<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarter ended
SEPTEMBER 30, 1997
ORBITAL SCIENCES CORPORATION
Commission file number 0-18287
DELAWARE 06-1209561
----------------------------------- -----------------------------
(State of Incorporation) (IRS Identification number)
21700 ATLANTIC BOULEVARD
DULLES, VIRGINIA 20166 (703) 406-5000
----------------------------------- -----------------------------
(Address of principal executive (Telephone number)
offices)
The registrant has (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and
(2) has been subject to such filing requirements for the past 90 days.
As of October 31, 1997, 32,334,230 shares of the registrant's common stock were
outstanding.
<PAGE> 2
PART 1
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ORBITAL SCIENCES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED; IN THOUSANDS, EXCEPT SHARE DATA)
A S S E T S
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 19,123 $ 26,859
Short-term investments, at market 19,888 5,827
Receivables, net 162,655 144,774
Inventories, net 44,089 27,159
Deferred income taxes and other assets 7,825 6,475
--------- ---------
TOTAL CURRENT ASSETS 253,580 211,094
PROPERTY, PLANT AND EQUIPMENT, AT COST, LESS ACCUMULATED
depreciation and amortization of $76,394 and $69,534, respectively 127,256 127,862
INVESTMENTS IN AFFILIATES, NET 181,843 86,524
EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED,
less accumulated amortization of $18,655 and $15,972, respectively 107,237 69,512
DEFERRED INCOME TAXES AND OTHER ASSETS 23,259 9,720
--------- ---------
TOTAL ASSETS $ 693,175 $ 504,712
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings and current portion of
long-term obligations $ 26,464 $ 38,519
Accounts payable 38,369 25,789
Accrued expenses 59,185 32,372
Deferred revenue 36,560 30,741
--------- ---------
TOTAL CURRENT LIABILITIES 160,578 127,421
LONG-TERM OBLIGATIONS, NET OF CURRENT PORTION 179,816 33,076
OTHER LIABILITIES 7,599 15,523
--------- ---------
TOTAL LIABILITIES 347,993 176,020
NON-CONTROLLING INTERESTS IN
NET ASSETS OF CONSOLIDATED SUBSIDIARIES (3,452) (1,810)
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred Stock, par value $.01; 10,000,000 shares authorized:
Series A Special Voting Preferred Stock, one share authorized and outstanding -- --
Class B Preferred Stock, 10,000 shares authorized and outstanding -- --
Common Stock, par value $.01; 80,000,000 shares authorized,
32,269,326 and 32,160,598 shares outstanding,
after deducting 15,735 shares held in treasury 323 322
Additional paid-in capital 325,394 323,592
Unrealized gains on short-term investments 44 14
Cumulative translation adjustment (4,209) (3,681)
Retained earnings 27,082 10,255
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 348,634 330,502
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 693,175 $ 504,712
========= =========
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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<PAGE> 3
ORBITAL SCIENCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED; IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
SEPTEMBER 30,
-----------------------------
1997 1996
------------ ------------
<S> <C> <C>
REVENUES $ 164,670 $ 119,571
COSTS OF GOODS SOLD 118,655 87,696
------------ ------------
GROSS PROFIT 46,015 31,875
RESEARCH AND DEVELOPMENT EXPENSES 6,476 3,918
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 26,334 20,039
AMORTIZATION OF EXCESS OF PURCHASE PRICE OVER
NET ASSETS ACQUIRED 956 794
------------ ------------
INCOME FROM OPERATIONS 12,249 7,124
NET INVESTMENT INCOME (EXPENSE) 1,007 (26)
EQUITY IN LOSSES OF AFFILIATES (6,929) (2,543)
NON-CONTROLLING INTERESTS IN LOSSES
OF CONSOLIDATED SUBSIDIARIES 533 396
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES 6,860 4,951
PROVISION FOR INCOME TAXES 730 495
------------ ------------
NET INCOME $ 6,130 $ 4,456
============ ============
NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE $ 0.18 $ 0.15
SHARES USED IN COMPUTING NET INCOME
PER COMMON AND COMMON EQUIVALENT SHARE 33,347,734 29,803,856
============ ============
NET INCOME PER COMMON SHARE, ASSUMING FULL DILUTION $ 0.18 $ 0.15
SHARES USED IN COMPUTING NET INCOME
PER COMMON SHARE, ASSUMING FULL DILUTION 34,492,637 31,663,151
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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<PAGE> 4
ORBITAL SCIENCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED; IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------------
1997 1996
------------ ------------
<S> <C> <C>
REVENUES $ 429,008 $ 340,977
COSTS OF GOODS SOLD 309,642 243,902
------------ ------------
GROSS PROFIT 119,366 97,075
RESEARCH AND DEVELOPMENT EXPENSES 18,170 15,249
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 69,456 59,133
AMORTIZATION OF EXCESS OF PURCHASE PRICE OVER
NET ASSETS ACQUIRED 2,439 2,373
------------ ------------
INCOME FROM OPERATIONS 29,301 20,320
NET INVESTMENT INCOME (EXPENSE) 1,317 (1,475)
EQUITY IN LOSSES OF AFFILIATES (13,590) (7,147)
NON-CONTROLLING INTERESTS IN LOSSES
OF CONSOLIDATED SUBSIDIARIES 1,717 994
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES 18,745 12,692
PROVISION FOR INCOME TAXES 1,918 1,269
------------ ------------
NET INCOME $ 16,827 $ 11,423
============ ============
NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE $ 0.51 $ 0.41
SHARES USED IN COMPUTING NET INCOME
PER COMMON AND COMMON EQUIVALENT SHARE 32,941,540 28,176,215
============ ============
NET INCOME PER COMMON SHARE, ASSUMING FULL DILUTION $ 0.50 $ 0.41
SHARES USED IN COMPUTING NET INCOME
PER COMMON SHARE, ASSUMING FULL DILUTION 33,960,724 31,575,334
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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<PAGE> 5
ORBITAL SCIENCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED; IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 16,827 $ 11,423
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization expense 18,435 17,828
Equity in losses of affiliates 13,590 7,147
Non-controlling interests in losses of consolidated subsidiaries (1,717) (994)
Gain on sale of fixed assets and investments -- (17)
Foreign currency translation adjustment (528) (716)
CHANGES IN ASSETS AND LIABILITIES:
Increase in current assets and other non-current assets (2,656) (11,958)
Decrease in current and other liabilities (15,715) (21,732)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 28,236 981
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (31,757) (31,548)
Proceeds from sales of fixed assets 34,699 --
Payments for business combinations (44,116) --
Purchases of available-for-sale investment securities (25,379) (9,163)
Sales of available-for-sale investment securities 4,720 9,576
Maturities of available-for-sale investment securities 6,631 8,920
Investments in affiliates (104,394) (19,662)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (159,596) (41,877)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net of (repayments) (14,712) 38,200
Principal payments on long-term obligations (22,690) (6,206)
Net proceeds from issuance of long-term obligations 159,223 (2,571)
Net proceeds from issuances of common stock to employees 1,803 1,406
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 123,624 30,829
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (7,736) (10,067)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 26,859 15,317
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 19,123 $ 5,250
========= =========
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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<PAGE> 6
ORBITAL SCIENCES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited interim financial
information reflects all adjustments, consisting of normal recurring accruals,
necessary for a fair presentation thereof. Certain information and footnote
disclosure normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted pursuant
to instructions, rules and regulations prescribed by the Securities and Exchange
Commission. Although the company believes that the disclosures provided are
adequate to make the information presented not misleading, these unaudited
interim condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and the footnotes
thereto included in the company's Annual Report on Form 10-K for the year ended
December 31, 1996. Operating results for the three- and nine-month periods ended
September 30, 1997 are not necessarily indicative of the results expected for
the full year.
Orbital Sciences Corporation is hereafter referred to as "Orbital" or the
"company."
(1) Inventories
Inventories consist of components inventory, work-in-process inventory and
finished goods inventory and are generally stated at the lower of cost or
net realizable value on a first-in, first-out, or specific identification
basis.
Components inventory consists primarily of components and raw materials
purchased to support future production efforts. Work-in-process inventory
consists primarily of (i) costs incurred under U.S. Government fixed-price
contracts accounted for using the percentage of completion method of
accounting applied on a units of delivery basis and (ii) partially
assembled commercial products, and generally includes direct production
costs and certain allocated indirect costs (including an allocation of
general and administrative costs). Work-in-process inventory has been
reduced by contractual progress payments received. Finished goods
inventory consists of fully assembled commercial products awaiting
shipment.
(2) Common Stock and Income Per Share
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<PAGE> 7
Income per common and common equivalent share ("primary EPS") is
calculated using the weighted average number of common and common
equivalent shares, to the extent dilutive, outstanding during the periods.
Income per common share assuming full dilution ("fully-diluted EPS") is
calculated using the weighted average number of common and common
equivalent shares outstanding during the periods plus the effects of an
assumed conversion of the company's 5% convertible subordinated notes due
October 2002, to the extent dilutive. (See Note 7). Any reduction of less
than three percent in the aggregate has not been considered dilutive in
the calculation and presentation of fully-diluted EPS. Subsidiary stock
options that enable holders to obtain the subsidiary's common stock
pursuant to stock option plans are included in computing the subsidiary's
earnings per share, to the extent dilutive. Those earnings per share data
are included in the company's consolidated per share computations based on
the company's holdings of the subsidiary's stock. (See Note 8).
(3) Income Taxes
The company has recorded its interim income tax provision based on
estimates of the company's effective tax rate expected to be applicable
for the full fiscal year. Estimated effective rates recorded during
interim periods may be periodically revised, if necessary, to reflect
current estimates.
(4) Reclassifications
Certain reclassifications have been made to the 1996 condensed
consolidated financial statements to conform to the 1997 condensed
consolidated financial statement presentation.
(5) Investments in Affiliates
On May 8, 1997, the company's subsidiary, Orbital Imaging Corporation
("ORBIMAGE"), completed a private placement of 300,100 shares of Series A
Cumulative Convertible Preferred Stock (the "Preferred Stock"), raising
gross proceeds of $30,010,000. Also on that date, Orbital purchased
ORBIMAGE common stock, bringing its total equity invested to approximately
$89,187,000. On July 3, 1997, ORBIMAGE placed an additional 72,605 shares
of Preferred Stock, raising an additional $7,260,500. Each share of
Preferred Stock entitles its holder to receive annual cumulative dividends
of 12% per annum. The Preferred Stock is convertible into ORBIMAGE common
stock in an amount equal to $100 per share of Preferred Stock, divided by
the Conversion Price of $4.17 per
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<PAGE> 8
share of Preferred Stock. After this transaction, Orbital no longer
controls ORBIMAGE's financial and operational affairs and, accordingly, no
longer consolidates ORBIMAGE's financial results. Orbital uses the equity
method of accounting for its investment in, and earnings or losses of,
ORBIMAGE.
Pursuant to a firm-fixed price contract with ORBIMAGE, Orbital is the
primary supplier to ORBIMAGE of imaging satellites, launch services and
ground systems. Additionally, Orbital provides certain administrative
support to ORBIMAGE on a cost-reimbursable basis. During the three- and
nine-months ended September 30, 1997, Orbital recorded sales of
approximately $35,915,000 and $71,345,000, respectively, pursuant to these
contracts. ORBIMAGE is capitalizing substantially all its purchases from
Orbital. During the nine months ended September 30, 1997, Orbital
eliminated 75% of its profits on sales to ORBIMAGE, or $2,347,000. Orbital
recorded no profits on sales to ORBIMAGE during the quarter ended
September 30, 1997.
(6) Business Combinations
CTA INCORPORATED ACQUISITION. On August 15, 1997, Orbital acquired
substantially all the assets, including all the stock of certain
subsidiaries, and certain liabilities relating to the satellite
manufacturing and communications services businesses of CTA INCORPORATED
("CTA"). The financial results of the acquired businesses have been
included in the company's consolidated results from August 15, 1997
through September 30, 1997. As consideration, Orbital (i) paid
approximately $13,000,000 in cash, including certain post-closing
adjustments, and (ii) retired $27,000,000 of outstanding debt related to
the acquired business. The company accounted for the acquisition using the
purchase method of accounting. The purchase price exceeded fair value of
the acquired net assets by approximately $40,533,000. This excess is being
amortized on a straight-line basis over 30 years. During the five years
following the closing, CTA will also be entitled to receive (i) royalties
from $500,000 to $3,000,000 for sales by the company of certain
geostationary satellites after five such satellites have been sold by the
company, and (ii) 3% of cumulative revenues in excess of $50,000,000
accrued during such period from the terrestrial wireless cargo management
system acquired from CTA.
The following supplemental financial information presents the consolidated
results of operations on a pro forma basis, as though the company had
acquired CTA on January 1, 1996 (in thousands, except share data):
Nine Months Nine Months
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<PAGE> 9
9/30/96 9/30/97
------- -------
Revenue $ 405,618 $ 477,073
Net income 11,009 18,151
Earnings per share:
Primary .39 .55
Fully diluted .39 .53
ROCKWELL INTERNATIONAL CORPORATION ACQUISITION. On July 31, 1997, Orbital
acquired from Rockwell International Corporation ("Rockwell") the assets
and certain liabilities associated with Rockwell's automotive navigation
product line. Orbital paid approximately $3,550,000 in cash and issued
Rockwell a $4,350,000 note, which bears interest at 6% and is repayable
semi-annually over three years. The company accounted for the acquisition
using the purchase method of accounting. The purchase price exceeded the
fair value of the net assets acquired by approximately $2,262,000, and is
being amortized on a straight-line basis over 10 years.
The CTA and the Rockwell acquisitions may require further adjustments to
excess of purchase price over the fair value of the net assets acquired.
The purchase price was allocated to the acquired assets and liabilities
using preliminary estimates of fair values as of the date of acquisition.
The final allocation of purchase price will be determined during the
remainder of 1997 when additional information becomes known about certain
business assumptions used to estimate fair value.
(7) Debt
On September 16, 1997, Orbital sold $100 million of 5% convertible
subordinated notes due October 2002. The notes, which are non-callable for
three years, are convertible at the option of the holders, into Orbital
common stock at a conversion price of $28.00 per share, subject to
adjustment in certain events. The sale was made to initial purchasers in
the United States ("U.S.") in reliance on an exemption under Section 4(2)
of the Securities Act of 1933, as amended (the "Securities Act"), and
resold by the initial purchasers in the U.S. to "qualified institutional
buyers" pursuant to Rule 144A under the Securities Act and outside the
U.S. to non-U.S. persons in reliance on Regulation S under the Securites
Act. The company used a portion of the proceeds from the sale
to pay down outstanding borrowings under its various lines of credit and
$10,000,000 on its term loan described below. The balance was invested in
short-term instruments.
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<PAGE> 10
On August 6, 1997, Orbital amended and restated its existing revolving
credit facility (the "facility") to provide for total borrowings from an
international syndicate of six banks of up to $100,000,000. The new
facility includes the company's subsidiary, Magellan Corporation
("Magellan"), as a borrower. The facility includes a $35,000,000 term
loan, which matures July 2001, and a $65,000,000 revolving line of
credit, borrowings under which are subject to a defined borrowing base
composed of certain receivables of Orbital and Magellan. The principal
amount of the term loan is payable in quarterly installments beginning
December 31, 1997. In September 1997, the company reduced borrowings
outstanding under the term loan from $35,000,000 to $25,000,000 with
proceeds from the convertible notes offering pursuant to the terms of the
facility. The interest rate charged under the facility is a variable
rate based on the prime rate or LIBOR at the company's election.
The weighted average interest rate on borrowings outstanding under this
facility at September 30, 1997 was 7.2%. The facility restricts the
payment of cash dividends and contains certain covenants with respect to
the company's working capital levels, fixed charge ratio, leverage ratio
and tangible net worth, and expires in August 2001.
Proceeds from the facility were used to repay and retire (i) Magellan's
$10,000,000 line of credit and (ii) a $25,000,000 six-month short-term
bridge loan that the company obtained on May 7, 1997.
On June 13, 1997, the company issued a $13,210,000 note to a financial
institution. The note bears interest at 7.19%, subject to adjustment,
principal and interest are payable monthly over sixty months, and the note
is secured by certain equipment located at the company's Germantown,
Maryland facility. In addition, on June 19, 1997, the company issued a
$10,000,000 note to a financial institution. The note bears interest at
8.64%, principal and interest are payable monthly over sixty months, and
the note is secured by certain office, computer and test equipment
related to the company's launch vehicle operations in Chandler, Arizona
and Dulles, Virginia.
Additionally, on June 27, 1997, the company terminated its L-1011 aircraft
lease, and purchased the L-1011 aircraft for approximately $9,860,000. The
company financed the purchase with a note for approximately $9,860,000,
which is secured by the aircraft. The note bears interest at 8.4% and
principal and interest are payable monthly over 94 months.
(8) New Accounting Pronouncements
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<PAGE> 11
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 128 ("SFAS No. 128"),
"Earnings Per Share." SFAS No. 128 establishes new procedures for the
computation, presentation and disclosure of EPS, simplifying the
calculations and making them more comparable with international accounting
standards. Pursuant to SFAS No. 128, the company will adopt the new
requirements in the fourth quarter of 1997, restating all prior periods.
The company expects that the adoption of SFAS No. 128 will not materially
impact previously reported primary or fully-diluted EPS.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income" ("SFAS No. 130"). SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components in the
financial statements. Pursuant to SFAS No. 130, the Company will adopt
the provisions of SFAS No. 130 in 1998. The disclosure of comprehensive
income in accordance with the provisions of SFAS No. 130 will impact the
manner of presentation of the company's financial statements as currently
and previously reported. Upon adoption, the company will be required to
reclassify previously reported annual and interim financial statements.
In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of
an Enterprise and Related Information" ("SFAS No. 131"). SFAS No. 131
establishes new procedures for the determination of business segments and
for the presentation and disclosure of segment information and requires
the disclosure of selected segment information in interim financial
statements beginning in 1998. The company is currently assessing the
impact of adopting SFAS No. 131. The company currently believes that it
will not be required to change the composition of its segments, but that
it will be required to report segment financial information more
frequently.
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<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER
30, 1997 AND 1996
In addition to the historical information contained herein, Management's
Discussion and Analysis of Financial Condition and Results of Operations also
includes forward-looking statements that involve known and unknown risks and
uncertainties and other factors that may cause the actual results, performance
or achievements of the company, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. These may include, but are not limited to,
general and economic business conditions, launch success, product performance,
availability of required capital, market acceptance of new products, services
and technologies, the introduction of products and services by competitors, and
performance of the company's affiliates, ORBCOMM Global, L.P. ("ORBCOMM") and
Orbital Imaging Corporation ("ORBIMAGE").
The company's products and services are grouped into three business sectors:
Space and Ground Infrastructure Systems, Satellite Access Products and
Satellite-Delivered Services. Space and Ground Infrastructure Systems include
Launch Systems, Satellites, Electronics and Sensor Systems, and Ground Systems.
The company's Satellite Access Products sector consists of recreational and
vehicle navigation products, communications products and transportation
management systems. The company's Satellite-Delivered Services sector includes
satellite-based two-way mobile data communications services and satellite-based
imagery services.
RECENT DEVELOPMENTS. On September 16, 1997, Orbital sold $100 million of 5%
convertible subordinated notes due October 2002. The notes, which are
non-callable for three years, are convertible, at the option of the holders,
into Orbital common stock at a conversion price of $28.00 per share, subject to
adjustment in certain events. The sale was made to initial purchasers in the
United States ("U.S.") in reliance on an exemption under Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"), and resold by the
initial purchasers in the U.S. to "qualified institutional buyers" pursuant to
Rule 144A under the Securities Act and outside the U.S. to non-U.S. persons in
reliance on Regulation S under the Securities Act.
On August 15, 1997, Orbital acquired substantially all the assets, including all
the stock of certain subsidiaries, and certain liabilities relating to the
satellite manufacturing and communications services businesses of CTA. The
financial results of the acquired businesses have been included in the company's
consolidated results from August 15, 1997 through September 30, 1997. As
consideration, Orbital (i) paid approximately $13,000,000 in cash, including
certain post-closing adjustments, and (ii) retired $27,000,000 of outstanding
debt related to the acquired business. The company funded the acquisition
utilizing its existing line of credit and cash flows from operations.
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<PAGE> 13
On July 31, 1997, Orbital acquired from Rockwell International Corporation
("Rockwell"), the assets and certain liabilities associated with Rockwell's
automotive navigation product line. Orbital paid approximately $3,550,000 in
cash and provided to Rockwell a $4,350,000 note, which bears interest at 6% and
is repayable semi-annually over three years.
REVENUES. Orbital's revenues for the three-month periods ended September 30,
1997 and 1996 were $164,670,000 and $119,571,000, respectively. Revenues for the
nine-month periods ended September 30, 1997 and 1996 were $429,008,000 and
$340,997,000, respectively. The increase in revenues during these periods is
generally reflective of the significant amount of new orders received since
1995, and to a lesser extent, to the revenues generated by the newly acquired
satellite manufacturing and communications services businesses of CTA.
Revenues for the 1997 third quarter include sales to ORBCOMM, a partnership in
which Orbital holds a 50% non-controlling interest, of $9,493,000 as compared to
$4,883,000 for the 1996 third quarter. Sales to ORBCOMM for the nine-month
periods ended September 30, 1997 and 1996 were $36,717,000 and $34,353,000,
respectively. Revenues for the three-month and nine-month periods ended
September 30, 1997 include sales of approximately $35,915,000 and $71,345,000,
respectively, to ORBIMAGE, a corporation in which Orbital holds a 75%
non-controlling interest. No such sales to ORBIMAGE were included in earlier
years. See Note 5 to the Financial Statements.
Space and Ground Infrastructure Systems
Revenues from the company's Space and Ground Infrastructure Systems totaled
$149,387,000 and $103,152,000 for the three months ended September 30, 1997 and
1996, respectively, and $378,109,000 and $282,312,000 for the nine months ended
September 30, 1997 and 1996, respectively.
Revenues from the company's launch systems of $29,905,000 in the third quarter
of 1997 were consistent with the $28,246,000 in the third quarter of 1996.
Launch systems revenues were $87,022,000 for the nine months ended September 30,
1997 as compared to $75,117,000 for the comparable 1996 period. The significant
increase in year-to-date revenues is attributable to increased revenues from the
company's Taurus launch vehicle program, and from the resumption of production
and launch of the company's Pegasus launch vehicle in 1997. Additionally, the
company was just beginning to perform work on a reusable launch vehicle in the
first quarter of 1996, and did not generate significant revenues until the
second quarter of 1996. Accordingly, year-to-date 1997 revenues attributable to
the reusable launch vehicle are significantly higher than the comparable 1996
period, but on a third quarter-to-third quarter comparison, revenues
attributable to the reusable launch vehicle were generally consistent. To date
in 1997, Orbital has carried out ten successful space missions, including six
suborbital missions and four Pegasus launches. Orbital expects total 1997 launch
systems revenues to exceed total 1996 launch systems revenues.
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<PAGE> 14
For the three months ended September 30, 1997, satellite revenues increased to
$74,485,000 from $29,475,000 in the same quarter of 1996. Satellite revenues
were $161,769,000 for the nine months ended September 30, 1997 as compared to
$80,016,000 for the comparable 1996 period. The significant increase in
satellite sales in 1997 is primarily due to additional revenues generated from
new satellite orders received in the second half of 1996 and from 1997 sales to
ORBIMAGE. Additionally, current quarter revenues include approximately
$22,000,000 of sales attributable to the satellite business unit acquired from
CTA on August 15, 1997. The company expects revenues from satellites to continue
to exceed 1996 revenues on a quarterly and year-to-date basis throughout 1997,
primarily due to work performed on new orders and the acquisition of the
satellite business unit from CTA.
Revenues from electronics and sensor systems were $26,915,000 for the three
months ended September 30, 1997 as compared to $25,572,000 in the 1996
comparable period. Electronics and sensor systems revenues for the nine months
ended September 30, 1997 and 1996 were $77,108,000 and $63,421,000,
respectively. The increase in revenues is primarily a result of work performed
on defense electronics and sensor system orders received during the second half
of 1996 and first quarter of 1997. Orbital expects this revenue trend to
continue and, accordingly, expects that 1997 sales of electronics and sensor
systems will exceed 1996 levels.
Revenues from the company's ground systems products were $18,802,000 in the
third quarter of 1997 as compared to $15,410,000 for the comparable 1996
quarter. Ground systems product revenues were $52,210,000 for the nine months
ended September 30, 1997 as compared to $50,178,000 for the comparable 1996
period. Ground systems revenues increased slightly on a quarter-to-quarter
basis, and are consistent on a year-to-date basis. The company expects 1997
annual ground systems products revenues to slightly exceed 1996 annual revenues
due to significant new orders received during the fourth quarter of 1996 and in
early 1997. This business segment also generated revenues for the three- and
nine-month periods ended September 30, 1996 of approximately $4,449,000 and
$13,580,000, respectively, attributable to the company's former subsidiary, The
PSC Communications Group Inc. ("PSC"). The company sold substantially all the
assets of PSC during the fourth quarter of 1996.
Satellite Access Products
Revenues from sales of satellite access products decreased slightly to
$15,261,000 for the 1997 third quarter as compared to $15,989,000 for the
comparable 1996 period. Satellite access product revenues were $50,796,000 for
the nine-months ended September 30, 1997 as compared to $57,445,000 for the
comparable 1996 period. The significant decrease in year-to-year revenues is
primarily attributable to increased competition and changing customer needs in
certain markets for recreational global positioning system ("GPS") navigation
products. Additionally, the entire GPS market has experienced a general
down-turn over the past several quarters, and the company believes that
it will continue to experience similar market conditions over the next few
quarters. The company anticipates the introduction of several new navigation and
-13-
<PAGE> 15
communication products during the remainder of 1997 and in 1998, which it
expects may improve its competitive position and may result in increased revenue
in 1998. In addition, as a result of the Rockwell acquisition in August 1997,
the company added automotive navigation systems to its product line, although
the company does not anticipate significant sales from this product line until
the second half of 1998.
Satellite-Delivered Services
The company's ORBCOMM start-up business generated minimal U.S. service revenues
in 1997 and 1996 and is not expected to generate significant revenues until
1998. As a result of the ORBIMAGE private placement transaction (see discussion
in Liquidity and Capital Resources section), Orbital no longer consolidates
ORBIMAGE's service revenues.
GROSS PROFIT. Gross profit depends on a number of factors, including the
company's mix of contract types and costs incurred thereon in relation to
estimated costs. The company's gross profit for the third quarter of 1997 was
$46,015,000 as compared to $31,875,000 in the 1996 third quarter. Gross profit
margin as a percentage of sales for those periods was approximately 27.9% and
26.7%, respectively. The company's gross profit for the first nine months of
1997 was $119,366,000 as compared to $97,075,000 for the first nine months of
1996. Gross profit margin as a percentage of sales for those periods decreased
slightly to approximately 27.8% from 28.5%, respectively. The decreased 1997
gross profit margin is primarily attributable to lower margins realized on
satellite access products due to factors related to increased competition and
changing customer needs. The lower margins realized in satellite access products
were offset, in part, by the release of certain contingency reserves that were
no longer needed. The company continues to realize favorable margin trends on
certain space infrastructure contracts. These favorable margins helped to
partially offset the company's year-to-date decrease in gross profit margin. The
company expects that its gross profit margin for the remainder of 1997 will
generally be consistent with the margin achieved during the first nine months of
1997.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses represent
Orbital's self-funded product development activities, and exclude direct
customer-funded development. Research and development expenses during the
three-month periods ended September 30, 1997 and 1996 were $6,476,000 (or 3.9%
of revenues) and $3,918,000 (or 3.3% of revenues), respectively. Research and
development expenses during the nine-month periods ended September 30, 1997 and
1996 were $18,170,000 (or 4.2% of revenues) and $15,249,000 (or 4.5% of
revenues), respectively. Research and development expenses in 1997 and 1996
relate primarily to the development of new or improved navigation and
communications products, improved launch vehicles and new satellite initiatives.
The company expects total 1997 expenditures to be slightly lower than 1996
expenditures as a percentage of revenues, but higher in absolute dollars.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses include the costs of marketing, advertising, promotional
and other selling
-14-
<PAGE> 16
expenses as well as the costs of the finance, administrative and general
management functions of the company. Selling, general and administrative
expenses for the third quarters of 1997 and 1996 were $26,334,000 (or 16.0% of
revenues) and $20,039,000 (or 16.8% of revenues), respectively. Selling, general
and administrative expenses for the first nine months of 1997 and 1996 were
$69,456,000 (or 16.2% of revenues) and $59,133,000 (or 17.3% of revenues),
respectively. The decrease in selling, general and administrative expenses as a
percentage of revenues in 1997 is generally reflective of the increase in
revenues due to a substantial amount of new orders received during the latter
half of 1996 and in 1997. During 1997, Orbital has been largely successful in
generating increased revenues from such new orders without corresponding
increases to general and administrative costs. The company expects selling,
general and administrative expenses as a percentage of revenues during the
remainder of 1997 to be consistent with the percentage attained during the first
nine months of 1997, but still lower as a percentage of revenues than 1996
levels.
INVESTMENT INCOME AND INVESTMENT EXPENSE. Net investment income was $1,007,000
for the three months ended September 30, 1997 as compared to net investment
expense of $26,000 in the 1996 third quarter. Net investment income during the
nine-months ended September 30, 1997 was $1,317,000 as compared to net
investment expense of $1,475,000 during the 1996 comparable period. Investment
income reflects interest earnings on short-term investments. Interest expense in
1997 is primarily for outstanding amounts on Orbital's revolving credit
facilities and on other secured and unsecured debt. In 1996, interest expense
included interest on the company's 6-3/4% convertible debentures, which were
converted to common stock in August 1996. Interest expense has been reduced by
capitalized interest of $4,052,000 and $2,237,000, respectively, for the third
quarter of 1997 and 1996, and by $7,024,000 and $5,208,000, respectively, for
the first nine months of 1997 and 1996. Due to the issuance of the 5%
convertible notes this quarter and other increases in borrowings to fund recent
business and asset acquisitions, the company expects interest (expensed and
capitalized) for the remainder of 1997 to be significantly higher than interest
in the first half of 1997, but expects total 1997 net interest expense to be
slightly less than that in 1996.
EQUITY IN LOSSES OF AFFILIATES AND NON-CONTROLLING INTERESTS IN LOSSES OF
CONSOLIDATED SUBSIDIARIES. Equity in losses of affiliates and non-controlling
interests in losses of consolidated subsidiaries for the third quarter of 1997
and 1996 were $6,396,000 and $2,147,000, respectively, and $11,873,000 and
$6,153,000 for the nine month periods ended September 30, 1997 and 1996,
respectively. These amounts primarily represent (i) elimination of 50% and 75%
of the profits on sales of infrastructure products to ORBCOMM and ORBIMAGE,
respectively, and (ii) the company's pro rata share of ORBCOMM's, ORBCOMM
International Partners L.P.'s ("ORBCOMM International"), and ORBIMAGE's current
period earnings and losses, net of non-controlling shareholders' pro rata share
of ORBCOMM USA L.P.'s ("ORBCOMM USA") current period earnings and losses. The
company expects the start-up losses of ORBCOMM, ORBCOMM International, ORBCOMM
USA and ORBIMAGE to continue to increase during the remainder of 1997 and into
1998. As a result, the
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<PAGE> 17
company expects its share of the ORBCOMM partnerships' losses to increase from
1996 amounts, and expects its share of ORBIMAGE's losses to increase from
year-to-date amounts.
PROVISION FOR INCOME TAXES. The company recorded an income tax provision of
$730,000 and $495,000 for the three-month periods ended September 30, 1997 and
1996, respectively. For the nine-month periods ended September 30, 1997 and
1996, the company recorded an income tax provision of $1,918,000 and $1,269,000,
respectively. The company records its interim income tax provisions based on
estimates of the company's effective tax rate expected to be applicable for the
full fiscal year. Estimated effective rates recorded during interim periods may
be periodically revised, if necessary, to reflect current estimates.
At December 31, 1996, Orbital had approximately $120,000,000 and $3,000,000 of
net operating loss and tax credit carryforwards, respectively, which are
available to reduce future income tax obligations, subject to certain annual
limitations and other restrictions.
LIQUIDITY AND CAPITAL RESOURCES
The company's growth has required substantial capital to fund an expanding
business base, as well as significant research and development and capital
expenditures. The company has funded these requirements to date, and
expects to fund its requirements in the future, through cash generated by
operations, working capital, loan facilities, asset-based financings, joint
venture arrangements, and private and public equity and debt offerings.
Additionally, the company has historically made strategic acquisitions of
businesses and routinely evaluates potential acquisition candidates. The
company expects to continue to pursue potential acquisitions that it believes
would enhance its businesses. The company has historically financed its
acquisitions, and expects to finance its future acquisitions, through cash on
hand, cash generated by operations, the issuance of debt and/or equity
securities, and/or asset-based financings.
At September 30, 1997, cash, cash equivalents and short-term investments were
$39,011,000, and the company had short-term and long-term debt obligations
outstanding of approximately $206,280,000. The outstanding debt consists
primarily of $100,000,000 of 5% convertible notes, issued during the current
quarter, and of secured and unsecured notes.
On September 16, 1997, Orbital completed the sale of $100 million of 5%
convertible subordinated notes due October 2002. The notes, which are
non-callable for three years, are convertible, at the option of the holders,
into Orbital common stock at a conversion price of $28.00 per share, subject to
adjustment in certain events. The company used a portion of the proceeds from
the sale to pay down outstanding borrowings under its various lines of credit
and $10,000,000 on a long-term loan. The balance was invested in short-term
instruments.
-16-
<PAGE> 18
On August 6, 1997, Orbital amended and restated its existing revolving credit
facility (the "facility") to provide for total borrowings from an international
syndicate of six banks of up to $100,000,000. The new facility includes Magellan
as a borrower. The facility includes a $35,000,000 term loan, which matures July
2001, and a $65,000,000 revolving line of credit, borrowings under which are
subject to a defined borrowing base composed of certain receivables of Orbital
and Magellan. The principal amount of the term loan is payable in quarterly
installments beginning December 31, 1997. In September 1997, the company
reduced borrowings outstanding under the term loan from $35,000,000 to
$25,000,000 with proceeds from the convertible notes offering pursuant to the
terms of the facility. The interest rate charged under the facility is
a variable rate based on the prime rate or LIBOR at the company's election. The
weighted average interest rate on borrowings outstanding under this facility at
September 30, 1997 was 7.2%. The facility restricts the payment of cash
dividends and contains certain covenants with respect to the company's working
capital levels, fixed charge ratio, leverage ratio and tangible net worth, and
expires in August 2001. Proceeds from the facility were used to repay and
retire (i) Magellan's $10,000,000 line of credit and (ii) a $25,000,000
six-month short-term bridge loan that the company obtained on May 7, 1997.
The company's operations provided net cash of approximately $28,236,000 in the
first nine months of 1997. Although the company's operations generated
significant net cash during the first nine months of 1997, the company does not
expect significant positive net cash flow from operations in the fourth quarter.
The company incurred approximately $31,757,000 in capital expenditures for
office equipment, capitalized software and various spacecraft, launch vehicle
and other production and test equipment in the first nine months of 1997. The
company currently expects 1998 capital expenditures to be at least equal to 1997
expenditures.
On May 8, 1997, ORBIMAGE completed a private placement of 300,100 shares of
Series A Cumulative Convertible Preferred Stock (the "Preferred Stock"), raising
gross proceeds of $30,010,000. On that date, Orbital also purchased ORBIMAGE
common stock, bringing its total equity invested to approximately $89,187,000.
On July 3, 1997, ORBIMAGE placed an additional 72,605 shares of Preferred Stock,
raising an additional $7,260,500.
ORBIMAGE currently expects that it will require additional financing to fully
fund its current business plan. To the extent some or all of the additional
funding can not be raised from third-party investors on specified terms, Orbital
has agreed to purchase up to approximately $42,000,000 in preferred stock (up to
$22,000,000 by December 31, 1997 and up to an additional $20,000,000 by June 30,
1998) on terms defined in the private placement.
In connection with ORBCOMM's issuance in August 1996 of $170,000,000 of Senior
Notes due 2004, Orbital and Teleglobe Inc. each agreed, under certain
circumstances specified in the indenture governing the Senior Notes, to provide
ORBCOMM an aggregate amount not to exceed $15,000,000 in capital contributions
or debt financing expressly subordinated to the Senior Notes. ORBCOMM currently
believes that it may require some or all of such funding in early 1998.
Orbital expects that its capital needs for the remainder of 1997 will, in part,
be provided by working capital, cash flows from operations, existing credit
facilities, customer financings and operating lease arrangements. The company
may also consider new debt
-17-
<PAGE> 19
and equity financings to further realign its capital structure and to fund
potential capital requirements or acquisitions in 1998. In addition, the company
is assessing various equity and financing strategies in certain of its
subsidiaries.
-18-
<PAGE> 20
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On October 31, 1997, the U.S. District Court for the Eastern
District of Pennsylvania, pursuant to an agreement between the
parties, dismissed with prejudice the action brought by BTG USA,
Inc. ("BTG") against Magellan. Pursuant to the agreement, each party
agreed to bear its own cost of the action, and BTG further agreed to
certain restrictions on its right to litigate against Magellan in
the future.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - A complete listing of exhibits required is given in
the Exhibit Index that precedes the exhibits filed with this
report.
(b) (i) On July 28, 1997, the Company filed a Current Report on
Form 8-K, dated July 11, 1997, disclosing that it had entered
into an agreement to acquire certain assets, including all
stock of certain subsidiaries, relating to the manufacturing
and communications services businesses of CTA INCORPORATED
(the "CTA Acquisition").
-19-
<PAGE> 21
(ii) On September 2, 1997, the Company filed a Current Report
on Form 8-K, dated August 15, 1997, disclosing that the
Company had completed the CTA Acquisition.
(iii) On September 9, 1997, the Company filed Amendment No. 1
on Form 8-K/A to its Current Report on Form 8-K, dated August
15, 1997, in order to reflect the Company's determination that
the CTA Acquisition was more appropriately reported pursuant
to Item 5 rather than Item 2.
(iv) On September 12, 1997, the Company filed a Current Report
on Form 8-K, dated September 11, 1997, disclosing that it
proposed to make an offering of convertible subordinated notes
not registered or required to be registered under the
Securities Act of 1933, as amended (the "Securities Act").
(v) On September 22, 1997, the Company filed a Current Report
on Form 8-K, dated September 17, 1997, disclosing that it had
completed its sale of $100 million convertible subordinated
notes in an offering not registered or required to be
registered under the Securities Act.
(vi) On October 1, 1997, the Company filed a Current Report on
Form 8-K, dated September 16, 1997, disclosing that its $100
million convertible subordinated notes were sold to initial
purchasers in the United States in reliance on an exemption
under Section 4(2) of the Securities Act, and resold by the
initial purchasers in the United States to "qualified
institutional buyers" pursuant to Rule 144A under the Act and
outside the United States to non-U.S. persons in reliance on
Regulation S under that Act.
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<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ORBITAL SCIENCES CORPORATION
DATED: November 14, 1997 By: /s/ David W. Thompson
-----------------------------------------
David W. Thompson, President
and Chief Executive Officer
DATED: November 14, 1997 By: /s/ Jeffrey V. Pirone
-----------------------------------------
Jeffrey V. Pirone, Senior Vice President
and Principal Financial Officer
<PAGE> 23
EXHIBIT INDEX
The following exhibits are filed as part of this report.
Exhibit No. Description
----------- -----------
4.1 Indenture dated as of September 16, 1997 between Orbital
Sciences Corporation and Deutsche Bank AG, New York
Branch
10.1 Second Amended and Restated Credit Agreement dated as of
August 5, 1997 among Orbital Sciences Corporation, Magellan
Corporation, the Banks listed therein and Morgan Guaranty
Trust Company of New York as Agent
10.4 Amended and Restated Security Agreement dated as of June 30,
1992 and amended and restated as of August 5, 1997 among
Orbital Sciences Corporation, Morgan Guaranty Trust Company of
New York as Collateral Agent and NationsBank, N.A., as
Designated Lockbox Bank
10.4.1 Security Agreement dated as of August 5, 1997 among Magellan
Corporation, Morgan Guaranty Trust Company of New York as
Collateral Agent and NationsBank, N.A., as Designated Lockbox
Bank
11 Statement re: Computation of Earnings Per Share (transmitted
herewith).
27 Financial Data Schedule (such schedule is furnished for the
information of the Securities and Exchange Commission and is
not to be deemed "filed" as part of the Form 10-Q, or
otherwise subject to the liabilities of Section 18 of the
Securities Exchange Act of 1934) (transmitted herewith).
<PAGE> 1
[Conformed Copy]
Exhibit 4.1
-----------------------------------------------
ORBITAL SCIENCES CORPORATION
COMPANY
DEUTSCHE BANK AG,
NEW YORK BRANCH
TRUSTEE
--------------------
INDENTURE
DATED AS OF SEPTEMBER 16, 1997
---------------------
5% CONVERTIBLE SUBORDINATED NOTES DUE 2002
-----------------------------------------------
<PAGE> 2
-------------------------------
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
Section 310(a)(1) ........................................ 6.8
(a)(2) ........................................ 6.8
(a)(3) ........................................ Not Applicable
(a)(4) ........................................ Not Applicable
(b) ........................................ 6.13
........................................ 6.9
Section 311(a) ........................................ 6.14
(b) ........................................ 6.14
Section 312(a) ........................................ 15.1
........................................ 15.3(a)
(b) ........................................ 15.3(b)
(c) ........................................ 15.3(c)
Section 313(a) ........................................ 15.4(a)
(a)(4) ........................................ 1.1
(b) ........................................ 15.4(a)
(c) ........................................ 15.4(a)
(d) ........................................ 15.4(b)
Section 314(a) ........................................ 15.5
(b) ........................................ Not Applicable
(c)(1) ........................................ 1.2
(c)(2) ........................................ 1.2
(c)(3) ........................................ Not Applicable
(d) ........................................ Not Applicable
(e) ........................................ 1.2
Section 315(a) ........................................ 6.1
(b) ........................................ 6.2
(c) ........................................ 6.1
(d) ........................................ 6.1
(e) ........................................ 5.14
Section 316(a) ........................................ 1.1
(a)(1)(A) ........................................ 5.2
........................................ 5.12
(a)(1)(B) ........................................ 5.13
(a)(2) ........................................ Not Applicable
(b) ........................................ 5.8
(c) ........................................ 1.4(e)
<PAGE> 3
Section 317(a)(1) ........................................ 5.3
(a)(2) ........................................ 5.4
(b) ........................................ 10.3
Section 318(a) ........................................ 1.13
<PAGE> 4
TABLE OF CONTENTS
PAGE
----
RECITALS................................................................. 1
ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.... 1
SECTION 1.1 Definitions............................................... 1
Act.................................................................. 2
Additional Amounts................................................... 2
Additional Interest.................................................. 2
Affiliate............................................................ 2
Applicable Price..................................................... 2
Authenticating Agent................................................. 2
Authorized Newspaper................................................. 2
Board of Directors or Board.......................................... 2
Board Resolution..................................................... 2
Business Day......................................................... 3
Cedel................................................................ 3
Certificated Security................................................ 3
Closing Price........................................................ 3
Code................................................................. 3
Commission........................................................... 3
Common Stock......................................................... 3
Company.............................................................. 3
Company Order........................................................ 4
Company Notice....................................................... 4
Constituent Person................................................... 4
Conversion Agent..................................................... 4
Conversion Price..................................................... 4
Corporate Trust Office............................................... 4
Corporation.......................................................... 4
Custodian............................................................ 4
Defaulted Interest................................................... 4
Depositary........................................................... 4
Designated Senior Indebtedness....................................... 5
Dollar or U.S.$...................................................... 5
DTC.................................................................. 5
Euroclear............................................................ 5
Event of Default..................................................... 5
Exchange Act......................................................... 5
Fundamental Change................................................... 5
Global Security...................................................... 5
i
<PAGE> 5
Global Security Legend............................................... 5
Holder............................................................... 5
Indebtedness......................................................... 6
Indenture............................................................ 6
Initial Purchasers................................................... 6
Interest Payment Date................................................ 6
Maturity............................................................. 7
Non-electing Share................................................... 7
Non-U.S. Holder...................................................... 7
Officer.............................................................. 7
Officers' Certificate................................................ 7
Opinion of Counsel................................................... 7
Outstanding.......................................................... 7
Paying Agent......................................................... 8
Payment Blockage Notice.............................................. 8
Person............................................................... 8
Place of Conversion.................................................. 8
Place of Payment..................................................... 8
Predecessor Security................................................. 8
Purchase Agreement................................................... 9
Purchased Shares..................................................... 9
QIB.................................................................. 9
Record Date.......................................................... 9
Redemption Date...................................................... 9
Redemption Price..................................................... 9
Reference Market Price............................................... 9
Registration Rights Agreement........................................ 9
Regular Record Date.................................................. 9
Regulation S......................................................... 9
Representative....................................................... 9
Repurchase Date...................................................... 10
Repurchase Price..................................................... 10
Responsible Officer.................................................. 10
Restricted Securities................................................ 10
Restricted Securities Legends........................................ 10
Rule 144A............................................................ 10
Rule 144A Information................................................ 10
Securities........................................................... 10
Securities Act....................................................... 10
Security Register.................................................... 10
Security Registrar................................................... 10
Senior Indebtedness.................................................. 11
Special Record Date.................................................. 11
Stated Maturity...................................................... 11
Subsidiary........................................................... 11
ii
<PAGE> 6
Successor Security................................................... 11
Tax Affected Security................................................ 12
Taxing Jurisdiction.................................................. 12
Tax Law Change....................................................... 12
Trading Day.......................................................... 12
Trust Indenture Act.................................................. 12
Trustee.............................................................. 12
United States........................................................ 12
U.S. Holder.......................................................... 12
Western Europe....................................................... 12
SECTION 1.2. Compliance Certificates and Opinions................... 13
SECTION 1.3. Form of Documents Delivered to the Trustee............. 13
SECTION 1.4. Acts of Holders of Securities.......................... 14
SECTION 1.5. Notices, Etc., to Trustee and Company.................. 16
SECTION 1.6. Notice to Holders of Securities; Waiver................ 17
SECTION 1.7. Effect of Headings and Table of Contents............... 17
SECTION 1.8. Successors and Assigns................................. 17
SECTION 1.9. Separability Clause.................................... 18
SECTION 1.10. Benefits of Indenture................................. 18
SECTION 1.11. Governing Law......................................... 18
SECTION 1.12. Legal Holidays........................................ 18
SECTION 1.13. Conflict with Trust Indenture Act..................... 19
SECTION 1.14. Jurisdiction.......................................... 19
SECTION 1.15. Indenture and Securities Solely Corporate Obligations. 19
SECTION 1.16. Luxembourg Obligations................................ 20
ARTICLE TWO - SECURITY FORMS............................................. 20
SECTION 2.1. Forms Generally........................................ 20
SECTION 2.2. Form of Security....................................... 21
SECTION 2.3. Assignment Form and Certificate of Transfer............ 35
SECTION 2.4. Form of Election of Holder to Require Repurchase....... 37
SECTION 2.5. Form of Conversion Notice.............................. 38
SECTION 2.6. Form of Certificate of Authentication.................. 39
ARTICLE THREE - THE SECURITIES........................................... 40
SECTION 3.1. Title and Terms........................................ 40
SECTION 3.2. Denominations.......................................... 41
SECTION 3.3. Execution, Authentication, Delivery and Dating......... 41
SECTION 3.4. Global Securities; Book-Entry Provisions;
Certificated Securities............................... 42
SECTION 3.5. Registration, Registration of Transfer and Exchange;
Restrictions on Transfer.............................. 45
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Securities........ 49
SECTION 3.7. Payment of Interest; Interest Rights Preserved......... 50
SECTION 3.8. Persons Deemed Owners.................................. 52
SECTION 3.9. Cancellation........................................... 52
iii
<PAGE> 7
SECTION 3.10. Computation of Interest............................... 52
SECTION 3.11. CUSIP Numbers......................................... 53
ARTICLE FOUR - SATISFACTION AND DISCHARGE................................ 53
SECTION 4.1. Satisfaction and Discharge of Indenture................ 53
SECTION 4.2. Application of Trust Money............................. 54
ARTICLE FIVE - REMEDIES.................................................. 55
SECTION 5.1. Events of Default...................................... 55
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment..... 56
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement
by Trustee............................................ 57
SECTION 5.4. Trustee May File Proofs of Claim....................... 58
SECTION 5.5. Trustee May Enforce Claims Without Possession of
Securities............................................ 58
SECTION 5.6. Application of Money Collected......................... 59
SECTION 5.7. Limitation on Suits.................................... 59
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert................... 60
SECTION 5.9. Restoration of Rights and Remedies..................... 60
SECTION 5.10. Rights and Remedies Cumulative........................ 60
SECTION 5.11. Delay or Omission Not Waiver.......................... 61
SECTION 5.12. Control by Holders of Securities...................... 61
SECTION 5.13. Waiver of Past Defaults............................... 61
SECTION 5.14. Undertaking for Costs................................. 62
SECTION 5.15. Waiver of Stay, Extension and Usury Laws.............. 62
ARTICLE SIX - THE TRUSTEE................................................ 62
SECTION 6.1. Certain Duties and Responsibilities.................... 62
SECTION 6.2. Notice of Defaults..................................... 63
SECTION 6.3. Certain Rights of Trustee.............................. 64
SECTION 6.4. Not Responsible for Recitals or Issuance of
Securities............................................ 65
SECTION 6.5. May Hold Securities, Act as Trustee Under Other
Indentures............................................ 65
SECTION 6.6. Money Held in Trust.................................... 66
SECTION 6.7. Compensation and Reimbursement......................... 66
SECTION 6.8. Corporate Trustee Required; Eligibility................ 67
SECTION 6.9. Resignation and Removal; Appointment of Successor...... 67
SECTION 6.10. Acceptance of Appointment by Successor................ 68
SECTION 6.11. Merger, Conversion, Consolidation or Succession to
Business............................................. 69
SECTION 6.12. Authenticating Agents................................. 69
SECTION 6.13. Disqualification; Conflicting Interests............... 70
SECTION 6.14. Preferential Collection of Claims Against Company..... 71
ARTICLE SEVEN - CONSOLIDATION, MERGER, TRANSFER OR LEASE................. 71
SECTION 7.1. Company May Consolidate, Etc., Only on Certain Terms... 71
SECTION 7.2. Successor Substituted.................................. 72
iv
<PAGE> 8
ARTICLE EIGHT - SUPPLEMENTAL INDENTURES.................................. 72
SECTION 8.1. Supplemental Indentures Without Consent of Holders of
Securities............................................ 72
SECTION 8.2. Supplemental Indentures with Consent of Holders of
Securities............................................ 73
SECTION 8.3. Execution of Supplemental Indentures................... 74
SECTION 8.4. Effect of Supplemental Indentures...................... 74
SECTION 8.5. Reference in Securities to Supplemental Indentures..... 75
SECTION 8.6. Notice of Supplemental Indentures...................... 75
ARTICLE NINE - MEETINGS OF HOLDERS OF SECURITIES......................... 75
SECTION 9.1. Purposes for Which Meetings May Be Called.............. 75
SECTION 9.2. Call, Notice and Place of Meetings..................... 76
SECTION 9.3. Persons Entitled to Vote at Meetings................... 76
SECTION 9.4. Quorum; Action........................................ 76
SECTION 9.5. Determination of Voting Rights; Conduct and
Adjournment of Meetings............................... 77
SECTION 9.6. Counting Votes and Recording Action of Meetings........ 78
ARTICLE TEN - COVENANTS.................................................. 78
SECTION 10.1. Payment of Principal, Premium and Interest............ 78
SECTION 10.2. Maintenance of Offices or Agencies.................... 79
SECTION 10.3. Money for Security Payments To Be Held in Trust....... 79
SECTION 10.4. Additional Amounts.................................... 81
SECTION 10.5. Corporate Existence................................... 81
SECTION 10.6. Statement by Officers as to Default................... 81
SECTION 10.7. Delivery of Certain Information....................... 82
SECTION 10.8. Additional Interest................................... 82
ARTICLE ELEVEN - REDEMPTION OF SECURITIES................................ 83
SECTION 11.1. Right of Redemption................................... 83
SECTION 11.2. Applicability of Article.............................. 83
SECTION 11.3. Election to Redeem; Notice to Trustee................. 83
SECTION 11.4. Selection by Trustee of Securities to Be Redeemed..... 83
SECTION 11.5. Notice of Redemption.................................. 84
SECTION 11.6. Deposit of Redemption Price........................... 85
SECTION 11.7. Securities Payable on Redemption Date................. 85
SECTION 11.8. Securities Redeemed in Part........................... 86
SECTION 11.9. Conversion Arrangement on Call for Redemption......... 86
ARTICLE TWELVE - CONVERSION OF SECURITIES................................ 87
SECTION 12.1. Conversion Privilege and Conversion Price............. 87
SECTION 12.2. Exercise of Conversion Privilege...................... 87
SECTION 12.3. Fractions of Shares................................... 89
SECTION 12.4. Adjustment of Conversion Price........................ 90
SECTION 12.5. Notice of Adjustments of Conversion Price............. 97
SECTION 12.6. Notice of Certain Corporate Action.................... 98
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<PAGE> 9
SECTION 12.7. Company to Provide Common Stock....................... 99
SECTION 12.8. Taxes on Conversions.................................. 99
SECTION 12.9. Company Covenant as to Common Stock.................. 100
SECTION 12.10. Cancellation of Converted Securities................ 100
SECTION 12.11. Provision in Case of Consolidation, Merger, or Sale
of Assets of the Company........................... 100
SECTION 12.12. Responsibility of Trustee for Conversion Provisions. 101
ARTICLE THIRTEEN - SUBORDINATION OF SECURITIES.......................... 102
SECTION 13.1. Agreement of Subordination........................... 102
SECTION 13.2. Payments to Holders.................................. 102
SECTION 13.3. Subrogation of Securities............................ 105
SECTION 13.4. Authorization to Effect Subordination................ 106
SECTION 13.5. Notice to Trustee.................................... 106
SECTION 13.6. Trustee's Relation to Senior Indebtedness of the
Company............................................. 107
SECTION 13.7. No Impairment of Subordination....................... 108
SECTION 13.8. Article Applicable to Paying Agents.................. 108
SECTION 13.9. Senior Indebtedness of the Company Entitled to Rely.. 108
SECTION 13.10. Certain Conversions Deemed Payment.................. 109
ARTICLE FOURTEEN - REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER
UPON A FUNDAMENTAL CHANGE............................................ 109
SECTION 14.1. Right to Require Repurchase.......................... 109
SECTION 14.2. Notices; Method of Exercising Repurchase Right, Etc.. 110
SECTION 14.3. Merger, Consolidation, Etc........................... 112
ARTICLE FIFTEEN - HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY...... 113
SECTION 15.1. Company to Furnish Trustee Names and Addresses of
Holders............................................. 113
SECTION 15.2. Trustee to Furnish Company Names and Addresses of
Holders............................................. 113
SECTION 15.3. Preservation of Information.......................... 114
SECTION 15.4. Reports by Trustee................................... 114
SECTION 15.5. Reports by Company................................... 114
SECTION 15.6. Reports with Respect to Registration of Securities... 115
vi
<PAGE> 10
INDENTURE, dated as of September 16, 1997, between Orbital Sciences
Corporation, a Delaware corporation (herein called the "Company"), and Deutsche
Bank AG, New York Branch, as Trustee hereunder (herein called the "Trustee").
RECITALS
The Company has duly authorized the creation of an issue of its 5%
Convertible Subordinated Notes due 2002 (herein called the "Securities") in an
aggregate principal amount not to exceed $100,000,000, and to provide therefor
the Company has duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder, the valid and
binding obligations of the Company, and to make this Indenture a valid and
binding agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, the Company and the Trustee mutually covenant
and agree, for the equal and proportionate benefit of all Holders of the
Securities as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
SECTION 1.1 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 accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States, and, except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally
accepted in the United States at the date of such computation; and
(3) 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.
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<PAGE> 11
"Act", when used with respect to any Holder of a Security, has the
meaning specified in Section 1.4.
"Additional Amounts" has the meaning specified in Section 2.2.
"Additional Interest" has the meaning specified in the Registration
Rights Agreement and Section 10.8.
"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.
"Applicable Price" means (i) in the event of a Fundamental Change in
which the holders of the Common Stock receive only cash, the amount of cash
received by the holder of one share of Common Stock and (ii) in the event of any
other Fundamental Change, the arithmetic average of the Closing Price for the
Common Stock during the ten Trading Days prior to the record date for the
determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Fundamental Change,
or, if there is no such record date, the date upon which the holders of the
Common Stock shall have the right to receive such cash, securities, property or
other assets in connection with the Fundamental Change.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.12 to act on behalf of the Trustee to authenticate
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.
"Board of Directors" or "Board" means either the board of directors of
the Company or any committee of that board empowered to act for it with respect
to this Indenture.
"Board Resolution" means a resolution duly adopted by the Board, a copy
of which, certified by the Secretary or an Assistant Secretary of the Company to
have been duly adopted by the Board and to be in full force and effect on the
date of such certification, shall have been delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, Place
of Conversion or any other place, as the case may be, means each Monday,
Tuesday, Wednesday,
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<PAGE> 12
Thursday and Friday that is not a day on which banking institutions in such
Place of Payment, Place of Conversion or other place, as the case may be, are
authorized or obligated by law or executive order to close; provided, however,
that a day on which banking institutions in either New York, New York or
Luxembourg are authorized or obligated by law or executive order to close shall
not be a Business Day for purposes of Section 10.1, 10.3, 11.6 or 13.5.
"Cedel" means Cedel Bank, societe anonyme.
"Certificated Security" means those Securities described in Section
3.4(a)(2) in fully registered, definitive form.
"Closing Price" has the meaning specified in Section 12.4(7)(a).
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" includes any stock or shares of any class of the
Company that has no preference in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution or winding up
of the Company and that is not subject to redemption by the Company; provided,
however, subject to the provisions of Section 12.11, shares issuable on
conversion of Securities shall include only shares of the class designated as
Common Stock of the Company at the date of this Indenture or shares of any class
or classes resulting from any reclassification or reclassifications thereof and
that have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and that are not subject to redemption by the Company; provided,
further, however, that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture 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 Order" or "Company Request" means a written order or
request signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its Chief Executive Officer, its President or an
Executive Vice President, a Senior Vice President or a Vice President, and by
its principal financial officer, its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Company Notice" has the meaning specified in Section 14.2.
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<PAGE> 13
"Constituent Person" has the meaning specified in Section 12.11.
"Conversion Agent" means any Person authorized by the Company to
convert Securities in accordance with Article Twelve. The Company has initially
appointed (i) the Trustee as its Conversion Agent, in The City of New York, New
York, and (ii) so long as the Securities are listed on the Luxembourg Stock
Exchange and the rules of the Luxembourg Stock Exchange shall require that a
Conversion Agent be maintained in Luxembourg, Banque de Luxembourg, as its
Conversion Agent in Luxembourg.
"Conversion Price" has the meaning specified in Section 12.1.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered (which at the date of this Indenture is located at 31 West 52nd
Street, New York, New York 10019).
"Corporation" means a corporation or company, including, without
limitation, a limited liability company, association, joint-stock company or
business trust.
"Custodian" shall mean Deutsche Bank AG, New York Branch, as
custodian with respect to a Global Security, or any successor entity thereto.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means, with respect to any Securities issued in whole
or in part in the form of one or more Global Securities, the clearing agency
that is registered under the Exchange Act and designated to act as Depositary
for such Securities, as contemplated by Section 3.4, or any successor clearing
agency registered under the Exchange Act as contemplated by Section 3.4.
"Designated Senior Indebtedness" means any particular Senior
Indebtedness of the Company in which the instrument creating or evidencing the
same or the assumption or guarantee thereof (or related agreements or documents
to which the Company is a party) expressly provides that such Senior
Indebtedness shall be "Designated Senior Indebtedness" for purposes of this
Indenture (provided that such instrument, agreement or other document may place
limitations and conditions on the right of such Senior Indebtedness to exercise
the rights of the Designated Senior Indebtedness).
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such
coin or currency of the United States as at the time shall be legal tender for
the payment of public and private debts.
"DTC" means The Depository Trust Company, a New York corporation.
"Euroclear" means the Euroclear System.
"Event of Default" has the meaning specified in Section 5.1.
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<PAGE> 14
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended from time to time.
"Fundamental Change" means the occurrence of any transaction or
event in connection with which at least 90% of the then Outstanding Common Stock
shall be exchanged for, converted into, acquired for or constitute solely the
right to receive, consideration (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which is not, based on the aggregate fair market
value (as defined in Section 12.4(7)) of such consideration ("Aggregate
Consideration"), represented by common stock or other shares, equal to at least
90% of the Aggregate Consideration, that are (or, upon consummation of or
immediately following such transaction or event, will be) listed on a United
States national securities exchange or approved for quotation on the Nasdaq
National Market or any similar United States system of automated dissemination
of quotations of securities prices.
"Global Security" shall have the meaning set forth in Section 3.4.
"Global Security Legend" means the legend substantially in the form
of legend required in the form of Security set forth in Section 2.2 to be placed
upon the Global Security.
"Holder", when used with respect to any Security, means the Person
in whose name the Security is registered in the Security Register.
"Indebtedness" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of such
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof) (other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services); (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances; (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such
Person and all obligations and other liabilities (contingent or otherwise) under
any lease or related document (including a purchase agreement) in connection
with the lease of real or personal property or improvements thereon which
provides that such Person is contractually obligated to purchase or cause a
third party to purchase the leased property and the obligations of such Person
under such lease or related document to purchase or to cause a third party to
purchase such leased property; (d) all obligations of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the course of
business); (e) all obligations to purchase, redeem or acquire capital stock of
such Person; (f) all direct or indirect guaranties or similar agreements by such
5
<PAGE> 15
Person in respect of, and obligations or liabilities (contingent or otherwise)
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (e); (g) any indebtedness or
other obligations described in clauses (a) through (f) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
the Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by the Person; and (h) any and all deferrals,
renewals, extensions, refinancings and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or liability of
the kind described in clauses (a) through (g).
"Indenture" means this Indenture as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this Indenture and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Indenture and any such supplemental indenture,
respectively.
"Initial Purchasers" means Deutsche Morgan Grenfell Inc. and J.P.
Morgan Securities Inc.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Maturity", when used with respect to any Security, means the date
on which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set forth in
Article Fourteen or otherwise.
"Non-electing Share" has the meaning specified in Section 12.11.
"Non-U.S. Holder" means any beneficial owner of a Note or Common
Stock that is not a U.S. Holder.
"Officer" with respect to the Company, means the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President
or an Executive Vice President or a Senior Vice President or a Vice President,
the principal financial officer, the Treasurer, or Assistant Treasurer, the
Secretary or an Assistant Secretary.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, a Vice Chairman of the Board, the Chief Executive Officer, the
President or an Executive Vice President or a Senior Vice President or a Vice
President and by the principal financial officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company and delivered
to the Trustee.
"Opinion of Counsel" means a written opinion of counsel who may be
an employee of the Company and who shall be reasonably acceptable to the
Trustee.
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<PAGE> 16
"Outstanding", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for the payment or redemption of which money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders of
such Securities, provided that if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; and
(iv) Securities converted into Common Stock pursuant to Article
Twelve;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a meeting of Holders
of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such determination as to the
presence of a quorum or upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which a Responsible Officer of the
Trustee actually knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company and, except
as otherwise specifically set forth herein, such term shall include the Company
if it shall act as its own Paying Agent. The Company has initially appointed (i)
the Trustee as its Paying Agent in The City of New York, New York, and (ii) so
long as the Securities are listed on the Luxembourg Stock Exchange and the rules
of the Luxembourg Stock Exchange shall require that a Paying Agent be maintained
in Luxembourg, Banque de Luxembourg, as its Paying Agent in Luxembourg.
"Payment Blockage Notice" has the meaning specified in Section
13.2.
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<PAGE> 17
"Person" means any individual, limited liability company,
corporation, partnership, limited liability partnership, joint venture,
association, trust, estate, unincorporated organization or government or any
agency or political subdivision thereof.
"Place of Conversion" has the meaning specified in Section 3.1.
"Place of Payment" has the meaning specified in Section 3.1.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means the Purchase Agreement, dated September
10, 1997, between the Company and the Initial Purchasers, as such agreement may
be amended from time to time.
"Purchased Shares" has the meaning specified in Section 12.4(6).
"QIB" shall mean a "qualified institutional buyer" as defined in
Rule 144A.
"Record Date" means any Regular Record Date or Special Record
Date.
"Redemption Date", when used with respect to any Security to be
redeemed in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Reference Market Price" means $15.13 and in the event of any
adjustment to the Conversion Price pursuant to Section 12.4, the Reference
Market Price shall also be adjusted so that the ratio of the Reference Market
Price to the Conversion Price after giving effect to any such adjustment shall
always be the same as the ratio of $15.13 to the initial Conversion Price
specified in Section 12.1 (without regard to any adjustment thereto).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of September 16, 1997, between the Company and the Initial
Purchasers, as such agreement may be amended from time to time.
"Regular Record Date" for interest payable in respect of any
Security on any Interest Payment Date means the March 15 or September 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
8
<PAGE> 18
"Representative" means the (a) indenture trustee or other trustee,
agent or representative for any Senior Indebtedness or (b) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required Persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"Repurchase Date" has the meaning specified in Section 14.1.
"Repurchase Price" has the meaning specified in Section 14.1.
"Responsible Officer", when used with respect to the Trustee, means
any officer of the Trustee including, without limitation, any Director, Vice
President, Assistant Vice President, Treasurer, Assistant Treasurer, Secretary,
Assistant Secretary, Corporate Trust Officer, Assistant Corporate Trust Officer
or other employee of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge and familiarity with the particular
subject.
"Restricted Securities" means all Securities required pursuant to
Section 3.5(c) to bear the Restricted Securities Legends.
"Restricted Securities Legends" means the legend substantially in
the form of the legend required in the form of Security set forth in Section 2.2
to be placed upon each Restricted Security.
"Rule 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Rule 144A Information" has the meaning specified in Section 10.7.
"Securities" has the meaning ascribed to it in the first
paragraph under the caption "Recitals".
"Securities Act" means the United States Securities Act of 1933, as
amended from time to time.
"Security Register" shall have the meaning specified in Section
3.5.
"Security Registrar" has the meaning specified in Section 2.2. The
Company has initially appointed (i) the Trustee as its Security Registrar in The
City of New York, New York and (ii), so long as the Securities are listed on the
Luxembourg Stock Exchange and the Luxembourg Stock Exchange shall require,
Banque de Luxembourg, as its Security Registrar in
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<PAGE> 19
Luxembourg for the purpose of registering Securities and transfers and exchanges
of Securities as provided herein.
"Senior Indebtedness" means, with respect to the Company, the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in such
proceeding) and rent payable on or in connection with, and all fees, costs,
expenses and other amounts accrued or due on or in connection with, Indebtedness
of the Company, whether outstanding on the date of this Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company
(including all deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing), unless in the case of any
particular Indebtedness the instrument creating or evidencing the same or the
assumption or guarantee thereof expressly provides that such Indebtedness shall
not be senior in right of payment to the Securities or expressly provides that
such Indebtedness is "pari passu" or "junior" to the Securities. Notwithstanding
the foregoing, Senior Indebtedness shall not include any Indebtedness of the
Company to any Subsidiary of the Company; provided, however, that the term
Senior Indebtedness shall include Indebtedness of the Company to any Subsidiary
of the Company arising by reason of a guarantee by the Company of Indebtedness
of such Subsidiary to a Person that is not a Subsidiary of the Company.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means, with respect to any Person, a corporation or
limited liability corporation more than 50% of the outstanding voting stock of
which is owned, directly or indirectly, or a partnership or limited partnership
more than 50% of the voting interest in which is owned, directly or indirectly,
by such Person or by one or more other Subsidiaries or by such Person and one or
more Subsidiaries. For the purposes of this definition, "voting stock" means
stock or other similar interests in the corporation which ordinarily has or have
voting power for the election of directors, or persons performing similar
functions, whether at all times or only so long as no senior class of stock or
other interests has or have such voting power by reason of any contingency;
provided, however, that only such Persons that are consolidated with the Company
in accordance with generally accepted accounting principles in the United States
shall be deemed Subsidiaries of the Company.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
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"Tax Affected Security" means any Security that, as a result of any
Tax Law Change, the Company has or will become obligated to pay Additional
Amounts in respect of such Security.
"Taxing Jurisdiction" has the meaning specified in Section 2.2.
"Tax Law Change" means any change in, or amendment to, the laws or
regulations, prevailing in the United States or any political subdivision or
taxing authority thereof or therein, which change or amendment becomes effective
on or after September 11, 1997 or any application or judicial, legislative or
administrative interpretation of such laws or regulations, not generally known
before the date of September 11, 1997.
"Trading Day" has the meaning specified in Section 12.4(7)(e).
"Trust Indenture Act" means the United States Trust Indenture Act of
1939, as in force at the date as of which this Indenture was executed; provided,
however, that in the event the United States Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the United States Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction (including Puerto Rico, the U.S. Virgin
Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands).
"U.S. Holder" means the beneficial owner of a Security or Common
Stock that for United States federal income tax purposes is (i) a citizen or
resident (as defined in Section 7701(b) of the Code) of the United States, (ii)
treated as a domestic corporation, domestic partnership or other domestic
entity, (iii) an estate the income of which is subject to U.S. federal income
taxation regardless of its source, (iv) a trust that is subject to the primary
supervision of a court within the United States and the control of a United
States person as described in Section 7701(a)(30) of the Code or (v) any other
person whose income or gain with respect to a Security or Common Stock is
effectively connected with the conduct of a United States trade or business.
"Western Europe" means Austria, Belgium, Denmark, Finland, France,
Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland and the United Kingdom.
The definitions of certain other terms are specified elsewhere in
this Indenture, including in Article Twelve.
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SECTION 1.2. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee or any
Paying Agent to take any action under any provision of this Indenture, the
Company shall furnish to the Trustee or the Paying Agent, as the case may be, 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 (excluding certificates
provided for in Section 10.6) 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 such individual, he or
she has made such examination or investigation as is necessary to enable
him or her, as the case may be, to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to the 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 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 such certificate or opinion is based are erroneous. Any
such certificate or opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
Officer or Officers
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stating that the information with respect to such factual matters is in the
possession of the Company unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders of Securities.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders of Securities may be embodied in and evidenced by (1) one or
more instruments of substantially similar tenor signed by such Holders in person
or by agents or proxies duly appointed in writing by such Holders, (2) the
record of Holders of Securities voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities duly
called and held in accordance with the provisions of Article Nine or (3) a
combination of such instruments and any such record. 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. The
Trustee shall promptly deliver to the Company copies of all such instruments and
records delivered to the Trustee with a courtesy copy to Company's counsel at
the address listed in Section 1.5 and if pertaining to any conversion notice,
with a courtesy copy to Company's common stock transfer agent at the address
listed in Section 1.5. Such instrument or instruments and record (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders of Securities signing such instrument or instruments and so
voting at such meeting. Proof of execution of any such instrument or of a
writing appointing any such agent or proxy, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 6.1) 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
Securities shall be proved in the manner provided in Section 9.6.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or not the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) The principal amount and serial number of any Security held by
any Person, and the date of his holding the same, shall be proved by the
Security Register.
(d) The fact and date of execution of any such instrument or writing
and the authority of the Person executing the same may also be proved in any
other manner which the Trustee or the Paying Agent deems sufficient; and the
Trustee or any Paying Agent may in any instance require further proof with
respect to any of the matters referred to in this Section 1.4.
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(e) The Company may set any day as the record date for the purpose
of determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted by this Indenture to be given or taken by
Holders. Promptly and in any case not later than ten days after setting a record
date, the Company shall notify the Trustee, each Paying Agent and the Holders of
such record date. If not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such action, or, in the case of any
such vote, prior to such vote, the record date for any such action or vote shall
be the 30th day (or, if later, the date of the most recent list of Holders
required to be provided pursuant to Section 15.1) prior to such first
solicitation or vote, as the case may be. With regard to any record date, the
Holders on such date (or their duly appointed agents or proxies), and only such
Persons, shall be entitled to give or take, or vote on, the relevant action,
whether or not such Holders remain Holders after such record date.
Notwithstanding the foregoing, the Company shall not set a record date for, and
the provisions of this paragraph shall not apply with respect to, any notice,
declaration or direction referred to in the next paragraph.
Upon receipt by the Trustee from any Holder of (i) any notice of
default or breach referred to in Section 5.1(3), if such default or breach has
occurred and is continuing and the Trustee shall not have given such a notice to
the Company, (ii) any declaration of acceleration referred to in Section 5.2, if
an Event of Default has occurred and is continuing and the Trustee shall not
have given such a declaration to the Company, or (iii) any direction referred to
in Section 5.12, if the Trustee shall not have taken the action specified in
such direction, then a record date shall automatically and without any action by
the Company or the Trustee be set for determining the Holders entitled to join
in such notice, declaration or direction, which record date shall be the close
of business on the tenth day (or, if such day is not a Business Day, the first
Business Day thereafter) following the day on which the Trustee receives such
notice, declaration or direction. Promptly after such receipt by the Trustee,
and as soon as practicable thereafter, the Trustee shall notify the Company and
the Holders of any such record date so fixed. The Holders on such record date
(or their duly appointed agents or proxies), and only such Persons, shall be
entitled to join in such notice, declaration or direction, whether or not such
Holders remain Holders after such record date; provided that, unless such
notice, declaration or direction shall have become effective by virtue of
Holders of the requisite principal amount of Securities on such record date (or
their duly appointed agents or proxies) having joined therein on or prior to the
90th day after such record date, such notice, declaration or direction shall
automatically and without any action by any Person be canceled and of no further
effect. Nothing in this paragraph shall be construed to prevent a Holder (or a
duly appointed agent or proxy thereof) from giving, before or after the
expiration of such 90-day period, a notice, declaration or direction contrary to
or different from, or, after the expiration of such period, identical to, the
notice, declaration or direction to which such record date relates, in which
event a new record date in respect thereof shall be set pursuant to this
paragraph. In addition, nothing in this paragraph shall be construed to render
ineffective any notice, declaration or direction of the type referred to in this
paragraph given at any time to the Trustee and the Company by Holders (or their
duly appointed agents or proxies) of the requisite principal amount of
Securities on the date such notice, declaration or direction is so given.
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Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Successor Security
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Successor Security.
The provisions of this Section 1.4 are subject to the provisions of
Section 9.5.
SECTION 1.5. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders of Securities or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,
(1) the Trustee or the Paying Agent in New York, New York or
the Paying Agent in Luxembourg by any Holder of Securities or by the
Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee and received at its
Corporate Trust Office, 31 West 52nd Street, 9th Floor, New York, New York
10019, Attention: Corporate Trust Department-Orbital Sciences Corporation
(facsimile number (212) 469-8979), or to or with the Paying Agent in
Luxembourg and received at 14 Boulevard Royal, L-2449 Luxembourg,
Attention: International Department (facsimile number: (352) 46 26 68). In
addition, a courtesy copy shall be sent to Trustee's counsel (which shall
not constitute notice to the Trustee): Ziegler, Ziegler & Altman, 750
Lexington Avenue, New York, New York 10022 (facsimile number (212)
319-7605), Attention: Scott A. Ziegler, Esq., or
(2) the Company by the Trustee or any Paying Agent or by any
Holder of Securities shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing, mailed,
first-class postage prepaid, or telecopied and confirmed by mail,
first-class postage prepaid, or delivered by hand or overnight courier,
addressed to the Company at, Orbital Sciences Corporation, 21700 Atlantic
Boulevard, Dulles, VA 20166 (facsimile number: (703) 406-5572, Attention:
General Counsel, or at any other address previously furnished in writing
to the Trustee by the Company. In addition, a courtesy copy shall be sent
to Company's counsel (which shall not constitute notice to the Company):
Hogan & Hartson L.L.P., 555 13th Street N.W., Washington DC 20004-1109
(facsimile number (202) 637-5910), Attention: Eve N. Howard, Esq. and if
relating to a conversion notice as described in Section 2.2, with a copy
to the Company's common stock transfer agent, the First National Bank of
Boston, c/o Boston EquiServe, Investor Relations, P.O. Box 8040, Boston,
MA 02266-8040.
Any request, demand, authorization, direction, notice, consent,
election or waiver 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.
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SECTION 1.6. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event, such notice shall be
sufficiently given to Holders of Securities if in writing and mailed,
first-class postage prepaid, to each Holder of a Security affected by such
event, at the address of such Holder as it appears in the Security Register, not
earlier than the earliest date and not later than the latest date prescribed for
the giving of such notice. Such notice shall be conclusively deemed to have been
given and received by Holders when such notice is mailed, whether or not such
Holder receives such notice.
In any case where notice to Holders of Securities is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder of a Security shall affect the sufficiency of such
notice with respect to other Holders of Securities given as provided above. In
case by reason of the suspension of or irregularities in regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification to Holders of Securities as shall be made with the
approval of the Trustee, which approval shall not be unreasonably withheld,
shall constitute a sufficient notification to such Holders for every purpose
hereunder.
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 of Securities 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.
SECTION 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.8. Successors and Assigns.
All covenants, stipulations, promises and agreements in this
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.9. Separability Clause.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.10. Benefits of Indenture.
Except as provided in the next sentence, nothing in this Indenture
or in the Securities, express or implied, shall give to any Person, other than
the parties hereto and their successors and assigns hereunder and the Holders of
Securities, any benefit or legal or equitable
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right, remedy or claim under this Indenture. The provisions of Article Thirteen
are intended to be for the benefit of, and shall be enforceable directly by, the
holders of Senior Indebtedness of the Company.
SECTION 1.11. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK, THE UNITED STATES OF AMERICA, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 1.12. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity of any Security or the last day on which a
Holder of a Security has a right to convert his Security shall not be a Business
Day at any Place of Payment or Place of Conversion, as the case may be, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal and premium, if any, or delivery for conversion
of such Security need not be made at such Place of Payment or Place of
Conversion, as the case may be, on or by such day, but may be made on or by the
next succeeding Business Day at such Place of Payment or Place of Conversion, as
the case may be, with the same force and effect as if made on the Interest
Payment Date, Redemption Date or Repurchase Date, or at the Stated Maturity or
by such last day for conversion; provided, however, that in the case that
payment is made on such succeeding Business Day, no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date,
Redemption Date, Repurchase Date, Stated Maturity or last day for conversion, as
the case may be through such next succeeding Business Day.
SECTION 1.13. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under the Trust Indenture
Act to be a part of and to govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be. Until such time as this Indenture shall be
qualified under the Trust Indenture Act, this Indenture, the Company and the
Trustee shall be deemed for all purposes hereof to be subject to and governed by
the Trust Indenture Act to the same extent as would be the case if this
Indenture were so qualified on the date hereof.
SECTION 1.14. Jurisdiction.
The Company hereby irrevocably and unconditionally submits to the
non-exclusive jurisdiction of any New York State or United States Federal court
sitting in New York City over any suit, action or proceeding arising out of or
relating to this Indenture or any Security. The Company irrevocably and
unconditionally waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
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<PAGE> 27
suit, action or proceeding brought in such a court and any claim that any such
suit, action or proceeding brought in such a court has been brought in an
inconvenient forum. To the extent that the Company has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process with
respect to itself or its property, the Company irrevocably waives such immunity
in respect of its obligations under the Indenture or any Security. The Company
agrees that final judgment in any such suit, action or proceeding brought in
such a court shall be conclusive and binding upon the Company, and, to the
extent permitted by applicable law, may be enforced in any court to the
jurisdiction of which the Company is subject by a suit upon such judgment or in
any manner provided by law; provided that service of process is effected upon
the Company in the manner specified in the following subsection or as otherwise
permitted by law.
SECTION 1.15. Indenture and Securities Solely Corporate
Obligations.
No recourse for the payment of the principal of or premium, if any,
or interest on any Security and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental
indenture or in any Security, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, agent, officer, or director or subsidiary, as such, past, present or
future, of the Company or of 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; it being expressly understood that all such liability is
hereby waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Securities.
SECTION 1.16. Luxembourg Obligations.
Any obligation of the Company under this Indenture (i) to maintain a
Conversion Agent, Paying Agent or Security Registrar in Luxembourg, (ii) to
maintain an office for payment and conversion of the Securities in Luxembourg
pursuant to Section 10.2, (iii) to publish notice of the occurrence of certain
events under this Indenture in Luxembourg or (iv) to take any other action under
this Indenture that is specifically required to be taken in Luxembourg (the
"Luxembourg Obligations") shall automatically cease to exist, and any of the
provisions in this Indenture regarding such Luxembourg Obligations shall no
longer have any force or effect, if at any time the Securities are either no
longer listed on the Luxembourg Stock Exchange or such obligation is no longer
required by the Luxembourg Stock Exchange.
ARTICLE TWO
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities shall be in substantially the form set forth in this
Article, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the Securities Act
and the Exchange Act, applicable state securities law or the rules of any
securities exchange, the
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Code, and the treasury regulations under the Code, or as may, consistently
herewith, be determined by the Officers of the Company executing such
Securities, as evidenced by their execution thereof.
The Assignment Form and Certificate of Transfer shall be in
substantially the form set forth in Section 2.3.
The Election of Holder to Require Repurchase Form shall be
substantially in the form set forth in Section 2.4.
The Conversion Notice shall be in substantially the form set forth
in Section 2.5.
The Trustee's certificate of authentication shall be in
substantially the form set forth in Section 2.6.
The Securities may be printed, lithographed, typewritten,
mimeographed or otherwise produced, as determined by the Officers of the Company
executing such Security, as evidenced by their execution thereof.
SECTION 2.2. Form of Security.
The following legends (collectively, the "Restricted Securities
Legends") shall appear on the face of each Restricted Security:
THE SECURITIES EVIDENCED BY THIS SECURITY (OR ITS PREDECESSOR) WERE
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SUCH
SECURITIES AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITIES MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. SUCH SECURITIES MAY BE
OFFERED AND SOLD ONLY IN ACCORDANCE WITH THE INDENTURE, COPIES OF WHICH ARE
AVAILABLE FOR INSPECTION AT THE CORPORATE TRUST OFFICE OF THE TRUSTEE. EACH
PURCHASER OF ANY BENEFICIAL INTEREST IN THE SECURITIES IS HEREBY NOTIFIED THAT
THE SELLER OF SUCH BENEFICIAL INTEREST IN THE SECURITIES MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
EACH BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES
EVIDENCED BY THIS SECURITY (INCLUDING ANY PARTICIPANT IN THE DEPOSITARY HOLDING
THE GLOBAL SECURITY THAT IS SHOWN AS HOLDING SUCH AN INTEREST ON THE RECORDS OF
SUCH DEPOSITARY AND EACH BENEFICIAL OWNER THAT HOLDS THROUGH ANY SUCH
PARTICIPANT) AGREES FOR THE BENEFIT OF ORBITAL SCIENCES CORPORATION (THE
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"COMPANY") THAT THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED (X)
PRIOR TO THE SECOND ANNIVERSARY (OR SUCH SHORTER PERIOD AS MAY THEN BE
APPLICABLE UNDER THE SECURITIES ACT REGARDING THE HOLDING PERIOD FOR NOTES UNDER
RULE 144(K) OF THE SECURITIES ACT OR ANY SUCCESSOR RULE) OF THE ISSUANCE HEREOF
(OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE
OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY OR A SUBSIDIARY THEREOF
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER), (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE OFFER, SALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER), (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS DEFINED
BELOW) (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER), (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT (AS INDICATED
BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER), (5)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER),
OR (6) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER), IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER
JURISDICTION.
EACH BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES
EVIDENCED BY THIS SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE
TRUSTEE SUCH CERTIFICATES, LEGAL OPINIONS AND OTHER INFORMATION AS IT MAY
REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES
WITH THE FOREGOING RESTRICTIONS. EACH BENEFICIAL OWNER WILL, AND EACH SUBSEQUENT
BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES EVIDENCED BY THIS
SECURITY IS REQUIRED TO, NOTIFY ANY PURCHASER OF ANY BENEFICIAL INTEREST IN THE
SECURITIES OR SUCH
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COMMON STOCK ISSUABLE UPON CONVERSION OF THE SECURITIES FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO ABOVE.
THE BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES
EVIDENCED BY THIS SECURITY, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A OR (2) A NON-U.S. PERSON OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
PARAGRAPH (O)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME
TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER
TRANSFERS OF THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES
RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE
HOLDER AND BENEFICIAL OWNERS OF AN INTEREST IN ANY OF THE SECURITIES EVIDENCED
BY THIS SECURITY AND ANY SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS
SECURITY AND THE BENEFICIAL INTERESTS THEREIN AND ANY SUCH SHARES TO HAVE AGREED
TO ANY SUCH AMENDMENT OR SUPPLEMENT.
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
SECURITY EVIDENCED HEREBY PURSUANT TO CLAUSE (5) ABOVE OR UPON TRANSFER OF THE
SECURITIES EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
The following legends (collectively, the "Global Security Legend")
shall appear on the face of the Global Security:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY,
THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL
PURPOSES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
21
<PAGE> 31
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO 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.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE FOR SECURITIES IN
DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE
INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC
TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR
BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
22
<PAGE> 32
ORBITAL SCIENCES CORPORATION
5% CONVERTIBLE SUBORDINATED NOTE
DUE 2002
No. R- U.S.$______
CUSIP NO. 685564 AB 2
ORBITAL SCIENCES CORPORATION, a Delaware corporation (herein called
the "Company", which term includes any successor Person under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to ___________. or registered assigns (the "Holder"), the principal sum of
_______________ United States Dollars (U.S.$__________) [(which amount may from
time to time be increased or decreased to such other principal amounts (which,
taken together with the principal amounts of all other Outstanding Securities,
shall not exceed $100,000,000 in the aggregate at any time) by adjustments made
on the records of the Trustee, as custodian of the Depositary, in accordance
with the rules and procedures of the Depositary)](1) on October 1, 2002 and to
pay interest thereon, from September 16, 1997, or from the most recent Interest
Payment Date (as defined below) to which interest has been paid or duly provided
for, semi-annually in arrears on April 1 and October 1 in each year (each, an
"Interest Payment Date"), commencing April 1, 1998, at the rate of 5% per annum
(together with any Additional Amounts and Additional Interest that the Company
may be required to pay) until the principal hereof is due, and at a rate of 5%
per annum on any overdue principal and premium, if any, and, to the extent
permitted by law, on any overdue interest.
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 the March 15 and September 15 (whether or not a
Business Day (as defined in the Indenture)), as the case may be, next preceding
such Interest Payment Date. Except as otherwise provided in the Indenture, any
such interest not so punctually paid or duly provided for ("Defaulted Interest")
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
Company, notice whereof will be given to Holders of Securities not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. Payments of
principal shall be made upon the surrender of this Security, at the office of
the
- --------
(1) This language shall appear on the Global Security.
23
<PAGE> 33
Trustee in The City of New York or, subject to the right of the Company to
terminate such appointment, the Paying Agent in Luxembourg, or at such other
office or agency of the Company as may be designated by it for such purpose in
The City of New York or Luxembourg in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts, or at such other offices or agencies as the Company
may designate, by United States Dollar check drawn on, or transfer to a United
States Dollar account (such a transfer to be made only to a Holder of an
aggregate principal amount of Securities in excess of U.S.$2,000,000, and only
if such Holder shall have furnished wire instructions in writing to the Trustee
no later than 15 days prior to the relevant payment date) maintained by the
Holder with a bank in The City of New York. Payment of interest on this Security
may be made by United States Dollar check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register, or, upon
written application by the Holder to the Security Registrar setting forth wire
instructions not later than the relevant Regular Record Date, by transfer to a
United States Dollar account (such a transfer to be made only to a Holder of an
aggregate principal amount of Securities in excess of U.S.$2,000,000 and only if
such Holder shall have furnished wire instructions in writing to the Trustee no
later than 15 days prior to the relevant payment date) maintained by the Holder
with a bank in The City of New York.
The Company will pay to the Holder of this Security who is a
Non-U.S. Holder (or in the case of a Global Security, to the registered Holder
on behalf of the beneficial owners in such Global Security who are Non-U.S.
Holders) such additional amounts ("Additional Amounts") as may be necessary in
order that every net payment of the principal of, premium, if any, and interest
on this Security (including payment on redemption or repurchase), after
deduction or withholding for, or on account of any present or future tax,
assessment or governmental charge imposed by, or as a result of such payment to,
the United States of America or any political subdivision or taxing authority
thereof or therein (each, a "Taxing Jurisdiction"), will not be less than the
amount provided for in this Security to be then due and payable; provided,
however, that the Company shall not be obligated to pay any Additional Amounts
in respect of payments becoming due on the Securities more than 15 days after
the Redemption Date with respect to any redemption of the Tax Affected
Securities pursuant to the third paragraph of the reverse of this Security to
the extent that the Company's obligation to pay such Additional Amounts arises
from the Tax Law Change that resulted in such redemption; and provided, further,
that the foregoing obligation to pay Additional Amounts will not apply to:
(a) any tax, assessment or other governmental charge which
would not have been so imposed but for (i) the existence of any present
or former connection between such Non-U.S. Holder (or between a
fiduciary, settlor, beneficiary, member, shareholder of or possessor of
a power over such Non-U.S. Holder, if such Non-U.S. Holder is an
estate, a trust, a partnership or a corporation) and the Taxing
Jurisdiction, including, without limitation, such Non-U.S. Holder (or
such fiduciary, settlor, beneficiary, member, shareholder or possessor)
being or having been a citizen, domiciliary or resident of the United
States or treated as a resident thereof, or being or having been
engaged in trade or business or present therein, or having or having
had a permanent establishment therein or (ii) such Non-U.S. Holder's
present or former status
24
<PAGE> 34
as a personal holding company, a foreign personal holding company with
respect to the United States, a controlled foreign corporation, a
passive foreign investment company, or a foreign private foundation or
foreign tax exempt entity for United States federal tax purposes, or a
corporation which accumulates earnings to avoid United States federal
income tax;
(b) any tax, assessment or other governmental charge which
would not have been so imposed but for the presentation by the Non-U.S.
Holder of this Security for payment on a date more than 15 days after
the date on which such payment became due and payable or the date on
which payment thereof is duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which
would not have been imposed but for the failure to comply with any
certification, identification or other reporting requirement concerning
the nationality, residence, identity or connection with the United
States of such Non-U.S. Holder (or beneficial owner of such Note), if
compliance is required or imposed by a statute, treaty, regulation or
administrative practice of the United States as a precondition to
exemption from all or part of such tax, assessment or other
governmental charge;
(e) any tax, assessment or other governmental charge which is
payable otherwise than by deduction or withholding from payments of
principal of, premium, if any, or interest on this Security;
(f) any tax, assessment or other governmental charge imposed
on interest received by a Non-U.S. Holder actually or constructively
holding 10% or more of the total combined voting power of all classes
of stock of the Company entitled to vote;
(g) any tax, assessment or other governmental charge imposed
on a Non-U.S. Holder that is a partnership or a fiduciary or other than
the sole beneficial owner of such payment, but only to the extent that
any beneficial owner or member of the partnership or beneficiary or
settlor with respect to the fiduciary would not have been entitled to
the payment of Additional Amounts had the beneficial owner, member,
beneficiary or settlor directly been the Holder of this Security;
(h) any tax, assessment or other governmental charge required
to be withheld by any Paying Agent from any payment of principal of,
premium, if any, or interest on any Note, if such payment can be made
without such withholding by any other Paying Agent in Western Europe;
or
(i) any combination of items (a), (b), (c), (d), (e), (f), (g)
and (h).
25
<PAGE> 35
Except as specifically provided herein and in the Indenture, the
Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein. Whenever in this
Security there is a reference, in any context, to the payment of the principal
of, premium, if any, or interest on, or in respect of, this Security, such
mention shall be deemed to include mention of the payment of Additional Amounts
payable as described in the preceding paragraph to the extent that, in such
context, Additional Amounts are, were or would be payable in respect of this
Security and express mention of the payment of Additional Amounts (if
applicable) in any provisions of this Security shall not be construed as
excluding Additional Amounts in those provisions of this Security where such
express mention is not made.
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. Capitalized terms used
herein, including on the reverse hereof, and not defined herein or on the
reverse hereof shall have the respective meanings given to such terms in the
Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof or an Authenticating Agent by the
manual signature of one of their respective authorized signatories, 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 Security to be duly
executed.
Dated:
ORBITAL SCIENCES CORPORATION
By:______________________________________
Name:
Title:
Attest
By:__________________________________
26
<PAGE> 36
[REVERSE OF NOTE]
This Security is one of a duly authorized issue of securities of the
Company designated as its "5% Convertible Subordinated Notes due 2002" (herein
called the "Securities"), limited in aggregate principal amount to
U.S.$100,000,000, issued and to be issued under and pursuant to an Indenture,
dated as of September 16, 1997 (herein called the "Indenture"), between the
Company and Deutsche Bank AG, New York Branch, 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, the holders of Senior
Indebtedness of the Company and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. The
Securities are issuable in the denomination of U.S.$1,000 and integral multiples
thereof. As provided in the Indenture and subject to the limitations therein set
forth, the Securities are exchangeable (a) at the office of the Trustee, or at
such other office or agency of the Company as may be designated by it for such
purpose in The City of New York or (b) so long as the Securities are listed on
the Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange
shall so require (and subject to the right of the Company to terminate the
appointment of any Security Registrar (as defined below)), the office of Banque
de Luxembourg, International Department, 14 Boulevard Royal, L-2449 Luxembourg,
or at such other offices or agencies outside the United States as the Company
may designate (each a "Security Registrar").
No sinking fund is provided for the Securities. Subject to the
redemption of Tax Affected Securities as described below, the Securities will
not be redeemable at the option of the Company prior to October 1, 2000. At any
time on or after October 1, 2000 and prior to maturity, the Securities are
subject to redemption at the option of the Company at any time, in whole or in
part, upon not less than 20 nor more than 60 days' notice to the Holders prior
to the Redemption Date, at the following Redemption Prices (expressed as
percentages of the principal amount thereof) if such Redemption Date occurs
during the 12-month period beginning October 1:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2000 102%
2001 101%
</TABLE>
and 100% on October 1, 2002; together, in each case, with accrued interest to,
but excluding the Redemption Date; Securities that are Tax Affected Securities
are also redeemable, in whole but not in part, under the circumstances described
in the next succeeding paragraph, at a Redemption Price equal to 100% of the
principal amount thereof plus interest accrued to, but excluding, the Redemption
Date; provided, however, that interest installments on Securities whose Stated
Maturity is on or prior to such Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Dates referred to on the face hereof
all as provided in the Indenture.
27
<PAGE> 37
If, as a result of a Tax Law Change, the Company is or would become
obligated on the next succeeding Interest Payment Date to pay to the Holder of
any Security Additional Amounts, as described in the third paragraph (following
the legends) of the face of this Security, and such obligation cannot be avoided
by the Company taking reasonable measures available to it, then the Company may,
at its option, redeem the Tax Affected Securities in whole, but not in part, at
any time, on giving not less than 20 days' notice to the Holders prior to the
Redemption Date, at a Redemption Price equal to 100% of the principal amount
plus interest accrued to, but excluding, the Redemption Date, and any Additional
Amounts then payable; provided, that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the Company would be
obligated to withhold or pay any such Additional Amounts were a payment in
respect of the Tax Affected Securities then made. Prior to the giving of any
notice of redemption pursuant to this paragraph, the Company shall deliver to
the Trustee (a) an Officers' Certificate stating that the Company is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Company so to redeem have occurred and
(b) an Opinion of Counsel selected by the Company to the effect that the
circumstances referred to above in this paragraph exist. The Trustee shall
accept such opinion as sufficient evidence of the satisfaction of the conditions
precedent described above, in which event it shall be conclusive and binding on
the Holder. The Company's right to redeem the Tax Affected Securities shall
continue as long as the Company is obligated to pay such Additional Amounts,
notwithstanding that the Company shall have made payments of Additional Amounts.
In the event of a redemption of less than all of the Securities, the
Trustee will not be required (a) to register the transfer or exchange of
Securities for a period of 15 days immediately preceding the date notice is
given identifying the serial numbers of the Securities called for such
redemption or (B) to register the transfer or exchange of any Security, or
portion thereof, called for redemption.
In any case where the due date for the payment of the principal or
premium, if any, or interest, including Additional Amounts and Additional
Interest on, any Security or the last day on which a Holder of a Security has a
right to convert his Security shall not be a Business Day, at any Place of
Payment or Place of Conversion, as the case may be, then payment of principal,
premium, if any, or interest, including Additional Amounts and Additional
Interest, or delivery for conversion of such Security need not be made on or by
such date at such place but may be made on or by the next succeeding Business
Day at such Place of Payment or Place of Conversion, as the case may be, with
the same force and effect as if made on the date for such payment or the date
fixed for redemption or repurchase, or by such last day for conversion, and no
interest shall accrue on the amount so payable for the period from and after
such date through such next succeeding Business Day.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his or her option, at any time on or
prior to the close of business on the Business Day immediately preceding October
1, 2002, or in case this Security or a portion hereof is called for redemption
or the Holder hereof has exercised his or her right to require the Company to
repurchase this Security or such portion hereof then in respect of this Security
until
28
<PAGE> 38
and including, but (unless the Company defaults in making the payment due upon
redemption or repurchase, as the case may be) not after, the close of business
on the Business Day next preceding the Redemption Date or the Repurchase Date,
as the case may be, to convert this Security (or any portion of the principal
amount hereof that is an integral multiple of U.S.$1,000, provided that the
unconverted portion of such principal amount is U.S.$1,000 or any integral
multiple thereof) into fully paid and nonassessable Common Stock of the Company
at an initial Conversion Price of U.S.$28.00 for each share of Common Stock (or
at the current adjusted Conversion Price if an adjustment has been made as
provided in the Indenture).
In order to convert a Certificated Security, a Holder must surrender
this Security, duly endorsed or assigned to the Company or in blank to a
Conversion Agent. In case surrender shall be made during the period from the
close of business of any Regular Record Date next preceding any Interest Payment
Date to the opening of business on such Interest Payment Date ("Interest
Period"), such Holder shall also be required to pay in New York Clearing House
or other funds acceptable to the Company an amount equal to the interest payable
on such Interest Payment Date on the principal amount of this Security then
being converted, and also to deliver the conversion notice hereon duly executed,
to the Company at the office of the Trustee in The City of New York or the
Conversion Agent in Luxembourg, or at such other office or agency of the
Company, subject to any laws or regulations applicable thereto and subject to
the right of the Company to terminate the appointment of any Conversion Agent as
may be designated by it for such purpose in The City of New York, or Luxembourg,
or at such other offices or agencies as the Company may designate (each a
"Conversion Agent").
No cash payment or adjustment shall be made on conversion of this
Security for interest accrued hereon from the Interest Payment Date next
preceding the date of conversion or for dividends on the Common Stock issued on
conversion hereof subject only (i) in the case of a conversion during an
Interest Period, to the obligation of the Holder to pay to the Company an amount
equal to the accrued interest in respect of this Security as provided in the
immediately preceding paragraph and the obligation of the Company to pay such
accrued interest to the Holder of this Security (or any Predecessor Security) of
record on the Regular Record Date that commences such Interest Period and (ii)
in the case of a conversion on an Interest Payment Date, the obligation of the
Company to pay to the Holder of this Security (or any Predecessor Security) of
record on the Regular Record Date next preceding such Interest Payment Date
interest accrued hereon from such next preceding Interest Payment Date.
Following a conversion, the Company shall promptly deliver to the Holder the
fixed number of shares of Common Stock (together with any cash adjustment, as
provided in the Indenture) into which this Security is convertible and such
delivery will be deemed to satisfy the Company's obligation to pay the principal
amount of this Security. No fractions of shares or scrip representing fractions
of shares will be issued on conversion, but instead of any fractional interest
(calculated to the nearest 1/100th of a share) the Company shall pay a cash
adjustment as provided in the Indenture. The Conversion Price is subject to
adjustment as provided in the Indenture. In addition, the Indenture provides
that in case of certain consolidations or mergers to which the Company is a
party (other than a consolidation or merger which does not result in any
reclassification, conversion, exchange or cancellation of the Common Stock) or
the transfer of all or substantially all of the property and assets of the
Company, the Indenture shall be amended, without the consent of any Holders of
29
<PAGE> 39
Securities, so that this Security, if then Outstanding, will be convertible
thereafter, during the period this Security shall be convertible as specified
above, only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger or transfer by a holder of the number
of shares of Common Stock of the Company into which this Security could have
been converted immediately prior to such consolidation, merger or transfer
(assuming such holder of Common Stock is not a Constituent Person (as defined in
the Indenture) and failed to exercise any rights of election and received per
share the kind and amount received per share by a plurality of Non-electing
Shares). No adjustment in the Conversion Price will be made until such
adjustment would require an increase or decrease of at least one percent of such
price, provided that any adjustment that would otherwise be made will be carried
forward and taken into account in the computation of any subsequent adjustment.
Subject to certain limitations in the Indenture, at any time when
the Company is not subject to Section 13 or 15(d) of the United States
Securities Exchange Act of 1934, as amended, upon the request of a Holder of a
Restricted Security or the holder of Common Stock issued upon conversion thereof
the Company will promptly furnish or cause to be furnished Rule 144A Information
(as defined in the Indenture) to such Holder of Restricted Securities or such
holder of Common Stock issued upon conversion of Restricted Securities, or to a
prospective purchaser of any such security designated by any such Holder or
holder, as the case may be, to the extent required to permit compliance by such
Holder or holder with Rule 144A under the Securities Act in connection with the
resale of any such security.
The Holder of this Security and the Common Stock issuable upon
conversion thereof is entitled to the benefits of a Registration Rights
Agreement (subject to the provisions thereof), dated as of September 16, 1997,
between the Company and the Initial Purchasers. In order to participate in any
such registration, Holders must obtain from the Trustee, and complete, sign and
deliver to the Company, a selling securityholder questionnaire, provide certain
other information with respect to the Holder and otherwise comply with the
provisions of the Registration Rights Agreement. The Company shall pay
Additional Interest to the Holder of this Security as provided for in the
Registration Rights Agreement. Whenever in this Security there is a reference,
in any context, to the payment of the principal of, premium, if any, or interest
on, or in respect of, this Security, such mention shall be deemed to include
mention of the payment of Additional Interest payable as described in the
preceding paragraph to the extent that, in such context, Additional Interest is,
was or would be payable in respect of this Security and express mention of the
payment of Additional Interest (if applicable) in any provisions of this
Security shall not be construed as excluding Additional Interest in those
provisions of this Security where such express mention is not made.
If a Fundamental Change (as defined in the Indenture) occurs at any
time on or prior to October 1, 2002, each Holder shall have the right, at such
Holder's option, to require the Company to repurchase all of such Holder's
Securities (or the portion of such Securities that is $1,000 or an integral
multiple of $1,000 in excess thereof) on the 45th day after notice thereof. Such
payment shall be made at the following Repurchase Prices (expressed as
percentages of the principal amount thereof) in the event of a Fundamental
Change occurring during the 12-month period beginning October 1, (September 17,
1997 in the case of the first period):
30
<PAGE> 40
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1997 102%
1998 102%
1999 102%
2000 102%
2001 101%
</TABLE>
and 100% at October 1, 2002; together in each case, with accrued interest to,
but excluding, the Repurchase Date; provided in each case that if the Applicable
Price (as defined in the Indenture) is less than the Reference Market Price (as
defined in the Indenture), the Company shall repurchase such Securities at a
price equal to the product of (i) foregoing Repurchase Price multiplied by (ii)
the fraction obtained by dividing the Applicable Price by the Reference Market
Price. In each case, the Company shall also pay accrued interest, if any, on
such Securities to, but excluding, the Repurchase Date; provided that if such
Repurchase Date is April 1 or October 1, then the interest payable on such date
shall be paid to the Holder of record of the Securities on the Regular Record
Date. Whenever in this Security there is a reference, in any context, to the
principal of any Security as of any time, such reference shall be deemed to
include reference to the Repurchase Price payable in respect of such Security to
the extent that such Repurchase Price is, was or would be so payable at such
time, and express mention of the Repurchase Price in any provision of this
Security shall not be construed as excluding the Repurchase Price in those
provisions of this Security when such express mention is not made.
[The following paragraph shall appear in each security that is not a
Global Security:
In the event of redemption, repurchase or conversion of this
Security in part only, a new Security or Securities for the unredeemed,
unrepurchased or unconverted portion hereof will be issued in the name of the
Holder hereof.]
[The following paragraph shall appear in the Global Security:
In the event of a deposit or withdrawal of an interest in this
Security, including an exchange, transfer, redemption, repurchase or conversion
of this Security in part only, the Trustee, as custodian of the Depositary,
shall make an adjustment on its records to reflect such deposit or withdrawal in
accordance with the rules and procedures of the Depositary.]
The indebtedness evidenced by this Security and the obligations of
the Company under the Indenture are to the extent and in the manner provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness (as defined in the Indenture) of the Company,
and this Security is issued subject to such provisions of the Indenture with
respect thereto. Each Holder of this Security, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the Trustee
on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes.
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<PAGE> 41
If an Event of Default (as defined in the Indenture) shall occur and
be continuing, the principal of all the Securities, together with accrued
interest to the date of declaration, may be declared due and payable in the
manner and with the effect provided in the Indenture. Upon payment (i) of the
amount of principal so declared due and payable, together with accrued interest,
premium, if any, Additional Amounts, if any, and Additional Interest, if any, to
the date of declaration, and (ii) of interest on any overdue principal and
overdue interest, to the extent permitted by law, all of the Company's
obligations in respect of the payment of the principal of and interest on the
Securities shall terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with either (a) the written consent of
the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding (as defined in the Indenture) or (b) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of at least the lesser of (i) a
majority in aggregate principal amount of the Securities at the time Outstanding
and (ii) 66-2/3% in aggregate principal amount of the Outstanding Securities
represented and entitled to vote at such meeting. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Successor Security, whether or not notation of such
consent or waiver is made upon this Security or such Successor Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless (a) such Holder shall have previously
given the Trustee written notice of a continuing Event of Default, (b) the
Holders of not less than 25% in aggregate principal amount of the Securities
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity and the Trustee shall not have received from the
Holders of a majority in aggregate principal amount of the Securities
Outstanding a direction inconsistent with such request, and (c) the Trustee
shall have failed to institute any such proceeding, for 60 days after receipt of
such notice, request and offer of indemnity. The foregoing shall not apply to
any suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof, premium, if any, or interest hereon (including any
Additional Amounts and Additional Interest) on or after the respective due dates
expressed herein or for the enforcement of the right to convert this Security as
provided in 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, premium,
if any, and interest on (including Additional
32
<PAGE> 42
Amounts and Additional Interest, as described herein) this Security at the
times, places and rate, and in the coin or currency, herein prescribed or to
convert this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of Securities is registrable on the Security
Register (as defined in the Indenture) upon surrender of a Security for
registration of transfer (a) at the Corporate Trust Office of the Trustee or at
such other office or agency of the Company as may be designated by it for such
purpose in The City of New York, or (b) so long as the Securities are listed on
the Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange
shall so require, the office of Banque de Luxembourg in Luxembourg or (c)
subject to any laws or regulations applicable thereto and to the right of the
Company to terminate the appointment of any Security Registrar (as defined in
the Indenture), at the offices of the Security Registrars described herein or at
such other offices or agencies as the Company may designate, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder thereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees by the Registrar. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to recover any tax or other
governmental charge payable in connection therewith.
No recourse for the payment of the principal (and premium, if any)
or interest on this Security and no recourse under or upon any obligation,
covenant or agreement of the Company in the Indenture or any indenture
supplemental thereto or in any Security, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, officer or director or subsidiary, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through 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 consideration for the issue hereof, expressly waived and
released.
Prior to due presentation of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered, as the owner
thereof for all purposes, whether or not such Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY THE LAW OF THE
STATE OF NEW YORK, UNITED STATES OF AMERICA WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
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<PAGE> 43
SECTION 2.3. Assignment Form and Certificate of Transfer.
ASSIGNMENT FORM AND CERTIFICATE OF TRANSFER
To assign this Security fill in the form below:
(I) or (we) assign and transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number, if any)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
Your signature:
-----------------------------------------------------
(Sign exactly as your name appears on the other side
of this Security)
Date:
------------------
Signature Guarantee:*
-----------------------------------------------
In connection with any transfer of any of the Securities evidenced
by this certificate occurring prior to the date that is two years (or such
shorter period as may then be applicable under the United States Securities Act
of 1933, as amended (the "Securities Act") (or any successor provision)) after
the later of the date of original issuance of such Securities and the last date,
if any, on which such Securities were owned by the Company or any Affiliate of
the Company, the undersigned confirms that such Securities are being
transferred:
CHECK ONE BOX BELOW
(1) / / to the Company or a Subsidiary thereof; or
(2) / / pursuant to and in compliance with Rule 144A under the
Securities Act; or
(3) / / pursuant to and in compliance with Regulation S under
the Securities Act; or
- ----------
* Signature must be guaranteed by a commercial bank, trust company or member
firm of a major stock exchange.
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<PAGE> 44
(4) / / pursuant to Rule 144 of the Securities Act;
(5) / / pursuant to an effective registration statement under
the Securities Act; or
(6) / / pursuant to another available exemption from the
registration requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however, that if box
(2), (3), (4), (5), (6) or (7) is checked, the Trustee (as instructed by the
Company) and the Company may require, prior to registering any such transfer of
the Securities, such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
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<PAGE> 45
SECTION 2.4. Form of Election of Holder to Require Repurchase.
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 14.1 of the Indenture, the undersigned hereby
elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Company to pay it or
_______________ the Repurchase Price plus interest accrued to, but excluding,
the Repurchase Date, as provided in the Indenture.
Dated:
----------------------------- ----------------------------------------
----------------------------------------
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a
member firm of a major stock exchange if
shares of Common Stock are to be issued,
or Securities to be delivered, other
than to or in the name of the registered
Holder.
----------------------------------------
Signature Guaranteed
Principal amount to be repurchased:
-------------------
Remaining principal amount following such repurchase:
--------------------
NOTICE: The signature to the foregoing Election must correspond to the name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
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<PAGE> 46
SECTION 2.5. Form of Conversion Notice.
CONVERSION NOTICE
The undersigned Holder of this Security hereby irrevocably exercises
the option to convert this Security, or any portion of the principal amount
hereof (which is an integral multiple of U.S.$1,000) below designated, into
shares of Common Stock of the Company in accordance with the terms of the
Indenture referred to in this Security, and directs that such shares, together
with a check in payment for any fractional shares and any Securities
representing any unconverted principal amount hereof, be delivered to and be
registered in the name of the undersigned unless a different name has been
indicated below. If shares of Common Stock or Securities are to be registered in
the name of a Person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto. Any amount required to be paid by
the undersigned on account of interest accompanies this Security.
Dated:
------------------------- ----------------------------------------
If shares or Securities are to be ----------------------------------------
registered in the name of a Person Signature(s)
other than the Holder, please print
such Person's name and address: If only a portion of the Security is
to be converted, please indicate:
Signature(s) must be guaranteed by a
- -------------------------------- commercial bank or trust company or a
Name member firm of a major stock exchange if
shares of Common Stock are to be issued,
or Securities to be delivered, other
- -------------------------------- than to or in the name of the
Address registered Holder.
Social Security or other Taxpayer ----------------------------------------
Identification Number, if any Signature Guaranteed
- --------------------------------
If only a portion of the Security is Principal amount and denominations of
to be converted, please indicate Securities representing unconverted
principal amount to be converted: principal amount to be issued:
U.S$:
U.S.$ --------------------------------
--------------------------- Denomination: U.S.$
---------------------
(any integral multiple of U.S.$1,000).
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<PAGE> 47
SECTION 2.6. Form of Certificate of Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated:
DEUTSCHE BANK AG, NEW YORK BRANCH
as Trustee
By:______________________________________
Authorized Signatory
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<PAGE> 48
ARTICLE THREE
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to U.S.$100,000,000,
except for Securities authenticated and delivered in exchange for, or in lieu
of, other Securities pursuant to Section 3.4, 3.5, 3.6, 8.5, 11.8, 12.2 or
14.2(e).
The Securities shall be known and designated as the "5% Convertible
Subordinated Notes due 2002" of the Company. Their Stated Maturity shall be
October 1, 2002 and they shall bear interest on their principal amount from
September 16, 1997, payable semi-annually in arrears on April 1 and October 1
each year, commencing April 1, 1998, at the rate of 5% (together with any
Additional Amounts and Additional Interest the Company may be required to pay)
until the principal thereof is due, and at the rate of 5% per annum on any
overdue principal and, to the extent permitted by law, on any overdue interest;
provided, however, that payments shall only be made on Business Days as provided
in Section 1.12.
The Securities are entitled to the benefits of registration rights
as provided by the Registration Rights Agreement.
The principal of, premium, if any, and interest on the Securities
shall be payable as provided in the form of Security set forth in Section 2.2
and the Repurchase Price shall be payable at such places as are identified in
the Company Notice given pursuant to Section 15.2 (any city in which any Paying
Agent is located being herein called a "Place of Payment").
The Securities shall be redeemable at the option of the Company, in
whole or in part, and at the option of the Company or otherwise in the event of
certain developments, including developments with respect to U.S. withholding
taxes, as provided in Article Eleven and in the form of Security set forth in
Section 2.2.
The Securities shall be convertible as provided in Article Twelve
(any city in which any Conversion Agent is located being herein called a "Place
of Conversion").
The Securities shall be subordinated in right of payment to Senior
Indebtedness of the Company as provided in Article Thirteen.
The Securities shall be subject to repurchase by the Company at the
option of the Holders as provided in Article Fourteen.
SECTION 3.2. Denominations.
The Securities shall be issuable without coupons in denominations of
U.S.$1,000 and integral multiples thereof.
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<PAGE> 49
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by an
Officer of the Company. Any such signature may be manual or facsimile.
Securities bearing the manual or facsimile signature of an
individual or individuals who were at any time the proper officer or officers of
the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company to
the Trustee or to its order for authentication (or to the Authenticating Agent),
together with a Company Order for the authentication and delivery of such
Securities, and the Trustee or an Authenticating Agent in accordance with such
Company Order shall authenticate and make available for delivery such Securities
as in this Indenture provided and not otherwise. In connection with any Company
Order for authentication, an Officers' Certificate and Opinion of Counsel
pursuant to Section 1.2 shall be required.
Each Security shall be dated the date of its authentication.
In authenticating the Securities and in accepting the additional
responsibilities under the Indenture in relation to such Securities, the Trustee
shall be entitled to receive and shall be fully protected in relying upon, an
Opinion of Counsel stating the following:
1. the form or forms of such Securities have been established in
conformity with the provisions of this Indenture;
2. the terms of such Securities have been established in conformity
with the provisions of this Indenture;
3. such Securities, when completed by appropriate insertions and
executed and delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the Trustee in
accordance with this Indenture and issued by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will constitute
the legal, valid and binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization and other similar laws of general applicability relating to or
affecting the enforcement of creditors' rights, to general equitable principles
and to such other qualifications as such counsel shall conclude do not
materially affect the rights of Holders of such Securities;
4. the Company has the corporate power to issue such Securities, and
has duly taken all necessary corporate action with respect to such issuance; and
5. such other opinions as may reasonably be requested by the
Trustee.
40
<PAGE> 50
The Trustee shall not be required to authenticate and deliver any
such Securities if the issue of such Securities pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably acceptable to
the Trustee.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee or an Authenticating Agent by manual signature of an
authorized signatory, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder and is entitled to the benefits of this Indenture.
SECTION 3.4. Global Securities; Book-Entry Provisions;
Certificated Securities.
(a) Securities Generally
(1) Securities issued to QIBs in reliance on Rule 144A and
Securities offered and sold in reliance upon Regulation S shall be issued
initially in the form of a global security (the "Global Security") in
definitive, fully registered form without interest coupons bearing the
Restricted Securities Legends and the Global Security Legend.
(2) Securities not in global form (each a "Certificated Security")
shall be issued only upon the events described in Section 3.4(b)(2) and shall
bear the Restricted Securities Legends, as required by this Indenture.
(b) Global Security
(1) A Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and deposited on behalf of the purchasers
of the Securities represented thereby with the Trustee at its New York office,
as custodian for the Depositary therefor, and such Global Security shall
constitute a single Security for all purposes of this Indenture. The aggregate
principal amount of such Global Security may from time to time be increased or
decreased by adjustments made by the Security Registrar on a schedule thereto,
as provided herein.
(2) Notwithstanding any other provision in this Indenture, no
transfer of a Global Security, in whole or in part, may be registered in the
name of any Person other than the Depositary for such Global Security or a
nominee thereof unless (i) such Depositary (A) has notified the Company that it
is unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be a clearing agency registered as such under the Exchange Act or
announces an intention permanently to cease business or does in fact do so or
(ii) there shall have occurred and be continuing an Event of Default with
respect to such Global Security. In such event, if a Successor Depositary for
such Global Security is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such ineligibility, the Company
will execute, and the Trustee, upon receipt of an Officers' Certificate
directing the
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<PAGE> 51
authentication and delivery of Securities, will authenticate and deliver,
Certificated Securities, and the Company will execute and deliver to the Trustee
Certificated Securities in any authorized denominations in an aggregate
principal amount equal to the principal amount of such Global Security in
exchange for such Global Security.
(3) If any Global Security is to be canceled in whole, it shall be
surrendered by or on behalf of the Depositary or its nominee to the Trustee, as
Security Registrar, pursuant to Section 3.4(b)(2), for cancellation as provided
in this Article Three. Upon any such surrender of a Global Security, the Trustee
shall, subject to this Article Three, authenticate and deliver any Certificated
Security (or any portion thereof) to or upon the order of, and registered in
such names as may be directed by, the Depositary or its authorized
representative. Upon the request of the Trustee, the Company shall promptly make
available to the Trustee a reasonable supply of Certificated Securities. The
Trustee shall be entitled to rely upon any order, direction or request of the
Depositary or its authorized representative which is given or made pursuant to
this Article Three or reasonably believed by it to be properly given.
(4) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
Indenture and the Securities, and owners of beneficial interests in a Global
Security shall hold such interests pursuant to the procedures of the Depositary.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Participants (as
defined below) and such owners of beneficial interests in a Global Security will
not be considered the owners or holders thereof.
(5) All payments on a Global Security will be made to the Depositary
or its nominee, as the case may be, as the registered owner and holder of such
Global Security and the Company will be fully discharged by payment to the
Depositary from any responsibility or liability in respect of each amount so
paid. Upon receipt of any such payment of principal, interest, premium,
Additional Interest, if any, or Additional Amounts, if any, in respect of a
Global Security, the Depositary will immediately credit Participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of such Global Security as shown on the records of the
Depositary.
(6) Owners of beneficial interests in Global Securities shall be
entitled or required, as the case may be, under the circumstances described in
this Section 3.4(b)(2), to receive physical delivery of Certificated Securities.
(7) Any Global Security may be endorsed with or have incorporated in
the text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the custodian, the Depositary
or by the National Association of Securities Dealers, Inc. in order for the
Securities to be tradable on The PORTAL Market or as may be required for the
Securities to be tradable on any other market developed for trading of
securities pursuant to Rule 144A or Regulation S or required to comply with any
applicable law or any regulation thereunder or with the rules and regulations of
Euroclear, Cedel or any securities
42
<PAGE> 52
exchange or automated quotation system upon which the Securities may be listed
or traded or to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular Securities are
subject.
(c) Book-Entry Provisions. This Section 3.4(c) shall apply to
the Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 3.4(c), authenticate and deliver one Global Security that shall (i)
represent an aggregate amount equal to the aggregate principal amount of such
outstanding Securities as the Company shall have directed the Trustee to
authenticate in the form of a Global Security and (ii) bear the Global Security
Legend and, as applicable, the Restricted Securities Legends.
At such time as all interests in a Global Security have been
redeemed, repurchased, converted, canceled, or transferred to a transferee who
receives Certificated Securities, such Global Security shall, upon receipt
thereof, be canceled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Custodian. At any time
prior to such cancellation, if any interest in the Global Security is
transferred to the Company or its Subsidiary, the principal amount of such
interest in the Global Security shall be deemed cancelled, and in accordance
with the standing procedures and instructions existing between the Depositary
and the Custodian, the principal amount of the Global Security shall be
appropriately reduced and an endorsement shall be made on such Global Security,
by the Trustee or the Custodian, at the direction of the Trustee, to reflect
such reduction or increase.
Members of, or participants in, the Depositary ("Participants")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary or by the Trustee, as the custodian of
the Depositary, or under such Global Security, and the Depositary may be treated
by the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Participants, the operation of
customary practices of such Depositary governing the exercise of the rights of a
Holder of a beneficial interest in any Global Security.
(d) The Certificated Securities. Except as provided in this
Indenture, owners of beneficial interest in Global Security will not be entitled
to receive physical delivery of Certificated Securities.
(e) Cessation of Restrictions. After a transfer of a Certificated
Security or a beneficial interest in the Global Security during the period of
the effectiveness of a registration statement with respect to the Securities as
contemplated by the Registration Rights Agreement or pursuant to Rule 144(k) of
the Securities Act, all requirements pertaining to the Restricted Securities
Legends on such Certificated Security or beneficial interest in the Global
Security will cease to apply and a Certificated Security or a Global Security,
as the case may be, without
43
<PAGE> 53
Restricted Securities Legends will be issued or the principal amount of the
Global Security without the Restricted Securities Legends will be increased and
the principal amount of the Global Security with the Restricted Securities
Legends will be reduced correspondingly, as the case may be, with respect to
such beneficial interests pursuant to Section 3.5(c)(ii).
SECTION 3.5. Registration, Registration of Transfer and Exchange;
Restrictions on Transfer.
(a) General. The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register maintained in such office
and in any other office or agency of the Company designated pursuant to Section
10.2 (including the office of Deutsche Bank AG, New York Branch, in The City of
New York, New York and the office of Banque de Luxembourg, in Luxembourg) being
herein sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers and exchanges of Securities as herein provided.
Included in the books and records for the Securities shall be notations as to
whether such Securities have been paid, exchanged or transferred and canceled or
lost, stolen, mutilated or destroyed and whether such Securities have been
replaced. In the case of the replacement of any of the Securities, the Security
Registrar shall keep a record of the Security so replaced and the Security
issued in replacement thereof. In the case of the cancellation of any of the
Securities, the Security Registrar shall keep a record of the Security so
canceled and the date on which such Security was canceled. The costs and
expenses of effecting any exchange or registration of transfer, except for the
expense of delivery by other than regular mail (if any) and except for the
payment of a sum sufficient to cover any tax or other governmental charges or
insurance charges that may be imposed with respect thereto, shall be borne by
the Company.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 10.2 for such
purpose with a request to register a transfer or to exchange such Security for
an equal principal amount of Securities of the same series of other
denominations, the Security Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor and bearing
such restrictive legends as may be required by this Indenture, at the Security
Registrar's request.
At the option of the Holder, and subject to the further provisions
of this Section 3.5, Securities may be exchanged for other Securities of any
authorized denomination and of a like aggregate principal amount, upon surrender
of the Securities to be exchanged at any such office or agency maintained by the
Company pursuant to Section 10.2. Whenever any Securities are so surrendered for
exchange, and subject to the further provisions of this Section 3.5, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive. Every Security
presented or surrendered for
44
<PAGE> 54
registration of transfer or for exchange shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed, by the Holder thereof or his attorney duly authorized
in writing.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and, subject to the other provisions of this Section 3.5, entitled to the
same benefits, under and subject to the same restrictions imposed by this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
Except as provided in Section 3.6, no service charge shall be made
for any registration of transfer or exchange of Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section 3.4, 8.5, 11.8,
12.2 or 14.2(e) (other than, in the case of Securities where the Common Stock is
to be issued or delivered in a name other than that of the Holder of the
Security) not involving any transfer and other than any stamp and other similar
duties, if any, which may be imposed in connection with any such transfer or
exchange by the United States or any political subdivision thereof or therein,
which shall be paid by the Company.
In the event of a redemption of the Securities in part, neither the
Company nor the Security Registrar will be required (a) to register the transfer
of or exchange of Securities for a period of 15 days immediately preceding the
date notice is given identifying the serial numbers of the Securities called for
such redemption or (b) to register the transfer of or exchange any Security, or
portion thereof, called for redemption.
(b) Restrictions on Transfer. Notwithstanding any provision to the
contrary herein, so long as a Global Security remains outstanding and is held by
or on behalf of the Depositary, transfers of a Global Security, in whole or in
part, or of any beneficial interest therein, shall only be made in accordance
with Section 3.4 and this Section 3.5; provided, however, that beneficial
interests in a Global Security may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Global Security in
accordance with the transfer restrictions set forth in the Restricted Securities
Legends on such Security. As used herein, "transfer" encompasses any sale,
pledge, transfer or other disposition whatsoever.
(i) Except for transfers or exchanges made in accordance with
any of clauses (ii), (iii) and (iv) of this Section 3.5(b), transfers of a
Global Security shall be limited to transfers of such Global Security in
whole, but not in part, to nominees of the Depositary or to a successor of
the Depositary or such successor's nominee.
(ii) Global Security to Certificated Security. If in the
event that Certificated Securities are to be issued pursuant to Section
3.4(b)(2), upon receipt by the Trustee, as Security Registrar, at its
office in The City of New York of (1) instructions from the Company
directing the Trustee, as Security Registrar, to authenticate and to
deliver one or more Certificated Securities of the same aggregate
principal amount at
45
<PAGE> 55
maturity as the beneficial interest in the Global Security to be
issued, such instructions to contain the name or names of the
designated transferee or transferees, the authorized denomination or
denominations of the Certificated Securities to be so issued and
appropriate delivery instructions and (2) such other certifications,
legal opinions or other information as the Company or the Trustee may
reasonably require to confirm that such transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, then the Company shall
execute, and the Trustee, as Security Registrar, shall authenticate and
deliver, one or more Certificated Securities of the same aggregate
principal amount at maturity in accordance with the instructions
referred to above. If such Certificated Securities are issued after the
close of business at the office or agency where such exchange occurs on
any Record Date and before the opening of business at such office or
agency on the next succeeding Interest Payment Date, interest will be
payable to the Holders of the Certificated Securities on such Interest
Payment Date as though the Holders thereof had held such Securities as
of the Record Date, subject to the provisions of Section 3.7.
(iii) Certificated Securities to Certificated Securities. If a
Holder of a Certificated Security wishes at any time to transfer such
Certificated Security to a person who is required to take delivery
thereof in the form of a Certificated Security, such Holder may,
subject to the restrictions on transfer set forth herein and in such
Certificated Security, cause the exchange of such Certificated Security
for one or more Certificated Securities of any authorized denomination
or denominations and of the same aggregate principal amount at
maturity. Upon receipt by the Trustee, as Security Registrar, at its
office in The City of New York of (1) such Certificated Security, duly
endorsed as provided herein, (2) instructions from such Holder
directing the Trustee, as Security Registrar, to authenticate and
deliver one or more Certificated Securities of the same aggregate
principal amount at maturity as the Certificated Security to be
exchanged, such instructions to contain the name or names of the
designated transferee or transferees, the authorized denomination or
denominations of the Certificated Securities to be so issued and
appropriate delivery instructions, and (3) such other certifications,
legal opinions or other information as the Company may reasonably
require to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, then the Trustee, as Security
Registrar, shall cancel or cause to be canceled such Certificated
Security and concurrently therewith, the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Certificated
Securities of the same aggregate principal amount at maturity, in
accordance with the instructions referred to above.
(c) Restricted Securities Legends. Upon their original issuance, the
Securities shall be Restricted Securities, shall bear the Restricted Securities
Legends and shall be issued as a Global Security registered in the name of Cede
& Co., as nominee of, and delivered to, The Depository Trust Company ("DTC"), as
Depositary, or pursuant to DTC's instructions, held by the Trustee, as custodian
for DTC, for credit by DTC to the respective accounts of Participants within DTC
for further credit to the respective accounts of beneficial owners of the
Securities represented thereby (or such other accounts as they may direct). The
Securities and their
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respective Successor Securities shall bear, or be subject to the provisions of,
the applicable Restricted Securities Legends, subject to the following:
(i) Subject to the following clauses of this Section 3.5(c),
a Certificated Security that has been issued as a result of events set
forth in Section 3.4(b)(2) shall bear the Restricted Securities
Legends, if any, borne by the Global Security for which the
Certificated Security was exchanged.
(ii) At any time after the Securities may be freely
transferred without registration under the Securities Act or without
being subject to transfer restrictions pursuant to the Securities Act
(including, without limitation, pursuant to Rule 144(k) of the
Securities Act or pursuant to an effective registration statement under
the Securities Act), (i) a new Security (other than a Global Security)
that does not bear the Restricted Securities Legends may be issued in
exchange for or in lieu of a Security or any portion thereof that bears
the Restricted Securities Legends and the Trustee shall authenticate
and deliver such a new Security in exchange for or in lieu of such
other Security as provided in this Article Three and (ii) in the case
of any beneficial interest in a Global Security, such beneficial
interest shall no longer be subject to the provisions set forth in the
Restricted Securities Legends. The Company shall inform the Trustee in
writing of the effective date of any such registration statement
registering the Securities under the Securities Act and shall notify
the Trustee at any time when a prospectus must be delivered with
respect to Securities to be sold pursuant to such registration
statement. The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the
aforementioned registration statement.
(iii) A new Security that does not bear the Restricted
Securities Legends may be issued in exchange for or in lieu of a
Security or any portion thereof that bears the Restricted Securities
Legends if, in the judgment of the Company, placing the Restricted
Securities Legends upon such new Security is not necessary to ensure
compliance with the registration requirements of the Securities Act,
and the Trustee, at the direction of the Company, shall authenticate
and deliver such a new Security as provided in this Article Three.
(iv) Except in connection with a transfer of a beneficial
interest in the Global Security pursuant to an effective registration
statement, in which case the Restricted Securities Legends shall not
apply to such beneficial interest in the Global Security so transferred
at the request of the Holder, if a Global Security is issued upon the
transfer, exchange or replacement of the Global Security bearing the
Restricted Securities Legends and if a request is made to remove such
Restricted Securities Legends from the Global Security, the Global
Security so issued shall bear the Restricted Securities Legends, or the
Restricted Securities Legends shall not be removed, as the case may be,
unless there is delivered to the Company such satisfactory evidence,
which may include an Opinion of Counsel, as may be reasonably required
by the Company, that neither the legend nor the restrictions on
transfer set forth therein are required to ensure that transfers
thereof will not violate the registration and prospectus delivery
requirements of the
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Securities Act. Upon provision of such satisfactory evidence, the
Company shall direct the Trustee and the Trustee shall authenticate and
deliver the Global Security that does not bear such legend.
(d) Common Stock. Any stock certificate representing Common Stock
issued upon conversion of the Securities shall bear the Restricted Securities
Legends borne by such Securities, to the extent required by this Indenture,
unless such Common Stock has been sold pursuant to a registration statement that
has been declared effective under the Securities Act (and which continues to be
effective at the time of such transfer) or sold pursuant to Rule 144(k) of the
Securities Act, or unless otherwise agreed by the Company in writing with
written notice thereof to the Common Stock transfer agent. With respect to the
transfer of Common Stock restricted hereunder, any deliveries of certificates,
legal opinions or other instruments that would be required to be made to the
Security Registrar in the case of transfer of Securities, as described above,
shall instead be made to the transfer agent of the Common Stock.
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Securities.
If any mutilated Security is surrendered to the Trustee or to a
Security Registrar outside the United States, the Company shall execute, the
Trustee or an Authenticating Agent shall authenticate and the Trustee or
Security Registrar shall deliver in exchange therefor a new Security of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
If there be delivered to the Company and either to the Trustee or to
a Security Registrar outside the United States:
(1) evidence to their satisfaction of the destruction, loss or
theft of any Security, and
(2) such security or indemnity as may be satisfactory to the Company
and the Trustee and such Security Registrar to save each of them and any agent
of either of them harmless,
then, in the absence of actual notice to the Company, the Trustee or the
Security Registrar that such Security has been acquired by a bona fide
purchaser, the Company shall execute, and upon its request, the Trustee or an
Authenticating Agent shall authenticate and the Trustee or Security Registrar
shall deliver in lieu of any such destroyed, lost or stolen Security or in
exchange for the Security, a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights may, instead of issuing a new Security, pay
such Security.
Upon the issuance of any new Security under this Section 3.6, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may
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be imposed in relation thereto (other than any stamp and other duties, if any,
which may be imposed in connection therewith by the United States of America or
any political subdivision thereof or therein, which shall be paid by the
Company) and any other expenses (including the fees and expenses of the Trustee,
any Paying Agent and any Security Registrar) connected therewith.
Every new Security issued pursuant to this Section 3.6 in lieu of
any mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and such new Security shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Securities duly issued
hereunder.
The provisions of this Section 3.6 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies of any Holder with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
SECTION 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security, and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as provided in this Clause. Thereupon, the Trustee
shall fix the 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 and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Securities at such Holder's address as it appears in
the Security Register, not less than 10 days
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prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
No cash payment or adjustment shall be made on conversion of a
Security for interest accrued thereon from the Interest Payment Date next
preceding the date of conversion or for dividends on the Common Stock issued on
conversion thereof subject only (i), in the case of a conversion after the close
of business on any Regular Record Date and prior to the next succeeding Interest
Payment Date, to the obligation of the Holder to pay to the Company an amount
equal to the accrued interest in respect of such Security as provided in Section
2.2 and the obligation of the Company to pay such accrued interest to the Holder
of such Security (or any Predecessor Security) of record on the Regular Record
Date next preceding such Interest Payment Date and (ii) in the case of a
conversion on an Interest Payment Date, the obligation of the Company to pay to
the Holder of such Security (or any Predecessor Security) of record on the
Regular Record Date next preceding such Interest Payment Date interest accrued
thereon from such next preceding Interest Payment Date.
SECTION 3.8. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company or the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of, premium, if any,
and (subject to Section 3.7) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
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 of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
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Notwithstanding the foregoing, with respect to any Global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any Depositary, as a Holder, with respect to
such Global Security or impair, as between such Depositary and owners of
beneficial interests in such Global Security, the operation of customary
practices governing the exercise of the rights of such Depositary (or its
nominee) as Holder of such Global Security.
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, repurchase,
registration of transfer or exchange or conversion shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee. All Securities so
delivered to the Trustee shall be canceled promptly by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section 3.9. The Trustee shall destroy all canceled
Securities in accordance with applicable law and its customary practices in
effect from time to time.
SECTION 3.10. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
SECTION 3.11. CUSIP Numbers.
The Company in issuing Securities may use "CUSIP" numbers (if then
generally in use) in addition to serial numbers; if so, the Trustee shall use
such "CUSIP" numbers in addition to serial numbers in notices of redemption and
repurchase as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such CUSIP numbers
either as printed on the Securities or as contained in any notice of a
redemption or repurchase and that reliance may be placed only on the serial or
other identification numbers printed on the Securities, and any such redemption
or repurchase shall not be affected by any defect in or omission of such CUSIP
numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights of conversion, or registration of
transfer or exchange, or replacement of Securities herein expressly provided for
and any right to receive Additional Amounts and Additional Interest, if any, as
provided in the form of Security set forth in Section 2.2 and the Company's
obligations to the Trustee pursuant to Section 6.7), and the Trustee, at the
expense of the Company, shall execute proper instruments in form and substance
satisfactory to the Trustee acknowledging satisfaction and discharge of this
Indenture, when
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(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 3.6 and (ii)
Securities for whose payment money has theretofore been deposited with the
Trustee or the Paying Agent in trust or segregated and held in trust by
the Company (whether or not such money has been repaid to the Company or
discharged from such trust, as provided in Section 10.3)) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee or the Paying Agent or its agent for cancellation (other than
Securities referred to in clauses (i) and (ii) of clause (1)(A) above)
(i) have become due and payable, or
(ii) will have 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 clause (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds
(immediately available to the Holders in the case of clause (i)) in
trust an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal, premium, if any, and
interest (including any applicable Additional Amounts and Additional
Interest) to the date of such deposit (in the case of Securities
that have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.7, the obligations
of the Company to any Authenticating Agent under Section 6.12, the obligation of
the Company to pay Additional Amounts and, if money shall have been deposited
with the Trustee pursuant to clause (1)(B) of this Section 4.1, the obligations
of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall
survive, and until such time as any Securities described in this Section 4.1
become due and payable or are redeemable, the Company shall remain obligated to
the holders of
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such Securities for all payments due thereunder, including the delivery of
additional funds to the Trustee if the funds previously provided to the Trustee
pursuant this Section 4.1 are insufficient to satisfy in full the amount of such
payments. Funds held in trust pursuant to this Section are not subject to the
provisions of Article Thirteen.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), as the Trustee may
determine, to the Persons entitled thereto, of the principal, premium, if any,
and interest for whose payment such money has been deposited with the Trustee;
but such money need not be segregated from other funds except to the extent
required by law.
All moneys deposited with the Trustee pursuant to Section 4.1 (and
held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon a Company Request.
ARTICLE FIVE
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Thirteen or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of the principal of or premium, if
any, on any Security at its Maturity, whether or not such payment is
prohibited by the subordination provisions of Article Thirteen; or
(2) default in the payment of any interest (including any
Additional Amounts or Additional Interest, if any) upon any Security when
it becomes due and payable, and continuance of such default for a period
of 30 days, whether or not such payment is prohibited by the subordination
provisions of Article Thirteen; or
(3) 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 the performance or breach of which is specifically
dealt with elsewhere in this Section), and continuance of such default or
breach for a period of 60 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 25% in aggregate principal amount of
the Outstanding
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Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(4) 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 bankruptcy,
moratorium of payments, insolvency, reorganization or other similar law
or (B) a decree or order adjudging the Company 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 substantially all of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(5) the commencement by the Company of a voluntary case or
proceeding under any applicable bankruptcy, moratorium of payments,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated bankrupt or insolvent or to be granted a
moratorium of payment, or the consent by the Company to the entry of a
decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable bankruptcy, moratorium of
payment, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy, moratorium of payment or insolvency
proceedings against it, or the filing by it of a petition or consent
seeking reorganization or similar relief under any applicable 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 other similar official of the Company or of
substantially all 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.
SECTION 5.2. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default (other than an Event of Default
specified in Section 5.1(4) or (5)) occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities may declare the principal of all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal and all accrued interest thereon shall become
immediately due and payable. If an Event of Default specified in Section 5.1(4)
or (5) occurs, the principal of, and accrued interest on, all the Securities
shall ipso facto become immediately due and payable without any declaration or
other Act of the Holders or any act on the part of the Trustee.
At any time after such declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article Five provided, the
Holders of a majority in aggregate principal amount
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of the Outstanding Securities, by written notice to the Company and the Trustee,
may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including any Additional Amounts
and Additional Interest) on all Securities,
(B) the principal of and premium, if any, on any Securities
which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate borne by the
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at a rate of 5% per annum, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel; and
(2) all Events of Default, other than the nonpayment of the
principal of, and any interest on, Securities which have become due solely by
such declaration of acceleration, have been cured or waived as provided in
Section 5.13.
No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest (including any
Additional Amounts and Additional Interest) on any Security when it
becomes due and payable and such default continues for a period of
30 days, or
(2) default is made in the payment of the principal of or
premium, if any, on any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and interest (including any Additional Amounts
and Additional Interest) and interest on any overdue principal and premium, if
any, and on any overdue interest (including any Additional Amounts and
Additional Interest), to the extent permitted by law, at a rate of 5% per annum,
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.
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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, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, moratorium of payments, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to the Company or
any other obligor upon the Securities or the property of the Company or of such
other obligor or the creditors of either, the Trustee (irrespective of whether
the principal of, and any interest on, the 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 proceeding or otherwise,
(1) to file and prove a claim for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of
the Securities and take such other actions, including participating as
a member, voting or otherwise, of any official committee of creditors
appointed in such matter, and to file such other papers or documents,
in each of the foregoing cases, 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 of Securities
allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities 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 of Securities to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and any other amounts due the Trustee under Section 6.7.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder of a Security in any such proceeding;
provided, however, that the Trustee may, on behalf of such Holders, vote for the
election of a trustee in bankruptcy or similar official.
SECTION 5.5. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which judgment
has been recovered.
SECTION 5.6. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article Five
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,
premium, if any, or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.7;
SECOND: To the payment of the amounts then due and unpaid for
principal, premium, if any, or interest (including any
Additional Amounts and Additional Interest) on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal, premium, if any, and interest (including any
Additional Amounts and Additional Interest), respectively; and
THIRD: Any remaining amounts shall be repaid to the
Company.
SECTION 5.7. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
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(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities 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 aggregate principal amount of the Outstanding
Securities;
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 of
such Holders, or to obtain or 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 such
Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, premium, if any, and interest (including
any Additional Amounts or Additional Interest) on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repurchase, on the Redemption Date or Repurchase Date, as the case
may be), and to convert such Security in accordance with Article Twelve, and to
institute suit for the enforcement of any such payment and right to convert, and
such rights shall not be impaired without the consent of such Holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Securities shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and such Holders shall continue as though no such proceeding had been
instituted.
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SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 3.6, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
any acquiescence therein. Every right and remedy given by this Article Five or
by law to the Trustee or to the Holders of Securities may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or (subject to
the limitations contained in this Indenture) by the Holders of Securities.
SECTION 5.12. Control by Holders of Securities.
Subject to Section 6.3(5), the Holders of a majority in aggregate
principal amount of the Outstanding Securities shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee,
provided that
(1) such direction shall not be in conflict with any rule
of law or with this Indenture;
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction;
(3) the Trustee need not take any action which might result in
personal liability or be unjustly prejudicial to the Holders of
Securities not consenting; and
(4) such direction shall be presented by such Holders to the
Trustee in a timely manner.
SECTION 5.13. Waiver of Past Defaults.
The Holders, either (a) through the written consent of not less than
a majority in aggregate principal amount of the Outstanding Securities, or (b)
by the adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of the lesser of (x) not
less than a majority in aggregate principal amount of Outstanding Securities and
(y) at least 66-2/3% in aggregate principal amount of the Outstanding Securities
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represented and entitled to vote at such meeting, may on behalf of the Holders
of all the Securities waive any past default hereunder and its consequences,
except a default (1) in the payment of the principal of, premium, if any, or
interest on any Security, or (2) in respect of a covenant or provision hereof
which under Article Eight cannot be modified or amended without the consent of
the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his or her 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 due regard to the merits
and good faith of the claims or defenses made by such party litigant.
SECTION 5.15. Waiver of Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension law or usury law
or other law that would prohibit or forgive the Company from paying all or any
portion of its obligations on the Securities as provided herein, wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE.
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and the
Trust Indenture Act, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
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(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture, but not to verify the contents
thereof.
(b) In case a Responsible Officer of the Trustee has actual
knowledge that an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of a majority in aggregate principal
amount of the Outstanding Securities or such lesser percentage as
provided in this Indenture relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under
this Indenture.
(d) 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.
(e) 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 has
not been provided to it.
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SECTION 6.2. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder as to
which the Trustee has received written notice, the Trustee shall give to all
Holders of Securities, in the manner provided in Section 1.6, notice of such
default, unless such default shall have been cured or waived; provided, however,
that, except in the case of a default in the payment of the principal of,
premium, if any, or interest on any Security, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interest of the Holders; and provided, further, that in the case of any default
of the character specified in Section 5.1(4), no such notice to Holders of
Securities 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.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
other certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, coupon,
other evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed or presented by the
proper party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company
Order (other than delivery of any Security to the Trustee for
authentication and delivery pursuant to Section 3.1, which shall be
sufficiently evidenced as provided therein), and any resolution of
the Board shall be sufficiently evidenced by a Board Resolution;
(3) 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;
(4) the Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(5) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Securities, unless
such Holders shall have offered to the Trustee
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reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(6) 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 sole
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;
(7) 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;
(8) the permissive right of the Trustee to take or refrain
from taking any actions enumerated in this Indenture shall not be
construed as a duty and the Trustee shall not be answerable in such
actions other than for its own negligence, bad faith or willful
misconduct in exercising any such right; and
(9) the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights
or powers conferred upon it by the Indenture.
SECTION 6.4. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture, of the Securities or of the
Common Stock issuable upon the conversion of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities, Act as Trustee Under Other
Indentures.
The Trustee, any Authenticating Agent, any Paying Agent, any
Conversion Agent or any other agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and may otherwise deal with the Company with the same rights it would have if it
were not the Trustee, Authenticating Agent, Paying Agent, Conversion Agent or
such other agent, subject to the Trust Indenture Act Sections 310(b) and 311.
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The Trustee may become and act as trustee under other indentures
under which other securities, or certificates of interest or participation in
other securities, of the Company are outstanding in the same manner as if it
were not Trustee hereunder.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time
agree in writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except for any such expense, disbursement or
advance as may be attributable to its negligence, bad faith or
willful misconduct; and
(3) to indemnify the Trustee (and its directors, officers,
employees and agents) for, and to hold it harmless against, any
loss, liability or expense incurred without negligence, bad faith or
willful misconduct on its part, arising out of or in connection with
the acceptance or administration of this trust, including the costs,
expenses and reasonable attorneys' fees of defending itself against
any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(4) or Section 5.1(5), the
expenses (including the reasonable charges of its counsel) and the compensation
for the services are intended to constitute expenses of the administration under
any applicable Federal or state bankruptcy, insolvency or other similar law.
Any Paying Agent or Authenticating Agent appointed hereunder shall
be entitled to the benefits of Section 6.7(3) as if the indemnity set forth
therefor were specifically afforded to such Paying Agent or Authenticating
Agent.
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The provisions of this Section shall survive the termination of this
Indenture or the earlier resignation or removal of the Trustee, any Paying Agent
or any Authenticating Agent, as the case may be.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such obligations
of the Company, the Trustee shall have a claim prior to the Securities 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 Securities.
SECTION 6.8. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such,
having (or if the Trustee is a member of a bank holding company, its bank
holding company having) a combined capital and surplus of at least
U.S.$50,000,000, subject to supervision or examination by Federal or state
authority, in good standing. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such 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 and a successor shall be
appointed pursuant to Section 6.9.
SECTION 6.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.10.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 6.10 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
a majority in aggregate principal amount of the Outstanding Securities,
delivered to the Trustee and the Company. If the instrument of acceptance by a
successor Trustee required by Section 6.10 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of removal, the removed
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(d) If at any time:
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(1) the Trustee shall cease to be eligible under Section 6.8 and
shall fail to resign after written request therefor by the Company
or by any Holder of a Security who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any such case (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder of a Security who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee and
shall comply with the applicable requirements of this Section and Section 6.10.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.10, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders of Securities and accepted appointment in the manner required by this
Section and Section 6.10, any Holder of a Security who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders of Securities in the manner provided in Section 1.6. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 6.10. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor
Trustee,
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the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be eligible under this Article.
SECTION 6.11. 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 be the successor of the Trustee hereunder,
provided such corporation shall be otherwise eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 6.12. Authenticating Agents.
The Trustee may appoint an additional Authenticating Agent or Agents
with respect to the Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities issued upon exchange or substitution pursuant
to this Indenture.
Securities authenticated by an Authenticating Agent shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder, and every reference
in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Appointment of each Authenticating Agent
shall be subject to acceptance by the Company, and each Authenticating Agent
shall at all times be a corporation organized and doing business under the laws
of the United States of America, any State thereof or the District of Columbia,
or Luxembourg, authorized under such laws to act as Authenticating Agent and
subject to supervision or examination by government or other fiscal authority.
If at any time an Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section 6.12, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 6.12.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
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under this Section 6.12, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.12, the Trustee may appoint a successor
Authenticating Agent which shall be subject to acceptance by the Company. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.12.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 6.12 and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.7.
If an Authenticating Agent is appointed with respect to the
Securities pursuant to this Section 6.12, the Securities may have endorsed
thereon, in addition to or in lieu of the Trustee's certification of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: DEUTSCHE BANK AG, NEW YORK BRANCH,
as Trustee
By [Authenticating Agent],
as Authenticating Agent
By: ______________________________________
Authorized Signatory
SECTION 6.13. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.14. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of Section 311 of
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the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).
ARTICLE SEVEN
CONSOLIDATION, MERGER, TRANSFER OR LEASE
SECTION 7.1. Company May Consolidate, Etc., Only on Certain
Terms.
The Company shall not consolidate with or merge into any other
Person or convey or transfer or lease its properties and assets substantially as
an entirety to any Person (other than to a wholly-owned subsidiary), and shall
not transfer and assign all its obligations of, and position as, the Company
hereunder, except for a consolidation or merger in which the Company is the
surviving party, unless:
(a) the Person formed by such consolidation or into which the
Company is merged or which acquires by conveyance or transfer the
properties and assets of the Company substantially as an entirety,
or to which obligations of, and position as, the Company hereunder
are transferred and assigned (the "Successor") (i) shall be a
corporation, limited liability company, partnership or trust
organized and existing under the laws of, and resident for tax
purposes in, the United States of America or any political
subdivision thereof, and (ii) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, due and
punctual payment of the principal of, premium, if any, and interest
(including Additional Amounts, if any, and Additional Interest, if
any) on all of the Securities and the performance of every covenant
of this Indenture and in the Securities on the part of the Company
to be performed or observed;
(b) immediately after giving effect to any such consolidation,
merger, conveyance or transfer, or such transfer and assignment, no
default and no Event of Default shall have occurred and be
continuing; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance or transfer, or such transfer and
assignment, and such supplemental indenture comply with this Article
and that all conditions precedent herein provided for relating to
such transaction have been compiled with.
SECTION 7.2. Successor Substituted.
Upon any consolidation, merger or any conveyance or transfer of the
properties and assets of the Company substantially as an entirety, or upon
transfer and assignment of all obligations of, and position as, the Company
hereunder, in accordance with Section 7.1, the Successor 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
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Company herein, and thereafter, the predecessor Person shall be relieved of all
obligations and covenants under the Indenture and the Securities.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1. Supplemental Indentures Without Consent of Holders
of Securities.
Without the consent of any Holders of Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto in form
satisfactory to the Trustee for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants
and obligations of the Company herein and in the Securities as
permitted by this Indenture; or
(2) to add to the covenants of the Company for the benefit
of the Holders of Securities, or to surrender any right or power
herein conferred upon the Company; or
(3) to add any Events of Default; or
(4) to secure the Securities; or
(5) to make provision with respect to the conversion rights
of Holders of Securities pursuant to Section 12.11 or the repurchase
rights of Holders of Securities pursuant to Section 14.1; or
(6) to provide for successor or additional trustees; or
(7) to comply with the requirements of the Trust Indenture Act
or the rules and regulations of the Commission thereunder in order
to effect or maintain the qualification of this Indenture under the
Trust Indenture Act, as contemplated by this Indenture or otherwise;
or
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein or which is otherwise defective, or to make any other
provisions with respect to matters or questions arising under this
Indenture as the Company and the Trustee may deem necessary or
desirable, provided, such action pursuant to this clause (8) shall
not adversely affect the interests of the Holders of Securities in
any material respect.
Upon Company Request, accompanied by a Board Resolution authorizing
the execution of any such supplemental indenture, and subject to and upon
receipt by the Trustee of
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the documents described in Section 8.3, the Trustee shall join with the Company
in the execution of any supplemental indenture authorized or permitted by the
terms of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained.
SECTION 8.2. Supplemental Indentures with Consent of Holders of
Securities.
With either (a) the written consent of the Holders of not less than
a majority in aggregate principal amount of the Outstanding Securities, by the
Act of said Holders delivered to the Company and the Trustee, or (b) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of at least the lesser of (x) a
majority in aggregate principal amount of the Outstanding Securities and (y)
66-2/3% in aggregate principal amount of the Outstanding Securities represented
and entitled to vote at such meeting, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent or affirmative vote of the Holder of each Outstanding Security
affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security; reduce the principal
amount or the rate of interest payable thereon or any premium
payable, if any, on the Securities; reduce the amount payable upon
redemption or mandatory repurchase thereof; modify the provisions
with respect to the repurchase right of the Holders in a manner
adverse to the Holders; change the obligation of the Company to pay
Additional Amounts pursuant to Section 10.4 or Additional Interest
in a manner adverse to the Holders; change the Place of Payment or
coin or currency in which any Security or the interest or any
premium thereon or any other amount in respect thereof is payable;
impair the right to institute suit for the enforcement of any
payment in respect of any Security on or after the Stated Maturity
thereof (or, in the case of redemption or any repurchase, on or
after the Redemption Date or Repurchase Date, as the case may be);
modify the obligation of the Company to maintain an office or agency
in The City of New York and, so long as the Securities are listed on
the Luxembourg Stock Exchange, in a Western European City; except as
permitted by Section 12.11, adversely affect the right to convert
any Security as provided in Article Twelve; or modify the provisions
of this Indenture with respect to the subordination of the
Securities in a manner adverse to the Holders of Securities; or
(2) modify any of the provisions of this Section or Section
5.13, except to increase any percentage contained herein or therein
or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; or
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(3) reduce the requirements of Section 9.4 for quorum or
voting, or reduce the percentage in aggregate principal amount of
the Outstanding Securities the consent of whose Holders is required
for any such supplemental indenture or the consent of whose Holders
is required for any waiver (of compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(4) modify the provisions of Article Fourteen in a manner
adverse to the Holders; or
(5) modify any of the provisions of Section 10.7 in a
manner adverse to the Holders.
It shall not be necessary for any Act of Holders of 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 8.3. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Sections 6.1 and 6.3) 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, and that such supplemental
indenture has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms. 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 8.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 8.5. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Company and the
Trustee, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
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SECTION 8.6. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 8.2, the Trustee
shall give notice to all Holders of Securities of such fact, setting forth in
general terms the substance of such supplemental indenture, in the manner
provided in Section 1.6. Any failure of the Company to give such notice, or any
defect therein, shall not in any way impair or affect the validity of any such
supplemental indenture.
So long as the Securities are listed on the Luxembourg Stock
Exchange and the rules of the Luxembourg Stock Exchange shall require, notice of
any supplemental indenture pursuant to this Article Eight will be given by
publication in an Authorized Newspaper in Luxembourg, or, if not practicable in
Luxembourg, elsewhere in a Western European city. Any failure of the Company to
give such notice, or any defect therein, shall not in any way impair or affect
the validity of any such supplemental indenture.
ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
SECTION 9.1. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities 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 action
provided by this Indenture to be made, given or taken by Holders of Securities.
SECTION 9.2. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities for any purpose specified in Section 9.1, to be held at such time and
at such place in The City of New York, New York or, so long as the Securities
are listed on the Luxembourg Stock Exchange and the Luxembourg Stock Exchange
shall so require, in Luxembourg, as the Trustee shall determine. Notice of every
meeting of Holders of Securities, 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 1.6, 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 25% in aggregate principal amount of the Outstanding
Securities shall have requested the Trustee to call a meeting of the Holders of
Securities for any purpose specified in Section 9.1, 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 Securities in the amount specified, as the case may be, may
determine the time and the place in The City of New
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York, New York, or, so long as the Securities are listed on the Luxembourg Stock
Exchange and the Luxembourg Stock Exchange shall require, in Luxembourg, for
such meeting and may call such meeting for such purposes by giving notice
thereof as provided in paragraph (a) of this Section.
SECTION 9.3. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities, a
Person shall be (a) a Holder of one or more Outstanding Securities on the
applicable record date, or (b) a Person appointed by an instrument in writing as
proxy for a Holder or Holders of one or more Outstanding Securities by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders 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 9.4. Quorum; Action.
The Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities shall constitute a quorum. 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 Holders of Securities, be
dissolved. In any other case, the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such reconvened
meeting, such reconvened meeting may be further adjourned for a period not less
than 10 days as determined by the chairman of the meeting prior to the
adjournment of such reconvened meeting (subject to repeated applications of this
sentence). Notice of the reconvening of any adjourned meeting shall be given as
provided in Section 9.2(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 of the principal amount of the Outstanding Securities
which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting
adjourned for a lack of a quorum, the Persons entitled to vote 25% in aggregate
principal amount of the Outstanding Securities at the time shall constitute a
quorum for the taking of any action set forth in the notice of the original
meeting.
At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any resolution and all matters (except as
limited by the proviso to Section 8.2) shall be effectively passed and decided
if passed or decided by the lesser of (i) not less than a majority in aggregate
principal amount of the Outstanding Securities and (ii) Persons entitled to vote
not less than 66-2/3% in aggregate principal amount of Outstanding Securities
represented and entitled to vote at such meeting.
Any resolution passed or decisions taken at any meeting of Holders
of Securities duly held in accordance with this Section shall be binding on all
the Holders of Securities, whether or not present or represented at the meeting.
The Trustee shall, in the name and at the
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expense of the Company, notify all the Holders of Securities of any such
resolutions or decisions pursuant to Section 1.6.
SECTION 9.5. 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 Securities in regard to proof of the holding of Securities
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 Securities shall
be proved in the manner specified in Section 1.4 and the appointment of any
proxy shall be proved in the manner specified in Section 1.4.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustee) of the meeting, unless the meeting
shall have been called by the Company or by Holders of Securities as provided in
Section 9.2(b), in which case the Company or the Holders of Securities calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities represented at the meeting.
(c) At any meeting, each Holder of a Security or proxy shall be
entitled to one vote for each U.S.$1,000 principal amount of Securities held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Security challenged as not Outstanding and ruled
by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security or proxy.
(d) Any meeting of Holders of Securities duly called pursuant to
Section 9.2 at which a quorum is present may be adjourned from time to time by
Persons entitled to vote a majority in aggregate principal amount of the
Outstanding Securities represented at the meeting, and the meeting may be held
as so adjourned without further notice.
SECTION 9.6. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy and
the principal amounts at Stated Maturity and serial numbers of the Outstanding
Securities held or represented by them. The permanent chairman 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 duplicate of all
votes cast at the meeting. A record, at least in duplicate, of the proceedings
of each meeting of Holders of Securities shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
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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 9.2 and, if applicable, Section 9.4. Each copy shall be signed and
verified by the affidavits of the permanent chairman 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 TEN
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually
pay the principal of and premium, if any, and interest (including Additional
Amounts, if any, or Additional Interest, if any) on the Securities in accordance
with the terms of the Securities, this Indenture and the Registration Rights
Agreement. The Company will deposit or cause to be deposited with the Trustee on
or prior to the due date for any installment of interest thereon or on the
Stated Maturity of any Security all payments so due, which payments shall be in
immediately available funds on the date of such due date or Stated Maturity, as
the case may be.
SECTION 10.2. Maintenance of Offices or Agencies.
The Company hereby appoints (a) an office or agency of the Trustee
in The City of New York, New York, where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration of
transfer or exchange, where Securities may be surrendered for conversion, and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served, and (b) so long as the Securities are listed
on Luxembourg Stock Exchange and the Luxembourg Stock Exchange shall so require,
the office of Banque de Luxembourg, 14 Boulevard Royal, L-2449 Luxembourg, as
its agent outside of the United States, where, subject to any applicable laws or
regulations, Securities may be surrendered for payment, where Securities may be
surrendered for registration of transfer or exchange and where Securities may be
surrendered for conversion.
The Company may at any time and from time to time vary or terminate
the appointment of any such agent or appoint any additional agents for any or
all of such purposes; provided, however, that until all of the Securities have
been delivered to the Trustee for cancellation, or moneys sufficient to pay the
principal of, premium, if any, and interest (including any Additional Amount and
Additional Interest) on the Securities have been made available for payment and
either paid or returned to the Company pursuant to the provisions of Section
10.3, the Company will maintain (1) in The City of New York, New York, an office
or agency where Securities may be presented or surrendered for payment and
conversion, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served, and (2) so long as the Securities
are listed on the Luxembourg Stock Exchange and the Luxembourg Stock Exchange
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shall so require, subject to any laws or regulations applicable thereto, in
Luxembourg an office or agency, where Securities may be presented and
surrendered for payment and conversion, where Securities may be presented for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee, and notice to the
Holders in accordance with Section 1.6, of the appointment or termination of any
such agents and 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,
presentations and surrenders may be made and notices and demands may be served
on the office or agency of the Trustee in The City of New York, New York, or
other Paying Agent or Conversion Agent outside the United States, and the
Company hereby appoints the Paying Agent in Luxembourg as its agent to receive
such respective presentations, surrenders, notices and demands outside the
United States.
SECTION 10.3. Money for Security Payments To Be Held in Trust.
If the Company shall act as its own Paying Agent, it will, on or
before each due date of the principal of, premium, if any, or interest
(including any Additional Amount or Additional Interest) on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, 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 the Company will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have appointed one or more Paying Agents,
it will, on or prior to each due date of the principal of, premium, if any, or
interest on any Securities, deposit with such Paying Agents a sum sufficient to
pay the principal, premium, if any, or interest so becoming due, such sum to be
held for the benefit of the Persons entitled to such principal, premium, if any,
or interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or any failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on Securities 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 Securities) in the making of any payment
of principal, premium, if any, or interest; and
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(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 by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
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, premium, if
any, or interest on any Security and remaining unclaimed at the earlier of the
date which is 10 days prior to the date such money would escheat to the state or
two years after such principal, premium, if any, or interest has become due and
payable shall be paid to the Company or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease.
SECTION 10.4. Additional Amounts.
The Company will pay to a Non-U.S. Holder of any Security Additional
Amounts as provided in the form of Security, as set forth in Section 2.2.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of, premium, if any, or interest on, or in respect of, any
Security, such mention shall be deemed to include mention of the payment of
Additional Amounts provided for in 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.
Unless the Company shall furnish the Trustee and the Paying Agent in
Luxembourg and the Paying Agent in The City of New York, New York, if other than
the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying Agents to the contrary at least 10 days prior to March 15, 1998, or an
earlier Redemption Date or Repurchase Date (and at least 10 days prior to each
date of payment of principal, premium, if any, or interest after March 15, 1998,
or such earlier Redemption Date or Repurchase Date), the Company shall be deemed
to have instructed the Trustee that payment of principal of, premium, if any, or
interest on the Securities made to the Holders of Securities is not subject to
withholding or deduction. If any withholding or deduction shall be required, an
Officers' Certificate shall specify the amount required to be withheld or
deducted with respect to such payments to such Holders of Securities and the
Company will pay to the Trustee or the applicable Paying Agent the Additional
Amounts, if any, required to be paid as set forth in the first sentence of this
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Section 10.4. 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, bad faith or willful misconduct arising
out of or in connection with actions taken or omitted by any of them in reliance
on any Officers' Certificate furnished or not furnished pursuant to this
Section. In the absence of any such Officers' Certificates with respect to
withholding, the Trustee can conclusively rely on the fact that there is no such
withholding.
SECTION 10.5. Corporate Existence.
Subject to Article Seven, the Company will do or cause to be done
all things necessary to preserve and keep its existence in full force and
effect.
SECTION 10.6. Statement by Officers as to Default.
The Company will deliver to the Trustee within 120 days after the
end of each fiscal year of the Company an Officers' Certificate stating that in
the course of performance by the signers of their duties as such officers of the
Company they would normally obtain knowledge of whether any default exists in
the performance and observance of any of the terms, provisions and conditions of
this Indenture and whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture. Such Officers' Certificate shall
further state, as to each such officer signing such Certificate, to the best
knowledge of such officer, as of the date of such Officers' Certificate, (a)
whether any default under the Indenture exists, (b) whether the Company (as
applicable) during the preceding fiscal year kept, observed, performed and
fulfilled each and every covenant and obligation of the Company under this
Indenture and (c) whether there was any default in the performance and
observance of any of the terms, provisions or conditions of this Indenture
during such preceding fiscal year. If the officer or officers signing the
Officers' Certificate know of such a default, whether then existing or occurring
during such preceding fiscal year, the Officers' Certificate shall describe such
default and its status with particularity. The Company shall also promptly
notify the Trustee if the Company's fiscal year is changed so that the end
thereof is on any date other than the then current fiscal year end date.
The Company will deliver to the Trustee, promptly upon becoming
aware of any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or any Event of Default, an Officers'
Certificate specifying with particularity such default or Event of Default and
further stating what action the Company has taken, is taking or proposes to take
with respect thereto.
Any notice required to be given under this Section 10.6 shall be
delivered to the Trustee at its Corporate Trust Office.
SECTION 10.7. Delivery of Certain Information.
At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, upon the request of a holder of a Restricted Security, the
Company will promptly furnish or cause to be furnished Rule 144A Information (as
defined below) to such holder of
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Restricted Securities, or to a prospective purchaser of any such security
designated by any such holder, as the case may be, to the extent required to
permit compliance by such holder with Rule 144A under the Securities Act (or any
successor provision thereto) in connection with the resale of any such security;
provided, however, that the Company shall not be required to furnish such
information in connection with any request made on or after the date which is
two years from the later of (i) the date such a security (or any such
predecessor security) was last acquired from the Company or (ii) the date such a
security (or any such predecessor security) was last acquired from an
"affiliate" of the Company within the meaning of Rule 144 under the Securities
Act (or any successor provision thereto). "Rule 144A Information" shall be such
information as is specified pursuant to Rule 144A(d)(4) under the Securities Act
(or any successor provision thereto).
SECTION 10.8. Additional Interest.
The Company will pay Additional Interest as provided in the
Registration Rights Agreement. Whenever in this Indenture there is mentioned, in
any context, the payment of the principal of, premium, if any, or interest on,
or in respect of, any Security, such mention shall be deemed to include mention
of the payment of Additional Interest provided for in the Registration Rights
Agreement to the extent that, in such context, Additional Interest is, was or
would be payable in respect thereof pursuant to the provisions of the
Registration Rights Agreement and express mention of the payment of Additional
Interest (if applicable) in any provisions hereof shall not be construed as
excluding Additional Interest in those provisions hereof where such express
mention is not made.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.1. Right of Redemption.
The Securities may be redeemed in accordance with the provisions of
the form of Security set forth in Section 2.2.
SECTION 11.2. Applicability of Article.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of the Securities or this
Indenture, shall be made in accordance with such provision and this Article
Eleven.
SECTION 11.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of any of the Securities, 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 in writing of such Redemption
Date. If the Securities are to be redeemed pursuant to an election of
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the Company which is subject to a condition specified in the form of Security
set forth in Section 2.2, the Company shall furnish the Trustee with an
Officers' Certificate stating that the Company is entitled to effect such
redemption and setting forth a statement of facts showing that the conditions
precedent to the right of the Company so to redeem have occurred.
SECTION 11.4. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed (other than
pursuant to the third paragraph on the reverse of the form of Security in
Section 2.2), the particular Securities to be redeemed shall be selected by the
Trustee within seven Business Days after it receives the notice described in
11.3, from the Outstanding Securities not previously called for redemption, by
lot or such method as the Trustee may deem fair and appropriate.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed may be treated by
the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 11.5. Notice of Redemption.
Notice of redemption shall be given in the manner provided in
Section 1.6 to the Holders of Securities to be redeemed not less than 20 nor
more than 60 days prior to the Redemption Date, and such notice shall be
irrevocable.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities are to be
redeemed, the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities which will
be outstanding after such partial redemption,
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(4) that on the Redemption Date the Redemption Price, and
accrued interest, if any, will become due and payable upon each such
Security to be redeemed, and that interest thereon shall cease to
accrue on and after said date,
(5) the Conversion Price then in effect, the date on which the
right to convert the Securities to be redeemed will terminate and
the places where such Securities may be surrendered for conversion,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued
interest, if any, and
(7) in the case of a notice of redemption pursuant to the
third paragraph on the reverse of the form of Security in Section
2.2, a form of written certification of each beneficial owner of a
Security as to such beneficial owner's entitlement to Additional
Amounts.
In case of a partial redemption, the notice shall specify the serial
and CUSIP numbers (if any) and the portions thereof called for redemption and
that transfers and exchanges may occur on or prior to the Redemption Date.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name of and at the expense of the Company. Notice of
redemption of Securities to be redeemed at the election of the Company received
by the Trustee shall be given by the Trustee to each Paying Agent in the name of
and at the expense of the Company.
So long as the Securities are listed on the Luxembourg Stock
Exchange and the rules of the Luxembourg Stock Exchange shall require, notice of
redemption will be given by publication in an Authorized Newspaper in
Luxembourg, or, if not practicable in Luxembourg, elsewhere in a Western
European city.
SECTION 11.6. Deposit of Redemption Price.
By 10:00 a.m. (New York time) on any Redemption Date of the
Securities, the Company shall deposit with the Trustee or with the Paying Agent
so directed by the Trustee (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an amount of
money (which shall be in immediately available funds on such Redemption Date)
sufficient to pay the Redemption Price of, and accrued interest on, all the
Securities which are to be redeemed on that date other than any Securities
called for redemption on that date which have been converted prior to the date
of such deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security, if a Security, or any Predecessor Security to receive
interest as provided in the last paragraph of Section 3.7) be paid to the
Company on Company Request as soon as administratively practicable after the
Trustee
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receives such Company Request or, if then held by the Company, shall be
discharged from such trust.
SECTION 11.7. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price, including accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
Security for redemption in accordance with said notice, such Security shall be
paid by the Company at the Redemption Price together with accrued and unpaid
interest to the Redemption Date; provided, however, that installments of
interest on Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Record Date according
to their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal amount of, premium, if any, and,
to the extent permitted by applicable law, accrued interest on such Security
shall, until paid, bear interest from the Redemption Date at a rate of 5% per
annum and such Security shall remain convertible into Common Stock until the
principal of such Security (or portion thereof, as the case may be) shall have
been paid or duly provided for.
SECTION 11.8. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 10.2 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.
SECTION 11.9. Conversion Arrangement on Call for Redemption.
In connection with any redemption of Securities, the Company may
arrange for the purchase and conversion of any Securities by an agreement with
one or more investment bankers or other purchasers (the "Purchasers") to
purchase such securities by paying to the Trustee in trust for the Holders, on
or before the Redemption Date, an amount not less than the applicable Redemption
Price, together with interest accrued to the Redemption Date, of such
Securities. Notwithstanding anything to the contrary contained in this Article
Eleven, the obligation of the Company to pay the Redemption Price, together with
interest accrued to, but excluding, the Redemption Date, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
Purchasers. If such an agreement is entered into (a copy of which
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shall be filed with the Trustee prior to the close of business on the Business
Day immediately prior to the Redemption Date), any Securities called for
redemption that are not duly surrendered for conversion by the Holders thereof
may, at the option of the Company, be deemed, to the fullest extent permitted by
law, and consistent with any agreement or agreements with such Purchasers, to be
acquired by such Purchasers from such Holders and (notwithstanding anything to
the contrary contained in Article Twelve) surrendered by such Purchasers for
conversion, all as of immediately prior to the close of business on the
Redemption Date (and the right to convert any such Securities shall be extended
though such time), subject to payment of the above amount as aforesaid. At the
direction of the Company, the Trustee shall hold and dispose of any such amount
paid to it to the Holders in the same manner as it would monies deposited with
it by the Company for the redemption of Securities. Without the Trustee's prior
written consent, no arrangement between the Company and such Purchasers for the
purchase and conversion of any Securities shall increase or otherwise affect any
of the powers, duties, responsibilities or obligations of the Trustee as set
forth in this Indenture, and the Company agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense arising out of or
in connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such Purchasers, including the costs and
expenses, including reasonable legal fees, incurred by the Trustee in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE TWELVE
CONVERSION OF SECURITIES
SECTION 12.1. Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions of this Article
Twelve, at the option of the Holder thereof, the Holder of any Security is
entitled, at any time prior to the close of business on the Business Day
immediately preceding October 1, 2002, to convert such Security into fully paid
and nonassessable shares (calculated as to each conversion to the nearest
1/100th of a share) of Common Stock at the Conversion Price, determined as
hereinafter provided, in effect at the time of conversion. Such conversion right
shall be subject, in the case of the conversion of any Global Security, to any
applicable book-entry procedures of the Depositary therefor and the following
sentence. In case a Security or portion thereof is called for redemption or is
delivered for repurchase, such conversion right in respect of the Security or
portion so called shall expire at the close of business on the Business Day
prior to the Redemption Date or the Repurchase Date (as defined in Article
Fourteen), as the case may be, unless the Company defaults in making the payment
due upon redemption or repurchase, as the case may be.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Price") shall be initially U.S.$28.00
per share of Common Stock. The Conversion Price shall be adjusted in certain
instances as provided in this Article Twelve.
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SECTION 12.2. Exercise of Conversion Privilege.
Beneficial owners of interests in a Global Security may exercise
their right of conversion by delivering to the Depositary the appropriate
instruction form for conversion pursuant to the Depositary's conversion program
and, in the case of conversions through Euroclear or Cedel, in accordance with
Euroclear's or Cedel's normal operating procedures. To convert a Certificated
Security into shares of Common Stock, a Holder must (i) complete and manually
sign the conversion notice in the form set forth in Section 2.4 on the back of
the Certificated Security (or complete and manually sign a facsimile thereof)
and deliver such notice to the office of a Conversion Agent, (ii) surrender the
Certificated Security to such Conversion Agent, (iii) if required, furnish
appropriate endorsements and transfer documents, (iv) if required, pay all
transfer or similar taxes, and (v) if required, pay funds equal to interest
payable on the next Interest Payment Date. The date on which all of the
foregoing requirements have been satisfied is the date of surrender for
conversion.
Notes surrendered for conversion, in whole or in part, shall be
forwarded promptly by the Conversion Agent to the Trustee for cancellation. The
Company shall execute and the Trustee shall authenticate and deliver a new
Security or Securities in principal equal to the unconverted portion of Notes so
surrendered. The Conversion Agent will deliver promptly to the Paying Agent in
New York, New York all funds collected representing interest payable on a
Security converted when required pursuant hereto. The Trustee shall promptly
deliver to the Company and the Company's Common Stock transfer agent
notification of such notice of conversion at the address described in Section
1.5. Such notice of conversion can be obtained from the Trustee at the Corporate
Trust Office or the office of any Conversion Agent. Each Security, or beneficial
interest therein, surrendered for conversion will be converted into Common Stock
in registered form.
Each Security, or beneficial interest therein, surrendered for
conversion (in whole or in part) during the period from the close of business on
any Regular Record Date to the opening of business on the next succeeding
Interest Payment Date shall be accompanied by payment in New York Clearing House
funds or other funds acceptable to the Company of an amount equal to the
interest payable on such Interest Payment Date on the principal amount of such
Security (or part thereof, as the case may be) being surrendered for conversion.
The interest so payable on such Interest Payment Date in respect of any Security
(or portion thereof, as the case may be), which Security (or portion thereof, as
the case may be) is surrendered for conversion during such period, shall be paid
to the Holder of such Security as of such Regular Record Date. No cash payment
or adjustment shall be made on conversion of a Security for interest accrued
thereon from the Interest Payment Date next preceding the date of conversion or
for dividends on the Common Stock issued on conversion thereof subject only (i),
in the case of a conversion after the close of business on any Regular Record
Date and prior to the next succeeding Interest Payment Date, to the obligation
of the Holder to pay to the Company an amount equal to the accrued interest in
respect of such Security as provided in Section 2.2 and the obligation of the
Company to pay such accrued interest to the Holder of such Security (or any
Predecessor Security) of record on the Regular Record Date next preceding such
Interest Payment Date and (ii) in the case of a conversion on an Interest
Payment Date, the obligation of
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the Company to pay to the Holder of such Security (or any Predecessor Security)
of record on the Regular Record Date next preceding such Interest Payment Date
interest accrued thereon from such next preceding Interest Payment Date.
The Company's delivery to the Holder of the number of shares of
Common Stock (and cash in lieu of fractions thereof, as provided in this
Indenture) into which a Security is convertible will be deemed to satisfy the
Company's obligation to pay the principal amount of the Security.
Securities shall be deemed to have been converted immediately prior
to the close of business on the day of surrender of such Securities for
conversion, in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Securities as Holders shall cease, and the Person
or Persons entitled to receive the shares of Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such Common Stock at such time. As promptly as practicable on or after the
conversion date, the Company shall issue and deliver to the Trustee, for
delivery to the Holder, a certificate or certificates for the number of full
shares of Common Stock issuable upon conversion, together with payment in lieu
of any fraction of a share, as provided in Section 12.3.
All shares of Common Stock delivered upon such conversion of
Securities that are Restricted Securities shall, if required, bear a restricted
securities legend, substantially to the same effect as the Restricted Securities
Legends, and shall be subject to the restrictions on transfer provided in such
legend. Neither the Trustee nor any agent maintained for the purpose of such
conversion shall have any responsibility for the inclusion or content of any
such restricted securities legends on such shares of Common Stock; provided,
however, that the Trustee or Conversion Agent shall have provided, to the
Company or to the Security Registrar for such shares of Common Stock, prior to
or concurrently with a request to the Company to deliver such shares of Common
Stock, written notice that the Securities delivered for conversion are
Restricted Securities.
In the case of any Security which is converted in part only, upon
such conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in an aggregate principal amount equal to
the unconverted portion of the principal amount of such Security. A Security may
be converted in part, but only if the principal amount of such Security to be
converted is any integral multiple of U.S.$1,000 and the principal amount of
such security to remain Outstanding after such conversion is equal to U.S.$1,000
or any integral multiple thereof.
SECTION 12.3. Fractions of Shares.
No fractional shares of Common Stock shall be issued upon conversion
of any Securities. If more than one Security shall be surrendered for conversion
at one time by the same Holder, the number of full shares which shall be
issuable upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
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otherwise be issuable upon conversion of any Securities (or specified portions
thereof), the Company shall calculate and pay a cash adjustment in respect of
such fraction (calculated to the nearest 1/100th of a share) in an amount equal
to the same fraction of the Current Market Price per share of Common Stock
(calculated in accordance with Section 12.4(7)(b) below) at the close of
business on the day of conversion.
SECTION 12.4. Adjustment of Conversion Price.
The Conversion Price shall be subject to adjustments from time to
time as follows:
(1) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator of which shall be the sum of such
number of shares and the total number of shares constituting such dividend or
other distribution, such reduction to become effective immediately after the
opening of business on the day following the date fixed for such determination.
If any dividend or distribution of the type described in this Section 12.4(1) is
declared but not so paid or made, the Conversion Price shall again be adjusted
to the Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(2) In case the Company shall issue rights or warrants to all
holders of its outstanding Common Stock entitling them (for a period expiring
within 45 days after the date fixed for determination of stockholders entitled
to receive such rights or warrants) to subscribe for or purchase Common Stock at
a price per share less than the Current Market Price (as defined in Section
12.4(7)(b)) on the date fixed for determination of stockholders entitled to
receive such rights or warrants, the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date fixed for determination of shareholders
entitled to receive such rights or warrants by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for determination of stockholders entitled to receive
such rights and warrants plus the number of shares which the aggregate exercise
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 the date fixed for determination of stockholders
entitled to receive such rights and warrants plus the total number of additional
shares of Common Stock offered for subscription or purchase. Such adjustment
shall be successively made whenever any such rights and warrants are issued, and
shall become effective immediately after the opening of business on the day
following the date fixed for determination of stockholders entitled to receive
such rights or warrants. To the extent that shares of Common Stock are not
delivered after the expiration of such rights or warrants, the Conversion Price
shall be readjusted to the Conversion Price which would then be in effect had
the adjustments made upon the issuance of such rights or warrants been made on
the basis of delivery of only the
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number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase Common Stock at less than such
Current Market Price, and in determining the aggregate exercise price of such
Common Stock, 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.
(3) In case outstanding Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced so that the Holder of
Securities thereafter surrendered for conversion shall be entitled to receive
the number of shares of Common Stock that such Holder would have been entitled
to receive immediately following such subdivision had such Securities been
converted immediately prior thereto, and conversely, in case outstanding shares
of Common Stock shall be combined into a smaller number of shares of Common
Stock, the Conversion Price in effect at the opening of business on the day
following the day upon which such combination becomes effective shall be
proportionately increased.
(4) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 12.4(1)
applies) or evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 12.4(2), and excluding
any dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 12.4(1) (any of the foregoing hereinafter in this Section 12.4(4) called
the "Distribution Securities")), then, in each such case, the Conversion Price
shall be reduced so that the same shall be equal to the price determined by
multiplying the Conversion Price in effect on the Distribution Record Date with
respect to such distribution by a fraction the numerator of which shall be the
Current Market Price per share of Common Stock on such Distribution Record Date
less the fair market value (as determined by the Board of Directors whose
determination shall be conclusive and described in a resolution of the Board of
Directors) on the Distribution Record Date of the portion of the Distribution
Securities so distributed applicable to one share of outstanding Common Stock
and the denominator of which shall be the Current Market Price per share of
outstanding Common Stock, such reduction to become effective immediately prior
to the opening of business on the day following such Distribution Record Date;
provided, however, that in the event the then fair market value (as so
determined) of the portion of the Distribution Securities so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price per share of the Common Stock on the Distribution Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion the amount of
Distribution Securities such Holder would have received had such Holder
converted each Security on the Distribution Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared. If the Company's Board of
Directors determines the fair market value of
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any distribution for purposes of this Section 12.4(4) by reference to the actual
or when issued trading market for any securities, it must in doing so consider
the prices in such market over the same period used in computing the Current
Market Price of the Common Stock.
In the event that the Company implements a stockholder rights plan,
such rights plan shall provide that upon conversion of the Securities the
Holders will receive, in addition to the Common Stock issuable upon such
conversion, the rights issued under such rights plan (notwithstanding the
occurrence of an event causing such rights to separate from the Common Stock at
or prior to the time of conversion). Any distribution of rights or warrants
pursuant to a stockholder rights plan complying with the requirements set forth
in the immediately preceding sentence of this paragraph shall not constitute a
distribution of rights or warrants for the purposes of this Section 12.4.
Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase shares
of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("Trigger Event"): (i) are deemed to be transferred with such
shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in
respect of future issuances of shares of Common Stock, shall be deemed not to
have been distributed for purposes of this Section 12.4 (and no adjustment to
the Conversion Price under this Section 12.4 will be required) until the
occurrence of the earliest Trigger Event, whereupon such rights and warrants
shall be deemed to have been distributed and an appropriate adjustment (if any
is required) to the Conversion Price shall be made under this Section 12.4(4).
If any such right or warrant, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject to events, upon the
occurrence of which such rights or warrants become exercisable to purchase
different securities, evidences of indebtedness or other assets, then the date
of the occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new rights or warrants with such
rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Price under this Section 12.4
was made, (1) in the case of any such rights or warrants which shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder or holders of shares of Common Stock with respect to
such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of shares of Common Stock as of the date of such
redemption or repurchase, and (2) in the case of such rights or warrants which
shall have expired or been terminated without exercise by any holders thereof,
the Conversion Price shall be readjusted as if such rights and warrants had not
been issued.
Notwithstanding the foregoing, in the event that the Company shall
distribute rights or warrants to subscribe for additional shares of the Common
Stock (other than rights or
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warrants described in Section 12.4(2)), pro rata to holders of Common Stock, the
Company may, in lieu of making any adjustment pursuant to this Section 12.4(4),
make proper provision so that each holder of a Security who converts such
Security (or any portion thereof) after the Distribution Record Date for such
distribution and prior to the expiration or redemption of such rights or
warrants shall be entitled to receive upon such conversion, in addition to the
shares of Common Stock issuable upon such conversion (the "Conversion Shares"),
a number of rights or warrants to be determined as follows: (i) if such
conversion occurs on or prior to the date for the distribution to the holders of
such rights or warrants of separate certificates evidencing such rights or
warrants (the "Distribution Date"), the same number of rights or warrants to
which a holder of a number of shares of Common Stock equal to the number of
Conversion Shares is entitled at the time of such conversion in accordance with
the terms and provisions of and applicable to such rights or warrants; and (ii)
if such conversion occurs after the Distribution Date, the same number of rights
or warrants to which a holder of the number of shares of Common Stock into which
the principal amount of the Security so converted was convertible immediately
prior to the Distribution Date would have been entitled on the Distribution Date
in accordance with the terms and provisions of, and applicable to such rights or
warrants.
For purposes of this Section 12.4(4) and Sections 12.4(1) and (2),
any dividend or distribution to which this Section 12.4(4) is applicable that
also includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Price reduction required by this Section 12.4(4) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Sections
12.4(1) and (2) with respect to such dividend or distribution shall then be
made), except (A) the Distribution Record Date of such dividend or distribution
shall be substituted as "the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution" and "the date fixed for
such determination" within the meaning of Sections 12.4(1) and (2) and (B) any
shares of Common Stock included in such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of Section 12.4(1).
(5) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding (w) any quarterly cash
dividend on the Common Stock to the extent the aggregate cash dividend per share
of Common Stock in any quarterly period does not exceed the greater of (A) the
amount per share of Common Stock of the next preceding quarterly cash dividend
on the Common Stock to the extent that such preceding quarterly dividend did not
require any adjustment of the Conversion Price pursuant to this Section 12.4(5)
(as adjusted to reflect subdivisions or combinations of the Common Stock), and
(B) 7.00% of the arithmetic average of the Closing Prices (determined as set
forth in Section 12.4(7)(a)) during the ten Trading Days immediately prior to
the date of declaration of such dividend, (x) any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, (y) any cash that is distributed as part of a
distribution requiring a Conversion Price adjustment pursuant to Section 12.4(4)
and (z) any cash distribution
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upon a merger or consolidation to which Section 12.11 hereof applies), then, in
such case, the Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such Distribution Record Date by a fraction of
which the numerator shall be the Current Market Price of the Common Stock on the
Distribution Record Date less the amount of cash so distributed (and not
excluded as provided above) applicable to one share of outstanding Common Stock
and the denominator shall be such Current Market Price of the Common Stock on
the Distribution Record Date, such reduction to be effective immediately prior
to the opening of business on the day following the Distribution Record Date;
provided, however, that in the event the portion of the cash so distributed
applicable to one share of outstanding Common Stock is equal to or greater than
the Current Market Price of the Common Stock on the Distribution Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion the amount of cash such
Holder would have received had such Holder converted each Security on the
Distribution Record Date. In the event that such dividend or distribution is not
so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or distribution
had not been declared. If any adjustment is required to be made as set forth in
this Section 12.4(5) as a result of a distribution that is a quarterly dividend,
such adjustment shall be based upon the amount by which such distribution
exceeds the amount of the quarterly cash dividend permitted to be excluded
pursuant hereto. If an adjustment is required to be made as set forth in this
Section 12.4(5) above as a result of a distribution that is not a quarterly
dividend, such adjustment shall be based upon the full amount of the
distribution.
(6) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) that as of the last time (the "Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it may be
amended) exceeds the Current Market Price per share of the Common Stock on the
Trading Day next succeeding the Expiration Time, the Conversion Price shall be
reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the Expiration Time by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) on the Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the Expiration Time and the denominator shall be the sum of (x)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchased Shares) on the Expiration Time and the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction to become effective immediately prior to the opening of business on
the day following the Expiration Time. In the event that the Company is
obligated to
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purchase shares pursuant to any such tender or exchange offer, but the Company
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Price shall again be adjusted
to be the Conversion Price which would then be in effect if such tender or
exchange offer had not been made.
(7) For purposes of this Section 12.4, the following terms shall
have the meaning indicated:
(a) "Closing Price" with respect to any securities on any day
shall mean the closing sale price regular way on such day or, in
case no such sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, in each case on
the New York Stock Exchange, or, if such security is not listed or
admitted to trading on such Exchange, on the principal security
exchange or quotation system in the United States on which such
security is quoted or listed or admitted to trading, or, the average
of the closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by the
Nasdaq National Market or a similar generally accepted reporting
service, or if not so available, in such manner as furnished by any
New York Stock Exchange member firm selected from time to time by
the Board of Directors for that purpose, or a price determined in
good faith by the Board of Directors or, to the extent permitted by
applicable law, a duly authorized committee thereof, whose
determination shall be conclusive.
(b) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten consecutive
Trading Days immediately prior to the date in question; provided,
however, that (1) if the "ex" date (as hereinafter defined) for any
event (other than the issuance or distribution or Fundamental Change
requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 12.4(1), (2), (3), (4), (5) or
(6) occurs during such ten consecutive Trading Days, the Closing
Price for each Trading Day prior to the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the
same fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, (2) if the "ex" date for
any event (other than the issuance, distribution or Fundamental
Change requiring such computation) that requires an adjustment to
the Conversion Price pursuant to Section 12.4(1), (2), (3), (4), (5)
or (6) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day in
question, the Closing Price for each Trading Day on and after the
"ex" date for such other event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of such
other event, and (3) if the "ex" date for the issuance, distribution
or Fundamental Change requiring such computation is prior to the day
in question, after taking into account any adjustment required
pursuant to clause (1) or (2) of this proviso, the Closing Price for
each Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash
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and the fair market value (as determined by the Board of Directors in a
manner consistent with any determination of such value for purposes of
Section 12.4(4) or (6), whose determination shall be conclusive and
described in a resolution of the Board of Directors) of the evidences
of indebtedness, shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the close of business on
the day before such "ex" date. For purposes of any computation under
Section 12.4(6), the Current Market Price of the Common Stock on any
date shall be deemed to be the average of the daily Closing Prices per
share of Common Stock for such day and the next two succeeding Trading
Days; provided, however, that if the "ex" date for any event (other
than the tender or exchange offer requiring such computation) that
requires an adjustment to the Conversion Price pursuant to Section
12.4(1), (2), (3), (4), (5) or (6) occurs on or after the Expiration
Time or Tender Expiration Time, as the case may be, for the tender or
exchange offer requiring such computation and prior to the day in
question, the Closing Price for each Trading Day on and after the "ex"
date for such other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the Conversion Price
is so required to be adjusted as a result of such other event. For
purposes of this paragraph, the term "ex" date, (1) when used with
respect to any issuance or distribution, means the first date on which
the Common Stock trades regular way on the relevant exchange or in the
relevant market from which the Closing Price was obtained without the
right to receive such issuance or distribution, (2) when used with
respect to any subdivision or combination of shares of Common Stock,
means the first date on which the Common Stock trades regular way on
such exchange or in such market after the time at which such
subdivision or combination becomes effective, and (3) when used with
respect to any tender or exchange offer means the first date on which
the Common Stock trades regular way on such exchange or in such market
after the Expiration Time or Tender Expiration Time, as the case may
be, of such offer.
(c) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
(d) "Distribution Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which the
holders of Common Stock have the right to receive any cash, securities
or other property or in which the Common Stock (or other applicable
security) is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(e) "Trading Day" shall mean (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or
another national security exchange, a day on which the New York Stock
Exchange or another
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national security exchange is open for business or (y) if the
applicable security is quoted on the Nasdaq National Market, a day on
which trades may be made on thereon or (z) if the applicable security
is not so listed, admitted for trading or quoted, any day other than a
Saturday or Sunday or a day on which banking institutions in the State
of New York are authorized or obligated by law or executive order to
close.
(8) Notwithstanding anything to the contrary contained herein, no
adjustment in the Conversion Price shall be required unless such adjustment
(plus any adjustments not previously made by reason of this paragraph (8)) would
require an increase or decrease of at least one percent in such price; provided,
however, that any adjustments which by reason of this paragraph (8) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Article shall be made to the
nearest cent or to the nearest one-hundredth of a share, as the case may be.
(9) The Company may, at its option, make such reductions in the
Conversion Price as the Board deems advisable, in addition to those required by
paragraphs (1), (2), (3), (4), (5) or (6) of this Section 12.4, in order to
avoid or diminish any income tax to any holders of Common Stock or rights to
purchase Common Stock resulting from any dividend or distribution on Common
Stock (or rights to acquire such shares) or from any event treated as such for
income tax purposes or resulting from any dividend or distribution of shares or
issuance of rights or warrants to purchase or subscribe for shares or from any
event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if (i)
the period is at least twenty (20) days, (ii) the reduction is irrevocable
during the period and (iii) the Board shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall give notice of the reduction to the
Holders of Securities in the manner provided in Section 1.6 at least fifteen
(15) days prior to the date the reduced Conversion Price takes effect, and such
notice shall state the reduced Conversion Price and the period during which it
will be in effect.
(10) No adjustment of the Conversion Price will result in zero or a
negative number.
SECTION 12.5. Notice of Adjustments of Conversion Price.
Whenever the Conversion Price is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Price in
accordance with Section 12.4 and shall prepare a certificate signed by
the President, Treasurer, Chief Financial Officer or Vice President of
Finance of the Company setting forth the adjusted Conversion Price and
showing in reasonable
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detail the facts upon which such adjustment is based, and such
certificate shall promptly be filed with the Trustee and with each
Conversion Agent; and
(2) a notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price shall
promptly be prepared and as soon as practicable thereafter, such
notice shall be provided by the Company to all Holders in accordance
with Section 1.6.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at its office during normal business
hours.
So long as the Securities are listed on the Luxembourg Stock
Exchange and the rules of the Luxembourg Stock Exchange shall so require, notice
of any adjustment of the Conversion Price pursuant to this Article Twelve will
be given by publication in an Authorized Newspaper in Luxembourg, or, if not
practicable in Luxembourg, elsewhere in a Western European city. Any failure of
the Company to give such notice, or any defect therein, shall not in any way
impair or affect the validity of any such Conversion Price adjustment.
SECTION 12.6. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other
distribution) on all or substantially all of its Common Stock
payable (i) otherwise than exclusively in cash or (ii) exclusively
in cash in an amount that would require any adjustment pursuant to
Section 12.4; or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other
rights that would require any adjustment pursuant to Section 12.4;
or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common
Stock), or of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of
the assets of the Company; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company or any subsidiary of the Company shall
commence a tender offer for all or a portion of the Company's
outstanding Common Stock (or shall amend any such tender offer);
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then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 10.2, and shall
cause to be provided to all Holders in accordance with Section 1.6, at least 20
days (or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record, expiration or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights, options or warrants, 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, rights, options or warrants are to be
determined, (y) the date on which the right to make tenders under such tender
offer expires or (z) the date on which such reclassification, consolidation,
merger, share exchange, conveyance, transfer, sale, dissolution, liquidation or
winding up is expected to become effective, and the date as of which it is
expected that holders of shares of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, share exchange,
conveyance, transfer, sale, lease, dissolution, liquidation or winding up. If at
the time the Trustee shall not be the Conversion Agent, a copy of such notice
and any notice referred to in the following paragraph shall also forthwith be
filed by the Company with the Trustee.
The preceding paragraph to the contrary notwithstanding, the Company
shall cause to be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.2, and shall cause to be
provided to all Holders in accordance with Section 1.6, notice of any tender
offer by the Company or any subsidiary of the Company for all or any portion of
the Common Stock at or about the time that such notice of tender offer is
provided to the public generally (such notice to be sent to all Holders within
five days after receipt of such notice by the Trustee or Conversion Agent from
the Company).
SECTION 12.7. Company to Provide Common Stock.
The Company shall ensure that the Company has, free from preemptive
rights, out of its authorized but unissued Common Stock, the full number of
shares of Common Stock for the purpose of effecting the conversion of
Securities.
SECTION 12.8. Taxes on Conversions.
The Company will pay any and all documentary, stamp or similar
duties to the United States of America or any political subdivision or taxing
authority thereof or therein that may be payable in respect of the issue or
delivery of Common Stock on conversion of Securities pursuant hereto. The
Company shall not, however, be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issue and delivery of Common
Stock in a name other than that of the Holder of the Security or Securities to
be converted, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such tax
or duty, or has established to the satisfaction of the Company that such tax or
duty has been paid. The Company extends no protection with respect to any other
taxes imposed in connection with the conversion of Securities.
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SECTION 12.9. Company Covenant as to Common Stock.
The Company covenants that all Common Stock that may be delivered
upon conversion of Securities, upon such delivery, will have been duly
authorized and validly issued and will be fully paid and nonassessable and,
except as provided in Section 12.8, the Company will pay all taxes, liens and
charges with respect to the issue thereof.
SECTION 12.10. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee or the Paying Agent in Luxembourg or its agent to be canceled by or at
the direction of the Trustee, which shall dispose of the same as provided in
Section 3.9.
SECTION 12.11. Provision in Case of Consolidation, Merger, or
Sale of Assets of the Company.
In case of any consolidation of the Company with, or merger of the
Company into, any other Person, or any merger of another Person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding Common Stock of the Company) or any sale
or transfer of all or substantially all of the assets of the Company, the
Company and the Person formed by such consolidation or resulting from such
merger or which acquires such assets shall execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Security then
Outstanding shall have the right thereafter, during the period such Security
shall be convertible as specified in Section 12.1, to convert such Security only
into the kind and amount of securities, cash and other property receivable upon
such consolidation, merger, sale or transfer by a holder of the number of shares
of Common Stock of the Company into which such Security might have been
converted immediately prior to such consolidation, merger, sale or transfer,
assuming such holder of Common Stock of the Company (i) is not a Person with
which the Company consolidated or into which the Company merged or which merged
into the Company or to which such sale or transfer was made, as the case may be
(a "Constituent Person"), or an Affiliate of a Constituent Person, and (ii)
failed to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer (provided that if the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer is
not the same for each share of Common Stock of the Company held immediately
prior to such consolidation, merger, sale or transfer by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purposes of this Section 12.11 the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by the
holders of each Non-electing Share shall be deemed to be the kind and amount so
receivable per share by a plurality of the Non-electing Shares). Such
supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article. The above provisions of this Section 12.11 shall similarly apply to
successive consolidations, mergers, sales or transfers. Notice of the execution
of such a
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supplemental indenture shall be given by the Company to the Holder of each
Security as provided in Section 1.6 promptly upon such execution.
Neither the Trustee, any Paying Agent nor any Conversion Agent shall
be under any responsibility to determine the correctness of any provisions
contained in any such supplemental indenture relating either to the kind or
amount of shares of stock or other securities or property or cash receivable by
Holders of Securities upon the conversion of their Securities after any such
consolidation, merger, conveyance, transfer, sale or lease or to any such
adjustment, but may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, an Opinion of Counsel with
respect thereto, which the Company shall cause to be furnished to the Trustee
upon request.
SECTION 12.12. Responsibility of Trustee for Conversion Provisions.
The Trustee, subject to the provisions of Section 6.1, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Conversion Price, or with respect to the nature or extent
of any such adjustment when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same, or whether a supplemental indenture need be entered into. Neither the
Trustee, subject to the provisions of Section 6.1, nor any Conversion Agent
shall be accountable with respect to the validity or value (or the kind or
amount) of any Common Stock, or of any other securities or property or cash,
which may at any time be issued or delivered upon the conversion of any
Security; and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Section 6.1, nor any
Conversion Agent shall be responsible for any failure of the Company to make or
calculate any cash payment or to issue, transfer or deliver any Common Stock or
share certificates or other securities or property or cash upon the surrender of
any Security for the purpose of conversion; and the Trustee, subject to the
provisions of Section 6.1, and any Conversion Agent shall not be responsible for
any failure of the Company to comply with any of the covenants of the Company
contained in this Article.
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 13.1. Agreement of Subordination.
The Company covenants and agrees, and each Holder of Securities
issued hereunder by his acceptance thereof likewise covenants and agrees, that
all Securities shall be issued subject to the provisions of this Article
Thirteen; and each Person holding any Security, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees to be bound by
such provisions.
The payment of the principal of, premium, if any, and interest on
all Securities (including, but not limited to, the Redemption Price with respect
to the Securities called for redemption in accordance with Article Eleven, or
the Repurchase Price with respect to Securities
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submitted for repurchase in accordance with Article Fourteen, as the case may
be, as provided in this Indenture and Additional Amounts, if any, and Additional
Interest, if any) issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full in cash of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred, created,
assumed or guaranteed, and that these subordination provisions are for the
benefit of the holders of Senior Indebtedness.
No provision of this Article Thirteen shall prevent the occurrence
of any default or Event of Default hereunder.
SECTION 13.2. Payments to Holders.
No payment shall be made with respect to the principal of, or
premium, if any, or interest on the Securities by the Company (including, but
not limited to, the Redemption Price with respect to the Securities to be called
for redemption in accordance with Article Eleven or the Repurchase Price with
respect to Securities submitted for repurchase in accordance with Article
Fourteen, as the case may be, as provided in this Indenture and Additional
Amounts, if any, Additional Interest, if any), except payments and distributions
made by the Trustee as permitted by the first or second paragraph of Section
13.5, if:
(i) a default in the payment of principal, premium, interest,
rent or other obligations due on any Senior Indebtedness of the
Company has occurred and is continuing (or, in the case of Senior
Indebtedness of the Company for which there is a period of grace, in
the event of such a default that continues beyond the period of
grace, if any, specified in the instrument or lease evidencing such
Senior Indebtedness of the Company), unless and until such default
shall have been cured or waived or shall have ceased to exist; or
(ii) a default (other than a payment default but including any
default in the payment of principal, premium, interest, rent or
other obligations on Designated Senior Indebtedness that would be a
payment default but for the period of grace specified in such
instrument or lease) on Designated Senior Indebtedness occurs and is
continuing that permits holders of such Designated Senior
Indebtedness to accelerate its maturity and the Trustee receives a
notice of the default (a "Payment Blockage Notice") from a
Representative of Designated Senior Indebtedness or a holder of
Designated Senior Indebtedness or the Company.
If the Trustee receives any Payment Blockage Notice pursuant to
clause (ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until at least 365 days shall have elapsed
since the initial effectiveness of the immediately prior Payment Blockage
Notice. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee (unless such default was
waived, cured or otherwise ceased to exist and thereafter subsequently
reoccurred) shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
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The Company may and shall resume payments on and distributions in
respect of the Securities upon:
(1) in the case of a payment default, the date upon which
the default is cured or waived or ceases to exist, or
(2) in the case of a default referred to in clause (ii) above,
the earlier of the date on which such default is cured or waived or ceases
to exist or 179 days after the date on which the applicable Payment
Blockage Notice is received if the maturity of such Designated Senior
Indebtedness has not been accelerated,
unless this Article Thirteen otherwise prohibits the payment or distribution at
the time of such payment or distribution (including, without limitation, in the
case of default referred to in clause (ii) above, as a result of a payment
default with respect to the applicable Senior Indebtedness as a consequence of
the acceleration of the maturity thereof or otherwise).
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary, or in bankruptcy, moratorium of
payments, insolvency, receivership or other proceedings, all amounts due or to
become due upon all Senior Indebtedness of the Company shall first be paid in
full in cash or other payment satisfactory to the holders of such Senior
Indebtedness of the Company, or payment thereof in accordance with its terms
provided for in cash or other payment satisfactory to the holders of such Senior
Indebtedness of the Company before any payment is made on account of the
principal of, premium, if any, or interest (including Additional Amounts, if
any, or Additional Interest, if any) on the Securities by the Company (except
payments by the Company made pursuant to Article Four from monies deposited with
the Trustee pursuant thereto prior to commencement of proceedings for such
dissolution, winding-up, liquidation or reorganization); and upon any such
dissolution or winding-up or liquidation or reorganization of the Company or
bankruptcy, insolvency, receivership or other proceeding, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders or the Trustee
would be entitled, except for the provision of this Article Thirteen, shall
(except as aforesaid) be paid by the Company or by any receiver, trustee in
bankruptcy, moratorium of payments, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee under
this Indenture if received by them or it, directly to the holders of Senior
Indebtedness of the Company (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness of the Company held by such holders,
or as otherwise required by law or a court order) or their Representative or
Representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness of the Company may have
been issued, as their respective interests may appear, to the extent necessary
to pay all Senior Indebtedness of the Company in full, in cash or other payment
satisfactory to the holders of such Senior Indebtedness of the Company, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness of the Company, before any payment or distribution is made
to the Holders or to the Trustee.
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For purposes of this Article Thirteen, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article Thirteen with
respect to the Securities to the payment of all Senior Indebtedness of the
Company which may at the time be outstanding; provided that (i) the Senior
Indebtedness of the Company is assumed by the new corporation, if any, resulting
from any reorganization or readjustment, and (ii) the rights of the holders of
Senior Indebtedness of the Company (other than leases which are not assumed by
the Company or the new corporation, as the case may be) are not, without the
consent of such holders, altered by such reorganization or readjustment. The
merger of the Company into another corporation or the liquidation or dissolution
of the Company following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided for in Article Seven shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 13.2
if such other corporation shall, as a part of such merger, conveyance or
transfer, comply with the conditions stated in Article Seven.
In the event of the acceleration of the Securities because of an
Event of Default, no payment or distribution shall be made to the Trustee or any
Holder of Securities in respect of the principal of, premium, if any, or
interest on the Securities by the Company (including, but not limited to, the
Redemption Price with respect to the Securities called for redemption in
accordance with Article Eleven or the Repurchase Price with respect to
Securities submitted for repurchase in accordance with Article Fourteen, as the
case may be, as provided in this Indenture and Additional Amounts, if any, and
Additional Interest, if any), except payments and distributions made by the
Trustee as permitted by the first or second paragraph of Section 13.5, until all
Senior Indebtedness of the Company has been paid in full in cash or other
payment satisfactory to the holders of Senior Indebtedness of the Company or
such acceleration is rescinded in accordance with the terms of this Indenture.
If payment of the Securities is accelerated because of an Event of Default, the
Company shall promptly notify holders of Senior Indebtedness of the Company of
the acceleration.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Securities before all Senior Indebtedness of the
Company is paid in full in cash or other payment satisfactory to the holders of
such Senior Indebtedness of the Company, or provision is made for such payment
thereof in accordance with its terms in cash or other payment satisfactory to
the holders of such Senior Indebtedness of the Company, such payment or
distribution shall be held in trust for the benefit of and shall be paid over or
delivered to the holders of Senior Indebtedness of the Company or their
Representative or Representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
of the Company may have been issued, as their respective interests may appear,
as calculated by the Company, for application to the payment of all Senior
Indebtedness of the Company remaining unpaid to the extent necessary to pay all
Senior Indebtedness of the Company in full in cash or other payment satisfactory
to the
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holders of such Senior Indebtedness of the Company, after giving effect to any
concurrent payment or distribution, or provision therefor, to or for the holders
of such Senior Indebtedness of the Company.
Nothing in this Article Thirteen shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.7. This Section 13.2
shall be subject to the further provisions of Section 13.5.
SECTION 13.3. Subrogation of Securities.
Subject to the payment in full in cash of all Senior Indebtedness of
the Company, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Indebtedness of
the Company pursuant to the provisions of this Article Thirteen (equally and
ratably with the holders of all indebtedness of the Company which by its express
terms is subordinated to other indebtedness of the Company to substantially the
same extent as the Securities are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness of the Company
to receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Indebtedness of the Company until the
principal, premium, if any, and interest on the Securities shall be paid in
full; and, for the purposes of such subrogation, no payments or distributions to
the holders of the Senior Indebtedness of the Company of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article Thirteen, and no payment over
pursuant to the provisions of this Article Thirteen, to or for the benefit of
the holders of Senior Indebtedness of the Company by Holders of the Securities
or the Trustee, shall, as between the Company, its creditors other than holders
of Senior Indebtedness of the Company, and the Holders of the Securities, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness of the Company. It is understood that the provisions of this
Article Thirteen are, and are intended, solely for the purposes of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of the Senior Indebtedness of the Company, on the other hand.
Nothing contained in this Article Thirteen or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness of the
Company, and the Holders of the Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Securities the
principal of (and premium, if any) and interest (including Additional Amounts
and Additional Interest, if any) on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company other than the holders of the Senior Indebtedness of the Company,
nor shall anything herein or therein prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
Thirteen of the holders of Senior Indebtedness of the Company in respect of
cash, property or securities of the Company received upon the exercise of any
such remedy.
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Upon any payment or distribution of assets of the Company referred
to in this Article Thirteen, the Trustee, subject to the provisions of Section
6.1, and the Holders of the Securities shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Indebtedness of the Company and other Indebtedness of the Company, the amount
thereof or payable thereon and all other facts pertinent thereto or to this
Article Thirteen.
SECTION 13.4. Authorization to Effect Subordination.
Each Holder of a Security by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article Thirteen and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 5.4 hereof at least 30 days before the expiration of the
time to file such claim, the holders of any Senior Indebtedness of the Company
or their Representatives are hereby authorized to file an appropriate claim for
and on behalf of the Holders of the Securities.
SECTION 13.5. Notice to Trustee.
The Company shall give prompt written notice in the form of an
Officers' Certificate to a Responsible Officer of the Trustee and to any Paying
Agent of any fact known to the Company which would prohibit the making of any
payment of monies deposited by the Company to or by the Trustee or any Paying
Agent in respect of the Securities pursuant to the provisions of this Article
Thirteen. Notwithstanding the provisions of this Article Thirteen or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
monies deposited by the Company to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article Thirteen, unless and until
a Responsible Officer of the Trustee shall have received written notice thereof
at the Corporate Trust Office from the Company (in the form of an Officers'
Certificate) or a Representative of Senior Indebtedness or of a holder or
holders of Senior Indebtedness of the Company or from any trustee thereof; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 6.1, shall be entitled in all respects to assume that no
such facts exist; provided that if on a date not fewer than two Business Days
prior to the date upon which by the terms hereof any such monies may become
payable for any purpose (including, without limitation, the payment of the
principal of, or premium, if any, or interest on any Security) the Trustee shall
not have received, with respect to such monies, the notice provided for in this
Section 13.5, then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such monies deposited
by the Company and to apply the same to the purpose for which they were
received,
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and shall not be affected by any notice to the contrary which may be received by
it on or after such prior date.
Notwithstanding anything in this Article Thirteen to the contrary,
nothing shall prevent any payment by the Trustee to the Holders of monies
deposited with it pursuant to Section 4.1, and any such payment shall not be
subject to the provisions of Section 13.1 or 13.2.
The Trustee, subject to the provisions of Section 6.1, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a Person representing himself to be a holder of Senior Indebtedness of the
Company (or a trustee on behalf of such holder) to establish that such notice
has been given by a Representative or a holder of Senior Indebtedness of the
Company or a trustee on behalf of any such holder or holders. In the event that
the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness of the
Company to participate in any payment or distribution pursuant to this Article
Thirteen, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
of the Company held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article Thirteen, and if such evidence is
not furnished the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 13.6. Trustee's Relation to Senior Indebtedness of the
Company.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Thirteen in respect of any Senior Indebtedness
of the Company at any time held by it, to the same extent as any other holder of
Senior Indebtedness of the Company, and nothing in this Indenture shall deprive
the Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Thirteen, and no
implied covenants or obligations with respect to the holders of Senior
Indebtedness of the Company shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company and, subject to the provisions of
Section 6.1, the Trustee shall not be liable to any holder of Senior
Indebtedness of the Company if it shall pay over or deliver to Holders of
Securities, the Company or any other Person money or assets to which any holder
of Senior Indebtedness of the Company shall be entitled by virtue of this
Article Thirteen or otherwise.
SECTION 13.7. No Impairment of Subordination.
No right of any present or future holder of any Senior Indebtedness
of the Company to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms,
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provisions and covenants of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with.
SECTION 13.8. Article Applicable to Paying Agents.
If at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall (unless the context otherwise requires) be
construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee; provided, however, that the
first paragraph of Section 13.5 shall not apply to the Company or any Affiliate
of the Company if it or such Affiliate acts as Paying Agent.
SECTION 13.9. Senior Indebtedness of the Company Entitled to
Rely.
The holders of Senior Indebtedness of the Company (including,
without limitation, Designated Senior Indebtedness) shall have the right to rely
upon this Article Thirteen, and no amendment or modification of the provisions
contained herein shall diminish the rights of such holders unless such holders
shall have agreed in writing thereto and such holders may enforce such
provisions.
SECTION 13.10. Certain Conversions Deemed Payment.
For the purposes of this Article Thirteen only, (1) the issuance and
delivery of junior securities upon conversion of Securities in accordance with
Article Twelve shall not be deemed to constitute a payment or distribution on
account of the principal of (or premium, if any) or interest on Securities or on
account of the purchase or other acquisition of Securities, and (2) the payment,
issuance or delivery of cash (except in satisfaction of fractional shares
pursuant to Section 12.2), property or securities (other than junior securities)
upon conversion of a Security shall be deemed to constitute payment on account
of the principal of such Security. For the purposes of this Section 13.10, the
term "junior securities" means (a) shares of any stock of any class of the
Company (including, without limitation, the Common Stock of the Company), or (b)
securities of the Company which are subordinated in right of payment to all
Senior Indebtedness of the Company which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Securities are so subordinated as provided in this
Article. Nothing contained in this Article Thirteen or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Indebtedness of the Company
and the Holders, the right, which is absolute and unconditional, of the Holder
of any Security to convert such Security in accordance with Article Twelve.
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ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION
OF THE HOLDER UPON A FUNDAMENTAL CHANGE
SECTION 14.1. Right to Require Repurchase.
In the event that a Fundamental Change (as hereinafter defined)
shall occur, then each Holder shall have the right, at the Holder's option, to
require the Company to repurchase, and upon the exercise of such right the
Company shall repurchase, all of such Holder's Securities, or any portion of the
principal amount thereof that is equal to U.S.$1,000 or any integral multiple
thereof (provided that no single Security may be repurchased in part unless the
portion of the principal amount of such Security to be Outstanding after such
repurchase is equal to U.S.$1,000 or integral multiples of U.S.$1,000 in excess
thereof), on the date (the "Repurchase Date") that is 45 days after the date of
the Company Notice (as defined in Section 14.2) at the following prices
(expressed as percentages of the principal amount thereof) (the "Repurchase
Price") in the event of a Fundamental Change occurring during the 12-month
period beginning October 1 (September 17 in the case of the first period):
<TABLE>
<CAPTION>
Year Repurchase Price
---- ----------------
<S> <C>
1997 102%
1998 102
1999 102
2000 102
2001 101
</TABLE>
and 100% on October 1, 2002; together in each case, with accrued interest to,
but excluding the Repurchase Date; provided that if the Applicable Price with
respect to the Fundamental Change is less than the Reference Market Price, the
Company shall repurchase such Securities at a price equal to the foregoing
Repurchase Price multiplied by the fraction obtained by dividing the Applicable
Price by the Reference Market Price; and provided, further, that installments of
interest on Securities whose Stated Maturity is on or prior to the Repurchase
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the Regular Record Date according
to their terms and the provisions of Section 3.7. Such right to require the
repurchase of the Securities shall not continue after a discharge of the Company
from its obligations with respect to the Securities in accordance with Article
Four, unless a Fundamental Change shall have occurred prior to such discharge.
Whenever in this Indenture (including Sections 2.2, 3.1, 5.1(1) and 5.8) there
is a reference, in any context, to the principal of any Security as of any time,
such reference shall be deemed to include reference to the Repurchase Price
payable in respect of such Security to the extent that such Repurchase Price is,
was or would be so payable at such time, and express mention of the Repurchase
Price in any provision of this Indenture shall not be construed as excluding the
Repurchase Price in those provisions of this Indenture when such express mention
is not made.
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SECTION 14.2. Notices; Method of Exercising Repurchase Right, Etc.
(a) Unless the Company shall have theretofore called for redemption
of all of the Outstanding Securities, on or before the 30th day after the
occurrence of a Fundamental Change, the Company or, at the request and expense
of the Company, the Trustee, shall give to all Holders of Securities, in the
manner provided in Section 1.6, notice (the "Company Notice") of the occurrence
of the Fundamental Change and of the repurchase right set forth herein arising
as a result thereof. The Company shall also deliver a copy of such Company
Notice to the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price,
(4) a description of the procedure which a Holder must follow
to exercise a repurchase right, and the place or places where such
Securities are to be surrendered for payment of the Repurchase Price and
accrued interest, if any,
(5) that on the Repurchase Date the Repurchase Price, and
accrued interest, if any, will become due and payable upon each such
Security designated by the Holder to be repurchased, and that interest
thereon shall cease to accrue on and after said date, and
(6) the Conversion Price then in effect, the date on which the
right to convert the principal amount of the Securities to be repurchased
will terminate and the place or places where such Securities may be
surrendered for conversion.
So long as the Securities are listed on the Luxembourg Stock
Exchange and the Luxembourg Stock Exchange shall so require, on or before the
30th day after the occurrence of a Fundamental Change, the Company or, at the
request of the Company, the Paying Agent in Luxembourg, will provide notice of
such Fundamental Change by publishing such notice in an Authorized Newspaper in
Luxembourg, or, if not practicable in Luxembourg, elsewhere in a Western
European city. No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this
Article are inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall deliver to the
Trustee or any Paying Agent on or before the 30th day after the date of the
Company Notice (i) written notice of the Holder's exercise of such right, which
notice shall set forth the name of the Holder, the principal amount of the
Securities to be repurchased (and, if any Security is to be repurchased in
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part, the serial number thereof, the portion of the principal amount thereof to
be repurchased and the name of the Person in which the portion thereof to remain
Outstanding after such repurchase is to be registered) and a statement that an
election to exercise the repurchase right is being made thereby, and (ii) the
Securities with respect to which the repurchase right is being exercised. Such
written notice shall be irrevocable, except that the right of the Holder to
convert the Securities with respect to which the repurchase right is being
exercised shall continue until the close of business on the Business Day prior
to the Repurchase Date.
(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
or the Paying Agent the Repurchase Price in cash, as provided above, for payment
to the Holder on the Repurchase Date together with accrued and unpaid interest
to, but excluding, the Repurchase Date payable with respect to the Securities as
to which their purchase right has been exercised; provided, however, that
installments of interest that mature on or prior to the Repurchase Date shall be
payable in cash, in the case of Securities, to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Regular Record Date.
(d) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such
Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the rate of 5% per annum, and each Security shall remain convertible into Common
Stock until the principal of such Security (or portion thereof, as the case may
be) shall have been paid or duly provided for.
(e) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.
(f) All securities delivered for repurchase shall be delivered to
the Trustee, the Paying Agent or any other agents (as shall be set forth in the
Company Notice) to be canceled by or at the direction of the Trustee, which
shall dispose of the same as provided in Section 3.9.
SECTION 14.3. Merger, Consolidation, Etc.
In the case of any merger, consolidation, sale or transfer of all or
substantially all of the assets of the Company to which Section 12.11 applies,
in which the Common Stock of the Company is changed or exchanged as a result
into the right to receive shares of stock and other securities or property or
assets (including cash) which includes Common Stock of the Company or common
stock of another Person that are, or upon issuance will be, traded on a United
States national securities exchange or approved for trading on an established
automated over-the-counter trading market in the United States and such shares
constitute at the time such
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change or exchange becomes effective in excess of 50% of the aggregate fair
market value of such shares of stock and other securities, property and assets
(including cash) (as determined by the Company, which determination shall be
conclusive and binding), then the Company and the Person resulting from such
merger or consolidation or which acquires the properties or assets (including
cash) of the Company, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (which shall comply with the Trust Indenture
Act as in force at the date of execution of such supplemental indenture)
modifying the provisions of this Indenture relating to the right of Holders to
cause the Company to repurchase the Securities following a Fundamental Change,
including, without limitation, the applicable provisions of this Article
Fourteen and the definitions of the Common Stock and Fundamental Change, as
appropriate, and such other related definitions set forth herein, as determined
in good faith by the Company (which determination shall be conclusive and
binding), to make such provisions apply in the event of a subsequent Fundamental
Change to the common stock and the issuer thereof if different from the Company
and the Common Stock of the Company (in lieu of the Company and Common Stock of
the Company).
ARTICLE FIFTEEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 15.1. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after the Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders of Securities as of such Regular Record Date, and
(b) at such other times as the Trustee may reasonably 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 no such list need be furnished so long as
the Trustee is acting as Security Registrar.
SECTION 15.2. Trustee to Furnish Company Names and Addresses of
Holders.
The Trustee will furnish or cause to be furnished to the Company, or
to Company's counsel:
(a) within 10 days from the date of this Indenture, an updated
Security Register,
(b) semi-annually, not more than 15 days after the Regular Record
Date, an updated Security Register, in such form as the Company may reasonably
require, of the names and addresses of the Holders of Securities as of such
Regular Record Date,
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(c) During the preparation, pendency and effectiveness of the shelf
registration statement (as defined in the Registration Rights Agreement)
beginning 30 days after the date of this Indenture and until such time as the
Company is no longer required to maintain the effectiveness of such Shelf
Registration Statement, the Trustee shall provide the Company on the first and
fifteenth date of every month (unless such date is a weekend or holiday, and
then on the preceding Business Day) during such period with an updated copy of
the Security Register detailing the holders of the Securities for the preceding
week, and
(d) at such other times as the Company may reasonably request in
writing, within 30 days after the receipt by the Trustee 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 no such list need be furnished so long as
the Trustee is not acting as Security Registrar.
SECTION 15.3. Preservation of Information.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 15.1, if any, and
the names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it pursuant to
Section 15.1 upon receipt of a new list so furnished.
(b) If and when this Indenture has become qualified under the Trust
Indenture Act, the rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made hereunder.
SECTION 15.4. Reports by Trustee.
(a) If and when this Indenture becomes qualified under the Trust
Indenture Act, the Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) If and when this Indenture becomes qualified under the Trust
Indenture Act, 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 the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
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SECTION 15.5. Reports by Company.
If and when this Indenture becomes qualified under the Trust
Indenture Act, the Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
SECTION 15.6. Reports with Respect to Registration of Securities.
The Company shall provide to the Trustee a form of Selling
Securityholder Questionnaire, within forty-five (45) days of the date of this
Indenture. Within 10 Business Days following the receipt of such Selling
Securityholder Questionnaire, the Trustee shall deliver to each Holder of
Securities at such time a copy of the Selling Securityholder Questionnaire in
the form provided to the Trustee by the Company. Thereafter, and until such time
as the Company is no longer required to maintain the effectiveness of the Shelf
Registration Statement (as defined in the Registration Rights Agreement), the
Trustee shall deliver, upon request of any Holder of Securities, a Selling
Securityholder Questionnaire in the form provided to the Trustee by the Company.
* * *
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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 instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
ORBITAL SCIENCES CORPORATION
By: /s /Jeffrey V. Pirone
Name:
Title: Senior Vice President
DEUTSCHE BANK AG, NEW YORK BRANCH
By: /s/ George H. Gregor
Name:
Title: Vice President
By: /s/ Peter C. Olson
Name:
Title: Vice President
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EXHIBIT A
<PAGE> 1
EXHIBIT 10.1
CONFORMED COPY
$100,000,000
SECOND AMENDED AND RESTATED
CREDIT AND REIMBURSEMENT AGREEMENT
dated as of
August 5, 1997
among
Orbital Sciences Corporation
and Magellan Corporation,
as Borrowers and Guarantors
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Administrative Agent and as Collateral Agent
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS
SECTION 1.01. Definitions........................................... 2
SECTION 1.02. Accounting Terms and Determinations................... 27
SECTION 1.03. Classes and Types of Loans and Borrowings............. 27
ARTICLE 2 THE CREDITS
SECTION 2.01. Commitments to Lend................................... 28
SECTION 2.02. Method of Borrowing................................... 28
SECTION 2.03. Letters of Credit..................................... 29
SECTION 2.04. Notes................................................. 33
SECTION 2.05. Maturity of Loans; Mandatory Prepayments.............. 34
SECTION 2.06. Interest Rates........................................ 35
SECTION 2.07. Commitment Fees....................................... 37
SECTION 2.08. Participation Fees.................................... 37
SECTION 2.09. Optional Termination of the Revolver Commitments...... 37
SECTION 2.10. Mandatory Termination of Commitments.................. 38
SECTION 2.11. Optional Prepayments.................................. 38
SECTION 2.12. General Provisions as to Payments..................... 38
SECTION 2.13. Funding Losses........................................ 39
SECTION 2.14. Computation of Interest and Fees...................... 39
SECTION 2.15. Deficiencies in the Borrowing Base.................... 39
SECTION 2.16. Withholding Tax Exemption............................. 40
SECTION 2.17. Method of Electing Interest Rates..................... 40
ARTICLE 3 CONDITIONS
SECTION 3.01. Effectiveness......................................... 42
SECTION 3.02. Transitional Provisions............................... 44
SECTION 3.03. All Credit Events..................................... 45
SECTION 3.04. First Borrowing by Each Borrower Subsidiary........... 46
ARTICLE 4REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES
SECTION 4.01. Corporate Existence and Power........................ 47
<PAGE> 3
SECTION 4.02. Corporate and Governmental Authorization No
Contravention............................................... 47
SECTION 4.03. Binding Effect....................................... 47
SECTION 4.04. Lien Enforceable..................................... 47
SECTION 4.05. Assignments Valid.................................... 47
SECTION 4.06. Financial Information................................ 48
SECTION 4.07. Litigation........................................... 48
SECTION 4.08. Compliance with ERISA................................ 49
SECTION 4.09. Environmental Matters................................ 49
SECTION 4.10. Taxes................................................ 49
SECTION 4.11. Subsidiaries......................................... 49
SECTION 4.12. Full Disclosure...................................... 50
ARTICLE 5 COVENANTS
SECTION 5.01. Information.......................................... 50
SECTION 5.02. Payment of Obligations............................... 53
SECTION 5.03. Maintenance of Property; Insurance................... 54
SECTION 5.04. Conduct of Business and Maintenance of Existence..... 56
SECTION 5.05. Compliance with Laws................................. 56
SECTION 5.06. Inspection of Property, Books and Records............ 56
SECTION 5.07. Investments.......................................... 56
SECTION 5.08. Minimum Consolidated Tangible Net Worth.............. 58
SECTION 5.09. Leverage............................................. 58
SECTION 5.10. Consolidated Fixed Charge Ratio...................... 58
SECTION 5.11. Consolidated Loss Ratio.............................. 58
SECTION 5.12. Consolidated Delinquency Ratio....................... 58
SECTION 5.13. Consolidated DSO Ratio............................... 58
SECTION 5.14. Negative Pledge...................................... 58
SECTION 5.15. Consolidations, Mergers and Sales of Assets.......... 60
SECTION 5.16. Use of Proceeds...................................... 60
SECTION 5.17. Subsidiary Debt...................................... 61
SECTION 5.18. Restricted Payments.................................. 61
ARTICLE 6 DEFAULTS
SECTION 6.01. Events of Default.................................... 61
SECTION 6.02. Notice of Default.................................... 64
ARTICLE 7 THE AGENTS
<PAGE> 4
SECTION 7.01. Appointment and Authorization........................ 65
SECTION 7.02. Agents and Affiliates................................ 65
SECTION 7.03. Action by Agents..................................... 65
SECTION 7.04. Consultation with Experts............................ 65
SECTION 7.05. Liability of Agents.................................. 65
SECTION 7.06. Indemnification...................................... 66
SECTION 7.07. Credit Decision...................................... 66
SECTION 7.08. Successor Agents..................................... 66
ARTICLE 8 CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair........................................ 67
SECTION 8.02. Illegality........................................... 67
SECTION 8.03. Increased Cost and Reduced Return.................... 68
SECTION 8.04. Base Rate Loans Substituted for Affected
Euro-Dollar Loans 70
ARTICLE 9 GUARANTY
SECTION 9.01. The Guaranty......................................... 70
SECTION 9.02. Guaranty Unconditional............................... 70
SECTION 9.03. Discharge Only upon Payment in Full; Reinstatement... 71
SECTION 9.04. Waiver by the Guarantor.............................. 72
SECTION 9.05. Limit of Liability................................... 72
SECTION 9.06. Subrogation.......................................... 72
SECTION 9.07. Stay of Acceleration................................. 72
ARTICLE 10 MISCELLANEOUS
SECTION 10.01. Notices............................................. 72
SECTION 10.02. No Waiver........................................... 73
SECTION 10.03. Expenses; Documentary Taxes; Indemnification........ 73
SECTION 10.04. Sharing of Set-Offs................................. 74
SECTION 10.05. Amendments and Waivers.............................. 74
SECTION 10.06. Successors and Assigns.............................. 75
SECTION 10.07. Collateral.......................................... 76
SECTION 10.08. Proprietary Information............................. 76
SECTION 10.09. Governing Law; Submission to Jurisdiction........... 77
SECTION 10.10. Counterparts; Integration........................... 77
SECTION 10.11. Severability........................................ 77
SECTION 10.12. Termination of Bridge Agreement..................... 77
<PAGE> 5
SECTION 10.13. WAIVER OF JURY TRIAL................................ 78
PRICING SCHEDULE
SCHEDULE I - Investment Policies of The Company
SCHEDULE II - Liens Existing on and as of the Effective Date
SCHEDULE III - MDA Investments
EXHIBIT A - Note
EXHIBIT B - Opinion of Hogan & Hartson LLP, Special Counsel
for the Borrowers
EXHIBIT C - Opinion of Davis Polk & Wardwell, Special Counsel for the
Administrative Agent and the Collateral Agent
EXHIBIT D - Form of Subsidiary Security Agreement
EXHIBIT E - [Intentionally Omitted]
EXHIBIT F - Form of Assignment and Assumption Agreement
EXHIBIT G-1 - Government Contracts
EXHIBIT G-2 - Form of Assignment
EXHIBIT G-3 - Form of Notice of Assignment
EXHIBIT H - Commercial Contractors
EXHIBIT I - Company Security Agreement
EXHIBIT J - Form of Election to Participate
EXHIBIT K - Form of Election to Terminate
EXHIBIT L - Form of Opinion of counsel for each Borrower Subsidiary
<PAGE> 6
SECOND AMENDED AND RESTATED
CREDIT AND REIMBURSEMENT AGREEMENT
AGREEMENT dated as of August 5, 1997 among ORBITAL SCIENCES CORPORATION
and MAGELLAN CORPORATION, as Borrowers and Guarantors, the BANKS listed on the
signature pages hereof and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Administrative Agent and as Collateral Agent.
W I T N E S S E T H :
WHEREAS, Orbital Sciences Corporation, a Delaware corporation (together
with its successors, the "COMPANY") as Borrower, the banks party thereto (the
"BANKS"), Morgan Guaranty Trust Company of New York, as Administrative Agent
(the "ADMINISTRATIVE AGENT") and J.P. Morgan Delaware, as Collateral Agent (the
"COLLATERAL AGENT"), are parties to an Amended and Restated Credit and
Reimbursement Agreement dated as of September 27, 1994 (as amended prior to the
Effective Date (as defined below), the "ORIGINAL CREDIT AGREEMENT"); and
WHEREAS, pursuant to a Security Agreement dated as of June 30, 1992
between the Company and the Collateral Agent (as amended from time to time, the
"COMPANY SECURITY Agreement"), the obligations of the Company under the
Financing Documents (as defined in the Original Credit Agreement) are secured by
Liens (as so defined) on the Collateral (as so defined); and
WHEREAS, Fairchild Space and Defense Corporation, a Delaware
corporation, has been merged with and into the Company; and
WHEREAS, the Borrower Subsidiaries (as defined below) are each a
Wholly-Owned Subsidiary (as so defined) of the Company; and
WHEREAS, the Company and the Banks wish to restructure the Financing
Documents by, among other things, adding Magellan as a "Borrower" and
"Guarantor" thereunder, changing the interest rate applicable to the loans
outstanding or to be made thereunder and amending the definition of Borrowing
Base contained therein;
NOW, THEREFORE, the parties hereto hereby agree that, on and as of the
Effective Date, the Original Credit Agreement is hereby amended and restated in
its entirety as follows:
ARTICLE 1
<PAGE> 7
DEFINITIONS
SECTION 1.1 The following terms, as used herein, have the following
meanings:
"ADJUSTED LONDON INTERBANK OFFERED RATE" has the meaning set forth in
Section 2.06(b).
"ADMINISTRATIVE AGENT" means Morgan Guaranty Trust Company of New York
in its capacity as administrative agent for the Banks hereunder, and its
successors in such capacity.
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Company) duly
completed by such Bank.
"AFFILIATE" means, with respect to any Person (i) any Person that
directly, or indirectly through one or more intermediaries, controls such Person
(a "CONTROLLING PERSON") or (ii) any Person (other than a Subsidiary of such
Person) which is controlled by or is under common control with a Controlling
Person. As used herein, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"AGENT" means the Administrative Agent or the Collateral Agent, as the
context may require, and "AGENTS" means both of them.
"AGGREGATE LC AMOUNT" has the meaning set forth in Section 6.01.
"AGREEMENT" means the Original Credit Agreement as amended and restated
by the Second Amended Credit Agreement and as the same may be further amended or
restated from time to time in accordance with the terms hereof.
"APPLICABLE LENDING OFFICE" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office and (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"ASSET SALE" means any sale, lease (as lessor) or other disposition
(including any such transaction effected by way of merger or consolidation or
any sale-leaseback transaction) by the Company or any of its Subsidiaries of any
asset, but excluding (i) dispositions of inventory, cash, cash equivalents and
other cash management investments and obsolete, unused or unnecessary equipment
and undeveloped real estate, in each case in the ordinary course of business and
(ii) dispositions to the Company or any Subsidiary.
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<PAGE> 8
"ASSIGNEE" has the meaning set forth in Section 10.06(c).
"ASSIGNMENT OF CLAIMS ACT" means the Assignment of Claims Act of 1940,
as amended, or any successor statute.
"AVAILABLE LC AMOUNT" means, on any date, with respect to each
Borrower, an amount equal to the lesser of (i) the excess (if any) of
$15,000,000 over the aggregate Letter of Credit Liabilities of all other
Borrowers on such date and (ii) the excess (if any) of such Borrower's Borrowing
Base over the aggregate outstanding principal amount of Revolver Loans to such
Borrower on such date.
"BANK" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 10.06(c), and their respective
successors.
"BASE RATE" means, for any day, a rate per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal
Funds Rate for such day.
"BASE RATE LOAN" means a Loan which bears interest at the Base Rate
plus the Base Rate Margin pursuant to the applicable Notice of Borrowing or
Notice of Interest Rate Election or the provisions of Article 8.
"BASE RATE MARGIN" means a rate per annum determined daily in
accordance with the Pricing Schedule.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA that is not a Plan or a Multiemployer Plan
and that is maintained or otherwise contributed to by any member of the ERISA
Group.
"BORROWER LC AMOUNT" has the meaning set forth in Section 6.01.
"BORROWERS" means the Company and each of the Borrower Subsidiaries,
and "BORROWER" means any one of them.
"BORROWER SUBSIDIARIES" means Magellan or any Wholly-Owned Subsidiary
of the Company as to which an Election to Participate shall have been delivered
to the Administrative Agent and as to which an Election to Terminate shall not
have been delivered to the Administrative Agent. Each such Election to
Participate and Election to Terminate shall be duly executed on behalf of such
Wholly-Owned Subsidiary and the Company in such number of copies as the
Administrative Agent may request. The delivery of an Election to Terminate shall
not affect any obligation of a Borrower Subsidiary theretofore incurred. The
Administrative Agent shall promptly give notice to the Banks of the receipt of
any Election to Participate or Election to Terminate.
3
<PAGE> 9
"BORROWING BASE" means, with respect to each Borrower, as of the date
of the most recent Borrowing Base Certificate delivered to the Collateral Agent
by or on behalf of such Borrower, an amount equal to the sum of (i) 90% of the
outstanding balance of Eligible DD250 Government Receivables; (ii) 90% of the
outstanding balance of Eligible Milestone Government Receivables; (iii) 60% of
the sum of Eligible Retained Government Receivables; (iv) 85% of the outstanding
balance of Other Eligible Government Receivables; (v) 60% of the sum of Eligible
Non-Billed Government Receivables, (vi) 90% of the outstanding balance of
Eligible State Commercial Receivables, (vii) 85% of the outstanding balance of
Eligible Commercial Receivables and (viii) 45% of the amount of Eligible
Non-Billed Commercial Receivables; provided that the sum of the amounts in
clauses (iii), (v) and (viii) above for all Borrowers shall not exceed 40% of
the sum of the Borrowing Bases of all Borrowers; and provided further that (A)
with respect to the Company, at least 90% of the aggregate amount of the portion
of Eligible Receivables included in its Borrowing Base pursuant to clauses (i),
(ii), or (iv) and the portion of the payment obligation included in the
Borrowing Base pursuant to clauses (iii) or (v) above must be created pursuant
to an Eligible Assigned Government Contract and (B) solely with respect to any
Borrower Subsidiary, (1) as of any date after two months after the first date on
which such Borrower becomes a Borrower Subsidiary hereunder, at least 80% of the
aggregate amount of the portion of Eligible Receivables included in its
Borrowing Base pursuant to clauses (i), (ii), or (iv) and the portion of the
payment obligation included in its Borrowing Base pursuant to clauses (iii) or
(v) above must be created pursuant to an Eligible Assigned Government Contract
and (2) as of any date after four months after the first date on which such
Borrower becomes a Borrower Subsidiary hereunder, at least 90% of aggregate
amount of the portion of Eligible Receivables included in its Borrowing Base
pursuant to clauses (i), (ii), or (iv) and the portion of the payment obligation
included in its Borrowing Base pursuant to clauses (iii) or (v) above must be
created pursuant to an Eligible Assigned Government Contract .
"BORROWING BASE CERTIFICATE" means a certificate of a Borrower,
executed by the chief financial officer, treasurer or the controller of the
Company, in a form mutually agreed to by the Company and the Administrative
Agent.
"BRIDGE AGREEMENT" means the Credit Agreement dated as of April 25,
1997 among the Company, the banks party thereto and Morgan Guaranty Trust
Company of New York, as Administrative Agent.
"CLASS" has the meaning set forth in Section 1.03.
"COLLATERAL" means all of the collateral in which a security interest
is granted to the Collateral Agent on behalf of the Banks in the Security
Agreements.
4
<PAGE> 10
"COLLATERAL ACCOUNT" has the meaning set forth in each Security
Agreement.
"COLLATERAL AGENT" means Morgan Guaranty Trust Company of New York (as
successor by merger to J.P. Morgan Delaware) in its capacity as collateral agent
for the Secured Parties hereunder and under each Security Agreement and its
successors in such capacity.
"COMMITMENT" means a Term Commitment or a Revolver Commitment.
"COMMITMENT FEE RATE" means a rate per annum determined in accordance
with the Pricing Schedule.
"COMPANY" has the meaning set forth in the first WHEREAS clause.
"COMPANY SECURITY AGREEMENT" has the meaning set forth in the second
WHEREAS clause.
"COMPANY'S 1996 FORM 10-K" means the Company's annual report on Form
10-K for the fiscal year ended December 31, 1996, as filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934, as
amended.
"CONSOLIDATED DEBT" means at any date, without duplication, the sum of
(i) the Debt of the Company and its Consolidated Subsidiaries determined on a
consolidated basis plus (ii) the portion of the Debt (other than Excluded
ORBCOMM Debt) of any Person accounted for by the Company on the equity method
properly allocable to the direct or indirect interest of the Company in such
Person, all determined as of such date.
"CONSOLIDATED DELINQUENCY RATIO" means, for any period, the percentage
equivalent of a fraction (i) the numerator of which is the average amount of
Receivables of all the Borrowers as of the last day of each calendar month
during such period that have remained unpaid for more than 60 days from the
original due date specified at the time of the original issuance of the invoice
therefor and (ii) the denominator of which is the average amount of Receivables
of all the Borrowers outstanding as of the last day of each calendar month
during such period.
"CONSOLIDATED DSO RATIO" means, for any period, a fraction (i) the
numerator of which is the average amount of Receivables of all the Borrowers as
of the last day of each calendar month during such period and (ii) the
denominator of which is the average daily revenues of all the Borrowers for the
preceding twelve month period ending on the last day of such period.
5
<PAGE> 11
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum, without
duplication, of (i) interest accrued on all Debt of the Company and its
Consolidated Subsidiaries (other than Debt owing to the Company or a
Consolidated Subsidiary) during such period, whether expensed or capitalized and
(ii) rental expense of the Company and its Consolidated Subsidiaries for such
period under operating leases of real or personal property.
"CONSOLIDATED LEVERAGE RATIO" means on any date the ratio of
Consolidated Debt on such date to Consolidated Tangible Net Worth at the last
day of the fiscal quarter most recently ended.
"CONSOLIDATED LOSS RATIO" means, for any calendar month, the percentage
equivalent of a fraction (i) the numerator of which is the gross credit write
offs of Receivables by all the Borrowers during such month and (ii) the
denominator of which is the amount of Receivables of all the Borrowers
outstanding at the end of such month.
"CONSOLIDATED NET INCOME" means, for any period, the consolidated net
income of the Company and its Consolidated Subsidiaries for such period.
"CONSOLIDATED SUBSIDIARY" means, at any date with respect to any
Person, any Subsidiary or other entity the accounts of which would be
consolidated with those of such Person in its consolidated financial statements
if such statements were prepared as of such date; provided that in no event
shall Orbital Imaging be a "Consolidated Subsidiary" of the Company.
"CONSOLIDATED TANGIBLE NET WORTH" means, at any date, the consolidated
stockholders' equity of the Company and its Consolidated Subsidiaries less their
consolidated Intangible Assets, all determined as of such date. For purposes of
this definition "INTANGIBLE ASSETS" means the amount (to the extent reflected in
determining such consolidated stockholders' equity) of (i) all write-ups (other
than write-ups resulting from foreign currency translations and write-ups of
assets of a going concern business made within twelve months after the
acquisition of such business) subsequent to December 31, 1996 in the book value
of any asset owned by the Company or a Consolidated Subsidiary, and (ii) all
goodwill, patents, trademarks, service marks, trade names, anticipated future
benefit of tax loss carry-forwards not fully reserved, copyrights, organization
or developmental expenses and other intangible assets.
"CONTROLLING PERSON" has the meaning assigned to such term in the
definition of "Affiliate".
"CREDIT EVENT" means the making of a Loan or the issuance of a Letter
of Credit.
6
<PAGE> 12
"DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all obligations of
such Person (whether fixed or contingent) to reimburse any bank or other Person
in respect of amounts paid or payable under a letter of credit or similar
instrument, (vi) all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person (such Debt to have a
principal amount, for purposes of determinations under this Agreement, not
exceeding the greater of (x) the net unencumbered carrying value of such asset
under generally accepted accounting principles and (y) the fair market value of
such asset as of the date the principal amount of such Debt is determined), and
(vii) all Debt of others Guaranteed by such Person; provided that Excluded
ORBCOMM Debt shall not constitute Debt of the Company or any of its Consolidated
Subsidiaries.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"DESIGNATED ELIGIBLE COMMERCIAL CONTRACTOR" means, at any time, any of
The Boeing Company, Lockheed Martin Corporation, Johns Hopkins University,
McDonnell Douglas Corporation. Rockwell International Corporation and TRW, Inc.,
if at such time, such Person is an Eligible Commercial Contractor.
"DESIGNATED INSURANCE POLICIES" has the meaning set forth in Section
5.03(c).
"DESIGNATED STATE" means the government of any State of the United
States of America or of any city located in any such State, and any agency or
instrumentality of the foregoing, so long as the senior unsecured long term debt
of any such government is rated at least AA- by S&P or Aa3 by Moody's.
7
<PAGE> 13
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Company and the Administrative Agent.
"DOMESTIC RECEIVABLE" means any Receivable due from an Obligor that is
both domiciled in the United States of America and (if not a natural person)
organized under the laws of the United States of America or any State thereof.
"EARNINGS AVAILABLE FOR FIXED CHARGES" means, for any period,
Consolidated Net Income for such period (excluding therefrom (i) any
extraordinary items of gain or loss and (ii) any gain or loss of any other
Person accounted for pursuant to the equity method, except in the case of gain
to the extent of cash distributions received from such Person during the
relevant period), plus the aggregate amounts deducted in determining
Consolidated Net Income for such period in respect of (i) interest and rental
expense and (ii) income taxes.
"EFFECTIVE DATE" means the date this Second Amended Credit Agreement
becomes effective in accordance with Section 3.01.
"ELECTION TO PARTICIPATE" means an Election to Participate
substantially in the form of Exhibit J hereto.
"ELECTION TO TERMINATE" means an Election to Terminate substantially in
the form of Exhibit K hereto.
"ELIGIBLE ASSIGNED GOVERNMENT CONTRACT" means an Eligible Government
Contract for which the Government has received and has delivered to the
Collateral Agent an acknowledgment of receipt of a notice of assignment
substantially in the form of Exhibit G-3.
"ELIGIBLE COMMERCIAL CONTRACT" means any contract between a Borrower
and an Eligible Commercial Contractor, which contract does not include a
provision prohibiting assignment of amounts due under such contract that has not
been effectively waived, in writing, by such Eligible Commercial Contractor.
"ELIGIBLE COMMERCIAL CONTRACTOR" means (i) with respect to Receivables
of Magellan or the Pomona operations, any Person and (ii) with respect to all
other Receivables, a Person set forth in Exhibit H or any supplement to Exhibit
H delivered by the Company on behalf of a Borrower to the Collateral Agent;
8
<PAGE> 14
provided that such Person must be approved by the Collateral Agent, acting in
its reasonable discretion, which approval may be revoked by the Collateral
Agent, acting in its reasonable discretion, at any time, and provided further
that the Collateral Agent may, in its reasonable discretion, approve such Person
only with respect to a portion (determined by the Collateral Agent in its
reasonable discretion) of any Eligible Receivable created pursuant to an
Eligible Commercial Contract to which such Person is a party.
"ELIGIBLE COMMERCIAL RECEIVABLE" means, at any date of determination
thereof, any Eligible Receivable created pursuant to an Eligible Commercial
Contract (other than an Eligible Commercial Contract with an Eligible Commercial
Contractor which is a Designated State).
"ELIGIBLE DD250 GOVERNMENT RECEIVABLE" means, as at any date of
determination thereof, any Eligible Receivable created pursuant to an Eligible
Government Contract for which Eligible Receivable the Government has issued a
Form DD250.
"ELIGIBLE GOVERNMENT CONTRACT" means a contract between any Borrower
and the Government, which contract:
(a) is set forth in Exhibit G-1 hereto (or in a supplement to
Exhibit G-1 delivered by the Company on behalf of a Borrower to the
Collateral Agent on behalf of the Banks not less than three (3)
Domestic Business Days prior to any delivery of a Borrowing Base
Certificate in which such contract is sought to be included);
(b) does not include a provision, substantially to the effect
of Federal Acquisition Regulation 52.232-24, prohibiting assignment of
amounts due from the Government under such contract; and
(c) is the subject of an instrument of assignment duly
completed and executed by the Borrower party to such contract
substantially in the form of Exhibit G-2 and a notice of assignment
duly completed and executed by the Collateral Agent, substantially in
the form of Exhibit G-3, in each case and for each such notice,
delivered either (i) to the Government for acknowledgment by the
Government, not less than three (3) Domestic Business Days prior to any
delivery of a Borrowing Base Certificate in which such contract is
sought to be included or (ii) to the Collateral Agent, not less than
three (3) Domestic Business Days prior to any delivery of a Borrowing
Base Certificate in which such contract is sought to be included, to be
held by the Collateral Agent (x) to be delivered to the Borrower, at
the request of the Borrower, for delivery to the Government and
acknowledgment by the Government or (y) so long as a Security Event has
occurred and is continuing, for delivery to the Government and
acknowledgment by the Government at the sole
9
<PAGE> 15
discretion of the Collateral Agent. Each such instrument and each such
notice shall contain such modifications as the Collateral Agent shall
reasonably determine to be necessary or advisable in order to comply
with any law applicable to transactions with the related Obligor.
"ELIGIBLE MILESTONE GOVERNMENT RECEIVABLE" means, at any date of
determination thereof, any Eligible Receivable created pursuant to an Eligible
Government Contract for which Eligible Receivable the Government has issued a
written acknowledgment of its obligations regarding payment thereof (other than
a Form DD250).
"ELIGIBLE NON-BILLED COMMERCIAL RECEIVABLES" means, at any date of
determination thereof, any unpaid portion of an obligation which but for the
fact that it has not yet been invoiced and that a portion of the goods to be
delivered, services to be rendered or other contractual milestone to be achieved
by the Borrower to give rise to such obligation has not yet been delivered,
rendered or achieved, as the case may be, would be an Eligible Commercial
Receivable; provided that any such obligation shall be invoiced and all such
goods shall be delivered, all such services shall be rendered or all such other
contractual milestones shall be achieved, as the case may be, by the Borrower
within ninety (90) days of the inclusion of such obligation within the Borrowing
Base; provided further that any such obligation shall not be an Eligible
Non-Billed Commercial Receivable if, at the relevant date of determination, (i)
(A) the Obligor of such obligation is an Eligible Commercial Contractor (other
than any Designated Eligible Commercial Contractor or ORBCOMM Global (if at the
relevant date of determination ORBCOMM Global is an Eligible Commercial
Contractor)) and the aggregate amount of all such obligations the Obligor of
which is such Eligible Commercial Contractor at such date exceeds 5% of the
aggregate amount of all Non-Billed Receivables at such date, (B) the Obligor of
such obligation is a Designated Eligible Commercial Contractor and the aggregate
amount all such obligations the Obligor of which is such Designated Commercial
Contractor at such date exceeds 15% of the aggregate amount of all Non-Billed
Receivables at such date or (C) (x) ORBCOMM Global is an Eligible Commercial
Contractor on such date and (y) the Obligor of such obligation is ORBCOMM Global
and the aggregate amount of all such obligations the Obligor of which is ORBCOMM
Global (or portion thereof with respect to which ORBCOMM Global constitutes an
Eligible Commercial Contractor) exceeds 7.5% of the aggregate amount of all
Non-Billed Receivables at such date and (ii) the Required Banks have not
specifically consented to the inclusion of such obligation as an Eligible
Non-Billed Commercial Receivable.
"ELIGIBLE NON-BILLED GOVERNMENT RECEIVABLES" means, at any date of
determination thereof, any unpaid portion of an obligation which but for the
fact that it has not yet been invoiced and that a portion of the goods to be
delivered, services to be rendered or other contractual milestone to be achieved
by the
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Borrower to give rise to such obligation has not yet been delivered, rendered or
achieved, as the case may be, would be an Eligible DD250 Government Receivable,
an Eligible Milestone Government Receivable or an Other Eligible Government
Receivable; provided that any such obligation shall be invoiced and all such
goods shall be delivered, all such services shall be rendered or all such other
contractual milestones shall be achieved, as the case may be, by the Borrower
within ninety (90) days of the inclusion of such obligation within the Borrowing
Base.
"ELIGIBLE RECEIVABLE" means, at any date of determination thereof, any
Receivable that arises under an Eligible Government Contract or an Eligible
Commercial Contract and as to which the Obligor is the Government or an Eligible
Commercial Contractor, other than the following:
(a) any Receivable for which all necessary government
funding has not been appropriated at the time such Receivable
is invoiced;
(b) any Domestic Receivable that is not invoiced and
payable by the Obligor in United States dollars;
(c) any Foreign Receivable unless (i) such Receivable
is invoiced to and payable from an office of the Obligor with
respect thereto located within the United States of America
and is invoiced and payable in United States dollars or (ii)
the payment in full of such Foreign Receivable by its Obligor
is backed by (x) one or more letters of credit issued by a
bank whose senior unsecured long term debt is rated at least A
by S&P or A2 by Moody's and such letters of credit are subject
to a perfected first priority Lien in favor of the Collateral
Agent for the benefit of the Secured Parties or (y) other
forms of credit enhancement satisfactory to the Collateral
Agent as to which security arrangements satisfactory to the
Collateral Agent have been made;
(d) any Receivable that does not comply with all
applicable legal requirements, including, without limitation,
all laws, rules, regulations and orders of any governmental or
judicial authority;
(e) any Receivable in respect of which there is any
unresolved known dispute with the Obligor but only to the
extent of such dispute;
(f) any Receivable whose original due date is more
than 90 days after the later of (i) the date of the original
issuance of the invoice therefor and (ii) the date of the
determination of the eligibility thereof;
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(g) any Receivable as to which the Obligor is an
Eligible Commercial Contractor that remains unpaid for more
than 60 days from the original due date specified at the time
of the original issuance of the invoice therefor;
(h) any Receivable as to which the Obligor is the
Government that remains unpaid for more than 90 days from the
original due date specified at the time of the original
issuance of the invoice therefor;
(i) any Receivable arising outside the ordinary
course of business of the Borrower (including any Receivable
not generated in accordance with the Borrower's normal credit
policies and procedures);
(j) any Receivable the Obligor of which is any
Eligible Commercial Contractor (other than any Designated
Eligible Commercial Contractor or ORBCOMM Global (if at the
relevant date of determination ORBCOMM Global is an Eligible
Commercial Contractor)) to the extent the aggregate amount of
all Receivables of all Borrowers the Obligor of which is such
Eligible Commercial Contractor at such date exceeds 5% of the
aggregate amount of all Receivables at such date, unless the
Required Banks shall have specifically consented to the
inclusion of such Receivable as an Eligible Receivable;
(k) any Receivable the Obligor of which is any
Designated Eligible Commercial Contractor to the extent the
aggregate amount of all Receivables of all Borrowers the
Obligor of which is such Designated Eligible Commercial
Contractor at such date exceeds 15% of the aggregate amount of
all Receivables at such date, unless the Required Banks shall
have specifically consented to the inclusion of such
Receivable as an Eligible Receivable;
(l) if at the relevant date of determination ORBCOMM
Global is an Eligible Commercial Contractor, any Receivable
the Obligor of which is ORBCOMM Global to the extent the
aggregate amount of all Receivables the Obligor of which is
ORBCOMM Global at such date (or portion thereof with respect
to which ORBCOMM Global constitutes an Eligible Commercial
Contractor) exceeds 7.5% of the aggregate amount of all
Receivables at such date, unless the Required Banks shall have
specifically consented to the inclusion of such Receivable as
an Eligible Receivable;
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(m) any Receivable evidenced by an "instrument" (as
defined in the UCC) not in the possession of the Collateral
Agent;
(n) any Receivable that is payable by the Obligor
more than 90 days after the Termination Date;
(o) any Receivable that is not an "account" as
defined in the UCC;
(p) any Receivable as to which the Borrower does not
have good title, free and clear of all Liens other than
Permitted Liens;
(q) any Receivable that is not at all times the legal
and valid payment obligation of the Obligor thereon,
enforceable against such Obligor in accordance with its terms,
subject to the effect of any applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally;
(r) any Receivable which is subject to any asserted
offset, counterclaim or other defense but only to the extent
of such asserted offset, counterclaim or other defense; and
(s) any Receivable from an Obligor that to the
Borrower's knowledge is the subject of a bankruptcy,
insolvency or similar proceeding.
A Receivable which is an Eligible Receivable, but which subsequently
fails to meet any of the foregoing requirements shall immediately cease to be an
Eligible Receivable.
"ELIGIBLE RETAINED GOVERNMENT RECEIVABLE" means, at any date of
determination thereof, any unpaid portion of an obligation that but for the fact
that it has not yet been invoiced by the Borrower would be an Eligible DD250
Government Receivable, an Eligible Milestone Government Receivable or an Other
Eligible Government Receivable (it being understood that all goods to be
delivered, services to be rendered or other contractual milestone to be achieved
by the Borrower to give rise to such obligation have been delivered, rendered or
achieved, as the case may be); provided that any such obligation shall be
invoiced by the Borrower within ninety (90) days of its inclusion within the
Borrowing Base.
"ELIGIBLE STATE COMMERCIAL RECEIVABLE" means, at any date of
determination thereof, any Eligible Receivable created pursuant to an Eligible
Commercial Contract with an Eligible Commercial Contractor which is a Designated
State.
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"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA GROUP" means the Company, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Company, or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office, branch
or Affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or Affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Company and the Administrative Agent.
"EURO-DOLLAR LOAN" means a Loan which bears interest at a Euro-Dollar
Rate plus the Euro-Dollar Margin pursuant to the applicable Notice of Borrowing
or Notice of Interest Rate Election.
"EURO-DOLLAR MARGIN" means a rate per annum determined daily in
accordance with the Pricing Schedule.
"EURO-DOLLAR RATE" means a rate of interest determined pursuant to
Section 2.06(b) on the basis of an Adjusted London Interbank Offered Rate.
"EVENTS OF DEFAULT" has the meaning set forth in Section 6.01.
"EXCLUDED ORBCOMM DEBT" means, at any date, (i) any Debt of ORBCOMM
Global which is not Guaranteed by the Borrower or any
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<PAGE> 20
Consolidated Subsidiary (other than OCC and ORBCOMM USA) and (ii) the ORBCOMM
Global Guaranty and any other Guarantee by OCC or ORBCOMM USA of any Debt of
ORBCOMM Global so long as at such date (A) the only assets owned or otherwise
held by OCC are the Federal Communications Commission's licenses and
authorizations to construct, launch and operate 34 satellites for the ORBCOMM
low-earth satellite system and to operate related gateway earth stations and
subscriber communications, as such licenses and authorizations may be amended or
modified, contracts between OCC and the Partnerships related to the construction
or operation of the ORBCOMM low-earth satellite system and OCC's investments in
ORBCOMM Global and ORBCOMM USA, (B) OCC conducts no business activities other
than holding such assets and (C) such Guarantee is non-recourse to, and is not
otherwise supported by the credit of, the Company or any of its Consolidated
Subsidiaries (other than OCC and ORBCOMM USA).
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day; provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Morgan Guaranty Trust Company of New
York on such day on such transactions as determined by the Administrative Agent.
"FINANCING DOCUMENTS" means this Agreement, the Security Agreements and
the Notes, and "FINANCING DOCUMENT" means any one of them.
"FOREIGN RECEIVABLE" means any Receivable that is not a Domestic
Receivable.
"GOVERNMENT" means the federal government of the United States of
America or any agency or instrumentality thereof.
"GROUP OF LOANS" means, at any time, a group of Loans of the same Class
consisting of (i) all such Loans which are Base Rate Loans at such time or (ii)
all Euro-Dollar Loans having the same Interest Period at such time, provided
that, if a Loan of any particular Bank is converted to or made as a Base Rate
Loan pursuant to Article 8, such Loan shall be included in the same Group or
Groups of Loans from time to time as it would have been in if it had not been so
converted or made.
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<PAGE> 21
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part); provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"GUARANTOR" means, with respect to each Borrower, the other Borrowers.
"INSURANCE ACCOUNT" has the meaning set forth in each Security
Agreement.
"INTEREST PERIOD" means, with respect to each Euro-Dollar Loan, the
period commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in an applicable Notice of Interest Rate
Election and ending one, two or three months thereafter as the Borrower may
elect in such notice; provided that:
(a) any Interest Period which would otherwise end on
a day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall,
subject to clause (d) below, end on the last Euro-Dollar
Business Day of a calendar month; and
(c) if any Interest Period with respect to any Term
Euro-Dollar Loan includes a date on which a scheduled payment
of principal of such Term Loan is required to be made under
Section 2.05(b) but does not end on such date, then (i) the
principal amount of each Term Euro-Dollar Loan required to be
repaid on such date shall have an Interest Period ending on
such date and (ii) the
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<PAGE> 22
remainder (if any) of each such Euro-Dollar Term Loan shall
have an Interest Period determined as set forth above; and
(d) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"INVESTMENT" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise.
"LC BANK" means Signet Bank/Virginia in its capacity as LC Bank under
the letter of credit facility described in Section 2.03, and its successors in
such capacity.
"LC EXPOSURE" means, with respect to each Revolver Bank and in respect
of any Borrower, at any one time, an amount equal to such Bank's Revolving
Percentage of the aggregate amount of Letter of Credit Liabilities at such time
in respect of all Letters of Credit issued upon the request of such Borrower.
"LETTER OF CREDIT COMMISSION RATE" means a rate per annum determined in
accordance with the Pricing Schedule.
"LETTER OF CREDIT LIABILITIES" means, on any date and in respect of any
Letter of Credit, the sum, without duplication, of (i) the amount available for
drawing under such Letter of Credit on such date plus (ii) the aggregate amount
outstanding on such date of all Reimbursement Obligations in respect of such
Letter of Credit.
"LETTERS OF CREDIT" has the meaning set forth in Section 2.03(a), and
"LETTER OF Credit" means any one of them.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Company or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"LOAN" means a Base Rate Loan or a Euro-Dollar Loan and "LOANS" means
Base Rate Loans or Euro-Dollar Loans or both.
"MAJOR CASUALTY PROCEEDS" means (i) the aggregate insurance proceeds
received in connection with one or more related events by the Company or any of
its Subsidiaries under any insurance policy maintained by the Company or any of
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<PAGE> 23
its Subsidiaries covering losses with respect to tangible real or personal
property or improvements or losses from business interruption or (ii) any award
or other compensation with respect to any condemnation of property (or any
transfer or disposition of property in lieu of condemnation) received by the
Company or any of its Subsidiaries, if the amount of such aggregate proceeds or
award or other compensation exceeds $5,000,000.
"MAGELLAN" means Magellan Corporation, a Delaware corporation, and its
successors.
"MAGELLAN AGREEMENT" means the Credit Agreement dated as of December 2,
1990 between Magellan and Silicon Valley Bank, as amended to the Effective Date.
"MATERIAL DEBT" means Debt in an aggregate principal amount exceeding
$5,000,000 (other than the Loans and the Reimbursement Obligations) of the
Company and/or one of more of its Subsidiaries arising in one or more related or
unrelated transactions.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $5,000,000.
"MDA" means MacDonald, Dettwiler and Associates Ltd, a Canadian
corporation, and its successors.
"MOODY'S" means Moody's Investors Service, Inc. or any successor to
such corporation's business of rating debt securities.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"NET CASH PROCEEDS" means, with respect to any Prepayment Event, an
amount equal to the cash proceeds received by the Company or any of its
Subsidiaries from or in respect of such Prepayment Event (including any cash
proceeds received as income or as other proceeds of any noncash proceeds of any
Asset Sale), less the sum of (x) any expenses reasonably incurred by such Person
in respect of such Prepayment Event and (y) if such Prepayment Event is an Asset
Sale, (I) the amount of any Debt (including prepayment penalties and interest
breakage fees) secured by a Lien on any asset disposed of in such Asset Sale and
discharged from the proceeds thereof and (II) any taxes actually paid or to be
payable by such Person (as estimated by a senior financial or accounting officer
of
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<PAGE> 24
such Person giving effect to the overall tax position of such Person) in respect
of such Asset Sale.
"NON-BILLED RECEIVABLES" means, at any date of determination thereof,
the sum of (i) the aggregate amount of unpaid portions of obligations which but
for the fact that they have not yet been invoiced and that a portion of the
goods to be delivered, services to be rendered or other contractual milestone to
be achieved by the Borrower to give rise to any such obligation has not yet been
delivered, rendered or achieved, as the case may be, would be an Eligible
Commercial Receivable on such date and (ii) the aggregate amount of unpaid
portions of obligations which but for the fact that they have not yet been
invoiced and that a portion of the goods to be delivered, services to be
rendered or other contractual milestone to be achieved by the Borrower to give
rise to any such obligation has not yet been delivered, rendered or achieved, as
the case may be, would be an Eligible DD250 Government Receivable, an Eligible
Milestone Government Receivable or an Other Eligible Government Receivable on
such date.
"NOTES" means promissory notes of a Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of such Borrower to repay the
Loans made to it, together with any modifications, substitutions, extensions or
renewals of such promissory notes, and "NOTE" means any one of such promissory
notes issued hereunder.
"NOTICE OF BORROWING" has the meaning set forth in Section 2.02.
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section
2.17.
"OBLIGOR" means, with respect to any Receivable, the Person or Persons
obligated to make payments with respect to such Receivable, including any
guarantor thereof.
"OCC" means Orbital Communications Corporation, a Delaware corporation,
and its successors.
"ORBCOMM GLOBAL" means ORBCOMM Global L.P., a Delaware limited
partnership, and its successors.
"ORBCOMM GLOBAL GUARANTY" means the non-recourse guaranty dated August
7, 1996, by Orbital Communications Corporation and ORBCOMM USA of the
$170,000,000 14% Senior Notes Due 2004 issued by ORBCOMM Global and ORBCOMM
Global Capital Corp., contained in the Indenture dated as of August 7, 1996,
issued by ORBCOMM Global and ORBCOMM Global Capital Corp. in favor of Marine
Midland Bank as Trustee, the proceeds of which Notes are to be applied to
develop the ORBCOMM system and the Partners' Contingent
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<PAGE> 25
Commitment Letter from the Company to ORBCOMM Global dated August 7, 1996.
"ORBCOMM USA" means ORBCOMM USA L.P., a Delaware limited partnership,
and its successors.
"ORBITAL IMAGING" means Orbital Imaging Corporation, a Delaware
corporation, and its successors.
"ORIGINAL CREDIT AGREEMENT" has the meaning set forth in the first
WHEREAS clause.
"OTHER ELIGIBLE GOVERNMENT RECEIVABLE" means, as at any date of
determination thereof, any Eligible Receivable created pursuant to an Eligible
Government Contract other than an Eligible DD250 Government Receivable, an
Eligible Milestone Government Receivable, an Eligible Non-Billed Government
Receivable or an Eligible Retained Government Receivable.
"PARENT" means, with respect to any Bank, any Controlling Person of
such Bank.
"PARTNERSHIPS" means ORBCOMM Global, ORBCOMM USA and ORBCOMM
International Partners L.P..
"PARTICIPANT" has the meaning set forth in Section 10.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED LIEN" has the meaning set forth in Section 5.14.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof (including,
without limitation, the Government).
"PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) that is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person that
was at such time a member of the ERISA Group for employees of any Person that
was at such time a member of the ERISA Group.
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"PREPAYMENT EVENT" means (i) the incurrence of any Debt by any Company
or any of its Subsidiaries on any date (other than (A) Debt incurred for the
purpose of financing all or any part of the cost of acquiring any asset,
including, without limitation, Debt of the Company in an amount not to exceed
$5,800,000 for the construction, expansion and purchase of equipment for the
high bay engineering facility located at 21830 Atlantic Blvd., Dulles, VA 20122,
(B) the Loans, (C) any Debt incurred by any of the Partnerships, (D) Debt
incurred by the Company under the working capital credit facility between the
Company and Deutsche Bank AG, dated as of July 8, 1996, as in existence on the
date hereof and (E) Debt incurred by MDA, MacDonald, Dettwiler Technologies
Limited and Earth Observation Sciences Ltd. under their credit facilities with
Royal Bank of Canada, dated as of September 16, 1996 and, other than with
respect to Earth Observation Sciences Ltd., ABN AMRO Bank Canada, dated as of
February 27, 1996, in each case as in existence on the date hereof, (ii) the
issuance of any equity securities by the Company or any of its Subsidiaries on
any date (other than any equity securities issued (A) in connection with stock
option or other employee benefit plans or (B) to the Company or any of its
Subsidiaries), (iii) any Asset Sale consummated on any date in any fiscal year
if (and solely to the extent that) the aggregate Net Cash Proceeds therefrom,
when combined with the aggregate Net Cash Proceeds from all other Asset Sales
consummated on or prior to such date in such fiscal year, exceeds $5,000,000
unless, within 5 Domestic Business Days after receipt by the Company or such
Subsidiary of any Net Cash Proceeds from such Asset Sale, the Company shall have
delivered to the Administrative Agent a certificate (an "ASSET SALE
CERTIFICATE") of the chief financial officer or the treasurer of the Company,
certifying as to (x) the aggregate amount of such Net Cash Proceeds, and (y) the
fact that the Company shall invest such Net Cash Proceeds in itself or in any of
its Subsidiaries within 90 days after receipt thereof, provided that if, on any
date, any fact included in such Asset Sale Certificate and required to be set
forth therein pursuant to clause (y) above shall cease to be true, such Asset
Sale shall be considered a Prepayment Event for purposes of this Agreement on
and as of such date and (iv) receipt of Major Casualty Proceeds, unless, within
5 Domestic Business Days after receipt by the Company or such Subsidiary
thereof, the Company shall have delivered to the Administrative Agent a
certificate (a "MAJOR CASUALTY PROCEEDS CERTIFICATE") of the chief financial
officer or the treasurer of the Company, certifying as to (x) the aggregate
amount of such Major Casualty Proceeds, and (y) the fact that the Company shall
invest such Major Casualty Proceeds to repair or replace affected assets within
90 days after receipt thereof, provided that if, on any date, any fact included
in such Major Casualty Proceeds Certificate and required to set forth therein
pursuant to clause (y) above shall cease to be true, the receipt of such Major
Casualty Proceeds shall be considered a Prepayment Event for purposes of this
Agreement on and as of such date. The description of any transaction as falling
within the above definition does not affect any limitation on such transaction
imposed by Article 5 of this Agreement.
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<PAGE> 27
"PREPAYMENT PERCENTAGE" means, (i) in respect of an incurrence of Debt,
100%, (ii) in respect of the issuance of equity securities not constituting
Debt, 50% and (iii) in respect of Asset Sales or receipt of Major Casualty
Proceeds, 75%.
"PRICING SCHEDULE" means the Schedule attached hereto and identified as
such.
"PRIME RATE" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York from time to time as its Prime Rate.
"QUARTERLY PAYMENT DATE" means each March 31, June 30, September 30 and
December 31.
"RECEIVABLE" means, at any date of determination thereof, the amount of
the unpaid portion of an obligation, as stated in the invoice to a customer of
any Borrower which such Borrower has issued with respect thereto, in respect of
goods delivered, services rendered or the achievement of other contractual
milestones in the ordinary course of business, which amount has been earned by
performance under the terms of the contract between the Borrower and such
customer relating to such goods, services or other contractual milestones, as
the case may be, net of any credits, rebates or offsets owed to the customer.
"REFERENCE BANKS" means the principal London offices of The Bank of
Tokyo, Ltd., The Bank of Nova Scotia and Morgan Guaranty Trust Company of New
York.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT OBLIGATIONS" means at any date, with respect to any
Borrower, the obligations of such Borrower pursuant to Section 2.03 to reimburse
the LC Bank for any amount, outstanding as of such date, paid by the LC Bank in
respect of a drawing under a Letter of Credit issued upon request of such
Borrower.
"REQUIRED BANKS" means at any time Banks having at least 66 2/3% of the
sum of (i) the aggregate amount of the Revolver Commitments or, if the Revolver
Commitments shall have been terminated, having at least 66 2/3% of the aggregate
Revolver Exposures at such time plus (ii) the aggregate outstanding amount of
the Term Loans at such time or, if no Term Loans are then outstanding, the Term
Commitments at such time.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution on
any shares of the Company's capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any payment on account of the purchase,
redemption,
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<PAGE> 28
retirement or acquisition of (a) any shares of the Company's capital stock or
(b) any option, warrant or other right to acquire shares of the Company's
capital stock.
"REVOLVER BANK" means each Bank identified as a Revolver Bank on the
signature pages hereof, each Assignee which becomes a Revolver Bank pursuant to
Section 10.06(c), and their respective successors.
"REVOLVER COMMITMENT" means, (i) with respect to each Revolver Bank
listed on the signature pages hereof, the amount set forth opposite the name of
such Revolver Bank on the signature pages hereof under the heading "Revolver
Commitments" and (ii) with respect to each Assignee that becomes a Revolver Bank
pursuant to Section 10.06(c), the amount of the Revolver Commitment thereby
assumed by it, in each case as such amount may be increased or reduced from time
to time pursuant to Section 10.06(c) or reduced from time to time pursuant to
Section 2.09.
"REVOLVER EXPOSURE" means, with respect to each Revolver Bank and in
respect of any Borrower, at any time, an amount equal to the sum of (i) the
aggregate principal amount of the Revolving Loans of such Revolver Bank to such
Borrower outstanding at such time and (ii) such Revolver Bank's LC Exposure at
such time with respect to such Borrower.
"REVOLVING LOAN" means a loan made by a Revolver Bank pursuant to
Section 2.01(b).
"REVOLVING PERCENTAGE" means, with respect to each Revolver Bank, at
any time, the percentage that such Revolver Bank's Revolver Commitment
constitutes of the aggregate amount of the Revolver Commitments at such time.
"SECOND AMENDED CREDIT AGREEMENT" means this Second Amended and
Restated Credit Agreement dated as of August 5, 1997 among the Borrowers, the
Banks and the Agents.
"SECURED PARTY" has the meaning set forth in any Security Agreement.
"SECURITY AGREEMENTS" means, collectively, the Company Security
Agreement and the Subsidiary Security Agreements, and "SECURITY AGREEMENT" means
any one of them.
"SECURITY EVENT" has the meaning set forth in any of the Security
Agreements.
"S&P" means Standard and Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc., or any successor to its business of rating debt
securities.
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"SUBSIDIARY" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Company (or if such term is used with
reference to any other Person, by such other Person); provided that in no event
shall Orbital Imaging or ORBCOMM USA be a "Subsidiary" of the Company.
"SUBSIDIARY SECURITY AGREEMENTS" means security agreements
substantially in the form of Exhibit D, among each Borrower Subsidiary and the
Collateral Agent, as amended from time to time, and "SUBSIDIARY SECURITY
AGREEMENT" means any one of them.
"TEMPORARY CASH INVESTMENT" means any Investment in (i) direct
obligations of the United States or Canada or any agency thereof, or obligations
guaranteed by the United States or Canada or any agency thereof, (ii) commercial
paper rated at least A-1 by S&P and P-1 by Moody's, (iii) time deposits with,
including certificates of deposit issued by, any office located in the United
States or Canada of any Bank or any bank or trust company which is organized
under the laws of the United States or any state thereof or Canada or any
province thereof, has capital, surplus and undivided profits aggregating at
least $100,000,000 and the unsecured long-term debt of which is rated at least
investment grade by each nationally recognized statistical rating organization
that rates such debt, (iv) money market funds that invest only in securities
described in clause (i), (ii) or (iii) above, (v) Investments made in accordance
with the investment policies set forth on Schedule I, or (vi) repurchase
agreements with respect to securities described in clause (i) above entered into
with an office of a bank or trust company meeting the criteria specified in
clause (iii) above; provided in each case that such Investment matures within
two years from the date of acquisition thereof by the Company or a Subsidiary.
"TERM BANK" means each Bank identified as a Term Bank on the signature
pages hereof, each Assignee which becomes a Term Bank pursuant to Section
10.06(c), and their respective successors.
"TERM COMMITMENT" means, with respect to each Term Bank listed on the
signature pages hereof, the amount set forth opposite the name of such Term Bank
on the signature pages hereof under the heading "Term Commitments".
"TERM LOAN" means a loan made by a Term Bank pursuant to Section
2.01(a).
"TERMINATION DATE" means August 5, 2001, or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time, the
amount (if any) by which (i) the present value of all benefits under such Plan
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<PAGE> 30
exceeds (ii) the fair market value of all Plan assets allocable to such benefits
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"WHOLLY-OWNED SUBSIDIARY" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except (i) directors'
qualifying shares and (ii) solely with respect to Magellan, up to 10,000,000
shares of its common stock which are held or may hereafter be held by employees
of Magellan or the Company and have been or will be acquired pursuant to the
Magellan Corporation 1996 Stock Option Plan) are at the time directly or
indirectly owned by the Company (or if such term is used with reference to any
other Person, by such other Person).
SECTION 1.2. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes in accordance with generally accepted
accounting principles) with the most recent audited consolidated financial
statements of the Company and its Consolidated Subsidiaries delivered to the
Banks provided that, if the Company notifies the Administrative Agent that the
Company wishes to amend any covenant in Article 5 to eliminate the effect of any
change in generally accepted accounting principles on the operation of such
covenant (or if the Administrative Agent notifies the Company that the Required
Banks wish to amend Article 5 for such purpose), then the Company's compliance
with such covenant shall be determined on the basis of generally accepted
accounting principles in effect immediately before the relevant change in
generally accepted accounting principles became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to the
Company and the Required Banks.
SECTION 1.3. Classes and Types of Loans and Borrowings. The term
"Borrowing" denotes the aggregation of Loans of one or more Banks to be made to
a Borrower pursuant to Article 2 on the same date, all of which Loans are of the
same Class and Type (subject to Article 8) and, except in the case of Base Rate
Loans, have the same initial Interest Period. Loans hereunder are distinguished
by "Class" and by "Type". The "Class" of a Loan (or of a Commitment to make such
a Loan or of a Borrowing comprised of such Loans or of a Group of such Loans)
refers to the determination whether such Loan is a Term Loan or a Revolving
Loan, each of which constitutes a Class. The "Type" of a Loan refers to the
determination whether such Loan is a Euro-Dollar Loan or a Base Rate Loan.
Identification of a Loan (or a Borrowing or Group) by both Class and Type
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<PAGE> 31
(e.g., a "Term Euro-Dollar Loan") indicates that such Loan is both a Term Loan
and a Euro-Dollar Loan (or that such Borrowing or Group of Loans is comprised of
such Loans).
ARTICLE 2
THE CREDITS
SECTION 2.1. Commitments to Lend. (a) Term Loans. Each Term Bank
severally agrees, on the terms and conditions set forth in this Agreement, to
make a Term Loan to the Company on the Effective Date in an aggregate principal
amount not to exceed such Term Bank's Term Commitment. The Borrowing pursuant to
this subsection shall be made from the several Term Banks ratably in proportion
to their respective Term Commitments. Loans made pursuant to this subsection are
not revolving in nature and amounts of such loans repaid or prepaid may not be
reborrowed.
(b) Revolving Loans. Each Revolver Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make Revolving Loans to any
Borrower from time to time prior to the Termination Date in amounts such that
the Revolver Exposure of such Revolver Bank at such time shall not exceed the
amount of its Revolver Commitment at such time. Each Borrowing under this
subsection shall be in an aggregate principal amount of $1,000,000 or any larger
multiple thereof (except that any such Borrowing may be in the aggregate amount
available in accordance with Section 3.04(d)) and shall be made from the several
Revolver Banks ratably in proportion to their respective Revolver Commitments.
Within the foregoing limits, the Borrower may borrow under this subsection,
prepay Revolving Loans to the extent permitted by Section 2.10 and reborrow at
any time under this subsection.
SECTION 2.2. Method of Borrowing. (a) The Borrower shall give the
Administrative Agent notice (a "Notice of Borrowing") not later than Noon (New
York City time) on (x) the date of each Base Rate Borrowing and (y) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing; specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) the Type and Class of such Borrowing, and
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<PAGE> 32
(iv) in the case of a Euro-Dollar Borrowing, the duration of
the initial Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
(b) Upon receipt (or deemed receipt) of a Notice of Borrowing, the
Administrative Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such Borrowing and such Notice of Borrowing
shall not thereafter be revocable by the Borrower.
(c) Not later than 1:00 P.M. (New York City time) on the date of each
Borrowing, each Bank shall make available its ratable share of such Borrowing,
in Federal or other immediately available funds, to the Administrative Agent at
its address specified in or pursuant to Section 10.01. Unless the Administrative
Agent determines that any applicable condition specified in Article 3 has not
been satisfied, the Administrative Agent will make the funds so received from
the Banks available to the Borrower at the Administrative Agent's aforesaid
address.
(d) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsection 2.02(c) and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such share available
to the Administrative Agent, such Bank and the Borrower severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, at the Federal Funds Rate. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
SECTION 2.3. Letters of Credit. (a) The LC Bank agrees, subject to the
terms and conditions hereof, to issue sight letters of credit hereunder from
time to time upon the request of any Borrower (such letters of credit issued,
the "LETTERS OF CREDIT"); provided that, immediately after each such Letter of
Credit is issued, the Letter of Credit Liabilities of such Borrower shall not
exceed its Available LC Amount. Each Letter of Credit shall be issued in an
amount equal to or greater than $100,000. Upon the date of issuance by the LC
Bank of a Letter of Credit, the LC Bank shall be deemed, without further action
by any party hereto, to have sold to each Revolver Bank, and each Revolver Bank
shall be deemed, without further action by any party hereto, to have purchased
from the LC Bank, a
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<PAGE> 33
participation in such Letter of Credit and the related Letter of Credit
Liabilities equal to each Revolver Bank's Revolving Percentage. The Borrower
shall pay to the LC Bank issuance fees in the amounts and at the times as agreed
between the Borrower and the LC Bank.
(b) Notice of Issuance. The Borrower shall give the LC Bank at least
three Domestic Business Days' prior notice (effective upon receipt) specifying
the date each Letter of Credit is to be issued, and describing the proposed
terms of such Letter of Credit and the nature of the transactions proposed to be
supported thereby. Upon receipt of such notice the LC Bank shall promptly notify
the Administrative Agent, and the Administrative Agent shall promptly notify
each Revolver Bank, of the contents thereof and of the amount of such Bank's
participation in such proposed Letter of Credit (determined in accordance with
Section 2.03(a)). The issuance by the LC Bank of each Letter of Credit shall, in
addition to the conditions precedent set forth in Article 3, be subject to the
conditions precedent that such Letter of Credit shall be in such form and
contain such terms as shall be reasonably satisfactory to the LC Bank and that
the Borrower shall have executed and delivered such other instruments and
agreements relating to such Letter of Credit as the LC Bank shall have
reasonably requested. No Letter of Credit shall have a term extending beyond the
fifth Domestic Business Day prior to the Termination Date.
(c) Reimbursement of Payments. Upon receipt from the beneficiary of
any Letter of Credit of any demand for payment or other drawing under such
Letter of Credit, the LC Bank shall notify the Administrative Agent and the
Administrative Agent shall promptly notify the Borrower and each other Revolver
Bank as to the amount to be paid as a result of such demand or drawing and the
payment date. If at any time the LC Bank shall make a payment to a beneficiary
of a Letter of Credit in respect of a drawing under such Letter of Credit, each
Revolver Bank will pay to the Administrative Agent, for the account of the LC
Bank, immediately upon the LC Bank's demand at any time during the period
commencing after such payment until reimbursement therefor in full by the
Borrower, an amount equal to such Revolver Bank's Revolving Percentage
multiplied by the amount of such payment, together with interest on such amount
for each day from the date of the LC Bank's demand for such payment (or, if such
demand is made after 3:00 P.M. (New York City time) on such date, from the next
succeeding Domestic Business Day) to the date of payment by such Revolver Bank
of such amount at a rate of interest per annum equal to the Federal Funds Rate
for such period. The LC Bank shall reimburse each Revolver Bank for any such
payments made for a draw honored under the Letter of Credit as a result of the
LC Bank's willful misconduct or gross negligence in honoring a draw which does
not conform to the terms of the Letter of Credit together with interest thereon
at a rate of interest per annum equal to the Federal Funds Rate for each day
from the date on which the Revolver Bank made payment to the LC Bank until the
date the LC Bank repays such amount in full.
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<PAGE> 34
(d) Reimbursement Unconditional. The Borrower shall be irrevocably and
unconditionally obligated forthwith to reimburse the LC Bank for any amounts
paid by the LC Bank upon any drawing under any Letter of Credit on the date of
such payment by the LC Bank, without presentment, demand, protest or other
formalities of any kind; provided that the Borrower shall not hereby be
precluded from asserting any claim for direct (but not consequential) damages
suffered by the Borrower to the extent, but only to the extent, caused by (i)
the willful misconduct or gross negligence of such LC Bank in determining
whether a request presented under any Letter of Credit complied with the terms
of such Letter of Credit or (ii) such Revolver Bank's failure to pay under any
Letter of Credit after the presentation to it of a request strictly complying
with the terms and conditions of the Letter of Credit. All such amounts paid by
the LC Bank and remaining unpaid by the Borrower shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the sum of 2% plus
the rate applicable to Base Rate Loans for such day. The LC Bank will pay to
each Revolver Bank ratably in accordance with its Revolver Commitment all
amounts (including interest) received from the Borrower for application in
payment, in whole or in part, of the Reimbursement Obligation in respect of any
Letter of Credit, but only to the extent such Revolver Bank has made payment to
the LC Bank in respect of such Letter of Credit pursuant to Section 2.03(c).
(e) Indemnification. The Borrower hereby indemnifies and holds
harmless each Revolver Bank and Agent from and against any and all claims and
damages, losses, liabilities, costs or expenses which such Revolver Bank or
Agent may incur by reason of or in connection with the execution and delivery or
transfer of or payment or failure to pay under any Letter of Credit, including,
without limitation, any claims, damages, losses, liabilities, costs or expenses
which the LC Bank may incur by reason of or in connection with the failure of
any other Revolver Bank to fulfill or comply with its obligations to the LC Bank
hereunder (but nothing herein contained shall affect any rights the Borrower may
have against such defaulting Revolver Bank); provided that the Borrower shall
not be required to indemnify any Revolver Bank or Agent for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of such Revolver Bank
or Agent in determining whether a request presented under any Letter of Credit
complied with the terms of such Letter of Credit or (ii) such Revolver Bank's
failure to pay under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of the Letter of
Credit. Nothing in this Section is intended to limit the obligations of the
Borrower under any other provision of this Agreement.
(f) Limited Liability of the LC Bank. The Borrower assumes all risks
of the acts or omissions of any beneficiary and any transferee of any Letter of
Credit with respect to its use of such Letter of Credit. The Revolver Banks, the
LC Bank
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<PAGE> 35
and their respective officers and directors shall not be liable or responsible
for, and the obligations of each Revolver Bank to make payments, and of the
Borrower to reimburse the LC Bank for payments, pursuant to this Section shall
not be excused by, any action or inaction of any Revolver Bank or the LC Bank
related to: (i) the use which may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (ii) the
validity, sufficiency or genuineness of documents presented under any Letter of
Credit, or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, insufficient, fraudulent or forged;
(iii) payment by the LC Bank against presentation of documents to the LC Bank
which do not comply with the terms of any Letter of Credit, including failure of
any documents to bear any reference or adequate reference to such Letter of
Credit; or (iv) any other circumstances whatsoever in making or failing to make
or notifying or failing to notify the LC Bank that it is required to make any
payment under any Letter of Credit. Notwithstanding the foregoing, the Borrower
shall have a claim against the LC Bank and the LC Bank shall be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential, damages suffered by the Borrower which were caused by (i) the LC
Bank's willful misconduct or gross negligence in determining whether documents
presented under any Letter of Credit comply with the terms thereof or (ii) the
LC Bank's willful failure to pay, or to notify any Revolver Bank that it is
required to pay, under any Letter of Credit after the presentation to the LC
Bank by any beneficiary (or a successor beneficiary to whom such Letter of
Credit has been transferred in accordance with its terms) of documents strictly
complying with the terms and conditions of such Letter of Credit. Subject to the
preceding sentence, the LC Bank may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary unless any beneficiary (or a successor
beneficiary to whom such Letter of Credit has been transferred in accordance
with its terms) and the Borrower shall have notified the LC Bank that such
documents do not comply with the terms and conditions of such Letter of Credit.
Each Revolver Bank shall, ratably in accordance with its Revolver Commitment,
indemnify the LC Bank (to the extent not reimbursed by the Borrower) against any
cost, expense (including counsel fees and disbursements), claim, demand, action,
loss or liability (except such as result from the LC Bank's gross negligence or
willful misconduct) that the LC Bank may suffer or incur in connection with this
Agreement or any action taken or omitted by the LC Bank hereunder.
(g) Letter of Credit Commission. The Borrower agrees to pay to the
Administrative Agent for the account of each Revolver Bank, ratably in
proportion to the Revolving Percentage of such Bank, a letter of credit
commission with respect to each Letter of Credit, computed for each day from and
including the date of issuance of such Letter of Credit up to but excluding the
last day a drawing is available under such Letter of Credit, at the Letter of
Credit
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<PAGE> 36
Commission Rate on the undrawn amount of such Letter of Credit on such day. Such
commission shall be payable quarterly in arrears on each Quarterly Payment Date
and on the Termination Date or, if earlier, the date of effectiveness of the
termination of the Revolver Commitments in their entirety.
SECTION 2.4. Notes. (a) The Loans of each Bank to each Borrower shall
be evidenced by a single Note of such Borrower payable to the order of such Bank
for the account of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans to such Borrower.
(b) Each Bank may, by notice to a Borrower and the Administrative
Agent, request that its Loans of a particular Type or Class to such Borrower be
evidenced by a separate Note in an amount equal to the aggregate unpaid
principal amount of such Loans. Each such Note shall be in substantially the
form of Exhibit A hereto with appropriate modifications to reflect the fact that
it evidences solely Loans of the relevant Type or Class. Each reference in this
Agreement to a "Note" or the "Notes" of such Bank shall be deemed to refer to
and include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(c), the
Administrative Agent shall mail such Note to such Bank. Each Bank shall record
the date and amount of each Loan made by it to each Borrower and the date and
amount of each payment of principal made with respect thereto, and prior to any
transfer of its Note of any Borrower, shall endorse on the schedule forming a
part thereof appropriate notations to evidence the foregoing information with
respect to each such Loan to such Borrower then outstanding; provided that the
failure of any Bank to make any such recordation or endorsement shall not affect
the obligations of the Borrowers hereunder or under the Notes or any other
Financing Documents. Each Bank is hereby irrevocably authorized by each Borrower
so to endorse its Note and to attach to and make a part of any Note a
continuation of any such schedule as and when required.
SECTION 2.5. Maturity of Loans; Mandatory Prepayments. (a) Maturity of
Loans. Each Loan of each Class shall mature, and the outstanding principal
amount thereof shall be due and payable (together with accrued interest
thereon), on the Termination Date.
(b) Scheduled Amortization of Term Loans. In addition, the Borrowers
shall repay, and there shall become due and payable, on each date set forth
below, an aggregate principal amount of the Term Loans equal to the amount set
forth below opposite such date (as such amount may be reduced from time to time
pursuant to subsection (d)(ii) and Section 2.11(c)):
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C> <C>
12/31/97 $1,250,000
</TABLE>
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<PAGE> 37
<TABLE>
<S> <C>
3/31/98 $1,250,000
6/30/98 $1,250,000
9/30/98 $1,250,000
12/31/98 $2,000,000
3/31/99 $2,000,000
6/30/99 $2,000,000
9/30/99 $2,000,000
12/31/99 $2,500,000
3/31/00 $2,500,000
6/30/00 $2,500,000
9/30/00 $2,500,000
12/31/00 $3,000,000
3/31/01 $3,000,000
6/30/01 $6,000,000
</TABLE>
(c) Mandatory Prepayments. In addition, in the event that the Company
or any of its Subsidiaries shall receive any Net Cash Proceeds as a result of
any Prepayment Event, the Company shall prepay the Term Loans, on the date upon
which the Company or such Subsidiary, as the case may be, shall have received
such Net Cash Proceeds, in an amount equal to the Prepayment Percentage
applicable to such Net Cash Proceeds; provided that (i) if the Prepayment
Percentage of the Net Cash Proceeds in respect of any Prepayment Event results
in an amount of less than $1,000,000, such prepayment shall be required to be
made on the date on which the Company or any of its Subsidiaries shall receive
Net Cash Proceeds which, together with all other Net Cash Proceeds from
Prepayment Events not previously applied, are equal to at least $1,000,000, (ii)
such prepayment shall be made on or before the fifth (5th) Domestic Business Day
following the consummation of any Asset Sale constituting a Prepayment Event,
(iii) no prepayment shall be required under this Section 2.05(c) unless and
until the aggregate amount of Net Cash Proceeds received by the Company and its
Subsidiaries in respect of Prepayment Events which have occurred after the
Effective Date exceeds $75,000,000, (iv) no prepayments shall be required under
this Section 2.05(c) on any date if and to the extent the aggregate principal
amount of Term Loans outstanding on such date does not exceed $25,000,000 and
(v) at the election of the Borrowers, if the amount of any such prepayment to be
made exceeds the amount of Term Loans then outstanding having an Interest Period
ending on the date of such prepayment, such excess amount shall be deposited in
the Collateral Account under the Company Security Agreement, and such excess
shall not be required to be prepaid until the last day of the Interest Periods
relating to such outstanding Term Loans in an aggregate principal amount equal
to or greater than such excess amount, unless an Event of Default has occurred
and is continuing or the Required Banks otherwise determine in their sole
discretion and so notify the Company. The Borrowers shall give the
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<PAGE> 38
Administrative Agent at least one Domestic Business Day's notice of each
mandatory prepayment of the Terms Loans pursuant to this subsection (c).
(d) Application of Prepayments. (i) Each prepayment of Loans made by
the Borrowers pursuant to this Section shall be applied to such Group or Groups
of Term Loans as the Company may designate in the applicable notice of
prepayment (or, failing such designation, as determined by the Administrative
Agent), and shall be applied to repay ratably the Loans of the several Banks
included in such Group or Groups.
(ii) The amount of any prepayment of the Term Loans made by the
Borrowers pursuant to subsection (c) shall be applied to reduce the amount of
subsequent scheduled repayments of the Term Loans pursuant to subsection (b) in
inverse order of maturity.
SECTION 2.6. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to the sum of
the Base Rate Margin plus the Base Rate, in each case for such day. Such
interest shall be payable quarterly in arrears on each Quarterly Payment Date
and, with respect to the principal amount of any Base Rate Loan converted to a
Euro-Dollar Loan, on the date such amount is so converted. Any overdue principal
of or interest on any Base Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such
day plus the Adjusted London Interbank Offered Rate applicable to such Interest
Period. Such interest shall be payable for each Interest Period on the last day
thereof.
The "ADJUSTED LONDON INTERBANK OFFERED RATE" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next highest 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered to
each of the Reference Banks in the London Interbank market at approximately
11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of
such Interest Period in an amount approximately equal to the principal amount of
the
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<PAGE> 39
Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such Interest
Period is to apply and for a period of time comparable to such Interest Period.
"EURO-DOLLAR RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve system in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a rate
per annum equal to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin for such day plus the Adjusted London Interbank Offered Rate
applicable to such Loan on the day before such payment was due and (ii) the
Euro-Dollar Margin for such day plus the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (x) the average (rounded
upward, if necessary, to the next higher 1/16 of 1%) of the respective rates per
annum at which one day (or, if such amount due remains unpaid more than three
Euro-Dollar Business Days, then for such other period of time not longer than
six months as the Administrative Agent may select) deposits in dollars in an
amount approximately equal to such overdue payment due to each of the
Euro-Dollar Reference Banks are offered to such Euro-Dollar Reference Bank in
the London interbank market for the applicable period determined as provided
above by (y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if the
circumstances described in clause 8.01(a) or 8.01(b) shall exist, at a rate per
annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for
such day).
SECTION 2.7. Commitment Fees. The Company shall pay to the
Administrative Agent for the account of each Revolver Bank a commitment fee at
the Commitment Fee Rate (determined in accordance with the Pricing Schedule) on
the daily amount by which such Revolver Bank's Revolver Commitment exceeds such
Revolver Bank's Revolver Exposure to all Borrowers. Such commitment fee shall
accrue from and including the Effective Date to but excluding the Termination
Date. Such commitment fee shall be payable quarterly in arrears on each
Quarterly Payment Date and on the Termination Date or, if earlier, the date of
effectiveness of the termination of the Revolver Commitments in their entirety.
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SECTION 2.8. Participation Fees. The Company shall pay to the
Administrative Agent on the Effective Date for the account of the Banks a
participation fee in an amount equal to .25% of the aggregate amount of the
Commitments in effect on such date under this Second Amended Credit Agreement,
which participation fee shall be payable to the Banks ratably in proportion to
their respective Commitments.
SECTION 2.9. Optional Termination of the Revolver Commitments. The
Company may, upon at least three Domestic Business Days' notice to the
Administrative Agent, terminate the Revolver Commitments at any time, if no
Revolving Loans and no Letters of Credit are outstanding at such time. If the
Revolver Commitments are so terminated, all accrued commitment fees shall be
payable on the effective date of such termination. Other than as set forth in
the first sentence of this Section, at no time may the Company reduce or
terminate any Commitments.
SECTION 2.10. Mandatory Termination of Commitments. (a) The Term
Commitments shall terminate at the close of business (New York City time) on the
Effective Date.
(b) The Revolver Commitments shall terminate on the Termination Date.
SECTION 2.11. Optional Prepayments. (a) Subject in the case of any
Euro-Dollar Borrowing, to Section 2.13, the Borrower may, upon at least one
Domestic Business Day's notice to the Administrative Agent, prepay any Group of
Base Rate Loans or upon at least three Euro-Dollar Business Days' notice to the
Administrative Agent, prepay any Group of Euro-Dollar Loans, in each case in
whole at any time, or from time to time in part in amounts aggregating
$1,000,000 or any larger multiple thereof by paying the principal amount to be
prepaid together with accrued interest thereon to the date of prepayment. Each
such optional prepayment shall be applied to prepay ratably the Loans of the
several Banks included in such Group of Loans.
(b) Upon receipt of a notice of prepayment pursuant to this Section,
the Administrative Agent shall promptly notify each Bank of the contents thereof
and of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
(c) Each prepayment of the Term Loans made by the Company pursuant to
this Section shall be applied to reduce pro-rata by amount the amount of the
subsequent scheduled repayments of the Term Loans to be made pursuant to Section
2.05(b).
SECTION 2.12. General Provisions as to Payments. (a) The Borrowers
shall make each payment of principal of, and interest on, the Loans and of
commissions and fees hereunder, not later than 12:00 Noon (New York City time)
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on the date when due, in Federal or other immediately available funds, to the
Administrative Agent at its address referred to in Section 10.01. The
Administrative Agent will promptly distribute to each Bank its ratable share of
each such payment received by the Administrative Agent for the account of the
Banks. Whenever any payment of principal of, or interest on, the Base Rate Loans
or fees shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, the Euro-Dollar Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. If the date for any payment of principal is extended by operation
of law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from a
Borrower prior to the date on which any payment is due from such Borrower to the
Banks hereunder that such Borrower will not make such payment in full, the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent that
such Borrower shall not have so made such payment, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If a Borrower makes any payment of
principal with respect to any Euro-Dollar Loan or any Euro-Dollar Loan is
converted to a Base Rate Loan (pursuant to Article 2, 6 or 8 or otherwise,
except pursuant to Section 8.02) on any day other than the last day of an
Interest Period applicable thereto, or the end of an applicable period fixed
pursuant to Section 2.06(c), or if the Borrower fails to borrow, prepay, convert
or continue any Euro-Dollar Loans after notice has been given to any Bank in
accordance with Section 2.02(a), 2.05(c), 2.11(b) or 2.17 the Company shall
reimburse each Bank within 15 days after demand for any resulting loss or
expense incurred by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment or conversion or failure to borrow,
prepay, convert or continue; provided that such Bank shall have delivered to the
Company a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
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SECTION 2.14. Computation of Interest and Fees. Interest based on the
Prime Rate hereunder shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and all
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.15. Deficiencies in the Borrowing Base. If at any time the
aggregate Revolver Exposure of all Revolver Banks with respect to any Borrower
shall exceed the sum of such Borrower's Borrowing Base and any amounts deposited
in such Borrower's Collateral Account, such Borrower shall within one Domestic
Business Day, prepay its Revolving Loans (together with accrued interest
thereon) in such aggregate amount as shall be necessary to reduce the amount of
such excess to zero.
SECTION 2.16. Withholding Tax Exemption. At least five Domestic
Business Days prior to the first date on which interest or any fees are payable
hereunder for the account of any Bank, each Bank that is not incorporated under
the laws of the United States of America or a state thereof agrees that it will
deliver to each of the Company and the Administrative Agent two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224, certifying
in either case that such Bank is entitled to receive payments under this
Agreement and the Notes without deduction or withholding of any United States
federal income taxes. Each Bank which so delivers a Form 1001 or 4224 further
undertakes to deliver to each of the Company and the Administrative Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Company or the Administrative Agent, in each case certifying
that such Bank is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date in which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with respect
to it and such Bank advises the Company and the Administrative Agent that it is
not capable of receiving payments without any deduction or withholding of United
States federal income tax.
SECTION 2.17. Method of Electing Interest Rates. (a) The Loans included
in each Borrowing shall initially be of the Type specified by the Borrower in
the applicable Notice of Borrowing. Thereafter, the Borrower may from time to
time elect to change or continue the Type of Loans in each Group of Loans,
subject in each case to the provisions of Article 8, as follows:
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(i) if such Loans are Base Rate Loans, the Borrower may,
subject to subsection (d), elect to convert such Loans to Euro-Dollar
Loans as of any Euro-Dollar Business Day; and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans as of any Domestic
Business Day or, subject to subsection (d), to continue such Loans as
Euro-Dollar Loans for an additional Interest Period as of any
Euro-Dollar Business Day, further subject to Section 2.13 in the case
of any such conversion or continuation effective on any day other than
the last day of the then current Interest Period applicable to such
Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Administrative Agent not later than 12:00 Noon (New York
City time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective. A Notice of Interest
Rate Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; provided that (i) such portion
is allocated ratably among the Loans comprising such Group and (ii) the portion
to which such Notice applies, and the remaining portion to which it does not
apply, are each at least $1,000,000 (unless such portion is comprised of Base
Rate Loans). If no such notice is timely received before the end of an Interest
Period for any Group of Euro-Dollar Loans, the Borrower shall be deemed to have
elected that such Group of Loans be converted to Base Rate Loans at the end of
such Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation selected
in such notice is to be effective;
(iii) if the Loans comprising such Group are to be converted,
the new Type of Loans and, if the Loans being converted are to be
Euro-Dollar Loans, the duration of the next succeeding Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans
for an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
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(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Administrative Agent shall
promptly notify each Bank of the contents thereof and such notice shall not
thereafter be revocable by the Borrower.
(d) The Borrower shall not be entitled to elect to convert any Loans
to, or continue any Loans for an additional Interest Period as, Euro-Dollar
Loans if a Default shall have occurred and be continuing when the Borrower
delivers notice of such election to the Administrative Agent.
ARTICLE 3
CONDITIONS
SECTION 3.1. Effectiveness. This Second Amended Credit Agreement shall
become effective on and as of the date when the Administrative Agent shall have
received all of the following:
(a) counterparts hereof signed by each of the parties hereto
(or, in the case of any party as to which an executed counterpart shall
not have been received, receipt by the Administrative Agent in form
satisfactory to it of telegraphic, telex, facsimile or other written
confirmation from such party of execution of a counterpart hereof by
such party);
(b) duly executed counterparts of an Amended and Restated
Company Security Agreement substantially in the form of Exhibit I (or,
in the case of any party as to which an executed counterpart shall not
have been received, receipt by the Administrative Agent in form
satisfactory to it of telegraphic, telex, facsimile or other written
confirmation from such party of execution of a counterpart hereof by
such party);
(c) duly executed Notes of each Borrower for the account of
each Bank dated on or before the Effective Date and complying with the
provisions of Section 2.04;
(d) counterparts of each Subsidiary Security Agreement to
which Magellan is a party, duly executed by the parties thereto;
(e) evidence satisfactory to it that the security interest
created by each Subsidiary Security Agreement constitutes a perfected
first priority Lien under the Uniform Commercial Code to the extent
such a Lien may be perfected thereunder;
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(f) a duly executed Perfection Certificate (as defined in the
Company Security Agreement), together with evidence satisfactory to the
Collateral Agent that the Lien created under the Company Security
Agreement constitutes a perfected first priority Lien to the extent a
Lien may be perfected thereunder;
(g) a duly executed Perfection Certificate (as defined in the
Subsidiary Security Agreement to which Magellan is a party), together
with evidence satisfactory to the Collateral Agent that the Lien
created under such Subsidiary Security Agreement constitutes a
perfected first priority Lien to the extent a Lien may be perfected
thereunder;
(h) the most recent Borrowing Base Certificate of each
Borrower required to be delivered by the Company pursuant to Section
5.01(c);
(i) an opinion of Hogan & Hartson LLP, special counsel for the
Borrowers, substantially in the form of Exhibit B hereto and covering
such additional matters relating to the transactions contemplated by
the Financing Documents as the Required Banks may reasonably request;
(j) an opinion of Davis Polk & Wardwell, special counsel for
the Administrative Agent and the Collateral Agent, substantially in the
form of Exhibit C hereto and covering such additional matters relating
to the transactions contemplated by the Financing Documents as the
Required Banks may reasonably request;
(k) certificates of insurance reasonably satisfactory to it
evidencing compliance with Section 5.03;
(l) evidence satisfactory to it that (x) the commitments under
the Bridge Agreement shall have been terminated and (y) all loans
outstanding thereunder, together with interest accrued thereon to but
excluding the Effective Date, all accrued fees and all other amounts
due and payable thereunder (including without limitation expenses
payable pursuant to Section 9.03 thereof) shall have been paid in full;
(m) evidence satisfactory to it that (x) the commitments under
the Magellan Agreement shall have been terminated and (y) all loans
outstanding thereunder, together with interest accrued thereon to but
excluding the Effective Date, all accrued fees and all other amounts
due and payable thereunder (including without limitation expenses
payable thereunder) shall have been paid in full; and
(n) all documents it may reasonably request relating to the
existence of the Borrowers, the corporate authority for and the
validity of
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the Financing Documents, and any other matters reasonably relevant
hereto, all in form and substance reasonably satisfactory to the
Administrative Agent;
provided that this Agreement shall not become effective or be binding on any
party hereto unless the foregoing conditions are satisfied not later than August
15, 1997. On the Effective Date the Original Credit Agreement will be
automatically amended and restated in its entirety to read as set forth herein.
On and after the Effective Date the rights and obligations of the parties hereto
shall be governed by this Second Amended Credit Agreement; provided that rights
and obligations of the parties hereto with respect to the period prior to the
Effective Date shall continue to be governed by the provisions of the Original
Credit Agreement. On the Effective Date the Commitment of each Bank shall be the
amount set forth opposite the name of such Bank on the signature pages of this
Second Amended Credit Agreement. The Notes delivered to each Bank under the
Original Credit Agreement shall become void on the Effective Date and, upon
receiving its new Notes delivered pursuant to subsection (c), each Bank will
cancel its original Notes and return them to the Company. No failure of a Bank
so to cancel and return its original Note shall affect the validity of its new
Notes. The Administrative Agent shall promptly notify the Company and the Banks
of the effectiveness of this Second Amended Credit Agreement, and such notice
shall be conclusive and binding on all parties hereto.
SECTION 3.2. Transitional Provisions. (a) Each Loan outstanding under
the Original Credit Agreement on the Effective Date shall mature on the
Termination Date.
(b) The interest rates determined in accordance with Section 2.06 of
this Second Amended Credit Agreement shall be effective on the Effective Date;
provided that, the interest rate applicable to each Euro-Dollar Loan outstanding
on the Effective Date for each day during the then current Interest Period
applicable thereto shall be the rate per annum equal to the sum of the
Euro-Dollar Margin (as defined in this Second Amended Credit Agreement) for such
day plus the Adjusted London Interbank Offered Rate applicable to such Loan for
such Interest Period (as determined pursuant to Section 2.06 of the Original
Credit Agreement).
(c) On the Effective Date, in the case of any Group of Base Rate Loans
then outstanding, and at the end of the then current Interest Period with
respect thereto in the case of any Group of Euro-Dollar Loans then outstanding,
the Borrower shall prepay such Group in its entirety and, to the extent the
Borrower elects to do so and subject to the conditions specified in this Article
3, the Borrower shall reborrow Revolver Loans from the Banks in proportion to
their respective Commitments after giving effect hereto, until such time as all
outstanding Loans are held by the Banks in such proportion.
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SECTION 3.3. All Credit Events. The obligation of any Bank to make a
Loan on the occasion of any Borrowing and the obligation of the LC Bank to issue
a Letter of Credit on the occasion of a request therefor by any Borrower are
each subject to the satisfaction of the following conditions:
(a) receipt (or deemed receipt) by the Administrative Agent of
a Notice of Borrowing as required by Section 2.02 or receipt by the LC
Bank of a request for issuance of a Letter of Credit as required by
Section 2.03, as the case may be;
(b) the fact that, immediately before and after such Credit
Event, no Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the
Borrowers contained in Article 4 of this Agreement (except, in the case
of any Borrowing subsequent to the Effective Date, the representations
and warranties contained in Sections 4.06(a) and 4.06(b)) and Section 2
of the respective Security Agreements shall be true on and as of the
date of such Credit Event;
(d) solely if such Credit Event is the making of a Revolving
Loan to or the issuance of a Letter of Credit for the account of any
Borrower, the fact that, immediately after such Credit Event (i), the
aggregate Revolver Exposure of all Banks in respect of such Borrower
will not exceed its Borrowing Base and (ii) the aggregate Revolver
Exposures of all Revolver Banks in respect of all Borrowers will not
exceed the aggregate amount of the Revolver Commitments; and
(e) solely if such Credit Event is the making of a Revolving
Loan to or the issuance of a Letter of Credit for the account of any
Borrower, receipt by the Administrative Agent of the most recent
Borrowing Base Certificate of such Borrower as required to be delivered
by the Company pursuant to Section 5.01(c) (without giving effect, for
purposes of this clause, to the proviso contained in such Section) or
Section 5.01(d), as the case may be.
Each Credit Event hereunder shall be deemed to be a representation and warranty
by the Borrower on the date of such Credit Event as to the facts specified in
clauses 3.04(b), 3.04(c) and, if applicable, 3.04(d).
SECTION 3.4. First Borrowing by Each Borrower Subsidiary. The
obligation of each Bank to make a Loan on the occasion of the first Borrowing by
each Borrower Subsidiary (other than Magellan) is subject to the satisfaction of
the following further conditions:
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(a) receipt by the Agent for the account of each Bank of a duly
executed Note of such Borrower Subsidiary, dated on or before the date of such
Borrowing complying with the provisions of Section 2.04.
(b) receipt by the Agent of an opinion of counsel for such Borrower
Subsidiary acceptable to the Agent, substantially in the form of Exhibit L
hereto and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(c) receipt by the Agent of counterparts of a Subsidiary Security
Agreement executed by such Borrower Subsidiary and each Lockbox Letter referred
to in such Subsidiary Security Agreement duly executed by the parties thereto;
(d) receipt by the Agent of a duly executed Perfection Certificate (as
defined in the Subsidiary Security Agreement to which such Borrower Subsidiary
is a party) and evidence satisfactory to the Collateral Agent that the security
interest created by such Subsidiary Security Agreement constitutes a perfected
first priority Lien to the extent a Lien may be created thereunder; and
(e) receipt by the Agent of all documents which it may reasonably
request relating to the existence of such Borrower Subsidiary, the corporate
authority for and the validity of the Election to Participate of such Eligible
Subsidiary, this Agreement, the Subsidiary Security Agreement and the Notes of
such Borrower Subsidiary, and any of the matters relevant thereto, all in form
and substance satisfactory to the Agent.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES
Each Borrower represents and warrants that:
SECTION 4.1. Corporate Existence and Power. Each Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and each has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
SECTION 4.2. Corporate and Governmental Authorization No Contravention.
The execution, delivery and performance by each Borrower of the Financing
Documents to which it is a party are within its corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
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respect of (except as contemplated herein) or filing with (except as
contemplated herein or by the Security Agreements), any governmental body,
agency or official and do not contravene, or constitute a default under, any
provision of (i) any applicable law, rule or regulation, (ii) the certificate of
incorporation or by-laws of any Borrower, (iii) any Material Debt instrument
binding upon any Borrower or (iv) any judgment, injunction, order, decree or
other material agreement or instrument binding upon any Borrower or, except as
contemplated by the Security Agreements, result in the creation or imposition of
any Lien on any asset of any Borrower or any of their respective Subsidiaries.
SECTION 4.3. Binding Effect. (i) This Agreement constitutes, (ii) the
Subsidiary Security Agreements and the Notes, when executed and delivered in
accordance with this Agreement will constitute and (iii) the Company Security
Agreement constitutes and, when amended and restated in accordance with this
Amended Credit Agreement will continue to constitute, a valid and binding
agreement or obligation of each Borrower signatory hereto or thereto, as the
case may be, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles of equity.
SECTION 4.4. Lien Enforceable. (i) Each Subsidiary Security Agreement,
when executed and delivered in accordance with this Agreement, will create and
(ii) the Company Security Agreement creates, in favor of the Collateral Agent
for the ratable benefit of the Secured Parties, a valid and binding first
priority Lien on the Collateral referred to therein.
SECTION 4.5. Assignments Valid. The assignments and notices of
assignment substantially in the form of Exhibits G-2 and G-3, respectively, when
completed by the Borrower and duly acknowledged by each governmental authority
or agency described therein, will constitute valid assignments of the monies due
or to become due under the Eligible Government Contracts described therein under
the Assignment of Claims Act.
SECTION 4.6. Financial Information. (a) The consolidated balance sheet
of the Company and its Consolidated Subsidiaries as of December 31, 1996 and the
related consolidated statements of operations and cash flows for the fiscal year
then ended, reported on by KPMG Peat Marwick LLP, copies of which have been
delivered to each of the Banks, fairly present in all material respects, in
conformity with generally accepted accounting principles, the consolidated
financial position of the Company and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such fiscal
year.
(b) The unaudited consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of March 31, 1997 and the related unaudited
consolidated statements of operations and cash flows for the three months then
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ended, copies of which have been delivered to each of the Banks, fairly present
in all material respects, in conformity with generally accepted accounting
principles applied on a basis consistent with the financial statements referred
to in subsection (a), the consolidated financial position of the Company and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such three month period (subject to normal
year-end adjustments).
(c) Since March 31, 1997 there has been no material adverse change in
the business, financial position or results of operations of the Company and its
Consolidated Subsidiaries, taken as a whole, and no event has taken place which
is reasonably likely to have a such material adverse effect in the future.
SECTION 4.7. Litigation. Except as to any matter that has been
disclosed prior to the date hereof in writing by the Company to the Banks, there
is no action, suit or proceeding pending against, or to the knowledge of any
Borrower threatened against the Company or any of its Subsidiaries before any
court or arbitrator or any governmental body, agency or official in which there
is a reasonable possibility of an adverse decision which could materially
adversely affect the business, financial position or results of operations of
the Company and its Consolidated Subsidiaries, taken as a whole, or which in any
manner draws into question the validity of any of the Financing Documents.
SECTION 4.8. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multi-employer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
SECTION 4.9. Environmental Matters. Except as to any matter that has
been disclosed prior to the date hereof in writing by the Company to the Banks,
(i) the Company and each of its Consolidated Subsidiaries have obtained all
permits, licenses and other authorizations that are required under all
Environmental Laws, except to the extent failure to have any such permit,
license or authorization would not have a material adverse effect on the
business, financial position or results of operations of the Company and its
Consolidated Subsidiaries, taken as a whole and (ii) the Company and its
Consolidated Subsidiaries are in compliance
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with the terms and conditions of all such permits, licenses and authorizations,
and are also in compliance with all other provisions of any applicable
Environmental Law or any order, judgment, injunction, notice or demand letter
issued or entered thereunder, except to the extent failure to comply would not
have a material adverse effect on the business, financial position or results of
operations of the Company and its Consolidated Subsidiaries, taken as a whole.
SECTION 4.10. Taxes. The Company and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Company or any of its
Subsidiaries other than taxes or assessments the validity of which the Company
or the relevant Subsidiary is contesting in good faith by appropriate
proceedings and is maintaining adequate reserves with respect thereto in
accordance with generally accepted accounting principles. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the Company,
adequate.
SECTION 4.11. Subsidiaries. (a) Each of the Company's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
(b) Each Borrower Subsidiary is a Wholly-Owned Subsidiary of the
Company, unless such Borrower Subsidiary has been merged with and into the
Company as permitted by the proviso in Section 5.15.
SECTION 4.12. Full Disclosure. No information heretofore or hereafter
furnished by any Borrower to the Agents or any Bank for purposes of or in
connection with this Agreement, the other Financing Documents or any transaction
contemplated hereby or thereby contains or, taken together with all such
information so furnished, will contain any untrue statement of a material fact
or omits or will omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE 5
COVENANTS
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Each Borrower agrees for itself and each of its Subsidiaries that so
long as any Bank has any Commitment hereunder or any amount payable under any
Financing Document remains unpaid:
SECTION 5.1. Information. The Company will deliver to each of the
Banks:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Company, a consolidated balance
sheet of the Company and its Consolidated Subsidiaries as of the end of
such fiscal year and the related consolidated statements of operations
and cash flows for such fiscal year, together with consolidating
balance sheets, statements of operations and operating cash flows for
such fiscal year for each of the Company's Consolidated Subsidiaries in
the form currently prepared by the Company, setting forth in each case
in comparative form the figures for the previous fiscal year, all such
consolidated statements reported on in a manner acceptable to the
Securities and Exchange Commission by KPMG Peat Marwick or other
independent public accountants of nationally recognized standing;
(b) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each fiscal year
of the Company, a consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of operations and cash flows for such quarter
and for the portion of the Company's fiscal year ended at the end of
such quarter, together with consolidating balance sheets, statements of
operations and operating cash flows for such quarter and the portion of
the Company's fiscal year ended at the end of such quarter for each of
the Company's Consolidated Subsidiaries in the form currently prepared
by the Company, setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of
the Company's previous fiscal year, all certified (subject to normal
year-end adjustments) as to fairness of presentation in all material
respects and generally accepted accounting principles by the chief
financial officer or the chief accounting officer of the Company;
(c) not later than twenty (20) days after the end of each
calendar month, a Borrowing Base Certificate setting forth the
calculation of each Borrower's Borrowing Base as of the tenth (10th)
day after the end of such month; provided that, the Company need not
deliver such Certificate pursuant to this Section with respect to any
Borrower (other than the Company) if the aggregate Revolver Exposure of
all Revolver Banks with respect to such Borrower at all times during
the one month-period ending as of such day is zero;
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(d) as soon as possible and in any event within three (3)
Domestic Business Days after the Administrative Agent shall have
requested, at the request of any Bank in its sole discretion, with
respect to any Borrower, a Borrowing Base Certificate setting forth the
calculation of such Borrower's Borrowing Base as of the date of the
most recent Borrowing Base Certificate of such Borrower (delivered
pursuant to Section 3.03(e) or Section 5.01(c)) adjusted to reflect the
deduction of the aggregate amount of Eligible Receivables included in
such calculation that have since such calculation ceased to be Eligible
Receivables (other than as a result of payment thereon to the
Collateral Account);
(e) within 20 days after the end of each calendar month,
reasonably detailed information on Eligible Receivables, the scope and
format of which shall be to the reasonable satisfaction of the
Collateral Agent and which shall include (but not necessarily be
limited to) (i) a monthly aged listing by account debtor of accounts
receivable and accounts payable, (ii) detailed monthly information
reconciling account receivable balances at the beginning and end of
each month, (iii) statements outlining collections, write-offs and
delinquencies and a monthly calculation of the Consolidated Loss Ratio,
the Consolidated Delinquency Ratio and the Consolidated DSO Ratio, (iv)
a listing of each Eligible Government Contract or Eligible Commercial
Contract with a value in excess of $5,000,000 (as of the date
immediately preceding termination or cancellation) which has been
terminated or canceled during such calendar month, and (v) such other
information that the Collateral Agent may reasonably request;
(f) simultaneously with the delivery of each set of financial
statements referred to in clauses 5.01(a) and 5.01(b) above, a
certificate of the chief financial officer or the treasurer of the
Company (i) setting forth in reasonable detail the calculations
required to establish whether the Company and, if applicable, each
other Borrower, is in compliance with the requirements of Sections 5.07
through 5.13, inclusive, and Section 5.17, on the date of such
financial statements and (ii) stating whether any Default exists on the
date of such certificate and, if any Default then exists, setting forth
the details thereof and the action which the Borrowers are taking or
propose to take with respect thereto;
(g) simultaneously with the delivery of each set of financial
statements referred to in clause 5.01(a) above, a statement of the firm
of independent public accountants that reported on such statements
whether anything has come to their attention to cause them to believe
the Company or if applicable, any of the other Borrowers, was not in
compliance with
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the requirements of Sections 5.07 through 5.13, inclusive, and Section
5.17 on the date of such financial statements;
(h) promptly upon the mailing thereof to the shareholders of
the Company generally, copies of all financial statements, reports and
proxy statements so mailed;
(i) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Company shall
have filed with the Securities and Exchange Commission;
(j) within five (5) days after any executive officer obtains
knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer or the treasurer of the
Company setting forth the details thereof and the action which the
Borrowers are taking or propose to take with respect thereto (for
purposes of this Section, "executive officer" shall mean any of the
President, Chief Executive Officer, Chief Financial Officer, Chief
Operating Officer, Treasurer, Controller and General Counsel of the
Company and the President of any Borrower);
(k) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan that might
constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability
under Title IV of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (vii) fails to make any payment or contribution to any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement or
makes any amendment to any Plan or Benefit Arrangement that has
resulted or
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could result in the imposition of a Lien or the posting of a bond or
other security, a certificate of the chief financial officer or the
chief accounting officer of the Company setting forth details as to
such occurrence and action, if any, which the Company or applicable
member of the ERISA Group is required or proposed to take; and
(l) from time to time such additional information regarding
the financial position or business of the Company and its Subsidiaries,
or the calculation of any Borrowing Base, as the Collateral Agent or
the Administrative Agent, at the request of any Bank, may reasonably
request.
SECTION 5.2. Payment of Obligations. Each Borrower will pay and
discharge, and will cause each of its respective Subsidiaries to pay and
discharge, at or before maturity or in accordance with customary trade
practices, all their respective material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and will maintain, and will cause each of
their respective Subsidiaries to maintain, in accordance with and to the extent
required by generally accepted accounting principles, appropriate reserves for
the accrual of any of the same.
SECTION 5.3. Maintenance of Property; Insurance. (a) Each Borrower will
keep, and will cause each of its Subsidiaries to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) Each Borrower will maintain, and will cause each of its
Subsidiaries to maintain:
(i) at all times, physical damage insurance on all real and
personal property owned by it on an all risks basis covering the repair
and replacement cost of all such property and consequential loss
coverage for business interruption and extra expense;
(ii) at all times, public liability insurance (including
products/completed operations liability coverage) in an amount not less
than $10,000,000, and
(c) from time to time, such other insurance coverage in such amounts
and with respect to such risks as it shall have determined in its reasonable
discretion to be necessary or advisable in the conduct of its business.
All such insurance will be provided by financially sound and
reputable insurers. The Company will deliver to the Banks (i) upon request of
any Bank through the Administrative Agent from time to time full information as
to
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the insurance carried, (ii) within five (5) days of receipt of notice from
any insurer a copy of any notice of cancellation or material change in coverage
from that existing on the date of this Agreement (other than any notice of
increase in the amount of any such coverage from the amount in effect on the
date of this Agreement) and (iii) forthwith, notice of any cancellation or
nonrenewal of coverage by any Borrower or any of its Subsidiaries with respect
to any insurance such Borrower must maintain, and must cause its Subsidiaries to
maintain, pursuant to this subsection.
(d) Prior to the Effective Date, each Borrower has caused the
Collateral Agent to be named as an additional insured party and the loss payee
(to the extent that the insurance policy is of a type that provides for a loss
payee) on each insurance policy (the "DESIGNATED INSURANCE POLICIES") such
Borrower is required to maintain pursuant to this Section and which is in
existence on the Effective Date, other than any such policy, or portion thereof,
solely with respect to equipment. Each Borrower will deliver to the Collateral
Agent, upon request, the insurance policies for each Designated Insurance
Policy. Each Designated Insurance Policy includes and shall include effective
waivers by the insurer of all claims for insurance premiums against the
Collateral Agent or any other Secured Party, provides and will provide that (i)
all insurance proceeds (other than any insurance proceeds with respect to any
mission success insurance policy (a "Mission Success Policy")) in excess of
$1,000,000 per claim for which the Collateral Agent is loss payee shall be
adjusted with and payable to the Collateral Agent, (ii) all insurance proceeds
with respect to any Mission Success Policy in excess of $1,000,000 per claim for
which the Collateral Agent is loss payee shall be payable to the Collateral
Agent and the Collateral Agent shall have the right to attend all meetings
relating to the adjustment of any such claim and shall be provided with all
information relating to such claim provided by the Borrower to the insurance
company with which such claim is being adjusted and any additional information
the Collateral Agent may reasonably request relating to such claim, (iii) the
insurer shall notify the Collateral Agent of any failure by the Borrower to pay
any premiums or other amounts due on any insurance policy and (iv) no
cancellation or termination of such Designated Insurance Policy shall be
effective until at least thirty (30) days after receipt by the Collateral Agent
of written notice thereof; provided that, solely with respect to any Mission
Success Policy, such Policy may provide that no cancellation or termination of
such Policy shall be effective until at least fifteen (15) days after receipt by
the Collateral Agent of written notice thereof. All insurance proceeds payable
to the Collateral Agent pursuant to this Section shall be deposited in the
Insurance Account. Each Borrower agrees that it will (x) give prior notice to
the Collateral Agent of any meeting referred to in clause (ii) of this
subsection, promptly upon request, provide the Collateral Agent with all
information referred to in clause (ii) of this subsection and (z) not agree to
any adjustment with respect to any claim described
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in clause (ii) of this subsection without the prior written consent of the
Collateral Agent, which consent shall not be unreasonably withheld.
(e) Each Borrower will cause the Collateral Agent to be named as an
additional insured party and the loss payee (to the extent that the insurance
policy is of a type that provides for a loss payee) on each Designated Insurance
Policy such Borrower acquires after the Effective Date pursuant to this Section;
provided that, nothing in this subsection shall be construed to require the
Company to cause the Collateral Agent to be named as an additional insured party
and the loss payee on any portion of any mission success insurance being
obtained by the Company or any of its Subsidiaries on behalf of a customer as to
which such customer is named loss payee. Each such insurance policy shall
include each of the waivers and provisions described in Section 5.03(d).
SECTION 5.4. Conduct of Business and Maintenance of Existence. Each
Borrower will continue, and will cause each of its Subsidiaries to continue, to
engage in business of the same general type as now conducted by it, and will
preserve, renew and keep in full force and effect, and will cause each of its
Subsidiaries to preserve, renew and keep in full force and effect its corporate
existence and rights, privileges and franchises necessary or desirable in the
normal conduct of business; provided that nothing contained in this Section
shall prohibit any transaction expressly permitted under Section 5.15.
SECTION 5.5. Compliance with Laws. Each Borrower will comply, and will
cause each of its Subsidiaries to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings.
SECTION 5.6. Inspection of Property, Books and Records. Each Borrower
will keep, and will cause each of its Subsidiaries to keep, proper books of
record and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and will
permit, and will cause each of its respective Subsidiaries to permit,
representatives of any Agent or any Bank, at such Agent's or Bank's expense, to
visit and inspect any of their respective properties, to examine and make
abstracts from any of their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times
during normal business hours, upon reasonable notice and as often as may
reasonably be desired by such Agent or such Bank.
SECTION 5.7. Investments. Neither the Company nor any Subsidiary will
make or acquire any Investment in any Person other than:
(a) Investments in any Borrower;
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(b) Investments (other than (i) Investments described in
clause (a) above and (ii) the ORBCOMM Global Guaranty)) in an aggregate
principal amount not exceeding $5,000,000 in direct or indirect
Subsidiaries of the Company immediately after such Investment is made
or acquired;
(c) Temporary Cash Investments;
(d) Investments made by the Company, any of its Wholly-Owned
Subsidiaries or OCC in an aggregate principal amount not exceeding
$75,250,000, in any entity or entities through which the Company, any
of its Wholly-Owned Subsidiaries or OCC will develop, construct,
operate and/or market the ORBCOMM low-earth orbit satellite
communications system;
(e) Investments (other than Investments described in clause
(b) above) made or acquired or committed to be made or acquired by MDA
prior to the date MDA was acquired by the Company and listed on
Schedule III;
(f) the ORBCOMM Global Guaranty;
(g) Investments in Orbital Imaging (i) made on or prior to
June 15, 1997; provided that (A) the aggregate amount of such
Investments ("Rollover Investments") does not exceed the aggregate
amount of Investments made by the Company in the Orbital Imaging
Project on or prior to December 1, 1996 and (B) neither the Company nor
any of its Subsidiaries shall contribute any cash or assets in
connection with, or as consideration for, the making of any such
Rollover Investment and (ii) in an aggregate principal amount not
exceeding $80,000,000 (in addition to Investments described in clause
(i));
(h) Investments in an aggregate amount not exceeding
$38,000,000 consisting of capital stock of Engineering Technologies,
Inc. and CTA Commercial Systems, Inc. purchased by the Company pursuant
to an Asset Acquisition Agreement dated as of July 11, 1997 between CTA
INCORPORATED and the Company;
(i) Investments by the Company or any of its Subsidiaries
constituting "vendor financing" under contracts entered into in the
ordinary course of business; and
(j) any Investment (other than any Investment in direct or
indirect Subsidiaries of the Company immediately after such Investment
is
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made or acquired) not otherwise permitted by the foregoing clauses of
this Section 5.07 if, immediately after such Investment is made or
acquired, the aggregate net book value of all Investments permitted by
this clause (j) does not exceed 12% of Consolidated Tangible Net Worth.
SECTION 5.8. Minimum Consolidated Tangible Net Worth. Consolidated
Tangible Net Worth at the last day of any fiscal quarter will not be less than
(i) $210,000,000 plus (ii) 50% of Consolidated Net Income for each fiscal
quarter of the Company ended after March 31, 1997 and on or prior to such date
and for which such Consolidated Net Income is positive (but with no deduction on
account of any fiscal quarter for which Consolidated Net Income is negative)
plus (iii) 100% of the aggregate amount by which Consolidated Tangible Net Worth
shall have been increased by reason of the issuance and sale after the Effective
Date and on or prior to such date of any capital stock or the conversion or
exchange of any Debt of the Company into or with capital stock of the Company
consummated after the Effective Date and on or prior to such date.
SECTION 5.9. Leverage. The Consolidated Leverage Ratio will at no time
exceed 1.25 to 1.0.
SECTION 5.10. Consolidated Fixed Charge Ratio. At the last day of any
fiscal quarter, the ratio of Earnings Available for Fixed Charges to
Consolidated Fixed Charges, in each case for the four consecutive fiscal
quarters then ended, will not be less than (i) for any fiscal quarter ending on
or before September 30, 1999, 1.10 to 1 and (ii) for any fiscal quarter ending
on or after December 31, 1999, 1.25 to 1.
SECTION 5.11. Consolidated Loss Ratio. The Consolidated Loss Ratio will
not at any time, for the calendar month then most recently ended, exceed .5%.
SECTION 5.12. Consolidated Delinquency Ratio. The Consolidated
Delinquency Ratio will not at any time, for the two consecutive calendar months
then most recently ended, exceed 35%.
SECTION 5.13. Consolidated DSO Ratio. The Consolidated DSO Ratio will
not at any time, for the three consecutive calendar months then most recently
ended, exceed 80 days.
SECTION 5.14. Negative Pledge. Neither the Company nor any Subsidiary
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except the following (each a "Permitted Lien"):
(a) Liens existing or provided for pursuant to a contract
existing as of the Effective Date and listed on Schedule II;
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(b) any Lien existing on any asset of any corporation at the
time such corporation becomes a Subsidiary and not created in
contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed
for the purpose of financing all or any part of the cost of acquiring
such asset; provided that such Lien attaches to such asset concurrently
with or within 120 days after the acquisition thereof;
(d) any Lien on any asset of any corporation existing at the
time such corporation is merged or consolidated with or into the
Company or a Subsidiary and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Company or a Subsidiary and not created in contemplation
of such acquisition;
(f) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing clauses of this Section; provided that such Debt is
not increased and is not secured by any additional assets;
(g) Liens arising in the ordinary course of its business which
do not secure Debt or Derivatives Obligations and do not in the
aggregate materially detract from the value of its assets or materially
impair the use thereof in the operation of its business;
(h) Liens created pursuant to any of the Security Agreements;
(i) Liens on assets other than the Collateral securing Debt
(other than the Loans and the Letter of Credit Liabilities), in an
aggregate amount not exceeding $75,000,000;
(j) Liens imposed by any governmental authority for taxes,
assessments, governmental charges, duties or levies not yet due or
which are being contested in good faith and by appropriate proceedings;
provided adequate reserves with respect thereto are maintained on the
books of the Company and its Consolidated Subsidiaries in accordance
with generally accepted accounting principles;
(k) carriers', warehousemen's, mechanics', transporters,
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business; provided any such Lien is either (A) discharged
within five (5) days of the date when payment of the obligation secured
by such
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Lien is due or (B) is being contested in good faith and by appropriate
proceedings;
(l) Liens securing judgments for an amount not exceeding
$5,000,000 and for a period not resulting in an Event of Default under
Section 6.01(k);
(m) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(n) deposits to secure the performance of bids, trade
contracts (other than for Debt), leases, statutory obligations, surety
and appeal bonds, performance bonds and other similar obligations
incurred in the ordinary course of business;
(o) Liens on any such asset imposed under the Federal
Acquisition Regulations to secure advance payments made by the
Government under contracts;
(p) Liens existing or provided for pursuant to a contract to
which any Borrower becomes a party as a result of a novation of a
contract described in clause 5.14(a); and
(q) Liens on cash and cash equivalents securing Derivatives
Obligations; provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed $3,000,000.
SECTION 5.15. Consolidations, Mergers and Sales of Assets. The Company
will not (a) consolidate or merge with or into any other Person or (b) sell,
lease or otherwise transfer, directly or indirectly, all or any substantial part
of the assets of the Company and its Subsidiaries, taken as a whole, to any
other Person; provided that nothing contained herein shall prohibit the Company
from merging any of its Subsidiaries with and into the Company.
SECTION 5.16. Use of Proceeds. The proceeds of the Loans made and the
Letters of Credit issued under this Agreement will be used by the Borrowers for
general corporate purposes, including working capital purposes and the funding
of acquisitions and, to the extent such funds are not required by the Borrowers
for working capital purposes or the funding of any such acquisitions, for
advances to the Company, its Subsidiaries and any entity that is a Subsidiary on
the date hereof.
SECTION 5.17. Subsidiary Debt. Total Debt of all of the Company's
Subsidiaries (excluding (i) Loans and Letter of Credit Liabilities hereunder
and, (ii) Debt of a Subsidiary to the Company or to a Wholly-Owned Subsidiary of
the
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Company) will at no time exceed 50% of Consolidated Tangible Net Worth. For
purposes of this Section, any preferred stock of a Subsidiary held by a Person
other than the Company or a Wholly-Owned Subsidiary of the Company shall be
included, at the higher of its voluntary or involuntary liquidation value, in
the "Debt" of such Subsidiary; provided that in no event shall the Exchangeable
Non-Voting Shares or the Class B Preferred Shares of MacDonald, Dettwiler
Holdings Inc. be included in the "Debt" of MacDonald, Dettwiler Holdings Inc.
SECTION 5.18. Restricted Payments. Neither the Company nor any
Subsidiary will declare or make any Restricted Payment.
ARTICLE 6
DEFAULTS
SECTION 6.1. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) any principal of any Loan or any Reimbursement Obligation
shall not be paid when due;
(b) any interest on any Loan, any fees or commissions or any
other amount payable under any Financing Document, shall not be paid
within one (1) Domestic Business Day after the due date thereof;
(c) any Borrower shall fail to observe or perform any covenant
or agreement contained in Sections 2.15, 5.01(c), 5.01(d), 5.01(j) and
5.07 to 5.18 inclusive;
(d) any Borrower shall fail to observe or perform any covenant
or agreement contained in any Financing Document (other than those
covered by clauses 6.01(a), 6.01(b)or 6.01(c) above) for thirty (30)
days after written notice thereof has been given to the Company by the
Administrative Agent at the request of any Bank;
(e) any representation, warranty, certification or statement
made by any Borrower in any Financing Document, or in any certificate,
financial statement or other document delivered pursuant thereto shall
prove to have been incorrect in any material respect when made (or
deemed made);
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(f) any Borrower or any of its Subsidiaries shall fail to make
any payment in respect of any Material Debt beyond any notice, grace or
cure period applicable with respect thereto;
(g) any event or condition (other than an event or condition
described in Section 6.01(f)) shall occur which results in the
acceleration of the maturity of any Material Debt or the accelerated
termination of binding commitments to lend monies or extend credit in
any other form to the Borrower or any Subsidiary in an aggregate amount
in excess of $5,000,000 or enables (or, with the giving of notice or
lapse of time or both, would enable) the holder of such Debt or the
maker of any such commitment, as the case may be, or any Person acting
on such holder's or maker's behalf, to accelerate the maturity of such
Debt or terminate any such commitment prior to the scheduled
termination thereof;
(h) the Company or any Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as
they become due, or shall take any corporate action to authorize any of
the foregoing;
(i) an involuntary case or other proceeding shall be commenced
against the Company or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Company or any Subsidiary under
the federal bankruptcy laws as now or hereafter in effect;
(j) any member of the ERISA Group shall fail to pay when due
an amount or amounts aggregating in excess of $5,000,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent
to terminate a Material Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of
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ERISA to terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $5,000,000;
(k) a judgment or order for the payment of money in excess of
$5,000,000 shall be rendered by a court of competent jurisdiction
against the Company and/or any of its Subsidiaries and the same shall
not be discharged (or provision shall not be made for such discharge),
or a stay of execution thereof shall not be procured, within 30 days
from the date of entry thereof and the Company or the relevant
Subsidiary shall not, within said period of 30 days, or such longer
period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during
such appeal;
(l) any Person or group of Persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act)
of 30% or more of the outstanding shares of common stock of the
Company; or, during any period of 12 consecutive calendar months,
individuals who were directors of the Company on the first day of such
period shall cease to constitute a majority of the board of directors
of the Company; or, except as permitted by the proviso in Section 5.15,
any Borrower Subsidiary shall cease to be a Wholly-Owned Subsidiary of
the Company; or
(m) the Lien created by any Security Agreement shall at any time
and for any reason not constitute a valid and perfected Lien on the
Collateral referred to therein subject to no prior or equal Lien other
than a Permitted Lien;
then, and in every such event, the Administrative Agent shall (i) if requested
by Banks having more than 50% in aggregate amount of the Commitments, by notice
to the Company terminate the Commitments and they shall thereupon terminate,
(ii) if requested by Banks holding Notes evidencing more than 50% in aggregate
principal amount of the Loans, by notice to the Company declare the Notes of any
or all of the Borrowers (together with accrued interest thereon) to be, and such
Notes shall thereupon become, immediately due and payable without presentment,
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demand, protest or other notice of any kind, all of which are hereby waived by
each Borrower and (iii) if requested by Banks having more than 50% in aggregate
amount of the LC Exposures, by notice to the Company declare an amount (the
"AGGREGATE LC AMOUNT") equal to the sum of the maximum amount which may at any
time be drawn under all Letters of Credit at the time outstanding issued upon
request of each Borrower (the "BORROWER LC AMOUNT") (whether or not a
beneficiary shall have presented, or shall be entitled at such time to present,
the drafts or other documents required to draw under any such Letter of Credit)
to be, and the Aggregate LC Amount shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by each Borrower; provided that in the case of any of
the Events of Default specified in clause 6.01(h) or 6.01(i) above with respect
to any Borrower, without any notice to any Borrower or any other act by any
Agent or Bank, the Commitments shall thereupon terminate, and the Notes of all
Borrowers (together with accrued interest thereon) and the Aggregate LC Amount
shall become immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by each Borrower.
Each Borrower LC Amount, when received by the Administrative Agent,
shall be deposited in the Borrower's Collateral Account, as cash collateral for
the Reimbursement Obligations of the Borrower in the event of any drawing under
any Letter of Credit issued upon request of such Borrower. Upon any drawing
under any such Letter of Credit, the Collateral Agent shall apply such amounts
held in the Collateral Account to such Reimbursement Obligations.
SECTION 6.2. Notice of Default. The Administrative Agent shall give
notice to the Company under Section 6.01(d) promptly upon being requested to do
so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENTS
SECTION 7.1. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers under the Financing Documents as are delegated to
such Agent by the terms thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 7.2. Agents and Affiliates. Each of the Agents in its
individual capacity shall have the same rights and powers under the Financing
Documents as any other Bank and may exercise or refrain from exercising the same
as though it were not an Agent and each of the Agents in its individual capacity
and their
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respective Affiliates may accept deposits from, lend money to, and generally
engage in any kind of business with the Company or any Subsidiary or Affiliate
of the Company as if it were not an Agent.
SECTION 7.3. Action by Agents. The obligations of each Agent under the
Financing Documents are only those expressly set forth therein. Without limiting
the generality of the foregoing, no Agent shall be required to take any action
with respect to any Default, except, in the case of the Administrative Agent, as
expressly provided in Article 6 and in the case of the Collateral Agent, as
expressly provided for in the Security Agreements.
SECTION 7.4. Consultation with Experts. Each Agent may consult with
legal counsel (who may be counsel for a Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.5. Liability of Agents. None of the Agents, their respective
Affiliates nor any of their respective directors, officers, agents, or employees
shall be liable to any Bank or any other Agent for any action taken or not taken
by it in connection with the Financing Documents (i) with the consent or at the
request of the Required Banks (or such greater number as may be required by
Section 10.05) or (ii) in the absence of its own gross negligence or willful
misconduct. None of the Agents, their respective Affiliates nor any of their
respective directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement, warranty
or representation made in connection with the Financing Documents or any
borrowing or the issuance of any letter of credit hereunder; (ii) the
performance or observance of any of the covenants or agreements of any Borrower,
(iii) the satisfaction of any condition specified in Article 3 hereof, except,
in the case of the Administrative Agent, receipt of items required to be
delivered to the Administrative Agent; (iv) the validity, effectiveness or
genuineness of the Financing Documents or any other instrument or writing
furnished in connection therewith or (v) the existence or sufficiency of the
Collateral. No Agent shall incur any liability by acting in reliance upon any
notice, consent, certificate, statement, or other writing (which may be a bank
wire, telex, facsimile or similar writing) believed by it to be genuine or to be
signed by the proper party or parties.
SECTION 7.6. Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify each Agent, their respective Affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitee's gross negligence or willful misconduct) that such
indemnitee
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may suffer or incur in connection with the Financing Documents or any action
taken or omitted by such indemnitee thereunder.
SECTION 7.7. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon any Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.8. Successor Agents. Any Agent may resign at any time by
giving written notice thereof to the Banks and the Company. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required Banks,
and shall have accepted such appointment, within 30 days after the retiring
Agent gives notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair .
If prior to the first day of any Interest Period for any Euro-Dollar Loan:
(a) the Administrative Agent is advised by the Reference Banks
that deposits in dollars (in the applicable amounts) are not being
offered to the Reference Banks in the London interbank market for such
Interest Period, or
(b) Banks holding 50% or more of the aggregate amount of the
affected Euro-Dollar Loans advise the Administrative Agent that the
Adjusted London Interbank Offered Rate as determined by the
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Administrative Agent will not adequately and fairly reflect the cost to
such Banks of funding such Euro-Dollar Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Company and
the Banks, whereupon until the Administrative Agent notifies the Company that
the circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Banks to make Euro-Dollar Loans or to continue or convert
outstanding Loans as or into Euro-Dollar Loans, shall be suspended and (ii) each
outstanding Euro-Dollar Loan, shall be converted into a Base Rate Loan on the
last day of the then current Interest Period applicable thereto. Unless the
Borrower notifies the Administrative Agent at least one Domestic Business Day
before the date of any Euro-Dollar Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow on such date, such Borrowing
shall instead be made as a Base Rate Borrowing.
SECTION 8.2. Illegality. If, on or after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Euro-Dollar Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for any Bank (or its Euro-Dollar Lending Office)
to make, maintain or fund its Euro-Dollar Loans to any Borrower and such Bank
shall so notify the Administrative Agent, the Administrative Agent shall
forthwith give notice thereof to the other Banks and the Company, whereupon
until such Bank notifies the Company and the Administrative Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Dollar Loans, or to continue or convert outstanding Loans
as or into Euro-Dollar Loans shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such notice is given, each Euro-Dollar Loan of
such Bank then outstanding shall be converted to a Base Rate Loan either (a) on
the last day of the then current Interest Period applicable to such Euro-Dollar
Loan if such Bank may lawfully continue to maintain and fund such Loan as a
Euro-Dollar Loan to such day or (b) immediately if such Bank shall determine
that it may not lawfully continue to maintain and fund such Loan as a
Euro-Dollar Loan to such day.
SECTION 8.3. Increased Cost and Reduced Return. (a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
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Euro-Dollar Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency:
(i) shall subject any Bank (or its Euro-Dollar Lending Office) to
any tax, duty or other charge with respect to its Euro-Dollar Loans,
its Notes or its obligation to make Euro-Dollar Loans, its letters of
credit or its obligation to issue or participate in any letters of
credit, or shall change the basis of taxation of payments to any Bank
(or its Euro-Dollar Lending Office) of the principal of or interest on
its Euro-Dollar Loans or any other amounts due under this Agreement in
respect of its Euro-Dollar Loans or its obligation to make Euro-Dollar
Loans or its letters of credit or its obligation to issue or
participate in any letters of credit, (except for changes in the rate
of tax on the overall net income of such Bank or its Euro-Dollar
Lending Office imposed by the jurisdiction in which such Bank's
principal executive office or Euro-Dollar Lending Office is located);
or
(ii) shall impose, modify or deem applicable any reserve, special
deposit, insurance assessment or similar requirement (including,
without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System but excluding any such
requirement included in an applicable Euro-Dollar Reserve Percentage)
against assets of, deposits with or for the account of, or credit
extended by, any Bank (or its Euro-Dollar Lending Office) or shall
impose on any Bank (or its Euro-Dollar Lending Office) or the London
interbank market any other condition affecting its Euro-Dollar Loans,
its Notes or its obligation to make Euro-Dollar Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Euro-Dollar Lending Office) of making or maintaining its Euro-Dollar Loans
or issuing or participating in any Letters of Credit, or to reduce the amount of
any sum received or receivable by such Bank (or its Euro-Dollar Lending Office)
under this Agreement or under its Note with respect thereto, by an amount deemed
by such Bank to be material, then, within 15 days after demand by such Bank
which demand shall set forth in reasonable detail the basis for such request
(with a copy to the Administrative Agent), the Company shall pay to such Bank
such additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority,
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central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency (other than as contemplated by Section 8.03(a)), has or would
have the effect of reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations hereunder to a level below
that which such Bank (or its Parent) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Bank to be material,
then from time to time, within 15 days after demand by such Bank which demand
shall set forth in reasonable detail the basis for such request (with a copy to
the Administrative Agent), the Company shall pay to such Bank such additional
amount or amounts as will compensate such Bank (or its Parent) for such
reduction.
(c) Each Bank will promptly notify the Company and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate
of any Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
SECTION 8.4. Base Rate Loans Substituted for Affected Euro-Dollar
Loans. If (i) the obligation of any Bank to make, or to continue or convert
outstanding Loans as or to, Euro-Dollar Loans to any Borrower has been suspended
pursuant to Section 8.02 or (ii) any Bank has demanded compensation under
Section 8.03(a) and the Borrower shall, by at least five Euro-Dollar Business
Days' prior notice to such Bank through the Administrative Agent, have elected
that the provisions of this Section shall apply to such Bank, then, unless and
until such Bank notifies the Company that the circumstances giving rise to such
suspension or demand for compensation no longer apply all Loans which would
otherwise be made by such Bank as (or continued as or converted to) Euro-Dollar
Loans shall instead be Base Rate Loans (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the other
Banks). If such Bank notifies the Company that the circumstances giving rise to
such suspension or demand for compensation no longer exist, the principal amount
of each such Base Rate Loan shall be converted into Euro-Dollar Loan on the
first day of the next succeeding Interest Period applicable to the related
Euro-Dollar Loans of the other Banks.
ARTICLE 9
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GUARANTY
SECTION 9.1. The Guaranty. Each Guarantor hereby jointly, severally and
unconditionally guarantees the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of the principal of and interest on
each Note issued by any Borrower pursuant to this Agreement, and the full and
punctual payment of all other amounts payable by any Borrower under any
Financing Document to which such Borrower is a party. Upon failure by any
Borrower to pay punctually any such amount, each Guarantor shall forthwith on
demand pay the amount not so paid at the place and in the manner specified in
this Agreement and the Banks need not proceed to first preserve, utilize or
exhaust any right or remedy against any Borrower or any other Guarantor or any
security for any obligation of any Borrower under any Financing Document held by
the Banks.
SECTION 9.2. Guaranty Unconditional. Subject to Section 9.05, the joint
and several obligations of each Guarantor hereunder shall be unconditional and
absolute and, without limiting the generality of the foregoing, each Guarantor
shall not be released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of any other Borrower under any
Financing Document, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any
Financing Document;
(iii) any release, non-perfection or invalidity of any direct or
indirect security for any obligation of any other Borrower under any
Financing Document;
(iv) any change in the corporate existence, structure or
ownership of any other Borrower or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any other Borrower
or its assets or any resulting release or discharge of any obligation
of any other Borrower contained in any Financing Document;
(v) the existence of any claim, defense, set-off or other rights
which such Guarantor may have at any time against any other Borrower,
any Agent, any Bank or any other Person, whether in connection herewith
or any unrelated transactions; provided that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory
counterclaim; or
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(vi) any other act or omission to act or delay of any kind by any
other Borrower, any Agent, any Bank or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of such
Guarantor's obligations hereunder.
SECTION 9.3. Discharge Only upon Payment in Full; Reinstatement. Each
Guarantor's obligations hereunder shall remain in full force and effect until
the Commitments shall have terminated, all Letters of Credit shall have expired,
the principal of and interest on the Notes, the Reimbursement Obligations, and
all other amounts payable by any Borrower under this Agreement or any other
Financing Document shall have been paid in full. If at any time any payment of
the principal of or interest on any Note or any other amount payable by any
Borrower under this Agreement or any other Financing Document is rescinded or
must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of such Borrower or otherwise, each Guarantor's obligations
hereunder with respect to such payment shall be reinstated at such time as
though such payment had been due but not made at such time.
SECTION 9.4. Waiver by the Guarantor. Each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against any other Borrower or any other Person.
SECTION 9.5. Limit of Liability. The obligations of each Borrower
Subsidiary as a Guarantor hereunder shall be limited to an aggregate amount
equal to the largest amount that would not render its obligations hereunder
subject to avoidance under Section 548 of the United States Bankruptcy Code or
any comparable provisions of any applicable state law.
SECTION 9.6. Subrogation. Upon making any payment with respect to any
Borrower hereunder, the Guarantor making such payment shall be subrogated to the
rights of the payee against the Borrower with respect to such payment; provided
that such Guarantor shall not enforce or accept any payment by way of
subrogation until all amounts of principal of and interest on the Notes and all
other amounts payable by all Borrowers under the Financing Documents have been
paid in full.
SECTION 9.7. Stay of Acceleration. In the event that acceleration of
the time for payment of any amount payable by any Borrower under any Financing
Document to which such Borrower is a party is stayed upon insolvency, bankruptcy
or reorganization of such Borrower, all such amounts otherwise subject to
acceleration under the terms of this Agreement shall nonetheless be payable by
each Guarantor hereunder forthwith on demand by the Administrative Agent made at
the request of the Required Banks.
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ARTICLE 10
MISCELLANEOUS
SECTION 10.1. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of any Borrower or Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Bank, at its address
or telex or facsimile number set forth in its Administrative Questionnaire or
(z) in the case of any party, such other address or telex or facsimile number as
such party may hereafter specify for the purpose by notice to the Administrative
Agent and the Company. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in or pursuant to this Section and the appropriate answerback
is received, (ii) if given by reputable overnight courier, one (1) Domestic
Business Day after being delivered to such courier, (iii) if given by certified
mail (return receipt requested), three (3) Domestic Business Days after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iv) if given by any other means, when received at the
address specified in this Section; provided that notices to the Administrative
Agent under Article 2 or Article 8 and notices to the LC Bank under Section
2.03(b) shall not be effective until received.
SECTION 10.2. No Waiver. No failure or delay by any Agent or any Bank
in exercising any right, power or privilege under any of the Financing Documents
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies therein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 10.3. Expenses; Documentary Taxes; Indemnification. (a) The
Company shall pay (i) all reasonable out-of-pocket expenses of the Agents,
including reasonable fees and disbursements of special counsel for the Agents
and any local counsel for the Agents, in connection with (x) the preparation of
the Financing Documents, (y) any waiver or consent under the Financing Documents
or (z) any amendment of the Financing Documents or any Default or alleged
Default thereunder and (ii) if an Event of Default occurs, all reasonable
out-of-pocket expenses incurred by any Agent or Bank, including reasonable fees
and disbursements of counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom. The Company shall indemnify each Bank against any transfer taxes,
documentary taxes, assessments or charges made by any governmental authority by
reason of the execution and delivery of the Financing Documents.
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(b) The Company agrees to indemnify each Bank and hold each Bank
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by any Bank (or by any Agent in
connection with its actions as Agent) in connection with any investigative,
administrative or judicial proceeding (whether or not such Bank shall be
designated a party thereto) relating to or arising out of the Financing
Documents, the Collateral or any transaction relating thereto; provided that no
Bank shall have the right to be indemnified hereunder for its own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.
SECTION 10.4. Sharing of Set-Offs. Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount of principal and interest due with
respect to the Note of any Borrower held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to the Note of such Borrower held by
such other Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Notes of such Borrower held by the other
Banks, and such other adjustments shall be made, as may be required so that all
such payments of principal and interest with respect to the Notes of such
Borrower held by the Banks shall be shared by the Banks pro rata; provided that
if the Bank purchasing such participations (the "Sharing Bank") should
subsequently be required to refund such payment to such Borrower, then each Bank
from whom a participation was purchased shall pay to the Sharing Bank its pro
rata share of the participations purchased together with its pro rata share of
interest on such amount if and to the extent the Sharing Bank is required to pay
interest on any refunded amount; provided further that nothing in this Section
shall impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of a Borrower other than its indebtedness hereunder.
Each Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Note in respect of which
it is an obligor acquired pursuant to the foregoing arrangements, may exercise
rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of such Borrower in the amount of such participation.
SECTION 10.5. Amendments and Waivers. Any provision of this Agreement
or the Notes may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by the Borrowers and the Required Banks (and, if the
rights or duties of the LC Bank or either Agent are affected thereby, by it);
provided that no such amendment or waiver shall, unless signed by all the Banks,
(i) increase or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii) postpone the date fixed for any payment of
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principal of or interest on any Loan or any fees hereunder or for termination of
any Commitment, (iv) amend the definition of Borrowing Base, (v) amend Section
2.15 hereof, (vi) amend any provision of Article 9 hereof, or (vii) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Notes, or the number of Banks, which shall be required for the Banks or any of
them to take any action under this Section or any other provision of this
Agreement or the Notes.
SECTION 10.6. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that no Borrower may assign
or otherwise transfer any of its rights under this Agreement without the prior
written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrowers and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrowers and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrowers hereunder including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such participation agreement may
provide that such Bank will not agree to any modification, amendment or waiver
of this Agreement described in clauses (i), (ii), (iii), (iv), (v) or (vi) of
Section 10.05 without the consent of the Participant. An assignment or other
transfer which is not permitted by subsection 10.06(c) below shall be given
effect for purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection.
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations with respect to its Term Commitment (if any), its Term
Loans (if any) and its Revolver Commitment (and corresponding Revolving Loans
and Letter of Credit Liabilities), and such Assignee shall assume such rights
and obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit F hereto executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consent of the Company,
the LC Bank and the Administrative Agent (which consents shall not be
unreasonably withheld); provided that (i) if an Assignee is another Bank or an
Affiliate of such transferor Bank, no such consent shall be required, (ii) any
such assignment shall be in respect of pro-rata portions of the transferor
Bank's Term Commitment or Term
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Loans, as applicable at the relevant time, and Revolver Commitment and (iii)
immediately after giving effect to any such assignment, (x) the sum of (A) the
transferor Bank's Term Commitment or aggregate outstanding principal amount of
Term Loans, as applicable at the relevant time and (B) the transferor Bank's
Revolver Commitment is equal to either $0 or at least $3,000,000 and (y) the sum
of (A) the Assignee's Term Commitment or aggregate outstanding principal amount
of Term Loans, as applicable at the relevant time and (B) the Assignee's
Revolver Commitment is at least equal to $3,000,000. Upon execution and delivery
of such instrument and payment by such Assignee to such transferor Bank of an
amount equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection, the transferor Bank, the Administrative Agent and
the Borrowers shall make appropriate arrangements so that, if required, new
Notes are issued to the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Administrative Agent an administrative fee for
processing such assignment in the amount of $2,000. If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall, prior to the first date on which interest or fees are payable
hereunder for its account, deliver to the Company and the Administrative Agent
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 2.16.
(d) Any Bank may at any time assign all or any portion of its rights
under the Financing Documents to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.
SECTION 10.7. Collateral. Each of the Banks represents to each Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 10.8. Proprietary Information. The Administrative Agent and
each Bank shall keep confidential any information provided by or on behalf of
any Borrower or any of their respective Subsidiaries and marked as confidential
or proprietary; provided, that nothing herein shall prevent the Administrative
Agent or any Bank from disclosing such information (i) to its officers,
directors, employees, agents, attorneys and accountants in accordance with
customary banking practices, (ii) upon the order of a court or administrative
agency, (iii) upon the request or demand of any regulatory agency or authority
having jurisdiction over such party, (iv) that has become publicly available
without breach of any agreement between the parties hereto, (v) as necessary for
the
71
<PAGE> 77
exercise of any remedy under any Financing Document or (vi) subject to
provisions similar to those contained in this Section, to any prospective
Participant or Assignee.
SECTION 10.9. Governing Law; Submission to Jurisdiction. Except as
otherwise provided for in the Security Agreements, each of the Financing
Documents shall be governed by and construed in accordance with the laws of the
State of New York. Each Borrower hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement, any other Financing
Document or the transactions contemplated hereby or thereby. Each Borrower
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
SECTION 10.10. Counterparts; Integration. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement and the other Financing Documents constitute the entire agreement
and understanding among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof.
SECTION 10.11. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Agents and the
Banks in order to carry out the intentions of the parties hereto as nearly as
may be possible, and (ii) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
SECTION 10.12. Termination of Bridge Agreement. The Company and each of
the Banks that is also a "Bank" party to the Bridge Agreement agrees that the
"Commitments" as defined in the Bridge Agreement shall be terminated in their
entirety on the Effective Date. Each of such Banks waives (a) any requirement of
notice of such termination pursuant to Section 2.07 of the Bridge Agreement and
(b) any claim to any commitment fees or other fees under the Bridge Agreement
for any day on or after the Effective Date. The Company (i) represents and
warrants that (x) after giving effect to the preceding sentences of this
Section, the commitments under the Bridge Agreement will be terminated effective
not later than the Effective Date, (y) as of the Effective Date, no loans will
be outstanding under the Bridge Agreement and (ii) covenants that all
72
<PAGE> 78
accrued and unpaid commitment fees and any other amounts due and payable under
the Bridge Agreement (including without limitation expenses payable pursuant to
Section 9.03 thereof) shall have been paid on or prior to the Effective Date.
SECTION 10.13. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE AGENTS
AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER
FINANCING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
73
<PAGE> 79
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ORBITAL SCIENCES CORPORATION
By /s/ Jeffrey V. Pirone
--------------------------------------
Title: Chief Financial Officer
21700 Atlantic Boulevard
Dulles, Virginia 20166
Facsimile number: (703) 406-3502
Attention:
MAGELLAN CORPORATION
By /s/ Kenneth H. Sunshine
--------------------------------------
Title: Vice President & Assistant
Treasurer
960 Overland Court
San Dimas, CA 91773
Facsimile number:
Attention:
TERM COMMITMENTS
Term Banks
AGENT:
$7,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ James E. London
--------------------------------------
Title: Vice President
CO-AGENTS:
$6,125,000 THE BANK OF NOVA SCOTIA
74
<PAGE> 80
By /s/ John Hopmans
--------------------------------------
Title: Senior Relationship Manager
$6,125,000 NATIONSBANK, N.A.
By /s/ James W. Gaittens
--------------------------------------
Title: Vice President
PARTICIPANTS:
$5,250,000 BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By /s/ Catherine Moeser
--------------------------------------
Title: Assistant Vice President
$5,250,000 SIGNET BANK
By /s/ Sushil K. Clarence
--------------------------------------
Title: Vice President
75
<PAGE> 81
$5,250,000 THE SUMITOMO BANK, LIMITED
By /s/ Barry P. Maddams
--------------------------------------
Title: Co-General Manager
By /s/ James L. Hogan
--------------------------------------
Title: Vice President & Manager
Total Term Commitments
$35,000,000
76
<PAGE> 82
REVOLVER COMMITMENTS
Revolver Banks
AGENT:
$13,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ James E. London
--------------------------------------
Title: Vice President
CO-AGENTS:
$11,375,000 THE BANK OF NOVA SCOTIA
By /s/ John Hopmans
--------------------------------------
Title: Senior Relationship Manager
$11,375,000 NATIONSBANK, N.A.
By /s/ James W. Gaittens
--------------------------------------
Title: Vice President
PARTICIPANTS:
$9,750,000 BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By /s/ Catherine Moeser
--------------------------------------
Title: Assistant Vice President
$9,750,000 SIGNET BANK
By /s/ Sushil K. Clarence
--------------------------------------
Title: Vice President
$9,750,000 THE SUMITOMO BANK, LIMITED
77
<PAGE> 83
By /s/ Barry P. Maddams
--------------------------------------
Title: Co-General Manager
By /s/ James L. Hogan
--------------------------------------
Title: Vice President & Manager
Total Revolver Commitments
$65,000,000
78
<PAGE> 84
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
and as Collateral Agent
By /s/ James E. Condon
--------------------------------------
Title: Vice President
60 Wall Street
New York, New York 10260
Facsimile number: 212-648-5018
Attention:
79
<PAGE> 85
PRICING SCHEDULE
Each of "Commitment Fee Rate", "Euro-Dollar Margin", "Base Margin" and
"Letter of Credit Commission Rate" means, for any day, the rate set forth below
in the row opposite such term and in the column corresponding to the Pricing
Level that applies for such day:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Pricing Level Level Level Level Level
I II III IV
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commitment Fee .3125% .375% .50% .50%
Rate
- --------------------------------------------------------------------
Euro-Dollar 1.00% 1.50% 2.00% 2.50%
Margin
- --------------------------------------------------------------------
Base Margin 0% .50% 1.00% 1.50%
Letter of Credit 1.00% 1.50% 2.00% 2.50%
Commission Rate
- --------------------------------------------------------------------
</TABLE>
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Pricing" applies for any day if, on such day, the Company's
senior unsecured long-term debt is rated BB or higher by S&P and Ba2 or higher
by Moody's.
"Level II Pricing" applies for any day if, on such day, (i) the
Company's senior unsecured long-term debt is rated BB- or higher by S&P and Ba3
or higher by Moody's and (ii) Level I Pricing does not apply.
"Level III Pricing" applies for any day if, on such day, (i) the
Company's senior unsecured long-term debt is rated B+ or higher by S&P and B1 or
higher by Moody's and (ii) neither Level I Pricing nor Level II Pricing applies.
"Level IV Pricing" applies for any day if no other Pricing Level
applies for such day.
"Pricing Level" refers to the determination of which of Level I, Level
II, Level III, or Level IV applies for any day.
The credit ratings to be utilized for purposes of this Schedule are
those assigned to the senior unsecured long-term debt securities of the Company
without third-party credit enhancement, and any rating assigned to any other
debt security of the Company shall be disregarded. The ratings in effect for any
day are those in effect at the close of business on such day.
<PAGE> 86
Notwithstanding the foregoing, until such time as the senior unsecured
long-term debt securities of the Company are rated by Moody's, the Pricing Level
shall be determined solely with reference to the rating by S&P, provided that in
no event may Level I Pricing apply unless the required ratings from both S&P and
Moody's are in effect.
3
<PAGE> 87
SCHEDULE I
Investment Policies of the Company
Purpose
To establish a policy for the investment of surplus cash.
Definition
Surplus Cash -- cash resources in excess of the needs of the corporation to
conduct its business.
All surplus cash will be under the control of the Chief Financial Officer. No
surplus cash beyond minor petty cash balances are permissible elsewhere within
the corporation.
Policy
1. Surplus cash will be invested in a manner which minimizes risk of
principal, provides sufficient liquidity and, within these constraints,
maximizes yield.
2. Investments will only be placed in debt instruments from entities that
have "investment grade" credit ratings or better at the time such
investments are made:
<TABLE>
<S> <C>
Commercial Paper A1/P1
Corporate Debt Securities A or above
State and Local Obligations A
</TABLE>
3. Investments will be made only in securities denominated in the U.S.
Dollar or foreign currency obligations fully hedged.
4. Investments will be made in instruments that will possess high
liquidity or instruments that can be converted to cash in a short
period of time. Accordingly, investments are restricted to instruments
with maturities of 2 years or less.
5. Not more than $5 million will be invested in the security instrument
from any single debtor other than the United States Government.
6. Within these guidelines, the Chief Financial Officer will have the
flexibility to invest surplus cash in the following debt instruments:
U.S. Treasury Bills
Overnight Repurchase Agreements of U.S.
<PAGE> 88
Government Securities
Eurodollar Obligations
Commercial Paper
Master Notes
Certificates of Deposit
Bankers Acceptances
Municipal Obligations
Corporate Bond Issues
7. Approvals for specific investment decisions are not required as long as
they meet the standards noted above.
8. Any investment which meets all the foregoing criteria at the time it is
made but subsequently ceases to do so shall be liquidated within a
reasonable time.
Accounting Control Requirements/Procedures
The Controller is responsible for ensuring that the Company's investment
portfolio is properly accounted for at all times. This process will include:
A. The establishment and maintenance of files for all accounts with
investment brokers and related confirmation documentation.
B. The preparation of journal entries on a monthly basis to accrue
investment income earned on investments, amortization of premiums or
discounts, cash receipts and fund transfers.
C. The preparation and maintenance of an investment schedule of all trades
for audit review. Quarterly policy compliance schedules will also be
maintained measuring quarterly investment activity against the
Company's written investment policy.
D. The preparation of weekly investment activity reports for management
review.
E. The reconciliation of all monthly interest statements received from the
organizations investing the Company's cash to the General Ledger.
3
<PAGE> 89
EXHIBIT A
NOTE
New York, New York
_____________, 199_
For value received, [NAME OF BORROWER], a Delaware corporation, (the
"Borrower"), promises to pay to the order of [NAME OF BANK] (the "Bank"), for
the account of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the maturity date provided for in the Credit Agreement. The
Borrower promises to pay interest on the unpaid principal amount of each such
Loan on the dates and at the rate or rates provided for in the Credit Agreement.
All such payments of principal and interest shall be made in lawful money of the
United States in Federal or other immediately available funds at the office of
Morgan Guaranty Trust Company of New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types and maturities thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
prior to any transfer hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding shall be endorsed by
the Bank on the schedule attached hereto, or on a continuation of such schedule
attached to and made a part hereof; provided that the failure of the Bank to
make any such recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Second Amended and
Restated Credit and Reimbursement Agreement dated as of August 5, 1997 among
[Orbital Sciences Corporation] [Magellan Corporation] and the Borrower, as
Borrowers and Guarantors, the banks listed on the signature pages thereof,
Morgan Guaranty Trust Company of New York, as Administrative Agent and as
Collateral Agent (as the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions for the
prepayment hereof, the acceleration of the maturity hereof and the basis upon
which this Note is secured.
The Guarantors have, pursuant to the provisions of the Credit
Agreement, unconditionally guaranteed the payment in full of the principal of
and interest on this Note.
[NAME OF BORROWER]
<PAGE> 90
By
Name:
Title:
2
<PAGE> 91
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Date Amount of Type of Class of Loan Amount of Notation
Loan Loan Principal Made By
Repaid
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 1
EXHIBIT 10.4
AMENDED AND RESTATED
SECURITY AGREEMENT
dated as of
June 30, 1992
and amended and restated
as of August 5, 1997
among
ORBITAL SCIENCES CORPORATION,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Collateral Agent
and
NATIONSBANK, N.A.,
as Designated Lockbox Bank
<PAGE> 2
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT dated as of June 30, 1992 and
amended and restated as of August 5, 1997 among ORBITAL SCIENCES CORPORATION
(with its successors, the "DEBTOR"), MORGAN GUARANTY TRUST COMPANY OF NEW YORK
(as successor by merger to J.P. Morgan Delaware), as Collateral Agent (with its
successors, the "COLLATERAL AGENT") and NATIONSBANK, N.A., as Designated Lockbox
Bank.
W I T N E S S E T H :
WHEREAS, the Debtor and certain of its wholly-owned subsidiaries, certain
banks (with their respective successors and assigns, the "BANKS"), Morgan
Guaranty Trust Company of New York, as administrative agent (the "ADMINISTRATIVE
AGENT") and J.P. Morgan Delaware, as collateral agent (the "ORIGINAL COLLATERAL
AGENT") have entered into a Credit and Reimbursement Agreement dated as of June
30, 1992 (as amended from time to time prior to the Effective Date (as defined
in the Credit Agreement referred to below), including without limitation by the
Amended and Restated Credit Agreement dated as of September 27, 1994 among the
Debtor and such wholly-owned subsidiaries, the Banks, the Administrative Agent
and the Original Collateral Agent, the "ORIGINAL CREDIT AGREEMENT"); and
WHEREAS, pursuant to a Security Agreement dated as of June 30, 1992
between the Debtor and the Original Collateral Agent (as amended from time to
time prior to the Effective Date, the "ORIGINAL COMPANY SECURITY AGREEMENT"),
the obligations of the Debtor under the Financing Documents (as defined in the
Original Credit Agreement) are secured by Liens (as so defined) on the
Collateral (as so defined); and
WHEREAS, the Original Collateral Agent has merged with and into Morgan
Guaranty Trust Company of New York, and Morgan Guaranty Trust Company of New
York as the survivor to such merger has assumed all of the obligations of the
Original Collateral Agent (Morgan Guaranty Trust Company of New York in its
capacity as successor by merger to the Original Collateral Agent, the
"COLLATERAL AGENT"); and
WHEREAS, the Debtor and the Banks wish to restructure the obligations of
the Debtor under the Financing Documents; and
<PAGE> 3
WHEREAS, in order to effect such restructuring, the Debtor, Magellan
Corporation, a subsidiary of the Debtor, the Banks, the Administrative Agent and
the Collateral Agent have entered into a Second Amended and Restated Credit
Agreement dated as of August 5, 1997 (the "SECOND AMENDED CREDIT AGREEMENT")
pursuant to which the Original Credit Agreement has been amended and restated in
its entirety as set forth therein (the Original Credit Agreement, as amended and
restated by the Second Amended Credit Agreement and as the same may be further
amended or amended and restated from time to time, the "CREDIT AGREEMENT");
WHEREAS, it is a condition to the effectiveness of the Second Amended
Credit Agreement that the Debtor and the Collateral Agent enter into an Amended
and Restated Company Security Agreement substantially in the form hereof;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Original Company Security Agreement is amended and restated in
its entirety as follows:
SECTION 1. Definitions.
Terms defined in the Credit Agreement and not otherwise defined herein
have, as used herein, the respective meanings provided for therein. The
following additional terms, as used herein, have the following respective
meanings:
"ANCILLARY RIGHTS" means rights incidental or ancillary to the Receivables
and the administration, servicing and collection thereof, including, without
limitation, all collateral security and guarantees of any kind (including
without limitation letters of credit or other forms of credit enhancement) given
by any Person to the Debtor with respect to any Receivable.
"COLLATERAL" has the meaning set forth in Section 3.
"COLLATERAL ACCOUNT" has the meaning set forth in Section 6.
"DESIGNATED LOCKBOX BANK" means NationsBank, N.A.
"INSURANCE ACCOUNT" has the meaning set forth in Section 7.
"INSURANCE PAYMENTS" means all proceeds payable to the Collateral Agent as
loss payee under, or unearned premiums with respect to, the Insurance Policies.
2
<PAGE> 4
"INSURANCE POLICIES" means the insurance policies evidencing the insurance
the Debtor is maintaining at any time pursuant to Section 5.03 of the Credit
Agreement other than any such policy solely with respect to equipment.
"LETTER OF CREDIT OBLIGATION" means at any time any Reimbursement
Obligations of the Debtor or other obligation of the Debtor to make a payment in
connection with a Letter of Credit issued for the account of the Debtor,
including contingent obligations with respect to amounts which are then, or may
thereafter become, available for drawing under Letters of Credit issued for the
account of the Debtor then outstanding.
"LIQUID INVESTMENTS" means Temporary Cash Investments; provided that (i)
each Liquid Investment shall mature within 30 days after it is acquired by the
Collateral Agent and (ii) in order to provide the Collateral Agent, for the
benefit of the Secured Parties, with a perfected security interest therein, each
Liquid Investment shall be either:
(i) evidenced by negotiable certificates or instruments, or if
non-negotiable then issued in the name of the Debtor, which (together with
any appropriate instruments of transfer) are delivered to, and held by,
the Collateral Agent or an agent thereof (which shall not be the Debtor or
any of its Affiliates) in the State of New York; or
(ii) in book-entry form and issued by the United States and subject
to pledge under applicable state law and Treasury regulations and as to
which (in the reasonable opinion of counsel to the Collateral Agent)
appropriate measures shall have been taken for perfection of the Security
Interests.
"PERFECTION CERTIFICATE" means the certificate, substantially in the form
of Exhibit A, completed and supplemented with the schedules and attachments
contemplated thereby to the satisfaction of the Collateral Agent, and duly
executed by the Debtor.
"PROCEEDS" means all proceeds of, and all other profits, rentals or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or realization upon, Collateral,
including without limitation all claims of the Debtor against third parties for
loss of, damage to or destruction of, or for proceeds payable under, or unearned
premiums with respect to, policies of insurance in respect of, any Collateral,
rights to any returned or repossessed goods relating to any Collateral, and any
condemnation or requisition payments with respect to any Collateral, in each
case whether now existing or hereafter arising.
3
<PAGE> 5
"RECORDS" means all right, title or interest of Debtor in and to all
documents, books, records and other information (including without limitation
computer programs, tapes, discs, punch cards, data processing software and
related property and rights) maintained with respect to Receivables.
"RECEIVABLES" means all "ACCOUNTS" (as defined in the UCC) now owned or
hereafter acquired by the Debtor, and shall also mean and include all accounts
receivable, contract rights, book debts, chattel paper, notes, drafts and other
obligations or indebtedness owing to the Debtor arising from the sale, lease or
exchange of goods or other property by it and/or performance of services by it
(including, without limitation, any such obligation which might be characterized
as an account, contract right or general intangible under the Uniform Commercial
Code in effect in any jurisdiction) and all of the Debtor's right in, to and
under all purchase orders for goods, services or other property to be provided
or sold by it or any Affiliate, and all monies due to or to become due to the
Debtor under all contracts for the sale (as seller), lease (as lessor) or
exchange of goods or other property and/or performance of services by it
(whether or not yet earned by performance on the part of the Debtor), in each
case whether now in existence or hereafter arising or acquired including,
without limitation, the right to receive the proceeds of said purchase orders
and contracts and all collateral security and guarantees of any kind given by
any Person with respect to any of the foregoing.
"SECURED OBLIGATIONS" means the obligations secured under this Agreement
including (a) all principal of and interest (including, without limitation, any
interest which accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency or reorganization of the Debtor,
whether or not allowed or allowable as a claim in any such proceeding) on any
loan to the Debtor under, or any note issued by the Debtor pursuant to, the
Credit Agreement, (b) all other amounts payable by the Debtor hereunder or under
the Credit Agreement (including without limitation any Reimbursement
Obligations) and (c) any renewals or extensions of any of the foregoing.
"SECURED PARTIES" means each of the Banks and the Agents.
"SECURITY EVENT" means any event, occurrence or condition which, in the
sole discretion of the Required Banks acting in good faith, "impairs the
prospect of payment" by the Debtor within the meaning of Section 1-208 of the
UCC.
"SECURITY INTERESTS" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"UCC" means the Uniform Commercial Code as in effect on the date hereof in
the State of New York; provided that if by reason of mandatory
4
<PAGE> 6
provisions of law, the perfection or the effect of perfection or non-perfection
of the Security Interest in any Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than New York, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection.
SECTION 2. Representations and Warranties.
The Debtor represents and warrants as follows:
(A) The Debtor has good title to all of the Collateral, free and clear of
any Liens other than the Permitted Liens. The Debtor has taken all actions
necessary under the UCC to perfect its interest in any Receivables purchased or
otherwise acquired by it, as against its assignors and creditors of its
assignors.
(B) Other than financing statements, mortgages, security agreements or
other similar or equivalent documents or instruments with respect to the
Security Interests and the Permitted Liens, no financing statement, mortgage,
security agreement or similar or equivalent document or instrument covering all
or any part of the Collateral is on file or of record in any jurisdiction in
which such filing or recording would be effective to perfect a Lien on such
Collateral. No Collateral is in the possession of any Person (other than the
Debtor) asserting any claim thereto or security interest therein, except that
the Collateral Agent or its designee may have possession of Collateral as
contemplated hereby.
(C) On the Effective Date, the Debtor shall deliver the Perfection
Certificate to the Collateral Agent. The information set forth therein shall be
correct and complete in all material respects. Promptly after the Effective
Date, the Debtor shall furnish to the Collateral Agent acknowledgment copies of
the filings set forth in Schedule 7 to the Perfection Certificate.
(D) The Security Interests constitute valid security interests under the
UCC securing the Secured Obligations to the extent the UCC is applicable
thereto. The Security Interests constitute perfected security interests in the
Collateral to the extent that a security interest therein may be perfected by
filing pursuant to the UCC, subject to no Liens except for the Permitted Liens
and prior to all Liens except for the Permitted Liens (other than the Security
Interests) existing on and as of the Effective Date.
(E) Upon the delivery to the Collateral Agent of assignments and notices of
assignment substantially in the forms of Exhibits G-2 and G-3, respectively, to
the Credit Agreement with respect thereto, and the filing of each such notice
with the governmental authority or agency or other office described therein, the
5
<PAGE> 7
Security Interests shall constitute valid assignments of the Receivables due
under Eligible Government Contracts to the extent that such assignment is
governed by the Assignment of Claims Act.
(F) No Person other than the Collateral Agent has been named as a loss
payee on any of the Insurance Policies, except as permitted in the proviso
contained in Section 5.03(e) of the Credit Agreement. No consent of any Person
is required in connection with the pledge of the Insurance Policies hereunder.
SECTION 3. The Security Interests.
(A) In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all of the obligations of the Debtor hereunder and under the other Financing
Documents, the Debtor hereby grants to the Collateral Agent for the ratable
benefit of the Secured Parties, a continuing security interest in and to all of
the following property of the Debtor, whether now owned or existing or hereafter
acquired or arising and regardless of where located (all being collectively
referred to as the "COLLATERAL"):
(1) Receivables;
(2) Ancillary Rights;
(3) Records;
(4) Insurance Payments;
(5) Insurance Policies;
(6) The Collateral Account, all cash deposited therein from time to
time, the Liquid Investments made pursuant to Section 6(D) and other
monies and property of any kind of the Debtor in the possession or under
the control of the Collateral Agent;
(7) The Insurance Account, all cash deposited therein from time to
time, and the Liquid Investments made pursuant to Section 7(C); and
(8) All Proceeds of all or any of the Collateral described in clauses
1 through 7 hereof.
(B) The Security Interests are granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or transfer or in
any
6
<PAGE> 8
way affect or modify, any obligation or liability of the Debtor with respect
to any of the Collateral or any transaction in connection therewith.
SECTION 4. Further Assurances; Covenants.
(A) The Debtor will not change its name, identity or corporate structure in
any manner or change the location of (i) its chief executive office or chief
place of business, or (ii) the locations where it keeps or holds any Collateral
from the applicable location described in the Perfection Certificate unless it
shall have given the Collateral Agent thirty (30) days prior notice thereof,
shall have taken all such action as the Collateral Agent shall reasonably deem
necessary to maintain at all times the perfection of the Security Interests in
the Collateral granted hereunder and shall have delivered an opinion of counsel
with respect thereto in accordance with Section 4(I).
(B) The Debtor will, from time to time, at its expense, execute, deliver,
file and record any statement, notice, assignment, instrument, document,
agreement or other paper and take any other action, (including, without
limitation, any filings of financing or continuation statements under the UCC,
or any such document or action in respect of the Assignment of Claims Act) that
from time to time may be necessary or desirable, or that the Collateral Agent
may reasonably request, in order to create, preserve, perfect, confirm or
validate the Security Interests or to enable the Collateral Agent and the
Secured Parties to obtain the full benefits of this Agreement, or to enable the
Collateral Agent to exercise and enforce any of its rights, powers and remedies
hereunder with respect to any of the Collateral. To the extent permitted by
applicable law, the Debtor hereby authorizes the Collateral Agent to execute and
file financing statements or continuation statements without the Debtor's
signature appearing thereon. The Debtor agrees that a carbon, photographic,
photostatic or other reproduction of this Agreement or of a financing statement
is sufficient as a financing statement. The Debtor shall pay the costs of, or
incidental to, any recording or filing of any financing or continuation
statements concerning the Collateral.
(C) The Debtor will maintain its qualification to do business and all
necessary licenses, permits and other governmental authorizations necessary in
any jurisdiction to enable the Debtor to perform its obligations in respect of
the Receivables and to administer, service and collect the Receivables.
(D) The Debtor will not, without the consent of the Required Banks, change
its credit or collection policies in a manner that is reasonably likely to
impair the collectibility of the Receivables.
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<PAGE> 9
(E) The Debtor will keep full and accurate books and records relating to
the Collateral, and stamp or otherwise mark such books and records in such
manner as the Required Banks may reasonably require in order to reflect the
Security Interests.
(F) The Debtor shall use all commercially reasonable efforts to cause to be
collected from its account debtors, as and when due, any and all amounts owing
under or on account of each Receivable (including, without limitation,
Receivables which are delinquent, such Receivables to be collected in accordance
with lawful collection procedures) and shall apply forthwith upon receipt
thereof all such amounts as are so collected to the outstanding balance of such
Receivables. Subject to the rights of the Collateral Agent and the Secured
Parties hereunder if an Event of Default shall have occurred and be continuing,
the Debtor may allow in the ordinary course of business as adjustments to
amounts owing under the Receivables (i) an extension or renewal of the time or
times of payment, or settlement for less than the total unpaid balance and (ii)
a refund, credit or other adjustment due as a result of returned, damaged, or
non-conforming merchandise, products or services, all in accordance with the
Debtor's sound business judgment. The costs and expenses (including, without
limitation, reasonable attorney's fees) of collection, whether incurred by the
Debtor or the Collateral Agent, shall be borne by the Debtor.
(G) Without the prior written consent of the Required Banks, the Debtor
will not sell, lease, exchange, assign or otherwise dispose of, or grant any
option with respect to, any Collateral except that, subject to the rights of the
Agents and the Banks hereunder if an Event of Default shall have occurred and be
continuing, the Debtor may dispose of Collateral as permitted by the terms of
the Credit Agreement.
(H) The Debtor will, promptly upon request, provide to the Collateral Agent
all information and evidence it may reasonably request concerning the Collateral
to enable the Collateral Agent to enforce the provisions of this Agreement.
(I) Not more than six months nor less than 30 days prior to each date on
which the Debtor proposes to take any action in connection with which an opinion
of counsel is to be delivered pursuant to Section 4(A), the Debtor shall, at its
cost and expense, cause to be delivered to the Secured Parties an opinion of
counsel, reasonably satisfactory to the Collateral Agent, substantially in the
form of Exhibit C to the effect that all financing statements and amendments or
supplements thereto, continuation statements and other documents required to be
recorded or filed in order to continue the perfection of the Security Interests
against all following the proposed action by the Debtor have been filed in each
filing office
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<PAGE> 10
necessary for such purpose and that all filing fees and taxes, if any, payable
in connection with such filings have been paid in full.
SECTION 5. [Reserved].
SECTION 6. Collateral Account.
(A) There is hereby established with the Collateral Agent a cash collateral
account for the Debtor (the "COLLATERAL ACCOUNT") in the name and under the
control of the Collateral Agent into which there shall be deposited from time to
time (i) the cash proceeds of the Collateral (other than any cash proceeds of
the Insurance Payments or the Insurance Policies) required to be delivered to
the Collateral Agent pursuant to subsection (B) of this Section 6 or any other
provision of this Agreement and (ii) the Borrower LC Amount received by the
Administrative Agent pursuant to Section 6.01 of the Credit Agreement. Any
income received by the Collateral Agent with respect to the balance from time to
time standing to the credit of the Collateral Account, including any interest or
capital gains on Liquid Investments, shall remain, or be deposited, in the
Collateral Account. The cash amounts on deposit from time to time in the
Collateral Account together with any Liquid Investments from time to time made
pursuant to subsection (D) of this Section shall constitute part of the
Collateral hereunder and shall not constitute payment of the Secured Obligations
until applied thereto as hereinafter provided.
(B) The Debtor shall instruct all Obligors to make all payments in respect
of the Eligible Receivables either (i) directly to the Collateral Agent (by
instructing that such payments be remitted to a post office box which shall be
in the name and under the control of the Collateral Agent) or (ii) to one or
more other banks in any state in the United States (by instructing that such
payments be remitted to a post office box which shall be in the name and under
the control of such bank) under a Lockbox Letter substantially in the form of
Exhibit B hereto duly executed by the Debtor and such bank or under other
arrangements, in form and substance reasonably satisfactory to the Collateral
Agent, pursuant to which the Debtor shall have irrevocably instructed such other
bank (and such other bank shall have agreed) to remit all proceeds of such
payments directly to the Collateral Agent for deposit into the Collateral
Account or as the Collateral Agent may otherwise instruct such bank. All such
payments made to the Collateral Agent shall be deposited in the Collateral
Account. In addition to the foregoing, the Debtor agrees that if the Proceeds of
any Collateral hereunder (including the payments made in respect of Receivables)
shall be received by it, the Borrower shall as promptly as possible deposit such
Proceeds into the Collateral Account. Until so deposited, all such Proceeds
shall be held in trust by the Debtor for the
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Collateral Agent and the other Secured Parties and shall not be commingled with
any other funds or property of the Debtor.
(C) The balance from time to time standing to the credit of the Collateral
Account shall, except upon the occurrence and continuation of a Security Event
or an Event of Default, be distributed to the Debtor upon the order of the
Debtor. If immediately available cash on deposit in the Collateral Account is
not sufficient to make any distribution to the Debtor referred to in the
previous sentence of this Section 6(C), the Collateral Agent shall liquidate as
promptly as practicable Liquid Investments as required to obtain sufficient cash
to make such distribution and, notwithstanding any other provision of this
Section 6, such distribution shall not be made until such liquidation has taken
place. Upon the occurrence and continuation of an Event of Default, the
Collateral Agent shall, if so instructed by the Required Banks, apply or cause
to be applied (subject to collection) any or all of the balance from time to
time standing to the credit of the Collateral Account in the manner specified in
Section 11.
(D) Amounts on deposit in the Collateral Account aggregating $1,000,000 or
more shall be invested and re-invested from time to time in such Liquid
Investments as the Debtor shall determine, which Liquid Investments shall be
under the control of the Collateral Agent, provided that, if an Event of Default
has occurred and is continuing, the Collateral Agent shall, if instructed by the
Required Banks, liquidate any such Liquid Investment and apply or cause to be
applied the proceeds thereof to the payment of the Secured Obligations in the
manner specified in Section 11.
SECTION 7. Insurance Accounts.
(A) There is hereby established with the Collateral Agent a cash collateral
account for the Debtor (the "INSURANCE ACCOUNT") in the name and under the
control of the Collateral Agent into which there shall be deposited from time to
time any amounts received by the Collateral Agent pursuant to Section 5.03(c) of
the Credit Agreement. Insurance Payments not identified to a particular Borrower
by the payor shall be deposited in the Insurance Account of the Borrower
designated by the Company by notice to the Collateral Agent or, in the absence
of such notice, shall be deposited in the Insurance Account of the Company. Any
income received by the Collateral Agent with respect to the balance from time to
time standing to the credit of the Insurance Account, including any interest or
capital gains on Liquid Investments, shall remain, or be deposited, in the
Insurance Account. The cash amounts on deposit from time to time in the
Insurance Account together with any Liquid Investments from time to time made
pursuant to subsection (C) of this Section shall constitute part of the
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Collateral hereunder and shall not constitute payment of the Secured Obligations
until applied thereto as hereinafter provided.
(B) The balance from time to time standing to the credit of the Insurance
Account shall, except upon the occurrence and continuation of a Default, be
distributed to the Debtor upon the order of the Debtor. If immediately available
cash on deposit in the Insurance Account is not sufficient to make any
distribution to the Debtor referred to in the previous sentence of this Section
7(B), the Collateral Agent shall liquidate as promptly as practicable Liquid
Investments as required to obtain sufficient cash to make such distribution and,
notwithstanding any other provision of this Section 7, such distribution shall
not be made until such liquidation has taken place. Upon the occurrence and
continuation of an Event of Default, the Collateral Agent shall, if so
instructed by the Required Banks, apply or cause to be applied (subject to
collection) any or all of the balance from time to time standing to the credit
of the Insurance Account in the manner specified in Section 11.
(C) Amounts on deposit in the Insurance Account aggregating $1,000,000 or
more shall be invested and re-invested from time to time in such Liquid
Investments as the Debtor shall determine, which Liquid Investments shall be
under the control of the Collateral Agent, provided that, if an Event of Default
has occurred and is continuing, the Collateral Agent shall, if instructed by the
Required Banks, liquidate any such Liquid Investment and apply or cause to be
applied the proceeds thereof to the payment of the Secured Obligations in the
manner specified in Section 11.
SECTION 8. General Authority.
The Debtor hereby irrevocably appoints the Collateral Agent its true and
lawful attorney, with full power of substitution, in the name of the Debtor, the
Agents, any other Secured Parties or otherwise, for the sole use and benefit of
the Collateral Agent and the Secured Parties, but at the Debtor's expense, to
the extent permitted by law (including, without limitation, applicable laws,
rules, regulations and orders) to exercise, at any time and from time to time
while and only after an Event of Default has occurred and is continuing, all or
any of the following powers with respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance
for any and all monies due or to become due thereon or by virtue
thereof;
(ii) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto;
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(iii) to sell, transfer, assign or otherwise deal in or with
the same or the proceeds or avails thereof, as fully and effectually
as if the Collateral Agent were the absolute owner thereof; and
(iv) to extend the time of payment of any or all thereof and
to make any allowance and other adjustments with reference thereto;
provided that the Collateral Agent shall give the Debtor not less than ten days'
prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral, except any Collateral which is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market. The Debtor agrees that such notice constitutes "reasonable
notification" within the meaning of Section 9-504(3) of the UCC.
SECTION 9. Remedies upon Event of Default.
(A) If any Event of Default has occurred and is continuing, the Collateral
Agent may at the direction of the Required Banks, exercise on behalf of the
Secured Parties all rights of a secured party under the UCC (or, if the Uniform
Commercial Code is not in effect in the jurisdiction where such rights are
exercised, the UCC as in effect in the State of New York to the extent not
prohibited by the laws of such jurisdiction), and, in addition, the Collateral
Agent may, at the direction of the Required Banks, without being required to
give any notice, except as herein provided or as may be required by mandatory
provisions of law, (i) withdraw all cash and Liquid Investments in the
Collateral Account and the Insurance Account and apply such cash and Liquid
Investments and other cash, if any, then held by it as Collateral as specified
in Section 11 and (ii) if there shall be no such cash or Liquid Investments or
if such cash and Liquid Investments shall be insufficient to pay all the Secured
Obligations in full, sell the Collateral (subject to any applicable laws, rules,
regulations and orders) or any part thereof at public or private sale, for cash,
upon credit or for future delivery, and at such price or prices as the
Collateral Agent may reasonably deem satisfactory. The Collateral Agent or any
other Secured Party may be the purchaser of any or all of the Collateral
(subject to any applicable laws, rules, regulations and orders) so sold at any
public sale (or, if the Collateral is of a type customarily sold in a recognized
market or is of a type which is the subject of widely distributed standard price
quotations, at any private sale). The Debtor will execute and deliver such
documents and take such other action as the Collateral Agent reasonably deems
necessary or advisable in order that any such sale may be made in compliance
with law. Upon any such sale the Collateral Agent shall have the right to
deliver, assign and transfer to the purchaser thereof the Collateral so sold
(subject to any applicable laws, rules, regulations and orders). Each purchaser
at any such sale shall (subject to any applicable laws, rules, regulations
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and orders) hold the Collateral so sold to it absolutely and free from any claim
or right of whatsoever kind, including any equity or right of redemption of the
Debtor which may be waived, and the Debtor, to the extent permitted by law,
hereby specifically waives all rights of redemption, stay or appraisal which it
has or may have under any law now existing or hereafter adopted. The notice (if
any) of such sale required by Section 8 shall (1) in the case of a public sale,
state the time and place fixed for such sale, and (2) in the case of a private
sale, state the day after which such sale may be consummated. Any such public
sale shall be held at such time or times within ordinary business hours and at
such place or places as the Collateral Agent may fix in the notice of such sale.
At any such sale the Collateral may be sold in one lot as an entirety or in
separate parcels, as the Collateral Agent may determine. The Collateral Agent
shall not be obligated to make any such sale pursuant to any such notice. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In case of any sale of all or
any part of the Collateral on credit or for future delivery, the Collateral so
sold may be retained by the Collateral Agent until the selling price is paid by
the purchaser thereof, but the Collateral Agent shall not incur any liability in
case of the failure of such purchaser to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may again be sold upon
like notice. The Collateral Agent, instead of exercising the power of sale
herein conferred upon it (subject to any applicable laws, rules, regulations and
orders) may, at the direction of the Required Banks, proceed by a suit or suits
at law or in equity to foreclose the Security Interests and sell the Collateral,
or any portion thereof, under a judgment or decree of a court or courts of
competent jurisdiction.
(B) For the purpose of enforcing any and all rights and remedies under this
Agreement the Collateral Agent may (i) require the Debtor to, and the Debtor
agrees that it will, at its expense and upon the request of the Collateral
Agent, forthwith assemble all or any part of the Collateral as directed by the
Collateral Agent and make it available at a place reasonably designated by the
Collateral Agent which is, in its opinion, reasonably convenient to the
Collateral Agent and the Debtor, whether at the premises of the Debtor or
otherwise, (ii) to the extent permitted by applicable law, enter, with or
without process of law and without breach of the peace, any premise where any of
the Collateral is or may be located, and without charge or liability to it seize
and remove such Collateral from such premises, (iii) have access to and use the
Debtor's books and records relating to the Collateral and (iv) prior to the
disposition of the Collateral, store or transfer it without charge in or by
means of any storage or transportation facility owned or leased by the Debtor,
process, repair or recondition it or otherwise prepare it for disposition in any
reasonable manner and to the extent the Collateral Agent deems
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reasonable, appropriate and, in connection with such preparation and
disposition, use without charge any trademark, trade name, copyright, patent or
technical process used by the Debtor.
SECTION 10. Limitation on Duty of Collateral Agent in Respect of
Collateral.
Beyond the exercise of reasonable care in the custody thereof, the
Collateral Agent shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property, and shall not be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by the Collateral Agent in good
faith.
SECTION 11. Application of Proceeds.
Upon the occurrence and during the continuance of an Event of Default, the
proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held in the Collateral Account and Insurance Account
shall be applied by the Collateral Agent in the following order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Collateral
Agent, and all expenses, liabilities and advances incurred or made by the
Collateral Agent in connection therewith, and any other unreimbursed
expenses for which the Collateral Agent or any Bank is to be reimbursed
pursuant to the Credit Agreement, and unpaid fees owing to the Agents
under the Credit Agreement;
second, to the ratable payment of accrued but unpaid interest on the
Secured Obligations;
third, to the ratable payment of unpaid principal of Loans and,
subject to the second sentence of subsection (b), Letter of Credit
Obligations;
fourth, to the ratable payment of all other Secured Obligations,
until all Secured Obligations shall have been paid in full; and
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finally, to payment to the Debtor or its successors or assigns, or
as a court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
(b) The Collateral Agent may make distributions hereunder in cash or in
kind or, on a ratable basis, in any combination thereof. If at any time any
monies collected or received by the Collateral Agent are distributable pursuant
to this Section in respect of a Letter of Credit Obligation which is a
contingent obligation at such time, then the Collateral Agent shall invest such
amounts in Liquid Investments selected by it and shall hold all such amounts so
distributable and all such Liquid Investments and the net proceeds thereof in
trust for application to the payment of such Letter of Credit Obligation at such
time as such Letter of Credit Obligation is no longer a contingent obligation.
If the Collateral Agent holds any amounts which were distributable in respect of
any Letter of Credit Obligations after all Letters of Credit have expired and
all amounts payable with respect thereto have been paid, such amounts shall be
applied in the order set forth in subsection (a) above.
(c) In making the determinations and allocations required by this Section,
the Collateral Agent shall have no liability to any of the Banks for actions
taken in reliance on information supplied by the Banks as to the amounts of the
Secured Obligations held by them. All distributions made by the Collateral Agent
pursuant to this Section shall be final, and the Collateral Agent shall have no
duty to inquire as to the application by the Banks of any amount distributed to
them. However, if at any time the Collateral Agent determines that an allocation
or distribution previously made pursuant to this Section was based on a mistake
of fact (including, without limiting the generality of the foregoing, mistakes
based on any assumption that principal or interest has been paid by payments
which are subsequently recovered from the recipient thereof through the
operation of any bankruptcy, reorganization, insolvency or other laws or
otherwise), the Collateral Agent may in its discretion, but shall not be
obligated to, adjust subsequent allocations and distributions hereunder so that,
on a cumulative basis, the Collateral Agent and the Banks receive the
distributions to which they would have been entitled if such mistake of fact had
not been made.
SECTION 12. Appointment of Co-agents.
At any time or times, in order to comply with any legal requirement in any
jurisdiction, the Collateral Agent may appoint another bank or trust company or
one or more other Persons, either to act as collateral co-agent or collateral
co-agents, jointly with the Collateral Agent, or to act as separate collateral
agent or collateral agents on behalf of the Secured Parties with such power and
authority
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as may be necessary for the effectual operation of the provisions hereof and may
be specified in the instrument of appointment (which may, in the discretion of
the Collateral Agent, include provisions for the protection of each such
collateral co-agent or separate collateral agent similar to the provisions of
Article 7 of the Credit Agreement).
SECTION 13. Designated Lockbox Bank. The Designated Lockbox Bank shall
have the rights and obligations of the Collateral Agent in respect of the
Collateral Account specified in Section 6 of this Agreement, provided that if an
Event of Default has occurred and is continuing, the Designated Lockbox Bank
shall exercise such rights and perform such obligations at the direction of the
Collateral Agent. In exercising such rights and performing such obligations the
Designated Lockbox Bank shall have the benefit of all privileges, immunities and
indemnities provided for the Collateral Agent under this Agreement including
without limitation the provisions of Section 14 hereof. The Designated Lockbox
Bank may resign as Designated Lockbox Bank in accordance with the provisions of
Section 7.08 of the Credit Agreement.
SECTION 14. Expenses.
The Debtor agrees that it will, on demand, pay to the Collateral Agent the
amount of any and all reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel and of any other experts, which the
Collateral Agent may incur in connection with (x) the administration or
enforcement of this Agreement, including such expenses as are incurred to
preserve the value of the Collateral and the validity, perfection, rank and
value of any Security Interest, (y) the collection, sale or other disposition of
any of the Collateral or (z) the exercise by the Collateral Agent of any of the
rights conferred upon it hereunder. The obligation to pay any such amount shall
be an additional Secured Obligation hereunder, and each such amount shall bear
interest from the time of demand at the rate applicable to Base Rate Loans.
SECTION 15. Termination of Security Interests; Release of Collateral.
Upon the repayment in full of all Secured Obligations, the termination of
the Commitments under the Credit Agreement and the cancellation or expiration of
all Letters of Credit, the Security Interests and all obligations of the Debtor
under this Agreement shall terminate and all rights to and interests in the
Collateral shall revert to the Debtor.
(b) Unless otherwise instructed by the Required Lenders at a time while an
Event of Default has occurred and is continuing, upon the consummation of any
Asset Sale permitted by the terms of the Credit Agreement, the Collateral Agent
shall release the Collateral (but not any Proceeds thereof) sold pursuant to
such
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Asset Sale. Any such release shall not require the consent of any Bank, and
the Collateral Agent shall be fully protected in relying on a certificate of the
Debtor as to whether an Event of Default has occurred and is continuing at any
relevant time or any particular Asset Sale is permitted by the terms of the
Credit Agreement.
(c) In addition to releases of Collateral permitted pursuant to subsection
(b), at any time and from time to time prior to such termination of the Security
Interests, the Collateral Agent may release any of the Collateral with the prior
written consent of the Required Banks; provided that the Collateral Agent may
release all or substantially all of the Collateral only with the prior written
consent of all of the Banks.
(d) Upon the termination of the Security Interests or any release of any
Collateral permitted by this Section, the Collateral Agent will promptly, at the
expense of the Debtor, execute and deliver to the Debtor such documents as the
Debtor shall reasonably request to evidence the termination of the Security
Interests or the release of such Collateral, as the case may be, including UCC
termination statements, and will duly assign, transfer and deliver to the Debtor
or to whomever lawfully shall be entitled to receive the same, such of the
Collateral as may be in the possession of the Collateral Agent.
SECTION 16. Notices.
All notices, communications and distributions to any party hereunder shall
be given in accordance with Section 10.01 of the Credit Agreement.
SECTION 17. Waivers, Non-Exclusive Remedies.
No failure on the part of the Collateral Agent to exercise, and no delay
in exercising and no course of dealing with respect to, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise by the Collateral Agent of any right under this Agreement preclude any
other or further exercise thereof or the exercise of any other right. The rights
in the Financing Documents are cumulative and are not exclusive of any other
remedies provided by law.
SECTION 18. Successors and Assigns.
This Agreement is for the benefit of the Collateral Agent and the other
Secured Parties and their successors and assigns, and in the event of an
assignment of all or any of the Secured Obligations, the rights hereunder, to
the extent applicable to the indebtedness so assigned, may be transferred with
such indebtedness. This Agreement shall be binding on the Debtor and the
Collateral Agent and their respective successors and assigns.
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SECTION 19. Changes in Writing.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only in writing signed by the Debtor and
the Collateral Agent with the consent of the Required Banks (or in the case of
changes to Section 15 hereof, all of the Banks).
SECTION 20. New York Law.
This Agreement shall be construed in accordance with and governed by the
laws of the State of New York, except as otherwise required by mandatory
provisions of law and except to the extent that remedies provided by the laws of
any jurisdiction other than New York are governed by the laws of such
jurisdiction.
SECTION 21. Severability.
If any provision hereof is invalid or unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Collateral Agent and the other Secured
Parties in order to carry out the intentions of the parties hereto as nearly as
may be possible; and (ii) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
SECTION 22. Counterparts.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ORBITAL SCIENCES CORPORATION
By /s/ Kenneth H. Sunshine
------------------------------------
Title: Vice President and Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral Agent
By /s/ James E. Condon
------------------------------------
Title: Vice President
NATIONSBANK N.A., as Designated
Lockbox Bank
By /s/ James W. Gaittens
------------------------------------
Title: Vice President
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EXHIBIT A
PERFECTION CERTIFICATE
The undersigned, the [chief executive officer/chairman] and the chief
legal officer of ORBITAL SCIENCES CORPORATION, a Delaware corporation (the
"DEBTOR"), hereby certify with reference to the Amended and Restated Security
Agreement dated as of June 30, 1992 and amended and restated as of August 5,
1997 between the Debtor and Morgan Guaranty Trust Company of New York, as
Collateral Agent (terms defined therein being used herein as therein defined),
to the Agents and each other Secured Party as follows:
1. Names. (a) The exact corporate name of the Debtor as of the date
hereof:
(b) Set forth below is each other corporate name the Debtor has had since
its organization, together with the period during which such name was used:
(c) Except as set forth in Schedule 1, the Debtor has not changed its
identity or corporate structure in any way within the past five years.
[Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of corporate organization. If any such change has occurred, include
in Schedule 1 the information required by paragraphs 1, 2 and 3 of this
certificate as to each acquiree or constituent party to a merger or
consolidation.]
(d) The following is a list of all other names (including trade names or
similar appellations) used by the Debtor or any of its divisions or other
business units at any time during the past five years:
2. Current Locations. (a) The chief executive office of the Debtor is
located at the following address:
MAILING ADDRESS COUNTY STATE
<PAGE> 22
(b) The following are all the places of business of the Debtor not
identified above in the states identified above:
NAME MAILING ADDRESS COUNTY STATE
3. Prior Locations. (a) Set forth below is the information required by
subparagraphs (a), (b) and (c) of paragraph 2 with respect to each location or
place of business maintained by the Debtor (except as otherwise disclosed in
paragraph 2) at any time during the past five years:
4. Unusual Transactions. Except as set forth in Schedule 4, all
Receivables have been originated by the Debtor and all Equipment has been
acquired by the Debtor in the ordinary course of its business.
5. File Search Reports. Attached hereto as Schedule 5(A) is a true copy of
a file search report from the Debtor in each jurisdiction identified in
paragraph 2 or 3 above with respect to each name set forth in paragraph 1 above.
Attached hereto as Schedule 5(B) is a true copy of each financing statement or
other filing identified in such file search reports.
6. UCC Filings. A duly signed financing statement on Form UCC-1 in
substantially the form of Schedule 6(A) hereto has been duly filed in the
Uniform Commercial Code filing office in each jurisdiction identified in
paragraph 2 hereof.
7. Schedule of Filings. Attached hereto as Schedule 7 is a schedule
setting forth filing information with respect to the filings described in
paragraph 6 above.
8. Filing Fees. All filing fees and taxes payable in connection with the
filings described in paragraph 6 above have been paid.
2
<PAGE> 23
IN WITNESS WHEREOF, we have hereunto set our hands this day of August 5,
1997.
Name:
Title:
Name:
Title:
3
<PAGE> 24
SCHEDULE 6(A)
DESCRIPTION OF COLLATERAL
All of Debtor's right, title and interest in and to the following, whether
now owned or existing or hereafter acquired or arising and regardless of where
located: (i) All accounts; (ii) All accounts receivable, contract rights, book
debts, chattel paper, notes, drafts and other obligations or indebtedness owing
to the Debtor arising from the sale, lease or exchange of goods or other
property by it and/or performance of services by it (including, without
limitation, any such obligation which might be characterized as an account,
contract right or general intangible under the Uniform Commercial Code in effect
in any jurisdiction) and all of the Debtor's right in, to and under all purchase
orders for goods, services or other property to be provided or sold by it or any
affiliate, and all monies due to or to become due to the Debtor under all
contracts for the sale (as seller), lease (as lessor) or exchange of goods or
other property and/or performance of services by it (whether or not yet earned
by performance on the part of the Debtor), in each case whether now in existence
or hereafter arising or acquired including, without limitation, the right to
receive the proceeds of said purchase orders and contracts and all collateral
security and guarantees of any kind given by any person with respect to any of
the foregoing; (iii) All rights incidental or ancillary to any of the foregoing
and the administration, servicing and collection thereof, including, without
limitation, all collateral security and guarantees of any kind (including
without limitation letters of credit or other forms of credit enhancement) given
by any person to the Debtor with respect to any of the foregoing; (iv) All
documents, books, records and other information (including, without limitation,
computer programs, tapes, discs, punch cards, data processing software and
related property and rights) maintained with respect to any of the foregoing;
(v) All proceeds payable to the loss payee under, or unearned premiums with
respect to, any policy of insurance maintained by or on behalf of the Debtor
except any policy solely with respect to equipment; and (vi) All proceeds of,
and all other profits, rentals, or receipts, in whatever form, arising from the
collection, sale, lease, exchange, assignment, licensing or other disposition
of, or realization upon, any of the foregoing, including without limitation all
claims of the Debtor against third parties for loss of, damage to or destruction
of, any of the foregoing, or for proceeds payable under, or unearned premiums
with respect to, policies of insurance in respect of any of the foregoing,
rights to any returned or repossessed goods relating to any of the foregoing,
and any condemnation or requisition payments with respect to any of the
foregoing.
<PAGE> 25
SCHEDULE 7
SCHEDULE OF FILINGS
DEBTOR FILING FILE DATE OF
OFFICER NUMBER FILING*
- --------
1 Indicate lapse date, of other than fifth anniversary.
<PAGE> 26
EXHIBIT B
[FORM OF LOCKBOX LETTER]
_______________ __, 19__
[Name and Address of Lockbox Bank]
Re: ORBITAL SCIENCES CORPORATION
Gentlemen:
We hereby notify you that effective _______________, 19__, we have
transferred exclusive control of our lock-box account[s] No.[s]. ____________
(the "LOCKBOX ACCOUNT[S]") maintained with you under the terms of the [Lockbox
Agreement] attached hereto as Exhibit A to Morgan Guaranty Trust Company of New
York, as Collateral Agent (the "COLLATERAL AGENT").
We hereby irrevocably instruct you to make all payments to be made by you
out of or in connection with the Lockbox Account[s] (i) to the Collateral Agent
for credit to account no. ____________ maintained by it at its office at
_______________________________ or (ii) as you may otherwise be instructed by
the Collateral Agent.
We also hereby notify you that the Collateral Agent shall be irrevocably
entitled to exercise any and all rights in respect of or in connection with the
Lockbox Account[s], including, without limitation, the right to specify when
payments are to be made out of or in connection with the Lockbox Account[s] and
the right to exercise sole dominion and control over all the contents in the
lock-box(es), including the right to deny any person access to such contents.
All funds deposited into the Lockbox Account[s] will not be subject to
deductions, set-off, banker's lien or any other right in favor of any other
person than the Collateral Agent, except that you may set-off against the
Lockbox Account[s] the face amount of any check deposited in and credited to
such Lockbox Account[s] which is subsequently returned for any reason. Your
compensation for providing the services contemplated herein shall be as mutually
agreed between you and us from time to time and we will continue to pay such
compensation.
<PAGE> 27
Please confirm your acknowledgment of and agreement to the foregoing
instructions by signing in the space provided below.
Very truly yours,
ORBITAL SCIENCES CORPORATION
By
Name:
Title:
Acknowledged and agreed to as of
this ____ day of ____________, 19__.
[LOCKBOX BANK]
By
Name:
Title:
2
<PAGE> 28
EXHIBIT C
OPINION OF
COUNSEL FOR DEBTOR
* * * *
1. The provisions of the Credit Agreement and the Company Security
Agreements are sufficient to create in favor of the Collateral Agent a security
interest in all right, title and interest of each Debtor in those items and
types of the Collateral described in the Security Agreement to which it is a
party in which a security interest may be created under Article 9 of the Uniform
Commercial Code as in effect in the State of New York.
2. Financing statements on Form UCC-1 have been duly executed by the
Debtor and have been duly filed in each filing office indicated in the
Perfection Certificate of the Debtor under the Uniform Commercial Code in effect
in each state in which said filing offices are located. The description of the
Collateral set forth in said financing statements is sufficient to perfect a
security interest in the items and types of Collateral described therein in
which a security interest may be perfected by the filing of a financing
statement under the Uniform Commercial Code as in effect in such states. Such
filings are sufficient to perfect the security interests created by the Security
Agreement in all right, title and interest of the Debtor party thereto in those
items and types of Collateral described in the Security Agreement in which a
security interest may be perfected by the filing of financing statements under
the Uniform Commercial Code in such states, except that we express no opinion as
to personal property affixed to real property in such a manner as to become a
fixture under the laws of any state in which Collateral may be located, and we
call your attention to the fact that the Collateral Agent's security interest in
certain of such Collateral may not be perfected by the filing of financing
statements under the Uniform Commercial Code.
<PAGE> 1
EXHIBIT 10.4.1
SECURITY AGREEMENT
dated as of August 5, 1997
among
MAGELLAN CORPORATION,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Collateral Agent
and
NATIONSBANK, N.A., as Designated Lockbox Bank
<PAGE> 2
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of August 5, 1997 among Magellan Corporation,
a Delaware corporation (with its successors, the "Borrower"), MORGAN GUARANTY
TRUST COMPANY of NEW YORK as Collateral Agent (the "Collateral Agent") and
NATIONSBANK, N.A., as Designated Lockbox Bank.
W I T N E S S E T H :
WHEREAS, Orbital Sciences Corporation and Magellan Corporation, as
Borrowers and Guarantors, certain banks (with their respective successors and
assigns, the "Banks"), Morgan Guaranty Trust Company of New York, as
Administrative Agent (the "Administrative Agent") and as Collateral Agent have
entered into a Second Amended and Restated Credit and Reimbursement Agreement
dated as of August 5, 1997 (as amended from time to time, the "Credit
Agreement");
WHEREAS, it is a condition to effectiveness of the Credit Agreement that
the Borrower grant a continuing security interest to the Collateral Agent for
the ratable benefit of the Secured Parties (as hereafter defined) in and to the
Collateral (as hereafter defined) to secure the Secured Obligations (as
hereinafter defined);
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that, on and as of the Effective Date (as
defined in the Credit Agreement) as follows:
SECTION 1. Definitions.
Terms defined in the Credit Agreement and not otherwise defined herein
have, as used herein, the respective meanings provided for therein. The
following additional terms, as used herein, have the following respective
meanings:
"ANCILLARY RIGHTS" means rights incidental or ancillary to the Receivables
and the administration, servicing and collection thereof, including, without
limitation, all collateral security and guarantees of any kind (including
without limitation letters of credit or other forms of credit enhancement) given
by any Person to the Borrower with respect to any Receivable.
"COLLATERAL" has the meaning set forth in Section 3.
<PAGE> 3
"COLLATERAL ACCOUNT" has the meaning set forth in Section 5.
"DESIGNATED LOCKBOX BANK" means NationsBank, N.A.
"INSURANCE ACCOUNT" has the meaning set forth in Section 6.
"INSURANCE PAYMENTS" means all proceeds payable to the Collateral Agent as
the loss payee under, or unearned premiums with respect to, the Insurance
Policies.
"INSURANCE POLICIES" means the insurance policies evidencing the insurance
the Borrower is maintaining at any time pursuant to Section 5.03 of the Credit
Agreement, other than any such policy, or portion thereof, solely with respect
to equipment.
"LETTER OF CREDIT OBLIGATION" means at any time any Reimbursement
Obligations of the Borrower or other obligation of the Borrower to make a
payment in connection with a Letter of Credit issued for the account of the
Borrower, including contingent obligations with respect to amounts which are
then, or may thereafter become, available for drawing under Letters of Credit
issued for the account of the Borrower then outstanding.
"LIQUID INVESTMENTS" means Temporary Cash Investments; provided that (i)
each Liquid Investment shall mature within 30 days after it is acquired by the
Collateral Agent and (ii) in order to provide the Collateral Agent, for the
benefit of the Secured Parties, with a perfected security interest therein, each
Liquid Investment shall be either:
(i) evidenced by negotiable certificates or instruments, or if
non-negotiable then issued in the name of the Borrower, which (together
with any appropriate instruments of transfer) are delivered to, and held
by, the Collateral Agent or an agent thereof (which shall not be the
Borrower or any of its Affiliates) in the State of New York; or
(ii) in book-entry form and issued by the United States and subject to
pledge under applicable state law and Treasury regulations and as to which
(in the reasonable opinion of counsel to the Collateral Agent) appropriate
measures shall have been taken for perfection of the Security Interests.
"PERFECTION CERTIFICATE" means the certificate, substantially in the form
of Exhibit A, completed and supplemented with the schedules and attachments
2
<PAGE> 4
contemplated thereby to the satisfaction of the Collateral Agent, and duly
executed by the Borrower.
"PROCEEDS" means all proceeds of, and all other profits, rentals or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or realization upon, Collateral,
including without limitation all claims of the Borrower against third parties
for loss of, damage to or destruction of, or for proceeds payable under, or
unearned premiums with respect to, policies of insurance in respect of, any
Collateral, rights to any returned or repossessed goods relating to any
Collateral, and any condemnation or requisition payments with respect to any
Collateral, in each case whether now existing or hereafter arising.
"RECEIVABLES" means all "accounts" (as defined in the UCC) now owned or
hereafter acquired by the Borrower, and shall also mean and include all accounts
receivable, contract rights, book debts, chattel paper, notes, drafts and other
obligations or indebtedness owing to the Borrower arising from the sale, lease
or exchange of goods or other property by it and/or performance of services by
it (including, without limitation, any such obligation which might be
characterized as an account, contract right or general intangible under the
Uniform Commercial Code in effect in any jurisdiction) and all of the Borrower's
right in, to and under all purchase orders for goods, services or other property
to be provided or sold by it or any Affiliate, and all monies due to or to
become due to the Borrower under all contracts for the sale (as seller), lease
(as lessor) or exchange of goods or other property and/or performance of
services by it (whether or not yet earned by performance on the part of the
Borrower), in each case whether now in existence or hereafter arising or
acquired including, without limitation, the right to receive the proceeds of
said purchase orders and contracts and all collateral security and guarantees of
any kind given by any Person with respect to any of the foregoing.
"RECORDS" means all right, title or interest of Borrower in and to all
documents, books, records and other information (including without limitation
computer programs, tapes, discs, punch cards, data processing software and
related property and rights) maintained with respect to Receivables.
"SECURED OBLIGATIONS" means the obligations secured under this Agreement
including (a) all principal of and interest (including, without limitation, any
interest that accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency or reorganization of the Borrower,
whether or not allowed or allowable as a claim in any such proceeding) on any
loan to the Borrower under, or any note issued by the Borrower pursuant to, the
Credit Agreement, (b) all amounts payable by the Borrower under Article 10 of
the Credit Agreement, (c) all other amounts payable
3
<PAGE> 5
by the Borrower hereunder or under the Credit Agreement (including without
limitation any Reimbursement Obligations) and (d) any renewals or extensions of
any of the foregoing; provided that the Secured Obligations described in clause
(b) above and any renewal or extension thereof described in clause (d) above
(collectively, the "Guaranteed Obligations"), shall be subordinate and junior in
rank to the other Secured Obligations for purposes of this Security Agreement
and the Liens created hereby.
"SECURED PARTIES" means each of the Banks and the Agents.
"SECURITY EVENT" means any event, occurrence or condition which, in the
sole discretion of the Required Banks acting in good faith, "impairs the
prospect of payment" by the Borrower within the meaning of Section 1-208 of the
UCC.
"SECURITY INTERESTS" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"UCC" means the Uniform Commercial Code as in effect on the date hereof in
the State of New York; provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection of the
Security Interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than New York, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection.
SECTION 2. Representations and Warranties.
The Borrower represents and warrants as follows:
(A) The Borrower has good title to all of the Collateral, free and clear of
any Liens other than the Permitted Liens. The Borrower has taken all actions
necessary under the UCC to perfect its interest in any Receivables purchased or
otherwise acquired by it, as against its assignors and creditors of its
assignors.
(B) Other than financing statements, mortgages, security agreements or
other similar or equivalent documents or instruments with respect to the
Security Interests and other Permitted Liens, no financing statement, mortgage,
security agreement or similar or equivalent document or instrument covering all
or any part of the Collateral is on file or of record in any jurisdiction in
which such filing or recording would be effective to perfect a Lien on such
Collateral. No Collateral is in the possession of any Person (other than the
Borrower) asserting any claim thereto or security interest therein, except that
the Collateral Agent or its designee may have possession of Collateral as
contemplated hereby.
4
<PAGE> 6
(C) On or prior to the Effective Date, the Borrower shall deliver the
Perfection Certificate to the Collateral Agent. The information set forth
therein shall be correct and complete in all material respects. Promptly after
the Effective Date, the Borrower shall furnish to the Collateral Agent
acknowledgment copies of the filings set forth in Schedule 7 to the Perfection
Certificate.
(D) The Security Interests constitute valid security interests under the
UCC securing the Secured Obligations to the extent the UCC is applicable
thereto. The Security Interests constitute perfected security interests in the
Collateral to the extent that a security interest therein may be perfected by
filing pursuant to the UCC, prior to all other Liens except for the Permitted
Liens (other than the Security Interests) existing on and as of the Effective
Date.
(E) Upon the delivery to the Collateral Agent of assignments and notices of
assignment substantially in the forms of Exhibits G-2 and G-3, respectively, to
the Credit Agreement with respect thereto, and the filing of each such notice
with the governmental authority or agency or other office described therein, the
Security Interests shall constitute valid assignments of the Receivables due
under Eligible Government Contracts to the extent that such assignment is
governed by the Assignment of Claims Act.
(F) No Person other than the Collateral Agent has been named as a loss
payee on any of the Insurance Policies, except as permitted in the proviso
contained in Section 5.03(e) of the Credit Agreement. No consent of any Person
is required in connection with the pledge of the Insurance Policies hereunder.
SECTION 3. The Security Interests.
(A) In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all of the obligations of the Borrower hereunder and under the other
Financing Documents, the Borrower hereby grants to the Collateral Agent for the
ratable benefit of the Secured Parties, a continuing security interest in and to
all of the following property of the Borrower, whether now owned or existing or
hereafter acquired or arising and regardless of where located (all being
collectively referred to as the "Collateral"):
(1) Receivables;
(2) Ancillary Rights;
(3) Records;
5
<PAGE> 7
(4) Insurance Payments;
(5) Insurance Policies;
(6) The Collateral Account, all cash deposited therein from time to
time, the Liquid Investments made pursuant to Section 5(D) and other
monies and property of any kind of the Borrower in the possession or under
the control of the Collateral Agent;
(7) The Insurance Account, all cash deposited therein from time to
time, and the Liquid Investments made pursuant to Section 6(C); and
(8) All Proceeds of all or any of the Collateral described in Clauses
1 through 7 hereof.
(B) The Security Interests are granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or transfer or in
any way affect or modify, any obligation or liability of the Borrower with
respect to any of the Collateral or any transaction in connection therewith.
SECTION 4. Further Assurances; Covenants.
(A) The Borrower will not change its name, identity or corporate structure
in any manner or change the location of (i) its chief executive office or chief
place of business, or (ii) the locations where it keeps or holds any Collateral
from the applicable location described in the Perfection Certificate unless it
shall have given the Collateral Agent thirty (30) days prior notice thereof,
shall have taken all such action as the Collateral Agent shall reasonably deem
necessary to maintain at all times the perfection of the Security Interests in
the Collateral granted hereunder and shall have delivered an opinion of counsel
with respect thereto in accordance with Section 4(I).
(B) The Borrower will, from time to time, at its expense, execute, deliver,
file and record any statement, notice, assignment, instrument, document,
agreement or other paper and take any other action, (including, without
limitation, any filings of financing or continuation statements under the UCC,
or any such document or action in respect of the Assignment of Claims Act) that
from time to time may be necessary or desirable, or that the Collateral Agent
may reasonably request, in order to create, preserve, perfect, confirm or
validate the Security Interests or to enable the Collateral Agent and the
Secured Parties to obtain the full benefits of this Agreement, or to enable the
Collateral Agent to exercise and enforce any of its rights, powers and remedies
hereunder with respect to any of the
6
<PAGE> 8
Collateral. To the extent permitted by applicable law, the Borrower hereby
authorizes the Collateral Agent to execute and file financing statements or
continuation statements without the Borrower's signature appearing thereon. The
Borrower agrees that a carbon, photographic, photostatic or other reproduction
of this Agreement or of a financing statement is sufficient as a financing
statement. The Borrower shall pay the costs of, or incidental to, any recording
or filing of any financing or continuation statements concerning the Collateral.
(C) The Borrower will maintain its qualification to do business and all
necessary licenses, permits and other governmental authorizations necessary in
any jurisdiction to enable the Borrower to perform its obligations in respect of
the Receivables and to administer, service and collect the Receivables.
(D) The Borrower will not, without the consent of the Required Banks,
change its credit or collection policies in a manner that is reasonably likely
to impair the collectibility of the Receivables.
(E) The Borrower will keep full and accurate books and records relating to
the Collateral, and stamp or otherwise mark such books and records in such
manner as the Required Banks may reasonably require in order to reflect the
Security Interests.
(F) The Borrower shall use all commercially reasonable efforts to cause to
be collected from its account debtors, as and when due, any and all amounts
owing under or on account of each Receivable (including, without limitation,
Receivables which are delinquent, such Receivables to be collected in accordance
with lawful collection procedures) and shall apply forthwith upon receipt
thereof all such amounts as are so collected to the outstanding balance of such
Receivables. Subject to the rights of the Collateral Agent and the other Secured
Parties hereunder if an Event of Default shall have occurred and be continuing,
the Borrower may allow in the ordinary course of business as adjustments to
amounts owing under the Receivables (i) an extension or renewal of the time or
times of payment, or settlement for less than the total unpaid balance and (ii)
a refund, credit or other adjustment due as a result of returned, damaged, or
non-conforming merchandise, products or services, all in accordance with the
Borrower's sound business judgment. The costs and expenses (including, without
limitation, reasonable attorney's fees) of collection, whether incurred by the
Borrower or the Collateral Agent, shall be borne by the Borrower.
(G) Without the prior written consent of the Required Banks, the Borrower
will not sell, lease, exchange, assign or otherwise dispose of, or grant any
option with respect to, any Collateral except that, subject to the rights of the
Agents and the Banks hereunder if an Event of Default shall have occurred and be
7
<PAGE> 9
continuing, the Borrower may dispose of Collateral as permitted by the terms of
the Credit Agreement.
(H) The Borrower will, promptly upon request, provide to the Collateral
Agent all information and evidence it may reasonably request concerning the
Collateral to enable the Collateral Agent to enforce the provisions of this
Agreement.
(I) Not more than six months nor less than 30 days prior to each date on
which the Borrower proposes to take any action in connection with which an
opinion of counsel is to be delivered pursuant to Section 4(A), the Borrower
shall, at its cost and expense, cause to be delivered to the Secured Parties an
opinion of counsel, reasonably satisfactory to the Collateral Agent,
substantially in the form of Exhibit C to the effect that all financing
statements and amendments or supplements thereto, continuation statements and
other documents required to be recorded or filed in order to continue the
perfection of the Security Interests following the proposed action by the
Borrower have been filed in each filing office necessary for such purpose and
that all filing fees and taxes, if any, payable in connection with such filings
have been paid in full.
(J) Within 5 Domestic Business Days of the date on which the conditions
specified in Section 3.01 of the Credit Agreement have been satisfied, the
Borrower will deliver to the Collateral Agent a duly executed Magellan Lockbox
Letter.
SECTION 5. Collateral Account.
(A) There is hereby established with the Collateral Agent a cash collateral
account for the Borrower (the "Collateral Account") in the name and under the
control of the Collateral Agent into which there shall be deposited from time to
time (i) the cash proceeds of the Collateral (other than any cash proceeds of
the Insurance Payments or the Insurance Policies) required to be delivered to
the Collateral Agent pursuant to subsection (B) of this Section 5 or any other
provision of this Agreement and (ii) the Borrower LC Amount received by the
Administrative Agent pursuant to Section 6.01 of the Credit Agreement. Any
income received by the Collateral Agent with respect to the balance from time to
time standing to the credit of the Collateral Account, including any interest or
capital gains on Liquid Investments, shall remain, or be deposited, in the
Collateral Account. The cash amounts on deposit from time to time in the
Collateral Account together with any Liquid Investments from time to time made
pursuant to subsection (D) of this Section shall constitute part of the
Collateral hereunder and shall not constitute payment of the Secured Obligations
until applied thereto as hereinafter provided.
8
<PAGE> 10
(B) The Borrower shall instruct all Obligors to make all payments in
respect of the Eligible Receivables either (i) directly to the Collateral Agent
(by instructing that such payments be remitted to a post office box which shall
be in the name and under the control of the Collateral Agent) or (ii) to one or
more other banks in any state in the United States (by instructing that such
payments be remitted to a post office box which shall be in the name and under
the control of such bank) under a Lockbox Letter substantially in the form of
Exhibit B hereto duly executed by the Borrower and such bank or under other
arrangements, in form and substance reasonably satisfactory to the Collateral
Agent, pursuant to which the Borrower shall have irrevocably instructed such
other bank (and such other bank shall have agreed) to remit all proceeds of such
payments directly to the Collateral Agent for deposit into the Collateral
Account or as the Collateral Agent may otherwise instruct such bank (the
"MAGELLAN LOCKBOX LETTER"). All such payments made to the Collateral Agent shall
be deposited in the Collateral Account. In addition to the foregoing, the
Borrower agrees that if the Proceeds of any Collateral hereunder (including the
payments made in respect of Receivables) shall be received by it, the Borrower
shall as promptly as possible deposit such Proceeds into the Collateral Account.
Until so deposited, all such Proceeds shall be held in trust by the Borrower for
the Collateral Agent and the other Secured Parties and shall not be commingled
with any other funds or property of the Borrower.
(C) The balance from time to time standing to the credit of the Collateral
Account shall, except upon the occurrence and continuation of a Security Event
or an Event of Default, be distributed to the Borrower upon the order of the
Borrower. If immediately available cash on deposit in the Collateral Account is
not sufficient to make any distribution to the Borrower referred to in the
previous sentence of this Section 5(C), the Collateral Agent shall liquidate as
promptly as practicable Liquid Investments as required to obtain sufficient cash
to make such distribution and, notwithstanding any other provision of this
Section 5, such distribution shall not be made until such liquidation has taken
place. Upon the occurrence and continuation of an Event of Default, the
Collateral Agent shall, if so instructed by the Required Banks, apply or cause
to be applied (subject to collection) any or all of the balance from time to
time standing to the credit of the Collateral Account to the payment of the
Secured Obligations in the manner specified in Section 10.
(D) Amounts on deposit in the Collateral Account aggregating $1,000,000 or
more shall be invested and re-invested from time to time in such Liquid
Investments as the Borrower shall determine, which Liquid Investments shall be
under the control of the Collateral Agent, provided that, if an Event of Default
has occurred and is continuing, the Collateral Agent shall, if instructed by
9
<PAGE> 11
the Required Banks, liquidate any such Liquid Investment and apply or cause to
be applied the proceeds thereof to the payment of the Secured Obligations in the
manner specified in Section 10.
SECTION 6. Insurance Account.
(A) There is hereby established with the Collateral Agent a cash collateral
account for the Borrower (the "Insurance Account") in the name and under the
control of the Collateral Agent into which there shall be deposited from time to
time any amounts received by the Collateral Agent pursuant to Section 5.03(c) of
the Credit Agreement. Insurance Payments not identified to a particular Borrower
by the payor shall be deposited in the Insurance Account of the Borrower
designated by the Company by notice to the Collateral Agent or, in the absence
of such notice, shall be deposited in the Insurance Account of the Company. Any
income received by the Collateral Agent with respect to the balance from time to
time standing to the credit of the Insurance Account, including any interest or
capital gains on Liquid Investments, shall remain, or be deposited, in the
Insurance Account. The cash amounts on deposit from time to time in the
Insurance Account together with any Liquid Investments from time to time made
pursuant to subsection (C) of this Section shall constitute part of the
Collateral hereunder and shall not constitute payment of the Secured Obligations
until applied thereto as hereinafter provided.
(B) The balance from time to time standing to the credit of the Insurance
Account shall, except upon the occurrence and continuation of a Default, be
distributed to the Borrower upon the order of the Borrower. If immediately
available cash on deposit in the Insurance Account is not sufficient to make any
distribution to the Borrower referred to in the previous sentence of this
Section 6(B), the Collateral Agent shall liquidate as promptly as practicable
Liquid Investments as required to obtain sufficient cash to make such
distribution and, notwithstanding any other provision of this Section 6, such
distribution shall not be made until such liquidation has taken place. Upon the
occurrence and continuation of an Event of Default, the Collateral Agent shall,
if so instructed by the Required Banks, apply or cause to be applied (subject to
collection) any or all of the balance from time to time standing to the credit
of the Insurance Account in the manner specified in Section 10.
(C) Amounts on deposit in the Insurance Account aggregating $1,000,000 or
more shall be invested and re-invested from time to time in such Liquid
Investments as the Borrower shall determine, which Liquid Investments shall be
under the control of the Collateral Agent; provided that, if an Event of Default
has occurred and is continuing, the Collateral Agent shall, if instructed by the
Required Banks, liquidate any such Liquid Investment and apply or cause to
10
<PAGE> 12
be applied the proceeds thereof to the payment of the Secured Obligations in the
manner specified in Section 10.
SECTION 7. General Authority.
The Borrower hereby irrevocably appoints the Collateral Agent its true and
lawful attorney, with full power of substitution, in the name of the Borrower,
the Agents, any other Secured Parties or otherwise, for the sole use and benefit
of the Collateral Agent and the other Secured Parties, but at the Borrower's
expense, to the extent permitted by law (including, without limitation,
applicable laws, rules, regulations and orders) to exercise, at any time and
from time to time while and only after an Event of Default has occurred and is
continuing, all or any of the following powers with respect to all or any of the
Collateral:
(i) to demand, sue for, collect, receive and give acquittance for
any and all monies due or to become due thereon or by virtue thereof;
(ii) to settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereto;
(iii) to sell, transfer, assign or otherwise deal in or with the
same or the proceeds or avails thereof, as fully and effectually as if the
Collateral Agent were the absolute owner thereof; and
(iv) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
provided that the Collateral Agent shall give the Borrower not less than ten
days' prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral, except any Collateral which is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market. The Borrower agrees that such notice constitutes "reasonable
notification" within the meaning of Section 9-504(3) of the UCC.
SECTION 8. Remedies upon Event of Default.
(A) If any Event of Default has occurred and is continuing, the Collateral
Agent may, at the direction of the Required Banks, exercise on behalf of the
Secured Parties all rights of a secured party under the UCC (or, if the Uniform
Commercial Code is not in effect in the jurisdiction where such rights are
exercised, the UCC as in effect in the State of New York to the extent not
prohibited by the laws of such jurisdiction), and, in addition, the Collateral
Agent may, at the direction of the Required Banks, without being required to
give any notice, except as herein provided or as may be required by mandatory
provisions
11
<PAGE> 13
of law, (i) withdraw all cash and Liquid Investments in the Collateral Account
and the Insurance Account and apply such cash and Liquid Investments and other
cash, if any, then held by it as Collateral as specified in Section 10 and (ii)
if there shall be no such cash or Liquid Investments or if such cash and Liquid
Investments shall be insufficient to pay all the Secured Obligations in full,
sell the Collateral (subject to any applicable laws, rules, regulations and
orders) or any part thereof at public or private sale, for cash, upon credit or
for future delivery, and at such price or prices as the Collateral Agent may
reasonably deem satisfactory. The Collateral Agent or any other Secured Party
may be the purchaser of any or all of the Collateral (subject to any applicable
laws, rules, regulations and orders) so sold at any public sale (or, if the
Collateral is of a type customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard price quotations, at any
private sale). The Borrower will execute and deliver such documents and take
such other action as the Collateral Agent reasonably deems necessary or
advisable in order that any such sale may be made in compliance with law. Upon
any such sale the Collateral Agent shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold (subject to any
applicable laws, rules, regulations and orders). Each purchaser at any such sale
shall (subject to any applicable laws, rules, regulations and orders) hold the
Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind, including any equity or right of redemption of the Borrower
which may be waived, and the Borrower, to the extent permitted by law, hereby
specifically waives all rights of redemption, stay or appraisal which it has or
may have under any law now existing or hereafter adopted. The notice (if any) of
such sale required by Section 7 shall (1) in the case of a public sale, state
the time and place fixed for such sale, and (2) in the case of a private sale,
state the day after which such sale may be consummated. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as the Collateral Agent may fix in the notice of such sale. At
any such sale the Collateral may be sold in one lot as an entirety or in
separate parcels, as the Collateral Agent may determine. The Collateral Agent
shall not be obligated to make any such sale pursuant to any such notice. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In case of any sale of all or
any part of the Collateral on credit or for future delivery, the Collateral so
sold may be retained by the Collateral Agent until the selling price is paid by
the purchaser thereof, but the Collateral Agent shall not incur any liability in
case of the failure of such purchaser to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may again be sold upon
like notice. The Collateral Agent, instead of exercising the power of sale
herein conferred upon it (subject to any applicable laws, rules, regulations and
orders) may, at the direction of the
12
<PAGE> 14
Required Banks, proceed by a suit or suits at law or in equity to foreclose the
Security Interests and sell the Collateral, or any portion thereof, under a
judgment or decree of a court or courts of competent jurisdiction.
(B) For the purpose of enforcing any and all rights and remedies under this
Agreement the Collateral Agent may (i) require the Borrower to, and the Borrower
agrees that it will, at its expense and upon the request of the Collateral
Agent, forthwith assemble all or any part of the Collateral as directed by the
Collateral Agent and make it available at a place reasonably designated by the
Collateral Agent which is, in its opinion, reasonably convenient to the
Collateral Agent and the Borrower, whether at the premises of the Borrower or
otherwise, (ii) to the extent permitted by applicable law, enter, with or
without process of law and without breach of the peace, any premise where any of
the Collateral is or may be located, and without charge or liability to it seize
and remove such Collateral from such premises, (iii) have access to and use the
Borrower's books and records relating to the Collateral and (iv) prior to the
disposition of the Collateral, store or transfer it without charge in or by
means of any storage or transportation facility owned or leased by the Borrower,
process, repair or recondition it or otherwise prepare it for disposition in any
reasonable manner and to the extent the Collateral Agent deems appropriate and,
in connection with such preparation and disposition, use without charge any
trademark, trade name, copyright, patent or technical process used by the
Borrower.
SECTION 9. Limitation on Duty of Collateral Agent in Respect of
Collateral.
Beyond the exercise of reasonable care in the custody thereof, the
Collateral Agent shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property, and shall not be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by the Collateral Agent in good
faith.
SECTION 10. Application of Proceeds.
(a) Upon the occurrence and during the continuance of an Event of Default,
the proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held in the Collateral Account and Insurance Account
shall be applied by the Collateral Agent in the following order of priorities:
13
<PAGE> 15
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Collateral
Agent, and all expenses, liabilities and advances incurred or made by the
Collateral Agent in connection therewith, and any other unreimbursed
expenses, in each case for which the Collateral Agent or any Bank is to be
reimbursed pursuant to the Credit Agreement, and unpaid fees owing to the
Agents under the Credit Agreement;
second, to the ratable payment of accrued but unpaid interest on any
Loans made to the Borrower and Letter of Credit commissions with respect
to Letters of Credit issued at the request of the Borrower;
third, to the ratable payment of unpaid principal of the Loans made
to the Borrower and unpaid Reimbursement Obligations with respect to
Letters of Credit issued at the request of the Borrower;
fourth, to the ratable payment of all other Secured Obligations
(other than the Guaranteed Obligations), until all such Secured
Obligations shall have been paid in full;
fifth, to the ratable payment of all Guaranteed Obligations, until
all such Secured Obligations shall have been paid in full; and
finally, to payment to the Borrower or its successors or assigns, or
as a court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds;
(b) The Collateral Agent may make distributions hereunder in cash or in
kind or, on a ratable basis, in any combination thereof. If at any time any
monies collected or received by the Collateral Agent are distributable pursuant
to this Section in respect of a Letter of Credit Obligation which is a
contingent obligation at such time, then the Collateral Agent shall invest such
amounts in Liquid Investments selected by it and shall hold all such amounts so
distributable and all such Liquid Investments and the net proceeds thereof in
trust for application to the payment of such Letter of Credit Obligation at such
time as such Letter of Credit Obligation is no longer a contingent obligation.
If the Collateral Agent holds any amounts which were distributable in respect of
any Letter of Credit Obligations after all Letters of Credit have expired and
all amounts payable with respect thereto have been paid, such amounts shall be
applied in the order set forth in subsection (a) above.
(c) In making the determinations and allocations required by this Section,
the Collateral Agent shall have no liability to any of the Banks for actions
taken in reliance on information supplied by the Banks as to the amounts of the
Secured
14
<PAGE> 16
Obligations held by them. All distributions made by the Collateral Agent
pursuant to this Section shall be final, and the Collateral Agent shall have no
duty to inquire as to the application by the Banks of any amount distributed to
them. However, if at any time the Collateral Agent determines that an allocation
or distribution previously made pursuant to this Section was based on a mistake
of fact (including, without limiting the generality of the foregoing, mistakes
based on any assumption that principal or interest has been paid by payments
which are subsequently recovered from the recipient thereof through the
operation of any bankruptcy, reorganization, insolvency or other laws or
otherwise), the Collateral Agent may in its discretion, but shall not be
obligated to, adjust subsequent allocations and distributions hereunder so that,
on a cumulative basis, the Collateral Agent and the Banks receive the
distributions to which they would have been entitled if such mistake of fact had
not been made.
SECTION 11. Appointment of Co-Agents.
At any time or times, in order to comply with any legal requirement in any
jurisdiction, the Collateral Agent may appoint another bank or trust company or
one or more other Persons, either to act as collateral co-agent or collateral
co-agents, jointly with the Collateral Agent, or to act as separate collateral
agent or collateral agents on behalf of the Secured Parties with such power and
authority as may be necessary for the effectual operation of the provisions
hereof and may be specified in the instrument of appointment (which may, in the
discretion of the Collateral Agent, include provisions for the protection of
each such collateral co-agent or separate collateral agent similar to the
provisions of Article 7 of the Credit Agreement).
SECTION 12. Designated Lockbox Bank. The Designated Lockbox Bank shall
have the rights and obligations of the Collateral Agent in respect of the
Collateral Account specified in Section 5 of this Agreement, provided that if an
Event of Default has occurred and is continuing, the Designated Lockbox Bank
shall exercise such rights and perform such obligations at the direction of the
Collateral Agent. In exercising such rights and performing such obligations the
Designated Lockbox Bank shall have the benefit of all privileges, immunities and
indemnities provided for the Collateral Agent under this Agreement including
without limitation the provisions of Section 13 hereof. The Designated Lockbox
Bank may resign as Designated Lockbox Bank in accordance with the provisions of
Section 7.08 of the Credit Agreement.
SECTION 13. Expenses.
The Borrower agrees that it will, on demand, pay to the Collateral Agent
the amount of any and all reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel and of any other experts, which the
15
<PAGE> 17
Collateral Agent may incur in connection with (x) the administration or
enforcement of this Agreement, including such expenses as are incurred to
preserve the value of the Collateral and the validity, perfection, rank and
value of any Security Interest, (y) the collection, sale or other disposition of
any of the Collateral or (z) the exercise by the Collateral Agent of any of the
rights conferred upon it hereunder. The obligation to pay any such amount shall
be an additional Secured Obligation hereunder, and each such amount shall bear
interest from the time of demand at the rate applicable to Base Rate Loans.
SECTION 14. Termination of Security Interests; Release of
Collateral.
(a) Upon the repayment in full of all Secured Obligations, the termination
of the Commitments under the Credit Agreement and the cancellation of all
Letters of Credit, the Security Interests and all obligations of the Borrower
under this Agreement shall terminate and all rights to and interests in the
Collateral shall revert to the Borrower.
(b) Unless otherwise instructed by the Required Lenders at a time while an
Event of Default has occurred and is continuing, upon the consummation of any
Asset Sale permitted by the terms of the Credit Agreement, the Collateral Agent
shall release the Collateral (but not any Proceeds thereof) sold pursuant to
such Asset Sale. Any such release shall not require the consent of any Bank, and
the Collateral Agent shall be fully protected in relying on a certificate of the
Borrower as to whether an Event of Default has occurred and is continuing at any
relevant time or any particular Asset Sale is permitted by the terms of the
Credit Agreement.
(c) In addition to releases of Collateral permitted pursuant to subsection
(b) any time and from time to time prior to such termination of the Security
Interests, the Collateral Agent may release any of the Collateral with the prior
written consent of the Required Banks; provided that the Collateral Agent may
release all or substantially all of the Collateral only with the prior written
consent of all of the Banks.
(d) Upon the termination of the Security Interests or any release of any
Collateral permitted by this Section, the Collateral Agent will promptly, at the
expense of the Borrower, execute and deliver to the Borrower such documents as
the Borrower shall reasonably request to evidence the termination of the
Security Interests or the release of such Collateral, as the case may be,
including UCC termination statements, and will duly assign, transfer and deliver
to the Borrower or to whomever lawfully shall be entitled to receive the same,
such of the Collateral as may be in the possession of the Collateral Agent.
SECTION 15. Notices.
16
<PAGE> 18
All notices, communications and distributions to any party hereunder shall
be given in accordance with Section 10.01 of the Credit Agreement.
SECTION 16. Waivers, Non-exclusive Remedies.
No failure on the part of the Collateral Agent to exercise, and no delay
in exercising and no course of dealing with respect to, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise by the Collateral Agent of any right under this Agreement preclude any
other or further exercise thereof or the exercise of any other right. The rights
in the Financing Documents are cumulative and are not exclusive of any other
remedies provided by law.
SECTION 17. Successors and Assigns.
This Agreement is for the benefit of the Collateral Agent and the other
Secured Parties and their successors and assigns, and in the event of an
assignment of all or any of the Secured Obligations, the rights hereunder, to
the extent applicable to the indebtedness so assigned, may be transferred with
such indebtedness. This Agreement shall be binding on the Borrower and the
Collateral Agent and their respective successors and assigns.
SECTION 18. Changes in Writing.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only in writing signed by the Borrower and
the Collateral Agent with the consent of the Required Banks (or in the case of
changes to Section 14 hereof, the consent of all of the Banks).
SECTION 19. New York Law.
This Agreement shall be construed in accordance with and governed by the
laws of the State of New York, except as otherwise required by mandatory
provisions of law and except to the extent that remedies provided by the laws of
any jurisdiction other than New York are governed by the laws of such
jurisdiction.
SECTION 20. Severability.
If any provision hereof is invalid or unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Collateral Agent and the other Secured
Parties in order to carry out
17
<PAGE> 19
the intentions of the parties hereto as nearly as may be possible; and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
SECTION 21. Counterparts.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
18
<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
MAGELLAN CORPORATION
By /s/ Kenneth H. Sunshine
------------------------------------
Name: Kenneth H. Sunshine
Title: Vice President and Assistant
Treasurer
MORGAN GUARANTY TRUST
COMPANY OR NEW YORK,
as Collateral Agent
By /s/ James E. Condon
------------------------------------
Name: James E. Condon
Title: Vice President
NATIONSBANK N.A., as Designated
Lockbox Bank
By /s/ James W. Gaittens
------------------------------------
Name: James W. Gaittens
Title: Vice President
19
<PAGE> 21
EXHIBIT A
PERFECTION CERTIFICATE
The undersigned, the [chief executive officer/chairman] and the chief
legal officer of MAGELLAN CORPORATION, a Delaware corporation (the "Borrower"),
hereby certify with reference to the Security Agreement dated as of August 5,
1997 among the Borrower and Morgan Guaranty Trust Company of New York, as
Collateral Agent (terms defined therein being used herein as therein defined),
to the Collateral Agent and each other Secured Party as follows:
1. Names. (a) The exact corporate name of the Borrower as of the date
hereof:
(b) Set forth below is each other corporate name the Borrower has had
since its organization, together with the period during which such name
was used:
(c) Except as set forth in Schedule 1, the Borrower has not changed
its identity or corporate structure in any way within the past five years.
[Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of corporate organization. If any such change has occurred, include
in Schedule 1 the information required by paragraphs 1, 2 and 3 of this
certificate as to each acquiree or constituent party to a merger or
consolidation.]
(d) The following is a list of all other names (including trade names
or similar appellations) used by the Borrower or any of its divisions or
other business units at any time during the past five years:
2. Current Locations. (a) The chief executive office of the Borrower is
located at the following address:
Mailing Address County State
<PAGE> 22
(b) The following are all the places of business of the Borrower not
identified above in the states identified above:
Name Mailing County State
Address
3. Prior Locations. (a) Set forth below is the information required by
subparagraphs (a), (b) and (c) of paragraph 2 with respect to each location or
place of business maintained by the Borrower (except as otherwise disclosed in
paragraph 2) at any time during the past five years:
4. Unusual Transactions. Except as set forth in Schedule 4, all
Receivables have been originated by the Borrower in the ordinary course of its
business.
5. File Search Reports. Attached hereto as Schedule 5(A) is a true copy of
a file search report from ____________ in each jurisdiction identified in
paragraph 2 or 3 above with respect to each name set forth in paragraph 1 above.
Attached hereto as Schedule 5(B) is a true copy of each financing statement or
other filing identified in such file search reports.
6. UCC Filings. A duly signed financing statement on Form UCC-1 in
substantially the form of Schedule 6(A) hereto has been duly filed in the
Uniform Commercial Code filing office in each jurisdiction identified in
paragraph 2 hereof.
7. Schedule of Filings. Attached hereto as Schedule 7 is a schedule
setting forth filing information with respect to the filings described in
paragraph 6 above.
8. Filing Fees. All filing fees and taxes payable in connection with the
filings described in paragraph 6 above have been paid.
<PAGE> 23
IN WITNESS WHEREOF, we have hereunto set our hands this ____ day of
_________, 199_.
Name:
Title:
Name:
Title:
2
<PAGE> 24
SCHEDULE 6(A)
Description of Collateral
All of Debtor's right, title and interest in and to the following, whether
now owned or existing or hereafter acquired or arising and regardless of where
located: (i) All accounts; (ii) All accounts receivable, contract rights, book
debts, chattel paper, notes, drafts and other obligations or indebtedness owing
to the Debtor arising from the sale, lease or exchange of goods or other
property by it and/or performance of services by it (including, without
limitation, any such obligation which might be characterized as an account,
contract right or general intangible under the Uniform Commercial Code in effect
in any jurisdiction) and all of the Debtor's right in, to and under all purchase
orders for goods, services or other property to be provided or sold by it or any
affiliate, and all monies due to or to become due to the Debtor under all
contracts for the sale (as seller), lease (as lessor) or exchange of goods or
other property and/or performance of services by it (whether or not yet earned
by performance on the part of the Debtor), in each case whether now in existence
or hereafter arising or acquired including, without limitation, the right to
receive the proceeds of said purchase orders and contracts and all collateral
security and guarantees of any kind given by any person with respect to any of
the foregoing; (iii) All rights incidental or ancillary to any of the foregoing
and the administration, servicing and collection thereof, including, without
limitation, all collateral security and guarantees of any kind (including
without limitation letters of credit or other forms of credit enhancement) given
by any person to the Debtor with respect to any of the foregoing: (iv) All
documents, books, records and other information (including, without limitation,
computer programs, tapes, discs, punch cards, data processing software and
related property and rights) maintained with respect to any of the foregoing;
(v) All proceeds payable to the loss payee under, or unearned premiums with
respect to, any policy of insurance maintained by or on behalf of the Debtor
except any policy solely with respect to equipment; and (vi) All proceeds of,
and all other profits, rentals, or receipts, in whatever form, arising from the
collection, sale, lease, exchange, assignment, licensing or other disposition
of, or realization upon, any of the foregoing, including without limitation all
claims of the Debtor against third parties for loss of, damage to or destruction
of, any of the foregoing, or for proceeds payable under, or unearned premiums
with respect to, policies of insurance in respect of any of the foregoing,
rights to any returned or repossessed goods relating to any of the foregoing,
and any condemnation or requisition payments with respect to any of the
foregoing.
<PAGE> 25
SCHEDULE 7
SCHEDULE OF FILINGS
Debtor Filing Officer File Number Date of Filing(1)
- --------
(1) Indicate lapse date, of other than fifth anniversary.
<PAGE> 26
EXHIBIT B
[FORM OF LOCKBOX LETTER]
______________, 199_
[Name and Address of Lockbox Bank]
Re:Magellan Corporation
Gentlemen:
We hereby notify you that effective ___________, 19__, we have transferred
exclusive control of our lock-box account[s] No.[s]. _______________ (the
"Lockbox Account[s]") maintained with you under the terms of the [Lockbox
Agreement] attached hereto as Exhibit A to Morgan Guaranty Trust Company of New
York, as Collateral Agent (the "Collateral Agent").
We hereby irrevocably instruct you to make all payments to be made by you
out of or in connection with the Lockbox Account[s] (i) to the Collateral Agent
for credit to account no. ________________ maintained by it at its office at
_________________ or (ii) as you may otherwise be instructed by the Collateral
Agent.
We also hereby notify you that the Collateral Agent shall be irrevocably
entitled to exercise any and all rights in respect of or in connection with the
Lockbox Account[s], including, without limitation, the right to specify when
payments are to be made out of or in connection with the Lockbox Account[s] and
the right to exercise sole dominion and control over all the contents in the
lock-box(es), including the right to deny any person access to such contents.
All funds deposited into the Lockbox Account[s] will not be subject to
deductions, set-off, banker's lien or any other right in favor of any other
person than the Collateral Agent, except that you may set-off against the
Lockbox Account[s] the face amount of any check deposited in and credited to
such Lockbox Account[s] which is subsequently returned for any reason. Your
compensation for providing the services contemplated herein shall be as mutually
agreed between you and us from time to time and we will continue to pay such
compensation.
<PAGE> 27
Please confirm your acknowledgment of and agreement to the foregoing
instructions by signing in the space provided below.
Very truly yours,
MAGELLAN CORPORATION
By
Name:
Title:
Acknowledged and agreed
to as of this ________ day of
_______________ , 199__.
[LOCKBOX BANK]
By
Name:
Title:
2
<PAGE> 28
EXHIBIT C
OPINION OF
COUNSEL FOR BORROWER
* * * *
1. The provisions of the Credit Agreement and the Subsidiary Security
Agreements are sufficient to create in favor of the Collateral Agent a security
interest in all right, title and interest of each Borrower in those items and
types of the Collateral described in the Security Agreement to which it is a
party in which a security interest may be created under Article 9 of the Uniform
Commercial Code as in effect in the State of New York.
2. Financing statements on Form UCC-1 have been duly executed by the
Borrower and have been duly filed in each filing office indicated in the
Perfection Certificate of the Borrower under the Uniform Commercial Code in
effect in each state in which said filing offices are located. The. description
of the Collateral set forth in said financing statements is sufficient to
perfect a security interest in the items and types of Collateral described
therein in which a security interest may be perfected by the filing of a
financing statement under the Uniform Commercial Code as in effect in such
states. Such filings are sufficient to perfect the security interests created by
the Security Agreement in all right, title and interest of the Borrower party
thereto in those items and types of Collateral described in the Security
Agreement in which a security interest may be perfected by the filing of
financing statements under the Uniform Commercial Code in such states, except
that we express no opinion as to personal property affixed to real property in
such a manner as to become a fixture under the laws of any state in which
Collateral may be located, and we call your attention to the fact that the
Collateral Agent's security interest in certain of such Collateral may not be
perfected by the filing of financing statements under the Uniform Commercial
Code.
<PAGE> 1
EXHIBIT 11.
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
THREE MONTH PERIOD ENDED SEPTEMBER 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSUMING
PRIMARY FULL DILUTION
------- -------------
<S> <C> <C>
WEIGHTED AVERAGE OF OUTSTANDING
SHARES 32,309,409 32,309,409
COMMON EQUIVALENT SHARES:
OUTSTANDING STOCK OPTIONS 1,038,325 1,587,990
OTHER POTENTIALLY DILUTIVE SECURITIES:
CONVERTIBLE NOTES (1) N/A 595,238
---------- ----------
SHARES USED IN COMPUTING
NET INCOME PER SHARE 33,347,734 34,492,637
========== ==========
NET INCOME $6,130,054 $6,130,054
ADJUSTMENTS ASSUMING FULL DILUTION: N/A N/A
========== ==========
NET INCOME $6,130,054 $6,130,054
========== ==========
NET INCOME PER SHARE $0.184 $0.178
DILUTION PERCENTAGE ASSUMING FULL DILUTION (2) N/A 3.3%
NET INCOME PER SHARE $0.18 $0.18
========== ==========
</TABLE>
NINE MONTH PERIOD ENDED SEPTEMBER 30, 1997
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSUMING
PRIMARY FULL DILUTION
------- -------------
<S> <C> <C>
WEIGHTED AVERAGE OF OUTSTANDING
SHARES 32,242,640 32,242,640
COMMON EQUIVALENT SHARES:
OUTSTANDING STOCK OPTIONS 698,900 1,519,671
OTHER POTENTIALLY DILUTIVE SECURITIES:
CONVERTIBLE NOTES (1) N/A 198,413
----------- -----------
SHARES USED IN COMPUTING
NET INCOME PER SHARE 32,941,540 33,960,724
=========== ===========
NET INCOME $16,826,524 $16,826,524
ADJUSTMENTS ASSUMING FULL DILUTION: N/A N/A
=========== ===========
NET INCOME $16,826,524 $16,826,524
=========== ===========
NET INCOME PER SHARE $0.5108 $0.495
DILUTION PERCENTAGE ASSUMING FULL DILUTION (2) N/A 3.0%
NET INCOME PER SHARE $0.51 $0.50
=========== ===========
</TABLE>
NOTES:
(1)- On September 16, 1997, the company sold $100 million of 5% convertible
subordinated notes due October 2002. The notes are convertible at the
option of the holders into Orbital common stock at a conversion price of
$28.00 per share
(2)- Dilution caused by common stock equivalents and other potentially
dilutive securities that is less than 3% is considered immaterial, and
only primary earnings per share is presented in the accompanying condensed
consolidated statement of earnings.
(3)- Subsidiary stock options that enable holders to obtain subsidiary's
common stock pursuant to effective stock option plans are included in
computing the subsidiary's earnings per share, to the extent dilutive.
Those earnings per share data are included in the Company's per share
computations based on the Company's holdings of the subsidiary's stock.
For the three- and nine-months ended September 30, 1997, all such
subsidiary stock options were anti-dilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF EARNINGS AT AND FOR
THE THREE- AND NINE-MONTHS ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 19,123
<SECURITIES> 19,888
<RECEIVABLES> 164,389
<ALLOWANCES> (1,724)
<INVENTORY> 44,089
<CURRENT-ASSETS> 253,580
<PP&E> 258,237
<DEPRECIATION> (76,394)
<TOTAL-ASSETS> 693,175
<CURRENT-LIABILITIES> 160,578
<BONDS> 179,816
0
0
<COMMON> 323
<OTHER-SE> 348,311
<TOTAL-LIABILITY-AND-EQUITY> 693,175
<SALES> 429,008
<TOTAL-REVENUES> 429,008
<CGS> 309,642
<TOTAL-COSTS> 100,621
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 189
<INTEREST-EXPENSE> 88
<INCOME-PRETAX> 18,745
<INCOME-TAX> 1,918
<INCOME-CONTINUING> 16,827
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,827
<EPS-PRIMARY> 0.51
<EPS-DILUTED> 0.50
</TABLE>
