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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 26, 1999,
REGISTRATION NO. 333-_____.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
DIGITAL MICROWAVE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 77-0016028
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
170 ROSE ORCHARD WAY
SAN JOSE, CALIFORNIA 95134
(408) 943-0777
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
CHARLES D. KISSNER
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
DIGITAL MICROWAVE CORPORATION
170 ROSE ORCHARD WAY
SAN JOSE, CALIFORNIA 95134
(408) 943-0777
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
WITH A COPY TO:
BRUCE ALAN MANN, ESQ.
Morrison & Foerster LLP
425 Market Street
San Francisco, California 94105-2482
(415) 268-7000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box:
/ /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
------------------------------
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: / /
------------------------------
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
CALCULATION OF REGISTRATION FEE (1)
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TITLE OF EACH CLASS AMOUNT TO BE PROPOSED OFFERING MAXIMUM AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED (2) REGISTERED (3) PRICE PER UNIT (4) OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Debt securities, Common Stock, par value $0.01
per share (5), Common Stock Warrants, Debt
Warrants $65,000,000 $65,000,000(6)(7) $18,070.00
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(1) Estimated in accordance with Rule 457(o) solely for the purpose of
calculating the registration fee.
(2) Any securities registered hereunder may be sold separately or as
units with other securities registered hereunder.
(3) Includes such indeterminate number of shares of Common Stock as may be
issued at indeterminable prices, but with an aggregate initial offering
price not to exceed $65,000,000, plus such indeterminate number of
shares of Common Stock as may be issued upon exercise of Securities
Warrants or in exchange for, or upon conversion of, debt securities
registered hereunder. Also includes such additional principal amount as
may be necessary such that, if debt securities are issued with an
original issue discount, the aggregate initial offering price of all
debt securities will equal $65,000,000 less the dollar amount of other
securities previously issued.
(4) Omitted pursuant to General Instruction II.D of Form S-3.
(5) Associated with the Common Stock are preferred share purchase rights
that will not be exercisable or evidenced separately from the Common
Stock prior to the occurrence of certain events.
(6) No separate consideration will be received for shares of Common Stock
that are issued upon conversion of debt securities.
(7) In U.S. Dollars or the equivalent thereof in one or more foreign
currencies or composite currencies.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION AND AMENDMENT
PRELIMINARY PROSPECTUS, DATED FEBRUARY 26, 1999
PROSPECTUS
[LOGO OF DIGITAL MICROWAVE CORPORATION APPEARS HERE]
DIGITAL MICROWAVE CORPORATION
BY THIS PROSPECTUS, WE MAY OFFER
UP TO $65,000,000 OF:
DEBT SECURITIES, COMMON STOCK,
DEBT WARRANTS AND COMMON STOCK WARRANTS
We will provide the specific terms of these securities in supplements
to this prospectus. For information on the general terms of these securities,
see "Description of debt securities," "Description of Common Stock," or
"Description of Securities Warrants." You should read this prospectus and the
applicable supplements carefully before you invest.
THIS INVESTMENT INVOLVES RISKS. SEE THE "RISK FACTORS" SECTION
BEGINNING ON PAGE 2.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
This prospectus is dated _______________, 1999.
<PAGE>
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PROSPECTUS SUMMARY
THIS SUMMARY MAY NOT CONTAIN ALL THE INFORMATION THAT MAY BE IMPORTANT
TO YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS BEFORE MAKING AN INVESTMENT
DECISION. THE TERMS "DMC," "WE," "OUR" AND "US" AS USED IN THIS PROSPECTUS
REFERS TO "DIGITAL MICROWAVE CORPORATION" AND ITS SUBSIDIARIES AS A COMBINED
ENTITY, EXCEPT WHERE IT IS MADE CLEAR THAT THE TERM ONLY MEANS THE PARENT
COMPANY.
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING
OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE EXCHANGE ACT
OF 1934, WHICH INVOLVE RISKS AND UNCERTAINTIES. ALL FORWARD-LOOKING STATEMENTS
INCLUDED IN THIS PROSPECTUS ARE BASED ON INFORMATION AVAILABLE TO DMC AS OF THE
DATE OF THIS PROSPECTUS, AND DMC DOES NOT ASSUME ANY OBLIGATION TO UPDATE ANY
FORWARD-LOOKING STATEMENTS. DMC'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM
THE RESULTS DISCUSSED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN
FACTORS, INCLUDING THOSE DETAILED IN "RISK FACTORS" BELOW.
DIGITAL MICROWAVE CORPORATION
DMC designs, manufactures and markets advanced wireless solutions for
worldwide telephone network interconnection and access. We provide our customers
with a broad product line, which contains products that operate using a variety
of transmission frequencies. Our broad product line allows us to market and sell
our products to service providers in many locations worldwide with varying
interconnection and access requirements. We design our products to meet the
requirements of mobile communications networks and fixed access networks
worldwide.
HOW TO REACH US
Our principal executive offices are located at 170 Rose Orchard Way,
San Jose, California 95134. Our telephone number at that address is (408)
943-0777. DMC is incorporated in Delaware and DMC's common stock trades on the
Nasdaq National Market under the symbol "DMIC."
THE OFFERING OF SECURITIES UNDER THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the SEC using a "shelf" registration offering process. Under this shelf offering
process, we may sell:
- debt securities,
- common stock,
- debt warrants and
- common stock warrants,
either separately or in units, in one or more offerings up to a total dollar
amount of $65,000,000. This prospectus provides you with a general description
of those securities. Each time we sell any securities described in this
prospectus, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may also
add, update or change information contained in this prospectus. You should
carefully read this prospectus and the applicable prospectus supplement together
with the additional information described under the heading "Where You Can Find
More Information About DMC" on page 19 of this prospectus.
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RISK FACTORS
AN INVESTMENT IN DMC INVOLVES A HIGH DEGREE OF RISK. IN ADDITION TO THE
OTHER INFORMATION INCLUDED IN THIS PROSPECTUS, YOU SHOULD CAREFULLY CONSIDER THE
FOLLOWING RISK FACTORS IN DETERMINING WHETHER OR NOT TO PURCHASE THE SECURITIES
OFFERED UNDER THIS PROSPECTUS. THESE MATTERS SHOULD BE CONSIDERED IN CONJUNCTION
WITH THE OTHER INFORMATION INCLUDED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS.
THERE ARE MANY RISKS ASSOCIATED WITH OUR INTERNATIONAL OPERATIONS
We are highly dependent on sales to customers outside the United
States. In fiscal year 1997, fiscal year 1998 and the nine months ended December
31, 1998, sales to international customers accounted for 95%, 93% and 86% of our
net sales. We expect that international sales will continue to account for the
majority of our net product sales for the foreseeable future. As a result, we
are subject to the risks of doing business internationally, which include:
- unexpected changes in regulatory requirements;
- fluctuations in foreign currency exchange rates;
- imposition of tariffs and other barriers and restrictions;
- management and operation of an enterprise spread over various
countries;
- burden of complying with a variety of foreign laws; and
- general economic and geopolitical conditions, including
inflation and trade relationships.
If any of the above risks actually occurs, there may be a material
adverse effect on our business, financial condition and results of operations.
In addition, recent worldwide economic events, particularly in Asia and
Latin America, including depreciation of currencies, failures of financial
institutions, stock market declines, and reduction in planned capital investment
at key enterprises, may continue to adversely impact our international revenues.
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY
Our quarterly operating results may vary significantly in the future
for a variety of reasons, including the following:
- volume and timing of product orders received and delivered
during the quarter;
- our ability and the ability of our key suppliers to respond to
changes made by customers in their orders;
- timing of new product introductions by us or our competitors;
- changes in the mix of products sold by us;
- cost and availability of components and subsystems;
- price erosion;
- adoption of new technologies and industry standards;
- competitive factors, including pricing, availability and demand
for competing products;
- fluctuations in foreign currency exchange rates;
- regulatory developments; and
- general economic conditions.
Each of the above factors is difficult to forecast and thus could have
a material adverse effect on our business, financial condition and results of
operations. In addition, we also may increase spending in response to
competition or to pursue new market opportunities. Accordingly, there can be no
assurance that we will be able to sustain profitability in the future,
particularly on a quarter-to-quarter basis.
THE MARKET IN WHICH WE OPERATE IS HIGHLY COMPETITIVE
The microwave interconnection and access business is a specialized
segment of the wireless telecommunications industry and is extremely
competitive. We expect this competition to increase in the future. Our products
compete on the basis of the following key characteristics:
- breadth of product line;
- customer service and support;
- price and financing terms;
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- performance;
- rapid time-to-market delivery capabilities; and
- reliability.
Failure to keep pace with technological advances would adversely affect
DMC's competitive position and could have a material adverse effect on our
business, results of operations and financial conditions. Our future success
will depend upon our ability to address the increasingly sophisticated needs of
our customers by enhancing current products, by developing and introducing new
products in a timely manner that keep pace with technological developments and
emerging wireless telecommunications services, and by providing our products at
competitive prices.
Several established and emerging companies offer a variety of
microwave, fiber optic and other connectivity products for applications
similar to those of our products. Our competitors may have more extensive
engineering, manufacturing and marketing capabilities and substantially
greater financial, technical and personnel resources than us. In addition,
our competitors may have greater name recognition, broader product lines, a
larger installed base of products and longer-standing customer relationships.
We consider our primary competitors to be Alcatel, L.M. Ericsson, NERA,
Siemens AG, P-COM, Inc. and the Microwave Communications Division of Harris
Corporation. In addition, other existing competitors presently include SIAE,
NEC, Nokia, ATI, a subsidiary of World Access, and Northern Telecom. In
addition, some of our competitors have product lines that compete with ours,
and are also original equipment manufacturers (OEMs) through which we market
and sell our products. Some of our largest customers could develop the
capability to manufacture products similar to those manufactured by us.
OUR AVERAGE SALES PRICES ARE DECLINING
Wireless infrastructure suppliers are experiencing, and are likely to
continue to experience, intense price pressure, which has resulted, and is
expected to continue to result, in downward pricing pressure on our products. As
a result, we have experienced, and expect to continue to experience, declining
average sales prices for our products. Our ability to attain improved gross
profit margins depends upon our ability to continue to improve manufacturing
efficiencies, reduce material costs of products and to continue to introduce new
products and product enhancements. There can be no assurance that we will be
able to offset this downward price pressure through corresponding cost
reductions. Any inability by us to respond to increased price competition would
have a material adverse effect on our business, financial condition and results
of operations. Since our customers frequently negotiate supply arrangements far
in advance of delivery dates, we must often commit to price reductions for our
products before we are aware of how, or if, cost reductions can be obtained. As
a result, current or future price reduction commitments could have, and any
inability by us to respond to increased price competition would have, a material
adverse effect on our business, financial condition and results of operations.
WE MUST DEVELOP NEW PRODUCTS IN ORDER TO KEEP UP WITH RAPID TECHNOLOGICAL CHANGE
The wireless communications market is characterized by rapidly changing
technologies and evolving industry standards. Accordingly, our future
performance, depends on a number of factors, including our ability to:
- identify emerging technological trends in our target markets;
- develop and maintain competitive products;
- enhance our products by adding innovative features that
differentiate our products from those of our competitors; and
- manufacture and bring products to market quickly at
cost-effective prices.
We believe that to remain competitive in the future we will need to
continue to develop new products, which will require the investment of
significant financial resources in new product development. In the event that
our new products are not timely developed, do not gain market acceptance or are
not manufacturable at competitive prices, our business, financial condition or
results of operations could be materially adversely affected.
In some instances, we enter into agreements to supply products to
customers where the products are not fully developed at the time of entering
into the agreement. Our failure to develop products required for timely
performance under these agreements can have a material impact on our business,
financial condition and results of operations.
Although we extensively test products prior to introduction, design
errors may be discovered after initial product sampling, resulting in delays in
volume production or recalls of products sold. The occurrence of these errors
could have a material adverse effect on our business, financial condition and
results of operations. Any significant delay or failure to develop, manufacture
or ship new or enhanced products by us could also have a material adverse effect
on our business, financial condition and results of operations.
WE DEPEND ON COMPONENT AVAILABILITY, SUBCONTRACTOR PERFORMANCE AND OUR KEY
SUPPLIERS
Our manufacturing operations are highly dependent upon the delivery of
materials by outside suppliers in a timely manner. In addition, we depend in
part upon subcontractors to assemble major components and subsystems
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used in our products in a timely and satisfactory manner. While we enter into
long-term or volume purchase agreements with a few of our suppliers, no
assurance can be given that materials, components, and subsystems will be
available in the quantities we require, if at all. Our inability to develop
alternative sources of supply quickly on a cost-effective basis could materially
impair our ability to manufacture and deliver products in a timely manner. There
can be no assurance that we will not experience material supply problems or
component or subsystem delays in the future.
OUR FAILURE TO MANAGE FUTURE GROWTH COULD HAVE ADVERSE EFFECTS
Future growth of our operations depends, in part, on our ability to
introduce new products and product enhancements to meet the emerging trends in
the wireless telecommunications industry. We have pursued, and will continue to
pursue, growth opportunities through internal development and acquisitions of
complementary businesses and technologies. We are unable to predict whether and
when any prospective acquisition candidate will become available or the
likelihood that any acquisition will be completed. We compete for acquisition
and expansion opportunities with many entities that have substantially greater
resources than us. In addition, acquisitions may involve difficulties in the
retention of personnel, diversion of management's attention, unexpected legal
liabilities, and tax and accounting issues. There can be no assurance that we
will be able to successfully identify suitable acquisition candidates, complete
acquisitions, integrate acquired businesses into our operations, or expand into
new markets. Once integrated, acquired businesses may not achieve comparable
levels of revenues, profitability, or productivity as our existing business or
otherwise perform as expected. Our failure to manage growth effectively could
have a material adverse effect on our business, financial condition and results
of operations.
WE MAY FAIL TO DEVELOP PRODUCTS THAT MEET THE TECHNICAL SPECIFICATIONS OF OUR
CUSTOMERS
Our customers typically require demanding specifications for quality,
performance and reliability. There can be no assurance that problems will not
occur with respect to the quality, performance and reliability of our systems or
related software tools. If these problems occur, we could experience increased
costs, delays in or cancellations or reschedulings of orders or shipments,
delays in collecting accounts receivable and product returns and discounts, any
of which would have a material adverse effect on our business, financial
condition and results of operations.
A SIGNIFICANT AMOUNT OF OUR REVENUES COMES FROM A FEW CUSTOMERS
During any given quarter, a small number of customers may account for a
significant portion of our net sales. For the nine months ended December 31,
1998, the top three customers accounted for 25% of our net sales. At December
31, 1998, three customers accounted for approximately 20% of our $61.3 million
backlog. There can be no assurance that our current customers will continue to
place orders with us, that orders by existing customers will continue to be at
levels of previous periods, or that we will be able to obtain orders from new
customers. Our customers typically are not contractually obligated to purchase
any quantity of products in any particular period and product sales to major
customers have varied widely from period to period. The loss of any existing
customer, a significant reduction in the level of sales to any existing
customer, or our failure to gain additional customers could have a material
adverse effect on our business, financial condition and results of operations.
WE DEPEND ON OUR DISTRIBUTION CHANNELS
We have relationships with OEM base station suppliers and in
selected countries we also market our products through independent agents and
distributors. These relationships increase our ability to pursue the limited
number of major contract awards each year. In addition, these relationships
are intended to provide our customers with easier access to financing and to
integrated systems providers with a variety of equipment and service
capabilities. There can be no assurance that we will be able to continue to
maintain and develop these relationships or that, if these relationships are
developed, they will be successful. The inability to establish or maintain
these distribution relationships could materially adversely affect our
business, financial condition or results of operations.
YEAR 2000 COMPLIANCE
We are aware of the issues associated with the programming code in
existing computer systems as the year 2000 approaches. The "Year 2000" problem
is concerned with whether computer systems will properly recognize date
sensitive information when the year changes to 2000. Systems that do not
properly recognize this information could generate erroneous data or cause a
system to fail. The Year 2000 problem is pervasive and complex as virtually
every company's computer operation will be affected in some way. Our computer
programs, which process our operational and financial transactions, were
designed and developed without considering the impact of the upcoming change in
century. In addition, some of DMC's products being shipped today are not Year
2000 ready. If not corrected, DMC's computer programs and products could fail or
create erroneous results by or at the Year 2000.
We are taking steps to ensure that our products and computer programs
will continue to operate on and after January 1, 2000. We have formed a Year
2000 project team consisting of staff from manufacturing, customer service,
finance, human resources, sales, marketing, legal, engineering and information
technology departments. A
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five phase solution process has been established consisting of (1) awareness,
(2) assessment, (3) renovation, (4) validation, and (5) implementation. We are
currently in the renovation stage with respect to most of our Year 2000 issues.
We estimate that we will complete this five phase process for all of our
significant systems by June 1999. We have identified our manufacturing IT system
as our highest priority and have implemented Year 2000 upgrades to our
manufacturing systems. DMC's network operating systems also are Year 2000 ready.
Most of our personal computers have been evaluated and have been found to be
non-compliant and software upgrades have been purchased. We are currently
installing these upgrades to correct the non-compliance. Some older personal
computers will be replaced or taken out of service.
We have completed an assessment of most of our DMC's products. Most of
DMC's hardware products are not affected by the Year 2000 issue because no
internal clock exists in these products. Year 2000 readiness testing is in
process for our newer products, including Altium and network software products.
Some older network software products are not Year 2000 ready and we have
developed an upgrade plan for customers who are using this software.
We have mailed letters to our primary suppliers and subcontractors to
determine whether they are developing plans to address processing transactions
in the Year 2000 and to monitor their progress toward Year 2000 capability. Less
than a third of the vendors contacted have responded and the Year 2000 team is
currently following up with vendors who have not responded. In addition,
responses from vendors who have responded are being evaluated to ensure the
readiness plans of the vendors adequately address the Year 2000 issue.
We believe that we will expend approximately $500,000 investigating and
remedying issues related to Year 2000 readiness involving internal operations.
Approximately $70,000 has been expensed to date for purchases of software test
tools, software upgrades and upgrading a security system related to Year 2000
readiness. In addition, we estimate that $100,000 of internal personnel costs
have been incurred to date supporting DMC's Year 2000 readiness plan.
If systems material to DMC's operations have not been made Year 2000
ready by the completion of the project, the Year 2000 issue could have a
material adverse effect on our financial statements. We are currently developing
a contingency plan to operate in the event that any non-compliant critical
systems are not remedied by January 1, 2000. We expect to finalize our
contingency plan by August 31, 1999.
Based on the steps being taken to address this issue and the progress
to date, we believe that the Year 2000 readiness expenses will not have a
material adverse effect on DMC's earnings. However, there can be no assurance
that Year 2000 problems will not occur with respect to DMC's computer systems.
Furthermore, the Year 2000 problem may impact other entities with which we
transact business, and we cannot predict the effect of the Year 2000 problem on
these entities or the resulting effect on us. As a result, if our preventative
and/or corrective actions or by those we do business with are not made in a
timely manner, the Year 2000 issue could have a material adverse effect on our
business, financial condition and results of operations.
WE COULD BE ADVERSELY AFFECTED BY MULTIPLE REGULATORY ENVIRONMENTS
Radio communications are subject to regulation by United States and
foreign laws and international treaties. Generally, our products must conform to
a variety of United States and international requirements established to avoid
interference among users of transmission frequencies and to permit
interconnection of telecommunications equipment. In addition, both in the United
States and internationally, we are affected by the allocation and auction of the
radio frequency spectrum by governmental authorities. Historically, in many
developed countries, the unavailability of frequency spectrum has inhibited the
growth of wireless telecommunications networks. In addition, to operate in a
jurisdiction, we must obtain regulatory approval for our products. Each
jurisdiction in which we market our products has its own regulations governing
radio communications. Products that support emerging wireless telecommunications
services can be marketed in a jurisdiction only if permitted by suitable
frequency allocations, auctions and regulations, and the process of establishing
new regulations is complex and lengthy. Failure by the governmental regulatory
authorities to allocate suitable frequency spectrum or to establish suitable
regulations for emerging wireless telecommunications services could have a
material adverse effect on our business, financial condition or results of
operations. There can be no assurance that governmental authorities, both in the
United States and internationally, will allocate sufficient radio frequency
spectrum for use by our products or that we will be successful in obtaining
approval for our products from these authorities.
WE DEPEND ON OUR KEY PERSONNEL
Due to the specialized nature of DMC's business, our future performance
is highly dependent upon the continued services of our key engineering personnel
and executive officers, including Charles D. Kissner, who currently serves as
DMC's Chairman of the Board and Chief Executive Officer. The loss of any key
personnel could have a material adverse effect on our business, financial
condition and results of operations. Our prospects depend upon our ability to
attract and retain qualified engineering, manufacturing, marketing, sales and
management personnel for our operations. Competition for personnel is intense
and there can be no assurance that we will be successful in attracting or
retaining qualified personnel. The failure of any key employee to perform in his
or her
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current position or our inability to attract and retain qualified personnel
could have a material adverse effect on our business, financial condition and
results of operations.
PROTECTION OF OUR INTELLECTUAL PROPERTY IS LIMITED; RISK OF INFRINGEMENT OF
RIGHTS OF OTHERS
We rely upon a combination of trade secrets, trademarks, copyrights,
patents and contractual rights to protect our intellectual property in the
United States and internationally. We enter into confidentiality and invention
assignment agreements with our employees, and enter into non-disclosure
agreements with our suppliers and appropriate customers so as to limit access to
and disclosure of our proprietary information. There can be no assurance that
any steps taken by us will be adequate to deter misappropriation or impede
independent third party development of similar technologies. In the event that
these intellectual property arrangements are insufficient, our business,
financial condition and results of operations could be materially adversely
affected. Moreover, there can be no assurance that the protection provided to
our intellectual property by the laws and courts of foreign nations will be
substantially similar to the remedies available under United States law or that
third parties will not assert infringement claims against us.
The wireless telecommunications industry is characterized by numerous
allegations of patent infringement among competitors and considerable related
litigation. Accordingly, we may in the future be notified that we are infringing
patent or other intellectual property rights of others. Although there are
currently no pending lawsuits regarding intellectual property rights matters
against us or unresolved notices that we are infringing upon intellectual
property rights of others, there can be no assurance that litigation or
infringement claims will not occur in the future. Litigation or claims could
result in substantial costs and diversion of resources and could have a material
adverse effect on our business, financial condition and results of operations.
In the event of an adverse result of any intellectual property litigation, we
could be required to expend significant resources to develop non-infringing
technology or to obtain licenses to the technology which is the subject of the
litigation. There can be no assurance that we would be successful in this
development or that any license would be available on commercially reasonable
terms.
OUR STOCK PRICE MAY BE VOLATILE
Announcements of developments related to our business, announcements by
competitors, quarterly fluctuations in our financial results and general
conditions in the telecommunications industry in which we compete or the
national economies in which we do business, and other factors could cause the
price of our common stock to fluctuate, perhaps substantially. In addition, in
recent years the stock market has experienced extreme price fluctuations, which
have often been unrelated to the operating performance of affected companies.
These factors and fluctuations could have a material adverse effect on the
market price of our common stock.
WE HAVE MADE FORWARD-LOOKING STATEMENTS IN THIS PROSPECTUS
The statements contained in this prospectus that are not historical
fact are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. The safe harbor provisions provided
in Section 27A of the Securities Act of 1933 and Section 21E of the Exchange
Act of 1934 apply to forward-looking statements we make. These statements can
be identified by the use of forward-looking terminology, including
"believes," "expects," "may," "will," "should," or "anticipates" or the
negative of these terms or other variations or comparable terminology, or by
discussions of strategy that involve risks and uncertainties. Numerous
factors, including economic and competitive conditions, timing and volume of
incoming orders, shipment volumes, product margins, and foreign exchange
rates, could cause actual results to differ materially from those described
in these statements, and prospective investors should carefully consider
these factors in evaluating these forward-looking statements. These
forward-looking statements are based on current expectations, and we assume
no obligation to update this information unless in the course of offering the
securities under this prospectus we provide you with a prospectus supplement.
USE OF PROCEEDS
Unless the applicable prospectus supplement states otherwise, the net
proceeds from the sale of the Offered Securities will be added to our general
corporate funds and may be used to repay long-term or short-term borrowings and
for other general corporate purposes. Until the net proceeds have been used,
they will be invested in short-term marketable securities. If we elect at the
time of the issuance of the securities to make different or more specific use of
proceeds other than as described in this prospectus, the change in use of
proceeds will be described in the applicable prospectus supplement.
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RATIOS OF EARNINGS TO FIXED CHARGES
The following table shows the ratio of earnings to fixed charges of DMC
for the last five fiscal years and the nine month periods ended December 31,
1997 and 1998.
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<CAPTION>
NINE MONTHS ENDED
YEAR ENDED MARCH 31, DECEMBER 31,
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1994 1995 1996 1997 1998 1997 1998
------------ ----------- ----------- ----------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges.................... (32.1) (4.1) (5.5) 6.7 27.5 48.6 (469.1)
</TABLE>
For purposes of calculating the ratios, fixed charges consist of:
- interest on debt; and
- the interest portion of rental expense on operating leases.
The ratio of earnings to fixed charges is calculated as follows:
(income before extraordinary charges and income taxes) + (fixed charges)
-------------------------------------------------------------------------
(fixed charges)
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DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the
debentures, notes, bonds and other evidences of indebtedness that we may issue
and which the trustee named in the applicable prospectus supplement will
authenticate and deliver under an indenture (the "Indenture"). The particular
terms of the debt securities offered by any prospectus supplement and the
extent, if any, to which these general provisions may apply to the debt
securities so offered will be described in the applicable prospectus supplement
relating to the debt securities.
We have summarized various terms and provisions of the form of
Indenture in this section. This summary is not complete. We also have filed the
form of the Indenture as an exhibit to the registration statement. You should
read the form of Indenture for additional information before you buy any debt
securities. The summary that follows includes numerical references in
parentheses to section numbers of the form of Indenture so that you can more
easily locate these provisions. Capitalized terms used but not defined in this
summary have the meanings specified in the Indenture.
GENERAL DESCRIPTION OF THE DEBT SECURITIES
Unless otherwise specified in the applicable prospectus supplement, the
debt securities will represent our direct, senior, unsecured obligations. The
Indenture does not limit the amount of debt securities that we may issue and
permits us to issue debt securities from time to time. Debt securities issued
under the Indenture will be issued as part of a series of securities that has
been established by us pursuant to the Indenture. (Section 301) Unless a
prospectus supplement relating to debt securities states otherwise, the
Indenture and the terms of the debt securities will not contain any covenants
designed to afford holders of any debt securities protection in a highly
leveraged or other transaction involving us that may adversely affect holders of
the debt securities. If we ever issue Bearer Securities, we will summarize
provisions of the Indenture that relate to Bearer Securities in the applicable
prospectus supplement.
A prospectus supplement relating to any series of debt securities being
offered will include specific terms relating to the offering. (Section 301)
These terms will include some or all of the following:
- the title and type of the debt securities;
- any limit on the total principal amount of the debt securities;
- the price at which the debt securities will be issued;
- the date or dates on which the principal of and premium, if any,
on the debt securities will be payable;
- the maturity date of the debt securities;
- any amortization with respect to the debt securities;
- any conversion mechanism whereby the debt securities would convert
into shares of Common Stock;
- if the debt securities will bear interest:
- the interest rate on the debt securities;
- the date from which interest will accrue;
- the record and interest payment dates for the debt
securities;
- the first interest payment date; and
- any circumstances under which we may defer interest
payments;
- any optional redemption provisions that would permit us or the
Holders as defined below, of debt securities to elect redemption
of the debt securities prior to their final maturity;
- any sinking fund provisions that would obligate us to redeem the
debt securities prior to their final maturity;
- the currency or currencies in which the debt securities will be
denominated and payable, if other than U.S. dollars;
- any provisions that would permit us or the Holders of the debt
securities to elect the currency or currencies in which the debt
securities are paid;
- whether the provisions described under the heading "Defeasance"
below apply to the debt securities;
- any changes to or additional Events of Default or covenants;
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- whether the debt securities will be issued in whole or in part in
the form of Global Securities and, if so, the name of the
depositary for those Global Securities (a "Global Security" means
a debt security that we issue in accordance with the Indenture to
represent all or part of a series of debt securities);
- any special tax implications of the debt securities; and
- any other terms of the debt securities.
A "Holder," with respect to a Registered Security, means the person in whose
name the Registered Security is registered in the Security Register. (Section
101)
PAYMENT; TRANSFER
In the applicable prospectus supplement, we will designate a place of
payment where you can receive payment of the principal of, and any premium and
interest on, the debt securities or where you can transfer the debt securities.
Even though we will designate a place of payment, we may elect to pay any
interest on the debt securities by mailing a check to the person listed as the
owner of the debt securities in the Security Register or by wire transfer to an
account designated by that person in writing not less than ten days before the
date of the interest payment. (Sections 305, 307, 1002) There will be no service
charge for any registration of transfer or exchange of the debt securities, but
we may require you to pay any tax or other governmental charge payable in
connection with a transfer or exchange of the debt securities. (Section 305)
DENOMINATIONS
Unless the prospectus supplement states otherwise, the debt securities
will be issued only in registered form, without coupons, in denominations of
$1,000 each or multiples of $1,000.
ORIGINAL ISSUE DISCOUNT
Debt securities may be issued under the Indenture as Original Issue
Discount Securities and sold at a substantial discount below their stated
principal amount. If a debt security is an "Original Issue Discount Security,"
that means that an amount less than the principal amount of the debt security
will be due and payable upon a declaration of acceleration of the maturity of
the debt security pursuant to the Indenture. (Section 101) The applicable
prospectus supplement will describe the federal income tax consequences and
other special factors which should be considered prior to purchasing any
Original Issue Discount Securities.
CLASSIFICATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The Indenture contains restrictive covenants that apply to us and all
of our Restricted Subsidiaries. Those covenants do not apply to our Unrestricted
Subsidiaries. For example, (1) the assets and indebtedness of Unrestricted
Subsidiaries and (2) investments by us or our Restricted Subsidiaries in
Unrestricted Subsidiaries are not included in the calculations described under
the heading "Restrictions on Secured Funded Debt" below. The Indenture does not
require us to maintain any Restricted Subsidiaries and, if we do not, the
Indenture will not provide any limitations on the amount of secured debt created
or incurred by our Subsidiaries.
A "Subsidiary" is any corporation of which we own more than 50% of the
outstanding shares of Voting Stock directly or through one or more of our other
Subsidiaries. "Voting Stock" means stock that is entitled to vote in an election
for directors.
"Restricted Subsidiaries" are all of our Subsidiaries other than
Unrestricted Subsidiaries. A "Wholly Owned Restricted Subsidiary" is a
Restricted Subsidiary of which we own all of the outstanding capital stock
directly or through our other Wholly Owned Restricted Subsidiaries.
Our "Unrestricted Subsidiaries" are:
- any Subsidiaries listed in a schedule to the Indenture;
- any Subsidiary that our Board of Directors in the future
designates as an Unrestricted Subsidiary pursuant to the
Indenture; and
- any other Subsidiary if a majority of its Voting Stock is owned
by an Unrestricted Subsidiary.
Our Board of Directors can at any time change a Subsidiary's
designation from an Unrestricted Subsidiary to a Restricted Subsidiary if (1)
the majority of that Subsidiary's Voting Stock is not owned by an Unrestricted
Subsidiary and (2) after the change of designation, we would be in compliance
with the restrictions contained in the Secured Funded Debt covenant described
under the heading "Restrictions on Secured Funded Debt" below. (Sections 101,
1010(a))
RESTRICTIONS ON SECURED FUNDED DEBT
The Indenture limits the amount of Secured Funded Debt that we and our
Restricted Subsidiaries may incur or otherwise create, including by guarantee.
Neither we nor our Restricted Subsidiaries may incur or otherwise
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create any new Secured Funded Debt unless immediately after the incurrence or
creation of the new Secured Funded Debt:
- the sum of:
- the aggregate principal amount of all of our outstanding
Secured Funded Debt and that of our Restricted Subsidiaries
(other than categories of Secured Funded Debt discussed
below), plus
- the aggregate amount of our Attributable Debt and that of
our Restricted Subsidiaries relating to sale and lease-back
transactions,
- does not exceed a percentage of our Consolidated Net Tangible
Assets to be determined prior to execution of the Indenture.
This limitation does not apply if the outstanding debt securities are secured
equally and ratably with or prior to the new Secured Funded Debt. (Sections
1008(a), 1008(c))
"Secured Funded Debt" means Funded Debt which is secured by a mortgage,
lien or other similar encumbrance upon any of our assets or those of our
Restricted Subsidiaries. (Section 101)
"Funded Debt" means:
- Indebtedness maturing or which we may extend or renew to mature,
more than 12 months after the time the amount of Secured Funded
Debt is computed, plus
- guarantees of Indebtedness or of dividends, except guarantees in
connection with the sale or discount of accounts receivable,
trade acceptances and other paper arising in the ordinary course
of business, plus
- in the case of a Subsidiary, all preferred stock of that
Subsidiary.
Funded Debt does not include any amount relating to obligations under
leases or guarantees of leases whether or not those obligations would be
included as liabilities on our consolidated balance sheet. (Section 101)
"Indebtedness" means, except as set forth in the next sentence:
- all items of indebtedness or liability, except capital and
surplus, which under GAAP would be included in total liabilities
on the liability side of a balance sheet as of the date that
indebtedness is being determined;
- indebtedness secured by a mortgage, lien or other similar
encumbrance on property owned subject to that mortgage, lien or
other similar encumbrance, regardless of whether the indebtedness
secured by that mortgage, lien or other similar encumbrance was
assumed; and
- guarantees, endorsements, other than for purposes of collection,
and other contingent obligations relating to, or to purchase or
otherwise acquire, indebtedness of others, unless the amount is
included in the preceding two bullet points.
Indebtedness does not include any obligations or guarantees of
obligations relating to lease rentals, even if these kinds of obligations or
guarantees of obligations would be included as liabilities on the consolidated
balance sheet of our Company and our Restricted Subsidiaries. (Section 101)
"Attributable Debt" means:
- the balance sheet liability amount of capital leases as
determined by GAAP, plus
- the amount of future minimum operating lease payments required to
be disclosed by GAAP, less any amounts required to be paid on
account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, discounted using
the methodology used to calculate the present value of operating
lease payments in our most recent Annual Report to Shareholders
reflecting that calculation.
The amount of Attributable Debt relating to an operating lease that can
be terminated by the lessee with the payment of a penalty will be calculated
based on the lesser of (1) the aggregate amount of lease payments required to be
made until the first date the lease can be terminated by the lessee plus the
amount of the penalty or (2) the aggregate amount of lease payments required to
be made during the remaining term of the lease. (Section 101)
"Consolidated Net Tangible Assets" means the total consolidated amount
of our assets and those of our Restricted Subsidiaries, minus applicable
reserves and other properly deductible items and after excluding any investments
made in Unrestricted Subsidiaries or in corporations while they were
Unrestricted Subsidiaries but which are not Subsidiaries at the time of the
calculation, minus
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- all liabilities and liability items, including capital leases, or
guarantees of capital leases, which under GAAP would be included
in the balance sheet, except Funded Debt, capital stock and
surplus, surplus reserves and provisions for deferred income
taxes, and
- goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other similar intangibles.
(Section 101)
The following categories of Secured Funded Debt will not be considered
in determining whether we are in compliance with the covenant described in the
first paragraph under the heading "Restrictions on Secured Funded Debt":
- Secured Funded Debt of a Restricted Subsidiary owing to us or to
one of our Wholly Owned Restricted Subsidiaries;
- Secured Funded Debt resulting from a mortgage, lien or other
similar encumbrance in favor of the U.S. Government or any State
or any instrumentality thereof to secure various payments;
- Secured Funded Debt resulting from a mortgage, lien or other
similar encumbrance on property, shares of stock or Indebtedness
of any company existing at the time that the respective company
becomes one of our Subsidiaries;
- Secured Funded Debt resulting from a mortgage, lien or other
similar encumbrance on property, shares of stock or Indebtedness
which (1) exists at the time that the property, shares of stock
or Indebtedness is acquired by us or one of our Restricted
Subsidiaries, including acquisitions by merger or consolidation,
(2) secures the payment of any part of the purchase price of or
construction cost for the respective property, shares of stock or
Indebtedness or (3) secures any indebtedness incurred prior to,
at the time of, or within 120 days after, the acquisition of the
respective property, shares of stock or Indebtedness or the
completion of any construction of the respective property for the
purpose of financing all or a part of the purchase price or
construction cost of the respective property, shares of stock or
Indebtedness, provided that, in all cases, we continue to comply
with the covenant relating to mergers and consolidations
discussed under the heading "Consolidation, Merger or Sale"
below; Secured Funded Debt secured by a mortgage, lien or other
similar encumbrance in connection with the issuance of revenue
bonds on which the interest is exempt from federal income tax
pursuant to the Internal Revenue Code of 1986; and
- any extension, renewal or refunding of (1) any Secured Funded
Debt permitted under the first paragraph under the heading
"Restrictions on Secured Funded Debt," (2) any Secured Funded
Debt outstanding at a date to be determined, of any then
Restricted Subsidiary or (3) any Secured Funded Debt of any
company outstanding at the time the respective company became a
Restricted Subsidiary. (Section 1008(b))
RESTRICTIONS ON SALE AND LEASE-BACK TRANSACTIONS
The Indenture provides that neither we nor any of our Restricted
Subsidiaries may enter into any sale and lease-back transaction involving any
Operating Property as defined below, more than 120 days after its acquisition or
the completion of its construction and commencement of its full operation,
unless either:
- we or the relevant Restricted Subsidiary could (1) create
Secured Funded Debt on the respective property equal to the
Attributable Debt with respect to the sale and lease-back
transaction and (2) still be in compliance with the restrictions
on Secured Funded Debt discussed in the "Restrictions on Secured
Funded Debt" section above; or we apply an amount, subject to
credits for various voluntary retirements of debt securities
and/or Funded Debt, equal to the greater of (a) the fair value of
the respective property or (b) the net proceeds of the respective
sale, within 120 days, to the retirement of Secured Funded Debt.
This restriction will not apply to any sale and lease-back transaction
(1) between us and one of our Restricted Subsidiaries, (2) between any of our
Restricted Subsidiaries or (3) involving a lease for a period, including
renewals, of three years or less. (Section 1009)
"Operating Property" means a parcel of real property owned by DMC or
any Subsidiary and primarily used in the operation of its business. If we
acquire a new Subsidiary that already owns and operates the respective property,
then the respective property will not be considered Operating Property until 90
days after the relevant acquisition. (Section 101)
CONSOLIDATION, MERGER OR SALE
The Indenture generally permits a consolidation or merger between us
and another corporation. It also permits the sale or transfer by us of all or
substantially all of our property and assets and the purchase by us of all or
substantially all of the property and assets of another corporation. These
transactions are permitted if:
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- the resulting or acquiring corporation, if other than us, assumes
all of our responsibilities and liabilities under the Indenture,
including the payment of all amounts due on the debt securities
and performance of the covenants in the Indenture;
- immediately after the transaction, no Event of Default exists;
and
- except in the case of a consolidation or merger of a Restricted
Subsidiary with or into us, either (1) we have obtained the
consent of the Holders of a majority in aggregate principal
amount of the outstanding debt securities of each series or (2)
immediately after the transaction, the resulting or acquiring
corporation could incur additional Secured Funded Debt and still
be in compliance with the restrictions on Secured Funded Debt as
described in the "Restrictions on Secured Funded Debt" section
above. (Section 801) Even though the Indenture contains the
provisions described above, we are not required by the Indenture
to comply with those provisions if we sell all of our property
and assets to another corporation if, immediately after the sale:
- that corporation is one of our Wholly Owned Restricted
Subsidiaries; and
- we could incur additional Secured Funded Debt and still be in
compliance with the restrictions on Secured Funded Debt, as
described in the "Restrictions on Secured Funded Debt" section
above. (Section 803)
If we consolidate or merge with or into any other corporation or sell
all or substantially all of our assets according to the terms and conditions of
the Indenture, the resulting or acquiring corporation will be substituted for us
in the Indenture with the same effect as if it had been an original party to the
Indenture. As a result, the relevant successor corporation may exercise our
rights and powers under the Indenture, in our name or in its own name and we
will be released from all our liabilities and obligations under the Indenture
and under the debt securities. (Section 802)
MODIFICATION AND WAIVER
Under the Indenture, specified rights and obligations of DMC and
specified rights of Holders of the debt securities may be modified or amended
with the consent of the Holders of a majority of the aggregate principal amount
of the outstanding debt securities of each series of debt securities affected by
the modification or amendment. The following modifications and amendments will
not be effective against any Holder without its consent:
- a change in various payments due on the debt securities;
- a change in the Place of Payment or currency in which any payment
on the debt securities is payable;
- a limitation of a Holder's right to sue us for the enforcement of
various payments due on the debt securities;
- a reduction in the percentage of outstanding debt securities
required to consent to a modification or amendment of the
Indenture;
- a limitation of a Holder's right, if any, to repayment of debt
securities at the respective Holder's option; and
- a modification of any of the foregoing requirements or a
reduction in the percentage of outstanding debt securities
required to waive compliance with specified provisions of the
Indenture or to waive various defaults under the Indenture.
(Section 902) Under the Indenture, the Holders of a majority of
the aggregate principal amount of the outstanding debt securities
of any series of debt securities may, on behalf of all Holders of
that series:
- waive compliance by us with specified restrictive
covenants of the Indenture; and
- waive any past default under the Indenture, except:
- a default in the payment of the principal of or any premium or
interest on any debt securities of that series; or
- a default under any provision of the Indenture which itself
cannot be modified or amended without the consent of the Holders
of each outstanding debt security of that series. (Sections 1012,
513)
EVENTS OF DEFAULT
"Event of Default," when used in the Indenture with respect to any
series of debt securities, means any of the following:
- failure to pay interest on any debt security of that series for
30 days after the payment is due;
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- failure to pay the principal of or any premium on any debt
security of that series when due;
- failure to deposit any sinking fund payment when due on debt
securities of that series;
- failure to perform any other covenant in the Indenture that
applies to debt securities of that series for 90 days after we
have received written notice of the failure to perform in the
manner specified in the Indenture;
- default under any Indebtedness for borrowed money, including
other series of debt securities, or under any mortgage, lien or
other similar encumbrance, indenture or instrument, including the
Indenture, which secures any Indebtedness for borrowed money, and
which results in acceleration of the maturity of an outstanding
principal amount of Indebtedness greater than an aggregate dollar
amount to be determined prior to the execution of the Indenture,
unless the acceleration is rescinded or the Indebtedness is
discharged within 10 days after we have received written notice
of the default in the manner specified in the Indenture;
- specified events in bankruptcy, insolvency or reorganization; or
- any other Event of Default that may be specified for the debt
securities of that series when that series is created.
(Section 501)
If an Event of Default for any series of debt securities occurs and
continues, the Trustee or the Holders of a percentage to be determined prior to
the execution of the Indenture, or higher, of the aggregate principal amount of
the outstanding debt securities of the series may declare the entire principal
of all the debt securities of that series to be due and payable immediately. If
a declaration occurs, the Holders of a majority of the aggregate principal
amount of the outstanding debt securities of that series can, subject to various
conditions, rescind the declaration. (Sections 502, 513)
The prospectus supplement relating to each series of debt securities
which are Original Issue Discount Securities will describe the particular
provisions that relate to the acceleration of maturity of a portion of the
principal amount of the respective series when an Event of Default occurs and
continues.
An Event of Default for a particular series of debt securities does not
necessarily constitute an Event of Default for any other series of debt
securities issued under the Indenture. The Indenture requires us to file an
officers' certificate with the Trustee each year that states that certain
defaults do not exist under the terms of the Indenture. (Section 1011) The
Trustee may withhold notice to the Holders of debt securities of any default,
except defaults in the payment of principal, premium, interest or any sinking
fund installment, if it considers the withholding of notice to be in the best
interests of the Holders. (Section 602)
Other than its duties in the case of a default, a Trustee is not
obligated to exercise any of its rights or powers under the Indenture at the
request, order or direction of any Holders, unless the Holders offer the Trustee
reasonable indemnification. (Sections 601, 603) If reasonable indemnification is
provided, then, subject to other rights of the Trustee, the Holders of a
majority in principal amount of the outstanding debt securities of any series
may, with respect to the debt securities of that series, direct 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.
(Sections 512, 603)
The Holder of a debt security of any series will have the right to
begin any proceeding with respect to the Indenture or for any remedy only if:
- the Holder has previously given the Trustee written notice of a
continuing Event of Default with respect to that series;
- the Holders of at least a percentage to be determined prior to
the execution of the Indenture, or higher, in aggregate principal
amount of the outstanding debt securities of that series have
made a written request of, and offered reasonable indemnification
to, the Trustee to begin a proceeding;
- the Trustee has not started a proceeding within 60 days after
receiving the request; and
- the Trustee has not received directions inconsistent with the
relevant request from the Holders of a majority in aggregate
principal amount of the outstanding debt securities of that
series during those 60 days. (Section 507)
However, the Holder of any debt security will have an absolute right to
receive payment of principal of and any premium and interest on the debt
security when due and to institute suit to enforce payment. (Section 508)
DEFEASANCE
DEFEASANCE AND DISCHARGE. At the time that we establish a series of
debt securities under the Indenture, we can provide that the debt securities of
that series are subject to the defeasance and discharge provisions of the
Indenture. If we so provide, we will be discharged from our obligations on the
debt securities of that series if we
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deposit with the Trustee, in trust, sufficient money or Government Obligations,
as defined below, to pay the principal, interest, any premium and any other sums
due on the debt securities of that series, such as sinking fund payments, on the
dates the relevant payments are due under the Indenture and the terms of the
debt securities. (Section 403) As used above, "Government Obligations" mean:
- securities of the same government which issued the currency in
which the series of debt securities are denominated and in which
interest is payable; or
- securities of government agencies backed by the full faith and
credit of the respective government. (Section 101)
In the event that we deposit funds in trust and discharge our
obligations under a series of debt securities as described above, then:
- the Indenture will no longer apply to the debt securities of that
series, except for obligations to compensate, reimburse and
indemnify the Trustee, to register the transfer and exchange of
debt securities, to replace lost, stolen or mutilated debt
securities and to maintain paying agencies and the trust funds;
and
- Holders of debt securities of that series can only look to the
trust fund for payment of principal, any premium and interest on
the debt securities of that series. (Section 403)
Under federal income tax law, a deposit and discharge may be treated as
an exchange of the related debt securities for an interest in the trust
mentioned above. Each holder might be required to recognize gain or loss equal
to the difference between (1) the holder's cost or other tax basis for the debt
securities and (2) the value of the holder's interest in the trust. Holders
might be required to include in income a share of the income, gain or loss of
the trust, including gain or loss recognized in connection with any substitution
of collateral, as described in this section under the heading "Substitution of
Collateral" below. You are urged to consult your own tax advisers as to the
specific consequences of a deposit and discharge, including the applicability
and effect of tax laws other than federal income tax law.
DEFEASANCE OF CERTAIN COVENANTS AND CERTAIN EVENTS OF DEFAULT. At the
time that we establish a series of debt securities under the Indenture, we can
provide that the debt securities of that series are subject to the covenant
defeasance provisions of the Indenture. If we so provide and we make the deposit
described in this section under the heading "Defeasance and Discharge" above:
- we will not have to comply with the following restrictive
covenants:
- consolidation, merger or sale (Sections 801, 803);
- restrictions on Secured Funded Debt (Section 1008);
- restrictions on sale and lease-back transactions
(Section 1009);
- classification of Restricted and Unrestricted Subsidiaries
(Section 1010); and
- any other covenant we designate when we establish the series of
debt securities; and
- we will not have to treat the events described in the fourth
bullet point under the heading "Events of Default" above as they
relate to the covenants listed above that have been defeased and
no longer are in effect and the events described in the fifth,
sixth and seventh bullet points under the heading "Events of
Default" as Events of Default under the Indenture in connection
with that series.
In the event of a defeasance, our obligations under the Indenture and
the debt securities, other than with respect to the covenants and the Events of
Default specifically referred to above, will remain in effect. (Section 1501)
If we exercise our option not to comply with the covenants listed above
and the debt securities of the relevant series become immediately due and
payable because an Event of Default has occurred, other than as a result of an
Event of Default specifically referred to above, the amount of money and/or
Government Obligations on deposit with the Trustee will be sufficient to pay the
principal, interest, any premium and any other sums, due on the debt securities
of the relevant series, such as sinking fund payments, on the date payments are
due under the Indenture and the terms of the debt securities, but may not be
sufficient to pay amounts due at the time of acceleration. However, we would
remain liable for the balance of the payments. (Section 1501)
SUBSTITUTION OF COLLATERAL. At the time that we establish a series of
debt securities under the Indenture, we can provide for our ability to, at any
time, withdraw any money or Government Obligations deposited pursuant to the
defeasance provisions described above if we simultaneously substitute other
money and/or Government Obligations which would satisfy our payment obligations
on the debt securities of that series pursuant to the defeasance provisions
applicable to those debt securities. (Section 402)
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DESCRIPTION OF DMC'S COMMON STOCK
This section describes the general terms and provisions of the shares
of our common stock. Any prospectus supplement will describe the specific terms
of the common stock offered through that prospectus supplement and any general
terms outlined in this section that will not apply to that common stock.
We have summarized terms and provisions of our common stock in this
section. This summary is not complete. You should read our Restated Certificate
of Incorporation and our Bylaws and the Certificate of Designation relating to
the Series A Preferred Stock for additional information before you buy any of
our common stock.
GENERAL DESCRIPTION OF OUR COMMON STOCK
SHARES OUTSTANDING. We are authorized to issue up to 95,000,000 shares
of common stock. As of February 22, 1999, 61,868,295 shares were issued and
outstanding.
VOTING. Holders of shares of our common stock are entitled to one vote
per share on all matters to be voted on by stockholders.
DIVIDENDS. Holders of our common stock are entitled to receive
dividends, if any, as may be declared from time to time by our Board of
Directors out of legally available funds.
LIQUIDATION. Upon liquidation or dissolution of DMC, holders of our
common stock are entitled to share ratably in the distribution of assets,
subject to the rights of the holders of our preferred stock.
PREEMPTIVE RIGHTS; SINKING FUND. Holders of our common stock have no
preemptive rights, subscription rights or conversion rights. There are no
redemption or sinking fund provisions with respect to our common stock.
LISTING. Our outstanding shares of common stock are listed on the
Nasdaq National Market under the symbol "DMIC." ChaseMellon Shareholder Services
L.L.C. serves as the transfer agent and registrar for our common stock.
OUR CERTIFICATE OF INCORPORATION AND BYLAWS CONTAIN ANTI-TAKEOVER PROVISIONS
Provisions of our Restated Certificate of Incorporation and Bylaws
could discourage potential acquisition proposals and could delay or prevent a
change in control of DMC. These provisions could diminish the opportunities for
a stockholder to participate in tender offers, including tender offers at a
price above the then current market value of our common stock. These provisions
may also inhibit fluctuations in the market price of our common stock that could
result from takeover attempts.
PREFERRED STOCK. Under our Restated Certificate of Incorporation, we
have authority to issue 5,000,000 shares of preferred stock in one or more
series as determined by our Board of Directors. No shares of preferred stock are
currently issued or outstanding. Our Board of Directors may, without further
action by our stockholders, issue a series of preferred stock and fix the rights
and preferences of those shares, including the dividend rights, dividend rates,
conversion rights, exchange rights, voting rights, terms of redemption,
redemption price or prices, liquidation preferences and the number of shares
constituting any series or the designation of any series. The rights of the
holders of our common stock will be subject to, and may be adversely affected
by, the rights of the holders of any preferred stock issued by us in the future.
NOMINATION PROCEDURES. In addition to members of our Board of
Directors, stockholders can nominate candidates for our Board of Directors.
However, a stockholder must follow the advance notice procedures described in
Section 14 of our Bylaws. In general, a stockholder must submit a written notice
of the nomination to our Corporate Secretary at least 60 days before a scheduled
meeting of our stockholders.
PROPOSAL PROCEDURES. Stockholders can propose that business other than
nominations to our Board of Directors be considered at an annual meeting of
stockholders only if a stockholder follows the advance notice procedures
described in our Bylaws. In general, a stockholder must submit a written notice
of the proposal and the stockholder's interest in the proposal at least 60 days
before the date set for the annual meeting of our stockholders.
AMENDMENT OF BYLAWS. Under our Bylaws, our Board of Directors can
adopt, amend or repeal the Bylaws, subject to limitations under the Delaware
General Corporation Law. Our stockholders also have the power to change or
repeal our Bylaws.
BUSINESS COMBINATION STATUTE. We are subject to Section 203 of the
Delaware General Corporation Law. Section 203 restricts specified transactions
and business combinations between a corporation and an "Interested Stockholder"
owning 15% or more of the corporation's outstanding voting stock for a period of
three years from the date the stockholder becomes an Interested Stockholder.
Subject to specified exceptions, unless the transaction is approved by our Board
of Directors and the holders of at least 66.67% of the outstanding voting stock
of the corporation, excluding shares held by the Interested Stockholder, Section
203 prohibits significant business transactions such as a merger with,
disposition of assets to, or receipt of disproportionate financial benefits by,
the Interested Stockholder, or any other transaction that would increase the
Interested Stockholder's proportionate ownership of any class or series of the
corporation's stock. The statutory ban does not apply if, upon consummation
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of the transaction in which any person becomes an Interested Stockholder, the
Interested Stockholder owns at least 85% of the outstanding voting stock of the
corporation, excluding shares held by persons who are both directors and
officers or by specified employee stock plans.
RIGHTS AGREEMENT. In October 1991, we adopted a Stockholder's Rights
Agreement pursuant to which one Preferred Share Purchase Right (a "Right") was
distributed for each outstanding share of our common stock. Each Right, as
adjusted to give effect to a stock dividend, which effected a two-for-one stock
split, in November 1997, entitles our stockholders to buy one two-hundredth of a
share of Series A Junior Participating preferred stock at an exercise price of
$50.00 upon specified events. The Rights expire on October 23, 2001, unless
earlier redeemed by DMC.
The Rights become exercisable if a person acquires 15% or more of our
common stock or announces a tender offer that would result in the person owning
15% or more of our common stock, other than a person who has reported or is
required to report beneficial ownership of our common stock on Schedule 13G
under the Exchange Act of 1934, with respect to whom the threshold is 20%. If
the Rights become exercisable, the holder of each Right, other than the person
whose acquisition triggered the exercisability of the Rights, will be entitled
to purchase, at the Right's then-current exercise price, a number of shares of
our common stock having a market value of twice the exercise price. In addition,
if DMC were to be acquired in a merger or business combination after the Rights
became exercisable, each Right would entitle its holder to purchase, at the
Right's then-current exercise price, stock of the acquiring company having a
market value of twice the exercise price. The Rights, as adjusted to give effect
to a stock dividend, which effected a two-for-one stock split, in November 1997,
are redeemable by us at a price of $0.005 per Right at any time within ten days
after a person has acquired 15%, or 20% in the case of a Schedule 13G filer, or
more of our common stock.
DESCRIPTION OF SECURITIES WARRANTS
This section describes the general terms and provisions of the warrants
for the purchase of debt securities or common stock (the "Securities Warrants")
that we may issue. The particular terms of the Securities Warrants offered by
any prospectus supplement and the extent, if any, to which these general
provisions may apply to the Securities Warrants so offered will be described in
the applicable prospectus supplement relating to the Securities Warrants.
Securities Warrants may be issued alone or together with debt
securities or common stock offered by any prospectus supplement and may be
attached to or separate from those securities. Each series of Securities
Warrants will be issued under a separate warrant agreement (a "Securities
Warrant Agreement") between us and a bank or trust company, as warrant agent
(the "Securities Warrant Agent"), which will be described in the applicable
prospectus supplement. The Securities Warrant Agent will act solely as our agent
in connection with the Securities Warrants and will not act as an agent or
trustee for any holders of Securities Warrants.
We have summarized general terms and provisions of the Securities
Warrant Agreements and Securities Warrants in this section. The summary is not
complete. We have also filed the forms of Securities Warrant Agreements and the
certificates representing the Securities Warrants ("Securities Warrant
Certificates") as exhibits to the registration statement. You should read the
applicable forms of Securities Warrant Agreement and Securities Warrant
Certificate for additional information before you buy any Securities Warrants.
PROVISIONS OF THE SECURITIES WARRANTS
If we offer Securities Warrants, the applicable prospectus supplement
will describe their terms. If Securities Warrants for the purchase of debt
securities are offered, the applicable prospectus supplement will describe the
terms of these Securities Warrants, including the following if applicable:
- the offering price;
- the currencies in which these Securities Warrants are being
offered;
- the designation, aggregate principal amount, currencies,
denominations and terms of the series of the debt securities that
can be purchased if a holder exercises these Securities Warrants;
- the designation and terms of any series of debt securities with
which these Securities Warrants are being offered and the number
of Securities Warrants offered with each debt security or share
of common stock;
- the date on and after which the holder of these Securities
Warrants can transfer them separately from the related common
stock or series of debt securities;
- the principal amount of the series of debt securities that can be
purchased if a holder exercises these Securities Warrants and the
price and currencies in which the principal amount may be
purchased upon exercise;
- the date on which the right to exercise these Securities Warrants
begins and the date on which the right expires;
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- United States federal income tax consequences; and
- any other terms of these Securities Warrants.
- Securities Warrants for the purchase of debt securities will be
in registered form only.
If Securities Warrants for the purchase of common stock are offered,
the applicable prospectus supplement will describe the terms of these Securities
Warrants, including the following where applicable:
- the offering price;
- the total number of shares that can be purchased if a holder of
these Securities Warrants exercises them;
- the designation and terms of the series of debt securities with
which these Securities Warrants are being offered and the number
of Securities Warrants being offered with each debt security or
share of common stock;
- the date on and after which the holder of these Securities
Warrants can transfer them separately from the related common
stock or series of debt securities;
- the number of shares of common stock that can be purchased if a
holder exercises these Securities Warrant and the price at which
the common stock may be purchased upon each exercise;
- the date on which the right to exercise these Securities Warrants
begins and the date on which the right expires;
- United States federal income tax consequences; and
- any other terms of these Securities Warrants.
- Securities Warrants for the purchase of Common Stock will be in
registered form only.
A holder of Securities Warrant Certificates may (1) exchange them for
new certificates of different denominations, (2) present them for registration
of transfer and (3) exercise them at the corporate trust office of the
Securities Warrant Agent or any other office indicated in the applicable
prospectus supplement. Until any Securities Warrants to purchase debt securities
are exercised, the holder of Securities Warrants will not have any of the rights
of Holders of the debt securities that can be purchased upon exercise, including
any right to receive payments of principal, premium or interest on the
underlying debt securities or to enforce covenants in the Indenture. Until any
Securities Warrants to purchase common stock are exercised, holders of
Securities Warrants will not have any of the rights of holders of the underlying
common stock, including any right to receive dividends or to exercise any voting
rights.
EXERCISE OF SECURITIES WARRANTS
Each holder of a Securities Warrant is entitled to purchase the
principal amount of debt securities or number of shares of common stock, as the
case may be, at the exercise price described in the applicable prospectus
supplement. After the close of business on the day when the right to exercise
terminates, or a later date if we extend the time for exercise, unexercised
Securities Warrants will become void.
A holder of Securities Warrants may exercise them by following the
general procedure outlined below:
- delivering to the Securities Warrant Agent the payment required
by the applicable prospectus supplement to purchase the
underlying security;
- properly completing and signing the reverse side of the
Securities Warrant Certificate representing the Securities
Warrants; and
- delivering the Securities Warrant Certificate representing the
Securities Warrants to the Securities Warrant Agent within five
business days of the Securities Warrant Agent receiving payment
of the exercise price.
If you comply with the procedures described above, your Securities
Warrants will be considered to have been exercised when the Securities Warrant
Agent receives payment of the exercise price. After you have completed those
procedures, we will, as soon as practicable, issue and deliver to you the debt
securities or common stock that you purchased upon exercise. If you exercise
fewer than all of the Securities Warrants represented by a Securities Warrant
Certificate, a new Securities Warrant Certificate will be issued to you for the
unexercised amount of Securities Warrants. Holders of Securities Warrants will
be required to pay any tax or governmental charge that may be imposed in
connection with transferring the underlying securities in connection with the
exercise of the Securities Warrants.
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AMENDMENTS AND SUPPLEMENTS TO SECURITIES WARRANT AGREEMENTS
We may amend or supplement a Securities Warrant Agreement without the
consent of the holders of the applicable Securities Warrants if the changes are
not inconsistent with the provisions of the Securities Warrants and do not
materially adversely affect the interests of the holders of the Securities
Warrants. We, along with the Securities Warrant Agent, may also modify or amend
a Securities Warrant Agreement and the terms of the Securities Warrants if a
majority of the then outstanding unexercised Securities Warrants affected by the
modification or amendment consent. However, no modification or amendment that
accelerates the expiration date, increases the exercise price, reduces the
majority consent requirement for any modification or amendment, or otherwise
materially adversely affects the rights of the holders of the Securities
Warrants may be made without the consent of each holder affected by the
modification or amendment.
COMMON STOCK WARRANT ADJUSTMENTS
Unless the applicable prospectus supplement states otherwise, the
exercise price of, and the number of shares of common stock covered by, a Common
Stock Warrant will be adjusted in the manner set forth in the applicable
prospectus supplement if specified events occur, including:
- if we issue capital stock as a dividend or distribution on the
common stock;
- if we subdivide, reclassify or combine the common stock;
- if we issue rights or warrants to all holders of common stock
entitling them for a period expiring 45 days after the date
fixed for determining the stockholders entitled to receive the
rights or warrants to purchase common stock at less than the
current market price as will be defined in the Warrant Agreement
for the applicable series of Common Stock Warrants; or
- if we distribute to all holders of common stock evidences of our
indebtedness or our assets, excluding specified cash dividends
and distributions described below, or rights or warrants,
excluding rights or warrants referred to above.
Except as stated above, the exercise price and number of shares of
common stock covered by a Common Stock Warrant will not be adjusted if we issue
common stock or any securities convertible into or exchangeable for common
stock, or securities carrying the right to purchase common stock or securities
convertible into or exchangeable for common stock.
Holders of Common Stock Warrants may have additional rights under the
following circumstances:
- a reclassification or change of the common stock;
- a consolidation or merger involving DMC; or
- a sale or conveyance to another corporation of all or
substantially all of our property and assets.
If one of the above transactions occurs and holders of our common stock
are entitled to receive stock, securities, other property or assets, including
cash, with respect to or in exchange for our common stock, the holders of the
Common Stock Warrants then outstanding will be entitled to receive upon exercise
of their Common Stock Warrants the kind and amount of shares of stock and other
securities or property that they would have received upon the reclassification,
change, consolidation, merger, sale or conveyance if they had exercised their
Common Stock Warrants immediately before the transaction.
PLAN OF DISTRIBUTION
We may sell the securities under this prospectus through agents,
through underwriters or dealers or directly to one or more purchasers.
Underwriters, dealers and agents that participate in the distribution
of the securities under this prospectus may be underwriters as defined in the
Securities Act of 1933 and any discounts or commissions received by them from us
and any profit on the resale of these securities by them may be treated as
underwriting discounts and commissions under the Securities Act. Any
underwriters or agents will be identified and their compensation, including
their underwriting discount, will be described in the applicable prospectus
supplement. The prospectus supplement also will describe other terms of the
offering, including any discounts or concessions allowed or reallowed or paid to
dealers and any securities exchanges on which these securities may be listed.
If underwriters are used in the sale, the securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. These
securities may be either offered to the public through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate. The
obligations of the underwriters to purchase these securities will be subject to
specified conditions precedent and the underwriters will be obligated to
purchase all the securities of a series if any are purchased. Any
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initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
The distribution of these securities may occur from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to the prevailing
market prices or at negotiated prices.
If the applicable prospectus supplement indicates, we will authorize
dealers or our agents to solicit offers by particular institutions to purchase
these securities from us pursuant to contracts that provide for payment and
delivery on a future date. We must approve all institutions, but they may
include, among others:
- commercial and savings banks;
- insurance companies;
- pension funds;
- investment companies; and
- educational and charitable institutions.
The institutional purchaser's obligations under the contract are only
subject to the condition that the purchase of these securities under this
prospectus at the time of delivery is allowed by the laws that govern the
purchaser. The dealers and our agents will not be responsible for the validity
or performance of the contracts.
We may have agreements with the underwriters, dealers and agents to
indemnify them against specific civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make as a result of those
specific civil liabilities.
Except for shares of common stock, when we issue the securities under
this prospectus, they may be new securities without an established trading
market. If we sell securities to an underwriter for public offering and sale,
the underwriter may make a market for the relevant securities, but the
underwriter will not be obligated to do so and could discontinue any market
making without notice at any time. Therefore, we cannot give any assurances to
you concerning the liquidity of any security under this prospectus. Underwriters
and agents and their affiliates may be customers of, engage in transactions
with, or perform services for us or our subsidiaries in the ordinary course of
their businesses.
LEGAL OPINIONS
Morrison & Foerster LLP, San Francisco, California, will issue an
opinion about the legality of the securities offered by this prospectus. Any
underwriters will be represented by their own legal counsel.
EXPERTS
The financial statements and schedules incorporated by reference in
this prospectus and elsewhere in the registration statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto. The consolidated financial statements
are, and consolidated financial statements included in subsequent filings
with the SEC will be, incorporated by reference in this prospectus in
reliance upon the report given upon the authority of said firm as experts in
accounting and auditing to the extent consolidated financial statements
included in subsequent filings are covered by consents executed by said firm
and filed with the SEC.
WHERE YOU CAN FIND MORE INFORMATION ABOUT DMC
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. Our SEC filings are available to the public over
the Internet at the SEC's web site at http://www.sec.gov. You also may read and
copy any document we file with the SEC at its public reference facilities at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional offices at
7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. You also can
obtain copies of the documents at prescribed rates by writing to the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of its public reference facilities. Our SEC filings also are available at the
offices of the Nasdaq Stock Market, located at 1735 K Street, N.W., Washington,
D.C. 20006.
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The SEC allows DMC to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is an important part of this prospectus and
information that we file subsequently with the SEC will automatically update
this prospectus. We incorporate by reference the documents listed below that we
previously filed with the SEC. These documents contain important information
about DMC and its finances.
- Annual Report on Form 10-K and on Form 10-K/A for the fiscal year
ended March 31, 1998;
- Quarterly Reports on Form 10-Q for the quarters ended June 30,
1998, September 30, 1998 and December 31, 1998;
- Current Reports on Form 8-K dated April 3, 1998, July 29, 1998
and October 20, 1998; and
- The description of the Company's common stock contained in the
Registration Statements on Form 8-A filed with the SEC on May 29,
1987 and November 5, 1991, as amended on December 27, 1996.
DMC also incorporates by reference additional documents that it may
file with the SEC after the initial filing of the registration statement that
contains this prospectus and prior to the time that we sell all the securities
offered by this prospectus. These additional documents include periodic reports,
such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, as well as proxy statements.
We will provide without charge to each person to whom a copy of this
prospectus is delivered, upon written or oral request, a copy of the information
that has been or may be incorporated by reference in this prospectus, other than
exhibits to the relevant documents. Direct any request for copies to Carl A.
Thomsen, Vice President, Chief Financial Officer and Secretary, at the corporate
headquarters of DMC, located at 170 Rose Orchard Way, San Jose, California 95134
(telephone number (408) 943-0777).
You should rely only on the information contained or incorporated by
reference in this prospectus or any applicable prospectus supplement. We have
not authorized anyone to provide you with any other information. We may only use
this prospectus to sell securities if it is accompanied by a prospectus
supplement. We are only offering these securities in states where the offer is
permitted. You should not assume that the information in this prospectus or any
applicable prospectus supplement is accurate as of any date other than the dates
on the front of those documents.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution
The following is an estimate, subject to future contingencies, of the
expenses to be incurred by the Registrant in connection with the issuance and
distribution of the securities being registered:
<TABLE>
<S> <C>
Registration Fee.....................................................$ 18,070
Legal Fees and Expenses*.................................................25,000
Accounting Fees and Expenses*............................................10,000
Printing and Engraving Fees*.............................................35,000
Listing Fees*............................................................17,500
Miscellaneous*......................................................... 10,000
-------
Total.................................................................$ 115,570
-------
</TABLE>
*Estimated pursuant to instruction to Item 511 of Regulation S-K.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the Delaware General Corporation Law (the "DGCL")
provides in relevant part that "a corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful." With respect to
derivative actions, Section 145(b) of the DGCL provides in relevant part that
"[a] corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor. . . . [by
reason of his service in one of the capacities specified in the preceding
sentence] against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interest of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper."
The Registrant's Restated Certificate of Incorporation provides that
each person who is or was or who had agreed to become a director or officer of
the Registrant or who had agreed at the request of the Registrant's Board of
Directors or an officer of the Registrant to serve as an employee or agent of
the Registrant or as a director, officer, employee or agent or another
corporation, partnership, joint venture, trust or other enterprise, shall be
indemnified by the Registrant to the full extent permitted by the DGCL or any
other applicable laws. Such Restated Certificate of Incorporation also provides
that the Registrant may enter into one or more agreements with any person which
provides for indemnification greater or different than that provided in such
Certificate, and that no amendment or repeal of such Certificate shall apply to
or have any effect on the right to indemnification permitted or authorized
thereunder for or with respect to claims asserted before or after such amendment
or repeal arising from acts or omissions occurring in whole or in part before
the effective date of such amendment or repeal.
The Registrant's Bylaws provide that the Registrant shall indemnify to
the full extent authorized by law any person made or threatened to be made a
party to an action or a proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he, his testator or intestate was or
is a director, officer or employee of the Registrant or any predecessor of the
Registrant or serves or served any other enterprise as a director, officer or
employee at the request of the Registrant or any predecessor of the Registrant.
The Registrant has entered into indemnification agreements with its
directors and certain of its officers.
The Registrant has purchased and maintains insurance on behalf of any
person who is or was a director or officer against loss arising from any claim
asserted against him and incurred by him in any such capacity, subject to
certain exclusions.
See also the undertakings set out in response to Item 17 herein.
II-1
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ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- -------
<S> <C>
1.1 Form of Underwriting Agreement for Debt Securities.
1.2 Form of Underwriting Agreement for Common Stock.
3.1 Restated Certificate of Incorporation (incorporated by reference to
Exhibit 3.1 of the Registrant's Annual Report on Form 10-K for the
year ended March 31, 1998).
3.2 Amended and Restated Bylaws dated as of October 8, 1998 (incorporated
by reference to Exhibit 3.1 of the Registrant's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1998).
4.1 Amended and Restated Rights Agreement, dated as of November 3, 1998,
between the Registrant and ChaseMellon Shareholder Services, L.L.C.,
including the form of the Certificate of Designations for the Series
A Junior Participating Stock (incorporated by reference to Exhibit
4.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1998.)
4.2 Form of Indenture.
4.3 Form of Debt Warrant Agreement, including form of Debt Warrant
Certificate.
4.4 Form of Common Stock Warrant Agreement, including form of Common
Stock Warrant Certificate.
4.5 Form of Senior Debenture.
5.1 Opinion of Morrison & Foerster LLP together with consent.
12.1 Computations of ratio of earnings to fixed charges.
23.1 Consent of Morrison & Foerster LLP (contained in the opinion of
counsel filed as Exhibit 5.1 to this Registration Statement).
23.2 Consent of Arthur Andersen LLP, independent public accountants.
24.1 Powers of Attorney (see page II-4 of the Registration Statement).
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement; provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-
II-2
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effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this Registration Statement
in reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
of 1933 shall be deemed to be part of this Registration Statement as of the time
it was declared effective.
(e) The undersigned Registrant hereby undertakes that for the purpose
of determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(f) The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Jose and the State of California, on this 26th
day of February, 1999.
DIGITAL MICROWAVE CORPORATION
By: /s/ CHARLES D. KISSNER
--------------------------------
Charles D. Kissner
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, severally and not jointly, Charles D.
Kissner and Carl A. Thomsen with full power to act alone, his true and lawful
attorneys-in-fact, with the power of substitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments to
this Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ CHARLES D. KISSNER Chairman of the Board and February 26, 1999
- ------------------------------------------ Chief Executive Officer
Charles D. Kissner
/S/ RICHARD C. ALBERDING Director February 26, 1999
- ------------------------------------------
Richard C. Alberding
/S/ PAUL BACHOW Director February 26, 1999
- ------------------------------------------
Paul Bachow
Director February __, 1999
- ------------------------------------------
John W. Combs
/S/ CLIFFORD H. HIGGERSON Director February 26, 1999
- ------------------------------------------
Clifford H. Higgerson
/s/ JAMES D. MEINDL Director February 26, 1999
- ------------------------------------------
James D. Meindl
/S/ V. FRANK MENDICINO Director February 26, 1999
- ------------------------------------------
V. Frank Mendicino
/S/ BILLY B. OLIVER Director February 26, 1999
- ------------------------------------------
Billy B. Oliver
/S/ HOWARD ORINGER Director February 26, 1999
- ------------------------------------------
Howard Oringer
/S/ CARL A. THOMSEN Vice President, Chief Financial February 26, 1999
- ------------------------------------------ Officer and Secretary (Principal
Carl A. Thomsen Financial and Accounting Officer)
</TABLE>
<PAGE>
Exhibit 1.1
DIGITAL MICROWAVE CORPORATION
UNDERWRITING AGREEMENT
[Date]
To the Representatives named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Dear Sirs:
Digital Microwave Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and
sell to the Underwriters named in Schedule II hereto (the "Underwriters"),
the principal amount set forth in Schedule II hereto of its debt securities
identified on Schedule I hereto (the "Securities"), to be issued under an
indenture, dated as of , as amended or supplemented from time to
time (the "Indenture") between the Company and , as Trustee (the
"Trustee"), less the principal amount of Securities covered by Delayed
Delivery Contracts (as defined in Section 3 hereof), if any, as provided in
Section 3 hereof and as may be specified in Schedule II hereto (any
Securities to be covered by Delayed Delivery Contracts being herein sometimes
referred to as "Contract Securities" and the Securities to be purchased by
the Underwriters (after giving effect to the deduction, if any, for Contract
Securities) being herein sometimes referred to as "Underwriters'
Securities"). If the firm or firms listed in Schedule II hereto include only
the firm or firms listed in Schedule I hereto, then the terms "Underwriters"
and "Representatives" as used herein shall each be deemed to refer to such
firm or firms.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a "shelf" registration statement on Form S-3, including a
prospectus, relating (among other securities) to the Securities, which
registration statement has become effective, and will promptly file with the
Commission a prospectus supplement specifically relating to the Securities
pursuant to Rule 424 under the Securities Act of 1933, as amended (the
"Act"). As used in this Agreement, the term "Registration Statement" means
such registration statement, including exhibits, financial statements,
schedules and documents incorporated by reference therein, as amended to the
date hereof. The term "Basic Prospectus" means the prospectus included in
the Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the prospectus supplement specifically relating to the
Securities as filed with the Commission pursuant to such Rule 424. The term
"preliminary prospectus" means any preliminary prospectus supplement
specifically relating to the Securities together with the Basic Prospectus.
Any reference herein to any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein as of the date of such preliminary prospectus or the Prospectus, as
the case may be.
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) The Registration Statement has become effective; no stop order suspending
the effectiveness of the Registration Statement is in effect; and no
proceedings for such purpose are pending before or threatened by the
Commission.
(b) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such
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<PAGE>
qualification, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(c) The authorized capital stock of the Company and the Securities materially
conform as to legal matters to the descriptions thereof contained in the
Prospectus.
(d) This Agreement has been duly authorized, executed and delivered by the
Company.
(e) There has not been any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial
or otherwise, or in the earnings, business or operations of the Company and
its subsidiaries, taken as a whole, from that set forth in the Prospectus.
(f) There are no legal or governmental proceedings pending or threatened to
which the Company or to which any of the properties of the Company is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts
or other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement that are not described or filed as required.
(g) The Company has all necessary consents, authorizations, approvals,
orders, certificates and permits of and from, and has made all declarations
and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a material adverse
effect on the Company.
(h) (i) Each document, if any, filed or to be filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in the Prospectus complied or will comply when so
filed in all material respects with the Exchange Act and the applicable rules
and regulations of the Commission thereunder, (ii) each part of the
Registration Statement, when such part became effective, did not contain and
each such part, as amended or supplemented, if applicable, will not contain,
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply and,
as amended or supplemented, if applicable, will comply in all material
respects with the Act and the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set
forth in this paragraph (m) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information concerning
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(e) Since the respective dates as of which information is given in the
Registration Statement and in the Prospectus, there have not been, and prior
to the Time of Delivery (as defined in Section 4 hereof) there will not be,
any changes in the capital stock (other than issuances of Common Stock upon
exercises of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible preferred stock) or
any increases in the long-term debt (excluding capital leases) of the Company
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, shareholders' investment or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus;
(f) The Company have good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by it,
free and clear of all liens, encumbrances and defects except such as are
2
<PAGE>
described in the Prospectus or such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made
of such property by the Company; and any real property and buildings held
under lease by the Company are held by it under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable;
(h) The Securities have been duly authorized, and, when issued and
delivered pursuant to this Agreement, and, in the case of any Contract
Securities, pursuant to Delayed Delivery Contracts (as defined in Section 3
hereof) with respect to such Contract Securities, will have been duly
executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits provided
by the Indenture; the Indenture has been duly authorized, executed and
delivered and constitutes a valid and legally binding instrument, enforceable
in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles; and the
Securities and the Indenture will conform to the description thereof in the
Prospectus; and in the event any of the Securities are purchased pursuant to
Delayed Delivery Contracts, each of such Delayed Delivery Contracts has been
duly authorized by the Company and, when executed and delivered by the
Company and the purchaser named therein, will constitute a valid and legally
binding agreement of the Company enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and any Delayed Delivery Contract
will conform to the description thereof in the Prospectus; and
(i) The issue and sale of the Securities and the compliance by the Company
with all of the provisions of the Securities, the Indenture, each of the
Delayed Delivery Contracts, if any, and this Agreement and the consummation
of the transactions herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Company pursuant to the
terms of, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the provisions of
the Amended and Restated Certificate of Incorporation or the Bylaws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company; and no
consent, approval authorization, order, registration or qualification of or
with any court or governmental agency or body is required for the issue and
sale of the Securities or the consummation of the other transactions
contemplated by this Agreement or any Delayed Delivery Contract or the
Indenture, except such as have been obtained, or will have been obtained at
the Time of Delivery, under the Act and the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and/or distribution of the Securities by the Underwriters.
2. Subject to the terms and conditions herein set forth, the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a
purchase price set forth in Schedule I hereto the principal amount of
Securities set forth opposite the name of such Underwriter in Schedule II
hereto, which principal amount shall be subject to reduction pursuant to
Section 3 hereof.
3. Upon the authorization by you of the release of the Securities, the
several Underwriters propose to offer the Securities for sale upon the terms
and conditions set forth in the Prospectus. The Company may specify in
3
<PAGE>
Schedule I hereto that the Underwriters are authorized to solicit offers to
purchase Securities from the Company pursuant to delayed delivery contracts
(herein called "Delayed Delivery Contracts"), substantially in the form of
Schedule IV attached hereto, but with such changes therein as the
Underwriters and the Company may authorize or approve. If so specified, the
Underwriters will endeavor to make such arrangements, and as compensation
therefor the Company will pay to the Underwriters, for their respective
accounts, at the time specified in Section 4 hereof, such commission, if any,
as may be set forth in Schedule I. Delayed Delivery Contracts, if any, are to
be with the investors of the types described in the Prospectus and subject to
other conditions therein set forth. The Underwriters will not have any
responsibility in respect of the validity or performance of any Delayed
Delivery Contracts.
The principal amount of Contract Securities to be deducted from the principal
amount of Securities to be purchased by each Underwriter as set forth in
Schedule II hereto shall be, in each case, the principal amount of Contract
Securities which the Company has been advised by the Underwriters have been
attributed to such Underwriter, PROVIDED that, if the Company has not been so
advised, the amount of Contract Securities to be so deducted shall be, in
each case, that proportion of Contract Securities which the principal amount
of Securities set forth opposite the name of such Underwriter in Schedule II
hereto bears to the total principal amount of the Securities set forth in
Schedule II hereto (rounded as the Underwriters may determine). The total
principal amount of Underwriters' Securities to be purchased by all the
Underwriters hereunder shall be the total principal amount of Securities set
forth in Schedule II hereto less the principal amount of the Contract
Securities. The Company will deliver to the Underwriters not later than 3:30
p.m., New York City time, on the third business day preceding the Time of
Delivery (or such other time and date as the Underwriters and the Company may
agree upon in writing) a written notice setting forth the principal amount of
Contract Securities.
4. Underwriters' Securities to be purchased by each Underwriter hereunder
shall be delivered by or on behalf of the Company to you for the account of
such Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor in same-day funds, at the office of
, at 9:30 a.m., New York City time, on [CLOSING DATE], or at
such other time and date as you and the Company may agree upon in writing,
such time and date being herein called the "Time of Delivery". The
Underwriters' Securities will be delivered by the Company to you in the form
of global Securities, representing all of the Securities, which will be
deposited by you on behalf of the Underwriters, with The Depository Trust
Company, or its nominee, for credit to the respective accounts of the
Underwriters.
Concurrently with the delivery of any Contract Securities to the purchasers
thereof pursuant to Delayed Delivery Contracts, the Company will deliver to
the Underwriters for their respective accounts a check payable to the order
of [LEAD UNDERWRITER] in the amount of any compensation payable by the
Company to the Underwriters in respect of any Delayed Delivery Contracts as
provided in Section 3 hereof and in Schedule I hereto.
5. The Company agrees with each of the Underwriters:
(a) To make no further amendment or supplement to the Registration
Statement or to the Prospectus prior to the Time of Delivery to which you
reasonably object promptly after reasonable notice thereof; to advise you
promptly of any such amendment or supplement after the Time of Delivery and
furnish you with copies thereof and to file promptly all reports and
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Securities; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has become effective or any supplement to the Prospectus or any
amended Prospectus has been filed, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
Preliminary
4
<PAGE>
Prospectus or the Prospectus, of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or of the Prospectus or for additional
information; and in the event of the issuance of any stop order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution, PROVIDED that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in such
quantities as you may from time to time reasonably request, and if the
delivery of a prospectus is required at any time prior to the expiration of
nine months after the time of issue of the Prospectus and if at such time
any event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Act, the Exchange Act or the
Trust Indenture Act, to notify you and upon your request to file such
document and to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance; and in case any Underwriter is required to deliver a prospectus
in connection with sales of any of the Securities at any time nine months
or more after the time of issue of the Prospectus, upon your request but at
the expense of such Underwriter, to prepare and deliver to such Underwriter
as many copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement, an earnings statement of the
Company and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act; and
(e) During the period beginning from the date hereof and continuing to
and including the later of the Time of Delivery or such earlier time as you
may notify the Company, not to offer, sell, contract to sell or otherwise
dispose of, except as provided hereunder, any securities of the Company
that are substantially similar to the Securities.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all
other expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
(except as otherwise expressly provided in Section 5(c) hereof) amendments
and supplements thereto and the mailing and delivering of copies thereof to
the Underwriters and dealers; (ii) the cost of printing this Agreement, the
Indenture, any Delayed Delivery Contracts, and the Blue Sky and Legal
Investment Memoranda; (iii) all expenses in connection with the qualification
of the Securities for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky and legal investment surveys; (iv) any fees
charged by securities rating services for rating the Securities; (v) the cost
of preparing the
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<PAGE>
Securities; (vi) the fees and expenses of the Trustees and any agent of the
Trustee and the fees and disbursements of counsel for the Trustee and any
such agent in connection with the Indenture and the Securities; and (vii) all
of the other costs and expenses incident to the performance of its
obligations hereunder and under any Delayed Delivery Contracts which are not
otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, Section 8 and Section 11
hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers
they may make.
7. The obligations of the Underwriters hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of
Delivery, materially true and correct, the condition that the Company shall
have performed all of its material obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to your reasonable satisfaction;
(b) , counsel for the Underwriters, shall have furnished to you
such opinion or opinions, dated the Time of Delivery, with respect to the
incorporation of the Company, the validity of the Indenture, the Securities,
the Delayed Delivery Contracts, if any, the Registration Statement, the
Prospectus, and other related matters as you may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) You shall have received on the Closing Date an opinion of Morrison &
Foerster LLP, dated the Closing Date, to the effect that
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its subsidiaries
taken as a whole;
(ii) the authorized capital stock of the Company and the Securities
materially conform as to legal matters to the descriptions thereof contained
in the Prospectus;
(iii) this Agreement has been duly authorized, executed and delivered by the
Company;
(iv) such counsel does not know of any legal or governmental proceeding
pending or threatened to which the Company is a party or to which any of the
properties of the Company is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required; and
(v) This Agreement has been duly authorized, executed and delivered by the
Company; and in the event any of the Securities are to be purchased pursuant
to Delayed Delivery Contracts, each of the Delayed Delivery Contracts has
been duly authorized, executed and delivered by the Company and, assuming
such contract has been duly executed and delivered by the purchaser named
therein, constitutes a valid and legally binding agreement of the Company
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
6
<PAGE>
general equity principles; and any Delayed Delivery Contracts conform to the
description thereof in the Prospectus;
(vi) The Securities have been duly authorized; the Underwriters' Securities
have been duly executed, authenticated, issued and delivered and constitute
valid and legally binding obligations of the Company entitled to the benefits
provided by the Indenture; the Contract Securities, if any, when executed,
authenticated, issued and delivered pursuant to the Indenture and the Delayed
Delivery Contracts, if any, will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture; and the Securities and the Indenture conform to the descriptions
thereof in the Prospectus;
(vii) The Indenture has been duly authorized, executed and delivered by the
parties thereto and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Indenture has been duly qualified under the Trust
Indenture Act;
(viii) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, each of
the Delayed Delivery Contracts and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or result
in a material breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Company or any of its
subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such counsel
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is subject, nor will such
action result in any violation of the provisions of the Amended and Restated
Certificate of Incorporation or the Bylaws of the Company or any statute or
any order, rule or regulation applicable to the Company and known to such
counsel of any court or governmental agency or body having jurisdiction over
the Company or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation of the other transactions contemplated by this
Agreement or the Indenture or any of the Delayed Delivery Contracts, except
such as have been obtained under the Act and the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and/or distribution of the Securities by the Underwriters;
(ix) The documents incorporated by reference in the Prospectus (other than
the financial statements and related schedules therein, as to which such
counsel need express no opinion), when they were filed with the Commission,
complied as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder; and
such counsel have no reason to believe that any of such documents, when they
were so filed, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which
they were made when such documents were so filed, not misleading; and
(x) The Registration Statement and the Prospectus and any further amendments
and supplements thereto made by the Company prior to the Time of Delivery
(other than the financial statements therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the rules and
regulations thereunder; such counsel have no reason to believe that the
Registration Statement contained as of its effective date or that the
Prospectus contained as of the date of the supplement comprising a part
thereof, or that either the Registration Statement or the Prospectus contains
as of the Time of Delivery (or that any further amendment or supplement
thereto made by the Company prior to the Time of Delivery contained as of its
date or contains as of the Time of Delivery) an untrue statement of material
fact or that the Registration Statement omitted as of such effective date, or
that the Prospectus omits as of the Time of Delivery to state a material fact
required to be stated therein or necessary to make the statements
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<PAGE>
therein not misleading; and such counsel does not know of any contracts or
other documents of a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by reference into the
Prospectus or required to be described in the Registration Statement or in
the Prospectus which are not filed or incorporated by reference or described
as required.
With respect to subparagraphs (ix) and (x) of paragraph (c) above, Morrison &
Foerster LLP may state that its opinion and belief are based on its
participation in the preparation of the Registration Statement and the
Prospectus and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the contents
thereof, but are without independent check or verification, except as
specified.
(d) At the Time of Delivery, Ernst & Young LLP shall have furnished to you
a letter or letters, dated the Time of Delivery, in form and substance
satisfactory to you, to the effect set forth in Schedule III hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, other than as set forth or contemplated
in the Prospectus; and (ii) since the respective dates as of which
information is given in the Prospectus there shall not have been any decrease
in the capital stock or any increase in the long-term debt (excluding capital
leases) of the Company or any of its subsidiaries or a change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, shareholders' investment or results
of operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any such
case described in clause (i) or (ii), is in your judgment so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Prospectus;
(g) On or after the date of this Agreement, there shall not have occurred
any of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iii) an outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war, the effect of any such event specified
in this clause (iii) in your judgment makes it impractical or inadvisable to
proceed with the public offering or the delivery of the Underwriters'
Securities on the terms and in the manner contemplated by the Prospectus; and
(h) On or after the date of this Agreement (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities the effect of which, in any event
specified in clause (i) or (ii), in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the Prospectus; and
(i) The Company shall have furnished or caused to be furnished to you at
the Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of the Time of Delivery and as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to
the Time of Delivery and the Company also shall have furnished to you a
certificate of officers of the Company satisfactory to you as to the matters
set forth in subsections (a), (f) and (h) of this Section.
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<PAGE>
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement in the form in which it was initially declared
effective, or the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim;
PROVIDED, HOWEVER, that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or such Prospectus or any such amendment or supplement in reliance
upon and in conformity with written information furnished to the Company by
any Underwriter through you expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Registration Statement in the form in
which it was initially declared effective, or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or such Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through you
expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to
9
<PAGE>
such amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access o information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Underwriters' Securities which it has agreed to purchase hereunder, you
may in your discretion arrange for you or another party or other parties to
purchase such Underwriters' Securities on the terms contained herein. If
within thirty-six hours after such default by any Underwriter you do not
arrange for the purchase of such Underwriters' Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to you to purchase such
Underwriters' Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so
arranged for the purchase of such Underwriters' Securities, or the Company
notifies you that it has so arranged for the purchase of such Underwriters'
Securities, you or the Company shall have the right to postpone the Time of
Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement
or the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under the Section with like effect as if such person had originally been a
party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Underwriters' Securities of a defaulting Underwriter or Underwriters by you
and the Company as provided in subsection (a) above, the aggregate
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<PAGE>
principal amount of such Underwriters' Securities which remains unpurchased
does not exceed one-tenth of the aggregate principal amount of all the
Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Underwriters'
Securities which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Securities which such Underwriter
agreed to purchase hereunder) of the Underwriters' Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If after giving effect to any arrangements for the purchase of the
Underwriters' Securities of a defaulting Underwriter or Underwriters by you
and the Company as provided in subsection (a) above the aggregate principal
amount of Underwriters' Securities which remains unpurchased exceeds
one-tenth of the aggregate principal amount of all the Securities, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Underwriters' Securities of a
defaulting Underwriter or Underwriters, then this Agreement shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve
a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or
the Company, or any officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company shall not then be under any liability to any Underwriter except as
provided in Section 6 and Section 8 hereof; but if for any other reason the
Underwriters' Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through you for
all out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Securities, but the
Company shall then be under no further liability to any Underwriter except as
provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the Company shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by [LEAD UNDERWRITER] on behalf of you as the
Representatives and may assume that such statement, request, notice or
agreement has been duly authorized by such Underwriter.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriters, shall be sufficient in all respects if delivered or sent by
registered mail to you as the Representatives in care of
[NAME AND ADDRESS OF LEAD UNDERWRITER], Attention: __________________; and if
to the Company, shall be sufficient in all respects if delivered or sent by
registered mail to Digital Microwave Corporation, 170 Rose Orchard Way, San
Jose, California 95134, Attention: Chief Financial Officer; PROVIDED,
HOWEVER, that any notice to an Underwriter pursuant to Section 8(c) hereof
shall be delivered or sent by registered mail to such Underwriter at its
address set forth in its Underwriters' Questionnaire or telex constituting
such Questionnaire delivered to the Company.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8
and 10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs,
executors, administrators,
11
<PAGE>
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely
of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be construed in accordance with the laws of the
State of California, without regard to conflict of laws principles.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the
same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us two counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Underwriters and the
Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of a telex,
copies of which, to the extent practicable and upon request, shall be
submitted to the Company for examination, but without warranty on your part
as to the authority of the senders thereof.
Very truly yours,
DIGITAL MICROWAVE CORPORATION
By:
------------------------------
Name:
------------------------------
Its:
------------------------------
ACCEPTED AND AGREED TO BY:
[REPRESENTATIVE(S)]
By:
------------------------------
Name:
------------------------------
Its:
------------------------------
On behalf of each of the Underwriters
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SCHEDULE I
Underwriting Agreement dated [PRICING DATE]
Registration Statement No.[____________]
Representatives:
Description of Securities:
Title:
Maturity:
Interest Rate:
Interest Payment Dates:
Aggregate principal amount and currency:
Purchase price and currency: $ plus accrued interest from
[INITIAL INTEREST ACCRUAL DATE]
Sinking fund provisions: [The Securities shall not be entitled to any
sinking fund.]
Redemption provisions: [The Securities are not redeemable prior to
maturity.]
Other provisions: [Defeasance provisions set forth in Articles Four and
Fifteen of the Indenture shall apply to the Securities]
Closing Date, Time and Location: [CLOSING DATE] at 9:30 a.m. at the office
of .
13
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SCHEDULE II
PRINCIPAL AMOUNT OF
UNDERWRITER SECURITIES TO BE PURCHASED
14
<PAGE>
SCHEDULE III
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules examined by them and included or
incorporated by reference in the Registration Statement or Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they have
made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim
financial statements, selected financial data, pro forma financial
information and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
furnished to the Representatives;
(iii) In their opinion, the unaudited selected financial information with
respect to the consolidated results of operations and financial position of
the Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year agrees
with the corresponding amounts (after restatement where applicable) in the
audited consolidated financial statements for such fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of changes in financial position
included or incorporated by reference in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements
of the Exchange Act as its applies to Form 10-Q and the related published
rules and regulations thereunder or are not in conformity with generally
accepted accounting principles for interim financial statements applied on
a basis substantially consistent with the basis for the audited
consolidated statements of income, consolidated balance sheets and
consolidated statements of changes in financial position included or
incorporated by reference in the Company's Annual Report on Form 10-K for
the most recent fiscal year;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on
a
15
<PAGE>
basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Company's Annual Report on Form 10-K for
the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in Clause (A) and any unaudited income statement
data and balance sheet items included in the Prospectus and referred to in
Clause (B) were not determined on a basis substantially consistent with the
basis for the audited financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(D) any unaudited pro forma consolidated condensed financial statements
included or incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements
of the Act and the published rules and regulations thereunder;
(E) as of a specified date not more than five days prior to the date of
such letter, when compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, there have been
-- any changes in the consolidated capital stock (other than issuances
of capital stock upon the exercise of stock options, pursuant to
performance shares or restricted stock awards and upon the conversion
of convertible securities, in each case which were outstanding on the
date of the latest balance sheet included or incorporated by
reference in the Prospectus), or
-- any increase in the consolidated long-term debt (excluding capital
leases) of the Company and its subsidiaries, or
-- any decrease in consolidated working capital greater than 1.5% of
the Company's most recent fiscal year-end total consolidated assets
(treating all commercial paper as a current liability), or
-- any decreases in consolidated shareholders' investment greater than
0.5% of the Company's most recent fiscal year-end total consolidated
assets (excluding decreases resulting from normally recurring
dividends), or
-- any decreases or increases in other items specified by the
Representatives
in each case except for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (E), when compared with the
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<PAGE>
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, there were
-- any decreases in consolidated net sales or earnings before income
taxes and extraordinary charges, or
-- any decreases in the total or per share amounts of consolidated net
income or other items specified by the Representatives, or
-- any increases in any items specified by the Representatives
in each case except for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(v) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (iv) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives
or in documents incorporated by reference in the Prospectus specified by
the Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
17
<PAGE>
SCHEDULE IV
DELAYED DELIVERY CONTRACT
Digital Microwave Corporation
C/O
ATTENTION:
Dear Sirs:
The undersigned hereby agrees to purchase from Digital Microwave Corporation
(hereinafter called the "Company"), and the Company agrees to sell to the
undersigned, $ principal amount of the Company's (hereinafter
called the "Securities"), offered by the Company's Prospectus dated
and Prospectus Supplement dated , receipt of a copy of which is hereby
acknowledged, at a purchase price of % of the principal amount thereof,
plus accrued interest from the date from which interest accrues as set forth
below, and on the further terms and conditions set forth in this contract.
The undersigned will purchase the Securities from the Company on ,
(the "Delivery Date") and interest on the Securities so purchased will accrue
from .
Payment for the Securities which the undersigned has agreed to purchase on
the Delivery Date shall be made to the Company or its order by certified or
official bank check in New York Clearing House funds at the office of
, or by wire transfer to a bank account specified
by the Company, on the Delivery Date upon delivery to the undersigned of the
Securities then to be purchased by the undersigned in definitive fully
registered form and in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communication addressed
to the Company not less than five full business days prior to the Delivery
Date.
The obligation of the undersigned to take delivery of and make payment for
the Securities on the Delivery Date shall be subject to the condition that
the purchase of the Securities to be made by the undersigned shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject. The obligation of the undersigned to take delivery
of and make payment for the Securities shall not be affected by the failure
of any purchaser to take delivery of and make payment for the Securities
pursuant to other contracts similar to this contract.
The undersigned understands that underwriters (the "Underwriters") are also
purchasing Securities from the Company, but that the obligations of the
undersigned hereunder are not contingent on such purchases.
[PROMPTLY AFTER COMPLETION OF THE SALE TO THE UNDERWRITERS THE COMPANY WILL
MAIL OR DELIVER TO THE UNDERSIGNED AT ITS ADDRESS SET FORTH BELOW NOTICE TO
SUCH EFFECT, ACCOMPANIED BY A COPY OF THE OPINION OF COUNSEL FOR THE COMPANY
DELIVERED TO THE UNDERWRITERS IN CONNECTION THEREWITH.]
The undersigned represents and warrants that, as of the date of this
contract, the undersigned is not prohibited from purchasing the Securities
hereby agreed to be purchased by it under the laws of the jurisdiction to
which the undersigned is subject.
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
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<PAGE>
This contract may be executed by either of the parties hereto in any number
of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
It is understood that the acceptance by the Company of any Delayed Delivery
Contract (including this contract) is in the Company's sole discretion and
that, without limiting the foregoing, acceptances of such contracts need not
be on a first-come, first-served basis. If this contract is acceptable to
the Company, it is requested that the Company sign the form of acceptance
below and mail or deliver one of the counterparts hereof to the undersigned
at its address set forth below. This will become a binding contract between
the Company and the undersigned when such counterpart is so mailed or
delivered by the Company.
Yours very truly,
By:
---------------
(Signature)
(Name and Title)
(Address)
Accepted: ,
DIGITAL MICROWAVE CORPORATION
By:
----------------------------
Name:
----------------------------
Its:
----------------------------
19
<PAGE>
Exhibit 1.2
DIGITAL MICROWAVE CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
[Date]
[Names and Addresses of
Representatives]
Dear Sirs:
Digital Microwave Corporation, a Delaware corporation (the "Company"), proposes
to issue up to _________ shares of its Common Stock, par value $0.01 per share
(the "Common Stock"), of which __________ shares of Common Stock would be issued
in connection with the sale of the Firm Shares (as hereinafter defined) and up
to _______ shares of Common Stock would be issued in connection with any sale of
Additional Shares (as hereinafter defined).
The Company proposes to sell to the several underwriters named in Schedule I
hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives") _________ of the shares of Common Stock (the "Firm Shares").
The Company also proposes to issue and sell to the several Underwriters not more
than an additional ___________ of the shares of Common Stock (the "Additional
Shares") if and to the extent that the Representatives shall have determined to
exercise, on behalf of the Underwriters, the right to purchase such shares of
Common Stock granted to the Underwriters in Article II hereof. The Firm Shares
and the Additional Shares are hereinafter collectively referred to as the
"Common Shares".
The Company has filed with the Securities and Exchange Commission (the
"Commission") a "shelf" registration statement on Form S-3, including a
prospectus, relating (among other securities) to the Common Shares, which
registration statement has become effective, and will promptly file with the
Commission a prospectus supplement specifically relating to the Common Shares
pursuant to Rule 424 under the Securities Act of 1933, as amended (the
"Act"). As used in this Agreement, the term "Registration Statement" means
such registration statement, including exhibits, financial statements,
schedules and documents incorporated by reference therein, as amended to the
date hereof. The term "Basic Prospectus" means the prospectus included in
the Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the prospectus supplement specifically relating to the Common
Shares as filed with the Commission pursuant to such Rule 424. The term
"preliminary prospectus" means any preliminary prospectus supplement
specifically relating to the Common Shares together with the Basic
Prospectus. Any reference herein to any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein as of the date of such preliminary prospectus or the
Prospectus, as the case may be.
I.
The Company represents and warrants to each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order suspending
the effectiveness of the Registration Statement is in effect; and no
proceedings for such purpose are pending before or threatened by the
Commission.
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(b) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(c) The authorized capital stock of the Company and the Common Shares
materially conform as to legal matters to the descriptions thereof contained
in the Prospectus.
(d) The Common Shares have been duly authorized and, when the Common Shares
are issued and delivered in accordance with the terms of this Agreement, the
Common Shares will be validly issued, fully paid and non-assessable, and the
issuance of such Common Shares is not subject to any preemptive or similar
rights.
(e) This Agreement has been duly authorized, executed and delivered by the
Company.
(f) The execution and delivery by the Company of, and the performance by the
Company of its obligations under, this Agreement will not contravene any
provision of applicable law or the articles of incorporation or by-laws of
the Company or any order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval or authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, except such as have been obtained under
the Act and such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Common Shares.
(g) There has not been any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial
or otherwise, or in the earnings, business or operations of the Company and
its subsidiaries, taken as a whole, from that set forth in the Prospectus.
(h) There are no legal or governmental proceedings pending or threatened to
which the Company or to which any of the properties of the Company is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts
or other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement that are not described or filed as required.
(i) The Company has all necessary consents, authorizations, approvals,
orders, certificates and permits of and from, and has made all declarations
and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a material adverse
effect on the Company.
(j) (i) Each document, if any, filed or to be filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in the Prospectus complied or will comply when so
filed in all material respects with the Exchange Act and the applicable rules
and regulations of the Commission thereunder, (ii) each part of the
Registration Statement, when such part became effective, did not contain and
each such part, as amended or supplemented, if applicable, will not contain,
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply and,
as amended or supplemented, if applicable, will comply in all material
respects with the Act and the applicable rules and regulations of the
Commission thereunder and (iv) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading,
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except that the representations and warranties set forth in this paragraph
(m) do not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information concerning any Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use
therein.
II.
The Company hereby agrees to sell to the several Underwriters named in
Schedule I hereto, and the Underwriters, upon the basis of the
representations and warranties herein contained, but subject to the
conditions hereinafter stated, agree, severally and not jointly, to purchase
from the Company the respective numbers of Firm Shares set forth opposite
their names in Schedule I hereto at $_____ a share (the "Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to
sell to the Underwriters the Additional Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to _______
Additional Shares at the Purchase Price. Additional Shares may be purchased
as provided in Article IV hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If
any Additional Shares are to be purchased, each Underwriter agrees, severally
and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule I
hereto opposite the name of such Underwriter bears to the total number of
Firm Shares set forth in Schedule I hereto.
The Company hereby agrees that, without the prior written consent of the
Representatives, it will not file any registration statement with the
Commission in respect of any shares of Common Stock of the Company or offer,
sell, contract to sell or otherwise dispose of any shares of such Common
Stock or any securities convertible into or exercisable or exchangeable for
such Common Stock for a period of ______ days after the date of this
Agreement, other than (i) any shares of such Common Stock sold upon the
exercise of an option or warrant or the conversion of a security outstanding
on the date hereof, (ii) any shares of such Common Stock registered, offered
or issued, or options in respect of such Common Stock granted, in connection
with any employee benefit plans of the Company or any of its subsidiaries
(including employee benefit plans assumed by the Company or any of its
subsidiaries in connection with an acquisition by the Company), or (iii) any
shares of such Common Stock registered, offered or issued in connection with
an acquisition by the Company.
III.
The Company is advised by you that the Underwriters propose to make a public
offering of their respective portions of the Common Shares as soon after this
Agreement has been entered into as in your judgment is advisable. The
Company is further advised by you that the Common Shares are to be offered to
the public initially at $______ per Common Share (the public offering price)
plus accrued dividends, if any, and to certain dealers selected by you at a
price that represents a concession not in excess of $_____ per Common Share
under the public offering price, and that the Underwriters may allow, and
such dealers may reallow, a concession, not in excess of $.____ per Common
Share, to any Underwriter or to certain other dealers.
IV.
Delivery of the Firm Shares shall be made, against payment therefor in
immediately available funds, at the office of _____________________________,
_____________________, at 10:00 A.M., local time, on ___________, ___, or at
such other time on the same or such other date, not later than ____________,
____, as shall be designated in writing by you. The time and date of such
delivery and payment are hereinafter referred to as the Closing Date.
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Delivery of any Additional Shares shall be made, against payment therefor in
immediately available funds, at the office of ______________________,
_______________, at 10:00 A.M., local time, on such date (which may be the
same as the Closing Date but shall in no event be earlier than the Closing
Date nor later than ten business days after the giving of the notice
hereinafter referred to) as shall be designated in a written notice from the
Representatives to the Company of their determination, on behalf of the
Underwriters, to purchase a number, specified in said notice, of Additional
Shares, or on such other date, in any event not later than _____________,
____, as shall be designated in writing by the Representatives. The time and
date of such delivery and payment are hereinafter referred to as the Option
Closing Date. The notice of the determination to exercise the option to
purchase Additional Shares and of the Option Closing Date may be given at any
time within 30 days after the date of this Agreement.
Payment for the Firm Shares and Additional Shares shall be made against
delivery to you on the Closing Date or the Option Closing Date, as the case
may be, for the respective accounts of the several Underwriters of stock
certificates evidencing the Firm Shares or Additional Shares, as the case may
be, registered in such names and in such denominations as you shall request
in writing not later than five full business days prior to the Closing Date
or the Option Closing Date, as the case may be, with any transfer taxes
payable in connection with the transfer of the Common Shares to the
Underwriters duly paid.
V.
The several obligations of the Underwriters hereunder are subject to the
following conditions:
(a) There shall not have occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations, of the Company and its subsidiaries, taken
as a whole, from that set forth in the Prospectus, that, in your judgment, is
material and adverse and that makes it, in your judgment, impracticable to
market the Common Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, to
the effect set forth in clause (a) above and to the effect that the
representations and warranties of the Company contained in this Agreement
shall be true and correct as of the Closing Date and the Company shall have
performed all of its obligations to be performed hereunder on or prior to the
Closing Date.
The officer signing and delivering such certificate may rely upon his
knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date an opinion of Morrison &
Foerster LLP, dated the Closing Date, to the effect that
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its subsidiaries
taken as a whole;
(ii) the authorized capital stock of the Company and the Common Shares
materially conform as to legal matters to the descriptions thereof contained
in the Prospectus;
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(iii) the Common Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, the Common Shares
will be validly issued, fully paid and non-assessable, and the issuance of
such Common Shares is not subject to any preemptive or similar rights;
(iv) this Agreement has been duly authorized, executed and delivered by the
Company;
(v) the execution and delivery by the Company of, and the performance by the
Company of its obligations under, this Agreement will not contravene any
provision of applicable law or the articles of incorporation or by-laws of
the Company or to such counsel's knowledge, any judgment or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval or authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except
such as have been obtained under the Act and such as may be required by the
securities or blue sky laws of the various states in connection with the
offer and sale of the Common Shares by the Underwriters;
(vi) such counsel has no reason to believe that the statements (x) in the
Basic Prospectus under "Description of Common Stock" and "Plan of
Distribution" and (y) in the prospectus supplement specifically relating to
the Common Shares under "Description of Capital Stock" and "Underwriters",
and (z) in the Registration Statement in Item 15, insofar as such statements
constitute a summary of the legal matters, documents or proceedings referred
to therein, fairly present the information called for with respect to such
legal matters, documents and proceedings and fairly summarize the matters
referred to therein;
(vii) such counsel does not know of any legal or governmental proceeding
pending or threatened to which the Company is a party or to which any of the
properties of the Company is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required; and
(viii) such counsel (x) is of the opinion that each document, if any, filed
pursuant to the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus (except for financial statements
and schedules as to which such counsel need not express any opinion) complied
when so filed as to form in all material respects with the Exchange Act and
the rules and regulations of the Commission thereunder, (y) is of the opinion
that the Registration Statement and the Prospectus and any supplements or
amendments thereto (except for financial statements and schedules as to which
such counsel need not express any opinion) comply as to form in all material
respects with the Act and the rules and regulations of the Commission
thereunder and (z) believes that (except for financial statements and
schedules as to which such counsel need not express any belief) the
Registration Statement and the Prospectus, as amended or supplemented, if
applicable, included therein at the time the Registration Statement became
effective did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus, as amended or
supplemented, if applicable, does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(d) You shall have received on the Closing Date an opinion of
____________________________, counsel for the Underwriters, dated the Closing
Date, covering the matters referred to in subparagraphs (iv), (v) and (vi)
(but only as to the statements (x) in the Basic Prospectus under "Description
of Common Stock" and "Plan of Distribution", and (y) in the prospectus
supplement specifically relating to the Common Shares under "Description of
Capital Stock" and "Underwriters") and clauses (x) and (y) of (viii) of
paragraph (c) above.
With respect to subparagraph (viii) of paragraph (c) above, Morrison &
Foerster LLP may state that its opinion and belief are based on its
participation in the preparation of the Registration Statement and the
Prospectus and
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any amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
(e) You shall have received on the date of this Agreement a letter dated such
date and also on the Closing Date a letter dated the Closing Date, in each
case in form and substance satisfactory to you, from Arthur Andersen LLP,
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in or incorporated by reference into the Registration Statement and
the Prospectus.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to the Representatives on the Option
Closing Date of such documents as the Representatives may reasonably request
with respect to the good standing of the Company, the due authorization and
issuance of the Additional Shares and other matters related to the issuance
of the Additional Shares.
VI.
In further consideration of the agreements of the Underwriters herein
contained, the Company covenants as follows:
(a) To furnish you and each other Underwriter with copies of the Registration
Statement (including exhibits thereto) and, during the period mentioned in
paragraph (c) below, as many copies of the Prospectus, any documents
incorporated therein by reference and any supplements and amendments thereto
as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish you a copy of each such proposed amendment or
supplement, and to file no such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the first date of the public offering of the
Common Shares as in the opinion of your counsel the Prospectus is required by
law to be delivered in connection with sales by an Underwriter or a dealer,
any event shall occur as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if it is necessary to amend or supplement the Prospectus
to comply with law, forthwith to prepare and furnish, at its own expense
(unless the amendment or supplement is required as the result of the act or
omission of any Underwriter, in which case such Underwriter(s) shall
reimburse the Company for its reasonable expenses incurred to effect the
amendment or supplement), to the Underwriters and to the dealers (whose names
and addresses you will furnish to the Company) to which Common Shares may
have been sold by you on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
be misleading or so that the Prospectus will comply with law.
(d) To cooperate with the Underwriters to qualify the Common Shares for offer
and sale under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request and to pay all reasonable expenses (including
reasonable fees and disbursements of counsel) in connection therewith as well
as all fees payable in connection with the review (if any) of the offering of
the Common Shares by the National Association of Securities Dealers, Inc.
(e) To make generally available to the Company's security holders as soon as
practicable an earnings statement covering the twelve-month period ending
____________, ____, that satisfies the provisions of Section 11(a) of the Act
and the rules and regulations of the Commission thereunder.
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(f) To endeavor to list the Common Shares on the Nasdaq National Market.
VII.
The Company agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to the Underwriters furnished to the Company in writing by any
Underwriter through you expressly for use therein.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company by such Underwriter through you
expressly for use in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any preliminary prospectus.
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (hereinafter
called the indemnified party) shall promptly notify the person against whom
such indemnity may be sought (hereinafter called the indemnifying party) in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) conclude both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying
party shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters and such
control persons of Underwriters, such firm shall be designated in writing by
___________________________. In the case of any such separate firm for the
Company, and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. The indemnifying
party shall not be lable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be
a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the third sentence of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of
the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party,
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effect any settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first or second paragraph of this
Article VII is unavailable to an indemnified party in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Underwriters from the offering of the Common
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and of the Underwriters in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Underwriters shall be
deemed to be in the same respective proportions as the net proceeds from the
offering (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate public offering price of the Common Shares. The relative fault of
the Company and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Article VII were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Article VII, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Common Shares underwritten by it
and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Article VII are
several, in proportion to the respective number of Firm Shares to be
purchased by each of such Underwriters as set forth opposite each
Underwriter's name in Schedule I hereto plus any additional Firm Shares which
such Underwriter may become obligated to purchase under this Agreement or the
Agreement Among Underwriters, and not joint.
The indemnity and contribution agreements contained in this Article VII and
the representations and warranties of the Company contained in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter or by or on behalf
of the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Common Shares. <PAGE>
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VIII.
This Agreement shall be subject to termination in your absolute discretion,
by notice given to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading
of any securities of the Company shall have been suspended on any exchange or
in any over-the-counter market, (iii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal or
New York State authorities, or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity
or crisis that, in your judgment, is material and adverse and (b) in the case
of any of the events specified in clauses (a)(i) through (iv), such event
singly or together with any other such event makes it, in your judgment,
impracticable to market the Common Shares on the terms and in the manner
contemplated in the Prospectus.
IX.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and
the aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Common Shares to be purchased on
such date, the other Underwriters shall be obligated severally in the
proportions that the number of Firm Shares set forth opposite their
respective names in Schedule I bears to the aggregate number of Firm Shares
set forth opposite the names of all such non-defaulting Underwriters, or in
such other proportions as you may specify, to purchase the Common Shares
which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number
of Common Shares that any Underwriter has agreed to purchase pursuant to
Article II be increased pursuant to this Article IX by an amount in excess of
one-ninth of such number of Common Shares without the written consent of such
Underwriter. If, on the Closing Date, or the Option Closing Date, as the case
may be, any Underwriter or Underwriters shall fail or refuse to purchase
Common Shares and the aggregate number of Common Shares with respect to which
such default occurs is more than one-tenth of the aggregate number of Common
Shares to be purchased on such date, and arrangements satisfactory to you and
the Company for the purchase of such Common Shares are not made within 36
hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter or the Company. In any such case
either you or the Company shall have the right to postpone the Closing Date
or the Option Closing Date, as the case may be, but in no event for longer
than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters, or such Underwriters
as have so terminated this Agreement with respect to themselves, severally,
for all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
This Agreement may be signed in two or more counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.
9
<PAGE>
This Agreement shall be governed by and construed in accordance with the laws
of the State of California, without regard to conflict of laws principles.
Very truly yours,
DIGITAL MICROWAVE CORPORATION
By: _______________________________
Name: _____________________________
Its: _______________________________
ACCEPTED AND AGREED TO BY:
[Lead Underwriter]
By: _________________________
Name: _______________________
Its: _________________________
Each acting severally on behalf of itself and the several Underwriters named
herein.
10
<PAGE>
SCHEDULE I
NUMBER OF
UNDERWRITER COMMON SHARES TOTAL
11
<PAGE>
Exhibit 4.2
DIGITAL MICROWAVE CORPORATION
TO
----------------------------------,
TRUSTEE
INDENTURE
DATED AS OF _________ ,______
SENIOR DEBT SECURITIES
<PAGE>
DIGITAL MICROWAVE CORPORATION
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
INDENTURE, DATED AS OF ___________, _______
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION INDENTURE SECTION
- --------------------------- -----------------
<S> <C>
(Section)310(a)(1) 609
(a)(2) 609
(a)(3) Not Applicable
(a)(4) Not Applicable
(a)(5) 609
(b) 608, 610
(c) Not Applicable
(Section)311(a) 613
(b) 613
(Section)312(a) 701, 702(a)
(b) 702(b)
(c) 702(c)
(Section)313(a) 703(a)
(b) 703(a)
(c) 703(a)
(d) 703(b)
(Section)314(a) 704, 1011
(b) Not Applicable
(c)(1) 102
(c)(2) 102
(c)(3) Not Applicable
(d) Not Applicable
(e) 102
(Section)315(a) 601
(b) 602
(c) 601
(d) 601
(e) 514
(Section)316(a) 101
(a)(1)(A) 104(h), 502, 512
(a)(1)(B) 104(h), 513
(a)(2) Not Applicable
(b) 508
(c) 104(h)
(Section)317(a)(1) 503
(a)(2) 504
(b) 1003
(Section)318(a) 107
(c) 107
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE ONE..............................................................................1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..................................1
SECTION 101. Definitions...............................................................1
SECTION 102. Compliance Certificates and Opinions......................................8
SECTION 103. Form of Documents Delivered to Trustee....................................9
SECTION 104. Acts of Holders...........................................................9
SECTION 105. Notices, etc., to Trustee and Company....................................12
SECTION 106. Notice to Holders; Waiver................................................12
SECTION 107. Conflict with Trust Indenture Act........................................13
SECTION 108. Effect of Headings and Table of Contents.................................13
SECTION 109. Successors and Assigns...................................................13
SECTION 110. Separability Clause......................................................13
SECTION 111. Benefits of Indenture....................................................13
SECTION 112. Governing Law............................................................13
SECTION 113. Legal Holidays...........................................................14
SECTION 114. Exemption from Individual Liability......................................14
SECTION 115. Counterparts.............................................................14
ARTICLE TWO.............................................................................14
DEBT SECURITY FORMS.....................................................................14
SECTION 201. Forms Generally..........................................................14
SECTION 202. Form of Trustee's Certificate of Authentication..........................15
SECTION 203. Debt Securities in Global Form...........................................15
ARTICLE THREE...........................................................................16
THE DEBT SECURITIES.....................................................................16
SECTION 301. Amount Unlimited; Issuance in Series.....................................16
SECTION 302. Denominations............................................................18
SECTION 303. Execution, Authentication, Delivery and Dating...........................18
SECTION 304. Temporary Debt Securities................................................20
SECTION 305. Registration; Registration of Transfer and Exchange......................22
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debt Securities....................25
SECTION 307. Payment of Interest; Interest Rights Preserved...........................26
SECTION 308. Persons Deemed Owners....................................................27
SECTION 309. Cancellation.............................................................28
SECTION 310. Computation of Interest..................................................28
SECTION 311. Certification by a Person Entitled to Delivery of a Bearer Security......28
SECTION 312. Judgments................................................................28
ARTICLE FOUR............................................................................29
Satisfaction and Discharge..............................................................29
SECTION 401. Satisfaction and Discharge of Indenture..................................29
SECTION 402. Application of Trust Money and Government Obligations....................30
SECTION 403. Satisfaction, Discharge and Defeasance of Debt Securities of any Series..30
ARTICLE FIVE............................................................................32
REMEDIES................................................................................32
SECTION 501. Events of Default........................................................32
SECTION 502. Acceleration of Maturity; Rescission and Annulment.......................33
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee..........34
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SECTION 504. Trustee May File Proofs of Claim.........................................35
SECTION 505. Trustee May Enforce Claims without Possession of Debt Securities or
Coupons..................................................................35
SECTION 506. Application of Money Collected...........................................35
SECTION 507. Limitation on Suits......................................................36
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.................................................................36
SECTION 509. Restoration of Rights and Remedies.......................................37
SECTION 510. Rights and Remedies Cumulative...........................................37
SECTION 511. Delay or Omission Not Waiver.............................................37
SECTION 512. Control by Holders of Debt Securities....................................37
SECTION 513. Waiver of Past Defaults..................................................38
SECTION 514. Undertaking for Costs....................................................38
SECTION 515. Waiver of Stay or Extension Laws.........................................38
ARTICLE SIX.............................................................................38
THE TRUSTEE.............................................................................39
SECTION 601. Certain Duties and Responsibilities......................................39
SECTION 602. Notice of Default........................................................39
SECTION 603. Certain Rights of Trustee................................................39
SECTION 604. Not Responsible for Recitals or Issuance of Debt Securities..............40
SECTION 605. May Hold Debt Securities or Coupons......................................40
SECTION 606. Money Held in Trust......................................................40
SECTION 607. Compensation and Reimbursement...........................................41
SECTION 608. Disqualification; Conflicting Interests..................................41
SECTION 609. Corporate Trustee Required; Eligibility..................................41
SECTION 610. Resignation and Removal; Appointment of Successor........................42
SECTION 611. Acceptance of Appointment by Successor...................................43
SECTION 612. Merger, Conversion, Consolidation or Succession to Business..............44
SECTION 613. Preferential Collection of Claims Against Company........................44
SECTION 614. Authenticating Agent.....................................................45
ARTICLE SEVEN...........................................................................46
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.......................................46
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders................46
SECTION 702. Preservation of Information; Communications to Holders...................46
SECTION 703. Reports by Trustee.......................................................46
SECTION 704. Reports by Company.......................................................47
ARTICLE EIGHT...........................................................................47
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE....................................47
SECTION 801. Company May Consolidate, etc. Only on Certain Terms......................47
SECTION 802. Successor Corporation Substituted........................................48
SECTION 803. Conveyance or Transfer to a Wholly-Owned Restricted Subsidiary...........48
SECTION 804. Limitation on Lease of Properties as Entirety............................48
ARTICLE NINE............................................................................48
Supplemental Indentures.................................................................48
SECTION 901. Supplemental Indentures without Consent of Holders.......................48
SECTION 902. Supplemental Indentures with Consent of Holders..........................50
SECTION 903. Execution of Supplemental Indentures.....................................50
SECTION 904. Effect of Supplemental Indentures........................................51
SECTION 905. Conformity with Trust Indenture Act......................................51
SECTION 906. Reference in Debt Securities to Supplemental Indentures..................51
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE TEN.............................................................................52
Covenants...............................................................................52
SECTION 1001. Payment of Principal, Premium and Interest..............................52
SECTION 1002. Maintenance of Office or Agency.........................................52
SECTION 1004. Corporate Existence.....................................................54
SECTION 1005. Maintenance of Properties...............................................54
SECTION 1006. Payment of Additional Amounts...........................................54
SECTION 1007. Payment of Taxes and Other Claims.......................................55
SECTION 1008. Restriction on the Creation of Secured Funded Debt......................55
SECTION 1009. Restriction on Sale and Lease-Back Transactions.........................56
SECTION 1010. Restriction on Permitting Unrestricted Subsidiaries to become
Restricted Subsidiaries.................................................57
SECTION 1011. Officer's Certificate as to Default.....................................57
SECTION 1012. Waiver of Certain Covenants.............................................57
ARTICLE ELEVEN..........................................................................57
REDEMPTION OF DEBT SECURITIES...........................................................58
SECTION 1101. Applicability of Article................................................58
SECTION 1102. Election to Redeem; Notice to Trustee...................................58
SECTION 1103. Selection by Trustee of Debt Securities to be Redeemed..................58
SECTION 1104. Notice of Redemption....................................................58
SECTION 1105. Deposit of Redemption Price.............................................59
SECTION 1106. Debt Securities Payable on Redemption Date..............................59
SECTION 1107. Debt Securities Redeemed in Part........................................60
ARTICLE TWELVE..........................................................................60
SINKING FUNDS...........................................................................60
SECTION 1201. Applicability of Article................................................60
SECTION 1202. Satisfaction of Sinking Fund Payments with Debt Securities..............61
SECTION 1203. Redemption of Debt Securities for Sinking Fund..........................61
ARTICLE THIRTEEN........................................................................62
REPAYMENT AT THE OPTION OF HOLDERS......................................................62
SECTION 1301. Applicability of Article................................................62
SECTION 1302. Repayment of Debt Securities............................................62
SECTION 1303. Exercise of Option; Notice..............................................62
SECTION 1304. Election of Repayment by Remarketing Entities...........................63
SECTION 1305. Securities Payable on the Repayment Date................................63
ARTICLE FOURTEEN........................................................................64
MEETINGS OF HOLDERS OF DEBT SECURITIES..................................................64
SECTION 1401. Purposes for Which Meetings May Be Called...............................64
SECTION 1402. Call, Notice and Place of Meetings......................................64
SECTION 1403. Persons Entitled to Vote at Meetings....................................64
SECTION 1404. Quorum; Action..........................................................64
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of Meetings.....65
SECTION 1406. Counting Votes and Recording Action of Meetings.........................66
ARTICLE FIFTEEN.........................................................................66
DEFEASANCE..............................................................................66
SECTION 1501. Termination of Company's Obligations....................................66
SECTION 1502. Repayment to Company....................................................67
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SECTION 1503. Indemnity for Government Obligations....................................68
EXHIBIT A-1.............................................................................71
EXHIBIT A-2.............................................................................73
EXHIBIT B...............................................................................74
</TABLE>
<PAGE>
INDENTURE (the "Indenture") dated as of ___________, ____, between DIGITAL
MICROWAVE CORPORATION, a Delaware corporation (hereinafter called the
"Company"), having its principal place of business at 170 Rose Orchard Way, San
Jose, California 95134 and __________________________________ (hereinafter
called the "Trustee"), having its Corporate Trust Office at
________________________________________________________.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of its debentures, notes, bonds and
other evidences of indebtedness (herein called the "Debt Securities").
All things necessary have been done to make this Indenture a valid agreement of
the Company, in accordance with its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Debt Securities
of any series created and issued on or after the date hereof by the Holders
thereof, it is mutually covenanted and agreed, for the benefit of all Holders of
such Debt Securities or of any such series, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or
unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this
Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture Act or
by Commission rule or regulation under the Trust Indenture Act, either directly
or by reference therein, as in force at the date as of which this instrument was
executed, except as provided in Section 905, have the meanings assigned to them
therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with GAAP; and
(4) 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.
Certain terms, used principally in Article Six, are defined in that Article.
"Act" when used with respect to any Holder has the meaning specified in Section
104.
1
<PAGE>
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities by contract or otherwise, and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" means, at any date as of which the amount thereof is to be
determined, the sum of attributable debt relating to capital leases and
operating leases under which any Person is liable. The amount of attributable
debt relating to capital leases is the balance sheet liability amount (capital
lease obligations and current portion thereof) in respect of such capital leases
as determined under GAAP. The amount of attributable debt relating to operating
leases is the amount of future minimum lease payments under such operating
leases required to be disclosed by GAAP, less any executory costs, discounted
using the methodology used to calculate the present value of operating lease
payments in the Company's most recent Annual Report to Shareholders that
reflects such a calculation. "Executory costs" mean amounts required to be paid
on account of maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges. In the case of any operating lease which is
terminable by the lessee upon the payment of a penalty, such net amount shall
include the lesser of (a) the rental payments to be paid under such lease until
the first date (after the date of such determination) upon which it may be so
terminated plus the then applicable penalty upon such termination, or (b) the
rental payments required to be paid during the remaining term of such lease
(assuming such termination provision is not exercised).
"Authenticating Agent" means any Person authorized by the Trustee to act on
behalf of the Trustee to authenticate Debt Securities.
"Authorized Newspaper" means a newspaper in an official language of the country
of publication or in the English language customarily published 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. 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 city meeting the foregoing
requirements and in each case on any Business Day.
"Bearer Security" means any Debt Security established pursuant to Section 201
which is payable to bearer including, without limitation, unless the context
otherwise indicates, a Debt Security in global bearer form.
"Board of Directors" means either the board of directors of the Company, or the
executive or any other committee of that board duly authorized to act in respect
hereof.
"Board Resolution" means a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee. Where any provision of this Indenture refers to
action to be taken pursuant to a Board Resolution (including the establishment
of any series of the Debt Securities and the forms and terms thereof), such
action may be taken by any committee of the Board or the Company or any officer
or employee of the Company authorized to take such action by a Board Resolution.
"Business Day", when used with respect to any Place of Payment, means any day
which is not a Saturday or Sunday and which is not a legal holiday or a day on
which banking institutions or trust companies in that Place of Payment are
authorized or obligated by law or executive order to close.
"CEDEL" or "CEDEL S.A." means Cedel Bank S.A.
"Commission" means the Securities and Exchange Commission, as from time to time
constituted, created under
2
<PAGE>
the Securities Exchange Act of 1934, or if at any time after the execution of
this instrument such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties on such date.
"Company" means the Person named as the "Company" in the first paragraph of this
instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" and "Company Order" mean, respectively, except as otherwise
provided in this Indenture, a written request or order signed in the name of the
Company by the Chairman of the Board, a Vice Chairman of the Board, the
President or a Vice President (any references to a Vice President of the Company
herein shall be deemed to include any Vice President of the Company whether or
not designated by a number or word or words added before or after the title
"Vice President"), the Treasurer, an Assistant Treasurer, the Controller, an
Assistant Controller, the Secretary or an Assistant Secretary of the Company or
by another officer of the Company duly authorized to sign by a Board Resolution,
and delivered to the Trustee.
"Consolidated Net Tangible Assets" means (a) the total amount of assets (less
applicable reserves and other properly deductible items) which under GAAP would
be included on a consolidated balance sheet of the Company and its Restricted
Subsidiaries after deducting therefrom (i) all liabilities and liability items,
including amounts in respect of obligations or guarantees of obligations under
leases, which under GAAP would be included on such balance sheet, except Funded
Debt, capital stock and surplus, surplus reserves and provisions for deferred
income taxes, and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, which in each
case under GAAP would be included on such consolidated balance sheet, less (b)
the amount which would be so included on such consolidated balance sheet for
Investments (less applicable reserves) (i) made in Unrestricted Subsidiaries, or
(ii) made in corporations while they were Unrestricted Subsidiaries but which at
the time of computation are not Subsidiaries of the Company.
"Corporate Trust Office" means the principal office of the Trustee at which at
any particular time its corporate trust business shall be administered, which
office at the date of original execution of this Indenture is located at
__________________________________________________________, Attention:
________________________, except that, with respect to presentation of the Debt
Securities for payment or registration of transfers or exchanges and the
location of the Security Registrar, such term means the office or agency of the
Trustee at which at any particular time its corporate agency business shall be
conducted, which at the date of original execution of this Indenture is located
at ______________________.
The term "corporation" includes corporations, associations, companies and
business trusts.
The term "coupon" means any interest coupon appertaining to a Bearer Security.
"Debt Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Debt Securities authenticated and delivered
under this Indenture.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Debt Securities of any series issuable
or issued in the form of a Global Security, the Person designated as Depositary
by the Company pursuant to Section 301 until a successor Depositary shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Depositary" shall mean or include each person who is then a
Depositary hereunder, and if at any time there is more than one such Person,
"Depositary" as used with respect to the Debt Securities of any such series
shall
3
<PAGE>
mean the Depositary with respect to the Debt Securities of that series.
"Designated Currency" has the meaning specified in Section 312.
"Dollar" or "$" means the coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from time to time
by the Council of the European Communities.
"Euroclear" means Morgan Guarantee Trust Company of New York, Brussels Office,
as operator of the Euroclear System.
"European Communities" means the European Economic Community, the European Coal
and Steel Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 501.
"Exchange Rate" shall have the meaning specified as contemplated in Section 301.
"Exchange Rate Agent" shall have the meaning specified as contemplated in
Section 301.
"Exchange Rate Officer's Certificate", with respect to any date for the payment
of principal of (and premium, if any) and interest on any series of Debt
Securities, means a certificate setting forth the applicable Exchange Rate and
the amounts payable in Dollars and Foreign Currencies in respect of the
principal of (and premium, if any) and interest on Debt Securities denominated
in ECU, any other composite currency or Foreign Currency, and signed by the
Chairman of the Board, a Vice Chairman of the Board, the President, a Vice
President, the Treasurer, an Assistant Treasurer or the Controller of the
Company or the Exchange Rate Agent appointed pursuant to Section 301, and
delivered to the Trustee.
"Foreign Currency" means a currency issued by the government of any country
other than the United States of America.
"Funded Debt" means (i) all Indebtedness which by its terms matures more than 12
months after the time of the computation of the amount thereof or which is
extendible or renewable at the option of the obligor on such Indebtedness to a
time more than 12 months after the time of the computation of the amount
thereof, (ii) all guarantees, direct or indirect, of any such Indebtedness or of
dividends, other than any guarantee in connection with the sale or discount by
the Company or any Restricted Subsidiary of accounts receivable, trade
acceptances and other paper arising in the ordinary course of business, and
(iii) in the case of any Subsidiary, all Preferred Stock of such Subsidiary,
taken at the greater of its voluntary or involuntary liquidation price at the
time of any calculation hereunder, but exclusive of accrued dividends, if any;
provided, however, that in determining the amount of Funded Debt of the Company
or any Subsidiary there shall not be included any amount in respect of
obligations under leases, or guarantees of obligations under leases, whether or
not such obligations or guarantees are shown on a balance sheet as liability
items. The Company or any Restricted Subsidiary shall be deemed to have assumed
Funded Debt secured by any Mortgage upon any of its property or assets whether
or not it has actually done so.
"GAAP" means, as of the date of any determination with respect thereto,
generally accepted accounting principles as used by the Financial Accounting
Standards Board and/or the American Institute of Certified Public Accountants,
consistently applied and maintained throughout the periods indicated.
4
<PAGE>
"Global Exchange Agent" has the meaning specified in Section 304.
"Global Exchange Date" has the meaning specified in Section 304.
"Global Security" means a Debt Security issued to evidence all or part of a
series of Debt Securities in accordance with Section 303.
"Government Obligations" means, in respect of any series of Debt Securities,
securities of (i) the government which issued the currency in which Debt
Securities of such series are denominated and/or in which interest is payable on
the Debt Securities of such series or (ii) government agencies backed by the
full faith and credit of such government.
"Holder", with respect to a Registered Security, means a Person in whose name
such Registered Security is registered in the Security Register and, with
respect to a Bearer Security or a coupon, means the bearer thereof.
"Indebtedness" means (i) all items of indebtedness or liability (except capital
and surplus) which in accordance with GAAP would be included in determining
total liabilities as shown on the liability side of a balance sheet as at the
date as of which indebtedness is to be determined, (ii) indebtedness secured by
any Mortgage existing on property owned subject to such Mortgage, whether or not
the indebtedness secured thereby shall have been assumed, and (iii) guarantees,
endorsements (other than for purposes of collection) and other contingent
obligations in respect of, or to purchase or otherwise acquire, indebtedness of
others, unless the amount thereof is included in indebtedness under the
preceding clause (i) or (ii); provided, however, that any obligations or
guarantees of obligations in respect of lease rentals, whether or not such
obligations or guarantees of obligations would be included as liabilities on a
consolidated balance sheet of the Company and its Restricted Subsidiaries, shall
not be included in Indebtedness.
"Indenture" means this instrument as originally executed or as it may from time
to time be supplemented, amended or restated by or pursuant to one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and, unless the context otherwise requires, shall include the
terms of a particular series of Debt Securities established as contemplated by
Section 301.
"Interest", when used with respect to an Original Issue Discount Security which
by its terms bears interest only after Maturity, means interest payable after
Maturity.
"Interest Payment Date", with respect to any Debt Security, means the Stated
Maturity of an installment of interest on such Debt Security.
"Investments" mean and include all investments, whether by acquisition of stock
or Indebtedness, or by loan, advance, transfer of property, capital contribution
or otherwise, made by the Company or by any Restricted Subsidiary, and shall
include all guarantees, direct or indirect, by the Company or any Restricted
Subsidiary of any Indebtedness of an Unrestricted Subsidiary which by its term
matures 12 months or less from the time of computation of the amount thereof to
the extent not included as a liability or liability item on the consolidated
balance sheet of the Company and its Restricted Subsidiaries, but shall not
include accounts receivable of the Company or of any Restricted Subsidiary
arising from the sale of merchandise in the ordinary course of business.
"Maturity", when used with respect to any Debt Security, means the date on which
the principal of such Debt Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, repayment at the option of the Holder or otherwise.
"Mortgage" means and includes any mortgage, pledge, lien, security interest,
conditional sale or other title
5
<PAGE>
retention agreement or other similar encumbrance.
"Officers' Certificate" means a certificate signed by the Chairman of the Board,
a Vice Chairman of the Board, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Operating Property" means any parcel of real property owned by the Company or
any Subsidiary and primarily used in the operation of its business, including
without limitation, parking facilities, and any equipment located at or
comprising a part of any such property, which has a net book value on the date
as of which the determination is being made in excess of ___% of Consolidated
Net Tangible Assets and which has been owned and operated by the Company or any
Subsidiary for more than 90 days; provided, however, that any such property or
equipment (not theretofore owned by the Company or a Subsidiary) owned and
operated by a corporation which becomes a Subsidiary after the execution and
delivery of this Indenture as originally executed shall not constitute Operating
Property unless owned and operated by such corporation for more than 90 days
after it becomes a Subsidiary.
"Opinion of Counsel" means a written opinion of counsel, who may (except as
otherwise expressly provided in this Indenture) be an employee of or counsel for
the Company, or who may be other counsel acceptable to the Trustee, which is
delivered to the Trustee.
"Original Issue Discount Security" means any Debt Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Debt Securities means, as of the date
of determination, all Debt Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Debt Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Debt Securities or portions thereof for whose payment or redemption money
or Government Obligations in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Debt Securities and any coupons
appertaining thereto; provided, however, that if such Debt Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made; and
(iii) Debt Securities in exchange for or in lieu of which other Debt Securities
have been authenticated and delivered, or which have been paid, pursuant to this
Indenture;
provided, however, that in determining whether the Holders of the requisite
principal amount of Debt Securities Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Debt Securities
owned by the Company or any other obligor upon the Debt Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon such request, demand, authorization,
direction, notice, consent or waiver, only Debt Securities which the Trustee
knows to be so owned shall be so disregarded. Debt Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Debt Securities and that the pledgee is not the Company or
any other obligor upon the Debt Securities or any Affiliate of the Company or of
such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the principal
of (and premium, if any) or
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interest on any Debt Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Debt Securities of any series
means any place where the principal of (and premium, if any) and interest on the
Debt Securities of that series are payable as specified as contemplated by
Section 301.
"Predecessor Security" of any particular Debt Security means every previous Debt
Security evidencing all or a portion of the same debt as that evidenced by such
particular Debt Security; and, for the purposes of this definition, any Debt
Security authenticated and delivered under Section 306 in lieu of a lost,
destroyed or stolen Debt Security shall be deemed to evidence the same debt as
the lost, destroyed or stolen Debt Security.
"Preferred Stock", as applied to the capital stock of any corporation, means
stock of any class or classes (however designated) which is preferred as to the
payment of dividends, or as to the distribution of assets on any voluntary or
involuntary liquidation or dissolution of such corporation, over shares of stock
of any other class of such corporation.
"Redemption Date", when used with respect to any Debt Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Debt Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" means any Debt Security in the form of Registered
Securities established pursuant to Section 201 which is registered in the
Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date on
the Registered Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Remarketing Entity", when used with respect to Debt Securities of any series
which are repayable at the option of the Holders thereof before their Stated
Maturity, means any person designated by the Company to purchase any such Debt
Securities.
"Repayment Date", when used with respect to any Debt Security to be repaid upon
exercise of an option for repayment by the Holder, means the date fixed for such
repayment pursuant to this Indenture.
"Repayment Price", when used with respect to any Debt Security to be repaid upon
exercise of an option for repayment by the Holder, means the price at which it
is to be repaid pursuant to this Indenture.
"Responsible Officer" when used with respect to the Trustee, means any officer
of the Trustee assigned by it to administer its corporate trust matters.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Secured Funded Debt" means any Funded Debt which is secured by a Mortgage upon
any assets of the Company or a Restricted Subsidiary, including in such assets,
without limitation, shares of stock or Indebtedness of any Subsidiary owned by
the Company or a Restricted Subsidiary.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
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"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Debt Security or any
installment of interest thereon, means the date specified in such Debt Security
or a coupon representing such installment of interest as the fixed date on which
the principal of such Debt Security or such installment is due and payable.
"Subsidiary" means any corporation more than 50% of the outstanding shares of
Voting Stock, except for directors' qualifying shares, of which shall at the
time be owned, directly or indirectly, by the Company or by one or more of the
Subsidiaries, or by the Company and one or more other Subsidiaries.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the
date as of which this instrument was executed, except as provided in Section
905.
"Trustee" means the Person named as the "Trustee" in the first paragraph of this
instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Debt Securities
of any series shall mean the Trustee with respect to Debt Securities of that
series.
"United States" means the United States of America (including the District of
Columbia) and its possessions.
"United States Alien" means any Person who, for United States Federal income tax
purposes, is a foreign corporation, a non-resident alien individual, a
non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.
"Unrestricted Subsidiary" means (a) (i) any Subsidiary listed in Schedule A
hereto, (ii) any Subsidiary created or acquired after the date hereof the
primary business of which consists of financing operations in connection with
leasing and conditional sales transactions on behalf of the Company and its
Subsidiaries, and/or purchasing accounts receivable, and/or making loans secured
by accounts receivable or inventory, or which is otherwise primarily engaged in
the business of a finance company, and (iii) any other Subsidiary which, in
accordance with the provisions of this Indenture, has been designated by Board
Resolution as an Unrestricted Subsidiary, in each case unless and until any of
the Subsidiaries referred to in the foregoing clauses (i), (ii) and (iii) shall,
in accordance with the provisions of this Indenture, be designated by Board
Resolution as a Restricted Subsidiary; and (b) any Subsidiary a majority of the
Voting Stock of which shall at the time be owned directly or indirectly by one
or more Unrestricted Subsidiaries.
"Voting Stock", as applied to the stock (or the equivalent thereof) of any
corporation, means stock (or the equivalent thereof) of any class or classes,
however designated, entitled in the ordinary course to vote in an election of
directors of such corporation, other than stock (or such equivalent) having such
power only by reason of the happening of a contingency.
"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary all the
outstanding capital stock of which, other than directors' qualifying shares, is
owned by the Company and its other Wholly-Owned Restricted Subsidiaries.
SECTION 102. Compliance Certificates and Opinions.
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Upon any application or request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall furnish to the Trustee,
if so requested by 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, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or opinion has
read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar as
it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based is erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinions or representations with respect to such
matters is erroneous.
Where any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.
SECTION 104. Acts of Holders.
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(a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing.
If Debt Securities of a series are issuable in whole or in part as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may, alternatively, be embodied in and evidenced by the record of
Holders of Debt Securities voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Debt Securities
duly called and held in accordance with the provisions of Article Fourteen, or a
combination of such instruments and any such record. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee, and, where it is
hereby expressly required, to the Company. Such instrument or instruments and
any such record (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such instrument
or instruments and so voting at any such meeting. Proof of execution of any such
instrument or of a writing appointing any such agent, or the holding by any
Person of a Debt Security, shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section. The record of any meeting of
Holders of Debt Securities shall be proved in the manner provided in Section
1406.
(b) The fact and date of the execution by any Person of any such instrument or
writing may be proved in any manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the Security
Register.
(d) The principal amount and serial numbers of Bearer Securities held by any
Person, and the date of holding the same, may be proved by the production of
such Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities in the amount and with the serial numbers
therein described; or such facts may be proved by the certificate or affidavit
of the Person holding such Bearer Securities, if such certificate or affidavit
is deemed by the Trustee to be satisfactory. The Trustee and the Company may
assume that such ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date issued in respect of the same
Bearer Security is produced, or (2) such Bearer Security is produced to the
Trustee by some other person, or (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no longer
Outstanding.
(e) The fact and date of execution of any such instrument or writing, the
authority of the Person executing the same and the principal amount and serial
numbers of Bearer Securities held by the Person so executing such instrument or
writing and the date of holding the same may also be proved in any other manner
which the Trustee deems sufficient; and the Trustee may in any instance require
further proof with respect to any of the matters referred to in this Section.
(f) Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Debt Security shall bind every future holder of
the same Debt Security and the Holder of every Debt Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, suffered or omitted by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Debt
Security.
(g) For purposes of determining the principal amount of Outstanding Debt
Securities of any series the Holders of which are required, requested or
permitted to give any request, demand, authorization, direction, notice,
consent, waiver or take any other Act under this Indenture, (i) each Original
Issue Discount Security shall be
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deemed to have the principal amount determined by the Trustee that could be
declared to be due and payable pursuant to the terms of such Original Issue
Discount Security as of the date there is delivered to the Trustee and, where it
is hereby expressly required, to the Company, such Act by Holders of the
required aggregate principal amount of the Outstanding Debt Securities of such
series and (ii) each Debt Security denominated in a Foreign Currency or
composite currency shall be deemed to have the principal amount determined by
the Exchange Rate Agent by converting the principal amount of such Debt Security
in the currency in which such Debt Security is denominated into Dollars at the
Exchange Rate as of the date such Act is delivered to the Trustee and, where it
is hereby expressly required, to the Company, by Holders of the required
aggregate principal amount of the Outstanding Debt Securities of such series.
(h) The Company may set any day as a record date for the purpose of determining
the Holders of Outstanding Debt Securities of any series entitled to give, make
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made or
taken by Holders of Debt Securities of such series, provided that the Company
may not set a record date for, and the provisions of this paragraph shall not
apply with respect to, the giving or making of any notice, declaration, request
or direction referred to in the next paragraph. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Debt Securities of the
relevant series on such record date, and no other Holders, shall be entitled to
take the relevant action, whether or not such Holders remain Holders after such
record date; provided that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date (as defined below) by
Holders of the requisite principal amount of Outstanding Debt Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Debt Securities of the relevant series on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Trustee in writing and to each Holder of Debt Securities of the
relevant series in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of determining the
Holders of Outstanding Debt Securities of any series entitled to join in the
giving or making of (i) any notice of an Event of Default, (ii) any declaration
of acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2), or (iv) any direction referred to in
Section 512, in each case with respect to Debt Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding Debt
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding Debt
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Debt Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of Debt
Securities of the relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party hereto
which sets such record dates may designate any day as the "Expiration Date" and
from time to time may change the Expiration Date to any earlier or later day;
provided that no such change shall be effective unless notice of the proposed
new Expiration Date
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is given to the other party hereto in writing, and to each Holder of Debt
Securities of the relevant series in the manner set forth in Section 106, on or
prior to the existing Expiration Date. If an Expiration Date is not designated
with respect to any record date set pursuant to this Section, the party hereto
which set such record date shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this
paragraph.
SECTION 105. Notices, etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or other
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided), if in writing
and sent by certified mail or by courier to the Trustee at its Corporate Trust
Office, or
(2) the Company by the Trustee or by any Holder shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if in writing and
sent by certified mail or by courier to the Company addressed to the attention
of its Secretary at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Except as otherwise expressly provided herein, where this Indenture provides for
notice to Holders of any event, (1) such notice shall be sufficiently given to
Holders of Registered Securities if in writing and mailed, first-class postage
prepaid, to each Holder of a Registered Security affected by such event, at such
Holder's address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice; and (2) such notice shall be sufficiently given to Holders of
Bearer Securities by publication thereof in an Authorized Newspaper in The City
of New York and, if the Debt Securities of such series are then listed on The
International Stock Exchange of the United Kingdom and the Republic of Ireland
and such stock exchange shall so require, in London, and, if the Debt Securities
of such series are then listed on the Luxembourg Stock Exchange and such stock
exchange shall so require, in Luxembourg and, if the Debt Securities of such
series are then listed on any other stock exchange outside the United States and
such stock exchange shall so require, in any other required city outside the
United States or, if not practicable, in Europe on a Business Day at least
twice, the first such publication to be 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 or irregularities in regular mail
service or for any other reason, it shall be impossible or impracticable to mail
notice of any event to Holders of Registered Securities when said notice is
required to be given pursuant to any provision of this Indenture or of the Debt
Securities, then any manner of giving such notice as shall be satisfactory to
the Trustee shall be deemed to be a sufficient giving of such notice. In any
case where notice to Holders of Registered Securities is to be given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder of a Registered Security shall affect the sufficiency
of such notice with respect to other Holders of Registered Securities or the
sufficiency of any notice by publication to Holders of Bearer Securities given
as provided above.
In case, by reason of the suspension of publication of any Authorized Newspaper,
or by reason of any other cause, it shall be impossible or impracticable to make
publication of any notice to Holders of Bearer Securities as provided above,
then such method of publication or notification as shall be made with the
approval of the Trustee shall constitute a sufficient publication of such
notice. Neither failure to give notice by publication to Holders of Bearer
Securities as provided above, nor any defect in any notice so published, shall
affect the
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sufficiency of any notice mailed to Holders of Registered Securities as provided
above.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Any request, demand, authorization, direction, notice, consent, election, waiver
or other Act required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind its
successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Debt Securities or any coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Debt Securities or any coupons, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any Paying Agent and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Debt Securities and any coupons shall be governed by and
construed in accordance with the laws of the State of California, without regard
to conflict of laws principles.
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SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repayment Date or
Stated Maturity of any Debt Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Debt Securities or any coupons) payment of interest or principal (and premium,
if any) need not be made at such Place of Payment on such date, but may be made
on the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date, Redemption Date, Repayment
Date or at the Stated Maturity, and no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, Redemption
Date, Repayment Date or Stated Maturity, as the case may be.
SECTION 114. Exemption from Individual Liability.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Debt Security or any coupon, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations of the Company, and that no such personal liability
whatever shall attach to, or is or shall be incurred by, the incorporators,
stockholders, officers or directors, as such, of the Company or of any successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debt Securities or any coupon or
implied therefrom; and that any and all such personal liability, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director, as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debt Securities or any coupon or
implied therefrom, are hereby expressly waived and released as a condition of,
and as a consideration for, the execution of this Indenture and the issue of
such Debt Securities.
SECTION 115. Counterparts.
This Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture.
ARTICLE TWO
DEBT SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, and the Bearer Securities and related
coupons, if any, of each series shall be in substantially the form (including
temporary or permanent global form) as shall be established in or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon, as
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may be required to comply with the rules of any securities exchange, or as may,
consistently herewith, be determined by the officers executing such Debt
Securities or coupons, as evidenced by their signatures on the Debt Securities
or coupons. If the form of Debt Securities of any series or coupons (including
any such Global Security) is established by action taken pursuant to a Board
Resolution, 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
303 for the authentication and delivery of such Debt Securities or coupons.
Unless otherwise specified as contemplated by Section 301, Debt Securities in
bearer form other than Debt Securities in temporary or permanent global form
shall have coupons attached.
The definitive Debt Securities and coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Debt Securities,
as evidenced by the execution of such Debt Securities and coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
This is one of the Debt Securities, of the series designated herein, described
in the within-mentioned Indenture.
- -----------------------------------,
as Trustee
By
---------------------------------------
Authorized Officer
SECTION 203. Debt Securities in Global Form.
If Debt Securities of a series are issuable in whole or in part in global form,
as specified as contemplated by Section 301, then, notwithstanding clause (10)
of Section 301 and the provisions of Section 302, such Global Security shall
represent such of the outstanding Debt Securities of such series as shall be
specified therein and may provide that it shall represent the aggregate amount
of Outstanding Debt Securities from time to time endorsed thereon and that the
aggregate amount of Outstanding Debt Securities represented thereby may from
time to time be reduced to reflect exchanges. Any endorsement of a Global
Security to reflect the amount, or any increase or decrease in the amount, of
Outstanding Debt Securities represented thereby shall be made in such manner and
upon instructions given by such Person or Persons as shall be specified therein
or in the Company Order to be delivered to the Trustee pursuant to Section 303
or Section 304.
The provisions of the last sentence of Section 303(g) shall apply to any Debt
Securities represented by a Debt Security in global form if such Debt Security
was never issued and sold by the Company and the Company delivers to the Trustee
the Debt Security in global form together with written instructions (which need
not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) with respect to the reduction in the principal amount of Debt
Securities represented thereby, together with the written statement contemplated
by the last sentence of Section 303(g).
Global Securities may be issued in either registered or bearer form and in
permanent form or, in the case of Bearer Securities, either temporary or
permanent form.
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ARTICLE THREE
THE DEBT SECURITIES
SECTION 301. Amount Unlimited; Issuance in Series.
The aggregate principal amount of Debt Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Debt Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Debt Securities of any series:
(1) the title of the Debt Securities of the series (which shall distinguish the
Debt Securities of the series from all other Debt Securities);
(2) the limit, if any, upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered under this
Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to Section 304, 305, 306, 906, 1107 or 1303
and except for any Debt Securities which, pursuant to Section 303, are deemed
never to have been authenticated and delivered hereunder);
(3) the date or dates on which the principal and premium, if any, of the Debt
Securities of the series are payable;
(4) the rate or rates, if any, at which the Debt Securities of the series shall
bear interest, or the method or methods by which such rate or rates may be
determined, the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest shall be payable, the Regular
Record Date for the interest payable on any Registered Security on any Interest
Payment Date and the circumstances, if any, in which the Company may defer
interest payments;
(5) the place or places where, subject to the provisions of Section 1002, the
principal of (and premium, if any) and interest on Debt Securities of the series
shall be payable, any Registered Securities of the series may be surrendered for
registration of transfer, Debt Securities of the series may be surrendered for
exchange and notices and demands to or upon the Company in respect of the Debt
Securities of the series and this Indenture may be served and where notices to
Holders pursuant to Section 106 will be published;
(6) if applicable, the period or periods within which or the date or dates on
which, the price or prices at which and the terms and conditions upon which Debt
Securities of the series may be redeemed, in whole or in part, at the option of
the Company;
(7) the obligation, if any, of the Company to redeem, repay or purchase Debt
Securities of the series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which Debt Securities
of the series shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation;
(8) whether Debt Securities of the series are to be issuable as Registered
Securities, Bearer Securities or both, whether Debt Securities of the series are
to be issuable with or without coupons or both and, in the case of
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Bearer Securities, the date as of which such Bearer Securities shall be dated if
other than the date of original issuance of the first Debt Security of such
series of like tenor and term to be issued;
(9) whether the Debt Securities of the series shall be issued in whole or in
part in the form of a Global Security or Securities and, in such case, the
Depositary and Global Exchange Agent for such Global Security or Securities,
whether such global form shall be permanent or temporary and, if applicable, the
Global Exchange Date;
(10) if Debt Securities of the series are to be issuable initially in the form
of a temporary Global Security, the circumstances under which the temporary
Global Security can be exchanged for definitive Debt Securities and whether the
definitive Debt Securities will be Registered and/or Bearer Securities and will
be in global form and whether interest in respect of any portion of such Global
Security payable in respect of an Interest Payment Date prior to the Global
Exchange Date shall be paid to any clearing organization with respect to a
portion of such Global Security held for its account and, in such event, the
terms and conditions (including any certification requirements) upon which any
such interest payment received by a clearing organization will be credited to
the Persons entitled to interest payable on such Interest Payment Date if other
than as provided in this Article Three;
(11) whether, and under what conditions, additional amounts will be payable to
Holders of Debt Securities of the series pursuant to Section 1006;
(12) the denominations in which any Registered Securities of the series shall be
issuable, if other than denominations of $1,000 and any integral multiple
thereof, and the denominations in which any Bearer Securities of such series
shall be issuable, if other than the denomination of $5,000;
(13) if other than the principal amount thereof, the portion of the principal
amount of Debt Securities of the series which shall be payable upon declaration
of acceleration of the Maturity thereof pursuant to Section 502;
(14) the currency or currencies of denomination of the Debt Securities of any
series, which may be in Dollars, any Foreign Currency or any composite currency,
including but not limited to the ECU, and, if any such currency of denomination
is a composite currency other than the ECU, the agency or organization, if any,
responsible for overseeing such composite currency;
(15) the currency or currencies in which payment of the principal of (and
premium, if any) and interest on the Debt Securities will be made, any other
currency or currencies in which payment of the principal of (and premium, if
any) or the interest on Registered Securities, at the election of each of the
Holders thereof, may also be payable and the periods within which and the terms
and conditions upon which such election is to be made, and the Exchange Rate and
Exchange Rate Agent;
(16) if the amount of payments of principal of (and premium, if any) or interest
on the Debt Securities of the series may be determined with reference to an
index, the manner in which such amounts shall be determined;
(17) if payments of principal of (and premium, if any) or interest on the Debt
Securities of the series are to be made in a Foreign Currency other than the
currency in which such Debt Securities are denominated, the manner in which the
Exchange Rate with respect to such payments shall be determined;
(18) any Events of Default with respect to Debt Securities of such series, if
not set forth herein;
(19) any other covenant or warranty included for the benefit of the Debt
Securities of the series in addition to (and not inconsistent with) those set
forth herein for the benefit of Debt Securities of all series, or any other
covenant or warranty included for the benefit of Debt Securities of the series
in lieu of any covenant or warranty
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set forth herein for the benefit of Debt Securities of all series, or any
provision that any covenant or warranty set forth herein for the benefit of Debt
Securities of all series shall not be for the benefit of Debt Securities of such
series, or any combination of such covenants, warranties or provisions and the
applicability, if any, of the provisions of Section 1012 to such covenants and
warranties;
(20) the terms and conditions, if any, pursuant to which the Company's
obligations under this Indenture may be terminated through the deposit of money
or Government Obligations as provided in Articles Four and Fifteen;
(21) the Person or Persons who shall be Security Registrar for the Debt
Securities of such series if other than the Trustee, and the place or places
where the Security Register for such series shall be maintained and the Person
or Persons who will be the initial Paying Agent or Agents, if other than the
Trustee; and
(22) any other terms of the series (which terms shall not be inconsistent with
the provisions of this Indenture).
All Debt Securities of any one series and the coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except, in
the case of Registered Securities, as to denomination and except as may
otherwise be provided in or pursuant to such Board Resolution and set forth in
such Officers' Certificate or in any such indenture supplemental hereto.
Debt Securities of any particular series may be issued at various times, with
different dates on which the principal or any installment of principal is
payable, with different rates of interest, if any, or different methods by which
rates of interest may be determined, with different dates on which such interest
may be payable and with different Redemption or Repayment Dates and may be
denominated in different currencies or payable in different currencies.
If any of the terms of a series of Debt Securities are established by action
taken pursuant to a Board Resolution, 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
Officers' Certificate setting forth the terms of the series.
SECTION 302. Denominations.
Debt Securities of each series shall be issuable in such form and denominations
as shall be specified in the form of Debt Security for such series approved or
established pursuant to Section 201 or in the Officers' Certificate delivered
pursuant to Section 301. In the absence of any specification with respect to the
Debt Securities of any series, the Registered Securities of such series, if any,
shall be issuable in denominations of $1,000 and any integral multiple thereof
and the Bearer Securities of such series, if any, shall be issuable in the
denominations of $5,000.
SECTION 303. Execution, Authentication, Delivery and Dating.
(a) The Debt Securities shall be executed on behalf of the Company by its
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by its Treasurer or one of its Assistant Treasurers or its
Secretary or one of its Assistant Secretaries under its corporate seal
reproduced thereon. The signature of any of these officers on the Debt
Securities may be manual or facsimile. Coupons shall bear the facsimile
signature of an authorized officer of the Company. Debt Securities and coupons
bearing the manual or facsimile signatures of individuals who were at any time
the proper officers of the Company shall bind the Company, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication
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and delivery of such Debt Securities or coupons of any series or did not hold
such offices at the date of such Debt Securities or coupons.
(b) At any time and from time to time after the execution and delivery of this
Indenture, Debt Securities of any series may be executed by the Company and
delivered to the Trustee for authentication, and, except as otherwise provided
in this Article Three, shall thereupon be authenticated and delivered by the
Trustee upon Company Order, without any further action by the Company; provided,
however, that, in connection with its original issuance, a Bearer Security may
be delivered only outside the United States and, except in the case of a
temporary Global Security, only if the Company or its agent shall have received
the certification required pursuant to Sections 304(b)(iii) and (iv), unless
such certification shall have been provided earlier pursuant to section
304(b)(v) hereof, and only if the Company has no reason to know that such
certification is false.
To the extent authorized in or pursuant to a Board Resolution and set forth in
an Officers' Certificate, or established in one or more indentures supplemental
hereto, such written Company Order may be given by any one officer or employee
of the Company, may be electronically transmitted, and may provide instructions
as to registration of holders, principal amounts, rates of interest, maturity
dates and other matters contemplated by such Board Resolution and Officers'
Certificate or supplemental indenture to be so instructed in respect thereof.
Before authorizing and delivering the first Debt Securities of any series (and
upon request of the Trustee thereafter), the Company shall deliver to the
Trustee (i) the certificates called for under Sections 201 and 301 hereof and
(ii) an Opinion of Counsel described in the next sentence.
In authenticating such Debt Securities, and accepting the additional
responsibilities under this Indenture in relation to any such Debt Securities,
the Trustee shall be entitled to receive, prior to the initial authentication of
such Debt Securities, and (subject to Section 601) shall be fully protected in
relying upon:
(i) a Board Resolution relating thereto and, if applicable, an appropriate
record of any action taken pursuant to such resolution certified by the
Secretary or an Assistant Secretary of the Company;
(ii) an executed supplemental indenture, if any, relating thereto;
(iii) an Officers' Certificate setting forth the form and terms of the Debt
Securities of such series and coupons, if any, pursuant to Sections 201 and 301
and stating that all conditions precedent provided for in this Indenture
relating to the issuance of such Debt Securities have been complied with; and
(iv) an Opinion of Counsel stating:
(A) that the form of such Debt Securities and coupons, if any, has been
established in or pursuant to a Board Resolution or by a supplemental indenture
as permitted by Section 201 in conformity with the provisions of this Indenture;
(B) that the terms of such Debt Securities and coupons, if any, have been
established in or pursuant to a Board Resolution or by a supplemental indenture
as permitted by Section 301 in conformity with the provisions of this Indenture;
and
(C) that such Debt Securities and coupons, if any, when authenticated and
delivered by the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute valid and
binding obligations of the Company, enforceable in accordance with their terms,
subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally and the application of general principles of equity and except further
as enforcement thereof may be limited by (i) requirements that a claim with
respect to any Debt Securities denominated other than in Dollars (or a Foreign
Currency or currency unit judgment in respect of such claim)
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be converted into Dollars at a rate of exchange prevailing on a date determined
pursuant to applicable law or (ii) governmental authority to limit, delay or
prohibit the making of payments in Foreign Currencies or currency units or
payments outside the United States.
(c) If the Company shall establish pursuant to Section 301 that the Debt
Securities of a series are to be issued in whole or in part in the form of one
or more Global Securities, then the Company shall execute and the Trustee shall,
in accordance with this Section and the Company Order with respect to such
series, authenticate and deliver one or more Global Securities in permanent or
temporary form that (i) shall represent and shall be denominated in an aggregate
amount equal to the aggregate principal amount of the Outstanding Debt
Securities of such series to be represented by one or more Global Securities,
(ii) shall be registered in the name of the Depositary for such Global Security
or Securities or the nominee of such Depositary and (iii) shall be delivered by
the Trustee to such Depositary or pursuant to such Depositary's instructions.
(d) The Trustee shall have the right to decline to authenticate and deliver any
Debt Securities under this Section 303 if the issuance of such Debt Securities
will adversely affect the Trustee's own rights, duties or immunities under the
Debt Securities and this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.
(e) If all the Debt Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Opinion of Counsel at the time of
issuance of each Debt Security, but such Opinion of Counsel, with appropriate
modifications, may instead be delivered at or prior to the time of the first
issuance of Debt Securities of such series.
(f) Each Registered Security shall be dated the date of its authentication. Each
Bearer Security shall be dated as of the date specified as contemplated by
Section 301.
(g) No Debt Security or coupon attached thereto shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose, unless there
appears on such Debt Security a certificate of authentication substantially in
the form provided for herein executed by the Trustee, and such certificate upon
any Debt Security shall be conclusive evidence, and the only evidence, that such
Debt Security has been duly authenticated and delivered hereunder. Except as
permitted by Section 306, the Trustee shall not authenticate and deliver any
Bearer Security unless all appurtenant coupons for interest then matured have
been detached and cancelled. Notwithstanding the foregoing, if any Debt Security
or portion thereof shall have been duly authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Debt Security to the Trustee for cancellation as provided in Section 309
together with a written statement (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) stating that such Debt
Security or portion thereof has never been issued and sold by the Company, for
all purposes of this Indenture such Debt Security shall be deemed never to have
been authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
(h) Each Depositary designated pursuant to Section 301 for a Global Security in
registered form must, at the time of its designation and at all times while it
serves as Depositary, be a clearing agency registered under the Securities
Exchange Act of 1934 and any other applicable statute or regulation.
SECTION 304. Temporary Debt Securities.
(a) Pending the preparation of definitive Debt Securities of any series, the
Company may execute, and upon receipt of documents required by Sections 301 and
303, together with a Company Order, the Trustee shall authenticate and deliver,
temporary Debt Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any denomination, substantially of the
tenor and terms of the definitive Debt
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Securities in lieu of which they are issued in registered form or, if
authorized, in bearer form with one or more coupons or without coupons, and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Debt Securities may determine, as evidenced by their
signatures on such Debt Securities. In the case of Debt Securities of any series
issuable as Bearer Securities, such temporary Debt Securities may be in global
form, representing all or any part of the Outstanding Debt Securities of such
series.
(b) Unless otherwise provided pursuant to Section 301:
(i) Except in the case of temporary Debt Securities in global form, if temporary
Debt Securities of any series are issued, the Company will cause definitive Debt
Securities of such series to be prepared without unreasonable delay. After the
preparation of definitive Debt Securities of such series, the related temporary
Debt Securities shall be exchangeable for such definitive Debt Securities upon
surrender of the temporary Debt Securities of such series at the office or
agency of the Company in the Place of Payment for such series, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary Debt
Securities of any series (accompanied, if applicable, by all unmatured coupons
and all matured coupons in default appertaining thereto), the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Debt Securities of the same series of like
tenor and terms and of authorized denominations; provided, however, that no
Bearer Security shall be delivered in exchange for a Registered Security; and
provided, further, that a Bearer Security shall be delivered in exchange for a
Bearer Security only in compliance with the conditions set forth in Section 305.
(ii) If Debt Securities of any series are issued in temporary global form, any
such temporary Global Security shall, unless otherwise provided pursuant to
Section 301, be delivered to the Depositary for the benefit of Euroclear and
CEDEL S.A., for credit to the respective accounts of the beneficial owners of
such Debt Securities (or to such other accounts as they may direct).
(iii) Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary Global
Security (the "Global Exchange Date"), the Company shall deliver definitive Debt
Securities to the Trustee or the agent appointed by the Company pursuant to
Section 301 to effect the exchange of the temporary Global Security for
definitive Debt Securities (the "Global Exchange Agent"), in an aggregate
principal amount equal to the principal amount of such temporary Global
Security, executed by the Company. On or after the Global Exchange Date, such
temporary Global Security shall be surrendered by the Depositary to the Global
Exchange Agent, to be exchanged, in whole or from time to time in part, for
definitive Debt Securities without charge and the Trustee or the Global Exchange
Agent, if authorized by the Trustee pursuant to Section 614, shall authenticate
and deliver, in exchange for each portion of such temporary Global Security, an
equal aggregate principal amount of definitive Debt Securities of the same
series of authorized denominations and of like tenor and terms as the portion of
such temporary Global Security to be exchanged. Upon any exchange of a part of
such temporary Global Security for definitive Debt Securities, the portion of
the principal amount and any interest thereon so exchanged shall be endorsed by
the Global Exchange Agent on a schedule to such temporary Global Security,
whereupon the principal amount and interest payable with respect to such
temporary Global Security shall be reduced for all purposes by the amount so
exchanged and endorsed. The definitive Debt Securities to be delivered in
exchange for any such temporary Global Security shall be in bearer form,
registered form, global registered form or global bearer form, or any
combination thereof, as specified as contemplated by Section 301, and, if any
combination thereof is so specified, as requested by the beneficial owner
thereof; provided, however, that, in the case of the exchange of the temporary
Global Security for definitive Bearer Securities (including a definitive Global
Bearer Security), upon such presentation by the Depositary, such temporary
Global Security shall be accompanied by a certificate signed by Euroclear as to
the portion of such temporary Global Security held for its account then to be
exchanged and a certificate signed by CEDEL S.A. as to the portion of such
temporary Global Security held for its account then to be exchanged, each in the
form set forth in Exhibit B to this Indenture; and provided, further, that
definitive Bearer Securities (including a definitive Global Bearer Security)
shall be delivered in exchange
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for a portion of a temporary Global Security only in compliance with the
requirements of Section 303.
(iv) The interest of a beneficial owner of Debt Securities of a series in a
temporary Global Security shall be exchanged for definitive Debt Securities of
the same series and of like tenor and terms following the Global Exchange Date
when the account holder instructs Euroclear or CEDEL S.A., as the case may be,
to request such exchange on such account holder's behalf and, in the case of the
exchange of the temporary Global Security for definitive Bearer Securities
(including a definitive Global Bearer Security), the account holder delivers to
Euroclear or CEDEL S.A., as the case may be, a certificate in the form set forth
in Exhibit A-1 and, if applicable, A-2 to this Indenture, dated no earlier than
15 days prior to the Global Exchange Date, copies of which certificate shall be
available from the offices of Euroclear and CEDEL S.A., the Global Exchange
Agent, any authenticating agent appointed for such series of Debt Securities and
each Paying Agent. Unless otherwise specified in such temporary Global Security,
any such exchange shall be made free of charge to the beneficial owners of such
temporary Global Security, except that a Person receiving definitive Debt
Securities must bear the cost of insurance, postage, transportation and the like
in the event that such Person does not take delivery of such definitive Debt
Securities in person at the offices of Euroclear and CEDEL S.A. Definitive Debt
Securities in bearer form to be delivered in exchange for any portion of a
temporary Global Security shall be delivered only outside the United States.
(v) Until exchanged in full as hereinabove provided, the temporary Debt
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Debt Securities of the same series and of
like tenor and terms authenticated and delivered hereunder, except that interest
payable on a temporary Global Security on an Interest Payment Date shall be
payable to Euroclear and CEDEL S.A. on such Interest Payment Date only if there
has been delivered by Euroclear and CEDEL S.A. to the Global Exchange Agent a
certificate or certificates in the form set forth in Exhibit B to this Indenture
dated no earlier than the first Interest Payment Date, for credit without
further interest on or after such Interest Payment Date to the respective
accounts of the Persons who are the beneficial owners of such temporary Global
Security on such Interest Payment Date and who have each delivered to Euroclear
or CEDEL S.A., as the case may be, a certificate in the form set forth in
Exhibit A-1 and, if applicable, A-2 to this Indenture dated no earlier than the
first Interest Payment Date. Any interest so received by Euroclear and CEDEL
S.A. and not paid as herein provided prior to the Global Exchange Date shall be
returned to the Global Exchange Agent which, upon expiration of two years after
such Interest Payment Date, shall repay such interest to the Company in
accordance with Section 1003.
SECTION 305. Registration; Registration of Transfer and Exchange.
The Company shall cause to be kept at one of the offices or agencies to be
maintained by the Company in accordance with the provisions of this Section 305
and Section 1002, with respect to the Debt Securities of each series which are
Registered Securities, a register (herein sometimes referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Registered Securities and of
transfers of Registered Securities. Pursuant to Section 301, the Company shall
appoint, with respect to Debt Securities of each series which are Registered
Securities, a "Security Registrar" for the purpose of registering such Debt
Securities and transfers and exchanges of such Debt Securities as herein
provided.
Upon surrender for registration of transfer of any Registered Security of any
series at the office or agency of the Company maintained for such purpose, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Registered
Securities of the same series of any authorized denomination or denominations,
of like tenor and terms and aggregate principal amount.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered
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Securities of the same series of any authorized form and denomination, of like
tenor and terms and aggregate principal amount, upon surrender of the Registered
Securities to be exchanged at such office or agency. Bearer Securities may not
be delivered in exchange for Registered Securities.
At the option of the Holder, Registered Securities or Bearer Securities of any
series may be issued in exchange for Bearer Securities (except as otherwise
specified as contemplated by Section 301 with respect to a Bearer Security in
global form) of the same series, of any authorized denominations and of like
tenor and terms and aggregate principal amount, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, such exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the Company
and the Trustee in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such payment; provided,
however, that, except as otherwise provided in Section 1002, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in exchange for a Registered Security
of the same series and like tenor and terms after the close of business at such
office or agency on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the coupon relating to such Interest
Payment Date or proposed date of payment, as the case may be.
Whenever any Debt Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Debt Securities
which the Holder making the exchange is entitled to receive.
If at any time the Depositary for the Debt Securities of a series notifies the
Company that it is unwilling or unable to continue as Depositary for the Debt
Securities of such series or if at any time the Depositary for the Debt
Securities of such series shall no longer be eligible under Section 303(h), the
Company shall appoint a successor Depositary with respect to the Debt Securities
of such series. If a successor Depositary for the Debt Securities of such series
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such ineligibility, the Company's election pursuant
to Section 301(9) shall no longer be effective with respect to the Debt
Securities of such series and the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Debt Securities of such series, will authenticate and deliver, Debt Securities
of such series in definitive form in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series
in exchange for such Global Security or Securities.
The Company may at any time and in its sole discretion determine that the Debt
Securities of any series issued in the form of one or more Global Securities
shall no longer be represented by such Global Security or Securities. In such
event the Company will execute, and the Trustee, upon receipt of a Company Order
for the authentication and delivery of definitive Debt Securities of such
series, will authenticate and deliver, Debt Securities of such series in
definitive form and in an aggregate principal amount equal to the principal
amount of the Global Security or Securities representing such series in exchange
for such Global Security or Securities.
If specified by the Company pursuant to Section 301 with respect to a series of
Debt Securities, the Depositary for such series of Debt Securities may surrender
a Global Security for such series of Debt Securities in exchange in whole or in
part for Debt Securities of such series of like tenor and terms and in
definitive form on
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such terms as are acceptable to the Company and such Depositary. Thereupon, the
Company shall execute, and the Trustee shall authenticate and deliver, without
charge to any Holder,
(a) to each Person specified by such Depositary a new Debt Security or
Securities of the same series, of like tenor and terms and of any authorized
denominations as requested by such person in aggregate principal amount equal to
and in exchange for such Person's beneficial interest in the Global Security;
and
(b) to such Depositary a new Global Security of like tenor and terms and in a
denomination equal to the difference, if any, between the principal amount of
the surrendered Global Security and the aggregate principal amount of Debt
Securities delivered to Holders thereof.
In any exchange provided for in any of the preceding three paragraphs, the
Company will execute and the Trustee will authenticate and deliver Debt
Securities (a) in definitive registered form in authorized denominations, if the
Debt Securities of such series are issuable as Registered Securities, (b) in
definitive bearer form in authorized denominations, with coupons attached, if
the Debt Securities of such series are issuable as Bearer Securities or (c) as
either Registered or Bearer Securities, as shall be specified by the beneficial
owner thereof, if the Debt Securities of such series are issuable in either
form; provided, however, that no definitive Bearer Security shall be delivered
in exchange for a temporary Global Security unless the Company or its agent
shall have received from the person entitled to receive the definitive Bearer
Security a certificate substantially in the form set forth in Exhibit A-1 and,
if applicable, A-2 hereto; and provided further that delivery of a Bearer
Security shall occur only outside the United States; and provided further that
no definitive Bearer Security will be issued if the Company has reason to know
that any such certificate is false.
Upon the exchange of a Global Security for Debt Securities in definitive form,
such Global Security shall be cancelled by the Trustee. Registered Securities
issued in exchange for a Global Security pursuant to this Section shall be
registered in such names and in such authorized denominations as the Depositary
for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
such Registered Securities to the persons in whose names such Debt Securities
are so registered. The Trustee shall deliver Bearer Securities issued in
exchange for a Global Security pursuant to this Section to the persons, and in
such authorized denominations, as the Depositary for such Global Security,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee; provided, however, that no definitive Bearer
Security shall be delivered in exchange for a temporary Global Security unless
the Company or its agent shall have received from the person entitled to receive
the definitive Bearer Security a certificate substantially in the form set forth
in Exhibit A-1 and, if applicable, A-2 hereto; and provided further that
delivery of a Bearer Security shall occur only outside the United States; and
provided further that no definitive Bearer Security will be issued if the
Company has reason to know that any such certificate is false. All Debt
Securities issued upon any registration of transfer or exchange of Debt
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debt
Securities surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company, the Security Registrar or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Security Registrar and the
Trustee duly executed, by the Holder thereof or such Holder's attorney duly
authorized in writing.
No charge to any Holder shall be made for any registration of transfer or
exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer, registration of transfer or exchange of Debt
Securities, other than exchanges expressly provided in this Indenture to be made
at the Company's own expense or without expense or without charge to the
Holders.
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The Company shall not be required (i) to issue, register the transfer of or
exchange Debt Securities of any particular series to be redeemed for a period of
fifteen days preceding the first publication of the relevant notice of
redemption or, if Registered Securities are outstanding and there is no
publication, the mailing of the relevant notice of redemption of Debt Securities
of such series selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (ii) to register the transfer
of or exchange any Registered Security so selected for redemption in whole or in
part, except the unredeemed portion of such Registered Security being redeemed
in part, or (iii) to exchange any Bearer Security so selected for redemption
except that such a Bearer Security may be exchanged for a Registered Security of
like tenor and terms of that series, provided that such Registered Security
shall be simultaneously surrendered for redemption.
Notwithstanding anything herein to the contrary, the exchange of Bearer
Securities into Registered Securities shall be subject to applicable laws and
regulations in effect at the time of exchange; neither the Company, the Trustee
nor the Security Registrar shall exchange any Bearer Securities into Registered
Securities if it has received an Opinion of Counsel that as a result of such
exchanges the Company would suffer adverse consequences under the United States
Federal income tax laws and regulations then in effect and the Company has
delivered to the Trustee a Company Order directing the Trustee not to make such
exchanges thereafter unless and until the Trustee receives a subsequent Company
Order to the contrary. The Company shall deliver copies of such Company Orders
to the Security Registrar.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debt Securities.
If (i) any mutilated Debt Security or a Bearer Security with a mutilated coupon
appertaining to it is surrendered to a Paying Agent outside the United States
designated by the Company, or, in the case of any Registered Security, to the
Trustee, or (ii) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Debt Security or coupon,
and there is delivered to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, then, in the absence
of notice to the Company and the Trustee that such Debt Security or coupon has
been acquired by a bona fide purchaser, the Company shall execute and upon its
written request the Trustee shall authenticate and deliver, in exchange for any
such mutilated Debt Security or Bearer Security with a mutilated coupon
appertaining to it or to which a destroyed, lost or stolen coupon appertains
(with all appurtenant coupons not destroyed, lost or stolen) or in lieu of any
such destroyed, lost or stolen Debt Security, a new Debt Security of like tenor
and terms and principal amount, bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
such destroyed, lost or stolen Debt Security or to the Debt Security to which
such destroyed, lost or stolen coupon appertains; provided, however, that any
such new Bearer Security will be delivered only in compliance with the
conditions set forth in Section 305.
In case any such mutilated, destroyed, lost or stolen Debt Security or coupon
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Debt Security, pay such Debt Security or coupon;
provided, however, that payment of principal of (and premium, if any) and any
interest on Bearer Securities shall, except as otherwise provided in Section
1002, be payable only at an office or agency located outside the United States;
and provided, further, that, with respect to any such coupons, interest
represented thereby (but not any additional amounts payable as provided in
Section 1006), shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
Upon the issuance of any new Debt Security or coupons under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and printing expenses)
connected therewith.
Every new Debt Security of any series, with its coupons, if any, issued pursuant
to this Section in lieu of any
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destroyed, lost or stolen Debt Security, or in exchange for a Bearer Security to
which a destroyed, lost or stolen coupon appertains, shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Debt Security and its coupons, if any, or the
destroyed, lost or stolen coupon shall be at any time enforceable by anyone, and
any such new Debt Security and coupons, if any, shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Debt Securities of that series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Debt Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Registered Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Registered Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest. In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture. At the
option of the Company, payment of interest on any Registered Security may be
made by check in the currency designated for such payment pursuant to the terms
of such Registered Security mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or by wire transfer to an
account in such currency designated by such Person in writing not later than ten
days prior to the date of such payment.
Any interest on any Registered Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of his having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Registered Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each Registered
Security of such series and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money and/or
Government Obligations the payments of principal and interest on which when due
(and without reinvestment) will provide money in such amounts as will (together
with any money irrevocably deposited in trust with the Trustee, without
investment) be equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money and/or
Government Obligations when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date. Unless the
Trustee is acting as the Security Registrar, promptly after such Special Record
Date, the Company shall furnish the Trustee with a list, or shall make
arrangements
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satisfactory to the Trustee with respect thereto, of the names and addresses of,
and principal amounts of Registered Securities of such series held by, the
Holders appearing on the Security Register at the close of business on such
Special Record Date. In the name and at the expense of the Company, the Trustee
shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid, to each
Holder of Registered Securities of such series at his address as it appears in
the Security Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following Clause (2). In case a Bearer Security of any series is surrendered at
the office or agency in a Place of Payment for such series in exchange for a
Registered Security of such series after the close of business at such office or
agency on any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
proposed date of payment and Defaulted Interest will not be payable on such
proposed date of payment in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the Registered
Securities of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Registered Securities may
be listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this Clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Debt Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debt Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Debt
Security.
Subject to the limitations set forth in Section 1002, the Holder of any coupon
appertaining to a Bearer Security shall be entitled to receive the interest
payable on such coupon upon presentation and surrender of such coupon on or
after the Interest Payment Date of such coupon at an office or agency maintained
for such purpose pursuant to Section 1002.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of transfer,
the Company, the Trustee and any agent of the Company or of the Trustee may
treat the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Section 307) interest on such
Registered Security and for all other purposes whatsoever, whether or not such
Registered Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the contrary.
The Company, the Trustee and any agent of the Company or the Trustee may treat
the bearer of any Bearer Security and the bearer of any coupon as the absolute
owner of such Bearer Security or coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such Bearer Security or coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security Registrar
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests
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of a Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
SECTION 309. Cancellation.
Unless otherwise provided with respect to a series of Debt Securities, all Debt
Securities and coupons surrendered for payment, redemption, repayment, transfer,
exchange or credit against any sinking fund payment pursuant to this Indenture
shall, if surrendered to the Company or any agent of the Company, be delivered
to the Trustee and shall be promptly cancelled by it. The Company may at any
time deliver to the Trustee for cancellation any Debt Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Debt Securities so delivered shall be promptly
cancelled by the Trustee. No Debt Securities shall be authenticated in lieu of
or in exchange for any Debt Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Debt Securities
and coupons held by the Trustee shall be destroyed and certification of their
destruction delivered to the Company unless by a Company Order the Company shall
direct that the cancelled Debt Securities or coupons be returned to it.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Debt Securities
of any series, interest on the Debt Securities of each series shall be computed
on the basis of a 360-day year of twelve 30-day months.
SECTION 311. Certification by a Person Entitled to Delivery of a Bearer
Security.
Whenever any provision of this Indenture or a Debt Security contemplates that
certification be given by a Person entitled to delivery of a Bearer Security,
such certification shall be provided substantially in the form of Exhibit A-1
and, if applicable, A-2 hereto, with only such changes as shall be approved by
the Company and consented to by the Trustee, whose consent shall not
unreasonably be withheld.
SECTION 312. Judgments.
The Company agrees that, to the fullest extent possible under applicable law and
except as may otherwise be specified as contemplated in Section 301, (a) the
obligation, if any, of the Company to pay the principal of (and premium, if any)
and interest on the Debt Securities of any series and any appurtenant coupons in
a Foreign Currency, composite currency or Dollars (the "Designated Currency") as
may be specified pursuant to Section 301 is of the essence, and judgments in
respect of such Debt Securities shall be given in the Designated Currency; (b)
the obligation of the Company to make payments in the Designated Currency of the
principal of (and premium, if any) and interest on such Debt Securities and any
appurtenant coupons shall, notwithstanding any payment in any other currency
(whether pursuant to a judgment or otherwise), be discharged only to the extent
of the amount in the Designated Currency that the Holder receiving such payment
may, in accordance with normal banking procedures, purchase with the sum paid in
such other currency (after any premium and cost of exchange) in the country of
issue of the Designated Currency in the case of Foreign Currency or Dollars or
in the international banking community in the case of a composite currency on
the Business Day immediately following the day on which such Holder receives
such payment; (c) if the amount in the Designated Currency that may be so
purchased for any reason falls short of the amount originally due, the Company
shall pay such additional amounts as may be necessary to compensate for such
shortfall; and (d) any obligation of the
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Company not discharged by such payment shall be due as a separate and
independent obligation and, until discharged as provided herein, shall continue
in full force and effect.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect (except
as to any surviving rights of registration of transfer or exchange of Debt
Securities herein expressly provided for and rights to receive payments of
principal and interest thereon and any right to receive additional amounts, as
provided in Section 1006) and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture when
(1) either
(A) all Debt Securities theretofore authenticated and delivered and all coupons
appertaining thereto (other than (i) coupons appertaining to Bearer Securities
surrendered in exchange for Registered Securities and maturing after such
exchange, surrender of which is not required or has been waived as provided in
Section 305, (ii) Debt Securities and coupons which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 306, (iii)
coupons appertaining to Bearer Securities called for redemption or surrendered
for repayment and maturing after the relevant Redemption Date or Repayment Date,
as appropriate, surrender of which has been waived as provided in Section 1106
or 1303 and (iv) Debt Securities and coupons for whose payment money and/or
Government Obligations have theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been delivered to
the Trustee cancelled or for cancellation; or
(B) all such Debt Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (B)(i), (B)(ii) or (B)(iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as trust funds
in trust for the purpose money and/or Government Obligations the payments of
principal and interest on which when due (and without reinvestment) will provide
money in such amounts as will (together with any money irrevocably deposited in
trust with the Trustee, without investment) be sufficient to pay and discharge
the entire indebtedness on such Debt Securities and coupons of such series for
principal (and premium, if any) and interest, and any mandatory sinking fund,
repayment or analogous payments thereon, on the scheduled due dates therefor to
the date of such deposit (in the case of Debt Securities and coupons which have
become due and payable) or to the Stated Maturity or Redemption Date, if any,
and all Repayment Dates (in the case of Debt Securities repayable at the option
of the Holders thereof); provided, however, that in the event a petition for
relief under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law is filed with respect to the Company within
91 days after the deposit, the
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obligations of the Company under the Indenture with respect to the Debt
Securities of such series shall not be deemed terminated or discharged, and in
such event the Trustee shall be required to return the deposited money and
Government Obligations then held by the Trustee to the Company;
(2) the Company has paid or caused to be paid all other sums payable hereunder
by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money or
Government Obligations shall have been deposited with the Trustee pursuant to
Subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money and Government Obligations.
(a) Subject to the provisions of the last paragraph of Section 1003, all money
and Government Obligations deposited with the Trustee pursuant to Section 401,
403 or 1501 shall be held in trust and such money and the principal and interest
received on such Government Obligations shall be applied by it, in accordance
with the provisions of the Debt Securities, any coupons and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and interest for whose
payment such money or Government Obligations have been deposited with the
Trustee.
(b) The Trustee shall deliver or pay to the Company from time to time upon
Company Request any Government Obligations or money held by it as provided in
Section 403 or 1501 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered 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
Government Obligations or money were deposited or received.
(c) The Trustee shall deliver to the Company from time to time upon Company
Request any Government Obligations held by it as provided in Section 403 or
1501, provided that the Company in substitution therefor simultaneously delivers
to the Trustee, money or other Government Obligations which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, would then be sufficient
to satisfy the Company's payment obligations in respect of the Debt Securities
in the manner contemplated by Section 403 or 1501.
SECTION 403. Satisfaction, Discharge and Defeasance of Debt Securities of any
Series.
If this Section 403 is specified, as contemplated by Section 301, to be
applicable to Debt Securities of any series, then, notwithstanding Section 401,
(i) the Company shall be deemed to have paid and discharged the entire
indebtedness on all the Outstanding Debt Securities of any such series and
related coupons; (ii) the provisions of this Indenture as it relates to such
Outstanding Debt Securities and related coupons shall no longer be in effect
(except as to (A) the rights of Holders of Debt Securities to receive, from the
trust fund described in subparagraph (1) below, payment of (x) the principal of
(and premium, if any) and any installment of principal of (and premium, if any)
or interest on such Debt Securities and related coupons on the Stated Maturity
of such principal (and premium, if any) or installment of principal (and
premium, if any) or interest or (y) any mandatory sinking fund, repayment or
analogous payments applicable to the Debt Securities of that
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series on that day on which such payments are due and payable in accordance with
the terms of this Indenture and of such Debt Securities, (B) the Company's
obligations with respect to such Debt Securities under Sections 304, 305, 306,
1002, 1003 and 1006, and (C) the rights, powers, trusts, duties and immunities
of the Trustee hereunder, including those under Section 607 hereof); and (iii)
the Trustee, at the expense of the Company, shall, upon Company Order, execute
proper instruments acknowledging satisfaction and discharge of such
indebtedness, when
(1) either
(A) with respect to all Outstanding Debt Securities of such series and related
coupons, with reference to this Section 403, the Company has deposited or caused
to be deposited with the Trustee irrevocably, as trust funds in trust, money
and/or Government Obligations the payments of principal and interest on which
when due (and without reinvestment) will provide money in such amounts as will
(together with any money irrevocably deposited in trust with the Trustee,
without investment) be sufficient to pay and discharge (i) the principal of (and
premium, if any) and interest on the Outstanding Debt Securities of that series
on the Stated Maturity of such principal or interest or, if such series may be
redeemed by the Company prior to the Stated Maturity thereof and the Company
shall have given irrevocable instructions to the Trustee to effect such
redemption, at the date fixed for such redemption pursuant to Article Eleven,
and (ii) any mandatory sinking fund payments or analogous payments applicable to
Debt Securities of such series on the date on which such payments are due and
payable in accordance with the terms of this Indenture and of such Debt
Securities; or
(B) the Company has properly fulfilled such other means of satisfaction and
discharge as is specified, as contemplated by Section 301, to be applicable to
the Debt Securities of such series;
(2) the Company has paid or caused to be paid all sums payable with respect to
the Outstanding Debt Securities of such series and related coupons;
(3) such deposit will not result in a breach of, or constitute a default under,
this Indenture or any other agreement or instrument to which the Company is a
party or by which it is bound;
(4) no Event of Default or event which, with the giving of notice or lapse of
time, or both, would become an Event of Default pursuant to Section 501(1), (2),
(3), (6) or (7) with respect to the Debt Securities of such series shall have
occurred and be continuing on the date of such deposit and no Event of Default
under Section 501(6) or Section 501(7) or event which, with the giving of notice
or lapse of time, or both, would become an Event of Default under Section 501(6)
or Section 501(7) shall have occurred and be continuing on the 91st day after
such date; provided, however, that should that condition fail to be satisfied on
or before such 91st day, the Trustee shall promptly, upon satisfactory receipt
of evidence of such failure, return such deposit to the Company;
(5) if the Debt Securities of that series are then listed on any domestic or
foreign securities exchange, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that such deposit, defeasance and discharge
will not cause such Debt Securities to be delisted; and
(6) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of the entire indebtedness of all
Outstanding Debt Securities and related coupons have been complied with.
Any deposits with the Trustee referred to in Section 403(1)(A) above shall be
irrevocable and shall be made under the terms of an escrow or trust agreement in
form and substance satisfactory to the Trustee. If any Outstanding Debt
Securities of such series are to be redeemed prior to their Stated Maturity,
whether pursuant to any optional redemption provisions or in accordance with any
mandatory sinking fund requirement, the applicable escrow or trust agreement
shall provide therefor and the Company shall make such arrangements as
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are satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
Upon the satisfaction of the conditions set forth in this Section 403 with
respect to all the Outstanding Debt Securities of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; provided that the Company shall not be discharged
from any payment obligations in respect of Debt Securities of such series which
are deemed not to be Outstanding under clause (iii) of the definition thereof if
such obligations continue to be valid obligations of the Company under
applicable law.
Notwithstanding the cessation, termination and discharge of all obligations,
covenants and agreements (except as provided above in this Section 403) of the
Company under this Indenture with respect to any series of Debt Securities, the
obligations of the Company to the Trustee under Section 607, and the obligations
of the Trustee under Section 402 and the last paragraph of Section 1003, shall
survive with respect to such series of Debt Securities.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Debt Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law, pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Debt Security of such series
when it becomes due and payable, and continuance of such default for a period of
30 days; or
(2) default in the payment of the principal of (or premium, if any, on) any Debt
Security of such series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due by the
terms of a Debt Security of such series; or
(4) default in the performance, or breach, of any covenant or warranty of the
Company in this Indenture (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically dealt with
or which has expressly been included in this Indenture solely for the benefit of
Debt Securities of a series other than such series), and continuance of such
default or breach for a period of 90 days after there has been given by
registered or certified mail, to the Company by the Trustee, or to the Company
and the Trustee by the Holders of at least ____% in principal amount of the
Outstanding Debt Securities of such series, a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder, or
(5) a default under any Indebtedness for money borrowed by the Company or any
Subsidiary (including a default with respect to Debt Securities of any series
other than that series) or under any Mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
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Indebtedness for money borrowed by the Company or any Subsidiary (including this
Indenture), whether such Indebtedness now exists or shall hereafter be created,
which default shall have resulted in such Indebtedness in an outstanding
principal amount in excess of $___________ becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable, without such acceleration having been rescinded or annulled, or such
Indebtedness having been discharged, within a period of 10 days after there
shall have been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least ___% in
principal amount of the Outstanding Securities of that series a written notice
specifying such default and requiring the Company to cause such acceleration to
be rescinded or annulled or cause such Indebtedness to be discharged and stating
that such notice is a "Notice of Default" hereunder; or
(6) the entry by a court having jurisdiction in the premises of (A) a decree or
order for relief in respect of the Company in an involuntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company 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
applicable Federal or State law, or appointing a custodian, 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
for relief or any such other decree or order unstayed and in effect for a period
of 90 consecutive days; or
(7) the commencement by the Company of a voluntary case or proceeding under any
applicable Federal or state bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or order for relief in
respect of the Company in an involuntary case or proceeding under any applicable
Federal or state bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company in furtherance of
any such action; or
(8) any other Event of Default provided with respect to Debt Securities of such
series specified as contemplated by Section 301.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Debt Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than ___% in principal amount of Outstanding Debt
Securities of such series may declare the principal amount (or, if the Debt
Securities of such series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of such series) of and
all accrued but unpaid interest on all the Debt Securities of such series to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by such Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable. Upon
payment of such amount, all obligations of the Company in respect of the payment
of principal of the Debt Securities of such series shall terminate.
At any time after such a declaration of acceleration with respect to Debt
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Debt Securities of such series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its
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consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to pay
(A) all overdue installments of interest on all Debt Securities of such series,
(B) the principal of (and premium, if any, on) any Debt Securities of such
series which have become due otherwise than by such declaration of acceleration
and interest thereon at the rate or rates prescribed therefor in such Debt
Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue
installments of interest at the rate or rates prescribed therefor in such Debt
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expense, disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default with respect to Debt Securities of such series, other
than the non-payment of the principal of Debt Securities of such series which
have become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any installment of interest on any Debt
Security when such interest becomes due and payable and such default continues
for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any, on)
any Debt Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debt Securities and any related coupons, the amount then due and
payable on such Debt Securities and coupons for principal (and premium, if any)
and interest and, to the extent that payment of such interest shall be legally
enforceable, interest upon the overdue principal (and premium, if any) and, upon
overdue installments of interest, at the rate or rates prescribed therefor in
such Debt Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel. If the Company fails to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon such Debt
Securities and coupons 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 such Debt Securities and coupons, wherever situated.
If an Event of Default with respect to Debt Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Debt Securities of such
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series and any related coupons by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings, or any voluntary or involuntary case under the Federal
bankruptcy laws as now or hereafter constituted, relative to the Company or any
other obligor upon the Debt Securities of a particular series or any related
coupons or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of such Debt
Securities shall then be due and payable as therein expressed or by declaration
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, by intervention in such proceedings or otherwise,
(1) to file and prove a claim for the whole amount of principal (and premium, if
any) and interest owing and unpaid in respect of the Debt Securities of such
series and any appurtenant coupons 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, its agents and counsel) and of the Holders allowed
in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or deliverable
on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator or
other similar official in any such proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Debt Securities or any coupons or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims without Possession of Debt Securities or
Coupons.
All rights of action and claims under this Indenture or the Debt Securities or
coupons may be prosecuted and enforced by the Trustee without the possession of
any of the Debt Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name, as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Debt Securities
and coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money on account of principal
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(and premium, if any) or interest, upon presentation of the Debt Securities or
any coupons, or both, as the case may be, and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for principal
of (and premium, if any) and interest on the Debt Securities and any coupons, in
respect of which or for the benefit of which such money has been collected
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Debt Securities and any coupons for principal (and
premium, if any) and interest, respectively. The Holders of each series of Debt
Securities denominated in ECU, any other composite currency or a Foreign
Currency and any matured coupons relating thereto shall be entitled to receive a
ratable portion of the amount determined by the Exchange Rate Agent by
converting the principal amount Outstanding of such series of Debt Securities
and matured but unpaid interest on such series of Debt Securities in the
currency in which such series of Debt Securities is denominated into Dollars at
the Exchange Rate as of the date of declaration of acceleration of the Maturity
of the Debt Securities; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 507. Limitation on Suits.
No Holder of any Debt Securities of any series or any related coupons shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Debt Securities of such series;
(2) the Holders of not less than [25%] in principal amount of the Outstanding
Debt Securities of such series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request;
(4) the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to the
Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Debt Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Debt
Security or coupon shall have
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the right which is absolute and unconditional to receive payment of the
principal of (and premium, if any) and (subject to Section 307) interest on such
Debt Security or payment of such coupon on the respective Stated Maturity or
Maturities expressed in such Debt Security or coupon (or, in the case of
redemption or repayment, on the Redemption Date or the Repayment Date, as the
case may be) and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceedings to enforce any right
or remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case the Company, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided in Section 306, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Debt Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.
SECTION 512. Control by Holders of Debt Securities.
The Holders of a majority in principal amount of the Outstanding Debt Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Debt Securities
of such series, provided, that
(1) such direction shall not be in conflict with any rule of law or with this
Indenture;
(2) subject to the provisions of Section 601, the Trustee shall have the right
to decline to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee, determine that the
proceedings so directed would be unjustly prejudicial to the Holders of Debt
Securities of such series not joining in any such direction; and
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(3) the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the Outstanding
Debt Securities of any series may on behalf of the Holders of all the Debt
Securities of any such series and any related coupons waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or interest on any
Debt Security of such series, or
(2) in respect of a covenant or provision hereof which under Article Nine cannot
be modified or amended without the consent of the Holder of each Outstanding
Debt Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Debt Security or
coupon by his acceptance thereof shall be deemed to have agreed, that 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 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 that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having a due regard to the merits
and good faith of the claims or defenses made by such party litigant, but the
provisions of this Section shall not apply to any suit instituted by the Company
or the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than [25%] in principal amount of the Outstanding
Debt Securities of any series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Debt Security or the payment of any coupons on or after the respective
Stated Maturity or Maturities expressed in such Debt Security or coupon (or, in
the case of redemption or repayment, on or after the Redemption Date or
Repayment Date, as the case may be).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law whenever 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 benefits or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
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THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
Except during the continuance of an Event of Default, the Trustee's duties and
responsibilities under this Indenture shall be governed by the Trust Indenture
Act. In case an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture, and shall
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.
Notwithstanding the foregoing, no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. Whether or not therein expressly
so provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. Notice of Default.
If a default occurs hereunder with respect to Debt Securities of any series the
Trustee shall transmit by mail to all Holders of Debt Securities of such series
notice of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(4) with respect to Debt Securities of such series no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Debt Securities of such series.
SECTION 603. Certain Rights of Trustee.
Except as otherwise provided in Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining from
acting upon any signature, resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(d) 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 reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture
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at the request or direction of any of the Holders of Debt Securities of such
series or any related coupons pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
coupon, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney,
other than any such books or records containing information as to the affairs of
the customers of the Company or any of its subsidiaries; provided that the
Trustee may examine such books and records relating to customers to the extent
that such books and records contain information as to any payments made to such
customers in their capacity as Holders of Debt Securities; provided, further,
that the Trustee shall treat all information regarding the Company which it
receives pursuant to this Indenture and its duties hereunder as confidential and
shall not disclose such information unless necessary in order to fulfill its
duties under this Indenture or the Trust Indenture Act; and
(g) the Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder; no Exchange Rate
Agent, Global Exchange Agent, Depositary or Paying Agent shall be deemed an
agent of the Trustee and the Trustee shall not be responsible for any act or
omission by any of them.
SECTION 604. Not Responsible for Recitals or Issuance of Debt Securities.
The recitals contained herein and in the Debt Securities, except the Trustee's
certificates of authentication, and in any coupons, and the information in any
registration statement, including all attachments thereto, except information
provided by the Trustee therein, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Debt Securities of any series or any coupons. The Trustee
shall not be accountable for the use or application by the Company of any Debt
Securities or the proceeds thereof. The Trustee shall not be responsible for and
makes no representations as to the Company's ability or authority to issue
Bearer Securities or the lawfulness thereof.
SECTION 605. May Hold Debt Securities or Coupons.
The Trustee, any Paying Agent, the Security Registrar or any other agent of the
Company or the Trustee, in its individual or any other capacity, may become the
owner or pledgee of Debt Securities and coupons, and, subject to Sections 608
and 613, may otherwise deal with the Company with the same rights it would have
if it were not Trustee, Paying Agent, Security Registrar or such agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee or any Paying Agent in trust hereunder need not be
segregated from other funds except to the extent required by law. Neither the
Trustee nor any Paying Agent shall be under any liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
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SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation for all
services rendered by it hereunder which shall have from time to time been
separately agreed to by the Company and the Trustee in writing (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon
its request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust or performance of its duties hereunder, including the reasonable costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.
The Trustee shall promptly notify the Company of any claim for which it may seek
indemnification pursuant to the provisions of this Indenture. The Company shall
be entitled to participate in, and to the extent that it shall wish, to assume
the defense of such claim, with counsel satisfactory to the Trustee (and the
Trustee shall cooperate in the defense thereof), and after notice from the
Company to the Trustee of the Company's election so to assume the defense
thereof, the Company shall not be liable to the Trustee under this Indenture for
any legal or other expenses subsequently incurred by the Trustee in connection
with the defense thereof other than reasonable costs of investigation. The
Company shall not be obligated under any settlement agreement relating to any
claim under this Indenture to which it has not agreed in writing.
As security for the performance of the obligations of the Company under this
Section the Trustee shall have a claim prior to the Debt Securities and any
coupons upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premium, if any)
or interest on particular Debt Securities or any coupons.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any conflicting interest within the meaning
of the Trust Indenture Act, the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest with respect to Debt Securities of any series by virtue of being a
trustee under (a) this Indenture with respect to any particular series of Debt
Securities or (b) __________________________________.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a corporation
that is eligible pursuant to the Trust Indenture Act to act as such and
organized and doing business under the laws of the United States, any State
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thereof or the District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$_______________, and subject to supervision or examination by Federal or State
authority; provided, however, that if Section 310(a) of the Trust Indenture Act
or the rules and regulations of the Commission under the Trust Indenture Act at
any time permit a corporation organized and doing business under the laws of any
other jurisdiction to serve as trustee of an indenture qualified under the Trust
Indenture Act, this Section 609 shall be automatically amended to permit a
corporation organized and doing business under the laws of any such other
jurisdiction to serve as Trustee hereunder. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time with respect to the Debt Securities of
one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Debt Securities of such
series.
(c) The Trustee may be removed at any time with respect to the Debt Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Debt Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 with respect to the Debt
Securities of any series after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Debt Security of such series for at
least six months, or
(2) the Trustee shall cease to be eligible under Section 609 with respect to any
series of Debt Securities and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting with respect to any series of
Debt Securities or a decree or order for relief by a court having jurisdiction
in the premises shall have been entered in respect of the Trustee in an
involuntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State bankruptcy, insolvency or
similar law; or a decree or order by a court having jurisdiction in the premises
shall have been entered for the appointment of a receiver, custodian,
liquidator, assignee, trustee, sequestrator or other similar official of the
Trustee or of its property or affairs, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation, winding up or liquidation, or
(4) the Trustee shall commence a voluntary case under the Federal bankruptcy
laws, as now or hereafter constituted, or any other applicable Federal or State
bankruptcy, insolvency or similar law or shall consent to the appointment of or
taking possession by a receiver, custodian, liquidator, assignee, trustee,
sequestrator or other similar official of the Trustee or its property or
affairs, or shall make an assignment for the benefit of
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creditors, or shall admit in writing its inability to pay its debts generally as
they become due, or shall take corporate action in furtherance of any such
action,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to such series at any time or (ii) subject to Section 514,
any Holder who has been a bona fide Holder of a Debt Security of any 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 for
the Debt Securities of such series and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting with
respect to any series of Debt Securities, or if a vacancy shall occur in the
office of Trustee for any cause, with respect to the Debt Securities or one or
more series, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee or Trustees with respect to the Debt Securities of that or
those series (it being understood that any such successor Trustee may be
appointed with respect to the Debt Securities of one or more or all of such
series and that at any time there shall be only one Trustee with respect to the
Debt Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Debt Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Debt Securities of
such series delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Trustee with respect to the Debt Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Debt Securities of any series shall
have been so appointed by the Company or the Holders and accepted appointment in
the manner hereinafter provided, any Holder who has been a bona fide Holder of a
Debt Security of such series for at least six months may, subject to Section
514, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Debt Securities of such series.
(f) The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Debt Securities of any series and each appointment
of a successor Trustee with respect to the Debt Securities of any series by
mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Debt Securities of such series
are issuable as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Debt Securities of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In the case of an appointment hereunder of a successor Trustee with respect
to all Debt Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder.
(b) In the case of the appointment hereunder of a successor Trustee with respect
to the Debt Securities of one or more (but not all) series, the Company, the
retiring Trustee upon payment of its charges and each successor
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Trustee with respect to the Debt Securities of one or more series shall execute
and deliver an indenture supplemental hereto wherein each successor Trustee
shall accept such appointment and which (1) 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 retiring
Trustee with respect to the Debt Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Debt Securities, shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Debt
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) 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 retiring 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 retiring Trustee with respect to the
Debt Securities of that or those series to which the appointment of such
successor Trustee relates; but, on the request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Debt Securities of that or those series to which the
appointment of such successor Trustee relates.
(c) 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
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under this
Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall, with the written approval of the Company, be the successor of
the Trustee hereunder, provided such corporation shall be otherwise qualified
and eligible under this Article, without the executing or filing of any paper or
any further act on the part of any of the parties hereto. In case any Debt
Securities shall have been authenticated, but not delivered, by the Trustee then
in office, any successor by merger, conversion, consolidation or sale to such
authenticating Trustee may adopt such authentication and deliver the Debt
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Debt Securities. In case any Debt Securities shall
not have been authenticated by such predecessor Trustee, any such successor
Trustee may authenticate and deliver such Debt Securities, in either its own
name or that of its predecessor Trustee, with the full force and effect which
this Indenture provides for the certificate of authentication of the Trustee. If
the Trustee's successor by merger, conversion, consolidation or sale shall not
have received the written approval of the Company, such successor shall resign
within 20 days after the merger, conversion, consolidation or sale and such
vacancy in the office of the Trustee shall be filled in the manner specified in
Section 610.
SECTION 613. Preferential Collection of Claims Against Company.
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If and when the Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Company (or any other obligor upon the
Debt Securities), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding collection of claims against the Company (or any such
other obligor).
SECTION 614. Authenticating Agent.
The Trustee may upon Company request appoint one or more Authenticating Agents
(including, without limitation, the Company or any Affiliate thereof) with
respect to one or more series of Debt Securities which shall be authorized on
behalf of the Trustee in authenticating Debt Securities of such series in
connection with the issue, delivery, registration of transfer, exchange, partial
redemption or repayment of such Debt Securities. Wherever reference is made in
this Indenture to the authentication of Debt Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be acceptable to the
Company and, in the case of Registered Securities, must be a corporation
organized and doing business under the laws of the United States or of any State
or the District of Columbia, having a combined capital surplus of at least
$____________, authorized under such laws to do a trust business and subject to
supervision or examination by Federal or State authorities, and in the case of
Bearer Securities and an authenticating agent who is not organized and doing
business under the laws of the United States or of any State thereof or the
District of Columbia, is subject to supervision or examination by the
appropriate foreign authorities.
Any corporation succeeding to the corporate agency business of an authenticating
agent shall continue to be an authenticating agent without the execution or
filing of any paper or any further act on the part of the Trustee or such
authenticating agent.
An authenticating agent may at any time resign with respect to one or more
series of Debt Securities by giving written notice of resignation to the Trustee
and to the Company. The Trustee may at any time terminate the agency of any
authenticating agent with respect to one or more series of Debt Securities by
giving written notice of termination to such authenticating agent and to the
Company. Upon receiving such a notice of resignation or upon such a termination,
or in case at any time an authenticating agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may appoint a
successor authenticating agent. Any successor authenticating agent upon
acceptance of its appointment hereunder shall become vested with all rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an authenticating agent herein. No successor authenticating
agent shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to 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 payment, subject to the provisions
of Section 607.
The provisions of Sections 104, 111, 306, 309, 603, 604 and 605 shall be
applicable to any authenticating agent.
Pursuant to each appointment made under this Section, the Debt Securities of
each series covered by such appointment may have endorsed thereon, in lieu of
the Trustee's certificate of authentication, an alternate certificate of
authentication in substantially the following form:
This is one of the Debt Securities, of the series designated herein, described
in the within-mentioned Indenture.
By:
---------------------------
As Authenticating Agent for the Trustee
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By:
---------------------------
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee with respect to
Debt Securities of each series for which it acts as Trustee:
(1) semi-annually, not later than May 15 and November 15 in each year, a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the Holders of Registered Securities as of the preceding May 1 or November 1,
as the case may be, and
(2) at such other times as the Trustee may request in writing, within 30 days
after the receipt by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such list is
furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Registered Securities
contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders of Registered Securities
received by the Trustee in its capacity as Paying Agent or Security Registrar,
if so acting. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished. The Trustee shall preserve
for at least two years the names and addresses of Holders of Bearer Securities
filed with the Trustee by such Holders.
(b) The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Debt Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Debt Securities or coupons, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee shall be held accountable by reason of any disclosure of information as
to the names and addresses of the Holders made pursuant to the Trust Indenture
Act.
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the first May 15
after the first issuance of Debt Securities pursuant to this Indenture and at
any other time required by the Trust Indenture Act, the Trustee shall
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transmit to Holders such reports concerning the Trustee and its actions under
this Indenture and such other matters as may be required pursuant to the Trust
Indenture Act in the manner required by the Trust Indenture Act.
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any Debt
Securities of such series are listed, with the Commission and also with the
Company. The Company will notify the Trustee when any series of Debt Securities
are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to
Holders such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the time and
in the manner pursuant to such Act; provided that such information, documents or
reports required to be filed with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc. Only on Certain Terms.
The Company shall not consolidate with or merge into any other corporation or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and the Company shall not permit any Person to consolidate with
or merge into the Company, or convey, transfer or lease its properties and
assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation organized and existing under
the laws of the United States of America, any political subdivision thereof or
any State thereof and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of (and premium, if any)
and interest (including all additional amounts, if any, payable pursuant to
Section 1006) on all the Debt Securities and the performance of every covenant
of this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of Default,
and no event which, after notice or lapse of time, or both, would become an
Event of Default, shall have happened and be continuing;
(3) except in the case of a consolidation or merger of a Restricted Subsidiary
with or into the Company, (a) the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series, by Act of
the Holders delivered to the Company and the Trustee, shall have consented
thereto, or (b)(i) immediately after giving effect to such transaction, the
corporation formed by or resulting or surviving therefrom or which
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shall have received such conveyance or transfer of properties and assets shall
be permitted to become liable for an increased amount of Secured Funded Debt
under the provisions of paragraph (a) of Section 1008, and (ii) prior to such
consolidation, merger, conveyance or transfer there shall have been filed with
the Trustee an Officers' Certificate stating that immediately after such
consolidation, merger, conveyance or transfer such corporation may take the
action referred to in the foregoing clause (i); and
(4) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger, conveyance,
transfer or lease and such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such transaction
have been met.
SECTION 802. Successor Corporation Substituted.
Upon any consolidation with or merger into any other corporation, or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 801, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor had been named as the
Company herein, and thereafter, except in the case of a lease, the Company
(which term for this purpose shall mean the Person named as the "Company" in the
first paragraph of this instrument or any successor corporation which shall
theretofore have become such in the manner presented in this Article) shall be
relieved of all obligations and covenants under this Indenture and the Debt
Securities and any coupons.
SECTION 803. Conveyance or Transfer to a Wholly-Owned Restricted Subsidiary.
Notwithstanding the provisions of Sections 801 and 802, and without any
requirement of complying with any of such provisions, the Company may convey or
transfer its properties and assets substantially as an entirety to another
corporation organized and existing under the laws of the United States of
America or any State or the District of Columbia which is lawfully entitled to
acquire the same; provided, however, that immediately after giving effect to
such conveyance or transfer and to the receipt of the consideration therefor (i)
such other corporation shall be a Wholly-Owned Restricted Subsidiary, and (ii)
the Company shall be permitted to become liable for an increased amount of
Secured Funded Debt under the provisions of paragraph (a) of Section 1008, and
prior to such conveyance or transfer there shall have been filed with the
Trustee an Officers' Certificate to the effect that the requirements of the
preceding clauses (i) and (ii) will be complied with in connection with such
conveyance or transfer.
SECTION 804. Limitation on Lease of Properties as Entirety.
The Company shall not lease its properties and assets substantially as an
entirety to any Person.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
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Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another corporation to the Company, and the
assumption by such successor of the covenants of the Company herein and in the
Debt Securities contained; or
(2) to add to the covenants of the Company, for the benefit of the Holders of
all or any series of Debt Securities (and if such covenants are to be for the
benefit of less than all series of Debt Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or any
coupons, to convey, transfer, assign, mortgage or pledge any property to or with
the Trustee, or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default (and if such Events of Default are
to be applicable to less than all series of Debt Securities, stating that such
Events of Default are expressly being included solely to be applicable to such
series); or
(4) to add to, change or eliminate any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of (or premium, if any,
on) Registered Securities or of principal of (or premium, if any, on) or any
interest on Bearer Securities, to permit Bearer Securities to be issued in
exchange for Registered Securities of other authorized denominations or to
permit or facilitate the issuance of Debt Securities in uncertificated form,
provided any such action shall not adversely affect the interests of the Holders
of Debt Securities of any series or any related coupons in any material respect;
or
(5) to change or eliminate any of the provisions of this Indenture, provided
that any such change or elimination (a) shall become effective only when there
is no Debt Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provisions
or (b) shall not apply to any Debt Security Outstanding; or
(6) to establish the form or terms of Debt Securities of any series as permitted
by Sections 201 and 301; or
(7) to secure the Debt Securities pursuant to the requirements of Section 1008
or otherwise; or
(8) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Debt Securities of one or more series and
to 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, pursuant to the requirements of Section
611(b); or
(9) to cure any ambiguity, to correct or supplement any provision herein which
may be defective or inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with any provision of this Indenture,
provided such other provisions shall not adversely affect the interests of the
Holders of Debt Securities of any series or any related coupons in any material
respect; or
(10) to add to or change or eliminate any provision of this Indenture as shall
be necessary or desirable in accordance with any amendments to the Trust
Indenture Act, provided such action shall not adversely affect the interest of
Holders of Debt Securities of any series or any related coupons in any material
respect.
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SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount
of the Outstanding Debt Securities of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights under this Indenture of
the Holders of such Debt Securities of such series and any related coupons;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Debt Security or coupon affected
thereby,
(1) change the Stated Maturity of the principal or any installment of principal
of, or any installment of interest on, any Debt Security, or reduce the
principal amount thereof or the interest thereon or any premium payable upon
redemption or repayment thereof, or change any obligation of the Company to pay
additional amounts pursuant to Section 1006 (except as contemplated by Section
801(1) and permitted by Section 901(1)), or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502, or
change any Place of Payment, or the coin or currency in which any Debt Security
or the interest thereon or any coupon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption or repayment, on or after the
Redemption Date or Repayment Date, as the case may be), or
(2) reduce the percentage in principal amount of the Outstanding Debt Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
reduce the requirements of Section 1404 for quorum or voting, or
(3) modify any of the provisions of this Section, Section 513 or Section 1012,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Debt Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section and Section 1012, or the deletion of this
proviso, in accordance with the requirements of Section 611(b) and 901(8), or
(4) adversely affect the right to repayment, if any, of Debt Securities of any
series at the option of the Holders thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Debt Securities, or which modifies
the rights of the Holders of Debt Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Debt Securities of any other series.
It shall not be necessary for any Act of Holders of the Debt Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this
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Article or the modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Debt Securities theretofore or thereafter authenticated and delivered
hereunder and of any coupons appertaining thereto shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform to
the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Debt Securities to Supplemental Indentures.
Debt Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Debt Securities of any series and any appurtenant coupons so modified as to
conform, in the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Debt Securities of such
series and any appurtenant coupons.
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ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Debt
Securities and any appurtenant coupons that it will duly and punctually pay the
principal of (and premium, if any) and interest on the Debt Securities in
accordance with the terms of the Debt Securities, any appurtenant coupons and
this Indenture. Any interest due on Bearer Securities on or before Maturity,
other than additional amounts, if any, payable as provided in Section 1006 in
respect of principal of (or premium, if any, on) such a Debt Security, shall be
payable only upon presentation and surrender of the coupon or coupons for such
interest installments as are evidenced thereby as they severally mature.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of Debt
Securities an office or agency where Debt Securities (but, except as otherwise
provided below, unless such Place of Payment is located outside the United
States, not Bearer Securities or coupons) may be presented or surrendered for
payment, where Debt Securities may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Company in respect of
the Debt Securities and this Indenture may be served. If Debt Securities of a
series are issuable as Bearer Securities, the Company will maintain, subject to
any laws or regulations applicable thereto, an office or agency in a Place of
Payment for such series which is located outside the United States where Debt
Securities of such series and the related coupons may be presented and
surrendered for payment (including payment of any additional amounts payable on
Debt Securities of such series pursuant to Section 1006); provided, however,
that if the Debt Securities of such series are listed on a stock exchange
located outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent in any required city located outside the
United States, as the case may be, so long as the Debt Securities of such series
are listed on such exchange. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of any such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices or demands may be made or served at
_______________________________, and the Company hereby appoints
_________________ its agent to receive all presentations, surrenders, notices
and demands, except that Bearer Securities of that series and the related
coupons may be presented and surrendered for payment (including payment of any
additional amounts payable on Bearer Securities of that series pursuant to
Section 1006) at the place specified for the purpose pursuant to Section 301(5).
No payment of principal of, or premium, if any, or interest on Bearer Securities
shall be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, payment
of principal of and any premium and interest (including additional amounts
payable in respect thereof) on any Bearer Security denominated in Dollars may be
made at an office or agency of, and designated by, the Company located in the
United States if (but only if) payment of the full amount of such principal,
premium, interest or additional amounts in Dollars at all offices outside the
United States maintained for the purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
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similar restrictions and the Trustee receives an Opinion of Counsel that such
payment within the United States is legal. Unless otherwise provided as
contemplated by Section 301 with respect to any series of Debt Securities, at
the option of the Holder of any Bearer Security or related coupon, payment may
be made by check in the currency designated for such payment pursuant to the
terms of such Bearer Security presented or mailed to an address outside the
United States or by transfer to an account in such currency maintained by the
payee with a bank located outside the United States.
The Company may also from time to time designate one or more other offices or
agencies (in or outside of such Place of Payment) where the Debt Securities of
one or more series and any related coupons (subject to the preceding paragraph)
may be presented or surrendered for any or all such purposes, and may from time
to time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for any series of Debt
Securities for such purposes. The Company will give prompt written notice to the
Trustee of any such designation and any change in the location of any such other
office or agency.
Section 1003. Money for Debt Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to any
series of Debt Securities, it will, on or before each due date of the principal
of (and premium, if any) or interest on any of the Debt Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect to any
series of Debt Securities, it will, on or before each due date of the principal
of (and premium, if any) or interest on any of the Debt Securities of such
series, deposit with a Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent with respect to any series of Debt
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will
(1) hold all sums held by it for the payment of the principal of (and premium,
if any) or interest on Debt Securities of such series in trust for the benefit
of the Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other obligor
upon the Debt Securities of such series or any appurtenant coupons) in the
making of any payment of principal of (and premium, if any) or interest on the
Debt Securities of such series; and
(3) at any time during the continuance of any such default, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in trust
by such Paying Agent.
The Company may at any time, for the purpose of terminating its obligations
under this Indenture with respect to Debt Securities of any series or for any
other purpose, pay, or by Company Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Company or such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which such sums were
held by the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all
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further liability with respect to such money.
Any principal and interest received on the Government Obligations deposited with
the Trustee or any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and premium,
if any) or interest on any Debt Security of any series or any money on deposit
with the Trustee or any Paying Agent representing amounts deducted from the
Redemption Price or Repayment Price with respect to unmatured coupons not
presented upon redemption or exercise of the Holder's option for repayment
pursuant to Section 1106 or 1303 and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Debt
Security or any coupon appertaining thereto shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money
(including the principal and interest received on Government Obligations
deposited with the Trustee), and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in an Authorized Newspaper of
general circulation in the [Borough of Manhattan, The City of New York], and
each Place of Payment or mailed to each such Holder, or both, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication or mailing, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights (charter and statutory) and franchises, provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 1005. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
Section 1006. Payment of Additional Amounts.
If the Debt Securities of a series provide for the payment of additional
amounts, the Company will pay to the Holder of any Debt Security of any series
or any coupon appertaining thereto additional amounts upon the terms and subject
to the conditions provided therein. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of (or premium, if any)
or interest on, or in respect of, any Debt Security of any series or the net
proceeds received on the sale or exchange of any Debt Security of any series,
such mention shall be deemed to include mention of the payment of additional
amounts provided for in the terms of such
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Debt Securities and this Section to the extent that, in such context, additional
amounts are, were or would be payable in respect thereof pursuant to the
provisions of this Section and express mention of the payment of additional
amounts (if applicable) in any provisions hereof shall not be construed as
excluding additional amounts in those provisions hereof where such express
mention is not made.
If the Debt Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Debt Securities (or if the Debt Securities of that series will
not bear interest prior to Maturity, the first day on which a payment of
principal (and premium, if any) is made), and at least 10 days prior to each
date of payment of principal (and premium, if any) or interest if there has been
any change with respect to the matters set forth in the below-mentioned
Officers' Certificate, the Company will furnish the Trustee and the Company's
principal Paying Agent or Paying Agents, if other than the Trustee, with an
Officers' Certificate instructing the Trustee and such Paying Agent or Paying
Agents whether such payment of principal of (and premium, if any) or interest on
the Debt Securities of that series shall be made to Holders of Debt Securities
of that series or the related coupons who are United States Aliens without
withholding for or on account of any tax, assessment or other governmental
charge described in the Debt Securities of that series. If any such withholding
shall be required, then such Officers' Certificate shall specify by country the
amount, if any, required to be withheld on such payments to such Holders of Debt
Securities or coupons and the Company will pay to the Trustee or such Paying
Agent the additional amounts, if any, required by the terms of such Debt
Securities and the first paragraph of this Section. The Company covenants to
indemnify the Trustee and any Paying Agent for, and to hold them harmless
against, any loss, liability or expense reasonably incurred without negligence
or bad faith on their part arising out of or in connection with actions taken or
omitted by any of them in reliance on any Officers' Certificate furnished
pursuant to this Section.
Section 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (1) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary, and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary, provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
Section 1008. Restriction on the Creation of Secured Funded Debt.
(a) The Company will not, and will not permit any Restricted Subsidiary to,
issue, assume or guarantee, incur or create any Secured Funded Debt unless
immediately thereafter the sum of (i) the aggregate principal amount of all
outstanding Secured Funded Debt of the Company and its Restricted Subsidiaries
(exclusive of any Secured Funded Debt permitted by paragraph (b) of this
Section) plus (ii) the aggregate amount of all Attributable Debt of the Company
and its Restricted Subsidiaries in respect of sale and leaseback transactions
(as defined in Section 1009) does not exceed ___% of Consolidated Net Tangible
Assets.
(b) Compliance with the requirements of Section 1008(a) shall be determined
without regard to (i) Secured Funded Debt of a Restricted Subsidiary owing to
the Company or a Wholly-Owned Restricted Subsidiary, (ii) Secured Funded Debt
resulting from the Mortgage of property of the Company or any Restricted
Subsidiary in favor of the United States, or any State thereof, or any
department, agency or instrumentality of the United States or any State thereof,
to secure partial, progress, advance or other payments to the Company or any
Restricted Subsidiary pursuant to the provisions of any contract or statute,
(iii) Secured Funded Debt resulting from Mortgages on property of, or on any
shares of stock or Indebtedness of, any corporation existing at
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the time such corporation becomes a Subsidiary, (iv) subject to Section 801,
Secured Funded Debt resulting from Mortgages on property, shares of stock or
Indebtedness existing at the time of acquisition thereof (including acquisition
through merger or consolidation) or to secure the payment of all or any part of
the purchase price or construction cost thereof or to secure any indebtedness
incurred prior to, at the time of, or within 120 days after, the acquisition of
such property or shares or Indebtedness or the completion of any such
construction for the purpose of financing all or any part of the purchase price
or construction cost thereof, (v) Secured Funded Debt resulting from Mortgages
incurred or assumed in connection with an issuance of revenue bonds the interest
on which is exempt from Federal income tax pursuant to section 103(b) of the
Internal Revenue Code of 1986, as amended (or any predecessor or successor
provision thereof), or (vi) any extension, renewal or refunding (or successive
extensions, renewals or refundings), in whole or in part (but without increase
in amount), of any Secured Funded Debt (and of any Mortgage securing the same)
permitted by the provisions of paragraph (a) of this Section 1008 or of any
Secured Funded Debt (and of any Mortgage securing the same) outstanding at
_____________ of those Subsidiaries which will constitute Restricted
Subsidiaries upon the execution and delivery of this Indenture as originally
executed or of any Secured Funded Debt (and of any Mortgage securing the same)
of any corporation outstanding at the time such corporation became a Restricted
Subsidiary, provided that the Mortgage securing such extended, renewed or
refunded Secured Funded Debt is limited to the same property (plus improvements
thereon) that secured the Secured Funded Debt so extended, renewed or refunded
immediately prior thereto.
(c) Notwithstanding the foregoing paragraphs of this Section, the Company or any
Restricted Subsidiary may issue, assume, guarantee, incur or create Secured
Funded Debt not permitted by such paragraphs if the Company shall first make
effective provision whereby the Debt Securities (together with, if the Company
shall so determine, any other Indebtedness or any obligations of the Company or
such Restricted Subsidiary then existing or thereafter created ranking equally
with the Debt Securities, including guarantees of Indebtedness or obligations of
others) shall be secured equally and ratably with (or prior to) such Secured
Funded Debt, so long as such Secured Funded Debt shall be so secured. If the
Company shall hereafter make provision to secure the Debt Securities equally and
ratably with (or prior to) any other Indebtedness or obligations pursuant to
this paragraph (c), then (i) the Company will promptly deliver to the Trustee an
Officers' Certificate and Opinion of Counsel stating that this paragraph (c) has
been complied with and that any instruments executed by the Company or any
Restricted Subsidiary in the performance of this paragraph (c) comply with the
requirements hereof, and (ii) the Trustee is hereby authorized to enter into an
indenture or agreement supplemental hereto and to take such action, if any, as
it may deem advisable to enable it to enforce the rights of the Holders of the
Debt Securities as so secured.
Section 1009. Restriction on Sale and Lease-Back Transactions.
The Company will not itself, and it will not permit any Restricted Subsidiary
to, enter into any arrangement with any bank, insurance company or other lender
or investor (not including the Company or any Restricted Subsidiary) or to which
any such lender or investor is a party, providing for the leasing by the Company
or any Restricted Subsidiary for a period, including renewals, in excess of
three years of any Operating Property which has been or is to be sold or
transferred, more than 120 days after the acquisition thereof or the completion
of construction and commencement of full operation thereof, by the Company or
any Restricted Subsidiary to such lender or investor or to any person to whom
funds have been or are to be advanced by such lender or investor on the security
of such Operating Property (herein referred to as a "sale and leaseback
transaction") unless either:
(1) the Company or such Restricted Subsidiary could create Secured Funded Debt
pursuant to Section 1008 on the Operating Property to be leased back in an
amount equal to the Attributable Debt with respect to such sale and leaseback
transaction without equally and ratably securing the Debt Securities, or
(2) the Company, within 120 days after the sale or transfer shall have been made
by the Company or by any
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such Restricted Subsidiary, applies an amount equal to the greater of (i) the
net proceeds of the sale of the Operating Property sold and leased back pursuant
to such arrangement or (ii) the fair market value of the Operating Property so
sold and leased back at the time of entering into such arrangements (as
determined by any two of the following: the Chairman of the Board of the
Company, its Chief Executive Officer, its President, any Vice President of the
Company, its Treasurer and its Controller) to the retirement of Secured Funded
Debt of the Company, provided that the amount to be applied to the retirement of
Secured Funded Debt of the Company shall be reduced by (a) the principal amount
of any Debt Securities delivered within 120 days after such sale to the Trustee
for retirement and cancellation, and (b) the principal amount of Secured Funded
Debt voluntarily retired by the Company within 120 days after such sale.
Notwithstanding the foregoing, no retirement referred to in this clause (2) may
be effected by payment at maturity or pursuant to any mandatory sinking fund
payment or any mandatory prepayment provision.
SECTION 1010. Restriction on Permitting Unrestricted Subsidiaries to become
Restricted Subsidiaries.
(a) The Company will not permit any Unrestricted Subsidiary to be designated as
a Restricted Subsidiary unless such Subsidiary has outstanding no Secured Funded
Debt and/or Attributable Debt except such Secured Funded Debt and Attributable
Debt as the Company could permit it to become liable for immediately after
becoming a Restricted Subsidiary under the provisions of Section 1008.
(b) Promptly after the adoption of any Board Resolution designating a Restricted
Subsidiary as an Unrestricted Subsidiary or an Unrestricted Subsidiary as a
Restricted Subsidiary, a copy thereof shall be filed with the Trustee, together,
in the case of the designation of an Unrestricted Subsidiary as a Restricted
Subsidiary, with an Officers' Certificate stating that the provisions of this
Section have been complied with in connection with such designation.
SECTION 1011. Officer's Certificate as to Default.
The Company will furnish to the Trustee not more than 120 days after the end of
the Company's fiscal year in each year (beginning with ____) a brief certificate
from the principal executive, financial or accounting officer or treasurer or
controller of the Company as to his or her knowledge of the Company's compliance
with all conditions and covenants under this Indenture (such compliance to be
determined without regard to any period of grace or requirement of notice
provided under this Indenture), and, if he or she has knowledge of any default,
specifying each such default of which the signer has knowledge and the nature
thereof.
SECTION 1012. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any covenant or
condition set forth in Sections 1004, 1005 and 1007 to 1010 inclusive with
respect to the Debt Securities of any series if, before the time for such
compliance the Holders of at least a majority in principal amount of the Debt
Securities at the time Outstanding shall, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.
ARTICLE ELEVEN
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REDEMPTION OF DEBT SECURITIES
SECTION 1101. Applicability of Article.
Debt Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Debt Securities of any series) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Debt Securities shall be evidenced by
a Board Resolution. In case of any redemption at the election of the Company of
less than all of the Debt Securities of any series, the Company shall, at least
45 days prior to the Redemption Date fixed by the Company (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount and the tenor and terms of the Debt
Securities of any series to be redeemed. In the case of any redemption of Debt
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Debt Securities or elsewhere in this Indenture,
the Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
SECTION 1103. Selection by Trustee of Debt Securities to be Redeemed.
Except as otherwise specified as contemplated by Section 301 for Debt Securities
of any series, if less than all the Debt Securities of any series with like
tenor and terms are to be redeemed, the particular Debt Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Debt Securities of such series with like tenor
and terms not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for Debt
Securities of such series or any integral multiple thereof which is also an
authorized denomination) of the principal amount of Registered Securities or
Bearer Securities (if issued in more than one authorized denomination) of such
series of a denomination larger than the minimum authorized denomination for
Debt Securities of such series.
The Trustee shall promptly notify the Company in writing of the Debt Securities
selected for redemption and, in the case of any Debt Securities selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Debt Securities shall relate, in the
case of any Debt Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debt Security which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 106 not
less than 30 nor more than 60 days prior to the Redemption Date, to each Holder
of Debt Securities to be redeemed.
All notices of redemption shall state:
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(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Debt Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Debt Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due and payable
upon each such Debt Security to be redeemed, and that interest thereon shall
cease to accrue on and after said date,
(5) the Place or Places of Payment where such Debt Securities, together in the
case of Bearer Securities with all coupons, if any, appertaining thereto
maturing after the Redemption Date, are to be surrendered for payment of the
Redemption Price,
(6) that Bearer Securities may be surrendered for payment only at such place or
places which are outside the United States, except as otherwise provided in
Section 1002,
(7) that the redemption is for a sinking fund, if such is the case, and
(8) the CUSIP number, if any.
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
Notice of redemption of Debt Securities to be redeemed at the election of the
Company shall be given by the Company, or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
aggregate and hold in trust as provided in Section 1003) an amount of money
and/or Government Obligations the payments of principal and interest on which
when due (and without reinvestment) will provide money on or prior to the
Redemption Date in such amounts as will (together with any money irrevocably
deposited in trust with the Trustee, without investment) be sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Debt Securities or portions thereof
which are to be redeemed on that date; provided, however, that deposits with
respect to Bearer Securities shall be made with a Paying Agent or Paying Agents
located outside the United States except as otherwise provided in Section 1002,
unless otherwise specified as contemplated by Section 301.
SECTION 1106. Debt Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Debt Securities to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Debt
Securities shall cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to the extent
provided below, shall be void. Upon surrender of any such Debt Security for
redemption in accordance with said notice, such Debt Security shall be paid by
the Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that
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installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only upon presentation and
surrender of coupons for such interest (at an office or agency located outside
the United States except as otherwise provided in Section 1002), and provided
further, that installments of interest on Registered Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Debt Securities, or one or more Predecessor Securities, registered as
such on the relevant Record Dates according to their terms and the provisions of
Section 307.
If any Bearer Security surrendered for redemption shall not be accompanied by
all appurtenant coupons maturing after the Redemption Date, such Bearer Security
may be paid after deducting from the Redemption Price an amount equal to the
face amount of all such missing coupons, or the surrender of such missing coupon
or coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Bearer Security shall
surrender to the Trustee or any Paying Agent any such missing coupon in respect
of which a deduction shall have been made from the Redemption Price, such Holder
shall be entitled to receive the amount so deducted without interest thereon;
provided, however, that interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located
outside of the United States except as otherwise provided in Section 1002.
If any Debt Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Debt Security.
SECTION 1107. Debt Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company, the Security
Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Debt Security without
service charge, a new Registered Security or Registered Securities of the same
series and of like tenor and terms, of any authorized denominations as requested
by such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Debt Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the
retirement of Debt Securities of a series except as otherwise specified as
contemplated by Section 301 for Debt Securities of such series. The minimum
amount of any sinking fund payment provided for by the terms of Debt Securities
of any series is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of Debt
Securities of any series is herein referred to an "optional sinking fund
payment". If provided for by the terms of Debt Securities of any series, the
amount of any sinking fund payment may be subject to reduction as provided in
Section 1202. Each sinking fund payment shall be applied to the
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redemption of Debt Securities of any series as provided for by the terms of Debt
Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Debt Securities.
The Company (1) may deliver Outstanding Debt Securities of a series (other than
any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Debt Securities of a series which have been redeemed
either at the election of the Company pursuant to the terms of such Debt
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Debt Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Debt Securities of such series required to be made pursuant to the terms of such
Debt Securities as provided for by the terms of such series; provided that such
Debt Securities have not been previously so credited. Such Debt Securities shall
be received and credited for such purpose by the Trustee at the Redemption Price
specified in such Debt Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly. If as a result of the delivery or credit of Debt Securities in lieu
of cash payments pursuant to this Section 1202, the principal amount of Debt
Securities to be redeemed in order to exhaust the aforesaid cash payment shall
be less than $100,000, the Trustee need not call Debt Securities for redemption,
except upon Company Request, and such cash payment shall be held by the Trustee
or a Paying Agent and applied to the next succeeding sinking fund payment,
provided, however, that the Trustee or such Paying Agent shall at the request of
the Company from time to time pay over and deliver to the Company any cash
payment so being held by the Trustee or such Paying Agent upon delivery by the
Company to the Trustee of Debt Securities purchased by the Company having an
unpaid principal amount equal to the cash payment requested to be released to
the Company.
SECTION 1203. Redemption of Debt Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any series of
Debt Securities (unless a shorter period shall be satisfactory to the Trustee),
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms of that series, the portion thereof, if any, which is to be satisfied by
payment of cash, the portion thereof, if any, which is to be satisfied by
crediting Debt Securities of that series pursuant to Section 1202 and the basis
for any such credit and, prior to or concurrently with the delivery of such
Officers' Certificate, will also deliver to the Trustee any Debt Securities to
be so credited and not theretofore delivered to the Trustee. Not less than 30
days (unless a shorter period shall be satisfactory to the Trustee) before each
such sinking fund payment date the Trustee shall select the Debt Securities to
be redeemed upon such sinking fund payment date in the manner specified in
Section 1103 and cause notice of the redemption thereof to be given in the name
of and at the expense of the Company in the manner provided in Section 1104.
Such notice having been duly given, the redemption of such Debt Securities shall
be made upon the terms and in the manner stated in Sections 1105, 1106 and 1107.
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ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article.
Debt Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with their
terms and (except as otherwise specified pursuant to Section 301 for Debt
Securities of such series) in accordance with this Article.
SECTION 1302. Repayment of Debt Securities.
Each Debt Security which is subject to repayment in whole or in part at the
option of the Holder thereof on a Repayment Date shall be repaid at the
applicable Repayment Price together with interest accrued to such Repayment Date
as specified pursuant to Section 301.
SECTION 1303. Exercise of Option; Notice.
Each Holder desiring to exercise such Holder's option for repayment shall, as
conditions to such repayment, surrender the Debt Security to be repaid in whole
or in part together with written notice of the exercise of such option at any
office or agency of the Company in a Place of Payment, not less than 30 nor more
than 45 days prior to the Repayment Date; provided, however, that surrender of
Bearer Securities together with written notice of exercise of such option shall
be made at an office or agency located outside the United States except as
otherwise provided in Section 1002. Such notice, which shall be irrevocable,
shall specify the principal amount of such Debt Security to be repaid, which
shall be equal to the minimum authorized denomination for such Debt Security or
an integral multiple thereof, and shall identify the Debt Security to be repaid
and, in the case of a partial repayment of the Debt Security, shall specify the
denomination or denominations of the Debt Security or Debt Securities of the
same series to be issued to the Holder for the portion of the principal of the
Debt Security surrendered which is not to be repaid.
If any Bearer Security surrendered for repayment shall not be accompanied by all
unmatured coupons and all matured coupons in default, such Bearer Security may
be paid after deducting from the Repayment Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Bearer Security shall
surrender to the Trustee or any Paying Agent any such missing coupon in respect
of which a deduction shall have been made from the Repayment Price, such Holder
shall be entitled to receive the amount so deducted without interest thereon;
provided, however, that interest represented by coupons shall be payable only at
an office or agency located outside the United States except as otherwise
provided in Section 1002.
The Company shall execute and the Trustee shall authenticate and deliver without
service charge to the Holder of any Registered Security so surrendered a new
Registered Security or Securities of the same series, of any authorized
denomination specified in the foregoing notice, in an aggregate principal amount
equal to any portion of the principal of the Registered Security so surrendered
which is not to be repaid.
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The Company shall execute and the Trustee shall authenticate and deliver without
service charge to the Holder of any Bearer Security so surrendered a new
Registered Security or Securities or new Bearer Security or Securities (and all
appurtenant unmatured coupons and matured coupons in default) or any combination
thereof of the same series of any authorized denomination or denominations
specified in the foregoing notice, in an aggregate principal amount equal to any
portion of the principal of the Debt Security so surrendered which is not to be
paid; provided, however, that the issuance of a Registered Security therefor
shall be subject to applicable laws and regulations, including provisions of the
United States Federal income tax laws and regulations in effect at the time of
the exchange; neither the Company, the Trustee nor the Security Registrar shall
issue Registered Securities for Bearer Securities if it has received an Opinion
of Counsel that as a result of such issuance the Company would suffer adverse
consequences under the United States Federal income tax laws then in effect and
the Company has delivered to the Trustee a Company Order directing the Trustee
not to make such issuances thereafter unless and until the Trustee receives a
subsequent Company Order to the contrary. The Company shall deliver copies of
such Company Order to the Security Registrar.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the repayment of Debt Securities shall relate, in the
case of any Debt Security repaid or to be repaid only in part, to the portion of
the principal of such Debt Security which has been or is to be repaid.
SECTION 1304. Election of Repayment by Remarketing Entities.
The Company may elect, with respect to Debt Securities of any series which are
repayable at the option of the Holders thereof before their Stated Maturity, at
any time prior to any Repayment Date to designate one or more Remarketing
Entities to purchase, at a price equal to the Repayment Price, Debt Securities
of such series from the Holders thereof who give notice and surrender their Debt
Securities in accordance with Section 1303.
SECTION 1305. Securities Payable on the Repayment Date.
Notice of exercise of the option of repayment having been given and the Debt
Securities so to be repaid having been surrendered as aforesaid, such Debt
Securities shall, unless purchased in accordance with Section 1304, on the
Repayment Date become due and payable at the price therein specified and from
and after the Repayment Date such Debt Securities shall cease to bear interest
and shall be paid on the Repayment Date, and the coupons for such interest
appertaining to Bearer Securities so to be repaid, except to the extent provided
above, shall be void, unless the Company shall default in the payment of such
price in which case the Company shall continue to be obligated for the principal
amount of such Debt Securities and shall be obligated to pay interest on such
principal amount at the rate borne by such Debt Securities from time to time
until payment in full of such principal amount.
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ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF DEBT SECURITIES
SECTION 1401. Purposes for Which Meetings May Be Called.
If Debt Securities of a series are issuable in whole or in part as Bearer
Securities, a meeting of Holders of Debt Securities of such series may be called
at any time and from time to time pursuant to this Article to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
Act provided by this Indenture to be made, given or taken by Holders of Debt
Securities of such series.
SECTION 1402. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of Debt Securities of
any series issuable as Bearer Securities for any purpose specified in Section
1401, to be held at such time and at such place in the Borough of Manhattan, The
City of New York, or in London as the Trustee shall determine. Notice of every
meeting of Holders of Debt Securities of any series, setting forth the time and
the place of such meeting and in general terms the action proposed to be taken
at such meeting, shall be given, in the manner provided in Section 106, not less
than 21 nor more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or the
Holders of at least ____% in principal amount of the Outstanding Debt Securities
of any series shall have requested the Trustee to call a meeting of the Holders
of Debt Securities of such series for any purpose specified in Section 1401, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have made the first publication
of the notice of such meeting within 21 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as provided herein,
then the Company or the Holders of Debt Securities of such series in the amount
above specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or in London for such meeting and
may call such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
SECTION 1403. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Debt Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Debt
Securities of such series, or (2) a Person appointed by an instrument in writing
as proxy for a Holder or Holders of one or more Outstanding Debt Securities of
such series by such Holder or Holders. The only Persons who shall be entitled to
be present or to speak at any meeting of Holders of Debt Securities of any
series shall be the Persons entitled to vote at such meeting and their counsel,
any representatives of the Trustee and its counsel and any representatives of
the Company and its counsel.
SECTION 1404. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the Outstanding
Debt Securities of a series shall constitute a quorum for a meeting of Holders
of Debt Securities of such series. In the absence of a quorum within 30 minutes
of the time appointed for any such meeting, the meeting shall, if convened at
the request of
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Holders of Debt Securities of such series, be dissolved. In the absence of a
quorum in any other case the meeting may be adjourned for a period of not less
than 10 days as determined by the chairperson of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairperson of the meeting prior to the
adjournment of such adjourned meeting. Notice of this reconvening of any
adjourned meeting shall be given as provided in Section 1402(a), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Debt Securities of such series which
shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented to a
meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted only by the affirmative vote of the Holders of majority
in principal amount of the Outstanding Debt Securities of that series, provided,
however, that, except as limited by the proviso to Section 902, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other Act which this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Debt Securities of a series may
be adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Debt Securities of
that series. Any resolution passed or decision taken at any meeting of Holders
of Debt Securities of any series duly held in accordance with this Section shall
be binding on all the Holders of Debt Securities of such series and the related
coupons, whether or not present or represented at the meeting.
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any meeting of Holders
of Debt Securities of such series in regard to proof of the holding of Debt
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Debt Securities shall be proved in the manner specified in Section 104 and
the appointment of any proxy shall be proved in the manner specified in Section
104 or, in the case of Bearer Securities, by having the signature of the person
executing the proxy witnessed or guaranteed by any trust company, bank or banker
authorized by Section 104 to certify to the holding of Bearer Securities. Such
regulations may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof specified in
Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairperson of the meeting, unless the meeting shall have been called by the
Company or by Holders of Debt Securities as provided in Section 1402(b), in
which case the Company or the Holders of Debt Securities of the series calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairperson. A permanent chairperson and a permanent secretary of the meeting
shall be elected by vote of the Persons entitled to vote a majority in principal
amount of the Outstanding Debt Securities of such series represented at the
meeting.
(c) At any meeting each Holder of a Debt Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount (or the equivalent in
ECU, any other composite currency or a Foreign Currency) of Debt Securities of
such series held or represented by him; provided, however, that no vote shall be
cast or counted at any meeting in respect of any Debt Security challenged as not
Outstanding and ruled by the chairperson of the meeting not to be Outstanding.
The chairperson of the meeting shall have no right to vote, except as a Holder
of a Debt Security of such series or proxy.
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(d) Any meeting of Holders of Debt Securities of any series duly called pursuant
to Section 1402 at which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in principal amount of the Outstanding
Debt Securities of such series represented at the meeting; and the meeting may
be held as so adjourned without further notice.
SECTION 1406. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of Debt
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Debt Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Debt Securities of such series held or represented by them. The
permanent chairperson of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
triplicate, of the proceedings of each meeting of Holders of Debt Securities of
any series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1402 and, if
applicable, Section 1401. Each copy shall be signed and verified by the
affidavits of the permanent chairperson and secretary of the meeting and one
such copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE FIFTEEN
DEFEASANCE
SECTION 1501. Termination of Company's Obligations.
If this Section 1501 is specified, as contemplated by Section 301, to be
applicable to any series of Debt Securities and if the Company deposits
irrevocably in trust with the Trustee money and/or Government Obligations the
payments of principal and interest on which when due (and without reinvestment)
will provide money in such amounts as will (together with any money irrevocably
deposited in trust with the Trustee, without investment) be sufficient to pay
the principal of (and premium, if any) and any installment of principal of (and
premium, if any) or interest when due on the Debt Securities of such series and
any coupons appertaining thereto on the Stated Maturity of such principal or
interest or, if such series may be redeemed by the Company prior to the Stated
Maturity thereof and the Company shall have given irrevocable instructions to
the Trustee to effect such redemption, at the date fixed for such redemption
pursuant to Article Eleven, and any mandatory sinking fund, repayment or
analogous payments thereon on the scheduled due dates therefor, the Company's
obligations under Sections 801, 803, 804, 1005, 1007, 1008, 1009 and 1010 and
any other covenant determined pursuant to Section 301 to be subject to this
Section shall terminate and Sections 501(4) (with respect to Sections 801, 803,
804, 1005, 1007, 1008, 1009 and 1010), 501(5), 501(6), 501(7) and 501(8) (if
specified as contemplated by Section 301) shall be deemed not to be an Event of
Default, in each case with respect to the Debt Securities of the series for
which such deposit was made; provided, however, that (i) no Event of Default
with respect to the Debt Securities of such series under Section 501(6) or
501(7) or event that
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with notice or lapse of time or both would constitute such an Event of Default
shall have occurred and be continuing on the 91st day after such date, (ii) such
deposit will not result in a breach of, or constitute a default under, this
Indenture or any other agreement or instrument to which the Company is a party
or by which it is bound, and (iii) such termination shall not relieve the
Company of its obligations under the Debt Securities of such series and this
Indenture to pay when due the principal of (and premium, if any) and interest
and additional amounts on such Debt Securities if such amounts are not paid (or
payment is not provided for) when due from the money and Government Obligations
(and the proceeds thereof) so deposited.
It shall be a condition to the deposit of cash and/or Government Obligations and
the termination of the Company's obligations pursuant to the provisions of this
Section with respect to the Debt Securities of any series under Sections 801,
803, 804, 1005, 1007, 1008, 1009 and 1010 and any other covenant determined
pursuant to Section 301 to be subject to this Section and the inapplicability of
the Events of Default contained in Sections 501(4), 501(5), 501(6), 501(7) and
501(8) to the extent set forth above pursuant to the provisions of this Section
with respect to Debt Securities of any series that the Company deliver to the
Trustee (i) an Officers' Certificate to the effect that under the laws in effect
on the date such money and/or Government Obligations are deposited with the
Trustee, the amount thereof will be sufficient, after payment of all Federal,
state and local taxes in respect thereof payable by the Trustee, to pay
principal (and premium, if any) and interest when due on the Debt Securities of
such series; and (ii) an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided for relating to the
defeasance contemplated in this Section have been complied with.
It shall be an additional condition to the deposit of cash and/or Government
Obligations and the termination of the Company's obligations pursuant to the
provisions of this Section under Sections 801, 803, 804, 1005, 1007, 1008, 1009
and 1010 and any other covenant determined pursuant to Section 301 to be subject
to this Section and the inapplicability of the Events of Default contained in
Section 501(4), 501(5), 501(6), 501(7) and 501(8) to the extent set forth above
pursuant to the provisions of this Section, with respect to the Debt Securities
of any series then listed on the Nasdaq National Market, that the Company
deliver an Opinion of Counsel that the Debt Securities of such series will not
be delisted from the Nasdaq National Market as a result of such deposit and
termination.
After a deposit as provided herein, the Trustee shall, upon Company Request,
acknowledge in writing the discharge of the Company's obligations pursuant to
the provisions of this Section with respect to the Debt Securities of such
series under Sections 801, 803, 804, 1005, 1007, 1008, 1009 and 1010 and any
other covenant determined pursuant to Section 301 to be subject to this Section
and the inapplicability of the Events of Default contained in Sections 501(4),
501(5), 501(6), 501(7) and 501(8) to the extent set forth above.
SECTION 1502. Repayment to Company.
The Trustee and any Paying Agent shall promptly pay to the Company upon Company
Request any money or Government Obligations not required for the payment of the
principal of (and premium, if any) and interest on the Debt Securities of any
series for which money or Government Obligations have been deposited pursuant to
Section 1501 held by them at any time.
The Trustee and any Paying Agent shall promptly pay to the Company upon Company
Request any money held by them for the payment of principal (and premium, if
any) and interest that remains unclaimed for two years after the Maturity of the
Debt Securities for which a deposit has been made pursuant to Section 1501.
After such payment to the Company, the Holders of the Debt Securities of such
series and any related coupons shall thereafter, as unsecured general creditors,
look only to the Company for the payment thereof.
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SECTION 1503. 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 the deposited Government Obligations
or the principal or interest received on such Government Obligations.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
DIGITAL MICROWAVE CORPORATION
By:
----------------------------------
Name:
--------------------------------
Its:
---------------------------------
[CORPORATE SEAL]
[TRUSTEE]
By:
----------------------------------
Name:
--------------------------------
Its:
---------------------------------
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STATE OF CALIFORNIA )
)SS.
COUNTY OF SANTA CLARA )
On the ____ day of __________, ____, before me personally came
___________________, to me known, who, being duly sworn, did depose and say that
he resides at ______________________________; that he is a ___________________
of Digital Microwave Corporation, a corporation described in and which executed
the above instrument; that he knows the seal of said corporation; that it was so
affixed pursuant to the authority of the Board of Directors of said corporation;
and that he signed his name thereto pursuant to like authority.
Notary Public
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STATE OF ____________ )
)SS.
COUNTY OF ___________ )
On the _____ day of ______________, ____, before me personally came
________________, to me known, who, being duly sworn, did depose and say that he
resides at _______________________________________________; that he is an
________________________________________ of ______________________________, a
_____________________ described in and which executed the above instrument; that
he knows the seal of said corporation; that it was so affixed pursuant to the
authority of the Board of Directors of said corporation; and that he signed his
name thereto pursuant to like authority.
Notary Public
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EXHIBIT A-1
[Form of Certificate of Beneficial Ownership by a
Non-United States Person or by Certain Other Persons]
Certificate
DIGITAL MICROWAVE CORPORATION
[Insert title or sufficient description of
Debt Securities to be delivered]
Reference is hereby made to the Indenture dated as of ______________, _____ (the
"Indenture") between Digital Microwave Corporation and ________________ (the
"Trustee"), covering the above-captioned Debt Securities. This is to certify
that as of the date hereof, __________________ principal amount of Debt
Securities credited to you for our account (i) is owned by persons that are not
United States Persons, as defined below; (ii) is owned by United States Persons
that are (a) foreign branches of United States financial institutions (as
defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial
institutions") purchasing for their own account or for resale, or (b) United
States Persons who acquired the Debt Securities through foreign branches of
United States financial institutions and who hold the Debt Securities through
such United States financial institutions on the date hereof (and in either case
(a) or (b), each such United States financial institution encloses herewith a
certificate in the form of Exhibit A-2 to the Indenture); or (iii) is owned by
United States or foreign financial institutions for purposes of resale during
the restricted period (as defined in U.S. Treasury Regulations Section 1.163-
5(c)(2)(i)(D)(7)), which United States or foreign financial institutions
described in clause (iii) above (whether or not also described in clause (i) or
(ii)) certify that they have not acquired the Debt Securities for purposes of
resale directly or indirectly to a United States Person or to a person within
the United States or its possessions.
[Insert if certificate does not relate to an interest payment--We undertake to
advise you by tested telex followed by written confirmation if the above
statement as to beneficial ownership is not correct on the date of delivery of
the above-captioned Debt Securities in bearer form as to all of such Debt
Securities with respect to such of said Debt Securities as then appear in your
books as being held for our account.] We understand that this certificate is
required in connection with United States tax laws. We irrevocably authorize you
to produce this certificate or a copy hereof to any interested party in any
administrative or legal proceedings with respect to the matters covered by this
certificate. "United States Person" shall mean a citizen or resident of the
United States of America (including the District of Columbia), a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof or an estate or trust that is
subject to United States Federal income taxation regardless of the source of its
income.
[This certificate excepts and does not relate to ___________ principal amount of
Debt Securities credited to you for our account and to which we are not now able
to make the certification set forth above. We understand that definitive Debt
Securities cannot be delivered and interest cannot be paid until we are able to
so certify with respect to such principal amount of Debt Securities.]*
Dated: _________________
[To be dated on or after ___________________ (the date determined as provided in
the Indenture)]
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[Name of Person Entitled to Receive Bearer Security]
(Authorized Signatory)
Name:
-------------------------------------
Title:
------------------------------------
*Delete if inappropriate
A-2
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EXHIBIT A-2
[Form of Certificate of Status as a
Foreign Branch of a United States Financial Institution]
Certificate
DIGITAL MICROWAVE CORPORATION
[Insert title or sufficient description of
Debt Securities to be delivered]
Reference is hereby made to the Indenture dated as of _________________, ____
(the "Indenture"), between Digital Microwave Corporation and ______________
____________________________, relating to the offering of the above-captioned
Debt Securities (the "Debt Securities"). Unless herein defined, terms used
herein have the same meaning as given to them in the Indenture.
The undersigned represents that it is a branch located outside the United States
of a United States securities clearing organization, bank or other financial
institution (as defined in U.S. Treasury Regulation Section 1.165- 12(c)(1)(v))
that holds customers' securities in the ordinary course of its trade or business
and agrees, and authorizes you to advise the issuer or the issuer's agent, that
it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986 and the regulations thereunder and is not
purchasing for resale directly or indirectly to a United States Person or to a
person within the United States or its possessions. We undertake to advise you
by tested telex followed by written confirmation if the statement in the
immediately preceding sentence is not correct on the date of delivery of the
above-captioned Debt Securities in bearer form.
We understand that this certificate is required in connection with the United
States tax laws. We irrevocably authorize you to produce this certificate or a
copy hereof to any interested party in any administrative or legal proceedings
with respect to the matters covered by this certificate.
Dated: _________________
[To be dated on or after ___________________ (the date determined as provided in
the Indenture)]
[Name of Person Entitled to Receive Bearer Security]
(Authorized Signatory)
Name:
-------------------------------------------
Title:
------------------------------------------
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EXHIBIT B
[Form of Certificate to be Given by Euroclear and Cedel S.A.
in Connection with the Exchange of All or a Portion of a
Temporary Global Security or to Obtain
Interest Prior to Exchange]
Certificate
DIGITAL MICROWAVE CORPORATION
[Insert title or sufficient description of Debt Securities
to be delivered]
We refer to that portion, __________________, of the Global Security
representing the above-captioned issue [which is herewith submitted to be
exchanged for definitive Debt Securities]* [for which we are seeking to obtain
payment of interest]* (the "Submitted Portion"). This is to certify, pursuant to
the Indenture dated as of _________________, 1996 (the "Indenture") between
Digital Microwave Corporation and __________________________ (the "Trustee"),
that we have received in writing, by tested telex or by electronic transmission
from member organizations with respect to each of the persons appearing in our
records as being entitled to a beneficial interest in the Submitted Portion a
Certificate of Beneficial Ownership by a Non-United States Person or by Certain
Other Persons [and, in some cases, a Certificate of Status as a Foreign Branch
of a United States Financial Institution, authorizing us to inform the issuer or
the issuer's agent that it will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986 and the
regulations thereunder]* substantially in the form of Exhibit A-1 [and A-2]* to
the Indenture.
We hereby request that you deliver to the office of _________________ in
___________ definitive Bearer Securities in the denominations on the attached
Schedule A.
We further certify that as of the date hereof we have not received any
notification from any of the persons giving such certificates to the effect that
the statements made by them with respect to any part of the Submitted Portion
are no longer true and cannot be relied on as of the date hereof.
Dated:
----------------------
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
BRUSSELS OFFICE, as Operator of the Euroclear System CEDEL S.A.
By:
--------------------------------------------
*Delete if inappropriate.
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Exhibit 4.3
DIGITAL MICROWAVE CORPORATION
FORM OF DEBT WARRANT AGREEMENT
THIS WARRANT AGREEMENT dated as of ____________, ____ between Digital Microwave
Corporation, a Delaware corporation (hereinafter called the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), and _________________ as Warrant Agent (herein called the "Warrant Agent").
WHEREAS, the Company has entered into an indenture (the "Indenture") dated as of
________, ____ between the Company and ___________, as trustee (the "Trustee"),
providing for the issuance from time to time of its unsecured debentures, notes
or other evidences of indebtedness (the "Debt Securities"), to be issued in one
or more series as provided in the Indenture; and
WHEREAS, the Company proposes to sell [if Warrants are sold with Debt Securities
or Common Stock -- [title of Debt Securities or Common Stock being offered] (the
"Offered Securities") with] warrant certificates evidencing one or more warrants
(the "Warrants" or individually a "Warrant") representing the right to purchase
[title of Debt Securities purchasable through exercise of Warrants] (the
"Warrant Securities"), such warrant certificates and other warrant certificates
issued pursuant to this Agreement being herein called the "Warrant
Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company
in connection with the issuance, exchange, exercise and replacement of the
Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced;
NOW THEREFORE, in consideration of the premises and of the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I.
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES.
Section 1.01. Issuance of Warrants. [If Warrants alone -- Upon issuance, each
Warrant Certificate shall evidence one or more Warrants.] [If Offered Securities
and Warrants --Warrants shall be [initially] issued in connection with the
issuance of the Offered Securities [but shall be separately transferable on and
after __________________ (the "Detachable Date")] [and shall not be separately
transferable] and each Warrant Certificate shall evidence one or more Warrants.]
Each Warrant evidenced thereby shall represent the right, subject to the
provisions contained herein and therein, to purchase a Warrant Security in the
principal amount of __________. [If Offered Securities and Warrants -- Warrant
Certificates shall be initially issued in units with the Offered Securities and
each Warrant Certificate included in such a unit shall evidence _______ Warrants
for each [__________ principal amount] [_________ shares] of Offered Securities
included in such unit.]
Section 1.02. Execution and Delivery of Warrant Certificates. Each Warrant
Certificate, whenever issued, shall be in registered form substantially in the
form set forth in Exhibit A hereto, shall be dated _________________ and may
have such letters, numbers, or other marks of identification or designation and
such legends or endorsements printed, lithographed or engraved thereon as the
officers of the Company executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made
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pursuant thereto or with any rule or regulation of any stock exchange on which
the Warrants may be listed, or to conform to usage. The Warrant Certificates
shall be signed on behalf of the Company by the Chairman of the Board, the
President or a Vice President of the Company and by the Treasurer or one of the
Assistant Treasurers or the Secretary or one of the Assistant Secretaries of the
Company under its corporate seal reproduced thereon. Such signatures may be
manual or facsimile signatures of such authorized officers and may be imprinted
or otherwise reproduced on the Warrant Certificates. The seal of the Company may
be in the form of a facsimile thereof and may be impressed, affixed, imprinted
or otherwise reproduced on the Warrant Certificates.
No Warrant Certificates shall be valid for any purpose, and no Warrant evidenced
thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
In case any officer of the Company who shall have signed any of the Warrant
Certificates either manually or by facsimile signature shall cease to be such
officer before the Warrant Certificates so signed shall have been countersigned
and delivered by the Warrant Agent, such Warrant Certificates may be
countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution of this Agreement
any such person was not such officer.
The term "holder" or "holder of a Warrant Certificate" as used herein shall mean
any person in whose name at the time any Warrant Certificate shall be registered
upon the books to be maintained by the Warrant Agent for that purpose [If
Offered Securities and Warrants are not immediately detachable -- or upon the
register of the Offered Securities prior to the Detachable Date. [Prior to the
Detachable Date, the Company will, or will cause the registrar of the Offered
Securities to, make available at all times to the Warrant Agent such information
as to holders of the Offered Securities with Warrants as may be necessary to
keep the Warrant Agent's records up to date].
Section 1.03. Issuance of Warrant Certificates. Warrant Certificates evidencing
the right to purchase an aggregate principal amount not exceeding _________
aggregate principal amount of Warrant Securities (except as provided in Sections
2.03(c), 3.02 and 4.01) may be executed by the Company and delivered to the
Warrant Agent upon the execution of this Warrant Agreement or from time to time
thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly
executed on behalf of the Company, countersign Warrant Certificates evidencing
Warrants representing the right to purchase up to _________ principal amount of
Warrant Securities and shall deliver such Warrant Certificates to or upon the
order of the Company. Subsequent to such original issuance of the Warrant
Certificates, the Warrant Agent shall countersign a Warrant Certificate only if
the Warrant Certificate is issued in exchange or substitution for one or more
previously countersigned Warrant Certificates or in connection with their
transfer, as hereinafter provided or as provided in Section 2.03(c).
Section 1.04. Temporary Warrant Certificates. Pending the preparation of
definitive Warrant Certificates, the Company may execute, and upon the order of
the Company, the Warrant Agent shall authenticate and deliver, temporary Warrant
Certificates which are printed, lithographed, typewritten, mimeographed or
otherwise produced substantially of the tenor of the definitive Warrant
Certificate in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificates may determine, as evidenced by their
execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company will cause definitive
Warrant Certificates to be prepared without unreasonable delay. After the
preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at the corporate trust office of
the Warrant Agent [or _____________________], without
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charge to the holder. Upon surrender for cancellation of any one or more
temporary Warrant Certificates the Company shall execute and the Warrant Agent
shall authenticate and deliver in exchange therefor definitive Warrant
Certificates representing the same aggregate number of Warrants. Until so
exchanged, the temporary Warrant Certificates shall in all respects be entitled
to the same benefits under this Agreement as definitive Warrant Certificates.
ARTICLE II.
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS.
Section 2.01. Warrant Price. During the period from __________________, through
and including _________________, the exercise price of each Warrant will be
_________ plus [accrued amortization of the original issue discount] [accrued
interest] from __________________. During the period from _________________,
through and including _________________, the exercise price of each Warrant will
be _________ plus [accrued amortization of the original issue discount] [accrued
interest] from _________________. [In each case, the original issue discount
will be amortized at a ____% annual rate, computed on an annual basis using the
"interest" method and using a 360-day year consisting of twelve 30-day months].
Such purchase price of Warrant Securities is referred to in this Agreement as
the "Warrant Price". [The original issue discount for each _________ principal
amount of Warrant Securities is _________.]
Section 2.02. Duration of Warrants. Each Warrant may be exercised in whole at
any time, as specified herein, on or after [the date thereof] [________________]
and at or before 3:30 p.m., New York City time, on ________________ [or such
later date as the Company may designate, by notice to the Warrant Agent and the
holders of Warrant Certificates mailed to their addresses as set forth in the
record books of the Warrant Agent] (the "Expiration Date"). Each Warrant not
exercised at or before 3:30 p.m., New York City time, on the Expiration Date
shall become void, and all rights of the holder of the Warrant Certificate
evidencing such Warrant under this Agreement shall cease.
Section 2.03. Exercise of Warrants. (a) During the period specified in Section
2.02 any whole number of Warrants may be exercised by providing certain
information as set forth on the reverse side of the Warrant Certificate and by
paying in full, in [lawful money of the United States of America] [applicable
currency,] [in cash or by certified check or official bank check or by, in each
case,] [by bank wire transfer] in immediately available funds the Warrant Price
for each Warrant exercised, to the Warrant Agent at its corporate trust office
[or at ______________________], provided that such exercise is subject to
receipt within five business days of such [payment] [wire transfer] by the
Warrant Agent of the Warrant Certificate with the form of election to purchase
Warrant Securities set forth on the reverse side of the Warrant Certificate
properly completed and duly executed. The date on which payment in full of the
Warrant Price is received by the Warrant Agent shall, subject to receipt of the
Warrant Certificates as aforesaid, be deemed to be the date on which the Warrant
is exercised. The Warrant Agent shall deposit all funds received by it in
payment of the Warrant Price in an account of the Company maintained with it [if
non-dollar denominated funds -- or in such other account designated by the
Company] and shall advise the Company by telephone at the end of each day on
which a [payment] [wire transfer] for the exercise of Warrants is received of
the amount so deposited to its account. The Warrant Agent shall promptly confirm
such telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly as practicable,
advise the Company and the Trustee of (i) the number of Warrants exercised, (ii)
the instructions of each holder of the Warrant Certificates evidencing such
Warrants with respect to delivery of the Warrant Securities to which such holder
is entitled upon such exercise, (iii) delivery of Warrant Certificates
evidencing the balance, if any, of the Warrants remaining after such exercise,
and (iv) such other information as the Company or such Trustee shall reasonably
require.
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(c) As promptly as practicable after the exercise of any Warrant, the Company
shall issue, pursuant to the Indenture, in authorized denominations to or upon
the order of the holder of the Warrant Certificate evidencing such Warrant, the
Warrant Securities to which such holder is entitled, in fully registered form,
registered in such name or names as may be directed by such holder. If fewer
than all of the Warrants evidenced by such Warrant Certificate are exercised,
the Company shall execute, and an authorized officer of the Warrant Agent shall
manually countersign and deliver, a new Warrant Certificate evidencing the
number of such Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or other tax or other
governmental charge required to be paid in connection with any transfer involved
in the issue of the Warrant Securities, and in the event that any such transfer
is involved, the Company shall not be required to issue or deliver any Warrant
Security until such tax or other charge shall have been paid or it has been
established to the Company's satisfaction that no such tax or other charge is
due.
ARTICLE III.
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES.
Section 3.01. No Rights as Warrant Securityholder Conferred by Warrants or
Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby shall
entitle the holder thereof to any of the rights of a holder of Warrant
Securities, including, without limitation, the right to receive the payment of
principal of, premium, if any, or interest on Warrant Securities or to enforce
any of the covenants in the Indenture.
Section 3.02. Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon
receipt by the Warrant Agent of evidence reasonably satisfactory to it and the
Company of the ownership of and the loss, theft, destruction or mutilation of
any Warrant Certificate and of indemnity reasonably satisfactory to the Warrant
Agent and the Company and, in the case of mutilation, upon surrender thereof to
the Warrant Agent for cancellation, then, in the absence of notice to the
Company or the Warrant Agent that such Warrant Certificate has been acquired by
a bona fide purchaser, the Company shall execute, and an authorized officer of
the Warrant Agent shall manually countersign and deliver, in exchange for or in
lieu of the lost, stolen, destroyed or mutilated Warrant Certificate, a new
Warrant Certificate of the same tenor and evidencing a like number of Warrants.
Upon the issuance of any new Warrant Certificate under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Warrant Agent) in connection
therewith. Every substitute Warrant Certificate executed and delivered pursuant
to this Section in lieu of any lost, stolen or destroyed Warrant Certificate
shall represent an additional contractual obligation of the Company, whether or
not the mutilated, lost, stolen or destroyed Warrant Certificate shall be at any
time enforceable by anyone, and shall be entitled to the benefits of this
Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder. The provisions of this
Section are exclusive and shall preclude (to the extent lawful) all other rights
and remedies with respect to the replacement of mutilated, lost, stolen or
destroyed Warrant Certificates.
Section 3.03. Holder of Warrant Certificate May Enforce Rights. Notwithstanding
any of the provisions of this Agreement, any holder of a Warrant Certificate,
without the consent of the Warrant Agent, the Trustee, the holder of any Warrant
Securities or the holder of any other Warrant Certificate, may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company suitable to enforce, or otherwise
in respect of, his right to exercise the Warrants evidenced by his Warrant
Certificate in the manner provided in his Warrant Certificate and in this
Agreement.
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Section 3.04. Merger, Consolidation, Conveyance, Transfer or Lease. If at any
time there shall be a merger, consolidation, conveyance, transfer or lease of
assets subject to Section 801 of the Indenture, then in any such event the
successor or assuming corporation referred to therein shall succeed to and be
substituted for the Company, with the same effect, subject to such Indenture, as
if it had been named herein and in the Warrant as the Company; the Company shall
thereupon be relieved of any further obligation hereunder or under the Warrants,
and the Company as the predecessor corporation may thereupon or at any time
thereafter be dissolved, wound up or liquidated. Such successor or assuming
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of the Company, any or all of the Warrants issuable
hereunder which theretofore shall not have been signed by the Company, and may
execute and deliver Warrant Securities in its own name pursuant to such
Indenture, in fulfillment of its obligations to deliver Warrant Securities upon
exercise of the Warrants. All the Warrants so issued shall in all respects have
the same legal rank and benefit under this Agreement as the Warrants theretofore
or thereafter issued in accordance with the terms of this Agreement as though
all of such Warrants had been issued at the date of the execution hereof. In any
case of any such consolidation, merger, conveyance, transfer or lease, such
changes in phraseology and form (but not in substance) may be made in the
Warrants thereafter to be issued as may be appropriate.
The Warrant Agent may receive a written opinion of legal counsel as conclusive
evidence that any such consolidation, merger, conveyance, transfer or lease
complies with the provisions of this Section 3.04 and such Indenture.
ARTICLE IV.
EXCHANGE AND TRANSFER
OF WARRANT CERTIFICATES.
Section 4.01. Exchange and Transfer of Warrant Certificates. [If Offered
Securities with Warrants which are immediately detachable -- Upon] [If Offered
Securities with Warrants which are not immediately detachable -- Prior to the
Detachable Date a Warrant Certificate may be exchanged or transferred only
together with the Offered Security to which the Warrant Certificate was
initially attached, and only for the purpose of effecting or in conjunction with
an exchange or transfer of such Offered Security. Prior to any Detachable Date,
each transfer of the Offered Security [on the register of the Offered
Securities] shall operate also to transfer the related Warrant Certificates.
After the Detachable date upon] surrender at the corporate trust office of the
Warrant Agent [or _________________], Warrant Certificates evidencing Warrants
may be exchanged for Warrant Certificates in other denominations evidencing such
Warrants or the transfer thereof may be registered in whole or in part; provided
that such other Warrant Certificates evidence the same aggregate number of
Warrants as the Warrant Certificates so surrendered. The Warrant Agent shall
keep, at its corporate trust office [and at _______________________], books in
which, subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates and exchanges and transfers of outstanding Warrant
Certificates, upon surrender of the Warrant Certificates to the Warrant Agent at
its corporate trust office [or ______________] for exchange or registration of
transfer, properly endorsed or accompanied by appropriate instruments of
registration of transfer and written instructions for transfer, all in form
satisfactory to the Company and the Warrant Agent. No service charge shall be
made for any exchange or registration of transfer of Warrant Certificates, but
the Company may require payment of a sum sufficient to cover any stamp or other
tax or other governmental charge that may be imposed in connection with any such
exchange or registration of transfer. Whenever any Warrant Certificates are so
surrendered for exchange or registration of transfer, an authorized officer of
the Warrant Agent shall manually countersign and deliver to the person or
persons entitled thereto a Warrant Certificate or Warrant Certificates duly
authorized and executed by the Company, as so requested. The Warrant Agent shall
not be required to effect any exchange or registration of transfer which will
result in the issuance of a Warrant Certificate evidencing a fraction of a
Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant
Certificates issued upon any exchange or registration of transfer of Warrant
Certificates shall be the valid obligations of the Company, evidencing the same
obligations, and
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entitled to the same benefits under this Agreement, as the Warrant Certificate
surrendered for such exchange or registration of transfer.
Section 4.02. Treatment of Holders of Warrant Certificates. [If Offered
Securities and Warrants are not immediately detachable -- Prior to the
Detachable Date, the Company, the Warrant Agent and all other persons may treat
the owner of the Offered Security as the owner of the Warrant Certificates
initially attached thereto for any purpose or as the person entitled to exercise
the rights represented by the Warrants evidenced by such Warrant Certificates,
any notice to the contrary notwithstanding. After the Detachable Date, and
prior] [Prior] to due presentment of a Warrant Certificate for registration of
transfer, the Company, the Warrant Agent and all other persons may treat the
holder of a Warrant Certificate as the owner thereof for any purpose and as the
person entitled to exercise the rights represented by the Warrants evidenced
thereby, any notice to the contrary notwithstanding.
Section 4.03. Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered for exchange, registration of transfer or exercise of the Warrants
evidenced thereby shall, if surrendered to the Company, be delivered to the
Warrant Agent and all Warrant Certificates surrendered or so delivered to the
Warrant Agent shall be promptly cancelled by the Warrant Agent and shall not be
reissued and, except as expressly permitted by this agreement, no Warrant
Certificate shall be issued hereunder in exchange or in lieu thereof. The
Warrant Agent shall deliver to the Company from time to time or otherwise
dispose of cancelled Warrant Certificates in a manner satisfactory to the
Company.
ARTICLE V.
CONCERNING THE WARRANT AGENT.
Section 5.01. Warrant Agent. The Company hereby appoints
__________________________ as Warrant Agent of the Company in respect of the
Warrants and the Warrant Certificates upon the terms and subject to the
conditions herein set forth; and _____________________ hereby accepts such
appointment. The Warrant Agent shall have the powers and authority granted to
and conferred upon it in the Warrant Certificates and hereby and such further
powers and authority to act on behalf of the Company as the Company may
hereafter grant to or confer upon it. All of the terms and provisions with
respect to such powers and authority contained in the Warrant Certificates are
subject to and governed by the terms and provisions hereof.
Section 5.02. Conditions of Warrant Agent's Obligations. The Warrant Agent
accepts its obligations herein set forth upon the terms and conditions hereof,
including the following to all of which the Company agrees and to all of which
the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees promptly to pay the
Warrant Agent the compensation to be agreed upon with the Company for all
services rendered by the Warrant Agent and to reimburse the Warrant Agent for
reasonable out-of-pocket expenses (including counsel fees) incurred without
negligence, bad faith or willful misconduct by the Warrant Agent in connection
with the services rendered hereunder by the Warrant Agent. The Company also
agrees to indemnify the Warrant Agent for, and to hold it harmless against, any
loss, liability or expense incurred without negligence, bad faith or willful
misconduct on the part of the Warrant Agent, arising out of or in connection
with its acting as Warrant Agent hereunder, as well as the reasonable costs and
expenses of defending against any claim of such liability.
(b) Agent for the Company. In acting under this Warrant Agreement and in
connection with the Warrant Certificates, the Warrant Agent is acting solely as
agent of the Company and does not assume any obligations or relationship of
agency or trust for or with any of the holders of Warrant Certificates or
beneficial owners of Warrants.
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(c) Counsel. The Warrant Agent may consult with counsel satisfactory to it, and
the written advice of such 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 the advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and shall incur no liability
for or in respect of any action taken or thing suffered by it in reliance upon
any Warrant Certificate, notice, direction, consent, certificate, affidavit,
statement or other paper or document reasonably believed by it to be genuine and
to have been presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, and its officers, directors and
employees, may become the owner of, or acquire any interest in, Warrants, with
the same rights that it or they would have if it were not the Warrant Agent
hereunder, and, to the extent permitted by applicable law, it or they may engage
or be interested in any financial or other transaction with the Company and may
act on, or as depositary, trustee or agent for, any committee or body of Holders
of Warrant Securities or other obligations of the Company as freely as if it
were not the Warrant Agent hereunder. Nothing in this Agreement shall be deemed
to prevent the Warrant Agent from acting as Trustee under any of the Indentures.
(f) No Liability for Interest. Unless otherwise agreed with the Company, the
Warrant Agent shall have no liability for interest on any monies at any time
received by it pursuant to any of the provisions of this Agreement or of the
Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall have no liability with
respect to any invalidity of this Agreement or any of the Warrant Certificates
(except as to the Warrant Agent's countersignature thereon).
(h) No Responsibility for Representations. The Warrant Agent shall not be
responsible for any of the recitals or representations herein or in the Warrant
Certificates (except as to the Warrant Agent's countersignature thereon), all of
which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be obligated to perform only
such duties as are herein and in the Warrant Certificates specifically set forth
and no implied duties or obligations shall be read into this Agreement or the
Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be
under any obligation to take any action hereunder which may tend to involve it
in any expense or liability, the payment of which within a reasonable time is
not, in its reasonable opinion, assured to it. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates authenticated by the Warrant Agent and delivered
by it to the Company pursuant to this Agreement or for the application by the
Company of any of the Warrant Certificates or for the application by the Company
of the proceeds of the Warrant Certificates. The Warrant Agent shall have no
duty or responsibility in case of any default by the Company in the performance
of its covenants or agreements contained herein or in the Warrant Certificates
or in the case of the receipt of any written demand from a holder of a Warrant
Certificate with respect to such default, including, without limiting the
generality of the foregoing, any duty or responsibility to initiate or attempt
to initiate any proceedings at law or otherwise or, except as provided in
Section 6.02 hereof, to make any demand upon the Company.
Section 5.03. Resignation and Appointment of Successor. (a) The Company agrees,
for the benefit of the holders from time to time of the Warrant Certificates,
that there shall at all times be a Warrant Agent hereunder until all the
Warrants have been exercised or are no longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving written
notice to the Company of such intention on its part, specifying the date on
which its desired resignation shall become effective; provided that such date
shall not be less than three months after the date on which such notice is given
unless the Company otherwise agrees. The Warrant Agent hereunder may be removed
at any time by the filing with it of an
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instrument in writing signed by or on behalf of the Company and specifying such
removal and the intended date when it shall become effective. Such resignation
or removal shall take effect upon the appointment by the Company, as hereinafter
provided, of a successor Warrant Agent (which shall be a bank or trust company
authorized under the laws of the jurisdiction of its organization to exercise
corporate trust powers) and the acceptance of such appointment by such successor
Warrant Agent. The obligation of the Company under Section 5.02(a) shall
continue to the extent set forth therein notwithstanding the resignation or
removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or shall be removed, or
shall become incapable of acting, or shall be adjudged a bankrupt or insolvent,
or shall commence a voluntary case under the Federal bankruptcy laws, as now or
hereafter constituted, or under any other applicable Federal or State
bankruptcy, insolvency or similar law or shall consent to the appointment of or
taking possession by a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Warrant Agent or its property or
affairs, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due, or
shall take corporate action in furtherance of any such action, or a decree or
order for relief by a court having jurisdiction in the premises shall have been
entered in respect of the Warrant Agent in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or similar law; or a decree or order by
a court having jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or similar official) of the Warrant Agent or of its property or
affairs, or any public officer shall take charge or control of the Warrant Agent
or of its property or affairs for the purpose of rehabilitation, conservation,
winding up or liquidation, a successor Warrant Agent, qualified as aforesaid,
shall be appointed by the Company by an instrument in writing, filed with the
successor Warrant Agent. Upon the appointment as aforesaid of a successor
Warrant Agent and acceptance by the successor Warrant Agent of such appointment,
the Warrant Agent shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute, acknowledge
and deliver to its predecessor and to the Company an instrument accepting such
appointment hereunder, and thereupon such successor Warrant Agent, without any
further act, deed or conveyance, shall become vested with all the authority,
rights, powers, trusts, immunities, duties and obligations of such predecessor
with like effect as if originally named as Warrant Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid, shall
thereupon become obligated to transfer, deliver and pay over, and such successor
Warrant Agent shall be entitled to receive, all monies, securities and other
property on deposit with or held by such predecessor, as Warrant Agent
hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be merged or
converted or any corporation with which the Warrant Agent may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Warrant Agent shall be a party, or any corporation to which the
Warrant Agent shall sell or otherwise transfer all or substantially all the
assets and business of the Warrant Agent, provided that it shall be qualified as
aforesaid, shall be the successor Warrant Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE VI.
MISCELLANEOUS.
Section 6.01. Amendment. This Agreement may be amended by the parties hereto,
without the consent of the holder of any Warrant Certificate, for the purpose of
curing any ambiguity, or of curing, correcting or supplementing any defective
provision contained herein, or making any other provisions with respect to
matters or questions arising under this Agreement as the Company and the Warrant
Agent may deem necessary or desirable; provided that such action shall not
materially adversely affect the interests of the holders of the
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Warrant Certificates. The parties hereto may also modify or amend this Agreement
and the terms of the Warrant Certificates with the consent of the holders of not
less than a majority in number of the then outstanding unexercised Warrant
Certificates affected thereby; provided that no such modification or amendment
that accelerates the expiration date, increases the exercise price, reduces the
number of outstanding Warrant Certificates the consent of the holders of which
is required for any such modification or amendment, or otherwise materially
adversely affects the rights of the holders of the Warrant Certificates, may be
made without the consent of each holder affected thereby.
Section 6.02. Notices and Demands to the Company and Warrant Agent. If the
Warrant Agent shall receive any notice or demand addressed to the Company by the
holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.
Section 6.03. Addresses. Any communication from the Company to the Warrant Agent
with respect to this Agreement shall be addressed to
__________________________________________________, Attention: _________________
and any communication from the Warrant Agent to the Company with respect to this
Agreement shall be addressed to Digital Microwave Corporation, 170 Rose Orchard
Way, San Jose, California 95134, Attention: Chief Financial Officer (or such
other address as shall be specified in writing by the Warrant Agent or by the
Company).
Section 6.04. Applicable Law. The validity, interpretation and performance of
this Agreement and each Warrant Certificate issued hereunder and of the
respective terms and provisions thereof shall be governed by, and construed in
accordance with, the laws of the State of ________________.
Section 6.05. Delivery of Prospectus. The Company will furnish to the Warrant
Agent sufficient copies of a prospectus relating to the Warrant Securities
deliverable upon exercise of the Warrants (the "Prospectus"), and the Warrant
Agent agrees that upon the exercise of any Warrant, the Warrant Agent will
deliver to the holder of the Warrant Certificate evidencing such Warrant, prior
to or concurrently with the delivery of the Warrant Securities issued upon such
exercise, a Prospectus. The Warrant Agent shall not, by reason of any such
delivery, assume any responsibility for the accuracy or adequacy of such
Prospectus.
Section 6.06. Obtaining of Governmental Approvals. The Company will from time to
time take all action which may be necessary to obtain and keep effective any and
all permits, consents and approvals of governmental agencies and authorities and
securities acts filings under United States Federal and State laws (including
without limitation a registration statement in respect of the Warrants and
Warrant Securities under the Securities Act of 1933), which may be or become
requisite in connection with the issuance, sale, transfer, and delivery of the
Warrant Securities issued upon exercise of the Warrant Certificates, the
exercise of the Warrants, the issuance, sale, transfer and delivery of the
Warrants or upon the expiration of the period during which the Warrants are
exercisable.
Section 6.07. Persons Having Rights under Warrant Agreement. Nothing in this
Agreement shall give to any person other than the Company, the Warrant Agent and
the holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement.
Section 6.08. Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which as so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
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<PAGE>
Section 6.10. Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Warrant Agent for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificate for
inspection by it.
IN WITNESS WHEREOF Digital Microwave Corporation and _______________ have caused
this Agreement to be signed by their respective duly authorized officers, and
their respective corporate seals to be affixed hereunto, and the same to be
attested by their respective Secretaries or one of their respective Assistant
Secretaries, all as of the day and year first above written.
DIGITAL MICROWAVE CORPORATION
By:
----------------------------------
Name:
--------------------------------
Its:
---------------------------------
[WARRANT AGENT]
By:
----------------------------------
Name:
--------------------------------
Its:
---------------------------------
10
<PAGE>
EXHIBIT A
FORM OF WARRANT CERTIFICATE
[Face of Warrant Certificate]
[Form of Legend if Prior to ___________________ this
Offered Securities with Warrant Certificate cannot be
Warrants which are not transferred or exchanged unless
immediately detachable. attached to a [Title of Offered
Securities].]
[Form of Legend if Warrants Prior to _______________, Warrants
are not immediately evidenced by this Warrant
exercisable. Certificate cannot be exercised.]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN
DIGITAL MICROWAVE CORPORATION
WARRANTS TO PURCHASE
[Title of Warrant Securities]
VOID AFTER 3:30 P.M., NEW YORK CITY TIME, ON _______________
No. ____ __________ Warrants
This certifies that _________________________ or registered assigns is the
registered owner of the above indicated number of Warrants, each Warrant
entitling such owner [if Offered Securities with Warrants which are not
immediately detachable -- , subject to the registered owner qualifying as a
"holder" of this Warrant Certificate, as hereinafter defined] to purchase, at
any time [after 3:30 p.m., New York City time, on _____________ and] on or
before 3:30 p.m., New York City time, on _________________, _________ principal
amount of [Title of Warrant Securities] (the "Warrant Securities"), of Digital
Microwave Corporation (the "Company"), issued and to be issued under the
Indenture (as hereinafter defined), on the following basis: during the period
from __________________, through and including __________________ the exercise
price of each Warrant will be _________ plus [accrued amortization of the
original issue discount] [accrued interest] from __________________; during the
period from __________________, through and including ___________________, the
exercise price of each Warrant will be _________ plus [accrued amortization of
the original issue discount] [accrued interest] from _________________; [in each
case, the original issue discount will be amortized at a ____% annual rate,
computed on an annual basis using the "interest" method and using a 360-day year
consisting of twelve 30-day months] (the "Warrant Price"). [The original issue
discount for each _________ principal amount of Warrant Securities is
_____________.] The holder may exercise the Warrants evidenced hereby by
providing certain information set forth on the back hereof, and by paying in
full [in lawful money of the United States of America] [applicable currency] [in
cash or by certified check or official bank check or by bank wire transfer, in
each case,] [by bank wire transfer] in immediately available funds, the Warrant
Price for each Warrant exercised to the Warrant Agent (as hereinafter defined)
and by surrendering this Warrant Certificate, with the purchase form on the back
hereof duly executed, at the corporate trust office of [name of Warrant Agent],
or its successor as warrant agent (the "Warrant Agent"), [or
_____________________], which is, on the date hereof, at the address on the
reverse hereof, and upon compliance with and subject to the conditions set forth
herein and in the Warrant Agreement (as hereinafter defined).
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<PAGE>
The term "holder" as used herein shall mean [if Offered Securities with Warrants
which are not immediately detachable -- , prior to ___________________ (the
"Detachable Date"), the registered owner of the Company's [title of Offered
Securities] to which this Warrant Certificate is initially attached, and after
such Detachable Date,] the person in whose name at the time this Warrant
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose pursuant to Section 4.01 of the Warrant Agreement.
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase Warrant Securities in registered form in denominations of
__________ and any integral multiples thereof. Upon any exercise of fewer than
all of the Warrants evidenced by this Warrant Certificate, there shall be issued
to the holder hereof a new Warrant Certificate evidencing the number of Warrants
remaining unexercised.
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement dated as of _________________ (the "Warrant Agreement") between the
Company and the Warrant Agent and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
holder of this Warrant Certificate consents by acceptance hereof. Copies of the
Warrant Agreement are on file at the above-mentioned office of the Warrant Agent
[and at ____________________].
The Warrant Securities to be issued and delivered upon the exercise of the
Warrants evidenced by this Warrant Certificate will be issued under and in
accordance with an indenture (the "Indenture"), dated as of _____________
between the Company and _________________, as trustee (the "Trustee"), and will
be subject to the terms and provisions contained in the Indenture. Copies of the
Indenture and the form of the Warrant Securities are on file at the corporate
trust office of the Trustee [and at ____________________].
[If Offered Securities with Warrants which are not immediately detachable --
Prior to __________________, this Warrant Certificate may be exchanged or
transferred only together with the [Title of Offered Securities] ("Offered
Securities") to which this Warrant Certificate was initially attached, and only
for the purpose of effecting, or in conjunction with, an exchange or transfer of
such Offered Security. After such date, transfer of this] [if Offered Securities
with Warrants which are immediately detachable -- Transfer of this] Warrant
Certificate may be registered when this Warrant Certificate is surrendered at
the corporate trust office of the Warrant Agent [or __________________] by the
registered owner or his assigns, in person or by an attorney duly authorized in
writing, in the manner and subject to the limitations provided in the Warrant
Agreement.
[If Offered Securities with Warrants which are not immediately detachable --
Except as provided in the immediately preceding paragraph, after] [If Offered
Securities with Warrants which are immediately detachable or Warrants alone --
After] countersignature by the Warrant Agent and prior to the expiration of this
Warrant Certificate, this Warrant Certificate may be exchanged at the corporate
trust office of the Warrant Agent [or ______________] for Warrant Certificates
representing the same aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of the
rights of a holder of the Warrant Securities, including, without limitation, the
right to receive payments of principal of, premium, if any, or interest, if any,
on the Warrant Securities or to enforce any of the covenants of the Indenture.
This Warrant Certificate shall not be valid or obligatory for any purpose until
countersigned by the Warrant Agent.
Dated as of ----------------------------.
DIGITAL MICROWAVE CORPORATION
By:
----------------------------------
12
<PAGE>
Name:
--------------------------------
Its:
---------------------------------
Countersigned:
By:
----------------------------------
Name:
--------------------------------
Its:
---------------------------------
As Warrant Agent
13
<PAGE>
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay in [Dollars]
[applicable currency] [in cash or by certified check or official bank check or
by bank wire transfer, in each case] [by bank wire transfer] in immediately
available funds the Warrant Price in full for Warrants exercised to [insert name
of Warrant Agent] [corporate trust department] [insert address of Warrant
Agent], Attn. ________________ [or ________________], which [payment] [wire
transfer] must specify the name of the holder and the number of Warrants
exercised by such holder. In addition, the holder must complete the information
required below, including any applicable certifications if the Warrant
Securities are issuable in bearer form, and present this Warrant Certificate in
person or by mail (certified or registered mail is recommended) to the Warrant
Agent at the appropriate address set forth below. This Warrant Certificate,
completed and duly executed, must be received by the Warrant Agent within five
business days of the [payment] [wire transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise _________ Warrants,
evidenced by this Warrant Certificate, to purchase _________ principal amount of
the [Title of Warrant Securities] (the "Warrant Securities") of Digital
Microwave Corporation and represents that he has tendered payment for such
Warrant Securities in [Dollars] [applicable currency] [in cash or by certified
check or official bank check or by bank wire transfer, in each case] [by bank
wire transfer] in immediately available funds to the order of Digital Microwave
Corporation, c/o [insert name and address of Warrant Agent], in the amount of
_________ in accordance with the terms hereof. The undersigned requests that
said principal amount of Warrant Securities be in fully registered form in the
authorized denominations, registered in such names and delivered all as
specified in accordance with the instructions set forth below.
If the number of Warrants exercised is less than all of the Warrants evidenced
hereby, the undersigned requests that a new Warrant Certificate representing the
remaining Warrants evidenced hereby be issued and delivered to the undersigned
unless otherwise specified in the instructions below.
Dated: NAME ADDRESS
---- -------
(Insert Social Security or
Other Identifying Number ---------------------------
of Holder)
14
<PAGE>
SIGNATURE
---------
Signature Guaranteed (Signature must conform in
- ------------------------ all respects to name of holder
as specified on face of this
Warrant Certificate and must
bear a signature guarantee by a
bank, trust company or member broker of the Nasdaq
National Market, New York, Midwest or Pacific
Stock Exchange)]
The warrants evidenced hereby may be exercised at the following address:
BY HAND AT
- ---------
BY MAIL AT
- ---------
[Instructions as to form and delivery of Warrant Securities and, if applicable,
Warrant Certificate evidencing unexercised Warrants -- complete as appropriate.]
15
<PAGE>
Assignment
Form of Assignment To Be Executed If Holder
Desires To Transfer Warrants Evidenced Hereby
FOR VALUE RECEIVED ______________________________________ hereby sells, assigns
and transfers unto
(Please print name) (Please insert social security or
other identifying number)
(Address)
(City, including zip code)
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _________________________ Attorney, to
transfer said Warrant Certificate on the books of the Warrant Agent with full
power of substitution in the premises.
Dated:
Signature
(Signature must conform in all respects to name of holder as specified on the
face of this Warrant Certificate and must bear a signature guarantee by a bank,
trust company or member broker of the Nasdaq National Market, New York, Midwest
or Pacific Stock Exchange)
Signature Guaranteed
16
<PAGE>
Exhibit 4.4
DIGITAL MICROWAVE CORPORATION
FORM OF COMMON STOCK WARRANT AGREEMENT
COMMON STOCK WARRANT AGREEMENT dated as of _________________, ____,
between Digital Microwave Corporation, a Delaware corporation (hereinafter
called the "Company"), and ___________________________ having a corporate trust
office in _______________________________, as warrant agent (hereinafter called
the "Warrant Agent").
WHEREAS, the Company proposes to issue [Class __] Purchase Warrants (hereinafter
called the "Warrants") entitling the holders thereof to purchase an aggregate of
_________ shares of Common Stock of the Company (par value $0.01 per share)
(hereinafter called the "Shares") at an initial cash purchase price of $______
per Share at any time [after _________________ and] prior to 3:30 p.m., New York
City time, on __________________, ____ (hereinafter called the "expiration
date") (unless extended as provided in Section 9A hereof); and
[IF WARRANTS ARE ATTACHED TO OTHER SECURITIES, INSERT --
WHEREAS, the Warrants will be offered in Units, each of which consists of
_______________________ and Warrants to purchase _________ Shares; and]
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing so to act, in connection with the issuance,
registration, transfer, exchange and exercise of Warrants to be issued from time
to time by the Company,
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
Section 1. Appointment of Warrant Agent. The Company hereby appoints the Warrant
Agent to act as agent for the Company in accordance with the instructions
hereinafter in this Agreement set forth, and the Warrant Agent hereby accepts
such appointment.
Section 2. Form of Warrant. The text of the Warrants and the form of election to
purchase Shares to be set forth on the reverse thereof shall be substantially as
set forth in Exhibit A attached hereto. Each Warrant shall, subject to the terms
of this Warrant Agreement, entitle the registered holder thereof to initially
purchase the number of Shares specified therein at an initial exercise price of
$______ per Share; provided, however, that the warrant exercise price and the
number of Shares issuable upon exercise of Warrants are subject to adjustment
upon the occurrence of certain events, all as hereinafter provided. The Warrants
shall be executed on behalf of the Company by the manual or facsimile signature
of the present or any future Chairman of the Board, President or Vice President
of the Company, under its seal, affixed or in facsimile, and by the manual or
facsimile signature of the present or any future Secretary or Assistant
Secretary of the Company.
The Company shall promptly notify the Warrant Agent from time to time in writing
of the number of Warrants to be issued and furnish written instructions in
connection therewith signed by an executive officer of the Company; such
notification and instructions may, but need not be, in the form of a general or
continuing authorization to the Warrant Agent.
The Warrants shall be dated by the Warrant Agent as of the date of each initial
issuance, and as of the date of issuance thereof upon any transfer or exchange
thereof.
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<PAGE>
Section 3. Countersignature and Registration. The Warrant Agent shall maintain
books for the transfer and registration of the Warrants. Upon the initial
issuance of the Warrants, the Warrant Agent shall issue and register the
Warrants in the names of the respective registered holders thereof. The Warrants
shall be countersigned by the Warrant Agent (or by any successor to the Warrant
Agent then acting as warrant agent under this Agreement) and shall not be valid
for any purpose unless so countersigned. Such Warrants may be so countersigned,
however, by the Warrant Agent (or by its successor as warrant agent) and be
delivered by the Warrant Agent, notwithstanding that the persons whose manual or
facsimile signatures appear thereon as proper officers of the Company shall have
ceased to be such officers at the time of such countersignature or delivery.
Upon issuance of any Warrant, the Company will present the same, or cause the
same to be presented, to the Warrant Agent for countersignature of such Warrant.
Section 4. Transfers and Exchanges. The Warrant Agent shall transfer, from time
to time, any outstanding Warrants upon the books to be maintained by the Warrant
Agent for that purpose, upon the surrender thereof for transfer properly
endorsed or accompanied by appropriate instructions for transfer. Upon any such
transfer, a new Warrant of like tenor shall be issued to the transferee and the
surrendered Warrant shall be cancelled by the Warrant Agent. All such Warrants
so cancelled shall be delivered by the Warrant Agent to the Company from time to
time. The Warrants may be exchanged at the option of the holder thereof, when
surrendered at the office in ______________________________________ of the
Warrant Agent, for another Warrant, or other Warrants of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of Shares. The Warrant Agent is hereby irrevocably
authorized to countersign and deliver, in accordance with the provisions of this
Section and Section 3 of this Agreement, such new Warrants required pursuant to
the provisions of this Section, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with Warrants duly executed on
behalf of the Company for such purpose.
[IF THE WARRANTS ARE ATTACHED TO OTHER SECURITIES, INSERT --
Notwithstanding the foregoing, until __________________, the Warrants shall not
be transferable apart from the _____________ to which they are attached, any
transfer of the _____________ shall be deemed a transfer of the Warrants
attached thereto, and any attempt to transfer the Warrants apart from the
___________________ shall be void and of no effect. Each Warrant shall contain a
legend to the foregoing effect.]
Section 5. Exercise of Warrants. The registered holder of each Warrant shall
have the right, which may be exercised as in such Warrant expressed, to purchase
from the Company (and the Company shall issue and sell to such registered
holder) the number of Shares specified in such Warrants, upon surrender to the
Company, at the office in _____________________________ of the Warrant Agent of
such Warrant, with the form of election to purchase on the reverse thereof duly
filled in and signed, and upon payment to the Warrant Agent for the account of
the Company of the warrant exercise price, determined in accordance with the
provisions of Section 9 of this Agreement, for the number of Shares in respect
of which such Warrant is then exercised. Payment of such warrant exercise price
may be made in cash, or by certified check or bank draft or postal or express
money order, payable in United States dollars, to the order of the Warrant
Agent. No adjustment shall be made for any dividends on any Shares issuable upon
exercise of any Warrant. Subject to Section 6, upon such surrender of Warrants,
and payment of the warrant exercise price as aforesaid, the Company shall issue
and cause to be delivered with all reasonable dispatch to or upon the written
order of the registered holder of such Warrants, and in such name or names as
such registered holder may designate, a certificate or certificates for the
number of full Shares so purchased upon the exercise of such Warrants, together
with cash, as provided in Section 9 of this Agreement, in respect of any
fraction of a Share otherwise issuable upon such surrender. Such certificate or
certificates shall be deemed to have been issued and any person so designated to
be named therein shall be deemed to have become a holder of record of such
Shares as of the date of the surrender of such Warrants and payment of the
warrant exercise price as aforesaid; provided, however, that if, at the date of
surrender of such Warrants and payment of such warrant exercise price, the
transfer books for the Shares purchasable upon the
2
<PAGE>
exercise of such Warrants shall be closed, no such surrender of such Warrants
and no such payment of such warrant exercise price shall be effective to
constitute the person so designated to be named therein as the holder of record
of such Shares on such date, but shall be effective to constitute such person as
the holder of record of such Shares for all purposes at the opening of business
on the next succeeding day on which the transfer books for the Shares
purchasable upon the exercise of such Warrants shall be opened, and the
certificates for the Shares in respect of which such Warrants are then exercised
shall be issuable as of the date on which such books shall next be opened, and
until such date the Company shall be under no duty to deliver any certificate
for such Shares. The rights of purchase represented by the Warrants shall be
exercisable, at the election of the registered holders thereof, either as an
entirety or from time to time for part only of the Shares specified therein and,
in the event that any Warrant is exercised in respect of less than all of the
Shares specified therein at any time prior to the date of expiration of the
Warrants, a new Warrant or Warrants of like tenor will be issued for the
remaining number of Shares specified in the Warrant so surrendered, and the
Warrant Agent is hereby irrevocably authorized to countersign and to deliver the
required new Warrants pursuant to the provisions of this Section and of Section
3 of this Agreement, and the Company, whenever required by the Warrant Agent,
will supply the Warrant Agent with Warrants duly executed on behalf of the
Company for such purpose.
Section 6. Payment of Taxes. The Company will pay any documentary stamp taxes
attributable to the initial issuance of Shares issuable upon the exercise of
Warrants; provided, however, that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer involved in the
issue or delivery of any certificates for Shares in a name other than that of
the registered holder of Warrants in respect of which such Shares are issued and
the Company shall not be required to issue and deliver the certificates for such
Shares unless and until the holder has paid to the Company the amount of any tax
which may be payable in respect of any transfer involved in such issuance or
shall establish to the satisfaction of the Company that such tax has been paid.
Section 7. Mutilated or Missing Warrants. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company will issue and the Warrant
Agent will countersign and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant, or in lieu of and substitution for the
Warrant lost, stolen or destroyed, a new Warrant of like tenor and representing
an equivalent right or interest, but only upon receipt of evidence satisfactory
to the Company and the Warrant Agent of such loss, theft or destruction of such
Warrants and indemnity, if requested, also satisfactory to them. Applicants for
such substitute Warrants shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company or the Warrant
Agent may prescribe. Any such new Warrant shall constitute an original
contractual obligation of the Company whether or not the allegedly lost, stolen,
mutilated or destroyed Warrant shall be at any time enforceable by anyone.
Section 8. Reservation of Shares, etc. Prior to the issuance of any Warrants
there shall have been reserved, and the Company shall at all times through the
expiration date keep reserved, out of its authorized and unissued Common Stock,
a number of Shares sufficient to provide for the exercise of the rights of
purchase represented by the Warrants, and the Transfer Agent for the Shares and
every subsequent Transfer Agent for the Shares issuable upon the exercise of any
of the rights of purchase aforesaid are hereby irrevocably authorized and
directed at all times to reserve such number of authorized and unissued Shares
as shall be requisite for such purpose. The Company will keep a copy of this
Agreement on file with the Transfer Agent for the Shares and with every
subsequent Transfer Agent for the Shares issuable upon the exercise of the
rights of purchase represented by the Warrants. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such Transfer Agent
certificates required to honor outstanding Warrants that have been exercised.
The Company will supply such Transfer Agent with duly executed certificates for
such purpose and will itself provide or otherwise make available any cash which
may be issuable as provided in Section 9 of this Agreement. All Warrants
surrendered in the exercise of the rights thereby evidenced or surrendered for
transfer, exchange or partial exercise shall be cancelled by the Warrant Agent
and shall thereafter be delivered to the Company.
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<PAGE>
Section 9. Warrant Price; Adjustments.
A. The warrant price per share at which Shares shall be purchasable upon
exercise of Warrants (herein called the "warrant exercise price") to and
including the expiration date (unless the expiration date is extended as
provided below in this Section 9A) shall be $______ per share, or, if adjusted
as provided in this Section, shall be such price as so adjusted. The Warrants
will not be exercisable prior to [the close of business on the date of any
initial issuance thereof] [_____________________] and will expire at 3:30 p.m.,
New York City time, on the expiration date; provided that the Company reserves
the right to, and may, in its sole discretion, at any time and from time to
time, at such time or times as the Company so determines, extend the expiration
date of the Warrants for such periods of time as it chooses; further provided
that in no case may the expiration date of the Warrants (as extended) be
extended beyond five years from the expiration date set forth above. Whenever
the expiration date of the Warrants is so extended, the Company shall at least
20 days prior to the then expiration date cause to be mailed to the Warrant
Agent and the registered holders of the Warrants in accordance with the
provisions of Section 17 hereof a notice stating that the expiration date has
been extended and setting forth the new expiration date.
B. The above provision is, however, subject to the following:
(1) The warrant purchase price, the number of Shares purchasable upon exercise
of each Warrant and the number of Warrants outstanding shall be subject to
adjustment as follows:
(a) In case the Company shall at any time after the date of this Agreement (i)
pay a dividend, or make a distribution, on the Common Stock which is payable in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (ii) subdivide or reclassify its outstanding shares of
Common Stock into a greater number of securities (including shares of Common
Stock), or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares (including shares of Common Stock), the number
of shares purchasable upon exercise of each Warrant immediately prior to the
occurrence of such event shall be adjusted so that the holder of each Warrant
shall be entitled to receive upon payment of the warrant purchase price the
aggregate number of shares of the Company which, if such Warrant had been
exercised immediately prior to the occurrence of such event, such holder would
have owned or have been entitled to receive immediately after the occurrence of
such event. An adjustment made pursuant to this subparagraph (a) shall become
effective immediately after the record date in the case of a dividend and shall
become effective immediately after the effective date in the case of a
subdivision or combination. If, as a result of an adjustment made pursuant to
this subparagraph (a), the holder of any Warrant thereafter exercised shall
become entitled to receive shares of two or more classes of capital stock of the
Company, the Board of Directors of the Company (whose determination shall be
conclusive) shall determine the allocation between or among shares of such
classes of capital stock.
In the event that at any time, as a result of an adjustment made pursuant to
this subparagraph (a), the holder of any Warrant thereafter exercised shall
become entitled to receive any shares or other securities of the Company other
than shares of Common Stock, thereafter the number of such other shares so
received upon exercise of any Warrant 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 shares of Common Stock contained in this
paragraph, and other provisions of this paragraph 9B(1) with respect to the
shares of Common Stock shall apply on like terms to any such other shares or
other securities.
[(b) In case the Company shall fix a record date for the issuance of rights or
warrants to all holders of its Common Stock entitling them (for a period
expiring within 45 days after such record date) to subscribe for or purchase
Common Stock at a price per share less than the current market price per share
of Common Stock (as defined in subparagraph (e) below) at such record date, the
warrant purchase price shall be determined by
4
<PAGE>
multiplying the warrant purchase price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of Shares
of Common Stock outstanding on such record date plus the number of Shares of
Common Stock which the aggregate offering price of the total number of Shares so
offered would purchase at such current market price, and the denominator of
which shall be the number of Shares of Common Stock outstanding on such record
date plus the number of additional Shares of Common Stock offered for
subscription or purchase. Such adjustment shall be made successively whenever
such a record date is fixed, and shall become effective immediately after such
record date. In determining whether any rights or warrants entitle the holders
to subscribe for or purchase Shares of Common Stock at less than such current
market price, and in determining the aggregate offering price of such shares,
there shall be taken into account any consideration received by the Company for
such rights or warrants, the value of such consideration, if other than cash, to
be determined by the Board of Directors of the Company. Common Stock owned by or
held for the account of the Company or any majority owned subsidiary shall not
be deemed outstanding for the purpose of any adjustment required under this
subparagraph (b).]
[(c) In case the Company shall fix a record date for making a distribution to
all holders of its Common Stock of evidences of its indebtedness or assets
(excluding regular quarterly or other periodic or recurring cash dividends or
distributions and cash dividends or distributions paid from retained earnings or
referred to in subparagraph (a) above) or rights or warrants to subscribe or
warrants to purchase (excluding those referred to in subparagraph (b) above),
then in each such case the warrant purchase price shall be determined by
multiplying the warrant purchase price in effect immediately prior to such
record date by a fraction (x) the numerator of which shall be such current
market price (as defined in subparagraph (e) below) per Share of Common Stock on
such record date, less the then fair market value (as determined in good faith
by the Board of Directors, whose determination shall be conclusive) of the
portion of the assets or evidences of indebtedness so distributed or of such
subscription rights or warrants applicable to one share of the Common Stock and
(y) the denominator of which shall be the current market price per share of the
Common Stock on such record date. Such adjustment shall be made successively
whenever such a record date is fixed and shall become effective immediately
after such record date. Notwithstanding the foregoing, in the event that the
Company shall distribute any rights or warrants to acquire capital stock
("Rights") pursuant to this subparagraph (c), the distribution of separate
certificates representing such Rights subsequent to their initial distribution
(whether or not such distribution shall have occurred prior to the date of the
issuance of such Warrants) shall be deemed to be the distribution of such Rights
for purposes of this subparagraph (c), provided that the Company may, in lieu of
making any adjustment pursuant to this subparagraph (c) upon a distribution of
separate certificates representing such Rights, make proper provision so that
each holder of such Warrants who exercises such Warrants (or any portion
thereof) (A) before the record date for such distribution of separate
certificates shall be entitled to receive upon such exercise shares of Common
Stock issued with Rights and (B) after such record date and prior to the
expiration, redemption or termination of such Rights shall be entitled to
receive upon such exercise, in addition to the shares of Common Stock issuable
upon such exercise, the same number of such Rights as would a holder of the
number of shares of Common Stock that such Warrants so exercised would have
entitled the holder thereof to purchase in accordance with the terms and
provisions of and applicable to the Rights if such Warrants were exercised
immediately prior to the record date for such distribution. Common Stock owned
by or held for the account of the Company or any majority owned subsidiary shall
not be deemed outstanding for the purpose of any adjustment required under this
subparagraph (c).]
(d) After each adjustment of the number of shares purchasable upon exercise of
each Warrant pursuant to subparagraph 9B(1)(a), the warrant exercise price shall
be adjusted by multiplying such warrant exercise price immediately prior to such
adjustment by a fraction of which the numerator shall be the number of Shares
purchasable upon exercise of each Warrant immediately prior to such adjustment,
and the denominator of which shall be the number of Shares so purchasable
immediately thereafter. [After each adjustment of the warrant exercise price
pursuant to subparagraph 9B(1)(b) or (c), the total number of Shares or
fractional part thereof purchasable upon the exercise of each Warrant shall be
proportionately adjusted to such number of shares or fractional parts thereof as
the aggregate warrant exercise price of the number of shares or
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<PAGE>
fractional part thereof purchasable immediately prior to such adjustment will
buy at the adjusted warrant exercise price.]
[(e) For the purpose of any computation under subparagraphs 9B(1)(b) and (c)
above, the current market price per Share of Common Stock at any date shall be
deemed to be the average of the daily closing prices for the 30 consecutive
business days commencing 45 business days before the day in question. The
closing price for each day shall be (i) if the Common Stock is listed or
admitted for trading on the Nasdaq National Market ("NASDAQ"), the last sale
price (regular way), or the average of the closing bid and ask prices (regular
way), if no sale occurred, of Common Stock, or, if the Common Stock is not
listed or admitted to trading on the Nasdaq National Market, on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange, on NASDAQ or, (ii) if not listed or quoted as described in (i), the
mean between the closing high bid and low asked quotations of Common Stock
reported by NASDAQ, or any similar system for automated dissemination of
quotations of securities prices then in common use, if so quoted, or (iii) if
not quoted as described in clause (ii), the mean between the high bid and low
asked quotations for Common Stock as reported by the National Quotation Bureau
Incorporated if at least two securities dealers have inserted both bid and asked
quotations for Common Stock on at least 5 of the 10 preceding days. If none of
the conditions set forth above is met, the closing price of Common Stock on any
day or the average of such closing prices for any period shall be the fair
market value of Common Stock as determined by a member firm of the New York
Stock Exchange selected by the Company.]
(f) (A) Nothing contained herein shall be construed to require an adjustment as
a result of the issuance of Common Stock pursuant to, or the granting or
exercise of any rights under, the Company's [List employee and shareholder
plans, if any, that might otherwise result in adjustments].
(B) In addition, no adjustment in the warrant exercise price shall be required
unless and until the earlier of the following shall have occurred: (x) such
adjustment would require an increase or decrease of at least 1% in the warrant
exercise price or (y) a period of 3 years shall have elapsed from the date of
the occurrence of any event requiring any such adjustment pursuant to
subparagraphs 9B(1)(a)[, (b) or (c)] above. All adjustments shall be made to the
nearest one hundredth of a Share and the nearest cent, and any adjustments which
by reason of this subparagraph (f) are not required to be made shall be carried
forward cumulatively and taken into account in any subsequent adjustment which
(including such carry-forward) is required to be made under this subparagraph
(f).
(g) In any case in which this subparagraph 9B(1) shall require that an
adjustment be made retroactively immediately following a record date, the
Company may elect to defer (but only until five business days following the
mailing of the notice described in subparagraph 9B(5) below) issuing to the
holder of any Warrant exercised after such record date the Shares of the Company
issuable upon such exercise over and above the Shares issuable upon such
exercise only on the basis of the warrant exercise price prior to adjustment.
(h) The Company may, at its option, at any time until the expiration date,
reduce the then current warrant exercise price to any amount deemed appropriate
by the Board of Directors of the Company for any period not exceeding twenty
(20) consecutive days (as evidenced in a resolution adopted by such Board of
Directors), but only upon giving the notices required by subparagraph 9(B)(5)
twenty (20) days prior to taking such action.
(i) Except as herein otherwise expressly provided, no adjustment in the warrant
exercise price shall be made by reason of the issuance of Shares, or securities
convertible into or exchangeable for Shares, or securities carrying the right to
purchase any of the foregoing or for any other reason whatsoever.
(j) Irrespective of any of the adjustments in the warrant exercise price or the
number of Shares, Warrant Certificates theretofore issued may continue to
express the same prices and number of shares as are stated in a
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similar Warrant Certificate issuable initially, or at some subsequent time,
pursuant to this Agreement and such number of Shares specified therein shall be
deemed to have been so adjusted.
(2) No fractional Shares of Common Stock shall be issued upon the exercise of
Warrants. If more than one Warrant shall be exercised at one time by the same
holder, the number of full Shares which shall be issuable upon such exercise
shall be computed on the basis of the aggregate number of Shares purchased
pursuant to the Warrants so exercised. Instead of any fractional Share of Common
Stock which would otherwise be issuable upon exercise of any Warrant, the
Company shall pay a cash adjustment in respect of such fraction in an amount
equal to the same fraction of the last sales price (or bid price if there were
no sales) per Share of Common Stock, in either case as reported on NASDAQ on the
business day which next precedes the day of exercise or, if the Common Stock is
not then listed or admitted to trading on NASDAQ, an amount equal to the same
fraction of the market price per share of Common Stock (as determined in a
manner described by the Board of Directors of the Company) at the close of
business on the business day which next precedes the day of exercise.
(3) In case any of the following shall occur while any Warrants are outstanding:
(a) any reclassification or change of the outstanding Shares of Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value); or (b) any consolidation or merger to which the Company
is a party (other than a consolidation or a merger in which the Company is the
continuing corporation and which does not result in any reclassification of, or
change in, the outstanding shares of Common Stock issuable upon exercise of the
Warrants); or (c) any sale or conveyance to another corporation of the property
of the Company as an entirety or substantially as an entirety; then the Company,
or such successor or purchasing corporation, as the case may be, shall make
appropriate provision by amendment of this Agreement or otherwise so that the
holders of the Warrants then outstanding shall have the right at any time
thereafter, upon exercise of such Warrants, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance as would be
received by a holder of the number of shares of Common Stock issuable upon
exercise of such Warrant immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. Such provision shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 9. The above provisions of this
subparagraph 9B(3) shall similarly apply to successive reclassifications,
changes, consolidations, mergers, sales or conveyances.
(4) Before taking any action which would cause an adjustment decreasing the
warrant exercise price so that the warrant exercise price is below the then par
value of the shares of Common Stock, the Company will take any corporate action
which may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and nonassessable Shares of Common
Stock at the warrant exercise price as so adjusted.
(5) Whenever the warrant exercise price then in effect is adjusted as herein
provided, the Company shall mail to each holder of the Warrants at such holder's
address as it shall appear on the books of the Company a statement setting forth
the adjusted warrant exercise price then and thereafter effective under the
provisions hereof, together with the facts, in reasonable detail, upon which
such adjustment is based.
(6) In case (i) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its current or
retained earnings, or (ii) the Company shall authorize the granting to the
holders of its Common Stock of rights to subscribe for or purchase any shares of
capital stock of any class or of any other rights, or (iii) there is to be any
reclassification of the Common Stock of the Company (other than a subdivision or
combination of its outstanding shares of Common Stock), or any consolidation or
merger to which the Company is a party and for which approval of any
shareholders of the Company is required, or (iv) any distribution is to be made
on or in respect of the Common Stock in connection with the dissolution,
liquidation or winding up of the Company, then the Company shall mail to each
holder of Warrants at such holder's address as it shall appear on the books of
the Company, at least twenty days (or ten days in any case
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<PAGE>
specified in clause (i) or (ii) above) prior to the applicable record date
hereinafter specified, a notice stating (x) the record date for such dividend,
distribution or rights, or, if a record is not to be taken, the date as of which
the holders of Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined, or (y) the date on which such
reclassification, consolidation, merger, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, dissolution, liquidation or winding up.
No failure to mail such notice nor any defect therein or in the mailing thereof
shall affect any such transaction or any adjustment in the warrant exercise
price required by this Section 9.
Section 10. Notice to Warrantholders. Nothing contained in this Agreement or in
any of the Warrants shall be construed as conferring upon the holders thereof
the right to vote or to consent or to receive notice as shareholders in respect
of the meetings of shareholders or the election of directors of the Company or
any other matter, or any rights whatsoever as shareholders of the Company.
Section 11. Certain Covenants of the Company.
A. So long as any unexpired Warrants remain outstanding and if required in order
to comply with the Securities Act of 1933, as amended (the "Act"), the Company
covenants and agrees that it will file such post-effective amendments to the
registration statement filed pursuant to the Act with respect to the Warrants
(File No. 33-_____) (or such other registration statements or post-effective
amendments or supplements) as may be necessary to permit the Company to deliver
to each person exercising a Warrant a prospectus meeting the requirements of
Section 10(a)(3) of the Act and otherwise complying therewith, and will deliver
such a prospectus to each such person. The Company further covenants and agrees
that it will obtain and keep effective all permits, consents and approvals of
governmental agencies and authorities, and will use its best efforts to take all
action which may be necessary to qualify the Shares for sale under the
securities laws of such of the United States, as may be necessary to permit the
free exercise of the Warrants, and the issuance, sale, transfer and delivery of
the Shares issued upon exercise of the Warrants, and to maintain such
qualifications during the entire period in which the Warrants are exercisable.
B. The Company covenants and agrees that it shall take all such action as may be
necessary to ensure that all Shares will at the time of delivery of certificates
for such Shares (subject to payment of the warrant exercise price) be duly and
validly authorized and issued and fully paid and nonassessable Shares, free from
any preemptive rights and taxes, liens, charges and security interests created
by or imposed upon the Company.
C. The Company covenants and agrees that it will take all action which may be
necessary to cause the Shares to be duly listed on the Nasdaq National Market or
any securities exchange on which the other shares of Common Stock of the Company
are listed.
Section 12. Disposition of Proceeds, etc.
A. The Warrant Agent shall account promptly to the Company with respect to
Warrants exercised and concurrently pay to the Company all moneys received by
the Warrant Agent for the purchase of Shares through the exercise of such
Warrants.
B. The Warrant Agent shall keep copies of this Agreement available for
inspection by holders of Warrants during normal business hours at its principal
office in the City of __________, __________.
Section 13. Merger or Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party, or any corporation succeeding to the
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<PAGE>
corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of (S)15 of this Agreement. In case at the time such successor to
the Warrant Agent shall succeed to the agency created by this Agreement, and if
any of the Warrants shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original
Warrant Agent and deliver such Warrants so countersigned; and in case at that
time any of the Warrants shall not have been countersigned, any successor to the
Warrant Agent may countersign such Warrants either in the name of the
predecessor Warrant Agent or in the name of the successor Warrant Agent; and in
all such cases such Warrant shall have the full force provided in the Warrants
and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and at such
time any of the Warrants shall have been countersigned but not delivered, the
Warrant Agent may adopt the countersignature under its prior name and deliver
Warrants so countersigned; and in case at that time any of the Warrants shall
not have been countersigned, the Warrant Agent may countersign such Warrants
either in its prior name or in its changed name; and in all such cases such
Warrants shall have the full force provided in the Warrants and in this
Agreement.
Section 14. Duties of Warrant Agent. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Warrants, by their acceptance
thereof, shall be bound:
A. The statements contained herein and in the Warrants shall be taken as
statements of the Company, and the Warrant Agent assumes no responsibility for
the correctness of any of the same except such as describe the Warrant Agent or
action taken or to be taken by it. The Warrant Agent assumes no responsibility
with respect to the distribution of the Warrants except as herein otherwise
provided.
B. The Warrant Agent shall not be responsible for any failure of the Company to
comply with any of the covenants contained in this Agreement or in the Warrants
to be complied with by the Company.
C. The Warrant Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its
attorneys, agents or employees, and the Warrant Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys,
agents or employees or for any loss to the Company resulting from such neglect
or misconduct, provided reasonable care shall have been exercised in the
selection and continued employment thereof.
D. The Warrant Agent may consult at any time with counsel satisfactory to it
(who may be counsel for the Company), and the Warrant Agent shall incur no
liability or responsibility to the Company or to any holder of any Warrant in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with the opinion or the advice of such counsel.
E. The Warrant Agent shall incur no liability or responsibility to the Company
or to any holder of any Warrant for any action taken in reliance on any notice,
resolution, waiver, consent, order, certificate, or other paper, document or
instrument believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
F. The Company agrees to pay to the Warrant Agent agreed upon compensation for
all services rendered by the Warrant Agent in the execution of this Agreement,
to reimburse the Warrant Agent for all expenses, taxes and governmental charges
and other charges of any kind and nature incurred by the Warrant Agent in the
execution of this Agreement and to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs and
reasonable counsel fees, for anything done or omitted by the Warrant
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<PAGE>
Agent in the execution of this Agreement except as a result of the Warrant
Agent's negligence, bad faith or willful misconduct.
G. The Warrant Agent shall be under no obligation to institute any action, suit
or legal proceeding or to take any other action likely to involve expense unless
the Company or one or more registered holders of Warrants shall furnish the
Warrant Agent with reasonable security and indemnity for any costs and expenses
which may be incurred, but this provision shall not affect the power of the
Warrant Agent to take such action as the Warrant Agent may consider proper,
whether with or without any such security or indemnity. All rights of action
under this Agreement or under any of the Warrants may be enforced by the Warrant
Agent without the possession of any of the Warrants or the production thereof at
any trial or other proceeding relative thereto, and any such action, suit or
proceeding instituted by the Warrant Agent shall be brought in its name as
Warrant Agent, and any recovery of judgment shall be for the ratable benefit of
the registered holders of the Warrants, as their respective rights or interests
may appear.
H. The Warrant Agent and any shareholder, director, officer or employee of the
Warrant Agent may buy, sell or deal in any of the Warrants or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
I. The Warrant Agent shall act hereunder solely as agent and not in a
ministerial capacity, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything which it
may do or refrain from doing in connection with this Agreement except for its
own gross negligence or bad faith.
Section 15. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Agreement by giving to the Company notice
in writing, and to the holders of the Warrants notice by publication, of such
resignation, specifying a date when such resignation shall take effect, which
notice shall be published at the expense of the Company at least once a week for
two consecutive weeks in a newspaper of general circulation in the City of New
York prior to the date so specified. The Warrant Agent may be removed by the
Company by like notice from the Company to the Warrant Agent and the holders of
Warrants at the expense of the Company. If the Warrant Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by the registered holder of a Warrant (who shall,
with such notice, submit his Warrant for inspection by the Company), then, at
the expense of the Company, the Warrant Agent or the registered holder of any
Warrant may apply to any court of competent jurisdiction for the appointment of
a successor to the Warrant Agent. Any successor Warrant Agent, whether appointed
by the Company or by such a court, shall be a bank or trust company, in good
standing, incorporated under the laws of any State or of the United States of
America, having at the time of its appointment as Warrant Agent a combined
capital and surplus of at least $50,000,000. After appointment the successor
Warrant Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent shall deliver and transfer to
the successor Warrant Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Failure to file or publish any notice provided for in this Section,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Warrant Agent or the appointment of the successor
Warrant Agent, as the case may be.
Section 16. Identity of Transfer Agent. Forthwith upon the appointment of any
Transfer Agent for the Shares or of any subsequent Transfer Agent for Shares
issuable upon the exercise of the rights of purchase represented
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<PAGE>
by the Warrants, the Company will file with the Warrant Agent a statement
setting forth the name and address of such Transfer Agent.
Section 17. Notices. Any notice pursuant to this Agreement to be given or made
by the Warrant Agent or by the registered holder of any Warrant to or on the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing by the Company
with the Warrant Agent) as follows:
Digital Microwave Corporation 170 Rose Orchard Way, San Jose, California 95134
Attn: Chief Financial Officer
Any notice pursuant to this Agreement to be given or made by the Company or by
the registered holder of any Warrant to or on the Warrant Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by the Warrant Agent with
the Company) as follows:
Any notice pursuant to this Agreement to be given or made by the Company or the
Warrant Agent to the registered holder of any Warrant shall be sufficiently
given or made (unless otherwise specifically provided for herein) if sent by
first-class mail, postage prepaid, addressed to said registered holder at his
address appearing on the Warrant register.
Section 18. Supplements and Amendments. The parties hereto may from time to time
supplement or amend this Agreement without the approval of any holders of
Warrants in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and which will not materially adversely affect the
interest of the registered holders of the Warrants. The parties hereto may also
modify or amend this Agreement and the terms of the Warrants with the consent of
the holders of not less than a majority in number of the then outstanding
unexercised Warrants affected thereby; provided that no such modification or
amendment that accelerates the expiration date, increases the exercise price,
reduces the number of outstanding Warrants the consent of the holders of which
is required for any such modification or amendment, or otherwise materially
adversely affects the rights of the holders of the Warrants, may be made without
the consent of each holder affected thereby.
Section 19. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 20. Law Governing Contract. This Agreement and each Warrant issued
hereunder shall be deemed to be a contract made under the laws of the State of
_____________ and for all purposes shall be construed in accordance with the
laws of said State.
Section 21. Benefits of This Agreement. Nothing in this Agreement shall be
construed to give to any person or entity other than the Company and the Warrant
Agent and the holders of Warrants any legal or equitable right, remedy or claim
under this Agreement, but this Agreement shall be for the sole and exclusive
benefit of the Company and the Warrant Agent and the holders of Warrants.
Section 22. Counterparts. This Agreement may be executed in any number of
counterparts, and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
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[IF THE WARRANTS ARE SUBJECT TO ACCELERATION BY THE COMPANY, INSERT --
Section 23. Acceleration of Warrants by the Company.
A. At any time on or after __________________, the Company shall have the right
to accelerate any or all Warrants at any time by causing them to expire at the
close of business on the day next preceding a specified date (the "Acceleration
Date"), if the Market Price (as hereinafter defined) of the Common Stock equals
or exceeds ______ percent (___%) of the then effective warrant exercise price,
adjusted as if no changes in such warrant exercise price had been made pursuant
to subsection 9B, on any 20 Trading Days (as hereinafter defined) within a
period of 30 consecutive Trading Days ending no more than five Trading Days
prior to the date on which the Company gives notice to the Warrant Agent of its
election to accelerate the Warrants.
B. "Market Price" for each Trading Day shall be, if the Common Stock is listed
or admitted for trading on the New York Stock Exchange, the last reported sale
price, regular way (or, if no such price is reported, the average of the
reported closing bid and asked prices, regular way) of Common Stock, in either
case as reported on the New York Stock Exchange Composite Tape or, if the Common
Stock is not listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the National Market System of NASDAQ or, if not listed
or admitted to trading on any national securities exchange or quoted on the
National Market System of NASDAQ, the average of the closing high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ, or such
other system then in use, or if on any such date the Shares of Common Stock are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by any New York Stock Exchange firm selected from time to
time by the Company for the purpose. "Trading Day" shall be each Monday through
Friday, other than any day on which securities are not traded in the system or
on the exchange that is the principal market for the Common Stock, as determined
by the Board of Directors of the Company.
C. In the event of an acceleration of less than all of the Warrants, the Warrant
Agent shall select the Warrants to be accelerated by lot, pro rata or in such
other manner as it deems, in its discretion, to be fair and appropriate.
D. Notice of an acceleration specifying the Acceleration Date shall be sent by
mailing first class, postage prepaid, to each registered holder of a Warrant
Certificate representing a Warrant accelerated at such holder's address
appearing on the Warrant register not more than 60 days nor less than 30 days
before the Acceleration Date. Such notice of an acceleration also shall be given
no more than 20 days, and no less than 10 days, prior to the mailing of notice
to registered holders of Warrants pursuant to this Section, by publication at
least once in a newspaper of general circulation in the City of New York.
E. Any Warrant accelerated may be exercised until the 3:30 p.m., New York City
time, on the business day next preceding the Acceleration Date. The warrant
exercise price shall be payable as provided in Section 5.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
DIGITAL MICROWAVE CORPORATION
By
-------------------------------------
Its
---------------------------------
Attest:
Warrant Agent
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By
-------------------------------------
Its
---------------------------------
Attest:
13
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[Form of Warrant]
Unless extended, Void After 3:30 P.M., New York City time, _______* _______,
____
[IF THE WARRANTS ARE ATTACHED TO OTHER SECURITIES, INSERT THE FOLLOWING --
[UNTIL ______________,] THE WARRANTS REPRESENTED BY THIS CERTIFICATE SHALL NOT
BE TRANSFERABLE APART FROM THE _____________ TO WHICH THEY ARE ATTACHED, ANY
TRANSFER OF THE _____________ SHALL BE DEEMED A TRANSFER OF THE WARRANTS
ATTACHED THERETO, AND ANY ATTEMPT OF TRANSFER THE WARRANTS APART FROM THE
_____________ SHALL BE VOID AND OF NO EFFECT.]
No. ___ Warrant to Purchase
____ Shares of Common Stock
CLASS __ WARRANT
DIGITAL MICROWAVE CORPORATION
FOR VALUE RECEIVED, Digital Microwave Corporation (the "Company"), upon the
surrender [after _______________] and prior to 3:30 P.M., New York City time,
________* _______, ____ (unless extended) of this Warrant for exercise, with the
exercise form on the reverse side hereof duly executed, at the office of
______________________, will sell and deliver or cause to be sold and delivered
to __________________ or assigns (the "Warrant Holder") a certificate or
certificates for the number of whole shares purchasable, as indicated above, of
fully paid and non-assessable shares of Common Stock ($1.00 par value) of the
Company (the "Shares"), for which this Warrant is exercised, at a price of
$_____ per Share (the "Warrant Price"), subject to all the terms, provisions and
conditions of a Common Stock Warrant Agreement dated as of ____________, ____
(the "Warrant Agreement"), executed by the Company and
_________________________________________________ (the "Warrant Agent"), which
Warrant Agreement is hereby incorporated herein by reference and made a part
hereof.
1. The Warrant Price shall be payable [in cash, certified check, bank draft,
postal or express money order or by bank wire transfer, in each case,] [by bank
wire transfer] in immediately available funds, payable in United States dollars,
to the order of the Warrant Agent. In certain events the Warrant Price and the
number of Shares deliverable on exercise of this Warrant are subject to
adjustments, as provided in the Warrant Agreement. No certificates for a
fractional Share will be issued. As to any fraction of a Share which would
otherwise be purchasable on the exercise of a Warrant, the Company shall pay the
cash value thereof determined as provided in the Warrant Agreement.
/*/The expiration date; see page 1 of the Warrant Agreement.
2. This Warrant is issued in accordance with the Warrant Agreement in which the
rights of the Warrant Holders and the terms, provisions and conditions upon
which this Warrant has been executed and delivered and may be exercised are more
fully set forth. Every Warrant Holder, by acceptance hereof, assents to all the
terms, provisions and conditions of the Warrant Agreement. A counterpart of the
Warrant Agreement is on file at the office of the Company in Minneapolis,
Minnesota, and at the office of the Warrant Agent in __________,
___________.
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3. In the event this Warrant shall not be exercised on or before ________*
_______, ____, unless said date is extended as provided for in Section 9 of the
Warrant Agreement, this Warrant shall become void and all rights hereunder shall
cease.
Reference is made to the further provisions of this Warrant set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
This Warrant shall not be valid for any purpose until it shall have been
countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed in its
name and on its behalf by the facsimile signatures of its duly authorized
officers and a facsimile of its seal.
Dated: ______________________
DIGITAL MICROWAVE CORPORATION
By
- --
Its
- ---
Attest:
Countersigned:
Warrant Agent
By
- --
Authorized Signature
[REVERSE OF WARRANT]
4. Subject to the provisions of paragraph 3 contained on the face of this
Warrant, (a) this Warrant, with or without other Warrants, upon surrender at the
office of the Warrant Agent, may be exchanged for another Warrant or Warrants of
like tenor in denominations entitling the Warrant Holder to purchase a like
aggregate number of Shares, but only to the extent provided in the Warrant
Agreement, or (b) this Warrant may be transferred at the office of the Warrant
Agent by the Warrant Holder or his assigns, in person or by attorney duly
authorized in writing, but only in the manner provided in the Warrant Agreement
and upon surrender of this Warrant. If this Warrant shall be exercised in part,
the Warrant Holder shall be entitled to receive, upon surrender hereof, another
Warrant or Warrants of like tenor for the number of whole Shares not purchased
upon such exercise.
5. No Warrant Holder shall be entitled to vote or receive dividends or be deemed
the holder of Shares of the Company for any purpose, nor shall anything
contained in the Warrant Agreement or herein be construed to confer upon the
Warrant Holder, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors of the Company, or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any action (whether upon any recapitalization, issue of securities,
reclassification of securities, consolidation, merger, conveyance or otherwise)
or to receive notice of meetings or other action affecting shareholders (except
for notices as provided for in the Warrant Agreement), or to receive dividends
or subscription rights or otherwise, until this Warrant shall have been
exercised and the Shares purchasable on the exercise hereof shall have become
deliverable as provided in the Warrant Agreement.
15
<PAGE>
6. Every holder of a Warrant, by accepting this Warrant, consents and agrees
with the Company, the Warrant Agent and with every subsequent holder of this
Warrant that until this Warrant is transferred on the books of the Warrant
Agent, the Company and the Warrant Agent may treat the registered holder hereof
as the absolute owner hereof for all purposes notwithstanding any notice to the
contrary.
7. The Company represents and warrants that the Shares to be issued by it as
provided in the Warrant Agreement have been duly authorized and, when so issued
in accordance with the Warrant Agreement, will be validly issued, fully-paid and
non-assessable. The Company represents and warrants that it has authority to
execute and deliver the Warrant Agreement and the Warrants thereunder, but the
Warrant Agent makes no representation with respect thereto, or with respect to
the validity or sufficiency of the Warrants, the Warrant Agreement or the
Shares.
16
<PAGE>
FORM OF EXERCISE
(Form of exercise to be executed by the Warrant Holder
at the time of exercise)
To
----------------------------
, Warrant
- -----------------------
Agent:
The undersigned, holder of the within Warrant, (1) exercises his right to
purchase _________ of the Shares of Common Stock ($1.00 par value) of Digital
Microwave Corporation, which the undersigned is entitled to purchase under the
terms of the within Warrant, and (2) makes payment in full for the number of
Shares of Common Stock so purchased by payment of $_________ in cash.
Please issue the certificate for Shares of Common Stock (and any new Warrants in
the case of a partial exercise) as follows:
Print or Type Name
Social Security or other Identifying Number
Street Address
City State Zip Code
17
<PAGE>
and deliver it (together with any new Warrants in the case of a partial
exercise) to the above address unless a different address is indicated below.
Dated:
-------------------
Signature
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant)
To be used only for special instructions for delivery. Deliver to:
Print or Type Name
Street Address
City State Zip Code
18
<PAGE>
ASSIGNMENT
(Form of assignment to be executed if
Warrant Holder desires to transfer Warrant)
FOR VALUE RECEIVED, _______________________ hereby sells, assigns and transfers
unto
Print or Type Name
Street Address
City State Zip Code
Social Security or other Identifying Number
the right represented by the within Warrant to purchase _________ Shares of
Common Stock ($1.00 par value) of Digital Microwave Corporation to which the
within Warrant relates and appoints _____________________ attorney to transfer
such right on the books of the Warrant Agent with full power of substitution in
the Premises.
Dated:
--------------------
Signature
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant)
Signature Guaranteed
19
<PAGE>
Exhibit 4.5
[Face of Debenture]
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.
CUSIP NO. ___________ PRINCIPAL AMOUNT:$___________
REGISTERED NO. __
DIGITAL MICROWAVE CORPORATION
____% DEBENTURES DUE ____
DIGITAL MICROWAVE CORPORATION, a corporation duly organized and existing under
the laws of the State of Delaware (hereinafter called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to CEDE & Co., or registered assigns,
the principal sum of ___________________________ ($___________) on
______________ and to pay interest thereon from _____________ or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for semi-annually on __________ and __________ of each year commencing
________________ at the rate of ____% per annum, until the principal hereof is
paid or made available for payment. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be __________ or _____________
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
Any interest not punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture.
Payment of interest on this Security will be made in immediately available funds
at the office or agency of the Company maintained for that purpose in the City
of San Jose, California, or the City of _________________, or, at the option of
the Holder hereof, at the office or agency to be maintained for that purpose in
the Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that, at the option of the
Company, payment of interest may be paid by check mailed to the Person entitled
thereto at such Person's last address as it appears in the Security Register or
by wire transfer to such account as may have been designated by such Person.
Payment of principal of and interest on this Security at Maturity will be made
against presentation of this Security at the office or agency of the Company
maintained for that purpose in the City of
1
<PAGE>
San Jose, California, or the City of _________________, or, at the option of the
Holder hereof, at the office or agency to be maintained for that purpose in the
Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Security set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its corporate seal.
DATED:
---------------
DIGITAL MICROWAVE CORPORATION
By:
-----------------------------------
Its:
----------------------------------
[SEAL]
Attest:
-------------------------------
Its:
----------------------------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
- ----------------------------------, as Trustee
By:
-------------------------------
Authorized Signature
2
<PAGE>
[Reverse of Debenture]
DIGITAL MICROWAVE CORPORATION
____% DEBENTURES DUE ____
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more series
under an indenture dated as of _______________, as amended or supplemented from
time to time (herein called the "Indenture"), between the Company and
__________________________________, as Trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $___________.
[**The Securities of this series are not subject to redemption prior to
______________.] [**The Securities of this series are subject to redemption
prior to _________________ as follows: _______________________________________]
The Securities will not be entitled to any sinking fund.
If an Event of Default, as defined in the Indenture, with respect to Securities
of this series shall occur and be continuing, the principal of the Securities of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
The Indenture contains provisions for defeasance at any time of (a) the entire
indebtedness on this Security and (b) certain restrictive covenants and certain
Events of Default, upon compliance by the Company with certain conditions set
forth therein, which provisions apply to this Security.
Upon due presentment for registration of transfer of this Security at the office
or agency of the Company in the City of San Jose, California, or the City of
_________________, or, at the option of the Holder hereof, at the office or
agency to be maintained for that purpose in the Borough of Manhattan, The City
of New York, a new Security or Securities of this series in authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange herefor, as provided in the Indenture and subject to the
limitations provided therein and to the limitations described below, without
charge except for any tax or other governmental charge imposed in connection
therewith.
This Security is exchangeable for definitive Securities in registered form only
if (x) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for this Security or if at any time the
3
<PAGE>
Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, (y) the Company in its sole discretion
determines that this Security shall be exchangeable for definitive Securities in
registered form and notifies the Trustee thereof or (z) an Event of Default with
respect to the Securities represented hereby has occurred and is continuing. If
this Security is exchangeable pursuant to the preceding sentence, it shall be
exchangeable for definitive Securities in registered form, bearing interest at
the same rate, having the same date of issuance, redemption provisions, Stated
Maturity and other terms and of authorized denominations aggregating a like
amount.
This Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor of the Depositary or a nominee of such successor. Except as provided
above, owners of beneficial interests in this global Security will not be
entitled to receive physical delivery of Securities in definitive form and will
not be considered the Holders hereof for any purpose under the Indenture.
No reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and interest on this Security at the
times, place and rate, and in the coin or currency, herein prescribed, except
that in the event the Company deposits money or Government Obligations as
provided in Section 401 or 403 of the Indenture, such payments will be made only
from proceeds of such money or Government Obligations.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or the interest on
this Security, or for any claim based hereon, or otherwise in respect hereof, or
based on or in respect of the Indenture or any indenture supplemental thereto,
against any incorporator, stockholder, officer or director, as such, past,
present or future, of the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
All terms used in this Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right
of survivorship and not
as tenants in common
UNIF GIFT MIN ACT -- Custodian
--------------------- ---------------------
(Cust) (Minor)
4
<PAGE>
Under Uniform Gifts to Minors Act
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
Please Insert Social Security or
Other Identifying Number of Assignee
(PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE)
the within Security of DIGITAL MICROWAVE CORPORATION and does hereby irrevocably
constitute and appoint __________________ attorney to transfer the said Security
on the books of the Company, with full power of substitution in the premises.
Dated:
--------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.
5
<PAGE>
MORRISON & FOERSTER LLP
Attorneys at Law
425 Market Street
San Francisco, California
94105-2482
February 26, 1999
Digital Microwave Corporation
170 Rose Orchard Way
San Jose, California 95134
Re: Form S-3 Universal Shelf Registration Statement
Ladies and Gentlemen:
We have acted as counsel to Digital Microwave Corporation, a Delaware
corporation (the "Company"), in connection with the proposed issuance and sale
by the Company of (a) shares of its common stock, $0.01 par value per share
("Common Stock"); (b) unsecured senior or subordinated debt securities of the
Company ("Debt Securities"); (c) warrants to purchase Debt Securities ("Debt
Warrants"); and (d) warrants to purchase shares of Common Stock ("Common Stock
Warrants"; with the Common Stock, Debt Securities, Debt Warrants and Common
Stock Warrants collectively referred to herein as the "Securities"). The
Securities are to be issued pursuant to a Registration Statement on Form S-3
(the "Registration Statement") filed by the Company with the Securities and
Exchange Commission (the "Commission") on February 26, 1999.
In connection with this opinion, we have examined such corporate records,
documents, instruments, and such questions of law as we have deemed necessary
for the purpose of rendering the opinions set forth herein. We have also
examined the Registration Statement on Form S-3 as filed with the Commission in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder.
In such examination, we have assumed the genuineness of all signatures and
the authenticity of all items submitted to us as originals and the conformity
with originals of all items submitted to us as copies.
The opinions hereinafter expressed are subject to the following
qualifications and exceptions:
(i) the effect of bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting the rights of
creditors generally, including without limitation, laws relating to fraudulent
transfers or conveyances, preferences and equitable subordination; and
<PAGE>
MORRISON & FOERSTER LLP
Digital Microwave Corporation
February 26, 1999
Page Two
(ii) our opinion is based upon current statutes, rules, regulations,
cases and official interpretive opinions, and it covers certain items that are
not directly or definitively addressed by such authorities.
Based upon and subject to the foregoing, we are of the opinion that:
1. With respect to the Common Stock, when (a) the Board of Directors of
the Company or a duly authorized committee of the Board (such Board of Directors
or committee being referred to herein as the "Board"), has taken all necessary
corporate action to approve the issuance of and establish the terms of the
offering of the Common Stock and related matters and (b) issued, sold and
delivered in the manner and for the consideration (not less than the par value
of the Common Stock) stated in the applicable definitive purchase, underwriting
or similar agreement or upon conversion, exchange or exercise of any other
Security in accordance with the terms of such Security or the instrument
governing such Security providing for such conversion, exchange or exercise as
approved by the Board, for the consideration approved by the Board (not less
than the par value of the Common Stock), the Common Stock will be duly
authorized, validly issued, fully paid and nonassessable.
2. With respect to the Debt Securities to be issued under an indenture
(incorporating the form of indenture filed as Exhibit 4.2 to the Registration
Statement or such other provisions as are contained in a document which will be
filed as an exhibit or incorporated by reference in the Registration Statement)
(the "Indenture"), when (a) the Indenture has been (i) duly authorized by the
Board, (ii) duly executed and delivered by each party thereto and (iii) duly
qualified under the Trust Indenture Act of 1939, as amended, (b) the Board has
taken all necessary corporate action to approve the issuance of and establish
the terms of such Debt Securities, the terms of the offering and related
matters, (c) the Debt Securities have been executed and authenticated in
accordance with the terms of the Indenture and (d) the Debt Securities have been
issued, sold and delivered in the manner and for the consideration stated in the
applicable definitive purchase, underwriting or similar agreement approved by
the Board, upon payment of the consideration provided for therein, or upon
exercise of any other Security in accordance with the terms of such Security or
the instrument governing such Security providing for such conversion, exchange
or exercise as approved by the Board, and the Indenture, the Debt Securities to
be issued under the Indenture will be legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms.
3. With respect to the Debt Warrants, when (a) one or more agreements
(incorporating the form of Debt Warrant Agreement filed as Exhibit 4.3 to the
Registration Statement or such other provisions as are contained in a document
which will be filed as an
<PAGE>
MORRISON & FOERSTER LLP
Digital Microwave Corporation
February 26, 1999
Page Three
exhibit to or incorporated by reference in the Registration Statement) have been
duly executed and delivered by the Company and a warrant agent, (b) the Board
has taken all necessary corporate action to approve the terms of the Debt
Warrants, (c) the Debt Warrant certificates have been executed and authenticated
in accordance with the terms of the appropriate agreement and (d) the Debt
Warrants have been issued, sold and delivered in the manner and for the
consideration stated in the applicable definitive purchase, underwriting or
similar agreement approved by the Board, upon payment of the consideration
therefor provided for therein, the Debt Warrants will be legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms.
4. With respect to the Common Stock Warrants, when (a) one or more
agreements (incorporating the form of Common Stock Warrant Agreement filed as
Exhibit 4.4 to the Registration Statement or such other provisions as are
contained in a document which will be filed as an exhibit to or incorporated by
reference in the Registration Statement) have been duly executed and delivered
by the Company and a warrant agent, (b) the Board has taken all necessary
corporate action to approve the terms of the Common Stock Warrants, (c) the
Common Stock Warrant certificates have been executed and authenticated in
accordance with the terms of the appropriate agreement and (d) the Common Stock
Warrants have been issued, sold and delivered in the manner and for the
consideration stated in the applicable definitive purchase, underwriting or
similar agreement approved by the Board, upon payment of the consideration
therefor provided for therein, the Common Stock Warrants will be legal, valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms.
In connection with our opinions expressed above, we have assumed that, at
or prior to the time of the delivery of any such Security, the Registration
Statement, and any amendments thereto (including post-effective amendments) will
have been declared effective, a prospectus supplement will have been prepared
and filed with the Commission describing the Securities offered thereby, the
authorization of the Securities applicable to such Security will not have been
modified or rescinded by the Board and there will not have occurred any change
in law affecting the validity or enforceability of such Security. We have also
assumed that none of the terms of any Security to be established subsequent to
the date hereof nor the issuance and delivery of such Security, nor the
compliance by the Company with the terms of such Security, will violate any
applicable federal or state law or will result in a violation of any provision
of any instrument or agreement then binding upon the Company or any restriction
imposed by any court or governmental body having jurisdiction over the Company.
We express no opinion as to matters governed by laws of any jurisdiction
other than the laws of the States of California, the General Corporation Law of
the State of Delaware and the federal laws of the United States of America, as
in effect on the date hereof.
<PAGE>
MORRISON & FOERSTER LLP
Digital Microwave Corporation
February 26, 1999
Page Four
We hereby consent to the filing of this opinion with the Commission in
connection with the filing of the Registration Statement referred to above. We
also consent to the use or our name in the related prospectus and prospectus
supplement under the heading "Legal Opinions."
Very truly yours,
/s/ Morrison & Foerster LLP
<PAGE>
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
DATA SUPPORT FOR RATIO CALCULATION:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED MARCH 31, DECEMBER 31,
------------------------------------------------------------------- -------------------------
1994 1995 1996 1997 1998 1997 1998
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Total pretax income (loss)... (27,122) (3,236) (14,708) 9,096 22,676 27,661 (93,548)
Total interest expense....... 819 635 2,255 1,582 856 581 199
</TABLE>
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports
dated April 21, 1998 included or incorporated by reference in Digital
Microwave Corporation's Form 10-K for the year ended March 31, 1998
and to all references to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
San Jose, California
February 25, 1999
