<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 6, 1995
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GEOTEK COMMUNICATIONS, INC.
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(Exact name of registrant as specified in charter)
Delaware 0-17581 22-2358635
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
20 Craig Road, Montvale, New Jersey 07645
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(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code 201-930-9305
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N/A
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(Former name or former address, if changed since last report.)
Exhibit Index appears at Page 6
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Item 5. Other Events
On July 6, 1995, Geotek Communications, Inc. (the "Company"), pursuant
to a purchase agreement dated June 29, 1995 (the "Purchase Agreement"),
issued and sold to Smith Barney Inc. (the "Initial Purchaser") 207,000 units
(the "Units") consisting of $207,000,000 in aggregate principal amount at
maturity of its 15% Senior Secured Discount Notes due 2005 (the "Notes") and
warrants (the "Warrants") to purchase an aggregate of 6,210,000 shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), at an
exercise price of $9.90 per share, which exercise price is subject to adjustment
in certain circumstances set forth in the Warrants. The Initial Purchaser has
the option (the "Over-allotment Option"), exercisable at any time and from time
to time prior to July 29, 1995, to purchase up to an additional 20,700 Units
(with each such Unit consisting of one Note with a principal amount at maturity
of $1,000 and Warrants to purchase 30 shares of Common Stock) at a purchase
price per Unit equal to the Accreted Value (as defined in the Indenture) of the
Note constituting a part of each of such additional Unit. A copy of the Purchase
Agreement is attached hereto as Exhibit (c)(1). The net proceeds to the Company
from the July 6, 1995 sale of the Units were approximately $96.0 million.
The Notes were issued under an indenture (the "Indenture") meeting the
requirements of the Trust Indenture Act of 1939, as amended. A copy of the
Indenture is attached hereto as Exhibit (c)(2). The maximum aggregate
principal amount at maturity of the Notes issuable under the Indenture is
$207,000,000 (plus the aggregate principal amount at maturity of any Notes
issued pursuant to the Over-allotment Option). No interest will be payable
on the Notes prior to July 15, 2000. However, the Notes were issued with an
initial Accreted Value of $483.44 per Unit. The Accreted Value of each Note
increases at a rate of 15% per annum, compounded semi-annually, until July 15,
2000 at which time the Accreted Value of each Note will be equal to $1,000. From
and after July 15, 2000, cash interest on the Notes will accrue at the rate of
15% per annum and will be payable semiannually on each July 15 and January 15
commencing January 15, 2001. The Notes mature on July 15, 2005. In addition, the
Company has the option to redeem the Notes, on or after July 15, 2000, in whole
or in part, at redemption prices beginning at 110% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the redemption date, for
the 12 month period beginning July 15, 2000, and declining to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the
redemption date, on or after July 15, 2003. In the event of a sale by the
Company to a Strategic Equity Investor (as defined in the Indenture) on or prior
to July 15, 1998 of Capital Stock (as defined in the Indenture) of the Company
for an aggregate purchase price equal to or exceeding $50,000,000, up to a
maximum of 20% of the aggregate Accreted Value of the Notes will be redeemable
at the option of the Company out of the net proceeds of such sale or sales at a
redemption price equal to 115% of the Accreted Value of the Notes to be redeemed
on the redemption date. In addition, the Company is obligated (a) upon a Change
of Control (as defined in the Indenture) to purchase all outstanding Notes at a
purchase price of 101% of the Accreted Value thereof, plus accrued and unpaid
interest, if any, to the date of purchase and (b) to make an offer to purchase
Notes at a purchase price of 100% of the Accreted Value thereof, plus accrued
and unpaid interest, if any, to the date of purchase with a portion of the net
cash proceeds from certain asset sales.
The Notes are senior obligations of the Company that rank senior in
right of payment to all Subordinated Indebtedness (as defined in the
Indenture) of the Company and the Guarantors (as defined below). In
addition, the Company is obligated pursuant to the Indenture to cause certain
of its existing and future wholly owned direct and indirect subsidiaries
organized under the laws of the United States (collectively, the
"Guarantors") to jointly and severally guarantee the Notes. Pursuant to a
notes registration rights agreement (the "Notes Registration Rights
Agreement"), the Company has agreed to offer the holders of the Notes the
right to exchange the Notes for an equal principal amount of a newly created
series of notes, identical in all material respects to the Notes, registered
under the Securities Act of 1933 as amended (the "Securities Act"). If the
Company fails to effectuate such exchange or otherwise register the Notes
under the Securities Act or otherwise comply with the procedures set forth in
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the Notes Registration Rights Agreement within the time periods prescribed by
the Notes Registration Rights Agreement, the Company will be subject to
substantial monetary penalties. A copy of the Notes Registration Rights
Agreement is attached hereto as Exhibit (c)(3).
The Indenture contains certain covenants that, subject to certain
exceptions, restrict the ability of the Company and certain of its
subsidiaries from incurring indebtedness, repurchasing Capital Stock and
subordinated indebtedness, engaging in transactions with affiliates, engaging
in sale-leaseback transactions, incurring or suffering to exist certain
liens, paying dividends or making other distributions, making investments,
selling assets, engaging in mergers and acquisitions and engaging in
businesses other than the telecommunications business. In addition, the
Indenture imposes limits on the ability of the Company's subsidiaries to
issue preferred stock and to create restrictions on their ability to pay
dividends and make certain other payments to the Company. The Company is
also required under the Indenture to make all cash investments in its wholly-
owned subsidiaries organized and doing business in the United States in the
form of a loan (each an "Intercompany Loan") and to pledge all such
Intercompany Loans as security for the Company's obligations under the Notes.
The Notes are secured by a pledge of all of the shares of capital stock
owned or hereafter acquired by the Company in each of National Band Three
Limited, PowerSpectrum, Inc., Geotek Communications GmbH, and the entities
through which the Company owns its interest in Bogen Corporation (each a
"Pledged Company"). The agreements governing these pledges (the "Pledge
Agreements") contain certain covenants with respect to the ability of the
Pledged Companies and their subsidiaries to incur indebtedness and to incur
liens, which covenants are more restrictive than the covenants contained in
the Indenture. Copies of each of the Pledge Agreements are attached hereto
as Exhibits (c)(4), Exhibit (c)(5), Exhibit (c)(6), respectively.
In the event the Company obtains the prior written consent of holders of
at least 66 2/3% of the aggregate principal amount of the Notes then
outstanding (the "Requisite Vote"), the Company may terminate the Pledge
Agreements, the guarantees issued by the Guarantors and the provisions in the
Indenture governing the guarantees and the other security arrangements
(including the pledges of the Intercompany Loans) (collectively, the
"Collateral Arrangements"). The Company is required to pay to each holder
voting in any such Company solicitation an amount in cash equal to .50% of
the Accreted Value of its Notes on the date of such vote. Each such vote is
referred to as a "Collateral Release Request." In the event the Company does
not receive the Requisite Vote pursuant to a Collateral Release Request, the
Company may, at its option, make an offer to purchase all of the outstanding
Notes at a purchase price of 101.5% of the Accreted Value thereof, plus
accrued and unpaid interest, if any, to the date of repurchase. Upon the
consummation of any such repurchase offer, the Collateral Arrangements shall
terminate.
The Warrants are issued under a warrant agreement (the "Warrant
Agreement"). Each Warrant has an exercise price of $9.90 per share, which
exercise price is subject to adjustment in certain circumstances set forth in
the Warrants. The Warrants are exercisable, in whole or in part, from
January 6, 1996 (the "Exercisability Date") until July 15, 2005 (the
"Expiration Date"). A copy of the Warrant Share Agreement is attached hereto
as Exhibit (c)(7). Pursuant to a warrant share registration rights agreement
(the "Warrant Share Registration Rights Agreement"), the Company has agreed
to file and use its best efforts to make effective, by the Exercisability
Date, a shelf registration statement under the Securities Act covering the
sale of the shares of Common Stock issuable upon exercise of the Warrants and
to keep such registration statement effective until thirty days after the
Expiration Date. A copy of the Warrant Share Registration Rights Agreement
is attached hereto as Exhibit (c)(8).
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Concurrently with the above described issuance and sale of the Units,
the Company, pursuant to a defeasance security agreement (the "Defeasance
Security Agreement"), defeased the Company's Senior Secured Notes due 1998
(the "Defeased Notes") by granting to the holders of the Defeased Notes (the
"Defeased Notes Holders") a first priority security interest in $42,218,000
(principal amount at maturity) of Governmental Obligations (as defined in the
Defeasance Security Agreement). The Company and the Defeased Notes Holders
are parties to a Note and Warrant Purchase Agreement (the "Note Agreement")
dated as of March 20, 1995. Pursuant to the terms of the Defeasance Security
Agreement, the Defeased Notes Holders released the security interest granted
to them pursuant to the Note Agreement, including the cancellation and
discharge of the Guarantees and the Pledge Agreement (each as defined in the
Note Agreement). In addition, pursuant to the terms of the Defeasance
Security Agreement, all of the restrictive covenants contained in the Note
Agreement, including those which limited the Company's ability to incur
indebtedness and to incur liens and those which required the Company to
maintain certain financial thresholds, were terminated. A copy of the
Defeasance Security Agreement is attached hereto as Exhibit (c)(9).
The summaries of the Purchase Agreement, the Indenture, the Note
Registration Rights Agreement, the Pledge Agreements, the Warrant Agreement,
the Warrant Shares Registration Rights Agreement and the Defeasance Security
Agreement are qualified in their entirety by reference to the copy of the
applicable document included as an exhibit to this filing.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
(1) Purchase Agreement, dated June 29, 1995
(2) Indenture, dated June 30, 1995
(3) Notes Registration Rights Agreement, dated July 6, 1995
(4) Pledge Agreement, dated July 6, 1995
(5) Share Transfer Agreement, dated July 6, 1995
(6) Charge Over Shares, dated July 6, 1995
(7) Warrant Agreement, dated June 30, 1995
(8) Warrant Share Registration Rights Agreement, dated July
6, 1995
(9) Defeasance Security Agreement, dated July 6, 1995
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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 hereunto duly authorized.
GEOTEK COMMUNICATIONS, INC.
Date: July 18, 1995 By: /s/ Yoram Bibring
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Name: Yoram Bibring
Title: Executive Vice President,
Chief Financial Officer and
Chief Operating Officer
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EXHIBIT INDEX
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Exhibit No.
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(c)(1) Purchase Agreement, dated June 29, 1995
(c)(2) Indenture, dated June 30, 1995
(c)(3) Notes Registration Rights Agreement, dated July 6, 1995
(c)(4) Pledge Agreement, dated July 6, 1995
(c)(5) Share Transfer Agreement, dated July 6, 1995
(c)(6) Charge Over Shares, dated July 6, 1995
(c)(7) Warrant Agreement, dated June 30, 1995
(c)(8) Warrant Share Registration Rights Agreement, dated July 6, 1995
(c)(9) Defeasance Security Agreement, dated July 6, 1995
<PAGE>
EXHIBIT (c)(1)
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GEOTEK COMMUNICATIONS, INC.
207,000 Units Consisting of
15% Senior Secured Discount Notes
due 2005 and Warrants
PURCHASE AGREEMENT
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June 29, 1995
SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
Geotek Communications, Inc., a Delaware corporation (the
"Company"), proposes, upon the terms and conditions set forth herein, to
issue and sell to you, as the initial purchaser (the "Initial Purchaser"),
207,000 units (the "Firm Units") consisting of $207,000,000 in aggregate
principal amount at maturity of its 15% Senior Secured Discount Notes due
2005 (the "Firm Notes") and warrants (the "Firm Warrants") to purchase
6,210,000 shares of Common Stock, par value $.01 per share, of the Company
(the "Common Stock"), each with an initial exercise price of $9.90 per share.
The Company also proposes, upon the terms and conditions set forth herein, to
issue and sell to the Initial Purchaser up to an additional 20,700 units (the
"Additional Units") consisting of $20,700,000 in aggregate principal amount
at maturity of its 15% Senior Secured Discount Notes due 2005 (the
"Additional Notes") and warrants to purchase up to an additional 621,000
shares of Common Stock (the "Additional Warrants"). The Firm Notes and the
Additional Notes are hereinafter collectively referred to as the "Notes."
The Firm Warrants and the Additional Warrants are hereinafter collectively
referred to as the "Warrants" and the Firm Units and the Additional Units are
hereinafter collectively referred to as the "Units." Each Unit will consist
of one Note, each having an initial Accreted Value (as defined in the
Indenture (as defined below)) of $483.44 and Warrants to purchase 30 shares
of Common Stock. The Notes will be issued pursuant to the provisions of an
Indenture, to be dated as of June 30, 1995 (the "Indenture"), between the
Company and IBJ Schroder Bank & Trust Company, as Trustee (the "Trustee").
The Notes will be secured by pledge agreements entered into by the Company
(the "Pledge Agreements") pursuant to which the Company will grant to the
Trustee, as collateral agent for the holders of the Notes (the "Collateral
Agent"), security interests in the Collateral (as defined in the Pledge
Agreements). The Warrants will be issued pursuant to the provisions of a
Warrant Agreement, to be dated as of June 30, 1995 (the "Warrant Agreement")
between the Company and IBJ Schroder Bank & Trust Company, as Warrant Agent
(the "Warrant Agent").
The Company wishes to confirm as follows its agreement with the
Initial Purchaser in connection with the purchase and resale of the Units.
1. Preliminary Offering Memorandum and Offering Memorandum. The
Units will be offered and sold to the Initial Purchaser without registration
under the Securities Act of 1933, as amended (the "Act"), in reliance on an
exemption pursuant to Section 4(2) under the Act. The Company has prepared a
preliminary offering memorandum, dated May 23, 1995, a preliminary offering
memorandum dated June 19, 1995, and a preliminary offering memorandum dated
June 28, 1995 (collectively, the "Preliminary Offering Memorandum"), and an
offering memorandum, dated June 30, 1995 (the "Offering Memorandum"), setting
forth information regarding the Company and the Units. Any references herein
to the Preliminary Offering Memorandum and the Offering Memorandum shall be
deemed to include all amendments and supplements thereto. The Company hereby
confirms that it has authorized the use of the Preliminary Offering
Memorandum and the Offering Memorandum in connection with the offering and
resale of the Units by the Initial Purchaser.
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The Company understands that the Initial Purchaser proposes to make
offers and sales (the "Exempt Resales") of the Units purchased by the Initial
Purchaser hereunder only on the terms and in the manner set forth in the
Offering Memorandum and Section 2 hereof, as soon as the Initial Purchaser
deems advisable after this Agreement has been executed and delivered, (i) to
persons in the United States whom the Initial Purchaser reasonably believes
to be qualified institutional buyers ("Qualified Institutional Buyers") as
defined in Rule 144A under the Act, as such rule may be amended from time to
time ("Rule 144A"), in transactions under Rule 144A, (ii) to a limited number
of other institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) and (7) under Regulation D under the Act) ("Regulation D")
("Accredited Investors") in private sales exempt from registration under the
Act and (iii) outside the United States to persons other than U.S. persons in
reliance upon Regulation S ("Regulation S") under the Act (such persons
specified in clauses (i), (ii) and (iii) being referred to herein as the
"Eligible Purchasers"). As used in this Agreement, the terms "United States"
and "U.S. persons" have the meaning given them in Regulation S.
It is understood and acknowledged that, upon original issuance
thereof, and until such time as the same is no longer required under the
applicable requirements of the Act, the Notes and the Warrants shall bear the
legends set forth in paragraphs 6 and 7, respectively, under the section of
the Offering Memorandum entitled "Transfer Restrictions."
It also is understood and acknowledged that holders (including
subsequent transferees) of the Notes will have the registration rights set
forth in the registration rights agreement pertaining to the Notes (the
"Notes Registration Rights Agreement"), to be dated as of the Closing Date,
in substantially the form of Exhibit A hereto, and that the holders(including
subsequent transferees) of the Warrants will have the registration rights set
forth in the registration rights agreement pertaining to the Warrants (the
"Warrant Registration Rights Agreement" and, together with the Notes
Registration Rights Agreement, the "Registration Rights Agreements"), to be
dated the date hereof in substantially the form of Exhibit B hereto. This
Agreement, the Indenture, the Pledge Agreements, the Registration Rights
Agreements and the Warrant Agreement are hereinafter referred to collectively
as the "Operative Documents."
Capitalized terms used herein without definition have the
respective meanings specified therefor in the Offering Memorandum.
2. Agreements to Sell, Purchase and Resell. (a) The Company
hereby agrees, subject to all the terms and conditions set forth herein, to
issue and sell to the Initial Purchaser and, upon the basis of the
representations, warranties and agreements of the Company herein contained
and subject to all the terms and conditions set forth herein, the Initial
Purchaser agrees to purchase from the Company, at a purchase price of
$96,069,197, 207,000 Units.
(b) The Company also agrees, subject to all the terms and
conditions set forth herein, to sell to the Initial Purchaser, and, upon the
basis of the representations, warranties and agreements of the Company herein
contained and subject to all the terms and conditions set forth herein, the
Initial Purchaser shall have the right to purchase from the Company pursuant
to an option (the "over-allotment option") which may be exercised at any time
and from time to time prior to 9:00 P.M., New York City time, on the 30th day
after the date of the Offering Memorandum (or, if such 30th day shall be a
Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange is open for trading), up to 20,700 Additional Units
at a purchase price per Unit equal to the Accreted Value of the Additional
Notes constituting a part of each of such Units on the date of delivery and
payment of the Additional Units.
(c) The Initial Purchaser has advised the Company that it proposes
to offer the Units for sale upon the terms and conditions set forth in this
Agreement and in the Offering Memorandum. The Initial Purchaser hereby
represents and warrants to, and agrees with, the Company that the Initial
Purchaser (i) is purchasing the Units pursuant to a private sale exempt from
registration under the Act, (ii) will not solicit offers for, or offer or
sell, the Units by means of any form of general solicitation or general
advertising or in any manner involving a public offering within the meaning
of Section 4(2) of the Act, (iii) will solicit offers for the Units only
from, and will offer, sell or deliver the Units as part of its initial
offering only to (A) persons in the United States whom the Initial Purchaser
<PAGE>
reasonably believes to be Qualified Institutional Buyers, or, if any such
person is buying for one or more institutional accounts for which such person
is acting as fiduciary or agent, only when such person has represented to the
Initial Purchaser that each such account is a Qualified Institutional Buyer,
to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A, in each case, in a transaction under Rule 144A, (B) to
a limited number of Accredited Investors that make the representations to and
agreements with the Company specified in Exhibit A to the Offering Memorandum
in private sales exempt from registration under the Act and (C) outside the
United States to persons other than U.S. persons in reliance on Regulation S
and (iv) that it will take reasonable steps to ensure that purchasers of
Units in the United States are aware that the Initial Purchaser may rely on
the exemption from the provisions of Section 5 of the Act provided by Rule
144A promulgated thereunder. The Initial Purchaser has advised the Company
that it will offer the Units to Eligible Purchasers at a price initially
equal to the Accreted Value of the Notes on the date of sale. Such price may
be changed by the Initial Purchaser at any time thereafter without notice.
(d) The Initial Purchaser represents and warrants that it has
offered and sold the Units and agrees that it will offer and sell the Units
(i) as part of its distribution at any time and (ii) otherwise until 40 days
after the later of the commencement of the offering of the Units and the
Closing Date, only in accordance with Rule 903 of Regulation S or as
otherwise permitted pursuant to paragraph (c) above. Accordingly, the
Initial Purchaser represents and agrees that neither such Initial Purchaser,
its affiliates nor any persons acting on its or their behalf has engaged or
will engage in any directed selling efforts with respect to the Units, and it
and they have complied and will comply with the offering restrictions
requirement of Regulation S. Such Initial Purchaser agrees that, at or prior
to confirmation of the sale of Units (other than a sale pursuant to Rule
144A), it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Units from such
Initial Purchaser during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"), and
may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering thereof and the closing
date of the sale, except in either case in accordance with
Regulation S (or Rule 144A under the Securities Act) under the
Securities Act. Terms used above and not otherwise defined have
the meaning given to them by Regulation S."
The Initial Purchaser understands that the Company and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Sections 7(c) and 7(d) hereof, counsel to the Company and counsel to the
Initial Purchaser, will rely upon the accuracy and truth of the foregoing
representations and agreements and the Initial Purchaser hereby consents to
such reliance.
3. Delivery of the Units and Payment Therefor. Delivery to the
Initial Purchaser of and payment for the Units shall be made at the offices
of Smith Barney Inc., 388 Greenwich Street, New York, NY 10013, at
10:00 A.M., New York City time, on July 6, 1995 (the "Closing Date"). The
place of closing for the Firm Units and the Closing Date may be varied by
agreement between the Initial Purchaser and the Company.
Delivery to the Initial Purchaser of and payment for any Additional
Units to be purchased by the Initial Purchaser shall be made at the
aforementioned office of Smith Barney Inc. at such time and on such date
specified by the Initial Purchaser (the "Option Closing Date"), which may be
the same as the Closing Date but shall in no event be earlier than the
Closing Date nor earlier than three nor later than ten business days after
the Initial Purchaser gives written notice to the Company of the Initial
Purchaser's determination to purchase the number of Additional Units
specified in such notice. The place of closing for any Additional Units and
the Option Closing Date for such Additional Units may be varied by agreement
between the Initial Purchaser and the Company.
<PAGE>
The Firm Units will be delivered to the Initial Purchaser against
payment of the purchase price for the Firm Units therefor as follows: (i)
$10,000,000 of the purchase price shall be paid by wire transfer of same day
funds, in connection with which the Company shall pay any reasonable interest
or other charges incurred by the Initial Purchaser (which amounts shall be
deducted from such payment); and (ii) the remainder of the purchase price
shall be paid by certified or official bank check or checks payable in New
York Clearing House (next day) funds to the order of the Company. Any
Additional Units that the Initial Purchaser may elect to purchase will be
paid for as provided in clause (ii) above. The Notes will be in definitive
or global form and registered in such names and in such denominations as the
Initial Purchaser shall request prior to 1:00 p.m., New York City time, on
the second business day preceding the Closing Date or any Option Closing
Date, as the case may be. The Units to be delivered to the Initial Purchaser
shall be made available to the Initial Purchaser in New York City for
inspection and packaging not later than 9:30 a.m., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as
the case may be.
4. Agreements of the Company. The Company agrees with the
Initial Purchaser as follows:
(a) The Company will advise the Initial Purchaser promptly and, if
requested by it, will confirm such advice in writing, within the period of
time referred to in paragraph (e) below, of any change in the Company's
condition (financial or otherwise), business, prospects, properties, net
worth or results of operations, or of the happening of any event which makes
any statement made in the Preliminary Offering Memorandum or the Offering
Memorandum untrue or which requires the making of any additions to or changes
in the Preliminary Offering Memorandum or the Offering Memorandum in order to
make the statements therein not misleading in light of the circumstances
under which they were made, or of the necessity to amend or supplement the
Preliminary Offering Memorandum or the Offering Memorandum to comply with any
law.
(b) The Company will furnish to the Initial Purchaser, without
charge, as of the date of the Offering Memorandum, such number of copies of
the Offering Memorandum as the Initial Purchaser may reasonably request.
(c) The Company will not make any amendment or supplement to the
Preliminary Offering Memorandum or to the Offering Memorandum of which the
Initial Purchaser shall not previously have been advised or to which it shall
reasonably object after being so advised or file any document with the
Securities and Exchange Commission (the "Commission") which upon filing
becomes incorporated by reference into the Preliminary Offering Memorandum
("an Incorporated Document"), without, in each case, delivering a copy of
such document to the Initial Purchaser prior to such filing.
(d) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to the Initial Purchaser, without
charge, in such quantities as the Initial Purchaser shall have requested or
may hereafter reasonably request, copies of the Preliminary Offering
Memorandum. The Company consents to the use, in accordance with the
securities or "blue sky" laws of the jurisdictions in which the Units are
offered by the Initial Purchaser and by dealers, prior to the date of the
Offering Memorandum, of each Preliminary Offering Memorandum so furnished by
the Company. The Company consents to the use of the Offering Memorandum in
accordance with the securities or "blue sky" laws of the jurisdictions in
which the Units are offered by the Initial Purchaser and by all dealers to
whom Units may be sold in connection with the offering and sale of the Units.
(e) If, at any time prior to completion of the distribution of the
Units by the Initial Purchaser to Eligible Purchasers, any event shall occur
that in the judgment of the Company or the Initial Purchaser or in the
opinion of counsel for the Initial Purchaser should be set forth in the
Offering Memorandum in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it is
necessary to supplement or amend the Offering Memorandum, or to file under
the Exchange Act any document which upon filing becomes an Incorporated
<PAGE>
Document, to comply with any law, the Company will forthwith prepare an
appropriate supplement or amendment thereto or file such document under the
Exchange Act, and will expeditiously furnish to the Initial Purchaser and
dealers a reasonable number of copies thereof. In the event that the Company
and the Initial Purchaser agree that the Offering Memorandum should be
amended or supplemented, or that a document should be filed under the
Exchange Act which upon filing becomes an Incorporated Document, the Company,
if requested by the Initial Purchaser, will promptly issue a press release
announcing or disclosing the matters to be covered by the proposed amendment
or supplement or such document unless such announcement or disclosure, in the
opinion of both counsel to the Company and to the Initial Purchaser, would
jeopardize the ability of the Company to rely on an exemption from
registration under the Act in connection with the sale of the Units
hereunder.
(f) The Company will cooperate with the Initial Purchaser and with
its counsel in connection with the qualification of the Units for offering
and sale by the Initial Purchaser and by dealers under the securities or
"blue sky" laws of such jurisdictions as the Initial Purchaser may designate
and will file such consents to service of process or other documents
necessary or appropriate in order to effect such qualification; provided,
that in no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action which
would subject it to service of process in suits, other than those arising out
of the offering or sale of the Units, in any jurisdiction where it is not now
so subject.
(g) So long as any of the Units, Notes or Warrants are
outstanding, the Company will furnish to the Initial Purchaser (i) as soon as
available, a copy of each report of the Company mailed to stockholders or
filed with the Commission, and (ii) from time to time such other information
concerning the Company as the Initial Purchaser may reasonably request.
(h) If this Agreement shall terminate or shall be terminated after
execution and delivery pursuant to any provisions hereof (otherwise than by
notice given by the Initial Purchaser terminating this Agreement pursuant to
Section 9 or Section 10 hereof) or if this Agreement shall be terminated by
the Initial Purchaser because of any failure or refusal on the part of the
Company to comply with the terms or fulfill any of the conditions of this
Agreement, the Company agrees to reimburse the Initial Purchaser for all
out-of-pocket expenses (including fees and expenses of its counsel)
reasonably incurred by it in connection herewith, but without any further
obligation on the part of the Company for loss of profits or otherwise.
(i) The Company will apply the net proceeds from the sale of the
Units to be sold by it hereunder substantially in accordance with the
description set forth in the Offering Memorandum under "Use of Proceeds" and
in a manner that will not result in the Company becoming an "investment
company" within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(j) Except as stated in this Agreement and in the Preliminary
Offering Memorandum and Offering Memorandum, the Company has not taken, nor
will it take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Units to facilitate the sale or resale of the Units. Except
as permitted by the Act, the Company will not distribute any offering
material in connection with the Exempt Resales.
(k) From and after the Closing Date, so long as any of the Units,
Notes or Warrants are outstanding and are "Restricted Securities" within the
meaning of Rule 144(a)(3) under the Act or, if earlier, until three years
after the Closing Date, and during any period in which the Company is not
subject to Section 13 or 15(d) of the Exchange Act, the Company will furnish
to holders of the Units, Notes and Warrants and prospective purchasers
thereof designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Act to permit compliance with Rule 144A in
connection with resale of the Units, Notes and Warrants.
<PAGE>
(l) The Company has complied and will comply with all provisions
of Florida Statutes Section 517.075 relating to issuers doing business with
Cuba.
(m) The Company agrees not to sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined
in the Act) that would be integrated with the sale of the Units in a manner
that would require the registration under the Act of the sale to the Initial
Purchaser or the Eligible Purchasers of the Units.
(n) The Company agrees to comply with all of the terms and
conditions of the Registration Rights Agreements, and all agreements set
forth in the representation letters of the Company to DTC relating to the
approval of the Units, Notes and Warrants by DTC for "book entry" transfer.
(o) The Company agrees that, prior to or contemporaneously with
any registration of the Notes pursuant to the Registration Rights Agreement,
or at such earlier time as may be so required, the Indenture shall be
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
The Company agrees to cause to be entered into any necessary supplemental
indentures in connection with such qualification.
(p) The Company shall, and shall use its best efforts to cause the
transfer agent with respect to the Units, Notes and Warrants to, refuse to
register any transfer of such securities sold pursuant to Rule 144A or
Regulation S if such transfer is not made in accordance with the provisions
of Rule 144A or Regulation S.
(q) The Company shall not, without the prior consent of the
Initial Purchaser, offer, sell, contract to sell or otherwise dispose of any
securities that are similar in quality or nature to the Notes offered hereby
(other than pursuant to an exchange offer for the Notes) for a period of 180
days after the Closing Date.
5. Representations and Warranties of the Company. The Company
represents and warrants to the Initial Purchaser that:
(a) The Preliminary Offering Memorandum and Offering Memorandum
have been prepared by the Company for use by the Initial Purchaser in
connection with the Exempt Resales. No order or decree preventing the use of
the Preliminary Offering Memorandum or the Offering Memorandum, or any order
asserting that the transactions contemplated by this Agreement are subject to
the registration requirements of the Act, has been issued and no proceeding
for that purpose has commenced or is pending or, to the knowledge of the
Company, is contemplated.
(b) The Preliminary Offering Memorandum (as amended) and the
Offering Memorandum as of their respective dates, and the Offering Memorandum
as of the Closing Date, did not and will not, as the case may be, contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except that this representation and warranty does not apply to
statements in or omissions from the Preliminary Offering Memorandum and
Offering Memorandum made in reliance upon and in conformity with information
relating to the Initial Purchaser or contained under the section entitled
"Private Placement" furnished to the Company in writing by or on behalf of
the Initial Purchaser expressly for use therein.
(c) The Indenture has been duly and validly authorized by the
Company and, upon its execution, delivery and performance by the Company and
assuming due authorization, execution, delivery and performance by the
Trustee, will be a valid, legal and binding agreement of the Company,
enforceable in accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally or equitable principles of general
applicability (whether such actions are deemed to be at law or in equity).
The Indenture conforms in all material respects to the description thereof in
the Offering Memorandum. No qualification of the Indenture under the 1939
Act is required in connection with the offer and sale of the Notes
contemplated hereby or in connection with the Exempt Resales. The Warrant
Agreement has been duly and validly authorized by the Company and, upon its
execution, delivery and performance by the Company and assuming due
authorization, execution, delivery and performance by the Warrant Agent, will
be a valid, legal and binding agreement of the Company, enforceable in
accordance with its terms, except as enforcement thereof may be limited by
<PAGE>
bankruptcy, insolvency, moratorium or other similar laws affecting creditors'
rights generally or equitable principles of general applicability (whether
such actions are deemed to be at law or in equity). The Warrant Agreement
conforms in all material respects to the description thereof in the Offering
Memorandum. The Registration Rights Agreements and this Purchase Agreement
have been duly and validly authorized by the Company and, upon their
respective execution, delivery and performance by the Company, will be valid,
legal and binding agreements of the Company, enforceable in accordance with
their respective terms, except as (i) enforcement thereof may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors'
rights, (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability (whether such actions are
deemed to be at law or in equity), and (iii) any rights to indemnity and
contributions may be limited by Federal and state securities laws and public
policy considerations.
(d) The Pledge Agreements have been duly and validly authorized by
the Company and, upon their execution, delivery and performance by the
Company, and assuming due authorization, execution, delivery and performance
by the Collateral Agent, will be valid, legal and binding agreements of the
Company, enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, moratorium or other similar
laws affecting creditors' rights generally or equitable principles of general
applicability (whether such actions are deemed to be at law or in equity).
The Pledge Agreements conform in all material respects to the description
thereof in the Offering Memorandum.
(e) The Notes have been duly and validly authorized by the Company
and, when executed by the Company and authenticated by the Trustee in
accordance with the Indenture and delivered to the Initial Purchaser against
payment therefor in accordance with the terms hereof, (i) will have been
validly issued and delivered, and will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable in accordance with their terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or equitable
principles of general applicability (whether such actions are deemed to be at
law or in equity), and (ii) will conform in all material respects to the
description thereof in the Offering Memorandum.
(f) The Warrants have been duly authorized by the Company and,
when executed by the Company and countersigned by the Warrant Agent, (i) will
be validly issued and, except as set forth in the Offering Memorandum, free
of any preemptive or similar rights and (ii) will conform in all material
respects to the description thereof in the Offering Memorandum. The Company
has duly authorized and reserved a sufficient number of shares of Common
Stock for issuance upon the exercise of the Warrants. All the outstanding
shares of capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable and, except as set forth in the
Offering Memorandum, are free of any preemptive or similar rights and were
issued and sold in compliance with all applicable Federal and state
securities laws. The authorized capital stock of the Company conforms to the
description thereof in the Offering Memorandum.
(g) The Company is (i) a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with
all requisite corporate power and authority to own, lease and operate its
properties, to conduct its business as described in the Offering Memorandum
and to enter into the Operative Documents and (ii) in good standing in each
jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify does not have a material adverse effect on
the condition (financial or otherwise), business, prospects, properties, net
worth or results of operations of the Company and its Subsidiaries (as
hereinafter defined) taken as a whole (a "Material Adverse Effect").
<PAGE>
(h) All the Company's subsidiaries (as defined in the Act) are
referred to herein individually as a "Subsidiary" and collectively as the
"Subsidiaries." Each Subsidiary is (i) a corporation duly organized, validly
existing and in good standing in the jurisdiction of its organization, with
all requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering
Memorandum, and (ii) in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify or be in good standing does not have a Material Adverse Effect. The
schedule delivered by the Company to the Initial Purchaser and dated the date
hereof sets forth a true and correct list of the percentage ownerships by the
Company of all of the entities in which it has an equity or other ownership
interest, either directly or through one or more Subsidiaries, and the entity
by which each such interest is held (the "Subsidiary Schedule"). All of such
interests consist solely of capital stock. Except as set forth on the
Subsidiary Schedule, the Company does not, either directly or through one or
more Subsidiaries, hold any equity or other ownership interest of any entity
and the Company does not have any right to acquire any other equity or other
ownership interest of any entity. Except as set forth in Schedule 2.3 to the
Agreement, dated as of March 20, 1995, by and among the Company and The SC
Fundamental Value Fund, L.P. and SC Fundamental Value BVI, Ltd. (the "Note
Purchase Agreement"), all of the outstanding shares of capital stock of each
of the entities listed on the Subsidiary Schedule as being owned by the
Company, either directly or through one or more Subsidiaries, have been duly
authorized and validly issued, are fully paid and nonassessable, and are
owned by the Company or the Subsidiary indicated on the Subsidiary Schedule
free and clear of any lien, adverse claim, security interest or other
encumbrance; provided, however, that the Company represents and warrants that
liens, security interests or other encumbrances granted with respect to the
Capital Stock of the Subsidiaries in connection with the Note Purchase
Agreement shall be discharged simultaneously with the Closing.
(i) Neither the Company nor any Subsidiary holds a general
partnership interest in any Limited Partnership.
(j) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened against the Company or any of the
Subsidiaries, to which the Company or any of the Subsidiaries or any of their
respective properties is subject, that are not disclosed in the Offering
Memorandum and which, if adversely decided, could cause a Material Adverse
Effect or materially affect the issuance of the Units or the consummation of
the transactions contemplated by the Operative Documents. There are no
material agreements, contracts, indentures, leases or other instruments that
are not described in the Offering Memorandum, the failure of which to
describe therein would constitute a material misstatement or the omission of
a material fact. Except as described in the second paragraph under
"Business -- Employees" in the Offering Memorandum, neither the Company nor any
Subsidiary is involved in any strike, job action or labor dispute with any
group of employees and, to the Company's knowledge, no such action or dispute
is threatened.
(k) Neither the Company nor any of the Subsidiaries is (i) in
violation of its certificate or articles of incorporation or by-laws or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body
having jurisdiction over the Company or any of the Subsidiaries, except where
any such violation or violations in the aggregate would not have a Material
Adverse Effect, or (ii) in default in any material respect in the performance
of any obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any material agreement,
indenture, lease or other instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their respective
properties may be bound, except for such defaults which in the aggregate
would not have a Material Adverse Effect or as may be disclosed in the
Offering Memorandum.
<PAGE>
(l) Neither the issuance, offer, sale or delivery by the Company
of the Units, Notes, Warrants or shares of Common Stock issuable upon the
exercise of the Warrants, the execution, delivery or performance of the
Operative Documents by the Company, nor the consummation by the Company of
the transactions contemplated hereby or thereby, (i) requires any consent,
approval, authorization or other order of, or registration or filing with,
any court, regulatory body, administrative agency or other governmental body,
agency or official (except such as may be required in connection with the
registration under the Act of the Notes or the shares of Common Stock
issuable upon the exercise of Warrants in accordance with the applicable
Registration Rights Agreement, the qualification of the Indenture under the
1939 Act, compliance with the securities or "blue sky" laws of various
jurisdictions and except as may be required under any applicable
telecommunications law, in the last such case to the extent described in the
Offering Memorandum), or conflicts or will conflict with or constitutes or
will constitute a breach of, or a default under, the certificate or articles
of incorporation or bylaws, or other organizational documents, of the Company
or any of the Subsidiaries or (ii) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under any material
agreement, indenture, lease or other instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound, or violates or will violate any statute,
law, regulation or filing or judgment, injunction, order or decree applicable
to the Company or any of the Subsidiaries or any of their respective
properties, or will result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which
any of them is a party or by which any of them may be bound or to which any
of the property or assets of any of them is subject.
(m) The accountants, Coopers & Lybrand, who have certified or
shall certify the financial statements included as part of the Offering
Memorandum (or any amendment or supplement thereto) are independent public
accountants under Rule 101 of the AICPA's Code of Professional Conduct and
its interpretation and rulings.
(n) The financial statements (historical and pro forma), together
with related notes forming part of the Offering Memorandum, present fairly in
all material respects the consolidated financial position, results of
operations and changes in stockholders* equity and cash flows of the Company
and the Subsidiaries on the basis stated in the Offering Memorandum at the
respective dates or for the respective periods to which they apply. Such
financial statements and related notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein. With respect to the
assumptions used in preparing the pro forma financial information and related
notes included in the Offering Memorandum, the Company has a reasonable basis
for such assumptions. The other financial and statistical information and
data set forth in the Offering Memorandum is accurately presented and, to the
extent such information and data is derived from the financial books and
records of the Company, is prepared on a basis consistent with such financial
statements and the books and records of the Company.
(o) Except as disclosed in the Offering Memorandum, subsequent to
the date as of which such information is given in the Offering Memorandum,
(i) neither the Company nor any of the Subsidiaries has incurred any
liability or obligation, direct or contingent, or entered into any
transaction not in the ordinary course of business, that is material to the
Company and the Subsidiaries taken as a whole and (ii) there has not been
(A) any material change in the capital stock or material increase in the
short-term or long-term debt of the Company or any of the Subsidiaries or
(B) any Material Adverse Change, or any development of which the Company knew
or should have known and which involves or which could reasonably be expected
to involve a prospective Material Adverse Change.
<PAGE>
(p) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal), other than intellectual
property (which is addressed in (w) below) and other than capital stock
(which is addressed in (h) above), described in the Offering Memorandum as
being owned by it, free and clear of all liens, claims, security interests or
other encumbrances except such as are described in the Offering Memorandum
(including, without limitation, any security interest pertaining to the cash
account pertaining to the Defeased Notes), any Incorporated Document or
exhibit thereto or that do not materially impair or are not expected to
materially impair the ability of the Company to use any such property, and
except for the lien on the license granted by the FCC having a call sign of
WNKL 343, and all the property described in the Offering Memorandum as being
held under lease by each of the Company and the Subsidiaries is held by it
under valid, subsisting and enforceable leases, with only such exceptions as
in the aggregate are not materially burdensome and do not interfere in any
material respect with the conduct of the business of the Company and the
Subsidiaries taken as a whole.
(q) Except as permitted by the Act, the Company has not
distributed and, prior to the later to occur of the Closing Date and
completion of the distribution of the Units, will not distribute any offering
material in connection with the offering and sale of the Units other than the
Preliminary Offering Memorandum and the Offering Memorandum, respectively.
(r) Each of the Company and the Subsidiaries have such permits,
licenses, franchises, and other approvals or authorizations of governmental
or regulatory authorities, including, without limitation, all waivers,
licenses and authorizations to develop, implement and operate wireless
telecommunications systems as described, and in such manner as is described,
in the Offering Memorandum (collectively, "Permits"), as are necessary under
applicable law to own their respective properties and to conduct their
respective business in the manner described in the Offering Memorandum,
except to the extent otherwise provided therein. The Company and each of the
Subsidiaries have fulfilled and performed in all material respects all of
their respective material obligations with respect to the Permits and no
event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or result in any other material
impairment of the rights of the holder of any such Permit, subject in each
case to such qualification as may be set forth in the Offering Memorandum.
Except as described in the Offering Memorandum, (i) there are no legal or
governmental proceedings pending or, to the knowledge of the Company,
threatened with respect to any of the Permits and (ii) neither the Company
nor any Subsidiary is in default under any Permit. All of the management
agreements pertaining to the licenses listed on Annex 1 to the draft opinion
of Skadden, Arps, Slate, Meagher & Flom, special counsel to the Company for
telecommunications regulatory matters, a copy of which is included as a part
of Exhibit D hereto, are valid, legal and binding agreements enforceable
against the parties thereto in accordance with their terms, except as (i)
enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting creditors' rights and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability (whether such actions are deemed to be at law or in equity).
All permits, licenses, franchises and other approvals or authorizations of
applicable telecommunications authorities, including, without limitation, all
waivers, licenses and authorizations to develop, implement and operate
wireless telecommunications systems (the "Regulatory Permits"), to the extent
held by the Company or a Subsidiary thereof, are held directly by Geotek
Acquisition Corp., Geotek Subsidiary Industries, Inc., MetroNet Systems,
Inc., Power Spectrum, Inc., USI Venture Corp., National Band Three Limited or
Geotek Communications GmbH ("Geotek Germany") (the "Pledged Companies") or by
their direct or indirect wholly-owned Subsidiaries, except that, in the case
of Geotek Germany, such Regulatory Permits are held by DBF Bundelfunk GmbH &
Co. K.G. ("DBF") and Preussag Bundelfunk GmbH ("Preussag"). All direct and
indirect interests (whether actual or contingent) of the Company and its
Subsidiaries in any Regulatory Permits, to the extent held by third parties
(including, without limitation, any rights pursuant to management agreements
or options), are held directly by the Pledged Companies or their wholly-owned
<PAGE>
Subsidiaries, except that, in the case of Geotek Germany, such interests are
held by DBF and Preussag. Neither the Company nor any Subsidiary thereof,
other than the Pledged Companies and their direct or indirect wholly-owned
Subsidiaries, has any right to acquire, is seeking to acquire or is otherwise
in the process of acquiring any Regulatory Permit or any actual or contingent
right therein, other than any Regulatory Permit issued pursuant to the laws
of India or Korea.
(s) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets, (iii) access to assets
is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(t) Neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any Subsidiary
has made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation, which
violation would have a Material Adverse Effect.
(u) The Company and each of the Subsidiaries have filed all tax
returns required to be filed, which returns are true and correct in all
material respects, and neither the Company nor any Subsidiary is in default
in the payment of any taxes which were payable pursuant to said returns or
any assessments with respect thereto, except where the failure to file such
returns and make such payments would not have a Material Adverse Effect.
(v) Except as described in the Offering Memorandum, no holder of
any security of the Company (other than holders of the Notes and the
Warrants) has any right to request or demand registration of shares of Common
Stock or any other security of the Company because of the consummation of the
transactions contemplated by this Agreement or the Registration Rights
Agreements. Except as described in or contemplated by the Operative
Documents or the Offering Memorandum or as described in writing to the
Initial Purchaser, there are no outstanding options, warrants or other rights
calling for the issuance of, and there are no commitments, plans or
arrangements to issue, any shares of capital stock of the Company or any
security convertible into or exchangeable or exercisable for capital stock of
the Company.
(w) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registration, service marks, service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights described in the Offering Memorandum as being owned by any of them
or, except as described in the Offering Memorandum, necessary for the current
and contemplated conduct of their respective businesses as described in the
Offering Memorandum (including, without limitation, all such patents,
trademarks and other rights necessary to develop, implement and operate
wireless telecommunications systems as described, and in such markets as are
described, in the Offering Memorandum). Except as described in the Offering
Memorandum, none of the officers of the Company is aware of any claim to the
contrary or any challenge by any other person to the rights of the Company
and the Subsidiaries with respect to any of the foregoing.
(x) Upon the possession by the Collateral Agent of the
certificates representing the Collateral, in the case of the Pledged
Companies (as defined in the Preliminary Offering Memorandum, as amended)
organized under the laws of a jurisdiction within the United States, or the
transfer on the share registry of the applicable Pledged Company to the
Collateral Agent of the shares of such Pledged Company, in the case of the
Pledged Companies organized under the laws of the United Kingdom or Germany,
and assuming that the Collateral Agent complies with any applicable notice or
registration provisions applicable to it, the security interests created in
favor of the Collateral Agent under the Pledge Agreements with respect to the
Collateral will constitute perfected security interests in such Collateral
and proceeds thereof, and no other filings, registration or recordings are
required in order to perfect the security interests in such Collateral and
proceeds under the Pledge Agreements.
<PAGE>
(y) The Company is not and, upon the sale of the Units to be
issued and sold thereby in accordance herewith and the application of the net
proceeds to the Company of such sale as described in the Offering Memorandum
under the caption "Use of Proceeds," will not be an "investment company" or
an entity "controlled" by an "investment company" within the meaning of the
Investment Company Act.
(z) When the Units, Notes and Warrants are issued and delivered
pursuant to this Agreement, such Units, Notes and Warrants will not be of the
same class (within the meaning of Rule 144A(d)(3) under the Act) as any
security of the Company that is listed on a national securities exchange
registered under Section 6 of the Exchange Act or that is quoted in a United
States automated inter dealer quotation system.
(aa) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D) of the Company has directly, or through any agent
(provided that no representation is made as to the Initial Purchaser or any
person acting on its behalf), (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the
Act) which is or will be integrated with the offering and sale of the Units
in a manner that would require the registration of the Units, Notes or
Warrants under the Act or (ii) engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with
the offering of the Units.
(ab) The Company is not required to deliver the information
specified in Rule 144A(d)(4) in connection with the offering and resale of
the Units, Notes or Warrants by the Initial Purchaser.
(ac) Assuming (i) that the representations and warranties in
Section 2 hereof are true, (ii) that the Initial Purchaser complies with the
covenants set forth in Section 2 hereof and (iii) that each person to whom
the Initial Purchaser offers, sells or delivers the Units is a Qualified
Institutional Buyer, an Accredited Investor or a person other than a U.S.
person outside the United States to whom offers and sales are being made in
reliance on Regulation S under the Act, the purchase and sale of the Units
pursuant hereto (including the Initial Purchaser's proposed offering of the
Units on the terms and in the manner set forth in the Offering Memorandum and
Section 2 hereof) is exempt from the registration requirements of the Act.
None of the Company, its Subsidiaries or affiliates or any person acting on
its or their behalf (other than the Initial Purchaser) has engaged in any
directed selling efforts (as that term is defined in Regulation S under the
Act) with respect to the Units and the Company, its Subsidiaries or
affiliates and any person acting on its or their behalf (other than the
Initial Purchaser) have complied with the offering restrictions requirement
of Regulation S.
(ad) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Units to the Initial Purchaser or by
the Initial Purchaser to Eligible Purchasers will not involve any prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975 of the
Code. The representation made by the Company in the preceding sentence is
made in reliance upon and subject to the accuracy of, and compliance with,
the representations and covenants made or deemed made by the Eligible
Purchasers as set forth in the Offering Memorandum under the section entitled
"Notice to Investors."
(ae) The Company is not required to obtain stockholder consent or
approval pursuant to the rules of The Nasdaq National Market, the Pacific
Stock Exchange or any other exchange or trading facility in connection with
the offering and sale of the Units.
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Initial Purchaser and each person, if any,
who controls the Initial Purchaser within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act (each a "Purchaser Indemnitee") from
and against any and all losses, claims, damages, liabilities and expenses
(including, without limitation, any legal or other expenses reasonably
incurred by the Purchaser Indemnitee in connection with defending or
investigating any such action or claim) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Offering Memorandum or Offering Memorandum or in any
<PAGE>
amendment or supplement thereto, or arising out of or based upon any omission
or alleged omission to state therein a 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, except insofar as
such losses, claims, damages, liabilities or expenses arise out of or are
based upon any untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted therefrom in reliance upon
and in conformity with the information relating to the Initial Purchaser
furnished in writing to the Company by or on behalf of the Initial Purchaser
expressly for use in connection therewith; provided, however, that the
indemnification provided for in this paragraph (a) with respect to the
Preliminary Offering Memorandum shall not inure to the benefit of the
applicable Purchaser Indemnitee on account of any such loss, claim, damage,
liability or expense arising from the sale of the Units by the Initial
Purchaser to any person if the untrue statement or alleged untrue statement
or omission or alleged omission of a material fact contained in the
Preliminary Offering Memorandum was corrected in the Offering Memorandum and
the Initial Purchaser sold Units to that person without sending or giving at
or prior to the written confirmation of such sale, a copy of the Offering
Memorandum (as then amended or supplemented) if the Company has previously
furnished sufficient copies thereof to the Initial Purchaser on a timely
basis. The indemnification obligation of the Company set forth in this
paragraph (a) shall be in addition to any liability which the Company may
otherwise have, including, without limitation, any liability for any breach
of any representation, warranty or covenant contained in this Agreement.
(b) If any action, suit or proceeding shall be brought against any
Purchaser Indemnitee in respect of which indemnification may be sought
against the Company, such Purchaser Indemnitee shall promptly notify the
parties against whom indemnification is being sought (the "indemnifying
parties"), and such indemnifying parties shall assume the defense thereof,
including the employment of counsel and payment of all fees and expenses.
Such Purchaser Indemnitee shall have the right to employ separate counsel in
any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Purchaser Indemnitee unless (i) the indemnifying parties have agreed in
writing to pay such fees and expenses, (ii) the indemnifying parties have
failed to assume the defense and employ counsel or (iii) the named parties to
any such action, suit or proceeding (including any impleaded parties) include
both such Purchaser Indemnitee and the indemnifying parties and such
Purchaser Indemnitee shall have been advised by its counsel that
representation of such Purchaser Indemnitee and any indemnifying party by the
same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests between
them (in which case the indemnifying party shall not have the right to assume
the defense of such action, suit or proceeding on behalf of the Purchaser
Indemnitee). It is understood, however, that the indemnifying parties shall,
in connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for the Initial
Purchaser and any other Purchaser Indemnitee not having actual or potential
differing interests with the Initial Purchaser or among themselves, which
firm shall be designated in writing by the Initial Purchaser. The
indemnifying parties shall not be liable for any settlement of any such
action, suit or proceeding effected without their written consent, but if
settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, the indemnifying parties
agree to indemnify and hold harmless the Purchaser Indemnitee, to the extent
provided in paragraph (a), from and against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.
<PAGE>
(c) The Initial Purchaser agrees to indemnify and hold harmless
the Company, and its directors and officers, and any person who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act (each a "Company Indemnitee") to the same extent as the
indemnity from the Company to the Initial Purchaser set forth in
paragraph (a) hereof, but only with respect to information relating to the
Initial Purchaser furnished in writing by or on behalf of the Initial
Purchaser expressly for use in the Preliminary Offering Memorandum or
Offering Memorandum or any amendment or supplement thereto. If any action,
suit or proceeding shall be brought against any Company Indemnitee based on
the Preliminary Offering Memorandum or Offering Memorandum, or any amendment
or supplement thereto, and in respect of which indemnity may be sought
against the Initial Purchaser pursuant to this paragraph (c), the Initial
Purchaser shall have the rights and duties given to the Company by paragraph
(b) above (except that if the Company shall have assumed the defense thereof
the Initial Purchaser shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the Initial Purchaser's expense), and
each Company Indemnitee shall have the rights and duties given to the Initial
Purchaser by paragraph (b) above. The indemnification obligation of the
Initial Purchaser set forth in this paragraph (c) shall be in addition to any
liability which the Initial Purchaser may otherwise have, including without
limitation, any liability for any breach of any representation, warranty or
covenant contained in this Agreement.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Initial Purchaser on the
other hand from the offering of the Units or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one hand
and the Initial Purchaser on the other in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Initial
Purchaser on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses and after
discounts and commissions received by the Initial Purchaser) received by the
Company bear to the total discounts and commissions received by the Initial
Purchaser, in each case as set forth in the table on the cover page of the
Offering Memorandum; provided that, in the event that the Initial Purchaser
shall have purchased any Additional Units hereunder, any determination of the
relative benefits received by the Company or the Initial Purchaser from the
offering of the Units shall include the net proceeds (before deducting
expenses and after discounts and commissions received by the Initial
Purchaser) received by the Company, and the discounts and commissions
received by the Initial Purchaser, from the sale of such Additional Units, in
each case computed on the basis of the respective amounts set forth in the
notes to the table on the cover page of the Offering Memorandum. The
relative fault of the Company on the one hand and the Initial Purchaser on
the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or by the Initial Purchaser on the
other hand and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
<PAGE>
(e) The Company and the Initial Purchaser agree that it would not
be just and equitable if contribution pursuant to this Section 6 were
determined by a pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to
in paragraph (d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating any claim or defending any
such action, suit or proceeding. Notwithstanding the provisions of this
Section 6, the Initial Purchaser shall not be required to contribute any
amount in excess of the amount by which the total price of the Units resold
by it in the initial placement of such Units exceeds the amount of any
damages which the Initial Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 6 are not exclusive and shall not limit
any rights or remedies that may otherwise be available to any indemnified
party at law or in equity.
(f) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under
this Section 6 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 6 and the
representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Purchaser Indemnitee or any Company
Indemnitee, (ii) acceptance of any Units and payment therefor hereunder and
(iii) any termination of this Agreement. A successor to any Purchaser
Indemnitee, or to any Company Indemnitee shall be entitled to the benefits of
the indemnity, contribution and reimbursement agreements contained in this
Section 6.
(g) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
7. Conditions of the Initial Purchaser's Obligations. The
obligations of the Initial Purchaser to purchase the Firm Units hereunder are
subject to the following conditions:
(a) At the time of execution of this Agreement and on the Closing
Date, no order or decree preventing the use of the Offering Memorandum or any
amendment or supplement thereto, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration requirements
of the Act, shall have been issued and no proceedings for that purpose shall
have been commenced or shall be pending or, to the knowledge of the Company,
be contemplated. No stop order suspending the sale of the Units in any
jurisdiction designated by the Initial Purchaser shall have been issued and
no proceedings for that purpose shall have been commenced or shall be pending
or, to the knowledge of the Company, shall be contemplated.
(b) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
business, prospects, properties, net worth or results of operations of the
Company or the Subsidiaries not contemplated by the Offering Memorandum
which, in the opinion of the Initial Purchaser, would materially adversely
affect the market for the Units or (ii) any event or development relating to
or involving the Company, any Subsidiary or any officer or director of the
Company which makes any statement made in the Offering Memorandum untrue or
which, in the opinion of the Company and its counsel or the Initial Purchaser
and its counsel, requires the making of any addition to or change in the
<PAGE>
Offering Memorandum in order to state a material fact required by any law to
be stated therein or necessary in order to make the statements therein not
misleading, if amending or supplementing the Offering Memorandum to reflect
such event or development would, in the opinion of the Initial Purchaser,
materially adversely affect the market for the Units or make it impracticable
to market the Units on the terms and in the manner contemplated in the
Offering Memorandum.
(c) The Initial Purchaser shall have received on the Closing Date
an opinion of (i) Klehr, Harrison, Harvey, Branzburg & Ellers, counsel for
the Company, (ii) Skadden, Arps, Slate, Meagher & Flom and Gardner, Carton &
Douglas, special counsel to the Company for telecommunications regulatory
matters, (iii) Fladgate Fielder and Bruckhaus, Westrich, Stegemann, special
counsel to the Company for telecommunications regulatory matters in the
United Kingdom and Germany, respectively, and (iv) Andrew Siegel, Esq.,
General Counsel of the Company, in form and substance reasonably satisfactory
to the Initial Purchaser and its counsel, in each case dated the Closing Date
and addressed to the Initial Purchaser.
(d) The Initial Purchaser shall have received on the Closing Date
an opinion of Chadbourne & Parke, counsel for the Initial Purchaser, dated
the Closing Date and addressed to the Initial Purchaser in form and substance
satisfactory to the Initial Purchaser.
(e) The Initial Purchaser shall have received on each of the date
hereof and the Closing Date letters, each dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to the
Initial Purchaser, from Coopers and Lybrand, the Company's independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information (including pro
forma financial information) contained in the Preliminary Offering Memorandum
and the Offering Memorandum.
(f) (i) There shall not have been any change in the capital stock
of the Company nor any material increase in the short-term or long-term debt
of the Company (other than in the ordinary course of business) from that set
forth or contemplated in the Offering Memorandum; (ii) there shall not have
been, since the respective dates as of which information is given in the
Offering Memorandum, except as may otherwise be stated in the Offering
Memorandum, any change resulting in a Material Adverse Effect; (iii) the
Company and the Subsidiaries shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business),
that are material to the Company and the Subsidiaries taken as a whole, other
than those reflected in the Offering Memorandum; and (iv) all the
representations and warranties of the Company contained in this Agreement
shall be true and correct in all material respects on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and the Initial Purchaser shall have received a certificate, dated the
Closing Date and signed by the chief executive officer and the chief
accounting officer of the Company (or such other officers as are acceptable
to the Initial Purchaser in its discretion), to the effect set forth in this
Section 7(f) and in Section 7(g) hereof.
(g) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(h) To the extent applicable, there shall not have been any
announcement by any "nationally recognized statistical rating organization,"
as defined for purposes of Rule 436(g) under the Act, that (i) it is
downgrading its rating assigned to any class of securities of the Company or
(ii) it is reviewing its ratings assigned to any class of securities of the
Company with a view to possible downgrading, or with negative implications,
or direction not determined.
(i) The Units, Notes and Warrants shall have been approved for
trading on PORTAL.
<PAGE>
(j) The Company and the Initial Purchaser shall have entered into
the other Operative Documents and the Collateral shall have been delivered to
the Collateral Agent pursuant to the terms of the Pledge Agreements.
(k) The Company shall have furnished or caused to be furnished to
the Initial Purchaser such further certificates and documents as the Initial
Purchaser shall have reasonably requested.
(l) Simultaneously with the consummation of the transactions
contemplated hereby, the Defeased Notes (as defined in the Preliminary
Offering Memorandum) shall have been defeased in accordance with the terms
thereof and the security interests granted in respect thereof (other than any
security interest in the restricted cash account containing the defeasance
amount) shall have been released.
All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchaser and counsel for
the Initial Purchaser.
Any certificate or document signed by any officer of the Company
and delivered to the Initial Purchaser, or to counsel for the Initial
Purchaser, shall be deemed a representation and warranty by the Company to
the Initial Purchaser as to the statements made therein.
The obligations of the Initial Purchaser to purchase any Additional
Notes hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 7, except that, if
any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (f) and paragraph
(k) shall be dated the Option Closing Date in question and the opinions
called for by paragraphs (c) and (d) shall be revised to reflect the sale of
Additional Units.
8. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it
of its obligations hereunder: (i) the preparation, printing or reproduction
of the Preliminary Offering Memorandum and the Offering Memorandum (including
financial statements thereto) and each amendment or supplement to the
Preliminary Offering Memorandum and Offering Memorandum, this Agreement and
the Indenture; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Preliminary Offering Memorandum, the Offering Memorandum, any
Incorporated Documents, and all amendments or supplements to any of them as
may be reasonably requested for use in connection with the offering and sale
of the Units; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Notes and the Warrants, including any stamp
taxes in connection with the original issuance and sale of the Notes and the
Warrants; (iv) the printing (or reproduction) and delivery of this Agreement,
any preliminary and supplemental "blue sky" memoranda and all other
agreements or documents printed (or reproduced) and delivered in connection
with the offering of the Units; (v) the application for quotation of the
Units, Notes and Warrants on PORTAL; (vi) the qualification of the Units for
offer and sale under the securities or "blue sky" laws of any states as
provided in Section 4(f) hereof (including the reasonable fees, expenses and
disbursements of counsel for the Initial Purchaser relating to the
preparation, printing or reproduction, and delivery of any preliminary and
supplemental blue sky memoranda and such qualification); (vii) the
performance by the Company of its obligations under the Registration Rights
Agreements; (viii) creating and perfecting security interests in the
Collateral in favor of the Collateral Agent pursuant to the Pledge
Agreements, including, without limitation, filing and recording fees and
expenses; and (ix) the fees and expenses of the Company's accountants, the
fees and expenses of counsel (including local and special counsel) for the
Company and the fees and expenses of the Trustee under the Indenture, the
Warrant Agent under the Warrant Agreement and the Collateral Agent under the
Pledge Agreements, and their counsel. The Company hereby agrees that it will
pay in full on the Closing Date the fees and expenses referred to in clause
(vi) of this Section 8 by delivering to counsel for the Initial Purchaser on
such date a check payable to such counsel in the requisite amount provided to
the Company in writing at least two (2) days prior to such date.
<PAGE>
9. Effective Date of Agreement. This Agreement shall become
effective upon the execution and delivery hereof by all the parties hereto.
Until such time as this Agreement shall have become effective, to the extent
that a party hereto, but not the other party hereto, has executed and
delivered this Agreement, such party executing and delivering this Agreement
may rescind such execution and delivery by written notice to the other party
hereto.
Any notice under this Section 9 may be given by telegram, telecopy
or telephone and shall be subsequently confirmed by letter.
10. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchaser, without
liability on the part of the Initial Purchaser to the Company, by notice to
the Company, if prior to the Closing Date or any Option Closing Date (if
different from the Closing Date and then only as to the Additional Notes), as
the case may be, (i) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or The Nasdaq National Market shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal or
state authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities or other international or domestic calamity, crisis
or change in political, financial or economic conditions, the effect of which
on the financial markets of the United States is such as to make it, in the
judgment of the Initial Purchaser, impracticable or inadvisable to commence
or continue the offering of the Units on the terms set forth on the cover
page of the Offering Memorandum or to enforce contracts for the resale of the
Units by the Initial Purchaser. Notice of such termination may be given to
the Company by telegram, telecopy or telephone and shall be subsequently
confirmed by letter.
11. Information Furnished by the Initial Purchaser. The
statements set forth in the stabilization legend on the inside front cover
and under the caption "Private Placement" in the Preliminary Offering
Memorandum and Offering Memorandum constitute the only information furnished
by or on behalf of the Initial Purchaser as such information is referred to
in Sections 5(b) and 6 hereof.
12. Miscellaneous. Except as otherwise provided in Sections 4, 9
and 10 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of
the Company at 20 Craig Road, Montvale, N.J. 07645, Attention: Andrew
Siegel, General Counsel, or (ii) if to the Initial Purchaser, to Smith Barney
Inc., 388 Greenwich Street, New York, NY 10013, Attention: Manager,
Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
Initial Purchaser, the Company, the affiliated persons and their respective
directors and officers referred to in Section 6 hereof and their respective
successors and assigns, to the extent provided herein, and no other person
shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" nor the term "successors and assigns" as used in
this Agreement shall include a purchaser from the Initial Purchaser of any of
the Notes in his status as such purchaser.
Neither party hereto may assign any of its rights or delegate any
of its obligations without the consent of the other party hereto.
The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed a part of this
Agreement.
13. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations, both
written and oral, between the parties with respect to the subject matter of
this Agreement.
14. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed within the State of New
York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
<PAGE>
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Initial Purchaser.
Very truly yours,
GEOTEK COMMUNICATIONS, INC.
By: /s/ Yoram Bibring
-------------------------------------
Name: Yoram Bibring
Title: Executive Vice President,
Chief Operating Officer and Chief
Financial Officer
Confirmed and accepted as of
the date first above written:
SMITH BARNEY INC.
By: Anthony S. Graham
---------------------------
Name: Anthony S. Graham
Title: Vice President
<PAGE>
The following is a summary of all omitted Exhibits to the foregoing
Purchase Agreement.
Exhibit A Notes Registration Rights Agreement (filed as Exhibit
(c)(3) to the Form 8-K).
Exhibit B Warrant Share Registration Rights Agreement (filed as
Exhibit (c)(8) to the Form 8-K).
Exhibit C Intentionally omitted
Exhibit D Opinion of Skaden, Arps, Slate, Meagher & Flom
The Registrant hereby agrees to furnish supplementally to the Commission
a copy of Exhibit D upon request of the Commission.
<PAGE>
EXHIBIT (c)(2)
<PAGE>
Geotek Communications, Inc., as Issuer
and
IBJ Schroder Bank & Trust Company, as Trustee
INDENTURE
Dated as of June 30, 1995
Up to $227,700,000
15% Senior Secured Discount Notes due 2005
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of June 30, 1995
Trust Indenture................................................. Indenture
Act Section ................................................. Section
- --------------- ----------
Section 310 (a)(1) ................................................ 7.11
(a)(2)................................................. 7.11
(a)(3)................................................. N.A.
(a)(4)................................................. N.A.
(a)(5)................................................. 7.11
(b)....................................... 7.09; 7.11; 11.02
(c).................................................... N.A.
Section 311 (a) ................................................... 7.12
(b).................................................... 7.12
(c).................................................... N.A.
Section 312 (a) ................................................... 2.15
(b)....................................................11.03
(c)....................................................11.03
Section 313 (a) ................................................... 7.07
(b)(1)................................................. 7.07
(b)(2)................................................. 7.07
(c)............................................. 7.07; 11.02
(d).................................................... 7.07
Section 314 (a) ............................................ 4.07; 11.02
(b)................................................... 10.02
(c)(1)................................................ 11.04
(c)(2)................................................ 11.04
(c)(3)................................................ N.A.
(d).............................. 10.03, 10.04, 10.05, 10.12
(e)................................................... 11.05
(f)................................................... N.A.
Section 315 (a) ................................................ 7.01(b)
(b)............................................. 7.05; 11.02
(c)................................................. 7.01(a)
(d)................................................. 7.01(c)
(e).................................................... 6.11
Section 316 (a)(1)(A) ............................................. 6.05
(a)(1)(B).............................................. 6.04
(a)(2)................................................. N.A.
(b).................................................... 6.07
(c).................................................... 2.17
Section 317 (a)(1) ................................................ 6.08
(a)(2)................................................. 6.09
(b).................................................... 2.05
Section 318 (a) ...................................................11.01
(b).................................................... N.A.
(c)....................................................11.01
________________________
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
i
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 1.01. Definitions ............................................ 1
Section 1.02. Incorporation by Reference of Trust Indenture Act ...... 32
Section 1.03. Rules of Construction .................................. 32
ARTICLE TWO
THE SECURITIES
Section 2.01. Form and Dating ........................................ 33
Section 2.02. Restrictive Legends .................................... 35
Section 2.03. Execution, Authentication and Denominations ............ 37
Section 2.04. Registrar and Paying Agent ............................. 39
Section 2.05. Paying Agent to Hold Money in Trust .................... 40
Section 2.06. Transfer and Exchange .................................. 41
Section 2.07. Book-Entry Provisions for the Global Securities ........ 42
Section 2.08. Special Transfer Provisions ............................ 44
Section 2.09. Replacement Securities ................................. 48
Section 2.10. Outstanding Securities ................................. 49
Section 2.11. Temporary Securities ................................... 50
Section 2.12. Cancellation ........................................... 50
Section 2.13. CUSIP Numbers .......................................... 50
Section 2.14. Defaulted Interest ..................................... 51
Section 2.15. Securityholder Lists ................................... 51
Section 2.16. Other Transfers ........................................ 51
Section 2.17. Record Date ............................................ 51
ARTICLE THREE
REDEMPTION OF SECURITIES
Section 3.01. Notices to the Trustee ................................. 52
Section 3.02. Selection of Securities To Be Redeemed ................. 52
Section 3.03. Notice of Redemption ................................... 52
Section 3.04. Effect of Notice of Redemption ......................... 54
Section 3.05. Deposit of Redemption Price ............................ 54
Section 3.06. Securities Redeemed or Purchased in Part ............... 54
ii
<PAGE>
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Securities .................................. 55
Section 4.02. Maintenance of Office or Agency ........................ 55
Section 4.03. Corporate Existence .................................... 56
Section 4.04. Payment of Taxes and Other Claims ...................... 56
Section 4.05. Maintenance of Properties; Insurance; Books and
Records; Compliance with Law ......................... 56
Section 4.06. Compliance Certificate ................................. 57
Section 4.07. SEC Reports ............................................ 59
Section 4.08. Limitation on Indebtedness ............................. 59
Section 4.09. Limitation on Restricted Payments ...................... 63
Section 4.10. Limitation on Liens .................................... 67
Section 4.11. Change of Control ...................................... 67
Section 4.12. Disposition of Proceeds of Asset Sales ................. 70
Section 4.13. Limitation on Issuances and Sale of Preferred Stock by
Subsidiaries ......................................... 74
Section 4.14. Limitation on Transactions with Interested Persons ..... 74
Section 4.15. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries ............................... 75
Section 4.16. Limitation on Sale-Leaseback Transactions .............. 77
Section 4.17. Activities of the Company and its Subsidiaries ......... 77
Section 4.18. Subsidiary Guarantees .................................. 77
Section 4.19. Waiver of Stay, Extension or Usury Laws ................ 83
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, etc. ........................... 83
Section 5.02. Successor Substituted .................................. 85
iii
<PAGE>
ARTICLE SIX
REMEDIES
Section 6.01. Events of Default ...................................... 85
Section 6.02. Acceleration ........................................... 87
Section 6.03. Other Remedies ......................................... 88
Section 6.04. Waiver of Past Defaults ................................ 89
Section 6.05. Control by Majority .................................... 89
Section 6.06. Limitation on Suits .................................... 89
Section 6.07. Right of Holders To Receive Payment .................... 90
Section 6.08. Collection Suit by Trustee ............................. 90
Section 6.09. Trustee May File Proofs of Claims ...................... 91
Section 6.10. Priorities ............................................. 91
Section 6.11. Undertaking for Costs .................................. 92
Section 6.12. Restoration of Rights and Remedies ..................... 92
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties ................................................. 92
Section 7.02. Rights of Trustee ...................................... 94
Section 7.03. Individual Rights of Trustee ........................... 95
Section 7.04. Trustee's Disclaimer ................................... 95
Section 7.05. Notice of Default ...................................... 95
Section 7.06. Money Held in Trust .................................... 95
Section 7.07. Reports by Trustee to Holders .......................... 96
Section 7.08. Compensation and Indemnity ............................. 96
Section 7.09. Replacement of Trustee ................................. 97
Section 7.10. Successor Trustee by Merger, etc. ...................... 98
Section 7.11. Eligibility; Disqualification .......................... 98
Section 7.12. Preferential Collection of Claims Against Company ...... 99
ARTICLE EIGHT
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 8.01. Satisfaction and Discharge ............................. 99
Section 8.02. Defeasance and Covenant Defeasance ..................... 100
Section 8.03. Application of Trust Money ............................. 104
Section 8.04. Repayment to Company ................................... 104
Section 8.05. Reinstatement .......................................... 105
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders ............................. 105
Section 9.02. With Consent of Holders ................................ 106
Section 9.03. Compliance with Trust Indenture Act .................... 107
Section 9.04. Revocation and Effect of Consents ...................... 107
Section 9.05. Notation on or Exchange of Securities .................. 108
Section 9.06. Trustee May Sign Amendments, etc. ...................... 108
iv
<PAGE>
ARTICLE TEN
PLEDGED COLLATERAL AND SECURITY
Section 10.01. Pledge Agreements ...................................... 109
Section 10.02. Recording and Opinions ................................. 110
Section 10.03. Release of Pledged Collateral .......................... 111
Section 10.04. Certificates of the Company ............................ 112
Section 10.05. Authorization of Actions to be Taken by the Trustee
Under the Pledge Agreements .......................... 113
Section 10.06 Authorization of Receipt of Funds by the Trustee Under
the Pledge Agreements ................................ 113
Section 10.07. Termination of Security Interests ...................... 113
Section 10.08. Releases Following Sale of Assets ...................... 114
Section 10.09. "Trustee" to Include Paying Agent ...................... 114
Section 10.10. Nominees of the Trustee ................................ 114
Section 10.11. Pledge of Certain Intercompany
Indebtedness ......................................... 115
Section 10.12. Collateral Release Request ............................. 115
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01 Trust Indenture Act of 1939 ............................ 120
Section 11.02 Notices ................................................ 120
Section 11.03 Communication by Holders with Other Holders ............ 121
Section 11.04 Certificate and Opinion as to Conditions Precedent ..... 121
Section 11.05 Statements Required in Certificate or Opinion .......... 121
Section 11.06 Rules by Trustee, Paying Agent, Registrar .............. 121
Section 11.07 Governing Law; Jurisdiction ............................ 122
Section 11.08 No Interpretation of Other Agreements .................. 123
Section 11.09 No Recourse Against Others ............................. 123
Section 11.10 Successors ............................................. 123
Section 11.11 Counterparts; Duplicate Originals ...................... 123
Section 11.12 Separability ........................................... 123
Section 11.13 Table of Contents, Headings, etc. ...................... 123
Section 11.14 Benefits of Indenture .................................. 123
SIGNATURES ............................................................. 124
EXHIBIT A Form of Series A Note .................................. A-1
EXHIBIT B Form of Series B Note .................................. B-1
EXHIBIT C Form of Certificate of Non-US Persons .................. C-1
EXHIBIT D Form of Opinion of Counsel for Issuance of Series B
Notes ................................................ D-1
EXHIBIT E Form of Certificate to be Delivered in Connection with
Transfers to Non-QIB Accredited Investors ............ E-1
EXHIBIT F Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S ................... F-1
EXHIBITS
G-1, G-2, G-3 Forms of Pledge Agreements ............................. G-1
<PAGE>
INDENTURE, dated as of June 30, 1995, between GEOTEK
COMMUNICATIONS, INC., a corporation incorporated under the laws of the State
of Delaware ("the Company"), and IBJ SCHRODER BANK & TRUST COMPANY, a banking
company organized under the laws of the State of New York, as trustee (the
"Trustee").
Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the
Company's 15% Senior Secured Discount Notes due 2005 (the "Series A Notes")
and the 15% Series B Senior Secured Discount Notes due 2005 which may be
exchanged for the Series A Notes (the "Series B Notes" together with the
Series A Notes, the "Securities").
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
1.01. Definitions.
"Accreted Value" means, for any Specified Date, the amount provided
below for each $1,000 principal amount at maturity of the Securities:
(a) if the Specified Date occurs on one of the following dates
(each a "Semi-Annual Accrual Date"), the Accreted Value will equal the
amount set forth below for such Semi-Annual Accrual Date:
Accreted
Semi-Annual Accrual Date Value
------------------------ --------
January 15, 1996 $ 521.58
July 15, 1996 560.70
January 15, 1997 602.75
July 15, 1997 647.96
January 15, 1998 696.56
July 15, 1998 748.80
January 15, 1999 804.96
July 15, 1999 865.33
January 15, 2000 930.23
July 15, 2000 1,000.00
(b) if the Specified Date occurs before the first Semi-Annual
Accrual Date, the Accreted Value will equal the sum of (i) the original
issue price of the Securities and (ii) an amount equal to the product of
(A) the Accreted Value for the first Semi-Annual Accrual Date less the
original issue price multiplied by (B) a fraction, the numerator of
which is the number of days from the Issue Date to the Specified Date,
using a 360-day year of twelve 30-day months, and the denominator of
which is the number of days elapsed from the Issue Date to the first
Semi-Annual Accrual Date, using a 360-day year of twelve 30-day months;
(c) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the Accreted Value will equal the sum of (i) the Accreted Value
for the Semi-Annual Accrual Date immediately preceding such Specified
Date and (ii) an amount equal to the product of (A) the Accreted Value
for the immediately following Semi-Annual Accrual Date less the Accreted
Value for the immediately preceding Semi-Annual Accrual Date multiplied
by (B) a fraction, the numerator of which is the number of days from the
immediately preceding Semi-Annual Accrual Date to the Specified Date,
using a 360-day year of twelve 30-day months, and the denominator of
which is 180; or
(d) if the Specified Date occurs after the last Semi-Annual
Accrual Date, the Accreted Value will equal $1,000.
In each case, the calculation of Accreted Value on such Specified
Date shall be delivered to the Trustee by the Company.
"Acquired Indebtedness" means Indebtedness of a person (a) assumed
in connection with an Asset Acquisition from such person or (b) existing at
the time such person becomes a Subsidiary of any other person.
<PAGE>
"Acquisition Put Obligation" of any person means any obligation to
purchase, redeem, retire, defease or otherwise acquire for value any interest
in any other person pursuant to an agreement in effect on the date of this
Indenture under which one party has the right to require the other party
thereto to make such purchase, redemption, retirement, defeasance or
acquisition; provided, that for purposes of the definition of the term
"Indebtedness," the term "Acquisition Put Obligation" shall not include any
obligation which, by its terms, can be satisfied solely by delivery of
Capital Stock (other than Redeemable Capital Stock) of such person.
"Affiliate" means, with respect to any specified person, any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For purposes of this
definition, the term "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.
"Agent" means any Registrar, Paying Agent, authenticating agent or
co-Registrar.
"Agent Members" shall have the meaning set forth in Section 2.07.
"Annualized Operating Cash Flow" means, for any fiscal quarter,
Operating Cash Flow for such fiscal quarter multiplied by four.
"Asset Acquisition" means (a) an Investment by the Company or any
Subsidiary of the Company in any other person pursuant to which such person
shall become a Subsidiary of the Company, or shall be merged with or into the
Company or any Subsidiary of the Company, (b) the acquisition by the Company
or any Subsidiary of the Company of the assets of any person (other than a
Subsidiary of the Company) which constitute all or substantially all of the
assets of such person or (c) the acquisition by the Company or any Subsidiary
of the Company of any division or line of business of any person (other than
a Subsidiary of the Company).
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease or other disposition to any person other than the
Company or a Wholly-Owned Subsidiary of the Company, in one or a series of
related transactions, of (a) any Capital Stock of any Subsidiary of the
Company (other than in respect of directors' qualifying shares or investments
by foreign nationals mandated by applicable law), (b) all or substantially
all of the properties and assets of any division or line of business of the
Company or any Subsidiary of the Company or (c) any other properties or
assets of the Company or any Subsidiary of the Company other than in the
ordinary course of business. For the purposes of this definition, the term
"Asset Sale" shall not include (a) any sale, issuance, conveyance, transfer,
lease or other disposition of properties or assets that is governed by the
provisions of Article Five, (b) disposition by the Company to a Wholly-Owned
Subsidiary or by a Subsidiary of the Company to the Company or a Wholly-Owned
Subsidiary, (c) distribution by the Company to its shareholders of the
Capital Stock of a Subsidiary in the Company's Communications Products Group
to the extent that such distribution is permitted pursuant to clause (h) of
the second paragraph of Section 4.09, (d) any sale issuance, conveyance,
transfer, lease or other disposition of properties or assets that constitute
a Permitted Investment or a Restricted Payment that is permitted under
Section 4.09, (e) any transfer of assets pursuant to any binding written
agreement in existence on the date of this Indenture, (f) any sale of any of
the assets of Geotest Inc. or (g) any transaction or series of related
transactions in connection with which the Company or a Subsidiary, as the
case may be, receives aggregate consideration of $75,000 or less.
"Asset Sale Offer" shall have the meaning set forth in Section
4.12.
"Asset Sale Offer Price" shall have the meaning set forth in
Section 4.12.
"Asset Sale Purchase Date" shall have the meaning set forth in
Section 4.12.
<PAGE>
"Attributable Value" means, as to any particular lease under which
any person is at the time liable other than a Capitalized Lease Obligation,
and at any date as of which the amount thereof is to be determined, the total
net amount of rent required to be paid by such person under such lease during
the initial term thereof as determined in accordance with GAAP, discounted
from the last date of such initial term to the date of determination at a
rate per annum equal to the discount rate which would be applicable to a
Capitalized Lease Obligation with a like term in accordance with GAAP. The
net amount of rent required to be paid under any such lease for any such
period shall be the aggregate amount of rent payable by the lessee with
respect to such period after excluding amounts required to be paid on account
of insurance, taxes, assessments, utility, operating and labor costs and
similar charges. In the case of any lease which is terminable by the lessee
upon the payment of a penalty, such net amount shall also include the amount
of such penalty, but no rent shall be considered as required to be paid under
such lease subsequent to the first date upon which it may be so terminated.
"Attributable Value" means, as to a Capitalized Lease Obligation under which
any person is at the time liable and at any date as of which the amount
thereof is to be determined, the capitalized amount thereof that would appear
on the face of a balance sheet of such person in accordance with GAAP.
"Average Life to Stated Maturity" means, with respect to any
Indebtedness, as at any date of determination, the quotient obtained by
dividing (a) the sum of the products of (i) the number of years (or any
fraction thereof) from such date to the date or dates of each successive
scheduled principal payment (including, without limitation, any sinking fund
requirements) of such Indebtedness multiplied by (ii) the amount of each such
principal payment by (b) the sum of all such principal payments.
"Bankruptcy Law" means Title 11 United States Code or any similar
law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or
any duly authorized committee of such board.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New
York, State of New York, are authorized or obligated by law, regulation or
executive order to close.
"Capital Stock" means, with respect to any person, any and all
shares, interests, participations, rights in or other equivalents (however
designated) of such person's capital stock, and any rights (other than debt
securities convertible into capital stock), warrants or options exchangeable
for or convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation under a lease
of (or other agreement conveying the right to use) any property (whether
real, personal or mixed) that is required to be classified and accounted for
as a capital lease obligation under GAAP, and the amount of any such
obligation at any date shall be the capitalized amount thereof at such date,
determined in accordance with GAAP.
"Cash Equivalents" means, at any time, (a) any evidence of
Indebtedness with a maturity of 360 days or less issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof); (b) any money market
fund sponsored by a registered broker-dealer or mutual fund distributor or
time deposit accounts, certificates of deposit or acceptances and money
market deposits with a maturity of 270 days or less of (i) any financial
institution that is organized under the laws of the United States, any state
thereof, the District of Columbia or any foreign country recognized by the
United States and which financial institution has capital, surplus and
undivided profits aggregating in excess of $50,000,000 (or the foreign
currency equivalent thereof) or (ii) any other financial institution that is
organized under the laws of the United States, any state thereof, the
District of Columbia or any foreign country recognized by the United States,
in an amount not to exceed $2,000,000 at any one time; (c) any evidence of
Indebtedness maturing, or otherwise payable without penalty, not more than l2
months after the date of the acquisition thereof issued by a corporation and
rated at least A-2 by Moody's or at least A by S&P; (d) repurchase agreements
<PAGE>
and reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the government of the United States
of America or issued by any agency thereof and backed by the full faith and
credit of the United States of America, in each case maturing within 180 days
from the date of acquisition, provided that the terms of such agreements
comply with the guidelines set forth in the Federal Financial Agreements of
Depository Institutions With Securities Dealers and Others, as adopted by the
Comptroller of the Currency on October 31, 1985; and (e) commercial paper
maturing not more than 90 days after the date of acquisition thereof that is
issued by a corporation (other than an Affiliate or Subsidiary of the
Company) organized and existing under the laws of the United States of
America or any jurisdiction thereof with a rating, at the time as of which
any Investment therein is made, of at least P-1 by Moody's or at least A-1 by
S&P.
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), is or becomes the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, upon the happening of an event
or otherwise), directly or indirectly, of more than 50% of the total Voting
Stock of the Company; (b) the Company consolidates with, or merges with or
into, another person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any person,
or any person consolidates with, or merges with or into, the Company, in any
such event pursuant to a transaction in which the outstanding Voting Stock of
the Company is converted into or exchanged for cash, securities or other
property, other than any such transaction where (i) the outstanding Voting
Stock of the Company is converted into or exchanged for (A) Voting Stock
(other than Redeemable Capital Stock) of the surviving or transferee
corporation or (B) cash, securities and other property in an amount which
could then be paid by the Company as a Restricted Payment under this
Indenture, or a combination thereof, and (ii) immediately after such
transaction, the persons who, immediately prior to such transaction,
beneficially owned the Voting Stock of the Company, beneficially own, in the
aggregate, more than 50% of the total Voting Stock of the surviving or
transferee corporation ("beneficially owned" shall have a meaning correlative
to that of "beneficial owner" as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time, upon the happening of an event or otherwise), provided, however, that
no Change of Control will be deemed to occur pursuant to this clause (b) if
(i) the surviving or transferee corporation has outstanding debt securities
having a maturity at original issuance of at least one year and if such debt
securities are rated Investment Grade by S&P or Moody's for a period of at
least 90 consecutive days, beginning on the date of such event (which period
will be extended up to 90 additional days to the extent that the rating of
such debt securities is under publicly announced consideration for possible
downgrading by the applicable rating agency), or (ii) the surviving or
transferee corporation (A) does not have any outstanding debt securities that
are, rated by S&P, Moody's or any other rating agency of national standing at
any time during a period of 90 consecutive days beginning on the date of such
event (which period will be extended up to 90 additional days to the extent
that any such rating agency has publicly announced that such corporation or
debt thereof will be rated), after such date but during such period debt
securities of such corporation having a maturity at original issuance of at
least one year are rated Investment Grade by S&P or Moody's and remain so
rated for the remainder of the period referred to in clause (i) of this
proviso, and (B) as of the Trading Day immediately before and the Trading Day
immediately after the date of such event, has Total Common Equity of at least
$10,000,000,000 (provided that, solely for the purpose of calculating Total
Common Equity as of such later Trading Day, the average Closing Price of
Common Stock of such corporation will be deemed to equal the Closing Price of
such Common Stock on such later Trading Day, subject to the last sentence of
<PAGE>
the definition of "Total Common Equity"); or (c) at any time during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors (together with any new directors whose
election by the Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of at least 66-2/3% of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office.
"Change of Control Date" shall have the meaning set forth in
Section 4.11.
"Change of Control Offer" shall have the meaning set forth in
Section 4.11.
"Change of Control Purchase Date" shall have the meaning set forth
in Section 4.11.
"Closing Price" on any Trading Day with respect to the per share
price of any shares of Capital Stock means the last reported sale price
regular way or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either
case on the New York Stock Exchange or, if such shares of Capital Stock are
not listed or admitted to trading on such exchange, on the principal national
securities exchange on which such shares are listed or admitted to trading
or, if not listed or admitted to trading on any national securities exchange,
on The Nasdaq National Market or, if such shares are not listed or admitted
to trading on any national securities exchange or quoted on such automated
quotation system but the issuer is a Foreign Issuer (as defined in Rule
3b-4(b) under the Exchange Act) and the principal securities exchange on
which such shares are listed or admitted to trading is a Designated Offshore
Securities Market (as defined in Rule 902(a) under the Securities Act), the
average of the reported closing bid and asked prices regular way on such
principal exchange, or, if such shares are not listed or admitted to trading
on any national securities exchange or quoted on such automated quotation
system and the issuer and principal securities exchange do not meet such
requirements, the average of the closing bid and asked prices in the over-
the-counter market as furnished by any New York Stock Exchange member firm
that is selected from time to time by the Company for that purpose and is
reasonably acceptable to the Trustee.
"Collateral" means the Pledged Collateral, the Intercompany Notes
and any other collateral to secure the obligations of the Company hereunder
and under the Securities.
"Collateral Arrangements" means the Pledge Agreements, the
Guarantees, the Note Pledge Agreements, the Security Agreements and any other
liens, encumbrances, security interests or similar arrangements created
hereby, described or referred to herein or therein otherwise contemplated by
the terms hereof or thereof.
"Collateral Release Offer" shall have the meaning set forth in
Section 10.12.
"Collateral Release Purchase Date" shall have the meaning set forth
in Section 10.12.
"Collateral Release Purchase Price" shall have the meaning set
forth in Section 10.12.
"Collateral Release Request" shall have the meaning set forth in
Section 10.12.
"Common Stock" means, with respect to any person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of, such person's common stock,
whether outstanding at the Issue Date or issued after the Issue Date, and
includes, without limitation, all series and classes of such common stock, in
each case, to the extent that such series or class of common stock does not
rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding
up of such person, to shares of Capital Stock of any other class of such
person.
<PAGE>
"Communications Products Group" means European Gateway Acquisition
Corporation, Bogen Corporation and Speech Design GmbH and their respective
subsidiaries in existence from time to time and their respective successors.
"Company" means the party named as such in this Indenture until a
successor replaces it (or any previous successor) pursuant to this Indenture,
and thereafter means such successor.
"Company Order" means a written request or order signed in the name
of the Company by any one of its Chairman of the Board, its Vice-Chairman,
its President, Chief Financial Officer, Chief Executive Officer, an Executive
Vice President or a Vice President, and by any one of its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Indebtedness to Annualized Operating Cash Flow Ratio"
means, as at any date of determination, the ratio of (a) the aggregate amount
of Indebtedness of the Company and its Subsidiaries on a consolidated basis
outstanding as at the date of determination to (b) the Annualized Operating
Cash Flow of the Company, and its Subsidiaries for the most recently
completed fiscal quarter of the Company.
"Consolidated Net Income" means, with respect to any person, for
any period, the consolidated net income (or loss) of such person and its
Subsidiaries for such period as determined in accordance with GAAP, adjusted,
to the extent included in calculating such net income, by excluding, without
duplication, (a) all extraordinary gains or losses, (b) the portion of net
income (but not losses) of such person and its Subsidiaries allocable to
minority interests in unconsolidated persons to the extent that cash
dividends or distributions have not actually been received by such person or
one of its Subsidiaries, (c) net income (or loss) of any person combined with
such person or one of its Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of combination, (d) any gain or
loss realized upon the termination of any employee pension benefit plan, on
an after-tax basis, (e) gains (or losses) in respect of any Asset Sales by
such person or one of its Subsidiaries, on an after-tax basis, (f) any gain
resulting from the write-up of assets and any loss resulting from the write-
down of assets, on an after-tax basis, and (g) the net income of any
Subsidiary of such person to the extent that the declaration of dividends or
similar distributions by that Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders;
provided, that, with respect to any person other than the Company, references
herein to Subsidiaries shall be deemed to refer to subsidiaries of such
person.
"Consolidated Net Worth" means, with respect to any person at any
date, the consolidated stockholders' equity of such person less the amount of
such stockholders' equity attributable to Redeemable Capital Stock of such
person and its Subsidiaries, as determined in accordance with GAAP; provided,
that, with respect to any person other than the Company, references herein to
Subsidiaries shall be deemed to refer to subsidiaries of such person.
"Corporate Trust Office" means the corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which on the date hereof is located at One State
Street, New York, New York 10004.
"covenant defeasance" shall have the meaning set forth in Section
8.02.
"Cumulous" shall have the meaning set forth in Section 4.18.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect
the Company or any of its Subsidiaries against fluctuations in currency
values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"defeasance" shall have the meaning set forth in Section 8.02.
"Defeased Notes" means the Senior Secured Convertible Notes due
1998 of the Company.
<PAGE>
"Depository" shall mean The Depository Trust Company, its nominees,
and their respective successors.
"Disinterested Director" means, with respect to any proposed
transaction between the Company and an Affiliate thereof, a member of the
Board of Directors who is not an officer or employee of the Company, would
not be a party to, or have a financial interest in, such transaction and is
not an officer, director or employee of, and does not have a financial
interest in (other than by virtue of ownership of less than 10% of the
Capital Stock of the Company or such Affiliate) such Affiliate.
"Event of Default" has the meaning set forth in Section 6.01.
"Excess Proceeds" shall have the meaning set forth in Section 4.12.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the exchange offer by the Company of Series
B Notes for Series A Notes pursuant to the Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset, the price, as
determined by the Board of Directors, acting in good faith, which could be
negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing buyer, neither of which is under pressure or
compulsion to complete the transaction; provided, however, that with respect
to any transaction which involves an asset or assets in excess of $1,000,000,
such determination shall be evidenced by written resolutions of the Board of
Directors delivered to the Trustee.
"FCC" means the U.S. Federal Communications Commission.
"Final Maturity Date" means July 15, 2005.
"First Payment Date" shall have the meaning set forth in Section
4.18.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession of the United States of America, which are
applicable from time to time.
"German Pledge Agreement" means the Pledge Agreement dated as of
the date hereof in the form of Exhibit G-3 hereto.
"Global Securities" means any of (i) the U.S. Global Security,
(ii) the Offshore Global Securities or (iii) the Series B Notes held in
global form.
"guarantee" means, as applied to any obligation, (a) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (b) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to assure in any
way the payment or performance (or payment of damages in the event of
non-performance) of all or any part of such obligation, including, without
limiting the foregoing, the payment of amounts drawn down by letters of
credit.
"Guarantees" shall have the meaning set forth in Section 4.18.
"Guarantors" shall have the meaning set forth in Section 4.18.
"Holder" or "Securityholder" means the person in whose name a
Security is registered on the Registrar's books.
"Indebtedness" means, with respect to any person, without
duplication, (a) all liabilities of such person for borrowed money or for the
deferred purchase price of property or services, excluding any trade payables
and other accrued current liabilities incurred in the ordinary course of
business, but including, without limitation, all obligations, contingent or
otherwise, of such person in connection with any letters of credit, banker's
acceptance or other similar credit transaction, (b) all obligations of such
person evidenced by bonds, notes, debentures or other similar instruments,
(c) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such person
(even if the rights and remedies of the seller or lender under such agreement
in the event of default are limited to repossession or sale of such
property), but excluding trade accounts payable arising in the ordinary
<PAGE>
course of business and lease obligations that are not Capitalized Lease
Obligations, (d) all Capitalized Lease Obligations of such person, (e) all
Indebtedness referred to in the preceding clauses of other persons and all
dividends of other persons, the payment of which is secured by (or for which
the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon property (including, without
limitation, accounts and contract rights) owned by such person, even though
such person has not assumed or become liable for the payment of such
Indebtedness (the amount of such obligation being deemed to be the lesser of
the value of such property or asset or the amount of the obligation so
secured), (f) all guarantees of Indebtedness referred to in this definition
by such person, (g) all Redeemable Capital Stock of such person, valued at
the greater of its voluntary or involuntary maximum fixed repurchase price
plus accrued dividends that are due and payable, (h) all obligations under or
in respect of Currency Agreements and Interest Rate Protection Obligations of
such person, (i) any Acquisition Put Obligation, (j) all Acquired
Indebtedness and (k) any amendment, supplement, modification, deferral,
renewal, extension or refunding of any liability of the types referred to in
clauses (a) through (j) above. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant
to this Indenture, and if such price is based upon, or measured by, the Fair
Market Value of such Redeemable Capital Stock, such Fair Market Value shall
be determined in good faith by the board of directors of the issuer of such
Redeemable Capital Stock. Notwithstanding the foregoing, the Defeased Notes
shall not constitute "Indebtedness" so long as the indebtedness represented
by the Defeased Notes is defeased in accordance with the terms thereof.
"Indebtedness to Annualized Operating Cash Flow Ratio" means, as at
any date of determination, as to any person, the ratio of (a) the aggregate
amount of Indebtedness of such person and its subsidiaries on a consolidated
basis outstanding as at the date of determination to (b) the Annualized
Operating Cash Flow of such person and its subsidiaries as at the end of the
most recently completed fiscal quarter of such person.
"Indenture" means this Indenture, as amended, modified or
supplemented from time to time.
"Independent Financial Advisor" means a firm (a) which does not,
and whose directors, officers and employees or Affiliates do not, have a
direct or indirect financial interest in the Company and (b) which, in the
judgment of the Board of Directors, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"Initial Purchaser" shall mean Smith Barney Inc.
"Institutional Accredited Investors" shall mean institutional
"accredited investors" as defined in Rule 501 (a)(1), (2), (3) or (7) under
the Securities Act.
"Intercompany Loan" shall have the meaning set forth in Section
10.11.
"Intercompany Note" shall have the meaning set forth in Section
10.11.
"interest" means, with respect to any Security, the amount of all
interest accruing on such Security, including all interest accruing
subsequent to the occurrence of any events specified in Sections 6.01(f) and
(g) or which would have accrued but for any such event, whether or not such
claims are allowable under applicable law.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Securities, as set forth therein.
"Interest Rate Protection Agreement" means any arrangement with any
other person whereby, directly or indirectly, such person is entitled to
receive from time to time periodic payments calculated by applying either a
floating or a fixed rate of interest on a stated notional amount in exchange
for periodic payments made by such person calculated by applying a fixed or a
floating rate of interest on the same notional amount and shall include
without limitation, interest rate swaps, caps, floors, collars and similar
agreements.
<PAGE>
"Interest Rate Protection Obligations" means the obligations of any
person under any Interest Rate Protection Agreement.
"Interested Person" shall have the meaning set forth in
Section 4.14.
"International Vendor Indebtedness" means Indebtedness incurred by
the Company or a Subsidiary of the Company (a) to finance the construction or
acquisition of Telecommunications Assets for use outside of the United States
by the Company or a Subsidiary of the Company, provided, however, that at the
time of incurrence, the aggregate outstanding principal amount of such
Indebtedness does not exceed 15% of the Total Market Capitalization of the
Company or (b) to fund the working capital needs of the Company or a
Subsidiary of the Company in connection with the provision of
telecommunication systems or services outside of the United States.
"Investment" means, with respect to any person, any direct or
indirect loan or other extension of credit or capital contribution to (by
means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition by such person of any Capital Stock, bonds, notes, debentures or
other securities or evidences of Indebtedness issued by, any other person;
provided that a transaction will not be an Investment by the Company if the
Company's payment therefor consists exclusively of shares of the Company's
Capital Stock (other than Redeemable Capital Stock) or options, warrants or
other rights to acquire Capital Stock of the Company (other than Redeemable
Capital Stock). The Fair Market Value of the assets of any Subsidiary of the
Company, less the aggregate liabilities of such Subsidiary, determined at the
time that such Subsidiary is designated as an Unrestricted Subsidiary shall
be deemed to be an Investment made by the Company in such Unrestricted
Subsidiary at such time. "Investments" shall exclude extensions of trade
credit by the Company and its Subsidiaries in the ordinary course of business
in accordance with normal trade practices of the Company or the applicable
Subsidiary, as the case may be.
"Investment Grade" means a rating of at least BBB-, in the case of
S&P, or Baa3, in the case of Moody's.
"Issue Date" means July 6, 1995.
"Licenses" means (a) SMR licenses granted by the FCC or any similar
governmental agency that entitle the holder to use the radio channels covered
thereby, subject to compliance with FCC rules and regulations, in connection
with its SMR business, (b) other similar licenses granted by the FCC or any
similar governmental agency that entitle the holder to use the radio channels
covered thereby, subject to compliance with FCC rules and regulations, in
connection with its other telecommunications business and (c) licenses for
technology used or usable in the telecommunications business.
"Lien" means any mortgage, charge, pledge, lien (statutory or
other), security interest, hypothecation, assignment for security, claim,
preference, priority or other encumbrance upon or with respect to any
property of any kind. A person shall be deemed to own subject to a Lien any
property which such person 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.
"Maturity Date" means, with respect to any Security, the date on
which any principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity with respect to such
principal or by declaration of acceleration, call for redemption or purchase
or otherwise.
"Minority Interest" means a financial interest representing 50% or
less of the total voting power of the outstanding Voting Stock of any person
that is not otherwise a Subsidiary of the Company and that is engaged
primarily in the telecommunications business and related activities and
services.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents, including payments
in respect of deferred payment obligations when received in the form of cash
or Cash Equivalents (except to the extent that such obligations are financed
or sold with recourse to the Company or any Subsidiary of the Company), net
of (a) brokerage commissions and other fees and expenses (including, without
limitation, fees and expenses of legal counsel and investment bankers)
related to such Asset Sale, (b) provisions for all taxes payable as a result
of such Asset Sale, (c) amounts required to be paid to any person (other than
the Company or any Subsidiary of the Company) owning a beneficial interest in
the assets subject to the Asset Sale and (d) appropriate amounts to be
provided by the Company or any Subsidiary of the Company, as the case may be,
as a reserve required in accordance with GAAP against any liabilities
associated with such Asset Sale and retained by the Company or any Subsidiary
<PAGE>
of the Company, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected
in an Officers' Certificate delivered to the Trustee.
"Non-Global Purchasers" shall have the meaning set forth in Section
2.01.
"Note Pledge Agreement" shall have the meaning set forth in Section
10.11.
"Officer" means the Chairman of the Board, the President, any
Executive Vice President, any Vice President, the Chief Financial Officer,
the Treasurer, the Secretary or the Controller of the Company.
"Officers' Certificate" means a certificate signed by two Officers
or by an Officer and an Assistant Treasurer or Assistant Secretary of the
Company and delivered to the Trustee.
"Offshore Global Securities" shall have the meaning set forth in
Section 2.01.
"Offshore Physical Securities" shall have the meaning set forth in
Section 2.01.
"Operating Cash Flow" means, with respect to any person, for any
fiscal quarter (a) such person's Consolidated Net Income plus depreciation
and amortization in respect thereof for such fiscal quarter, plus (b) all
amounts deducted in calculating Consolidated Net Income for such fiscal
quarter in respect of interest expense and other financing costs and all
income taxes, whether or not deferred, applicable to such income period, and
other non-cash items reducing Consolidated Net Income, minus (c) other non-
cash items increasing Consolidated Net Income, all as determined on a
consolidated basis in accordance with GAAP. For purposes of calculating
Operating Cash Flow for the fiscal quarter most recently completed prior to
any date on which an action is taken that requires a calculation of the
Consolidated Indebtedness to Annualized Operating Cash Flow Ratio, (a) any
person that is a Subsidiary or an operating business of the Company on such
date (or would become a Subsidiary or an operating business of the Company in
connection with the transaction that requires the determination of such
ratio) will be deemed to have been a Subsidiary or an operating business of
the Company at all times during such fiscal quarter, (b) any person that is
not a Subsidiary or an operating business of the Company on such date (or
would cease to be a Subsidiary or an operating business of the Company in
connection with the transaction that requires the determination of such
ratio) will be deemed not to have been a Subsidiary or an operating business
of the Company at any time during such fiscal quarter and (c) if the Company
or any Subsidiary will have in any manner acquired (including through
commencement of activities constituting such operating business) or disposed
(including through termination or discontinuance of activities constituting
such operating business) of any operating business during or subsequent to
the most recently completed fiscal quarter, such calculation will be made on
a pro forma basis on the assumption that such acquisition or disposition had
been completed on the first day of such completed fiscal quarter. For
purposes of calculating Operating Cash Flow for the fiscal quarter most
recently completed prior to any date on which an action is taken that
requires a calculation of the Indebtedness to Annualized Operating Cash Flow
Ratio, (a) any person that is a subsidiary or an operating business of the
applicable person on such date will be deemed to have been a subsidiary or an
operating business of such person at all times during such fiscal quarter,
(b) any person that is not a subsidiary or an operating business of such
person on such date will be deemed not to have been a subsidiary or an
operating business of such person at any time during such fiscal quarter and
(c) if such person or any subsidiary thereof will have in any manner acquired
(including through commencement of activities constituting such operating
business) or disposed (including through termination or discontinuance of
activities constituting such operating business) of any operating business
during or subsequent to the most recently completed fiscal quarter, such
calculation will be made on a pro forma basis on the assumption that such
acquisition or disposition had been completed on the first day of such
completed fiscal quarter.
<PAGE>
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee. The counsel may be an employee of
or counsel to the Company.
"Other Qualified Senior Notes" means any outstanding senior
indebtedness of the Company issued pursuant to an instrument having a
provision substantially similar to Section 4.12.
"Pari Passu Indebtedness" means Indebtedness of the Company which
ranks pari passu in right of payment with the Securities.
"Paying Agent" has the meaning set forth in Section 2.04, except
that, for the purposes of Section 4.11 and Section 4.12 and Articles Three
and Eight, the Paying Agent shall not be the Company or a Subsidiary of the
Company or any of their respective Affiliates.
"Permanent Offshore Global Security" shall have the meaning set
forth in Section 2.01.
"Permitted Investments" means any of the following:
(a) Investments in any Wholly-Owned Subsidiary of the Company (including any
person that pursuant to such Investment becomes a Wholly-Owned Subsidiary of
the Company) and any person that is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets to, the Company
or any Wholly-Owned Subsidiary of the Company at the time such Investment is
made; (b) Investments in Cash Equivalents; (c) Investments in the Securities;
(d) Investments in Currency Agreements on commercially reasonable terms
entered into by the Company or any of its Subsidiaries in the ordinary course
of business in connection with the operations of the business of the Company
or its Subsidiaries to hedge against fluctuations in foreign exchange rates;
(e) loans or advances to officers, employees or consultants of the Company
and its Subsidiaries in the ordinary course of business for bona fide
business purposes of the Company and its Subsidiaries (including travel and
moving expenses) not in excess of $1,000,000 in the aggregate at any one time
outstanding; (f) Investments in evidences of Indebtedness, securities or
other property received from another person by the Company or any of its
Subsidiaries in connection with any bankruptcy proceeding or by reason of a
composition or readjustment of debt or a reorganization of such person or as
a result of foreclosure, perfection or enforcement of any Lien in exchange
for evidences of Indebtedness, securities or other property of such person
held by the Company or any of its Subsidiaries, or for other liabilities or
obligations of such other person to the Company or any of its Subsidiaries
that were created in accordance with the terms of this Indenture;
(g) Investments in Interest Rate Protection Agreements on commercially
reasonable terms entered into by the Company or any of its Subsidiaries in
the ordinary course of business in connection with the operations of the
business of the Company or its Subsidiaries to hedge against fluctuations in
interest rates; (h) non-cash Investments by the Company or any Subsidiary
made with respect to the licensing of rights with respect to the Company's
telecommunications technology, excluding any Investment to be made through
the contribution of Licenses in such markets in any jurisdiction in which the
Company or any of its Subsidiaries has any license as of the date of this
Indenture of the type described in clause (a) of the definition of
"Licenses," (i) the making of any Investment in any Subsidiary, Unrestricted
Subsidiary or Minority Interest, provided that at the time of and after
giving effect to any such Investment, the Fair Market Value (measured at the
time of each such Investment) of all such Investments made after the date of
this Indenture does not exceed the greater of $50,000,000 and 10% of the
Total Market Value of Equity of the Company plus the cash proceeds realized
upon disposition of any Investment (or portion thereof) permitted by this
clause (i), (j) the making of any Investment in any Subsidiary, Unrestricted
Subsidiary or Minority Interest, in each case that is not wholly-owned, to
the extent that such Investment is funded entirely from Capital Stock sold
specifically to fund such Investment, (k) the contribution by the Company to
a newly-formed joint venture of the Capital Stock or the assets (including,
without limitation, Licenses) of a Subsidiary of the Company that derives
substantially all of its revenue outside of the United States and the
contribution to such joint venture of Indebtedness of such Subsidiary held by
the Company or any Subsidiary of the Company (provided, however, that the
amount of such Indebtedness shall not exceed an amount equal to the aggregate
<PAGE>
principal amount of such Indebtedness held by the Company or any Subsidiary
of the Company on the date of this Indenture) in exchange for Capital Stock
of such joint venture, provided that, immediately prior to the contribution
by the Company to such joint venture of the Capital Stock or assets of any
such Subsidiary, the other party (or an entity that directly or indirectly
controls such party) to such joint venture shall have Total Market
Capitalization of at least $5,000,000,000, total revenues of at least
$500,000,000 for its four most recently completed fiscal quarters or shall
be, or shall have been prior to its privatization, a state-owned provider of
voice telephony services, (l) Investments in the Communications Products
Group, after the date of this Indenture in an aggregate amount not to exceed
$5,000,000, (m) loans or advances to directors, officers, employees, or
consultants of the Company or of any of its Subsidiaries to finance the
exercise of options to purchase Capital Stock of the Company, to the extent
that such loans or advances are secured by the Capital Stock underlying the
options so exercised and such loans or advances are required to be repaid out
of the proceeds of the sale of any such Capital Stock, (n) any amount
deposited in trust prior to the execution and delivery of this Indenture
specifically for the purpose of defeasing the Defeased Notes, to the extent
necessary to defease the Defeased Notes and (o) Investments in the form of
Indebtedness permitted to be incurred by the Company or any of its
Subsidiaries pursuant to clause (d) or (e) of Section 4.08. For purposes of
determining whether an Investment constitutes a Permitted Investment, in the
event that an Investment meets the criteria of more than one of the types of
Permitted Investments described in the above clauses, the Company, in its
sole discretion, shall classify such Investment and only be required to
include the amount and type of such Permitted Investment in one of such
clauses.
"Permitted Liens" means the following types of Liens:
(a) Liens for taxes, assessments or governmental charges or claims
either (i) not delinquent or (ii) contested in good faith by appropriate
proceedings and as to which the Company or any of its Subsidiaries shall
have set aside on its books such reserves as may be required pursuant to
GAAP;
(b) statutory Liens of landlords and other Liens imposed by law
and Liens of carriers, warehousemen, mechanics, suppliers, materialmen
and repairmen incurred in the ordinary course of business for sums not
yet delinquent or being contested in good faith, if such reserve or
other appropriate provision, if any, as shall be required by GAAP shall
have been made in respect thereof;
(c) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, governmental contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(d) judgment Liens not giving rise to an Event of Default if such
reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made in respect thereof and any appropriate legal
proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired;
(e) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not
interfering in any material respect with the ordinary conduct of the
business of the Company or any of its Subsidiaries;
(f) any interest or title of a lessor under any Capitalized Lease
Obligation or operating lease;
(g) Liens securing International Vendor Indebtedness; provided,
however, that (i) such International Vendor Indebtedness shall not be
secured by any property or assets of the Company or any Subsidiary of
the Company other than the Telecommunications Assets so constructed or
acquired with such International Vendor Indebtedness and (ii) the Lien
securing such Indebtedness either (A) exists at the time of such
acquisition or construction or (B) shall be created within 90 days
thereof;
<PAGE>
(h) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(i) any Lien covering property or assets acquired by the Company
from a person other than a Subsidiary of the Company that secured
Indebtedness of such person assumed by the Company in connection with
such acquisition, that exists immediately prior to and is not incurred
in anticipation of such acquisition and that does not thereafter cover
any other property or assets or secure any other Indebtedness;
(j) Liens secured solely by Capital Stock of the Company or a
Subsidiary of the Company with respect to any Acquisition Put Obligation
of the Company, provided that such Lien is released when such
Acquisition Put Obligation is satisfied by payment by the Company or a
Subsidiary in accordance with its terms or terminates without any
continuing obligation on the part of the Company or any Subsidiary;
(k) Liens securing Indebtedness, other than Indebtedness that is
subordinated in right of payment to the Securities, in the aggregate
principal amount of up to $10,000,000 at any time outstanding, provided
that such Indebtedness is permitted to be incurred under the terms of
this Indenture;
(l) Liens securing Indebtedness of PowerSpectrum incurred in
connection with government sponsored programs, to the extent incurred by
Power Spectrum;
(m) Liens, to the extent that such liens do not cover any assets
of the Company other than the assets so financed and are created within
90 days after the acquisition of the equipment to which the Lien
relates, on equipment arising with respect to Indebtedness incurred to
purchase such equipment; and
(n) Liens on Collateral permitted pursuant to the Pledge
Agreements.
"person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
charitable foundation, unincorporated organization, government or any agency
or political subdivision thereof or any other entity.
"Physical Securities" means Securities in the form of permanent
certificated Securities in registered form in substantially the form set
forth in Exhibit A.
"Pledge Agreements" means (i) the U.S. Pledge Agreement, the U.K.
Pledge Agreement and the German Pledge Agreement, each as amended, modified
or supplemented from time to time and (ii) such other pledge agreements as
may be required under the terms of the Pledge Agreements described in clause
(i) above or this Indenture.
"Pledged Collateral" (i) means the "Pledged Collateral" as defined
in the U.S. Pledge Agreement, (ii) the "Charged Property" as defined in the
U.K. Pledge Agreement, (iii) the "Shares" as defined in the German Pledge
Agreement and (iv) any other Capital Stock held by the Company which is
required to be pledged as Collateral pursuant to the Pledge Agreements or
this Indenture.
"PowerSpectrum" means PowerSpectrum Technology, Ltd.
"Predecessor Security" means, with respect to any particular
Security, 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 2.07
in exchange for a mutilated Security or in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the mutilated,
lost, destroyed or stolen Security.
"Preferred Stock" means, as applied to the Capital Stock of any
person, Capital Stock of such person of any class or classes (however
designated) that ranks prior as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such person, to shares of Capital Stock of any
other class of such person.
"Presently Existing Guarantor" shall have the meaning set forth in
Section 4.18.
<PAGE>
"principal" means, with respect to any debt security, the principal
of the security plus, when appropriate, the premium, if any, on the security
and any interest on overdue principal.
"Private Placement Legend" means the legend initially set forth on
the Securities in the form set forth in Section 2.02(a).
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Redeemable Capital Stock" means any shares of any class or series
of Capital Stock (other than Preferred Stock of the Company outstanding on
the date of this Indenture), that, either by the terms thereof, by the terms
of any security into which it is convertible or exchangeable or by contract
or otherwise, is, or upon the happening of an event or passage of time would
be, required to be redeemed for cash or other assets (other than Capital
Stock) prior to the Stated Maturity with respect to the principal of any
Security or is redeemable at the option of the holder thereof at any time
prior to any such Stated Maturity, or is convertible into or exchangeable for
debt securities at any time prior to any such Stated Maturity; provided,
however, that any Capital Stock that would not constitute Redeemable Capital
Stock but for provisions thereof giving holders thereof the right to require
the Company to repurchase or redeem such Capital Stock upon the occurrence of
a change in control or an event of default occurring prior to the final
maturity of the Securities shall not constitute Redeemable Capital Stock if
such Capital Stock specifically provides that the Company will not repurchase
or redeem any such stock pursuant to such provisions prior to the Company's
repurchase of the Securities as are required to be purchased under
Section 4.11 or the Company's payment of the Securities as may be required
under Article Six.
"Redemption Date" means, with respect to any Security to be
redeemed, the date fixed by the Company for such redemption pursuant to this
Indenture and the Securities.
"Redemption Price" means, with respect to any Security to be
redeemed, the price fixed for such redemption pursuant to the terms of this
Indenture and the Securities.
"Registrable Securities" shall mean the Series A Notes; provided,
however, that Series A Notes shall cease to be Registrable Securities when
(i) as to Series A Notes exchanged for Series B Notes, the Exchange Offer has
been consummated, (ii) a Registration Statement with respect to such Series A
Notes shall have been declared effective under the Securities Act and such
Series A Notes shall have been disposed of pursuant to such Registration
Statement, (iii) such Series A Notes may be distributed to the public
pursuant to Rule 144(k) (or any similar provision then in force, but not Rule
144A under the Securities Act) under the Securities Act or (iv) such Series A
Notes shall have ceased to be outstanding.
"Registrar" has the meaning set forth in Section 2.04.
"Registration Rights Agreement" means the Notes Registration Rights
Agreement dated as of July 6, 1995 between the Company and Smith Barney Inc.,
and certain permitted assigns specified therein.
"Registration Statement" shall mean any registration statement of
the Company that covers any of the Series B Notes or Registrable Securities
pursuant to the provisions of the Registration Rights Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, and in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Regulation S" means Regulation S under the Securities Act.
"Replacement Assets" shall have the meaning set forth in
Section 4.12.
"Restricted Payments" has the meaning set forth in Section 4.09.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale-Leaseback Transaction" of any person means an arrangement
with any lender or investor or to which such lender or investor is a party
providing for the leasing by such person of any property or asset of such
person which has been or is being sold or transferred by such person after
the acquisition thereof or the completion of construction or commencement of
operation thereof to such lender or investor or to any person to whom funds
<PAGE>
have been or are to be advanced by such lender or investor on the security of
such property or asset. The stated maturity of such arrangement shall be the
date of the last payment of rent or any other amount due under such
arrangement prior to the first date on which such arrangement may be
terminated by the lessee without payment of a penalty.
"SEC" means the U.S. Securities and Exchange Commission, as from
time to time constituted, or if at any time after the execution of this
Indenture such SEC is not existing and performing the applicable duties now
assigned to it, then the body or bodies performing such duties at such time.
"Securities" means the securities that are issued under this
Indenture, as amended or supplemented from time to time pursuant to this
Indenture.
"Securities Act" means the U.S. Securities Act of 1933, as amended
from time to time.
"Security Agreement" means any document pursuant to which a
security interest (other than by way of a pledge) is granted hereunder,
including any security interest in any cash pursuant to the Pledge
Agreements.
"Separation Date" shall have the meaning set forth in Section 2.02.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of the Registration
Rights Agreement that covers all of the Registrable Securities (but no other
securities unless approved by the person or persons who have requested the
Company to file the Shelf Registration Statement) on an appropriate form
under Rule 415 under the Securities Act, or any similar rule that may be
adopted by the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, and in each case including
the Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Significant Subsidiary" shall have the same meaning as in
Rule 1.02(v) of Regulation S-X under the Securities Act.
"S&P" means Standard & Poor's Corporation, and its successors.
"SMR" means a mobile radio communications system that is operated
as described in the Offering Memorandum relating to the Securities.
"Specified Date" means, with respect to a given calculation of
Accreted Value, the date as of which such calculation is made.
"Stated Maturity" means, when used with respect to any Security or
any installment of interest thereon, 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, and when used with respect to any other
Indebtedness, means the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such Indebtedness,
or any installment of interest thereon, is due and payable.
"Strategic Equity Investor" means, with respect to any sale of the
Company's Capital Stock, any person engaged in the telecommunications
business which, both as of the Trading Day immediately before the day of such
sale and immediately after the Trading Day of such sale, has a Total Market
Capitalization of at least $5,000,000,000 or any Subsidiary of any such
Person. In calculating Total Market Capitalization for the purpose of this
definition, the consolidated Indebtedness of such person, solely when
calculated as of the Trading Day immediately after the day of such sale, will
be calculated after giving effect to such sale (including any Indebtedness
incurred in connection with such sale) and the Closing Price of the Common
Stock of such person, solely when calculated as of the Trading Date
immediately after the day of such sale, will be deemed to be the Closing
Price of such Common Stock on such succeeding Trading Day, subject to the
last sentence of the definition of "Total Market Capitalization."
"subsidiary" has the meaning given to such term under the
Securities Act.
"Subsidiary" means, with respect to any person, a corporation 50%
or more of whose Voting Stock is at the time, directly or indirectly, owned
by such person, by one or more Subsidiaries of such person or by such person
and one or more Subsidiaries thereof and over which such person exercises
control, directly or indirectly, through one or more Subsidiaries. For
purposes of this definition, any directors' qualifying shares or investments
<PAGE>
by foreign nationals mandated by applicable law shall be disregarded in
determining the ownership of a Subsidiary. Notwithstanding the foregoing, an
Unrestricted Subsidiary shall not be deemed a Subsidiary of the Company under
the Indenture, other than for purposes of the definition of an "Unrestricted
Subsidiary" and the definition of "Communications Products Group," unless the
Company shall have designated an Unrestricted Subsidiary as a "Subsidiary" by
written notice to the Trustee under this Indenture, accompanied by an
Officers' Certificate as to compliance with this Indenture; provided,
however, that the Company shall not be permitted to designate any
Unrestricted Subsidiary as a Subsidiary unless, after giving pro forma effect
to such designation, (a) the Company would be permitted to incur $1.00 of
additional Indebtedness (other than Indebtedness described under clauses (a)
through (n) inclusive of the second paragraph of Section 4.08) under clauses
(a) and (b) of the first paragraph of Section 4.08 (assuming a market rate of
interest with respect to such Indebtedness) and (b) all Indebtedness and
Liens of such Unrestricted Subsidiary would be permitted to be incurred by a
Subsidiary of the Company under this Indenture. A designation of an
Unrestricted Subsidiary as a Subsidiary may not thereafter be rescinded.
"Subsidiary Borrower" shall have the meaning set forth in Section
10.11.
"Surviving Entity" shall have the meaning set forth in Section
5.01.
"Suspension Event" means any event which makes any statement made
in the Shelf Registration Statement or the related prospectus untrue in any
material respect or which requires the making of any changes in the Shelf
Registration Statement or prospectus in order to make the statements therein
not misleading.
"Suspension Event Notice" means the notice required pursuant to the
Registration Rights Agreement to be given by the Company to the Holders upon
the occurrence of a Suspension Event.
"Telecommunications Assets" means, with respect to any person, any
tangible or intangible asset (including, without limitation, subscriber
units) that is utilized by such person, directly or indirectly, for the
design, development, installation, integration, management or provision of
telecommunications systems and/or services, including, without limitation,
any business or services in which the Company currently is engaged.
"Temporary Offshore Global Security" shall have the meaning set
forth in Section 2.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as amended.
"Total Common Equity" of any person means, as of any day of
determination (and as modified for purposes of the definition of "Change of
Control"), the product of (a) the aggregate number of outstanding primary
shares of Common Stock of such person on such day (which shall not include
any options or warrants on, or securities convertible or exchangeable into,
shares of Common Stock of such person) and (b) the average Closing Price of
such Common Stock over the 20 consecutive Trading Days immediately preceding
such day. If no such Closing Price exists with respect to shares of any such
class, the value of such shares for purposes of clause (b) of the preceding
sentence shall be determined by the Board of Directors in good faith and
evidenced by a written opinion as to such value issued by an investment
banking firm of recognized national standing.
"Total Market Capitalization" of any person means, as of any day of
determination, the sum of (a) the consolidated Indebtedness of such person
and its Subsidiaries on such day, plus (b) the product of (i) the aggregate
number of outstanding primary shares of Common Stock of such person on such
day (which shall not include any options or warrants on, or securities
convertible or exchangeable into, shares of Common Stock of such person other
than, in the case of the Company, any shares of Preferred Stock of the
Company, that, as of the day of determination, cannot, pursuant to the terms
thereof as in effect on the date of this Indenture, be required to be
redeemed by the Company in cash), and (ii) the average Closing Price of such
Common Stock over the 20 consecutive Trading Days immediately preceding such
day, plus (c) the liquidation value of any outstanding shares of Preferred
<PAGE>
Stock of such person on such day. If no such Closing Price exists with
respect to shares of any such class, the value of such shares for purposes of
clause (b) for the preceding sentence shall be determined by the Board of
Directors in good faith and evidenced by a written opinion as to such value
issued by an investment banking firm of recognized national standing.
"Total Market Value of Equity" of any person means, as of any day
of determination, the sum of (a) the product of (i) the aggregate number of
outstanding primary shares of Common Stock of such person (which shall not
include any options or warrants on, or securities convertible or exchangeable
into, shares of Common Stock of such person) and (ii) the average Closing
Price of such Common Stock over the 20 consecutive Trading Days immediately
preceding such day, plus (b) the liquidation value of any outstanding shares
of Preferred Stock of such person on such day. If no such Closing Price
exists with respect to shares of any such class, the value of such shares for
purposes of clause (a) of the preceding sentence shall be determined by the
Board of Directors in good faith and evidenced by a written opinion as to
such value issued by an investment banking firm of recognized national
standing.
"Trading Day" means, with respect to a securities exchange or
automated quotation system, a day on which such exchange or system is open
for a full day of trading.
"Trust Officer" means any officer in the Corporate Trust Office of
the Trustee or any other officer 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 of and
familiarity with the particular subject.
"Trustee" means the party named as such in this Indenture until a
successor replaces such party (or any previous successor) in accordance with
the provisions of this Indenture, and thereafter means such successor.
"Units" shall have the meaning set forth in Section 2.06.
"Unrestricted Subsidiary" means a Subsidiary of the Company
(a) that is a Subsidiary in the Company's Communications Products Group or
(b) (i) none of whose properties or assets were owned by the Company or any
of its Subsidiaries prior to the Issue Date, other than any such assets as
are transferred to such Unrestricted Subsidiary in accordance with Section
4.09, (ii) whose properties and assets, to the extent that they secure
Indebtedness, secure only Non-Recourse Indebtedness and (iii) which has no
Indebtedness other than Non-Recourse Indebtedness. As used above, "Non-
Recourse Indebtedness" means Indebtedness as to which (a) neither the Company
nor any of its Subsidiaries (other than the relevant Unrestricted Subsidiary
or another Unrestricted Subsidiary) (i) provides credit support (including
any undertaking, agreement or instrument which would constitute
Indebtedness), (ii) guarantees or is otherwise directly or indirectly liable
or (iii) constitutes the lender (in each case, other than pursuant to and in
compliance with Section 4.09) and (b) no default with respect to such
Indebtedness (including any rights which the holders thereof may have to take
enforcement action against the relevant Unrestricted Subsidiary or its
assets) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Company or its Subsidiaries (other than
Unrestricted Subsidiaries) to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity.
"U.K. Pledge Agreement" means the Pledge Agreement dated as of the
date hereof in the form of Exhibit G-2 hereto.
"U.S. Global Security" shall have the meaning set forth in Section
2.01.
"U.S. Government Obligations" shall have the meaning set forth in
Section 8.02.
"U.S. Physical Securities" shall have the meaning set forth in
Section 2.01.
"U.S. Pledge Agreement" means the Pledge Agreement dated as of the
date hereof in the form of Exhibit G-1 hereto.
<PAGE>
"Voting Stock" means any class or classes of Capital Stock pursuant
to which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors,
managers or trustees of any person (irrespective of whether or not, at the
time, Capital Stock of any other class or classes shall have, or might have,
voting power by reason of the happening of any contingency).
"Warrants" shall have the meaning set forth in Section 2.06.
"Wholly-Owned Subsidiary" means any Subsidiary of the Company of
which 100% of the outstanding Capital Stock is owned by one or more
Wholly-Owned Subsidiaries of the Company or by the Company and one or more
Wholly-Owned Subsidiaries of the Company. For purposes of this definition,
any directors' qualifying shares or investments by foreign nationals mandated
by applicable law shall be disregarded in determining the ownership of a
Subsidiary. For purposes of clause (a) of the definition of "Permitted
Investments," PowerSpectrum shall be deemed to be a Wholly-Owned Subsidiary
of the Company for so long as PowerSpectrum shall be a Subsidiary of the
Company and for so long as PowerSpectrum shall not materially engage in a
line of business other than (i) the line of business in which it is engaged
on the date of this Indenture or (ii) a line of business involving
exploitation of FHMA* frequency hopping technology.
1.02. Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder or Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the indenture securities means the Company or any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them therein.
1.03. Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
1. a term has the meaning assigned to it;
2. words in the singular include the plural, and words in the
plural include the singular;
3. "or" is not exclusive;
4. provisions apply to successive events and transactions;
5. all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
6. the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
7. all references to $ or dollars shall refer to the lawful
currency of the United States of America.
<PAGE>
ARTICLE TWO
THE SECURITIES
2.01. Form and Dating. The Series A Notes and the Trustee's
certificate of authentication with respect thereto shall be substantially in
the form annexed hereto as Exhibit A. The Series A Notes shall be in an
aggregate principal amount at maturity no greater than $207,000,000 (plus the
aggregate principal amount at maturity of any Series A Notes issued pursuant
to the Initial Purchaser's option to purchase up to an additional $20,700,000
aggregate principal amount at maturity of the Series A Notes to cover
overallotments) provided that if, upon completion of the Exchange Offer, the
Series B Notes are issued hereunder, the principal amount of Series A Notes
shall be reduced by the principal amount of Series B Notes so issued. The
Series B Notes, when and if issued, and the Trustee's certificate of
authentication with respect thereto shall be substantially in the form
annexed hereto as Exhibit B. The Series B Notes shall be in an aggregate
principal amount at maturity no greater than $207,000,000 (plus the aggregate
principal amount at maturity of any Series A Notes issued pursuant to the
Initial Purchaser's option to purchase up to an additional $20,700,000
aggregate principal amount at maturity of the Series A Notes to cover
overallotments) less the principal amount of Series A Notes that are not
exchanged for Series B Notes in the Exchange Offer or otherwise. The
Securities may have notations, legends or endorsements required by law, stock
exchange agreements to which the Company is subject or usage. The Company
shall approve the form of the Securities and any notation, legend or
endorsement on the Securities. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the form of the Securities
annexed hereto as Exhibits A and B shall constitute, and are hereby expressly
made, a part of this Indenture. To the extent applicable, the Company and
the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby.
The Series A Notes offered and sold in reliance on Rule 144A shall
be issued initially in the form of a single permanent global Security in
definitive, fully registered form, without interest coupons, substantially in
the form set forth in Exhibit A (the "U.S. Global Security"), deposited with
the Trustee, as custodian for the Depository and registered in the name of a
nominee of the Depository, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the
U.S. Global Security may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the
Depository or its nominee, as hereinafter provided.
The Series A Notes offered and sold in offshore transactions in
reliance on Regulation S shall be issued initially in the form of a single
temporary global Security in definitive, fully registered form, without
interest coupons, substantially in the form set forth in Exhibit A (the
"Temporary Offshore Global Security") deposited with the Trustee, as
custodian for the Depository, and registered in the name of a nominee of the
Depository for the accounts of Euroclear and Cedel, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. At any
time on or after August 15, 1995, upon receipt by the Trustee and the Company
of a duly executed certificate substantially in the form of Exhibit C hereto,
a single permanent global Security in definitive, fully registered form,
without interest coupons, substantially in the form set forth in Exhibit A
(the "Permanent Offshore Global Security," and together with the Temporary
Offshore Global Security, the "Offshore Global Securities") duly executed by
the Company and authenticated by the Trustee as hereinafter provided shall be
deposited with the Trustee, as custodian for the Depository, and the
Registrar shall reflect on its books and records the date and a decrease in
the principal amount of the Temporary Offshore Global Security in an amount
equal to the principal amount of the beneficial interest in the Temporary
Offshore Global Security transferred.
<PAGE>
The Series A Notes originally purchased by or transferred to
Institutional Accredited Investors which are not QIB's ("Non-Global
Purchasers") shall be issued in the form of permanent certificated Securities
in registered form, without interest coupons, in substantially the form set
forth in Exhibit A (the "Physical Securities"). Upon the transfer of
Physical Securities by a Non-Global Purchaser either to a QIB or in
accordance with Regulation S, such Physical Securities shall, unless the
relevant Global Security has previously been exchanged in whole for Physical
Securities pursuant to Section 2.07(b), be exchanged for an interest in such
Global Security.
The Series B Notes issued in exchange for interests in the U.S.
Global Security and the Offshore Global Securities and for Physical
Securities, in accordance with the terms and conditions of the Exchange Offer
shall also be issued initially in the form of a single permanent global
Security in definitive, fully registered form, without interest coupons,
substantially in the form set forth in Exhibit B.
The definitive Securities shall be typed, printed, lithographed or
engraved or produced by any combination of these methods or may be produced
in any other manner permitted by the rules of any securities exchange on
which the Securities may be listed, all as determined by the officers
executing such Securities, as evidenced by their execution of such
Securities.
2.02. Restrictive Legends. (a) Unless and except to the extent
that the Series A Notes are exchanged for Series B Notes or otherwise
transferred pursuant to an effective Registration Statement in accordance
with the Registration Rights Agreement, the U.S. Global Security, the
Temporary Offshore Global Security and any Physical Security issued pursuant
to Section 2.07 in exchange for interests therein shall bear the following
legend, subject to Section 2.08(f):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY OR THE LAST DATE ON WHICH
THIS SECURITY WAS HELD BY THE COMPANY OR ANY AFFILIATE OF THE COMPANY, RESELL
OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND
IF SUCH TRANSFER IS IN RESPECT OF AN ACCRETED VALUE OF NOTES AT THE TIME OF
TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
(D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR
(F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE OF THE SECURITY OR THE LAST DATE ON WHICH THIS
SECURITY WAS HELD BY THE COMPANY OR AN AFFILIATE OF THE COMPANY, THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO
<PAGE>
THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. 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 INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.
(b) Each Global Security shall also bear the following legend:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.08 OF THE INDENTURE.
(c) Prior to the close of business upon the earliest to occur of
(i) January 30, 1996, (ii) the commencement of the Exchange Offer, (iii) such
earlier date as the Initial Purchaser may determine and specify to the
Trustee in writing, and (iv) in the event of a Change of Control, the date
the Company mails notice thereof to the Holders (the "Separation Date"), each
Series A Note shall bear the following legend:
THIS NOTE IS INITIALLY ISSUED AS PART OF AN ISSUANCE OF UNITS (THE "UNITS"),
EACH OF WHICH CONSISTS OF A 15% SENIOR SECURED DISCOUNT NOTE DUE 2005 HAVING
A PRINCIPAL AMOUNT AT MATURITY OF $1,000 (THE "NOTES") OF GEOTEK
COMMUNICATIONS, INC.(THE "COMPANY") AND WARRANTS TO PURCHASE 30 SHARES OF
COMMON STOCK OF THE COMPANY (THE "WARRANTS"). PRIOR TO THE CLOSE OF BUSINESS
UPON THE EARLIEST TO OCCUR OF (i) JANUARY 30, 1996, (ii) THE COMMENCEMENT OF
AN EXCHANGE OFFER RELATING TO THE NOTES, (iii) SUCH EARLIER DATE AS SMITH
BARNEY, INC., AS INITIAL PURCHASER OF THE UNITS, MAY DETERMINE AND SPECIFY TO
THE TRUSTEE UNDER THE INDENTURE RELATING TO THE NOTES ("THE INDENTURE") IN
WRITING, AND (iv) IN THE EVENT OF A CHANGE OF CONTROL (AS DEFINED IN THE
INDENTURE), THE DATE THE COMPANY MAILS NOTICE THEREOF TO HOLDERS OF THE
NOTES, THE NOTES EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR
EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER
WITH, THE WARRANTS AND, DURING SUCH TIME, THE NOTES WILL EFFECTIVELY BE
SUBJECT TO ANY TRANSFER RESTRICTIONS APPLICABLE TO THE WARRANTS.
2.03. Execution, Authentication and Denominations. Two Officers
shall execute the Securities for the Company by facsimile or manual signature
in the name and on behalf of the Company. The seal of the Company, if any,
shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee or authenticating agent authenticates the
Security, the Security shall be valid nevertheless.
A Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
<PAGE>
The Trustee or an authenticating agent shall upon receipt of a
Company Order authenticate for original issue Series A Notes in the aggregate
principal amount at maturity not to exceed $207,000,000 (subject to any
increase as provided for in Section 2.01 hereof). The Trustee or an
authenticating agent shall upon receipt of a Company Order authenticate for
original issue Series B Notes in an aggregate principal amount at maturity
not to exceed $207,000,000 (subject to any increase as provided for in
Section 2.01 hereof); provided that such Series B Notes shall be issuable
only upon the valid surrender for cancellation of Series A Notes of a like
aggregate principal amount at maturity in accordance with the Exchange Offer.
In each case, the Trustee shall be entitled to receive any Officers'
Certificate and any Opinion of Counsel of the Company that it may reasonably
request in connection with such authentication of Securities, including,
without limitation, in the case of the original issuance of Series B Notes,
an Opinion of Counsel dated the date thereof substantially to the effect set
forth in Exhibit D hereto. Such Company Order shall specify the amount of
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated. The aggregate principal amount at
maturity of Securities outstanding at any time may not exceed the amount set
forth above except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities pursuant to Section 2.06, 2.09, 2.10 or 2.11.
The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such authenticating agent. An
authenticating agent has the same rights as an Agent to deal with the Company
or an Affiliate of the Company. The Trustee shall not be liable for any act
or failure of the authenticating agent to perform any duty either required
herein or authored herein to be performed by such person in accordance with
this Indenture.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 in principal amount at maturity
and any integral multiple of $1,000 in excess thereof.
2.04. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar"), an office or agency where
Securities may be presented for payment (the "Paying Agent") and an office or
agency where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served, which shall be in the Borough of
Manhattan, The City of New York. The Company shall cause the Registrar to
keep a register of the Securities and of their transfer and exchange (the
"Security Register"). The Company may have one or more co-Registrars and one
or more additional Paying Agents. Unless the context otherwise requires, the
terms "Registrar" and "Paying Agent" shall apply to any co-Registrar and
additional Paying Agent, respectively.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
give prompt written notice to the Trustee of the name and address of any such
Agent and any change in the address of such Agent. If the Company fails to
maintain a Registrar, Paying Agent and/or agent for service of notices and
demands, the Trustee shall, upon written notice thereof from the Company, act
as such Registrar, Paying Agent and/or agent for service of notices and
demands for so long as such failure shall continue. The Company may remove
any Agent upon written notice to such Agent and the Trustee; provided that no
such removal shall become effective until (i) the acceptance of an
appointment by a successor Agent to such Agent as evidenced by an appropriate
agency agreement entered into by the Company and such successor Agent and
delivered to the Trustee or (ii) notification to the Trustee that the Trustee
shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Company, any Subsidiary of
the Company, or any Affiliate of any of them may act as Paying Agent,
Registrar or co-Registrar, and/or agent for service of notice and demands;
provided, however, that neither the Company, any Subsidiary of the Company
nor any Affiliate of any of them shall act as Paying Agent in connection with
the defeasance of the Securities or the discharge of this Indenture under
Article Eight.
<PAGE>
The Company initially appoints the Trustee as Registrar, Paying
Agent, authenticating agent and agent for service of notice and demands. If,
at any time, the Trustee is not the Registrar, the Registrar shall make
available to the Trustee, on or before each Interest Payment Date and at such
other times as the Trustee may reasonably request, the names and addresses of
the Holders as they appear in the Security Register.
2.05. Paying Agent to Hold Money in Trust. Not later than each
due date of the principal, premium, if any, and interest on any Securities,
the Company shall deposit with the Paying Agent money in immediately
available funds sufficient to pay such principal, premium, if any, and
interest so becoming due. The Company shall require each Paying Agent other
than the Trustee to agree in writing that such Paying Agent shall hold in
trust for the benefit of the Holders or the Trustee all money held by the
Paying Agent for the payment of principal of, premium, if any, and interest
on the Securities (whether such money has been paid to it by the Company or
any other obligor on the Securities), and that such Paying Agent shall
promptly notify the Trustee of any default by the Company (or any other
obligor on the Securities) in making any such payment. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee
and account for any funds disbursed, and the Trustee may at any time during
the continuance of any payment default, upon written request to a Paying
Agent, require such Paying Agent to pay all money held by it to the Trustee
and to account for any funds disbursed. Upon doing so, the Paying Agent
shall have no further liability for the money so paid over to the Trustee.
If the Company or any Subsidiary of the Company or any Affiliate of any of
them acts as Paying Agent, it will, on or before each due date of any
principal of, premium, if any, or interest on the Securities, segregate and
hold in a separate trust fund for the benefit of the Holders a sum of money
sufficient to pay such principal, premium, if any, or interest so becoming
due until such sum of money shall be paid to such Holders or otherwise
disposed of as provided in this Indenture, and will promptly notify the
Trustee of its action or failure to act. The Company may pay on any due date
of the principal, premium, if any, or interest on the Securities such amount
that is due and payable by its check payable in lawful money of the United
States and mailed to each Holder's registered address as reflected in the
Security Register.
2.06. Transfer and Exchange. The Securities are issuable only in
registered form. The Series A Notes shall initially be issued as part of an
issuance of Units (the "Units"), each of which consists of a Series A Note
having a principal amount at maturity of $1,000 and Warrants to purchase 30
shares of Common Stock (the "Warrants"). Prior to the close of business upon
the earliest to occur of (i) January 30, 1996, (ii) the commencement of the
Exchange Offer, (iii) such earlier date as the Initial Purchaser may
determine and specify to the Trustee in writing, and (iv) in the event of a
Change of Control, the date the Company mails notice thereof to the Holders,
the Series A Notes may not be transferred or exchanged separately from, but
may be transferred or exchanged only together with, the Warrants. A Holder
may transfer a Security by written application to the Registrar stating the
name of the proposed transferee and otherwise complying with the terms of
this Indenture. No such transfer shall be effected until, and such
transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar in the Security
Register. Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee, and any agent of the Company shall treat
the person in whose name the Security is registered as the owner thereof for
all purposes whether or not the Security shall be overdue, and neither the
Company, the Trustee, nor any such agent shall be affected by notice to the
contrary. Furthermore, the Depository shall, by acceptance of a Global
Security, agree that transfers of beneficial interests in such Global
Security may be effected only through a book-entry system maintained by the
Depository (or its agent), and that ownership of a beneficial interest in the
Security shall be required to be reflected in a book entry. When Securities
are presented to the Registrar or a co-Registrar with a request to register
the transfer or to exchange them for an equal principal amount of Securities
<PAGE>
of other authorized denominations (including on exchange of Series A Notes
for Series B Notes), the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met;
provided that no exchanges of Series A Notes for Series B Notes shall occur
until a Registration Statement shall have been declared effective by the
Commission (with written notice thereof from the Company to the Trustee) and
that any Series A Notes that are exchanged for Series B Notes shall be
canceled by the Trustee. To permit registrations of transfers and exchanges
in accordance with the terms, conditions and restrictions hereof, the Company
shall execute and the Trustee shall authenticate Securities at the
Registrar's request. No service charge shall be made for any registration of
transfer or exchange or redemption of the Securities, but the Company may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or other similar governmental charge payable upon exchanges
pursuant to Section 2.11, 3.06 or 9.05).
The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption
of Securities selected for redemption under Section 3.02 and ending at the
close of business on the day of such mailing, (ii) to register the transfer
of or exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part or
(iii) to register the transfer of or exchange any security between a record
date and the next succeeding interest payment date.
2.07. Book-Entry Provisions for the Global Securities. (a) The
Global Securities initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for the Depository and (iii) bear legends as set forth
in Section 2.02.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner
of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent
of the Company or the Trustee, from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a holder of any
Security.
(b) Transfers of any Global Security shall be limited to transfers
of such Global Security in whole, but not in part, to the Depository, its
successors or their respective nominees. Beneficial interests in any Global
Security may be transferred in accordance with the applicable rules and
procedures of the Depository and, if applicable, Euroclear and Cedel and the
provisions of Section 2.08. If, for any reason, a beneficial owner requires
physical delivery of a Physical Security, such beneficial owner shall
transfer its interest in the Global Security in exchange for Physical
Securities in accordance with the applicable rules and procedures of the
Depository and, if applicable, Euroclear and Cedel and the provisions of
Section 2.08. In addition, Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in any Security
if (i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Global Security and a successor Depository is
not appointed by the Company within 90 days of such notice or (ii) an Event
of Default has occurred and is continuing and the Registrar has received a
request from the Depository.
(c) Any beneficial interest in one of the Global Securities that
is transferred to a person who takes delivery in the form of an interest in
the other Global Security will, upon transfer, cease to be an interest in
such Global Security and become an interest in the other Global Security and,
accordingly, will thereafter be subject to all transfer restrictions, if any,
and other procedures applicable to beneficial interests in such other Global
Security for as long as it remains such an interest.
<PAGE>
(d) In connection with any transfer of a beneficial interest in
the U.S. Global Security to a transferee receiving Physical Securities
pursuant to paragraph (b) of this Section, the Registrar shall reflect on its
books and records the date and a decrease in the principal amount of the U.S.
Global Security in an amount equal to the principal amount of the beneficial
interest in the U.S. Global Security to be transferred, and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more Physical
Securities of like tenor and amount.
(e) In connection with the transfer of an entire Global Security
to beneficial owners pursuant to paragraph (b) of this Section, such Global
Security shall be deemed to be surrendered to the Trustee for cancellation,
and the Company shall execute, and the Trustee shall authenticate and
deliver, to each beneficial owner identified by the Depository in exchange
for its beneficial interest in such Global Security an equal aggregate
principal amount of Physical Securities of authorized denominations.
(f) Any Physical Security delivered in exchange for an interest in
the U.S. Global Security or the Temporary Offshore Global Security pursuant
to paragraphs (b), (d) or (e) of this Section shall, except as otherwise
provided by paragraph (f) of Section 2.08, bear the legend regarding transfer
restrictions applicable to the Physical Security set forth in Sections
2.02(a) and 2.02(c).
(g) The registered holder of a Global Security may grant proxies
and otherwise authorize any person, including Agent Members and persons that
may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Securities.
2.08. Special Transfer Provisions. Unless and until the Series A
Notes are exchanged for Series B Notes or otherwise transferred pursuant to
an effective Registration Statement in accordance with the Registration
Rights Agreement, the following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors.
The following provisions shall apply with respect to the registration of
any proposed transfer of a Series A Note to any Institutional Accredited
Investor that is not a QIB:
(i) The Registrar shall register the transfer of any Series A
Note, whether or not such Series A Note bears the Private Placement
Legend, if the proposed transferee has delivered to the Registrar (x) a
certificate reasonably acceptable to the Trustee that the requested
transfer is at least three years after the later of the Issue Date and
the last date on which such Series A Note was held by an Affiliate of
the Company or (y)(A) a certificate substantially in the form of Exhibit
E hereto and (B) if the Accreted Value of the Series A Notes being
transferred at the time of such transfer is less than $250,000, an
Opinion of Counsel acceptable to the Company, the Registrar and the
Trustee that such transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security or the Offshore Global
Securities, upon receipt by the Registrar of (x) the documents, if any,
required by paragraph (i) and (y) instructions given in accordance with
the Depository's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the
principal amount of the beneficial interest in such Global Security to
be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Physical Certificates of like
tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of a Series A
Note to a QIB:
(i) If the Series A Note to be transferred consists of Physical
Securities or an interest in the Temporary Offshore Global Security, the
Registrar shall register the transfer if such transfer is being made by
a proposed transferor who has checked the box provided for on the form
of Series A Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
<PAGE>
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Series A Note stating, or has otherwise
advised the Company and the Registrar in writing, that it is purchasing
the Series A Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member and the
Series A Note to be transferred consists of Physical Securities or an
interest in the Temporary Offshore Global Security, upon receipt by the
Registrar of the documents referred to in clause (i) and instructions
given in accordance with the Depository's and the Registrar's
procedures, the Registrar shall reflect on its books and records the
date and an increase in the principal amount of the U.S. Global Security
in an amount equal to the principal amount of the Physical Securities or
the interest in the Temporary Offshore Global Security, as the case may
be, to be transferred, and the Trustee shall cancel the Physical
Securities or decrease the amount of the Temporary Offshore Global
Security so transferred.
(c) Transfers of Interests in the Temporary Offshore Global
Security. The following provisions shall apply with respect to
registration of any proposed transfer of interests in the Temporary
Offshore Global Security:
(i) The Registrar shall register the transfer of any Series A
Note (x) if the proposed transferee is a Non-U.S. Person and the
proposed transferor has delivered to the Registrar a certificate
substantially in the form of Exhibit F hereto or (y) if the proposed
transferee is a QIB and the proposed transferor has checked the box
provided for on the form of Series A Note stating, or has otherwise
advised the Company and the Registrar in writing, that the sale has been
made in compliance with the provisions of Rule 144A to a transferee who
has signed the certification provided for on the form of Series A Note
stating, or has otherwise advised the Company and the Registrar in
writing, that it is purchasing the Series A Note for its own account or
an account with respect to which it exercises sole investment discretion
and that it and any such account is a QIB within the meaning of Rule
144A, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding
the Company as it has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor
is relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member, upon receipt
by the Registrar of the documents referred to in clause (i)(y) above and
instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the U.S.
Global Security in an amount equal to the principal amount of the
Temporary Offshore Global Security to be transferred, and the Trustee
shall decrease the amount of the Temporary Offshore Global Security.
(d) Transfers of Interests in the Permanent Offshore Global
Security to U.S. Persons. The following provision shall apply with
respect to any transfer of interests in the Permanent Offshore Global
Security to U.S. Persons: The Registrar shall register the transfer of
any Security without requiring any additional certification.
(e) Transfers to Non-U.S. Persons at any Time. The following
provisions shall apply with respect to any transfer of a Series A Note
to a Non-U.S. Person:
<PAGE>
(i) Prior to August 15, 1995, the Registrar shall register any
proposed transfer of a Series A Note to a Non-U.S. Person upon receipt
of a certificate substantially in the form of Exhibit F hereto from the
proposed transferor.
(ii) On and after August 15, 1995, the Registrar shall register
any proposed transfer to any Non-U.S. Person if the Series A Note to be
transferred is an interest in the U.S. Global Security, upon receipt of
a certificate substantially in the form of Exhibit F from the proposed
transferor.
(iii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (ii) and
(y) instructions in accordance with the Depository's and the Registrar's
procedures, the Registrar shall reflect on its books and records the
date and a decrease in the principal amount of the U.S. Global Security
in an amount equal to the principal amount of the beneficial interest in
the U.S. Global Security to be transferred, and (b) if the proposed
transferee is an Agent Member, upon receipt by the Registrar of
instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Offshore
Global Security in an amount equal to the principal amount of the U.S.
Global Security to be transferred, and the Trustee shall decrease the
amount of the U.S. Global Security.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Series A Notes not bearing the Private Placement Legend,
the Registrar shall deliver Series A Notes that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Series
A Notes bearing the Private Placement Legend, the Registrar shall
deliver only Series A Notes that bear the Private Placement Legend
unless either (i) the circumstances contemplated by the fourth paragraph
of Section 2.01 or paragraph (a)(i)(x) or (e)(ii) of this Section 2.08
exist or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company, the Registrar and the Trustee to
the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(g) General. The provisions of Sections 2.01, 2.02, 2.07 and
2.08 hereof shall be qualified in their entirety by any applicable
securities laws of the United States and any other applicable
jurisdiction and by the procedures of any applicable clearing agency, in
each case as in effect from time to time, and all such laws and clearing
procedures shall be deemed to be incorporated herein by reference. By
its acceptance of any Series A Note bearing the Private Placement
Legend, each Holder of such a Series A Note shall be deemed to
acknowledge the restrictions on transfer of such Series A Note set forth
in this Indenture and in the Private Placement Legend and agrees that it
will transfer such Series A Note only as provided in this Indenture.
The Registrar shall not register a transfer of any Series A Note unless
such transfer complies with the restrictions on transfer of such Series
A Note set forth in this Indenture. In connection with any transfer of
Series A Notes, each Holder agrees by its acceptance of the Series A
Notes to furnish the Registrar or the Company such certifications, legal
opinions or other information as either of them may reasonably require
to confirm that such transfer is being made pursuant to an exemption
from, or a transaction not subject to, the registration requirements of
the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with
respect to) the sufficiency of any such certifications, legal opinions
or other information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.07 or this Section
2.08. The Company shall have the right to inspect and make copies of all
such letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Registrar.
<PAGE>
2.09. Replacement Securities. If a mutilated Security is
surrendered to the Trustee or if the Holder claims that the Security has been
lost, destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Security of like tenor and principal amount
and bearing a number not contemporaneously outstanding; provided that the
requirements of the second paragraph of Section 2.10 are met. If required by
the Trustee or the Company, an indemnity bond must be furnished that is
sufficient in the judgment of both the Trustee and the Company to protect the
Company, the Trustee or any Agent from any loss that any of them may suffer
if a Security is replaced. The Company may charge such Holder for its
expenses and the expenses of the Trustee in replacing a Security. In case
any such mutilated, lost, destroyed or wrongfully taken Security has become
or is about to become due and payable, the Company in its discretion may pay
such Security instead of issuing a new Security in replacement thereof.
Every replacement Security is an additional obligation of the
Company and shall be entitled to the benefits of this Indenture.
2.10. Outstanding Securities. Securities outstanding at any time
are all Securities that have been authenticated by the Trustee, except for
those canceled by it, those delivered to it for cancellation and those
described in this Section 2.10 as not outstanding.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a bona fide
purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on the maturity date money sufficient to pay Securities
payable on that date, then on and after that date, such Securities cease to
be outstanding and interest on them shall cease to accrue.
A Security does not cease to be outstanding because the Company or
one of its Affiliates holds such Security, provided, however, that, in
determining whether the Holders of the requisite principal amount of the
outstanding Securities 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 of such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as outstanding if the pledgee establishes to
the satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor.
2.11. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have insertions,
substitutions, omissions and other variations determined to be appropriate by
the Officers executing the temporary Securities, as evidenced by their
execution of such temporary Securities. If temporary Securities are issued,
the Company will cause definitive Securities to be prepared without
unreasonable delay. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at the office or agency of the Company
designated for such purpose pursuant to Section 4.02, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities
of authorized denominations. Until so exchanged, the temporary Securities
shall be entitled to the same benefits under this Indenture as definitive
Securities.
<PAGE>
2.12. Cancellation. The Company at any time may deliver to the
Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold.
The Registrar and the Paying Agent shall forward to the Trustee any
Securities surrendered to them for transfer, exchange or payment. The
Trustee shall cancel all Securities surrendered for transfer, exchange,
payment or cancellation and shall dispose of them in accordance with its
normal procedure or the written instructions of the Company.
2.13. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" and CINS numbers (if then generally in use), and the Trustee
shall use CUSIP numbers or CINS numbers, as the case may be, in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any
notice of redemption or exchange and that reliance may be placed only on the
other identification numbers printed on the Securities.
2.14. Defaulted Interest. If the Company defaults in a payment
of interest on the Securities, it shall pay, or shall deposit with the Paying
Agent, money in immediately available funds sufficient to pay the defaulted
interest, plus (to the extent lawful) any interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date.
A special record date, as used in this Section 2.14 with respect to the
payment of any defaulted interest, shall mean the 15th day next preceding the
date fixed by the Company for the payment of defaulted interest, whether or
not such day is a Business Day. At least 15 days before the subsequent
special record date, the Company shall mail to each Holder and to the Trustee
a notice that states the subsequent special record date, the payment date and
the amount of defaulted interest to be paid.
2.15. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders and shall otherwise comply
with TIA * 312(a). If the Trustee is not the Registrar, the Company shall
furnish to the Trustee at least seven Business Days before each interest
payment date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require
of the names and addresses of Securityholders, and the Company shall
otherwise comply with TIA * 312(a).
2.16. Other Transfers. Notwithstanding anything to the contrary
in this Article Two, the Registrar may register the transfer of any Security
to any "accredited investor" as defined in Rule 501(a)(5) under the
Securities Act upon the delivery to the Registrar of documentation (including
certificates of the transferee and an Opinion of Counsel) in form and
substance satisfactory to the Company, the Registrar and the Trustee, to the
effect that such transfer is in compliance with the securities laws of the
United States and the various states thereof.
2.17. Record Date. The record date for purposes of determining
the identity of Securityholders entitled to vote or consent to any action
authorized or permitted under this Indenture shall be determined as provided
for in TIA * 316(c).
<PAGE>
ARTICLE THREE
REDEMPTION OF SECURITIES
3.01. Notices to the Trustee.
If the Company elects to redeem Securities pursuant to Paragraph
3(a) or 3(b) of the Securities, it shall notify the Trustee of the Redemption
Date and principal amount of Securities to be redeemed.
The Company shall notify the Trustee by an Officers' Certificate,
stating that such redemption will comply with the provisions hereof and of
the Securities, of any redemption at least 45 but not more than 60 days
before the Redemption Date or such shorter period as may be acceptable to the
Trustee.
3.02. Selection of Securities To Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed shall be selected from the
outstanding Securities not previously called for redemption either (x) pro
rata, by lot or by such other method as the Trustee considers to be fair and
appropriate or (y) in such manner as complies with the requirements of the
principal national securities exchange, if any, on which the Securities being
redeemed are listed. The amounts to be redeemed shall be equal to $1,000
principal amount at maturity or any integral multiple thereof.
The Trustee shall promptly notify the Company and the 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 redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
3.03. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at the address
of such Holder appearing in the Security Register maintained by the
Registrar.
All notices of redemption shall identify the Securities to be
redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued interest, if
any, to be paid;
(c) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue
on and after the Redemption Date, and the only remaining right of the
Holders of such Securities is to receive payment of the Redemption Price
upon surrender to the Paying Agent of the Securities redeemed;
(d) if any Security is to be redeemed in part, the portion of the
principal amount (equal to $1,000 or any integral multiple thereof) of
such Security to be redeemed and that on and after the Redemption Date,
upon surrender for cancellation of such original Security to the Paying
Agent, a new Security or Securities in the aggregate principal amount
equal to the unredeemed portion thereof will be issued without charge to
the Holder;
(e) that Securities called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price and the name and
address of the Paying Agent;
(f) the CUSIP number, if any, relating to such Securities, but no
representation is made as to the correctness or accuracy of any such
CUSIP number; and
(g) the paragraph of the Securities pursuant to which the
Securities are being redeemed.
<PAGE>
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 and at the expense of the Company; provided,
however, that the Company shall furnish the Trustee with the contents of such
notice.
3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the
Redemption Price. Upon surrender to the Paying Agent, such Securities called
for redemption shall be paid at the Redemption Price plus accrued interest to
the Redemption Date, but interest installments whose maturity is on or prior
to such Redemption Date will be payable on the relevant Interest Payment
Dates to the Holders of record at the close of business on the relevant
record dates referred to in the Securities.
3.05. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with
the Paying Agent an amount of money in same day funds sufficient to pay the
Redemption Price of, and accrued interest on, all the Securities or portions
thereof which are to be redeemed on that date, other than Securities or
portions thereof called for redemption on that date which have been delivered
by the Company to the Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment of such Redemption Price, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal, premium, if any, and, to the extent
lawful, accrued interest thereon shall, until paid, bear interest from the
Redemption Date at the rate provided in the Securities.
3.06. Securities Redeemed or Purchased in Part.
Upon surrender to the Paying Agent of a Security which is to be
redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to, and in
exchange for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed.
ARTICLE FOUR
COVENANTS
4.01. Payment of Securities.
The Company will pay, or cause to be paid, the principal of and
interest on the Securities by 10:30 a.m. New York City time on the dates and
in the manner provided in the Securities and this Indenture. An installment
of principal or interest shall be considered paid on the date due if the
Trustee or Paying Agent (other than the Company, a Subsidiary of the Company
or any Affiliate thereof) holds on that date money designated and set aside
for and sufficient to pay the installment in a timely manner and is not
prohibited from paying such money to the Holders of the Securities pursuant
to the terms of this Indenture.
The Company will pay interest on overdue principal at the rate and
in the manner provided in the Securities; it shall pay interest on overdue
installments of interest at the same rate and in the same manner, to the
extent lawful.
4.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange or for presentation for payment and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee as set forth in Section 11.02.
<PAGE>
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
The Company hereby initially designates the office of the Trustee,
IBJ Schroder Bank & Trust Company, located at One State Street in the Borough
of Manhattan, City of New York 10004, as such office of the Company in
accordance with this Section 4.02.
4.03. Corporate Existence.
Subject to Article Five, the Company shall do or cause to be done
all things necessary to and will cause each of its Subsidiaries to, preserve
and keep in full force and effect the corporate or partnership existence and
rights (charter and statutory), licenses and/or franchises of the Company and
each of its Subsidiaries; provided, however, that the Company or any of its
Subsidiaries shall not be required to preserve any such rights, licenses or
franchises if the Board of Directors shall reasonably determine that (x) the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries taken as a whole and (y) the loss thereof is
not materially adverse to either the Company and its Subsidiaries taken as a
whole or to the ability of the Company to otherwise satisfy its obligations
hereunder.
4.04. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or
any of its Subsidiaries or upon the income, profits or property of the
Company or any of its Subsidiaries, and (b) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a Lien upon the
property of the Company or any Subsidiary of the Company; provided, however,
that the Company shall not be required to pay or discharge or cause to be
paid or discharged any such tax, assessment, charge or claim, the amount,
applicability or validity of which is being contested in good faith by
appropriate proceedings and for which adequate provision has been made or
where the failure to effect such payment or discharge is not adverse in any
material respect to the Company and its Subsidiaries taken as a whole.
4.05. Maintenance of Properties; Insurance;
Books and Records; Compliance with Law.
(a) The Company shall, and shall cause each of its Subsidiaries
to, cause all properties and assets to be maintained and kept in good
condition, repair and working order (reasonable wear and tear excepted) and
supplied with all necessary equipment, and shall cause to be made all
necessary repairs, renewals, replacements, additions, betterments and
improvements thereto, as shall be reasonably necessary for the proper conduct
of its business; provided, however, that nothing in this Section 4.05(a)
shall prevent the Company or any of its Subsidiaries from discontinuing the
operation and maintenance of any of its properties or assets if such
discontinuance is, in the judgment of the Board of Directors of the Company
or such Subsidiary, desirable in the conduct of its business and if such
discontinuance is not materially adverse to either the Company and its
Subsidiaries taken as a whole or the ability of the Company to otherwise
satisfy its obligations hereunder.
(b) The Company shall, and shall cause each of its Subsidiaries
to, maintain with financially sound and reputable insurers such insurance as
may be required by law (other than with respect to any environmental
impairment liability insurance not commercially available) and such other
insurance to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated (which may include
self-insurance in the same form as is customarily maintained by companies
similarly situated).
<PAGE>
(c) The Company shall, and shall cause each of its Subsidiaries
to, keep proper books of record and account, in which full and correct
entries shall be made of all material business and financial transactions of
the Company and each Subsidiary of the Company and reflect on its financial
statements adequate accruals and appropriations to reserves, all in
accordance with GAAP consistently applied to the Company and its Subsidiaries
taken as a whole.
(d) The Company shall and shall cause each of its Subsidiaries to
comply with all statutes, laws, ordinances, or government rules and
regulations to which it is subject, non-compliance with which would
materially adversely affect the business, earnings, properties, assets or
condition (financial or otherwise) of the Company and its Subsidiaries taken
as a whole.
4.06. Compliance Certificate.
(a) The Company will deliver to the Trustee within 60 days after
the end of each of the Company's first three fiscal quarters and within 90
days after the end of the Company's fiscal year, or such later date as the
Company files its annual report on Form 10-K with the SEC for such fiscal
year, but in no event later than 120 days after the end of such fiscal year,
an Officers' Certificate stating whether or not the signers know of any
Default or Event of Default under this Indenture by the Company. If they do
know of such a Default or Event of Default, the certificate shall describe
any such Default or Event of Default and its status. The first certificate
to be delivered pursuant to this Section 4.06(a) shall be for the first
fiscal quarter of the Company beginning after the Issue Date. The Company
shall also deliver a certificate to the Trustee at least annually within 90
days after the end of each fiscal year, or such later date as the Company
files its annual report on Form 10-K with the SEC for such fiscal year, but
in no event later than 120 days after the end of such fiscal year, from its
principal executive, financial or accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture and the Pledge Agreements, such compliance to be determined
without regard to any period of grace or requirement of notice provided
herein.
(b) The Company shall deliver to the Trustee within 90 days after
the end of each fiscal year, or such later date as the Company files its
annual report on Form 10-K with the SEC for such fiscal year, but in no event
later than 120 days after the end of such fiscal year, a written statement by
the Company's independent certified public accountants stating (A) that their
audit examination has included a review of the terms of this Indenture and
the Securities as they relate to accounting matters, and (B) whether, in
connection with their audit examination, any Default or Event of Default
under this Indenture has come to their attention and, if such a Default or
Event of Default has come to their attention, specifying the nature and
period of existence thereof; provided, however, that, without any restriction
as to the scope of the audit examination, such independent certified public
accountants shall not be liable by reason of any failure to obtain knowledge
of any such Default or Event of Default that would not be disclosed in the
course of an audit examination conducted in accordance with GAAP.
(c) The Company will deliver to the Trustee as soon as possible,
and in any event within 10 days after the Company becomes aware or should
reasonably have become aware of the occurrence of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect
thereto.
4.07. SEC Reports.
The Company shall file with the SEC the annual reports, quarterly
reports and the information, documents and other reports required to be filed
with the SEC pursuant to Sections 13 and 15 of the Exchange Act, whether or
not the Company has a class of securities registered under the Exchange Act.
In accordance with the provisions of TIA Section 314(a), the Company shall file
with the Trustee and provide to each Holder, within 15 days after it files
them with the SEC (or if such filing is not permitted under the Exchange Act,
15 days after the Company would have been required to make such filing),
copies of the annual reports and of the information, documents and other
<PAGE>
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or 15 of the Exchange Act. The Company also
shall comply with the other provisions of TIA Section 314(a). In addition, the
Company shall cause its annual reports to stockholders and any quarterly or
other financial reports furnished by it to stockholders generally to be filed
with the Trustee and mailed no later than the date such materials are mailed
or made available to the Company's stockholders, to the Holders at their
addresses as set forth in the register of Securities maintained by the
Registrar.
4.08. Limitation on Indebtedness.
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or in any
manner become directly or indirectly liable, contingently or otherwise, for
the payment of (in each case, to "incur") any Indebtedness (including,
without limitation, any Acquired Indebtedness); provided, however, that the
Company or any of its Subsidiaries (other than Subsidiaries whose Capital
Stock is then pledged under the Pledge Agreements or the direct or indirect
subsidiaries of such Subsidiaries) will be permitted to incur Indebtedness
(including, without limitation, Acquired Indebtedness) if (a) at the time of
such incurrence, no Default or Event of Default shall have occurred and be
continuing and (b) at the time of such incurrence and after giving pro forma
effect thereto, the Consolidated Indebtedness to Annualized Operating Cash
Flow Ratio would not exceed 7.0 to l.0 in the case of any such incurrence of
Indebtedness on or before January 1, 1999, or 4.5 to 1.0 in the case of any
such incurrence of Indebtedness thereafter.
Notwithstanding the foregoing, the Company and its Subsidiaries
may, to the extent specifically set forth below, incur each and all of the
following:
(a) Indebtedness of the Company and the Subsidiaries evidenced by
the Securities and the Guarantees;
(b) Indebtedness of the Company and its Subsidiaries outstanding
on the Issue Date;
(c) (i) Interest Rate Protection Obligations of the Company
covering Indebtedness of the Company or a Subsidiary of the Company and
(ii) Interest Rate Protection Obligations of any Subsidiary of the
Company covering Indebtedness of such Subsidiary; provided, however,
that, in the case of either clause (i) or (ii), (A) any Indebtedness to
which any such Interest Rate Protection Obligation relates bears
interest at a fluctuating interest rate and (B) the notional principal
amount of any such Interest Rate Protection Obligation does not exceed
the principal amount of the Indebtedness to which such Interest Rate
Protection Obligation relates;
(d) Indebtedness of a Subsidiary of the Company owed to and held
by the Company or another Subsidiary, except that (i) any transfer of
such Indebtedness by the Company or a Subsidiary (other than to the
Company or to another Subsidiary of the Company) and (ii) the sale,
transfer or other disposition by the Company or any Subsidiary of the
Company of Capital Stock of a Subsidiary of the Company which is owed
Indebtedness of another Subsidiary of the Company such that the first
such Subsidiary ceases to be a Subsidiary of the Company shall, in each
case, be an incurrence of Indebtedness by the second such Subsidiary,
subject to the other provisions of this Section 4.08;
(e) Indebtedness of the Company owed to and held by a Subsidiary
of the Company which is unsecured and subordinated in right of payment
to the payment and performance of the Company's obligations under this
Indenture and the Securities except that (i) any transfer of such
Indebtedness by a Subsidiary of the Company (other than to another
Subsidiary of the Company) and (ii) the sale, transfer or other
disposition by the Company or any Subsidiary of the Company of Capital
Stock of a Subsidiary which holds Indebtedness of the Company such that
it ceases to be a Subsidiary shall, in each case, be an incurrence of
Indebtedness by the Company, subject to the other provisions of this
Section 4.08;
<PAGE>
(f) Indebtedness under Currency Agreements; provided that in the
case of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its
Subsidiaries outstanding other than as a result of fluctuations in
foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(g) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business, provided that
such Indebtedness is extinguished within two Business Days of
incurrence;
(h) Indebtedness of the Company or any of its Subsidiaries
represented by standby letters of credit or trade letters of credit
entered into in the ordinary course of business;
(i) International Vendor Indebtedness;
(j) guarantees of Indebtedness by the Company of companies in the
Communications Products Group, in an aggregate principal amount at any
time not exceeding $10,000,000;
(k) guarantees of Indebtedness by the Company or any of its
Subsidiaries of Indebtedness permitted to be incurred by any of them
hereunder, to the extent that the guaranteeing party could otherwise
incur such debt pursuant to this Indenture;
(l) Indebtedness issued to finance the acquisition of
Telecommunications Assets to be used in the United States by the Company
or one of its Subsidiaries, to the extent incurred by the Company or one
of its Subsidiaries that does not hold, or hold any rights in, any
Licenses for U.S. 900 MHz radio channels;
(m) Indebtedness of the Company or any Subsidiary of the Company
in addition to that described in clauses (a) through (l) above in an
aggregate principal amount outstanding at any time not exceeding
$20,000,000; and
(n) (i) Indebtedness of the Company the proceeds of which are used
solely to refinance (whether by amendment, renewal, substitution,
replacement, extension or refunding) Indebtedness (plus reasonable fees
and expenses directly associated with such financing) of the Company or
any of its Subsidiaries and (ii) Indebtedness of any Subsidiary of the
Company the proceeds of which are used solely to refinance (whether by
amendment, renewal, substitution, replacement, extension or refunding)
Indebtedness (plus reasonable fees and expenses directly associated with
such financing) of such Subsidiary, in each case other than Indebtedness
refinanced, redeemed or retired under clause (j), (k) or (m) of this
Section 4.08; provided, however, that (A) the principal amount of
Indebtedness incurred pursuant to this clause (n) (or, if such
Indebtedness provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of the
maturity thereof, the original issue price of such Indebtedness) shall
not exceed the sum of the principal amount of Indebtedness so
refinanced, plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of such
Indebtedness or the amount of any premium reasonably determined by the
Board of Directors as necessary to accomplish such refinancing by means
of a tender offer or privately negotiated purchase, plus the amount of
expenses in connection therewith and (B) in the case of Indebtedness
incurred by the Company pursuant to this clause (n) to refinance
Indebtedness subordinated in right of payment to the Securities, such
Indebtedness (I) has an Average Life to Stated Maturity equal to or
greater than the remaining Average Life to Stated Maturity of the
Indebtedness being financed and (II) is subordinated to the Securities
in the same manner and to the same extent that the Indebtedness being
refinanced is subordinated to the Securities.
For purposes of determining compliance with this Section 4.08, in
the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described in the above clauses, the
Company in its sole discretion, shall classify such item of Indebtedness
and only shall be required to include the amount and type of such
Indebtedness in one of such clauses.
<PAGE>
4.09. Limitation on Restricted Payments.
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly:
(a) declare or pay any dividend or make any other distribution or
payment on or in respect of Capital Stock of the Company or any of its
Subsidiaries or any payment made to the direct or indirect holders (in
their capacities as such) of Capital Stock of the Company or any of its
Subsidiaries (other than (i) dividends or distributions payable solely
in Capital Stock of the Company (other than Redeemable Capital Stock) or
in options, warrants or other rights to purchase Capital Stock of the
Company (other than Redeemable Capital Stock), (ii) the declaration or
payment of dividends or other distributions to the extent declared or
paid to the Company or any Wholly-Owned Subsidiary of the Company and
(iii) the declaration or payment of dividends or other distributions by
any Subsidiary of the Company to all holders of Common Stock of such
Subsidiary on a pro rata basis);
(b) purchase, redeem, defease or otherwise acquire or retire for
value any Capital Stock of the Company or any of its Subsidiaries (other
than any such Capital Stock owned by a Wholly-Owned Subsidiary of the
Company);
(c) make any principal payment on, or purchase, defease,
repurchase, redeem or otherwise acquire or retire for value, prior to
any scheduled maturity, scheduled repayment, scheduled sinking fund
payment or other Stated Maturity, any Indebtedness that is subordinated
in right of payment to the Securities (other than any such Indebtedness
owned by the Company or a Wholly-Owned Subsidiary of the Company); or
(d) make any Investment (other than any Permitted Investment) in
any person (such payments or Investments described in the preceding
clauses (a), (b), (c) and this clause (d) are collectively referred to
as "Restricted Payments");
provided, however, that the Company or any Subsidiary thereof may make a
Restricted Payment if, at the time of and after giving effect to the proposed
Restricted Payment (the amount of any such Restricted Payment, if other than
cash, shall be the Fair Market Value on the date of such Restricted Payment
of the asset(s) proposed to be transferred by the Company or such Subsidiary,
as the case may be, pursuant to such Restricted Payment), (i) no Default or
Event of Default shall have occurred and be continuing, (ii) after giving
effect to such Restricted Payment, the Company would be able to incur $1.00
of additional Indebtedness pursuant to clause (b) of the first paragraph of
Section 4.08 (assuming a market rate of interest with respect to such
additional Indebtedness) and (iii) the aggregate amount of all Restricted
Payments declared or made from and after the Issue Date would not exceed the
sum of (A) 50% of the aggregate Consolidated Net Income of the Company
accrued on a cumulative basis during the period beginning on the first day of
the fiscal quarter of the Company during which the Issue Date occurs and
ending on the last day of the fiscal quarter of the Company immediately
preceding the date of such proposed Restricted Payment, which period shall be
treated as a single accounting period (or, if such aggregate cumulative
Consolidated Net Income of the Company for such period shall be a deficit,
minus 100% of such deficit) plus (B) the aggregate net proceeds, including
the Fair Market Value of property other than cash, received by the Company
either (I) as capital contributions to the Company after the Issue Date from
any person (other than a Subsidiary of the Company) or (II) from the issuance
or sale of Capital Stock (excluding Redeemable Capital Stock and Capital
Stock issued pursuant to clause (j) of the definition of "Permitted
Investments," but including Capital Stock issued upon the conversion of
convertible Indebtedness (including Indebtedness that is Redeemable Capital
Stock) or from the exercise of options, warrants or rights to purchase
Capital Stock (other than Redeemable Capital Stock and Capital Stock issued
pursuant to clause (j) of the definition of "Permitted Investments")) of the
Company to any person (other than to a Subsidiary of the Company) after the
Issue Date plus (C) in the case of the disposition or repayment of any
Investment constituting a Restricted Payment made after the Issue Date
(excluding any Investment described in clause (i) of the following
paragraph), an amount equal to the lesser of the return of capital with
<PAGE>
respect to such Investment and the cost of such Investment, in either case,
less the cost of the disposition of such Investment. For purposes of the
preceding clause (iii)(B), (x) the value of the aggregate net cash proceeds
received by the Company upon the issuance of Capital Stock upon the
conversion of convertible Indebtedness (including Indebtedness that is
Redeemable Capital Stock) or upon the exercise of options, warrants or rights
will be the net cash proceeds received upon the issuance of such
Indebtedness, options, warrants or rights plus the incremental cash amount
received by the Company upon the conversion or exercise thereof and (y) the
Fair Market Value of property other than cash shall be determined by the
Board of Directors, whose good faith determination shall be conclusive and
evidenced by (i) a resolution filed with the Trustee and (ii) in the case of
Fair Market Value in excess of $20 million, a written opinion as to such Fair
Market Value issued by an Independent Financial Advisor.
None of the foregoing provisions will prohibit (a) the payment of
any dividend within 60 days after the date of its declaration, if at the date
of declaration such payment would be permitted by the foregoing paragraph;
(b) so long as no Default or Event of Default shall have occurred and be
continuing, the redemption, repurchase or other acquisition or retirement of
any shares of any class of Capital Stock of the Company in exchange for, or
out of the net cash proceeds of, a substantially concurrent (i) capital
contribution to the Company from any person (other than a Subsidiary of the
Company) or (ii) issue and sale of other shares of Capital Stock (other than
Redeemable Capital Stock) of the Company to any person (other than a
Subsidiary of the Company), provided, however, that the amount of any such
net cash proceeds that are utilized for any such redemption, repurchase or
other acquisition or retirement shall be excluded from clause (iii)(B) of the
preceding paragraph; (c) so long as no Default or Event of Default shall have
occurred and be continuing, any redemption, repurchase or other acquisition
or retirement of Indebtedness that is subordinated in right of payment to the
Securities by exchange for, or out of the net cash proceeds of, a
substantially concurrent (i) capital contribution to the Company from any
person (other than a Subsidiary of the Company) or (ii) issue and sale of
(A) Capital Stock (other than Redeemable Capital Stock) of the Company to any
person (other than to a Subsidiary of the Company), provided, however, that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase or other acquisition or retirement shall be excluded
from clause (iii)(B) of the preceding paragraph, or (B) Indebtedness of the
Company issued to any person (other than a Subsidiary of the Company), so
long as such Indebtedness is Indebtedness that is subordinated in right of
payment to the Securities which (I) has an Average Life to Stated Maturity
equal to or greater than the remaining Average Life to Stated Maturity of the
Indebtedness so redeemed, repurchased, acquired or retired and (II) is
subordinated to the Securities in the same manner and at least to the same
extent as the Indebtedness so purchased, exchanged, redeemed, acquired or
retired; (d) the payment of dividends on Preferred Stock (other than
Redeemable Capital Stock that requires the payment of cash upon any mandatory
redemption or sinking fund obligation exercisable at the option of the holder
thereof) of the Company issued subsequent to the date hereof to any person
who purchases, in a single transaction or series of related transactions, for
no less than $50,000,000, shares of such Preferred Stock, provided that the
rate of dividends on such Preferred Stock does not exceed, as of the date the
issuance thereof is approved by the Board of Directors, the prime rate of
interest most recently published in The Wall Street Journal and the aggregate
amount of such dividends payable in any fiscal year does not exceed
$10,000,000; (e) the repurchase of Capital Stock of the Company (including
options, warrants or other rights to acquire such Capital Stock) from
employees or former employees of the Company or any Subsidiary thereof for
consideration not to exceed $500,000 in the aggregate in any fiscal year;
(f) the payment by the Company of any required dividends on or prior to
July 15, 2000 on its Preferred Stock outstanding, or issuable pursuant to an
agreement in effect on the date hereof in accordance with the terms thereof
as in effect on the date of the Indenture; (g) so long as no Default or Event
<PAGE>
of Default shall have occurred and be continuing, the distribution by the
Company to its shareholders of the Capital Stock of an Unrestricted
Subsidiary in the Company's Communications Products Group; (h) so long as no
Default or Event of Default shall have occurred and be continuing, required
payments by the Company or any of its Subsidiaries pursuant to Acquisition
Put Obligations in existence on the date hereof; (i) Investments constituting
Restricted Payments made as a result of the receipt of non-cash consideration
from any Asset Sale made pursuant to and in compliance with Section 4.12 and
(j) any payments made in connection with a Repurchase Event under the Warrant
Agreement dated as of June 30, 1995 between the Company and IBJ Schroder Bank
& Trust Company, as Warrant Agent. In computing the amount of Restricted
Payments previously made for purposes of clause (iii) of the preceding
paragraph, Restricted Payments made under clauses (d), (e), (f), (g), (h) and
(i) of this paragraph shall be included and payments made under clauses (a),
(b), (c) and (j) of this paragraph shall not be so included.
Until such time as the Pledge Agreements and any other security
arrangements hereunder are no longer in effect, any cash Investment by the
Company made on or after the date hereof in any wholly-owned subsidiary
thereof organized under the laws of and doing business in the United States
shall be required to be made in the form of a loan, which shall be required
to be evidenced by an Intercompany Note. All Intercompany Notes shall be
required to be pledged by the Company to the Trustee as Collateral.
4.10. Limitation on Liens.
The Company will not, and will not permit any of its Subsidiaries
to, create, incur, assume or suffer to exist any Liens of any kind against or
upon any of its property or assets, or any proceeds therefrom, other than
Liens securing Indebtedness that is subordinated in right of payment to the
Securities, so long as the Securities are secured by a Lien on such property,
assets or proceeds that is senior in priority to such Liens; provided,
however, that the foregoing shall not prohibit (i) Liens existing as of the
Issue Date, including Liens securing indebtedness under the Defeased Notes;
(ii) Liens securing the Securities; (iii) Liens in favor of the Company or
one or more of its Subsidiaries, other than any Lien on any property or
assets of the Company or any of its Subsidiaries securing Indebtedness to one
or more Subsidiaries; (iv) any Lien securing only Indebtedness of a
Subsidiary of the Company, to the extent that the incurrence of such
Indebtedness is permitted under this Indenture and such Indebtedness is not
subordinated in right of payment to the Securities; (v) Liens securing
Indebtedness which is incurred to refinance Indebtedness which has been
secured by a Lien permitted under this Indenture and which has been incurred
in accordance with the provisions of this Indenture, provided that such Liens
do not extend to or cover any property or assets of the Company or any of its
Subsidiaries not securing the Indebtedness so refinanced; and (vi) Permitted
Liens.
4.11. Change of Control.
Upon the occurrence of a Change of Control (the date of such
occurrence, the "Change of Control Date"), the Company will notify the
Holders of Securities in writing of such occurrence and shall make an offer
to purchase (the "Change of Control Offer"), and shall purchase, on a
Business Day (the "Change of Control Purchase Date") not more than 60 nor
less than 30 days following the Change of Control Date all Securities then
outstanding at a purchase price equal to 101% of the Accreted Value thereof
plus accrued and unpaid interest, if any, to the Change of Control Purchase
Date.
Notice of a Change of Control Offer shall be mailed by the Company
not later than the 30th day after the Change of Control Date to the Holders
of Securities at their last registered addresses with a copy to the Trustee
and the Paying Agent. The Change of Control Offer shall remain open from the
time of mailing for at least 20 Business Days and until 5:00 p.m., New York
City time, on the Change of Control Purchase Date. The notice, which shall
govern the terms of the Change of Control Offer, shall include such
disclosures as are required by law and shall state:
(a) that the Change of Control Offer is being made pursuant to
this Section 4.11 and that all Securities validly tendered into the
Change of Control Offer and not withdrawn will be accepted for payment;
<PAGE>
(b) the purchase price (including the amount of accrued interest,
if any) for each Security, the Change of Control Purchase Date and the
date on which the Change of Control Offer expires;
(c) that any Security not tendered for payment will continue to
accrue interest in accordance with the terms thereof;
(d) that, unless the Company shall default in the payment of the
purchase price, any Security accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of
Control Purchase Date;
(e) that Holders electing to have Securities purchased pursuant to
a Change of Control Offer will be required to surrender their Securities
to the Paying Agent at the address specified in the notice prior to 5:00
p.m., New York City time, on the Business Day immediately preceding the
Change of Control Purchase Date and must complete any form of letter of
transmittal proposed by the Company and reasonably acceptable to the
Trustee and the Paying Agent;
(f) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than 5:00 p.m., New York City time,
on the third Business Day immediately preceding the Change of Control
Purchase Date, a telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of Securities the Holder
delivered for purchase, the Security certificate number (if any) and a
statement that such Holder is withdrawing its election to have such
Securities purchased;
(g) that Holders whose Securities are purchased only in part will
be issued Securities equal in principal amount to the unpurchased
portion of the Securities surrendered;
(h) the instructions that Holders must follow in order to tender
their Securities; and
(i) information concerning the business of the Company, the most
recent annual and quarterly reports of the Company filed with the SEC
pursuant to the Exchange Act (or, if the Company is not then permitted
to file any such reports with the SEC, the comparable reports prepared
pursuant to Section 4.07), a description of material developments in the
Company's business, information with respect to pro forma historical
financial information after giving effect to such Change of Control and
such other information concerning the circumstances and relevant facts
regarding such Change of Control Offer as would be material to a Holder
of Securities in connection with the decision of such Holder as to
whether or not it should tender Securities pursuant to the Change of
Control Offer.
On the Change of Control Purchase Date, the Company shall
(a) accept for payment Securities or portions thereof validly tendered
pursuant to the Change of Control Offer, (b) deposit with the Paying Agent
money, in immediately available funds, sufficient to pay the purchase price
of all Securities or portions thereof so tendered and accepted and
(c) deliver to the Trustee the Securities so accepted together with an
Officers' Certificate setting forth the Securities or portions thereof
tendered to and accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to the Holders of Securities so accepted payment in
an amount equal to the purchase price for such Securities, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of any Security
surrendered. Any Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Change of Control Offer not later than the first
Business Day following the Change of Control Purchase Date.
The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements
applicable to a Change of Control Offer made by the Company and purchases all
Securities validly tendered and not withdrawn under such Change of Control
Offer.
<PAGE>
The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act, and any other securities
laws or regulations in the event that a Change of Control occurs and the
Company is required to purchase Securities pursuant to this Section 4.11.
4.12. Disposition of Proceeds of Asset Sales.
(a) The Company will not, and will not permit any of its
Subsidiaries to, make any Asset Sale unless (i) the Company or such
Subsidiary, as the case may be, receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the shares or assets
sold or otherwise disposed of and (ii) at least 85% of such consideration
consists of cash or Cash Equivalents or the assumption of Indebtedness of the
Company or such Subsidiary or other obligations relating to such assets and
release from all liability on the Indebtedness or other obligations assumed,
unless, in the case of clause (ii), the remainder of such consideration
consists of (x) property or assets that will be owned by the Company or a
Subsidiary of the Company and are to be used in a telecommunications business
or related activities or services that thereafter will be conducted by the
Company or such Subsidiary or (y) Capital Stock or other securities issued by
a party to the transaction or an Affiliate thereof, which Capital Stock or
other securities are freely tradeable and which are sold for cash within 90
days of the consummation of the Asset Sale in connection with which they were
acquired. The Company or such Subsidiary, as the case may be, may, within
180 days of such Asset Sale, apply such Net Cash Proceeds (or enter into a
binding agreement within such 180-day period to apply such Net Cash Proceeds
within 45 days of the date of such agreement) to (i) an investment in
properties and assets that replace the properties and assets that were the
subject of such Asset Sale or in properties and assets that will be used in
the business of the Company and its Subsidiaries existing on the Issue Date
or in businesses reasonably related thereto ("Replacement Assets") or (ii) in
the case of an Asset Sale by a Subsidiary of the Company, the repayment of
any Indebtedness of such Subsidiary. Any Net Cash Proceeds from any Asset
Sale that are not invested in Replacement Assets within the 180-day period
described above constitute "Excess Proceeds" subject to disposition as
provided below.
(b) When the aggregate amount of Excess Proceeds exceeds
$10,000,000, the Company will make an offer (an "Asset Sale Offer") to all
Holders and all holders of Other Qualified Senior Notes, to be consummated
not more than 40 Business Days thereafter (the "Asset Sale Purchase Date"),
to purchase the maximum principal amount of Securities and Other Qualified
Senior Notes, on a pro rata basis according to the Accreted Value or
principal amount, as the case may be, of the Securities and the Other
Qualified Senior Notes that may be purchased out of the Excess Proceeds
(i) with respect to the Other Qualified Senior Notes, based on the terms set
forth in the instrument related to each issue of the Other Qualified Senior
Notes and (ii) with respect to the Securities, at an offer price (the "Asset
Sale Offer Price") in cash in an amount equal to 100% of the Accreted Value
on the date fixed for closing of such offer plus accrued and unpaid interest,
if any, to the date fixed for the closing of such offer in accordance with
the procedures set forth in this Section 4.12. To the extent that the
aggregate Accreted Value or principal amount, as the case may be, of
Securities and Other Qualified Senior Notes tendered pursuant to an Asset
Sale Offer is less than the Excess Proceeds, the Company may use such
deficiency in the business of the Company and its Subsidiaries on the Issue
Date or in businesses reasonably related thereto (including for general
corporate purposes). If the aggregate Accreted Value or principal amount, as
the case may be, of Securities and Other Qualified Senior Notes surrendered
by holders thereof exceeds the amount of Excess Proceeds, then the Excess
Proceeds will be allocated pro rata according to Accreted Value or principal
amount, as the case may be, to the Securities and each issue of the Other
Qualified Senior Notes and the Trustee will select the Securities to be
purchased from the amount allocated to the Securities on the basis set forth
in this Indenture. Upon completion of such offer to purchase, the amount of
Excess Proceeds will be reset at zero.
<PAGE>
(c) Notice of an Asset Sale Offer shall be mailed by the Company
to all Holders not less than 20 Business Days nor more than 40 Business Days
before the Asset Sale Purchase Date at their last registered address with a
copy to the Trustee and the Paying Agent. The Asset Sale Offer shall remain
open from the time of mailing for at least 20 Business Days and until at
least 5:00 p.m., New York City time, on the Asset Sale Purchase Date. The
notice, which shall govern the terms of the Asset Sale Offer, shall include
such disclosures as are required by law and shall state:
(i) that the Asset Sale Offer is being made pursuant to this
Section 4.12;
(ii) the Asset Sale Offer Price (including the amount of accrued
interest, if any) for each Security, the Asset Sale Purchase Date and
the date on which the Asset Sale Offer expires;
(iii) that any Security not tendered or accepted for payment will
continue to accrue interest in accordance with the terms thereof;
(iv) that, unless the Company shall default in the payment of
the Asset Sale Offer Price, any Security accepted for payment pursuant
to the Asset Sale Offer shall cease to accrue interest after the Asset
Sale Purchase Date;
(v) that Holders electing to have Securities purchased pursuant
to an Asset Sale Offer will be required to surrender their Securities to
the Paying Agent at the address specified in the notice prior to 5:00
p.m., New York City time, on the Business Day immediately preceding the
Asset Sale Purchase Date and must complete any form of letter of
transmittal proposed by the Company and reasonably acceptable to the
Trustee and the Paying Agent;
(vi) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than 5:00 p.m., New York City time,
on the third Business Day immediately preceding the Asset Sale Purchase
Date, a telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Securities the Holder delivered
for purchase, the Security certificate number (if any) and a statement
that such Holder is withdrawing its election to have such Securities
purchased;
(vii) that if Securities in a principal amount in excess of the
Holder's pro rata share of the amount of Excess Proceeds are tendered
pursuant to the Asset Sale Offer, the Company shall purchase Securities
on a pro rata basis among the Securities tendered (with such adjustments
as may be deemed appropriate by the Company so that only Securities in
denominations of $1,000 principal amount at maturity or integral
multiples of $1,000 shall be acquired);
(viii) that Holders whose Securities are purchased only in part
will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered;
(ix) the instructions that Holders must follow in order to
tender their Securities; and
(x) information concerning the business of the Company, the
most recent annual and quarterly reports of the Company filed with the
SEC pursuant to the Exchange Act (or, if the Company is not permitted to
file any such reports with the SEC, the comparable reports prepared
pursuant to Section 4.07), a description of material developments in the
Company's business, information with respect to pro forma historical
financial information after giving effect to such Asset Sale and Asset
Sale Offer and such other information concerning the circumstances and
relevant facts regarding such Asset Sale Offer as would be material to a
Holder of Securities in connection with the decision of such Holder as
to whether or not it should tender Securities pursuant to the Asset Sale
Offer.
(d) On the Asset Sale Purchase Date, the Company shall (i) accept
for payment, on a pro rata basis, Securities or portions thereof tendered
pursuant to the Asset Sale Offer, (ii) deposit with the Paying Agent money,
in immediately available funds, in an amount sufficient to pay the Asset Sale
Offer Price of all Securities or portions thereof so tendered and accepted
<PAGE>
and (iii) deliver to the Trustee the Securities so accepted together with an
Officers' Certificate setting forth the Securities or portions thereof
tendered to and accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to Holders of Securities so accepted payment in an
amount equal to the Asset Sale Offer Price for such Securities, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of any Security
surrendered. Any Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Asset Sale Offer not later than the first
Business Day following the Asset Sale Purchase Date. For purposes of this
Section 4.12, the Trustee shall act as Paying Agent.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in the event that an Asset Sale occurs and the Company is
required to purchase Securities pursuant to this Section 4.12.
4.13. Limitation on Issuances and Sale
of Preferred Stock by Subsidiaries.
The Company (a) will not permit any of its Subsidiaries to issue
any Preferred Stock (other than to the Company or a Wholly-Owned Subsidiary
of the Company) and (b) will not permit any person (other than the Company or
a Wholly-Owned Subsidiary of the Company) to own any Preferred Stock of any
Subsidiary of the Company; provided that the terms of this Section 4.13 shall
not be violated by the acquisition by the Company of any person that will be
a Subsidiary of the Company upon the consummation of such acquisition and
that had Preferred Stock outstanding prior to such acquisition that was not
issued in anticipation of such acquisition.
4.14. Limitation on Transactions with
Interested Persons.
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, enter into or suffer to exist any transaction or
series of related transactions (including, without limitation, the sale,
transfer, disposition, purchase, exchange or lease of assets, property or
services) with, or for the benefit of, any Affiliate of the Company or any
beneficial owner (as such term is defined under the definition "Change of
Control" in this Indenture) of 10% or more of the Company's Common Stock at
any time outstanding (in each case, an "Interested Person"), unless (a) such
transaction or series of related transactions is on terms that are no less
favorable to the Company or such Subsidiary, as the case may be, than those
which could have been obtained in a comparable transaction at such time from
persons who are not Affiliates of the Company or Interested Persons, (b) with
respect to the sale of Capital Stock of the Company (other than Redeemable
Capital Stock) involving aggregate payments or value equal to or greater than
$5,000,000, such transaction must have been approved in good faith by a
majority of the Board of Directors and a majority of its Disinterested
Directors as evidenced by a resolution of the Disinterested Directors filed
with the Trustee, (c) with respect to a transaction or series of related
transactions involving aggregate payments or value equal to or greater than
$5,000,000, (i) such transaction must have been approved in good faith by a
majority of the Board of Directors and a majority of the Disinterested
Directors, as evidenced by a resolution of the Disinterested Directors filed
with the Trustee and (ii) other than a transaction provided for in clause (b)
above, the Company has obtained a written opinion from an Independent
Financial Advisor stating that the terms of such transaction or series of
transactions are fair to the Company or the applicable Subsidiary, as the
case may be, from a financial point of view and (d) with respect to a
transaction or series of transactions involving aggregate payments or value
equal to or greater than $500,000, the Company shall have delivered an
Officers' Certificate to the Trustee certifying that such transaction or
series of transactions comply with the preceding clause (a) and, if
applicable, certifying that the opinion referred to in the preceding
clause (c) (ii) has been delivered or that such transaction or series of
transactions have been approved by a majority of the Board of Directors of
the Company and by a majority of the Disinterested Directors; provided,
however, that this Section 4.14 will not restrict the Company or its
<PAGE>
Subsidiaries from (i) paying dividends in respect of their Capital Stock to
the extent permitted under Section 4.09, (ii) paying reasonable and customary
fees to directors of the Company who are not employees of the Company,
(iii) making loans or advances to officers, employees or consultants of the
Company and its Subsidiaries (including travel and moving expenses) in the
ordinary course of business for bona fide business purposes of the Company or
such Subsidiary not in excess of $1,000,000 in the aggregate at any one time
outstanding, (iv) engaging in any transaction effected pursuant to an
agreement existing on the date hereof, pursuant to the terms of such
agreement as in effect on the date hereof, (v) engaging in any transaction
between the Company and any Subsidiary or between Subsidiaries or
(vi) entering into any employment or consulting agreement or compensation
arrangement with any natural person in the ordinary course of business
consistent with past practice. For purposes of this Section 4.14, any
transaction or series of related transactions between the Company or any
Subsidiary and an Affiliate of the Company that is approved in the manner
described in clause (b), (c) or (d) of the preceding sentence will be deemed
to be on terms as favorable as those that might be obtained at the time of
such transaction (or series of transactions) from a person that is not such
an Affiliate.
4.15. Limitation on Dividends and Other
Payment Restrictions Affecting
Subsidiaries.
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any
Subsidiary of the Company to (a) pay dividends, in cash or otherwise, or make
any other distributions on or in respect of its Capital Stock or any other
interest or participation in, or measured by, its profits, (b) pay any
Indebtedness owed to the Company or any other Subsidiary of the Company,
(c) make loans or advances to, or any Investment in, the Company or any other
Subsidiary of the Company or (d) transfer any of its properties or assets to
the Company or any other Subsidiary of the Company, except for such
encumbrances or restrictions existing under or by reason of (i) any other
provision of this Indenture or any provision of any of the Pledge Agreements,
(ii) applicable law, (iii) customary non-assignment provisions of any
contract or any lease governing a leasehold interest of the Company or any
Subsidiary of the Company, (iv) customary restrictions on transfers of
property subject to a Lien permitted under this Indenture which could not
materially adversely affect the Company's ability to satisfy its obligations
under this Indenture and the Securities, (v) any agreement or other
instrument of a person acquired by the Company or any Subsidiary of the
Company (or a Subsidiary of such acquired person) in existence at the time of
such acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any person, or the properties
or assets of any person, other than the person, or the properties or assets
of the person, so acquired, (vi) provisions contained in agreements or
instruments relating to Indebtedness which prohibit the transfer of all or
substantially all of the assets of the obligor thereunder unless the
transferee shall assume the obligations of the obligor under such agreement
or instrument, (vii) restrictions imposed under agreements governing
International Vendor Indebtedness, provided that such restrictions terminate
no later than July 15, 2000, (viii) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement which has been entered into for
the sale or disposition of all or substantially all of the Capital Stock or
assets of such Subsidiary, (ix) customary restrictions pursuant to any
agreement relating to Indebtedness of any Subsidiary permitted under
Section 4.08 and incurred for working capital purposes, provided that such
restrictions terminate no later than July 15, 2000, (x) encumbrances and
restrictions under Indebtedness in effect on the Issue Date and encumbrances
and restrictions in permitted refinancings or replacements thereof which are
no less favorable to the Holders than those contained in the Indebtedness so
refinanced or replaced, (xi) provisions contained in agreements or
instruments governing Indebtedness permitted pursuant to clause (l) of the
<PAGE>
second paragraph of Section 4.08, provided that such restrictions terminate
no later than July 15, 2000, and (xii) any such encumbrance or restriction
pursuant to any agreement that amends, extends, refinances, refunds, renews
or replaces any agreement described in clauses (i), (iii), (v), (vi), (vii),
(ix) or (xi), whether or not by or among the same parties, provided that the
terms and conditions of any such encumbrances of restrictions are no less
favorable to the Holders than those under or pursuant to the agreement
amended, extended, refinanced, refunded, renewed or replaced.
4.16. Limitation on Sale-Leaseback
Transactions.
The Company will not, and will not permit any of its Subsidiaries
to, enter into any Sale-Leaseback Transaction with respect to any property of
the Company or any of its Subsidiaries (other than Sale-Leaseback
Transactions between the Company and any of its Wholly-Owned Subsidiaries or
between any such Wholly-Owned Subsidiaries). Notwithstanding the foregoing,
the Company and its Subsidiaries may enter into Sale-Leaseback Transactions
with respect to property acquired or constructed after the Issue Date,
provided, that (a) the Attributable Value of such Sale-Leaseback Transaction
shall be deemed to be Indebtedness of the Company or such Subsidiary, as the
case may be, and (b) after giving pro forma effect to any such Sale-Leaseback
Transaction and the foregoing clause (a), the Company would be able to incur
$1.00 of additional Indebtedness pursuant to the first paragraph of
Section 4.08 (assuming a market rate of interest with respect to such
additional Indebtedness).
4.17. Activities of the Company and
Its Subsidiaries.
The Company will not, and will not permit any of its Subsidiaries
to, engage in any business other than the telecommunications business and
related activities and services, and such businesses, activities and services
as the Company and its Subsidiaries are engaged in on the date hereof.
4.18. Subsidiary Guarantees.
(a) The Company shall cause (i) each of its wholly-owned direct
and indirect subsidiaries organized under the laws of a state of the United
States or the District of Columbia, doing business in the United States and
existing as of the date hereof, which such subsidiaries are listed on
Schedule 4.18 hereto and (ii) in accordance with paragraph (c) of this
Section 4.18, each of its subsidiaries that becomes such a wholly-owned
direct or indirect subsidiary subsequent to the date of this Indenture
(collectively, the "Guarantors") to jointly and severally guarantee the
obligations of the Company under the Securities, this Indenture, the Pledge
Agreements, the Note Pledge Agreements, the Security Agreements and any other
security arrangements pursuant to supplemental indentures ("Guarantees"),
which such Guarantees (i) shall be in form and substance reasonably
satisfactory to the Trustee and (ii) shall be executed and delivered by all
of the Guarantors in existence on the date of this Indenture (each a
"Presently Existing Guarantor") and shall be accompanied by an Opinion of
Counsel as to the enforceability thereof and such other matters as the
Trustee may reasonably request within 60 days after the date hereof. At the
time any Guarantees are entered into, the Company shall additionally deliver
to the Trustee an Officers' Certificate (which such Officers' Certificate
shall be in form and substance reasonably satisfactory to the Trustee)
certifying that all Guarantees required to be delivered under the terms of
this Section 4.18 have been delivered and describing any acquisitions,
mergers, consolidations or sales of substantially all of the assets of or
with respect to the subsidiaries listed on Schedule 4.18 hereto. To the
extent that the Company is unable to obtain the Guarantee of each Presently
Existing Guarantor within such 60-day period, the Company shall deposit with
the Paying Agent an aggregate amount of $500,000 in immediately available
funds on the 61st day (the "First Payment Date") after the date of this
Indenture, and an additional $500,000 on each succeeding 90th day after the
First Payment Date upon which all of such Guarantees have not been obtained,
which amounts the Paying Agent shall promptly mail or deliver on a pro rata
basis to Holders of record on each such date.
<PAGE>
(b) Notwithstanding the foregoing, no subsidiary of the Company
shall be required to become a Guarantor hereunder if and to the extent such
subsidiary either (i) is prohibited under applicable law (but not by the
terms of any contract, including, without limitation, any other indenture)
from becoming a Guarantor and compliance with any such law would be
materially burdensome to such Guarantor (and such subsidiary delivers an
Opinion of Counsel to the effect that such Guarantee is so prohibited) or
(ii) has assets with an aggregate Fair Market Value of less than $100,000 and
does not hold any Licenses (and such subsidiary delivers an Officers'
Certificate certifying thereto) and Cumulous Holding Corp., Inc. ("Cumulous")
shall not be required to become a Guarantor hereunder to the extent that
there shall be a contractual restriction in effect on the Issue Date
preventing it from becoming a Guarantor hereunder.
(c) To the extent that, after the date of this Indenture, the
Company establishes or acquires any additional wholly-owned direct and
indirect subsidiaries which are organized under the laws of a state of the
United States or the District of Columbia and which do business in the United
States, the Company shall promptly, but in no case later than 30 days after
the date of such establishment or acquisition, cause each such subsidiary to
jointly and severally guarantee the obligations of the Company under the
Securities, this Indenture, the Pledge Agreements, the Note Pledge
Agreements, the Security Agreements and any other security arrangements
pursuant to a Guarantee in form and substance satisfactory to the Trustee, to
the fullest extent provided herein and shall be accompanied by an Opinion of
Counsel as to the enforceability thereof and such other matters as the
Trustee may reasonably request.
(d) To the extent that any wholly-owned subsidiary of the Company
that is organized under the laws of a state of the United States or the
District of Columbia (other than Cumulous if it is not a Guarantor) is not
required to execute and deliver a Guarantee as contemplated above, the
Company hereby covenants that such subsidiary shall not engage in any
business activities in the United States or hold any License. To the extent
any such subsidiary engages in such business activities or holds any License
at such time, the Company shall cause such business activities to be ceased
promptly and/or such Licenses to be transferred (and the Company will use its
best efforts to cause any Licenses to be so transferred), as soon as
practicable, to a Guarantor.
(e) Upon the execution and delivery of a Guarantee, each Guarantor
hereby agrees as follows:
(i) The obligations of each Guarantor pursuant to its
Guarantee will be subordinated in right of repayment to any
obligation of such Guarantor pursuant to any Indebtedness incurred
by such Guarantor to finance the construction or acquisition of
Telecommunications Assets by such Guarantor for use by such
Guarantor in the United States. The obligations of each Guarantor
pursuant to its Guarantee shall be pari passu or senior in right of
repayment to all other obligations of such Guarantor.
(ii) Subject to the terms and conditions of paragraph (iii)
of this Section 4.18(e), such Guarantor may not consolidate or merge
with or into (whether or not such Guarantor is the surviving
entity), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets in
one or more related transactions to another person unless:
(A) such Guarantor is the surviving person or the person
formed by or surviving any such consolidation or merger
(if other than such Guarantor) or the person to which such
sale, assignment, transfer, lease, conveyance or other
disposition will have been made is a corporation organized
or existing under the laws of the United States, any state
thereof or the District of Columbia;
<PAGE>
(B) the person formed by or surviving any such consolidation
or merger (if other than such Guarantor) or the person to
which such sale, assignment, transfer, lease, conveyance
or other disposition will have been made assumes all the
obligations of such Guarantor, pursuant to a supplemental
indenture which shall be in form and substance reasonably
satisfactory to the Trustee and shall be accompanied by an
Opinion of Counsel as to the enforceability thereof, under
the Securities and this Indenture;
(C) no Default or Event of Default shall have occurred and be
continuing on the date of such transaction or shall occur
as a result of such transaction; and
(D) Such Guarantor or the person formed by or surviving any
such consolidation or merger, or the person to which such
sale, assignment, transfer, lease, conveyance or other
disposition will have been made (i) will have Consolidated
Net Worth immediately after the transaction (but prior to
any purchase accounting adjustments or accrual of deferred
tax liabilities resulting from the transaction) not less
than the Consolidated Net Worth of such Guarantor
immediately preceding the transaction and (ii) will have
an Indebtedness to Annualized Operating Cash Flow Ratio
immediately after the transaction that does not exceed
such Guarantor's Indebtedness to Annualized Operating Cash
Flow Ratio immediately preceding the transaction in
respect of the same period.
(E) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor
corporation, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the
Trustee, of this Guarantee and the due and punctual
performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor
corporation shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor corporation
thereupon may cause to be signed any Guarantees to be
endorsed upon the Securities issuable hereunder which
heretofore shall not have been signed by the Company and
delivered to the Trustee. Such Guarantee shall in all
respects have the same legal rank and benefit under this
Indenture as the Guarantees theretofore and thereafter
issued in accordance with the terms of this Indenture as
though all of such Guarantees had been issued at the same
date.
(iii) Except as set forth in Articles Four and Five of this
Indenture, nothing contained in this Indenture shall prevent any
consolidation or merger of a Guarantor with or into the Company or
shall prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company.
(iv) In the event of a sale or other disposition of all of
the assets of such Guarantor, by way of merger, consolidation or
otherwise or a sale or other disposition of all of the Capital Stock
of such Guarantor (other than to a Subsidiary of the Company), then
such Guarantor (in the event of a sale or other disposition, by way
of such merger, consolidation or otherwise, of all of the Capital
Stock of such Guarantor) or the person acquiring the property (in
the event of a sale or other disposition of all of the assets of
such Guarantor) will be released and relieved of any obligations
under its Guarantee, provided that the proceeds of such sale or
other disposition are applied in accordance with the provisions of
Section 4.12 of this Indenture. Upon delivery by the Company to the
<PAGE>
Trustee of an Officers' Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Company
in accordance with the provisions of this Indenture, including
without limitation Section 4.12, the Trustee shall execute any
documents reasonably required in order to evidence the release of
any Guarantor from its obligations under its Guarantee. Any
Guarantor not released from its obligations under its Guarantee
shall remain liable for the full amount of principal of and interest
on the Securities and for the other obligations of any Guarantor
under the Indenture.
(v) Such Guarantor shall agree jointly and severally and
unconditionally to guarantee to each Holder of a Security
authenticated and delivered by the Trustee and to the Trustee and
its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Securities, the Pledge
Agreements, the Note Pledge Agreements, the Security Agreements or
any other security arrangements or the obligations of the Company
hereunder or thereunder, that: (a) the Accreted Value of and
interest on the Securities will be promptly paid in full when due,
whether at Stated Maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest on
the Securities, if any, if lawful, and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will
be promptly paid in full or performed, all in accordance with the
terms hereof and thereof; and (b) in case of any extension of time
of payment or renewal of any Securities or any of such other
obligations, that same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal,
whether at Stated Maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, such Guarantor will be jointly and
severally obligated to pay the same immediately. Such Guarantor
shall agree that its obligations under such Guarantee shall be
unconditional, irrespective of the validity, regularity or
enforceability of the Securities, this Indenture, the Pledge
Agreements, the Note Pledge Agreements, the Security Agreements or
any other security arrangements, the absence of any action to
enforce the same, any waiver or consent by any Holder of the
Securities with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a Guarantor. Such
Guarantor shall waive diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and
covenant that such Guarantee will not be discharged except by
complete performance of the obligations contained in the Securities
and this Indenture or in accordance with Section 10.12 and Section
4.18(f) hereof. If any Holder or the Trustee is required by any
court or otherwise to return to the Company or any Guarantor, or any
Custodian, Trustee, liquidator or other similar official acting in
relation to either the Company or any Guarantor, any amount paid by
either to the Trustee or such Holder, such Guarantor's guarantee, to
the extent theretofore discharged, shall be reinstated in full force
and effect. Such Guarantor shall agree that it shall not be
entitled to any right of subrogation in relation to the Holders in
respect of any obligations guaranteed. Such Guarantor shall further
agree that, as between such Guarantor, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed may be accelerated as provided in Article Six
hereof for the purposes of such Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in
respect of the obligations guaranteed, and (y) in the event of any
declaration of acceleration of such obligations as provided in
Article Six, such obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purpose
of such Guarantee.
<PAGE>
(vi) Each Guarantee shall provide that, in the event that
such Guarantee would constitute or result in a violation of any
applicable fraudulent conveyance or similar law of any relevant
jurisdiction, the liability of the applicable Guarantor under such
Guarantee shall be reduced to the maximum amount permissible under
such fraudulent conveyance or similar law.
(f) In the event (i) Holders of 66 2/3% or more of the aggregate
principal amount at maturity of the Securities outstanding on a Collateral
Release Request Date consent thereto or (ii) upon the consummation of a
Collateral Release Offer, in either case, in accordance with the terms,
conditions and procedures set forth in Section 10.12 hereof, then the
Guarantees shall automatically terminate and the Company shall have no
further obligations under this Section 4.18.
4.19. Waiver of Stay, Extension or 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 or extension
law or any usury law or other law which would prohibit or forgive the Company
from paying all or any portion of the principal of, premium, if any, or
interest on the Securities as contemplated herein, wherever enacted, now or
at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company 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 FIVE
SUCCESSOR CORPORATION
5.01. When Company May Merge, etc.
The Company will not, in any transaction or series of transactions,
merge or consolidate with or into, or sell, assign, convey, transfer, lease
or otherwise dispose of all or substantially all of its properties and assets
as an entirety to, any person or persons, and the Company will not permit any
of its Subsidiaries to enter into any such transaction or series of
transactions if such transaction or series of transactions, in the aggregate,
would result in a sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all of the properties and assets of the
Company or the Company and its Subsidiaries, taken as a whole, to any other
person or persons, unless at the time of and after giving effect thereto
(a) either (i) if the transaction or series of transactions is a merger or
consolidation, the Company shall be the surviving person of such merger or
consolidation, or (ii) the person formed by such consolidation or into which
the Company or such Subsidiary is merged or to which the properties and
assets of the Company or such Subsidiary, as the case may be, are transferred
(any such surviving person or transferee person being the "Surviving Entity")
shall be a corporation organized and existing under the laws of the United
States of America, any state thereof or the District of Columbia and shall
expressly assume by a supplemental indenture executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all the obligations
of the Company under the Securities and this Indenture, and in each case,
this Indenture shall remain in full force and effect; (b) immediately before
and immediately after giving effect to such transaction or series of
transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), no Default or Event
of Default shall have occurred and be continuing and the Company or the
Surviving Entity, as the case may be, after giving effect to such transaction
or series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of transactions),
<PAGE>
could incur $1.00 of additional Indebtedness pursuant to the first paragraph
of Section 4.08 (assuming a market rate of interest with respect to such
additional Indebtedness); and (c) immediately after giving effect to such
transaction or series of transactions on a pro forma basis (including,
without limitation, any Indebtedness incurred or anticipated to be incurred
in connection with or in respect of such transaction or series of
transactions), the Consolidated Net Worth of the Company or the Surviving
Entity, as the case may be, is at least equal to the Consolidated Net Worth
of the Company immediately before such transaction or series of transactions.
In connection with any consolidation, merger, transfer, lease,
assignment or other disposition contemplated hereby, the Company shall
deliver, or cause to be delivered, to the Trustee, in form and substance
reasonably satisfactory to the Trustee, an Officer's Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, transfer,
lease, assignment or other disposition and the supplemental indenture in
respect thereof comply with the requirements under this Indenture; provided,
however, that solely for purposes of computing amounts described in subclause
(d)(iii) of Section 4.09, any such successor person shall only be deemed to
have succeeded to and be substituted for the Company with respect to periods
subsequent to the effective time of such merger, consolidation or transfer of
assets.
5.02. Successor Substituted.
Upon any consolidation or merger, or any sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Company in accordance with Section 5.01 hereof,
the successor person or persons formed by such consolidation or into which
the Company is merged or the successor person to which such sale, assignment,
conveyance, transfer, lease or other disposition is made, shall succeed to,
and be substituted for, and may exercise every right and power of, the
Company under this Indenture and the Securities with the same effect as if
such successor had been named as the Company herein; provided, however, that
solely for purposes of computing amounts described in subclause (c) of
Section 4.09, any such successor person shall only be deemed to have
succeeded to and be substituted for the Company with respect to periods
subsequent to the effective time of such merger, consolidation or transfer of
assets.
ARTICLE SIX
REMEDIES
6.01. Events of Default.
An "Event of Default" means any of the following events:
(a) a default in the payment of the principal of or premium, if
any, on any Security when the same becomes due and payable (upon Stated
Maturity, acceleration, optional redemption, required purchase,
scheduled principal payment or otherwise); or
(b) a default in the payment of an installment of interest on any
of the Securities, when the same becomes due and payable, which default
continues for a period of 30 days; or
(c) a failure to perform or observe any other term, covenant or
agreement contained in the Securities, this Indenture or any of the
Pledge Agreements (other than a default specified in clause (a) or (b)
above), which failure continues for a period of 30 days after written
notice thereof requiring the Company to remedy the same shall have been
given (i) to the Company by the Trustee or (ii) to the Company and the
Trustee by Holders of at least 25% in aggregate principal amount of the
Securities then outstanding; or
(d) a default or defaults under one or more agreements,
instruments, mortgages, bonds, debentures or other evidences of
Indebtedness under which the Company or any Subsidiary of the Company
then has outstanding Indebtedness in excess of $5,000,000, individually
or in the aggregate, and either (i) such Indebtedness is already due and
payable in full other than by reason of an acceleration or (ii) such
default or defaults have resulted in the acceleration of the maturity of
such Indebtedness and such acceleration has not been rescinded within a
period of 15 days; or
<PAGE>
(e) one or more judgments, orders or decrees of any court or
regulatory or administrative agency of competent jurisdiction for the
payment of money in excess of $5,000,000, either individually or in the
aggregate, shall be entered against the Company or any Subsidiary of the
Company or any of their respective properties and shall not be
discharged or fully bonded and there shall have been a period of 60 days
after the date on which any period for appeal has expired and during
which a stay of enforcement of such judgment, order or decree, shall not
be in effect; or
(f) the Company or any Significant Subsidiary of the Company
pursuant to or under or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief against it
in an involuntary case or proceeding;
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property;
(iv) makes a general assignment for the benefit of its
creditors; or
(v) shall generally not pay its debts when such debts become
due or shall admit in writing its inability to pay its debts
generally; or
(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any Significant
Subsidiary of the Company in an involuntary case or proceeding;
(ii) appoints a Custodian of the Company or any Significant
Subsidiary of the Company for all or substantially all of its
properties; or
(iii) orders the liquidation of the Company or any Significant
Subsidiary of the Company;
and in each case the order or decree remains unstayed and in effect for
60 days; or
(h) any Guarantee of a Significant Subsidiary shall be held in a
judicial proceeding to be unenforceable or invalid or shall cease for
any reason to be in full force and effect, or any Guarantor, or person
acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Guarantee.
Subject to the provisions of Sections 7.01 and 7.02, the Trustee
shall not be charged with knowledge of any Default or Event of Default unless
written notice thereof shall have been given to a Trust Officer at the
Corporate Trust Office of the Trustee by the Company, the Paying Agent, any
Holder or any of their respective agents.
6.02. Acceleration.
If an Event of Default (other than as specified in Section 6.01(f)
or (g)) occurs and is continuing, the Trustee, by written notice to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding, by written notice to the Trustee and the
Company, may declare the Accreted Value of, premium, if any, and accrued and
unpaid interest, if any, on all of the outstanding Securities to be due and
payable immediately, upon which declaration, all amounts payable in respect
of the Securities shall be immediately due and payable. If an Event of
Default specified in Section 6.01(f) or (g) occurs and is continuing, then
the Accreted Value of, premium, if any, and accrued and unpaid interest, if
any, on all of the Securities shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee
or any Holder.
After a declaration of acceleration under this Indenture, but
before a judgment or decree for payment of the money due has been obtained by
the Trustee, the Holders of a majority in aggregate principal amount of the
outstanding Securities, by written notice to the Company and the Trustee, may
rescind such declaration if (a) the Company has paid or deposited with the
Trustee a sum sufficient to pay (i) all amounts due the Trustee under Section
7.08 and the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, (ii) all overdue interest on all
Securities, (iii) the Accreted Value of and premium, if any, on any
<PAGE>
Securities which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Securities, and
(iv) to the extent that payment of such interest is lawful, interest upon
overdue interest which has become due otherwise than by such declaration of
acceleration at the rate borne by the Securities; (b) the rescission would
not conflict with any judgment or decree of a court of competent
jurisdiction; and (c) all Events of Default, other than the non-payment of
Accreted Value of, premium, if any, and interest on the Securities that have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 6.04.
No such rescission shall affect any subsequent Default or Event of
Default or impair any right subsequent therein.
6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, premium, if any, or interest on the Securities or to
enforce the performance of any provision of the Securities, this Indenture or
any of the Pledge Agreements.
All rights of action and claims under this Indenture, the
Securities and the Pledge Agreements may be enforced by the Trustee even if
it does not possess any of the Securities or does not produce any of them in
the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
6.04. Waiver of Past Defaults.
Subject to the provisions of Sections 6.07 and 9.02, the Holders of
not less than a majority in aggregate principal amount of the outstanding
Securities by notice to the Trustee may, on behalf of the Holders of all the
Securities, waive any existing Default or Event of Default and its
consequences, except a Default or Event of Default specified in Section
6.01(a) or (b) or in respect of any provision hereof which cannot be modified
or amended without the consent of the Holder of each outstanding Security
affected thereby pursuant to Section 9.02. When a Default or Event of
Default is so waived, it shall be deemed cured and shall cease to exist.
6.05. Control by Majority.
The Holders of not less than 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,
however, that the Trustee may refuse to follow any direction (a) that
conflicts with any rule of law or this Indenture, (b) that the Trustee
determines may be unduly prejudicial to the rights of another Securityholder,
or (c) that may expose the Trustee to personal liability unless the Trustee
has been provided reasonable indemnity against any loss or expense caused by
its following such direction; and provided, further, that the Trustee may
take any other action deemed proper by the Trustee that is not inconsistent
with such direction.
6.06. Limitation on Suits.
No Holder shall have any right to institute any proceeding or
pursue any remedy with respect to this Indenture, the Securities or any of
the Pledge Agreements unless:
(a) Holders of at least 25% in aggregate principal amount of the
outstanding Securities make a written request to the Trustee to
institute such proceeding or pursue such remedy;
(b) such Holders offer and, if requested, provide to the Trustee
reasonable indemnity against any loss, liability or expense;
(c) the Trustee fails to institute such proceeding or pursue such
remedy within 60 days after receipt of such request; and
(d) within such 60-day period the Trustee does not receive a
direction which is inconsistent with the request from the Holders of a
majority in aggregate principal amount of the outstanding Securities;
<PAGE>
The foregoing limitations shall not apply to a suit instituted by a
Holder for the enforcement of the payment of principal of, premium, if any,
or accrued interest on, such Security on or after the respective due dates
set forth in such Security, subject to applicable grace periods.
A Holder may not use this Indenture to prejudice the rights of any
other Holders or to obtain priority or preference over such other Holders.
6.07. Right of Holders To Receive Payment.
Notwithstanding any other provision in this Indenture, the right of
any Holder to receive payment of the principal of, premium, if any, and
interest on such Security, on or after the respective Stated Maturities
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after the respective Stated Maturities, is absolute and
unconditional and shall not be impaired or affected without the consent of
the Holder.
6.08. Collection Suit by Trustee.
If an Event of Default specified in clause (a) or (b) of Section
6.01 occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company, or any other
obligor on the Securities for the whole amount of Accreted Value of, premium,
if any, and accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per
annum borne by the Securities and 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.
6.09. Trustee May File Proofs of Claims.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company or the
Subsidiaries of the Company (or any other obligor upon the Securities), their
creditors or their property and shall be entitled and empowered to collect
and receive any monies or other property payable or deliverable on any such
claims and to distribute the same, and any Custodian in any such judicial
proceedings is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agent and counsel, and any other amounts due the Trustee
under Section 7.08. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
6.10. Priorities.
If the Trustee collects any money pursuant to this Article Six, it
shall pay out such money in the following order:
First: to the Trustee for amounts due under Section 7.08;
Second: to Holders for interest accrued on the Securities,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Securities for interest;
Third: to Holders for amounts of Accreted Value (including any
premium) owing under the Securities, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Securities for
Accreted Value (including any premium); and
Fourth: the balance, if any, to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Securityholders pursuant to
this Section 6.10.
<PAGE>
6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as Trustee, a court may in its discretion require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section 6.11 does not apply to any suit by the Trustee,
any suit by a Holder pursuant to Section 6.07, or a suit by Holders of more
than 10% in aggregate principal amount of the outstanding Securities.
6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Security and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of
the Trustee and the Holders shall continue as though no such proceeding had
been instituted.
ARTICLE SEVEN
TRUSTEE
7.01. Duties.
(a) In case 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 such person's own affairs.
(b) Except during the continuance of an Event of Default,
(i) the Trustee need perform only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) 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 as to form only to the
requirements of this Indenture.
(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
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of
its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
<PAGE>
(e) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b), (c) and (d) of this
Section 7.01.
7.02. Rights of Trustee.
Subject to Section 7.01 hereof and the provisions of TIA * 315:
(a) the Trustee may rely on any document reasonably believed by it
to be genuine and to have been signed or presented by the proper person.
The Trustee need not investigate any fact or matter stated in the
document.
(b) before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an
Opinion of Counsel, which shall conform to Sections 11.04 and 11.05.
The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such certificate or opinion.
(c) the Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) the Trustee shall not be liable for any action taken or
omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion, rights or powers conferred upon it
by this Indenture other than any liabilities arising out of its own
negligence or willful misconduct.
(e) the Trustee may consult with counsel of its own choosing and
the advice or opinion of such counsel as to matters of law shall be full
and complete authorization and protection in respect of any action
taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(g) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Holders pursuant to the provisions of
this Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby.
7.03. Individual Rights of Trustee.
The Trustee, any Paying Agent, Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 7.11 and 7.12 and TIA ** 310
and 311, may otherwise deal with the Company and its Subsidiaries with the
same rights it would have if it were not the Trustee, Paying Agent, Registrar
or such other agent.
7.04. Trustee's Disclaimer.
The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities, it shall not be
accountable for the Company's use or application of the proceeds from the
Securities, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee and it shall not be
responsible for any statement in the Securities other than the Trustee's
certificate of authentication.
7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to each Holder notice of
the Default or Event of Default within 30 days after obtaining knowledge
thereof; provided, however, that, except in the case of a Default or Event of
Default specified in Section 6.01(a) or (b), the Trustee shall be protected
in withholding such notice if and so long as a committee of Trust Officers in
good faith determines that the withholding of such notice is in the interest
of the Holders.
<PAGE>
7.06. Money Held in Trust.
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required herein or by law. The Trustee shall not be under any liability for
interest on any moneys received by it hereunder, except as the Trustee may
agree with the Company.
7.07. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, the Trustee shall, to the extent that
any of the events described in TIA * 313(a) shall have occurred within the
previous twelve months, but not otherwise, mail to each Holder a brief report
dated as of such May 15 that complies with TIA * 313(a). The Trustee also
shall comply with TIA ** 313(b) and 313(c).
A copy of each report at the time of its mailing to Holders shall
be mailed to the Company and filed with the SEC and each securities exchange,
if any, on which the Securities are listed.
The Company shall notify the Trustee in writing if the Securities
become listed on any securities exchange.
7.08. Compensation and Indemnity.
The Company covenants and agrees to pay the Trustee from time to
time reasonable compensation for its services. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee upon request for all
reasonable disbursements, expenses and advances incurred or made by it. Such
expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents, accountants and counsel.
The Company shall indemnify the Trustee and its officers and
directors for, and hold it harmless against, any loss or liability incurred
by it arising out of or in connection with the administration of this trust
and its rights or duties hereunder, including the costs and expenses,
including 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. The Trustee shall notify the Company promptly of
any claim asserted against the Trustee for which it may seek indemnity. The
Company shall defend the claim and the Trustee shall reasonably cooperate in
the defense. The Trustee may have separate counsel and the Company shall pay
the reasonable fees and expenses of such counsel. The Company need not pay
for any settlement made without its prior written consent. The Company need
not reimburse any expense or indemnify against any loss or liability to the
extent incurred by the Trustee through its negligence, bad faith or willful
misconduct.
To secure the Company's payment obligations in this Section 7.08,
the Trustee shall have a Lien prior to the Securities on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal of, premium, if any, or interest on particular
Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.01(f) or (g), the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.08 and any Lien
arising hereunder and under any of the Pledge Agreements shall survive the
resignation or removal of any trustee, the discharge of the Company's
obligations pursuant to Article Eight and/or the termination of this
Indenture.
7.09. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of
a majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the Company and the Trustee and may appoint a
successor trustee with the Company's prior written consent. The Company may
remove the Trustee if:
1. the Trustee fails to comply with Section 7.11;
<PAGE>
2. the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
3. a receiver or other public officer takes charge of the Trustee
or its property; or
4. the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of
such event and shall promptly appoint a successor Trustee. The Trustee shall
be entitled to payment of its fees and reimbursement of its expenses while
acting as Trustee, and to the extent such amounts remain unpaid, the Trustee
that has resigned or has been removed shall retain the Lien afforded by
Section 7.08. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the outstanding Securities may,
with the Company's prior written consent, appoint a successor Trustee to
replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all property held by it as Trustee
to the successor Trustee, subject to the Lien provided in Section 7.08, the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Securityholder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company
or the Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.11, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.09, the Company's obligations under Section 7.08 shall continue for the
benefit of the retiring Trustee.
7.10. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to,
another corporation or national banking association, the resulting, surviving
or transferee corporation or national banking association without any further
act shall, if such resulting, surviving or transferee corporation or national
banking association is otherwise eligible hereunder, be the successor
Trustee.
7.11. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA ** 310(a)(1) and 310(a)(5) and which
shall have a combined capital and surplus of at least $50,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of federal, state, territorial or District of Columbia
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, the Trustee shall
resign immediately in the manner and with the effect hereinafter specified in
this Article. The Trustee is subject to TIA * 310(b).
7.12. Preferential Collection of Claims
Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). If the present or any future
Trustee shall resign or be removed, it shall be subject to TIA Section 311(a) to
the extent provided therein.
<PAGE>
ARTICLE EIGHT
SATISFACTION AND DISCHARGE; DEFEASANCE
8.01. Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect as to all outstanding Securities, except as to those obligations
referred to in the penultimate paragraph of this Section 8.01, when:
(a) either (i) all Securities theretofore authenticated and
delivered (except lost, stolen or destroyed Securities which have been
replaced or paid or 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 and thereafter repaid to the
Company or discharged from such trust, as provided in Section 8.04) have
been delivered to the Trustee for cancellation, or (ii) all Securities
not theretofore delivered to the Trustee for cancellation (except lost,
stolen or destroyed Securities which have been replaced or paid) have
been called for redemption pursuant to the terms of the Securities or
have otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders for that purpose, funds in an amount sufficient
without consideration of reinvestment of such interest, to pay and
discharge the entire Indebtedness on the Securities not theretofore
delivered to the Trustee for cancellation for principal of, premium, if
any, and interest on such Securities to the date of deposit together
with irrevocable instructions from the Company directing the Trustee to
apply such funds to the payment thereof at maturity or redemption, as
the case may be;
(c) no Default or Event of Default with respect to this Indenture
or the Securities shall have occurred and be continuing on the date of
such deposit or shall occur as a result of such deposit;
(d) the Company shall have paid all other sums payable by it
hereunder;
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent under this Section 8.01 have been complied with.
Notwithstanding the foregoing paragraph, the Company's obligations
in Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02 and 7.08 shall survive until
the Securities are no longer outstanding pursuant to Section 2.10. After the
Securities are no longer outstanding, the Company's obligations in Sections
7.08, 8.03, 8.04 and 8.05 shall survive.
After such delivery or irrevocable deposit the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Securities and this Indenture except for those surviving obligations
specified above.
8.02. Defeasance and Covenant Defeasance.
(a) The Company may, at its option and at any time, terminate the
obligations of the Company with respect to the outstanding Securities,
including, without limitation, all of the Company's obligations under the
Pledge Agreements, by electing to have either paragraph (b) or paragraph (c)
below be applied to the outstanding Securities upon compliance with the
conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Securities, including, without limitation, all of the Company's obligations
under the Pledge Agreements, on the date the conditions set forth below are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Securities, which shall
thereafter be deemed to be "outstanding" only for the purposes of
paragraph (e) below and the other Sections of and matters under this
Indenture referred to in (i) and (ii) below, and to have satisfied all its
other obligations under such Securities and this Indenture insofar as such
<PAGE>
Securities are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities to receive
payments in respect of the principal of, premium, if any, and interest on
such Securities when such payments are due, (ii) the Company's obligations
with respect to such Securities under Sections 2.06, 2.07 and 4.02, and, with
respect to the Trustee, under Section 7.08, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (iv) this Article Eight.
Subject to compliance with this Section 8.02, the Company may exercise its
option under this paragraph (b) notwithstanding the prior exercise of its
option under paragraph (c) below with respect to the Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and
discharged from its obligations under any covenant contained in Section 5.01
and in Sections 4.03 through 4.17 with respect to the outstanding Securities
and from its obligations under the Pledge Agreements on and after the date
the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and the Securities shall thereafter be deemed to be not
"outstanding" for the purpose of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants or under the Pledge Agreements, but shall
continue to be deemed "outstanding" for all other purposes hereunder and
thereunder. For this purpose, such covenant defeasance means that, with
respect to the outstanding Securities, the Company may omit to comply with
and shall have no liability in respect of any term, condition or limitation
set forth in any such covenant or under the Pledge Agreements, whether
directly or indirectly, by reason of any reference elsewhere herein to any
such covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall
not constitute a Default or an Event of Default under Section 6.01(c), but,
except as specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities:
(i) the Company shall irrevocably have deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities,
(x) cash, in United States dollars, (y) direct non-callable obligations
of, or non-callable obligations guaranteed by, the United States of
America for the payment of which guarantee or obligation the full faith
and credit of the United States is pledged ("U.S. Government
Obligations"), or (z) a combination thereof, sufficient, in the opinion
of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee,
to pay and discharge, and which shall be applied by the Trustee to pay
and discharge, the principal of, premium, if any, and interest on the
outstanding Securities (except lost, stolen or destroyed Securities
which have been replaced or repaid) to redemption or maturity, as the
case may be, or otherwise in accordance with the terms of this Indenture
and of such Securities;
(ii) no Default or Event of Default or event which with notice
or lapse of time or both would become a Default or an Event of Default
shall have occurred and be continuing on the date of such deposit or,
insofar as Section 6.01(a) is concerned, at any time during the period
ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period);
(iii) such legal defeasance or covenant defeasance shall not
cause the Trustee to have a conflicting interest with respect to any
securities of the Company;
(iv) such legal defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a Default or Event of
Default under, this Indenture or any other material agreement or
instrument to which the Company is a party or by which it is bound;
<PAGE>
(v) in the case of an election under paragraph (b) above, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the
date of this Indenture, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of the outstanding
Securities will not recognize income, gain or loss for Federal income
tax purposes as a result of such legal defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such legal defeasance had not
occurred;
(vi) in the case of an election under paragraph (c) above, the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of the outstanding Securities will not recognize
income, gain or loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred;
(vii) in the case of an election under either paragraph (b) or
(c) above, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; and
(viii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent under this Indenture to either the legal defeasance
under paragraph (b) above or the covenant defeasance under paragraph (c)
above, as the case may be, have been complied with.
(e) All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee pursuant to paragraph (d) above
in respect of the outstanding Securities shall be held in trust and applied
by the Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent (other
than the Company or any Affiliate of the Company) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become
due thereon in respect of principal, premium and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to paragraph (d) above or the principal,
premium, if any, and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of
the outstanding Securities.
Anything in this Section 8.02 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the
request, in writing, by the Company any money or U.S. Government Obligations
held by it as provided in paragraph (d) above which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent legal defeasance or covenant defeasance.
8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Sections 8.01 and 8.02, and shall
apply the deposited money and the money from U.S. Government Obligations in
accordance with this Indenture to the payment of principal of, premium, if
any, and interest on the Securities.
<PAGE>
8.04. Repayment to Company.
Subject to Sections 7.08, 8.01 and 8.02, the Trustee shall promptly
pay to the Company, upon receipt by the Trustee of an Officers' Certificate,
any excess money, determined in accordance with Section 8.02, held by it at
any time. The Trustee and the Paying Agent shall pay to the Company, upon
receipt by the Trustee or the Paying Agent, as the case may be, of an
Officers' Certificate, any money held by it for the payment of principal,
premium, if any, or interest that remains unclaimed for two years after
payment to the Holders is required; provided, however, that the Trustee and
the Paying Agent before being required to make any payment may, but need not,
at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled
to such money notice that such money remains unclaimed and that after a date
specified therein, which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining
will be repaid to the Company. After payment to the Company, Holders
entitled to money must look solely to the Company for payment as general
creditors unless an applicable abandoned property law designates another
person, and all liability of the Trustee or Paying Agent with respect to such
money shall thereupon cease.
8.05. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Indenture by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then and only then the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had been made pursuant to this Indenture until such time as the
Trustee is permitted to apply all such money or U.S. Government Obligations
in accordance with this Indenture; provided, however, that if the Company has
made any payment of principal of, premium, if any, or interest on any
Securities because of the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution of its Board of
Directors, and the Trustee may amend, waive or supplement this Indenture, the
Securities or any of the Pledge Agreements without notice to or the consent
of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article Five of this Indenture;
(c) to provide for uncertificated Securities in addition to
certificated Securities;
(d) to comply with any requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional benefit
or rights to the Holders or that does not adversely affect the rights of
any Holder.
Notwithstanding the above, the Trustee and the Company may not make
any change that adversely affects the rights of any Holders hereunder. The
Company shall be required to deliver to the Trustee an Opinion of Counsel
stating that any such change made pursuant to paragraph (a) or (e) of this
Section 9.01 does not adversely affect the rights of any Holder.
9.02. With Consent of Holders.
Subject to Section 6.04, the Company, when authorized by a Board
Resolution and the Trustee may amend this Indenture, the Securities or any of
the Pledge Agreements with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding,
and the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding by written notice to the Trustee may waive future
compliance by the Company with any provision of this Indenture, the
Securities or any of the Pledge Agreements.
<PAGE>
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
(a) reduce the principal amount of, extend the fixed maturity of,
or alter the redemption provisions of, the Securities;
(b) change the currency in which any Security, or any premium or
interest thereon, is payable or make the principal of, premium, if any,
or interest on any Security payable in money other than that stated in
the Security;
(c) reduce the percentage in principal amount of outstanding
Securities the Holders of which must consent to an amendment or
supplement to or waiver of any provision of or consent to take any
action under this Indenture, the Securities or any of the Pledge
Agreements;
(d) impair the right to institute suit for the enforcement of any
payment on or with respect to the Securities;
(e) waive a default in the payment with respect to, the
Securities; or
(f) reduce or change the rate or time for payment of interest on
any Security.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holder of each Security
affected thereby, with a copy to the Trustee, a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any amendment, supplement or waiver.
9.03. Compliance with Trust Indenture Act.
Every amendment of or supplement to this Indenture or the
Securities shall comply with the TIA as then in effect.
9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by such Holder and every
subsequent Holder of that Security or portion of that Security that evidences
the same debt as the consenting Holder's Security, even if notation of the
consent is not made on any Security. However, any such Holder or subsequent
Holder may revoke the consent as to his Security or portion of a Security
prior to such amendment, supplement or waiver becoming effective. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. Notwithstanding the above, nothing in this paragraph shall impair
the right of any Holder under Section 316(b) of the TIA.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then
notwithstanding the second and third sentences of the immediately preceding
paragraph, those persons who were Holders at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously
given, whether or not such persons continue to be Holders after such record
date. Such consent shall be effective only for actions taken within 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder; unless it makes a change described in any of clauses
(a) through (f) of Section 9.02; if it makes such a change, the amendment,
supplement or waiver shall bind every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security.
<PAGE>
9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee shall (in accordance with the specific direction of the
Company) request the Holder of the Security to deliver it to the Trustee.
The Trustee shall (in accordance with the specific direction of the Company)
place an appropriate notation on the Security about the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or issue a new Security shall not
affect the validity and effect of such amendment, supplement or waiver.
9.06. Trustee May Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article Nine if the amendment, supplement or
waiver does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign
it. In signing or refusing to sign such amendment, supplement or waiver, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that the
execution of any amendment, supplement or waiver is authorized or permitted
by this Indenture, that it is not inconsistent herewith and that it will be
valid and binding upon the Company in accordance with its terms.
ARTICLE TEN
PLEDGED COLLATERAL AND SECURITY
10.01. Pledge Agreements.
The due and punctual payment of the principal of and interest on
the Securities when and as the same shall be due and payable, whether on an
interest payment date, at maturity, by acceleration, repurchase, redemption
or otherwise, and interest on the overdue principal of and interest (to the
extent permitted by law), if any, on the Securities and performance of all
other obligations of the Company to the Holders or the Trustee under this
Indenture and the Securities, according to the terms hereunder or thereunder,
shall be secured as provided in the Pledge Agreements, which the Company has
entered into simultaneously with the execution of this Indenture. Each
Holder, by its acceptance of the Securities, consents and agrees to the terms
of the Pledge Agreements (including, without limitation, the provisions
providing for foreclosure and release of Pledged Collateral) as the same may
be in effect or may be amended from time to time in accordance with their
respective terms and authorizes and directs the Trustee to enter into the
Pledge Agreements and to perform its obligations and exercise its rights
thereunder in accordance therewith. The Company shall deliver to the Trustee
a copy of the Pledge Agreements, and shall do or cause to be done all such
acts and things as may be necessary or proper, or as may be required by the
provisions of the Pledge Agreements, or as may be reasonably requested by the
Trustee, to assure and confirm to the Trustee the security interests in the
Pledged Collateral contemplated hereby or by the Pledge Agreements, as from
time to time constituted, so as to render the same available for the security
and benefit of this Indenture and of the Securities secured hereby, according
to the intent and purposes herein expressed. The Company shall take, or
shall cause its subsidiaries to take, any and all actions reasonably required
to cause the Pledge Agreements to create and maintain, as security for the
obligations of the Company hereunder and under the Securities, valid and
enforceable perfected Liens in and on all the Pledged Collateral, in favor of
the Trustee for the benefit of the Holders, superior to and prior to the
rights of all third persons, except for those Liens expressly contemplated by
the Pledge Agreements.
<PAGE>
10.02. Recording and Opinions.
(a) The Company shall furnish to the Trustee simultaneously with
the execution and delivery of this Indenture one or more Opinions of Counsel
either (i) stating that in the opinion of such counsel all action has been
taken with respect to the recording, registering and filing of this
Indenture, financing statements or other instruments necessary to make
effective the Liens intended to be created by the Pledge Agreements, and
reciting with respect to the security interests in the Pledged Collateral,
the details of such actions, or (ii) stating that, in the opinion of such
counsel, no such action is necessary to make such Liens effective.
(b) The Company shall furnish to the Trustee simultaneously with
the execution and delivery of each additional Pledge Agreement, any Note
Pledge Agreement, any Security Agreement or any substitution of Collateral
under any such agreement, one or more Opinions of Counsel either (i) stating
that in the opinion of such counsel all action has been taken with respect to
the recording, registering and filing of any financing statements or other
instruments necessary to make effective the Liens intended to be created by
such agreement, and reciting with respect to the details in the new
Collateral (by way of substitution or otherwise) the details of such actions,
or (ii) stating that, in the opinion of such counsel, no such action is
necessary to make such Liens effective.
(c) The Company shall furnish to the Trustee on June 30 in each
year beginning with June 30, 1996, one or more Opinions of Counsel, each
dated as of such date, either (i) (A) stating that, in the opinion of such
counsel, all action has been taken with respect to the recording,
registering, filing, re-recording, re-registering and refiling of all
financing statements, continuation statements or other instruments of further
assurance as is necessary (1) to make effective the Liens intended to be
created by the Note Pledge Agreements and (2) to maintain the Liens of the
Pledge Agreements and any Note Pledge Agreements and Security Agreements and
reciting with respect to the security interests in the applicable Collateral
the details of such actions or referring to prior Opinions of Counsel in
which such details are given and (B) based on relevant laws as in effect on
the date of each such Opinion of Counsel, all financing statements and
continuation statements have been executed and filed that are necessary as of
such date and during the succeeding 12 months fully to preserve and protect,
to the extent such protection and preservation are possible by filing, the
rights of the Holders and the Trustee hereunder and under the Pledge
Agreements and any Note Pledge Agreements and Security Agreements with
respect to the security interests in the Collateral, or (ii) stating that, in
the opinion of such counsel, no such action is necessary to make effective
and/or maintain such Liens, as the case may be.
10.03. Release of Collateral.
(a) Subject to subsections (b), (c) and (d) of this Section 10.03,
Collateral may be released from the Liens and security interests created by
the Pledge Agreements and any Note Pledge Agreements and Security Agreements
at any time or from time to time in accordance with the provisions of such
agreements and as provided hereby. In addition, upon the request of the
Company pursuant to an Officers' Certificate certifying that all conditions
precedent hereunder and under any such agreements, to the extent applicable,
have been met and stating whether or not such release is in connection with
an Asset Sale or a Collateral Release Request, the Trustee shall (at the sole
cost and expense of the Company) release Collateral which is sold, conveyed
or disposed of in compliance with the provisions of this Indenture and any
such agreements, to the extent applicable, provided, that if such sale,
conveyance or disposition constitutes an Asset Sale, the Company shall apply
the Net Cash Proceeds in accordance with Section 4.12 and any such
agreements, to the extent applicable. Upon receipt of such Officers'
Certificate, the Trustee shall execute, deliver or acknowledge any necessary
or proper instruments of termination, satisfaction or release to evidence the
release of any Collateral permitted to be released pursuant to this Indenture
and any such agreements, to the extent applicable.
<PAGE>
(b) Except to the extent that any Lien on the proceeds of
Collateral is automatically released by operation of Section 9-306 of the
Uniform Commercial Code or other similar law, no Collateral shall be released
from the Liens and security interests created by the Pledge Agreements and
any Note Pledge Agreements and/or Security Agreements pursuant to the
provisions of such agreements unless there shall have been delivered to the
Trustee the certificate required by this Section 10.03.
(c) At any time when an Event of Default shall have occurred and
be continuing and the maturity of the Securities shall have been accelerated
(whether by declaration or otherwise), no Collateral shall be released
pursuant to the provisions of the Pledge Agreements and any Note Pledge
Agreements and/or Security Agreements, and no release of Collateral in
contravention of this Section 10.03(c) shall be effective as against the
Holders.
(d) The release of any Collateral from the Liens and security
interests created by this Indenture and the Pledge Agreements and any Note
Pledge Agreements and/or Security Agreements shall not be deemed to impair the
security under this Indenture in contravention of the provisions hereof if and
to the extent that any such Collateral is released pursuant to the terms hereof
or, subject to complying with the requirements of this Section 10.03, pursuant
to the terms of the Pledge Agreements and any Note Pledge Agreements and/or
Security Agreements. To the extent applicable, the Company shall cause TIA
Section 314(d) relating to the release of property or securities from the Liens
and security interests of the Pledge Agreements and any Note Pledge Agreements
and relating to the substitution therefor of any property or securities to be
subjected to the Liens and security interests of the Pledge Agreements and any
Note Pledge Agreements to be complied with. Any certificate or opinion required
by TIA Section 314(d) may be made by an Officer of the Company except in cases
where TIA Section 314(d) requires that such certificate or opinion be made by an
independent person, which person shall be an independent engineer, appraiser or
other expert selected or approved by the Trustee in the exercise of reasonable
care.
10.04. Certificates of the Company.
(a) The Company shall furnish to the Trustee, prior to each
proposed release of Collateral pursuant to the Pledge Agreements and any Note
Pledge Agreements, (i) all documents required by Section 314(d) of the TIA
and (ii) an Opinion of Counsel, which may be rendered by internal counsel to
the Company, to the effect that such accompanying documents constitute all
documents required by Section 314(d) of the TIA. The Trustee may, to the
extent permitted by Sections 7.01 and 7.02 hereof, accept as conclusive
evidence of compliance with the foregoing provisions the appropriate
statements contained in such documents and such Opinion of Counsel.
10.05. Authorization of Actions to Be Taken by
the Trustee Under the Security Documents.
Subject to the provisions of Sections 7.01 and 7.02 hereof, the
Trustee may, in its sole discretion and without the consent of the Holders,
on behalf of the Holders, take all actions it deems necessary or appropriate
in order to (a) enforce any of the terms of the Pledge Agreements and any
Note Pledge Agreements and/or Security Agreements and (b) collect and receive
any and all amounts payable in respect of the obligations of the Company
hereunder. The Trustee shall have power to institute and maintain such suits
and proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts that may be unlawful or in violation of the Pledge
Agreements and any Note Pledge Agreements and/or Security Agreements or this
Indenture, and such suits and proceedings as the Trustee may deem expedient
to preserve or protect its interests and the interests of the Holders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial
to the interests of the Holders or of the Trustee).
<PAGE>
10.06. Authorization of Receipt of Funds by the
Trustee Under the Security Documents.
The Trustee is authorized to receive any funds for the benefit of
the Holders distributed under the Pledge Agreements and any Note Pledge
Agreements and/or Security Agreements, and to make further distributions of
such funds to the Holders according to the provisions of this Indenture.
10.07. Termination of Security Interests.
Upon the payment in full of all obligations of the Company under
this Indenture, the Securities, the Pledge Agreements and any Note Pledge
Agreements and/or Security Agreements, the Trustee shall, at the request of
the Company and upon receipt of an Officers' Certificate certifying as to the
foregoing, release the Liens pursuant to this Indenture and the Pledge
Agreements and any Note Pledge Agreements and/or Security Agreements.
10.08. Releases Following Sale of Assets.
Concurrently with any sale of assets, any Liens in favor of the
Trustee in the assets sold thereby shall be released; provided, that in the
event of an Asset Sale, the Net Cash Proceeds from such sale or other
disposition are applied in accordance with the provisions of Section 4.12,
the Pledge Agreements and any Note Pledge Agreements and/or Security
Agreements; provided, further, that, the Net Cash Proceeds resulting from any
sale or disposition of Collateral are applied to the purchase of Replacement
Assets that are subject to a first priority perfected Lien in favor of the
Trustee or the acquisition or formation of a Subsidiary that, when acquired
or formed, will have all of its outstanding Capital Stock subject to a first
priority perfected Lien in favor of the Trustee. If the Company does not
apply such Net Cash Proceeds in accordance with the preceding sentence, such
Net Cash Proceeds shall remain in an account subject to a first priority
perfected Lien in favor of the Trustee and shall not be released until the
obligations of the Company under this Indenture and the Securities, have been
discharged, the Pledge Agreements, and any Securities Pledge Agreements
and/or Security Agreements shall have otherwise been terminated or until such
Net Cash Proceeds have been distributed to the Holders of the Securities as
Excess Proceeds.
10.09. "Trustee" to Include Paying Agent.
In case at any time a 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 Ten shall in such case (unless the context
shall otherwise require) be construed as extending to and including such
Paying Agent within its meaning as fully and for all intents and purposes as
if such Paying Agent were named in this Article Ten.
10.10. Nominees of the Trustee.
Notwithstanding anything contained herein to the contrary, the
Trustee may in its sole discretion designate a nominee or nominees to hold
any Collateral on its behalf and/or to exercise on its behalf any voting or
other rights or powers with respect thereto, provided, however, that nothing
contained in this Section 10.10 shall relieve the Trustee from any of its
obligations hereunder.
10.11. Pledge of Notes Pertaining to Certain
Intercompany Indebtedness.
The Company shall not, on or at any time after the date of this
Indenture, make any cash investment in any wholly-owned subsidiary of the
Company which is organized under the laws of the United States or any state
thereof or the District of Columbia and which is doing business in the United
States (each, a "Subsidiary Borrower") unless such investment is structured
as a loan by the Company to such Subsidiary Borrower (an "Intercompany
Loan"). The Company shall cause each such Intercompany Loan to be evidenced
by a promissory note (an "Intercompany Note") executed by the Subsidiary
Borrower in favor of the Company, which such Intercompany Loan shall be on
commercially reasonable terms, and which such Intercompany Note shall be in
form and substance typical for loans of such type and satisfactory to the
Trustee, and the Company, by means of one or more pledge agreements (each, a
"Note Pledge Agreement") substantially similar in form and substance to the
U.S. Pledge Agreement, with only such reasonable modifications as shall be
necessary to reflect differences in the type of Collateral being pledged,
shall pledge such Intercompany Notes as Collateral in favor of the Trustee
for the benefit of the Holders. The Company shall deliver to the Trustee a
<PAGE>
copy of each Note Pledge Agreement prior to the making of any such
Intercompany Loan, and shall, prior to the making of any such Intercompany
Loan, do or cause to be done all such acts and things as may be necessary or
proper, or as may be required by the provisions of the Note Pledge
Agreements, or as may be reasonably requested by the Trustee, to assure and
confirm to the Trustee the security interests contemplated thereby, which
such security interests shall be first priority liens, so as to render the
same available for the security and benefit of this Indenture and of the
Securities secured hereby, according to the intent and purposes herein
expressed. The Company shall take, and shall cause each Subsidiary Borrower
to take, any and all action reasonably required or requested by the Trustee
to cause the Note Pledge Agreements to create and maintain valid and
enforceable perfected Liens in and on all the Collateral pledged thereby, in
favor of the Trustee for the benefit of the Holders, superior to and prior to
the rights of all third persons.
10.12. Collateral Release Request.
(a) At any time during which no Default or Event of Default or
event which with notice or lapse of time or both would become a Default or an
Event of Default shall have occurred or be continuing, and upon receipt by
the Trustee of an Officers' Certificate certifying as to the foregoing, the
Company may request (each such request being a "Collateral Release Request"
and the date such request is made being the "Collateral Release Request
Date") in writing the Holders' consent to terminate the Collateral
Arrangements and release the Collateral as provided hereby.
(b) A Collateral Release Request shall be mailed by the Company to
the Holders at their registered addresses and shall state:
(i) that the Collateral Release Request is being made pursuant
to this Section 10.12;
(ii) that the prior written consent of Holders of at least 66 2/3%
of the aggregate principal amount at maturity of the Securities
outstanding on the Collateral Release Request Date is required to
terminate the Collateral Arrangements and release the Collateral
pursuant to this Section 10.12;
(iii) that Holders electing to permit the Collateral Arrangements
to be terminated will be required to deliver in writing their votes with
respect to the Collateral Release Request to the Trustee within 30
Business Days after the Collateral Release Request Date;
(iv) that if, upon the conclusion of such 30 Business Day period
commencing on the Collateral Release Request Date, Holders of 66 2/3% or
more of the aggregate principal amount at maturity of the Securities
outstanding on the Collateral Release Request Date consent thereto, the
Collateral Arrangements (including, without limitation, the Guarantees)
shall terminate and the Collateral shall be released upon delivery to
the Trustee of an Officers' Certificate setting forth the votes received
on the Collateral Release Request; and
(v) that if, upon the conclusion of such 30 Business Day period
commencing on the Collateral Release Request Date, Holders of less than
66 2/3% of the aggregate principal amount at maturity of the Securities
outstanding on the Collateral Release Request Date have consented to
terminate the Collateral Arrangements and release the Collateral the
Collateral Arrangements will not be terminated and the Collateral will
not be released unless the Company, at its option, within 5 Business
Days after the conclusion of such 30 Business Day period, makes an offer
to purchase (the "Collateral Release Offer") all of the then outstanding
Securities at a purchase price (the "Collateral Release Purchase Price")
equal to 101.5% of the Accreted Value thereof plus accrued and unpaid
interest, if any, to the date of purchase (the "Collateral Release
Purchase Date") and, if a Collateral Release Offer is made, the Company,
within 40 Business Days after the Collateral Release Offer, shall
purchase, all of the Securities tendered to the Company pursuant to the
Collateral Release Offer at a purchase price (the "Collateral Release
Purchase Price") equal to 101.5% of the Accreted Value thereof plus
accrued and unpaid interest, if any, to the date of purchase (the
"Collateral Release Purchase Date") and upon the consummation of such
purchase, the Collateral Arrangements shall terminate and the Collateral
shall be released.
<PAGE>
(c) Notice of a Collateral Release Offer shall be mailed by the
Company not less than 20 nor more than 40 Business Days before the Collateral
Release Purchase Date to all Holders at their last registered address with a
copy to the Trustee and the Paying Agent. The Collateral Release Offer shall
remain open from the time of mailing for at least 20 Business Days and until
at least 5:00 p.m., New York City time, on the Collateral Release Purchase
Date. The notice, which shall govern the terms of the Collateral Release
Offer, shall include such disclosures as are required by law and shall state:
(i) that the Collateral Release Offer is being made pursuant to
this Section 10.12;
(ii) the Collateral Release Purchase Price (including the amount
of accrued original issue discount on the Security or accrued interest,
if any) for each Security, the Collateral Release Purchase Date and the
date on which the Collateral Release Offer expires;
(iii) that any Security not tendered or accepted for payment will
continue to accrete and/or accrue interest in accordance with the terms
thereof;
(iv) that, unless the Company shall default in the payment of
the Collateral Release Purchase Price, any Security accepted for payment
pursuant to the Collateral Release Offer shall cease to accrete and/or
accrue interest after the Collateral Release Purchase Date;
(v) that Holders electing to have Securities purchased pursuant
to a Collateral Release Offer will be required to surrender their
Securities to the Paying Agent at the address specified in the notice
prior to 5:00 p.m., New York City time, on the Business Day immediately
preceding the Collateral Release Purchase Date and must complete any form
of letter of transmittal proposed by the Company and reasonably
acceptable to the Trustee and the Paying Agent;
(vi) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than 5:00 p.m., New York City time,
on the third Business Day immediately preceding the Collateral Release
Purchase Date, a telex, facsimile transmission or letter setting forth
the name of the Holder, the aggregate principal amount at maturity of
Securities the Holder delivered for purchase, the Security certificate
number (if any) and a statement that such Holder is withdrawing its
election to have such Securities purchased;
(vii) that Holders whose Securities are purchased only in part
will be issued new Securities equal in aggregate principal amount at
maturity to the unpurchased portion of the Securities surrendered;
(viii) the instructions that Holders must follow in order to
tender their Securities; and
(ix) information concerning the business of the Company, the
most recent annual and quarterly reports of the Company filed with the
SEC pursuant to the Exchange Act (or, if the Company is not permitted to
file any such reports with the SEC, the comparable reports prepared
pursuant to Section 4.07), a description of material developments in the
Company's business, information with respect to pro forma historical
financial information after giving effect to such Collateral Release
Offer and the consummation of the transactions contemplated thereby and
such other information concerning the circumstances and relevant facts
regarding such Collateral Release Offer as would be material to a Holder
of Securities in connection with the decision of such Holder as to
whether or not it should tender Securities pursuant to the Collateral
Release Offer.
(d) On the Collateral Release Purchase Date, the Company shall
(i) accept for payment, on a pro rata basis, Securities or portions thereof
tendered pursuant to the Collateral Release Offer, (ii) deposit with the
Paying Agent money, in immediately available funds, in an amount sufficient
to pay the Collateral Release Purchase Price of all Securities or portions
thereof so tendered and accepted and (iii) deliver to the Trustee the
Securities so accepted together with an Officers' Certificate setting forth
the Securities or portions thereof tendered to and accepted for payment by
the Company. The Paying Agent shall promptly mail or deliver to Holders of
<PAGE>
Securities so accepted payment in an amount equal to the Collateral Release
Purchase Price for such Securities, and the Trustee upon order of the Company
shall promptly authenticate and mail or deliver to such Holders new
Securities equal in aggregate principal amount at maturity to any unpurchased
portion of any Securities surrendered. Any Securities not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company will publicly announce the results of the Collateral Release Offer
not later than the first Business Day following the Collateral Release
Purchase Date. For purposes of this Section 10.12, the Trustee shall act as
Paying Agent. Upon the consummation of such purchase, the Collateral
Arrangements and the covenants contained therein automatically shall
terminate and the Collateral shall be released.
(e) Notwithstanding Sections 10.12(b), (c) and (d) hereof, the
Company shall comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or
regulations in the event that a Collateral Release Request is made and the
Company is required to purchase Securities pursuant to this Section 10.12.
Any provision of Section 10.12(b), (c) and (d) hereof will be deemed to be
amended to the extent necessary to give effect to any such law.
(f) If the Company at any time makes a Collateral Release Request,
the Company shall deposit with the Paying Agent, within 35 Business Days
after the Collateral Release Request Date, immediately available funds in an
amount sufficient to pay to the Holders voting on such Collateral Release
Request an amount in cash equal to .50% of the Accreted Value of the
outstanding Securities held by such voting Holders on the Collateral Release
Request Date, and the Paying Agent shall promptly mail or deliver such amount
to such voting Holders on a pro rata basis.
ARTICLE ELEVEN
MISCELLANEOUS
11.01. Trust Indenture Act of 1939.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable,
be governed by such provisions.
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
excluded, as the case may be.
11.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
If to the Company to:
Geotek Communications, Inc.
20 Craig Road
Montvale, NJ 07645
Attention: General Counsel
If to the Trustee to:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention: Corporate Trust and Agency
Administration
The parties hereto by notice to the other parties may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, postage prepaid, to a Holder,
including any notice delivered in connection with TIA Section 310(b), TIA
Section 313(c), TIA Section 314(a) and TIA Section 315(b), shall be mailed by
first class mail to such Holder at the address of such Holder as it appears on
the Securities register maintained by the Registrar and shall be sufficiently
given to such Holder if so mailed within the time prescribed. Copies of any such
communication or notice to a Holder shall also be mailed to the Trustee.
<PAGE>
Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Holders. Except for a notice to the Trustee, which is deemed given only when
received, if a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
11.03. Communication by Holders with
Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
obligors, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
11.04. Certificate and Opinion as to
Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, such obligor shall furnish to the
Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
11.05. Statements Required in Certificate
or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that the person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to
express an opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
11.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders. The Paying Agent or Registrar may make reasonable rules
for its functions.
11.07. Governing Law; Jurisdiction.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York. The Company
irrevocably submits to the jurisdiction of any United States or State court
located in the State of New York in any suit or proceeding based on or
arising under this Indenture or the Securities and irrevocably agrees that
all claims in respect of such suit or proceeding may be determined in any
such court. The Company irrevocably waives the defense of an inconvenient
forum to the maintenance of such suit or proceeding. The Company hereby
agrees to designate and appoint CT Corporation System, 1633 Broadway, New
York, NY 10019 as an agent upon whom process may be served in any suit or
proceeding based on or arising under this Indenture or the Securities. The
Company further agrees that service of process upon the Company, or upon an
agent appointed pursuant to the preceding sentence accompanied with written
notice of said service to the Company, as the case may be, mailed by first
class mail shall be deemed in every respect effective service of process upon
the Company in any such suit or proceeding. Nothing herein shall affect the
Trustee's or any Holder's right to serve process in any other manner
permitted by law. The Company agrees that a final non-appealable judgment in
any such suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner.
<PAGE>
11.08. No Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this
Indenture.
11.09. No Recourse Against Others.
A director, officer, employee, stockholder or Affiliate, as such,
of the Company shall not have any liability for any obligations of the
Company under the Securities or this Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder
by accepting a Security waives and releases all such liability.
11.10. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.
11.11. Counterparts; Duplicate Originals.
This Indenture may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument. The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all such executed copies together
represent the same agreement.
11.12. Separability.
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, and a Holder shall have no claim therefor against any party hereto.
11.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
11.14. Benefits of Indenture.
Except as provided in Article Ten, nothing in this Indenture or in
the Securities, express or implied, shall give to any person, other than the
parties hereto and their successors hereunder, and the Holders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
GEOTEK COMMUNICATIONS, INC.
Attest: By: /s/ Yaron Eitan
-------------------------------
Name: Yaron Eitan
Title: President
(SEAL)
IBJ SCHRODER BANK & TRUST
COMPANY, as Trustee
Attest: By: /s/ Barbara McCluskey
--------------------------------
Name: Barbara McCluskey
Title: Asst. Vice President
(SEAL)
<PAGE>
EXHIBIT A
GEOTEK COMMUNICATIONS, INC.
15% SERIES A SENIOR SECURED DISCOUNT NOTE DUE 2005
No. 1 $207,000,000
CUSIP 373654AC6
GEOTEK COMMUNICATIONS, INC., a corporation incorporated under the
laws of the State of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to CEDE & CO. or registered
assigns, the principal sum of Two Hundred Seven Million Dollars on July 15,
2005, at the office or agency of the Company referred to below, and to pay
cash interest thereon, which such interest will accrue from and after
July 15, 2000 at the rate of 15% per annum (subject to adjustment, as
provided on the reverse hereof) and will be payable on January 15 and
July 15, in each year, commencing on January 15, 2001, accruing from the most
recent Interest Payment Date to which interest has been paid or duly provided
for or, if no interest has been paid, from July 15, 2000, until the principal
hereof is paid or duly provided for. Interest shall be computed on the basis
of a 360-day year of twelve 30-day months from July 6, 1995. No interest
shall be payable on the Securities prior to July 15, 2000.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture referred to
on the reverse hereof, be paid to the person in whose name this Security is
registered at the close of business on the regular record date for such
interest, which shall be January 1 or July 1 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date and may be
paid, at the option of the Company, by check mailed to such person. Any such
interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the rate borne by the Securities, to the extent lawful,
shall forthwith cease to be payable to the Holder on such regular record
date, and may be paid to the person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a
special record date for the payment of such defaulted interest to be fixed by
the Trustee, notice of which shall be given to Holders of Securities not less
than 10 days prior to such special record date, or may 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
such Indenture.
This Security is issued with original issue discount for Federal
income tax purposes in the aggregate amount of $136,187,370 ($657.91 per
$1,000 principal amount). For Federal income tax purposes, the aggregate
issue price of the Security is $70,812,630 ($342.09 per $1,000 principal
amount), the yield to maturity is 19.35% and the issue date is July 6, 1995.
Payment of the principal of, premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan in The City of New York, or at such
other office or agency of the Company as may be maintained for such purpose,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the address of the person entitled thereto as such address
shall appear on the security register maintained by the Registrar.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual
signature, and a seal has been affixed hereon, this Security shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for
any purpose.
A-1
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Date: GEOTEK COMMUNICATIONS, INC.
----------------------
By:
-----------------------------------
Name:
Title:
Attest: [SEAL]
Authorized Signature
A-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
IBJ SCHRODER BANK &
TRUST COMPANY
By:
-------------------------------
Authorized Signatory
A-3
<PAGE>
(Reverse of Security)
1. Indenture. This Security is one of a duly authorized issue of
Securities of the Company designated as its 15% Series A Senior Secured
Discount Notes due 2005, limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $227,700,000
(as contemplated by Section 2.01 of the Indenture), which may be issued under
an indenture (herein called the "Indenture") dated as of June 30, 1995,
between Geotek Communications, Inc., a Delaware corporation, as issuer (the
"Company"), and IBJ Schroder Bank & Trust Company, a banking company
organized under the laws of the State of New York, as trustee (herein called
the "Trustee," which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Trustee and the Holders of the Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered.
All capitalized terms used in this Security which are defined in
the Indenture and not otherwise defined herein shall have the meanings
assigned to them in the Indenture.
No reference herein to the Indenture and no provisions 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 this Security at the times, place and rate,
and in the coin or currency, herein prescribed.
2. Additional Interest.
(a) if a Registration Statement is not filed within 60 days
following the Issue Date, then, commencing on the 61st day after the Issue
Date, additional interest payable in cash (the "Additional Interest") shall
accrue on the Series A Notes at a rate of 0.50% per annum for the first 90
days immediately following the 60th day after the Issue Date, such Additional
Interest rate increasing by an additional 0.25% per annum at the beginning of
each subsequent 90-day period;
(b) if a Registration Statement is filed pursuant to clause (a)
above or otherwise prior to 120 days following the Issue Date and is not
declared effective within such 120-day period, then, commencing on the 121st
day after the Issue Date, Additional Interest shall accrue on the Series A
Notes at a rate of 0.50% per annum for the first 90 days immediately
following the 120th day after the Issue Date, such Additional Interest rate
increasing by an additional 0.25% per annum at the beginning of each
subsequent 90-day period; and
(c) if (i) the Company has not exchanged Series B Notes for all
Series A Notes validly tendered in accordance with the terms of the Exchange
Offer on or prior to 45 days after the date on which the Registration
Statement was declared effective or (ii) if applicable, the Shelf
Registration Statement ceases to be effective or the prospectus which is a
part thereof cannot be used as a result of a Suspension Event Notice for a
period of more than 90 days, in each case under this clause (ii) prior to
three years from the effective date of such Shelf Registration Statement,
then Additional Interest shall accrue on the Series A Notes at a rate of
0.50% per annum for the first 60 days immediately following (A) the 46th day
after such effective date, in the case of (A) above, or (B) the day such
Shelf Registration Statement ceases to be effective or a Suspension Event has
lasted for more than 90 days in the case of (ii) above, such Additional
Interest rate increasing by an additional 0.25% per annum at the beginning of
each subsequent 60-day period.
A-4
<PAGE>
In the case of each of clauses (a), (b) and (c) of the preceding
paragraph, such Additional Interest will be payable in cash semi-annually in
arrears on each July 15 and January 15, commencing January 15, 1996 and shall
be calculated at the rates noted above as a percentage of the Accreted Value
of the Securities as of the January 1 or July 1 immediately preceding the
interest payment date (or as of July 15, 1995 in the case of the first such
interest payment date); provided, however, that such Additional Interest rate
on the Series A Notes may not exceed 1.0% per annum; and, provided, further,
that (1) upon the filing of the Registration Statement (in the case of clause
(a) above), (2) upon the effectiveness of the Registration Statement (in the
case of clause (b) above) or (3) upon the exchange of Series B Notes for all
Series A Notes validly tendered or upon the effectiveness of the Shelf
Registration Statement that had ceased to remain effective prior to three
years from its original effective date or the end of the Suspension Event (in
the case of clause (b) or (c) above), Additional Interest on the Series A
Notes as a result of such clause (a), (b) or (c) shall cease to accrue.
3. Redemption.
(a) Optional Redemption. The Securities are subject to
redemption, at the option of the Company, in whole or in part, in principal
amounts of $1,000 or any integral multiple of $1,000, at any time on or after
July 15, 2000 upon not less than 30 nor more than 60 days' prior notice at
the following Redemption Prices (expressed as percentages of the principal
amount) plus accrued and unpaid interest, if any, to the Redemption Date, if
redeemed during the 12-month period beginning July 15 of the years indicated
below:
Redemption
Year Price
---- ----------
2000 110.000%
2001 106.667%
2002 103.333%
2003 and thereafter 100.000%
(b) Optional Redemption upon Stock Sale to a Strategic Equity
Investor. In the event of the sale by the Company to a Strategic Equity
Investor (other than Vanguard Cellular Systems, Inc.) on or prior to July 15,
1998 of Capital Stock of the Company, in a single transaction or series of
related transactions for an aggregate purchase price equal to or exceeding
$50,000,000, up to a maximum of 20% of the aggregate Accreted Value of the
Securities will be redeemable at the option of the Company out of the net
proceeds of such sale or sales to the extent that such proceeds consist of
cash or Cash Equivalents. Such Securities will be redeemable on not less
than 30 nor more than 60 days' prior notice at a redemption price equal to
115.0% of the Accreted Value of the Securities to be redeemed to the
redemption date. Any such redemption shall occur within 90 days after (but
not before) such sale or last such sale in the case of a series of related
transactions.
(c) Interest Payments. In the case of any redemption of
Securities, interest installments whose Stated Maturity is on or prior to the
Redemption Date will 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 Date referred to on the face hereof. Securities (or portions
thereof) for whose redemption and payment provision is made in accordance
with the Indenture shall cease to bear interest from and after the Redemption
Date.
(d) Partial Redemption. In the event of redemption of this
Security in part only, a new Security or Securities for the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
A-5
<PAGE>
4. Offers to Purchase. Sections 4.11, 4.12 and 10.12 of the
Indenture, respectively, provide that upon the occurrence of a Change of
Control, following certain Asset Sales and in connection with a Collateral
Release Request, and subject to further limitations contained therein, the
Company shall make an offer to purchase certain amounts of the Securities in
accordance with the procedures set forth in the Indenture.
5. Defaults and Remedies. If an Event of Default shall occur and
be continuing, the principal of premium, if any, all of the outstanding
Securities, plus all accrued and unpaid interest, if any, to and including
the date the Securities are paid, may be declared due and payable immediately
in the manner and with the effect provided in the Indenture.
6. Defeasance. The Indenture contains provisions (which
provisions apply to this Security) for defeasance at any time of (a) the
entire indebtedness of the Company under this Security and (b) certain
restrictive covenants and related Defaults and Events of Default, in each
case upon compliance by the Company with certain conditions set forth
therein.
7. Amendments and Waivers. The Indenture and the Pledge
Agreements permit, with certain exceptions as provided in the Indenture, the
amendment of the Indenture and the Pledge Agreements and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture and the Pledge Agreements at any time by the Company and the
Trustee with the consent of the Holders of at least a majority in aggregate
principal amount of the Securities at the time outstanding. 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 the Pledge Agreements
and certain past Defaults under the Indenture and this Security and their
consequences. Any such consent or waiver by or on behalf of the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Security.
8. Denominations, Transfer and Exchange. The Securities are
issuable only in registered form without coupons in denominations of $1,000
principal amount at maturity and any integral multiple thereof. A Holder may
register the transfer or exchange of Securities in accordance with the
Indenture. No service charge shall be made for any registration of transfer
or exchange or redemption of Securities, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
9. Persons Deemed Owners. Prior to and at the time of due
presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security shall be overdue, and neither the Company, the
Trustee nor any agent thereof shall be affected by notice to the contrary.
10. Security. The Securities are secured by pledges of shares of
Capital Stock owned by the Company to the extent provided for in the
Indenture and the Pledge Agreements.
11. Guarantees. Payment of the Accreted Value, premium (if any)
and interest (including interest on overdue principal and overdue interest,
if lawful) will, to the extent provided for in the Indenture, be
unconditionally guaranteed by certain subsidiaries of the Company.
12. Governing Law. This Security shall be governed by and
construed in accordance with the laws of the State of New York, without
regard to conflicts of law principles.
A-6
<PAGE>
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- ----------------------------------
_________________________________________
_________________________________________
Please print or typewrite name and address including zip code of assignee
_________________________________________
the within Security and all rights thereunder, hereby irrevocably
constituting and appointing
_________________________________________
attorney to transfer said Security on the books of the Company with full
power of substitution in the premises.
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of an effective Registration or
(ii) three years after the later of the original issuance of this Security or
the last date on which this Security was held by an Affiliate of the Company,
the undersigned confirms, that without utilizing any general solicitation or
general advertising:
[Check One]
[ ](a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule l44A thereunder.
or
[ ](b) this Security is being transferred other than in accordance with
(a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the
Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Security in the name of any Person
other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.08 of the
Indenture shall have been satisfied.
Date:
NOTICE: The signature to
this assignment must
correspond with the name as
written upon the face of the
within-mentioned instrument
in every particular, without
alteration or any change
whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:
NOTICE: To be executed by an
executive officer
A-7
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant
to Section 4.11, 4.12 or 10.12 of the Indenture, check the appropriate box:
Section 4.11 [ ]
Section 4.12 [ ]
Section 10.12 [ ]
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 4.11, 4.12 or 10.12 of the Indenture, state the
amount:
$ principal amount at maturity
-------------
Date: Your Signature:
------------------------
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guarantee:
------------------------------------
A-8
<PAGE>
EXHIBIT B
---------
GEOTEK COMMUNICATIONS, INC.
15% SERIES B SENIOR SECURED DISCOUNT NOTE DUE 2005
No. $
-------------------- ----------------
GEOTEK COMMUNICATIONS, INC., a corporation incorporated under the
laws of the State of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to _______________ or
registered assigns, the principal sum of _______________ Dollars on July 15,
2005, at the office or agency of the Company referred to below, and to pay
cash interest thereon, which such interest will accrue from and after
July 15, 2000 at the rate of 15% per annum (subject to adjustment, as
provided on the reverse hereof) and will be payable on January 15 and
July 15, in each year, commencing on January 15, 2001, accruing from the most
recent Interest Payment Date to which interest has been paid or duly provided
for or, if no interest has been paid, from July 15, 2000, until the principal
hereof is paid or duly provided for. Interest shall be computed on the basis
of a 360-day year of twelve 30-day months from July 6, 1995. No interest
shall be payable on the Securities prior to July 15, 2000.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture referred to
on the reverse hereof, be paid to the person in whose name this Security is
registered at the close of business on the regular record date for such
interest, which shall be January 1 or July 1 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date and may be
paid, at the option of the Company, by check mailed to such person. Any such
interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the rate borne by the Securities, to the extent lawful,
shall forthwith cease to be payable to the Holder on such regular record
date, and may be paid to the person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a
special record date for the payment of such defaulted interest to be fixed by
the Trustee, notice of which shall be given to Holders of Securities not less
than 10 days prior to such special record date, or may 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
such Indenture.
Payment of the principal of, premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan in The City of New York, or at such
other office or agency of the Company as may be maintained for such purpose,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the address of the person entitled thereto as such address
shall appear on the security register maintained by the Registrar.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual
signature, and a seal has been affixed hereon, this Security shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for
any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Date: GEOTEK COMMUNICATIONS, INC.
---------------------
By:
Name:
Title:
Attest: [SEAL]
Authorized Signature
B-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
IBJ SCHRODER BANK &
TRUST COMPANY
By:______________________________
Authorized Signatory
B-3
<PAGE>
(Reverse of Security)
1. Indenture. This Security is one of a duly authorized issue of
Securities of the Company designated as its 15% Series B Senior Secured
Discount Notes due 2005, limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $227,700,000
(as contemplated by Section 2.01 of the Indenture), which may be issued under
an indenture (herein called the "Indenture") dated as of June 30, 1995,
between Geotek Communications, Inc., a Delaware corporation, as issuer (the
"Company"), and IBJ Schroder Bank & Trust Company, a banking company
organized under the laws of the State of New York, as trustee (herein called
the "Trustee," which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Trustee and the Holders of the Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered.
All capitalized terms used in this Security which are defined in
the Indenture and not otherwise defined herein shall have the meanings
assigned to them in the Indenture.
No reference herein to the Indenture and no provisions 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 this Security at the times, place and rate,
and in the coin or currency, herein prescribed.
2. Redemption.
(a) Optional Redemption. The Securities are subject to
redemption, at the option of the Company, in whole or in part, in principal
amounts of $1,000 or any integral multiple of $1,000, at any time on or after
July 15, 2000 upon not less than 30 nor more than 60 days' prior notice at
the following Redemption Prices (expressed as percentages of the principal
amount) plus accrued and unpaid interest, if any, to the Redemption Date, if
redeemed during the 12-month period beginning July 15 of the years indicated
below:
Redemption
Year Price
---- ----------
2000 110.000%
2001 106.667%
2002 103.333%
2003 and thereafter 100.000%
(b) Optional Redemption upon Stock Sale to a Strategic Equity
Investor. In the event of the sale by the Company to a Strategic Equity
Investor (other than Vanguard Cellular Systems, Inc.) on or prior to July 15,
1998 of Capital Stock of the Company, in a single transaction or series of
related transactions for an aggregate purchase price equal to or exceeding
$50,000,000, up to a maximum of 20% of the aggregate Accreted Value of the
Securities will be redeemable at the option of the Company out of the net
proceeds of such sale or sales to the extent that such proceeds consist of
cash or Cash Equivalents. Such Securities will be redeemable on not less
than 30 nor more than 60 days' prior notice at a redemption price equal to
115.0% of the Accreted Value of the Securities to be redeemed to the
redemption date. Any such redemption shall occur within 90 days after (but
not before) such sale or last such sale in the case of a series of related
transactions.
(c) Interest Payments. In the case of any redemption of
Securities, interest installments whose Stated Maturity is on or prior to the
Redemption Date will 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 Date referred to on the face hereof. Securities (or portions
thereof) for whose redemption and payment provision is made in accordance
with the Indenture shall cease to bear interest from and after the Redemption
Date.
B-4
<PAGE>
(d) Partial Redemption. In the event of redemption of this
Security in part only, a new Security or Securities for the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
3. Offers to Purchase. Sections 4.11, 4.12 and 10.12 of the
Indenture, respectively, provide that upon the occurrence of a Change of
Control, following certain Asset Sales and in connection with a Collateral
Release Request, and subject to further limitations contained therein, the
Company shall make an offer to purchase certain amounts of the Securities in
accordance with the procedures set forth in the Indenture.
4. Defaults and Remedies. If an Event of Default shall occur and
be continuing, the principal of premium, if any, all of the outstanding
Securities, plus all accrued and unpaid interest, if any, to and including
the date the Securities are paid, may be declared due and payable immediately
in the manner and with the effect provided in the Indenture.
5. Defeasance. The Indenture contains provisions (which
provisions apply to this Security) for defeasance at any time of (a) the
entire indebtedness of the Company under this Security and (b) certain
restrictive covenants and related Defaults and Events of Default, in each
case upon compliance by the Company with certain conditions set forth
therein.
6. Amendments and Waivers. The Indenture and the Pledge
Agreements permit, with certain exceptions as provided in the Indenture, the
amendment of the Indenture and the Pledge Agreements and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture and the Pledge Agreements at any time by the Company and the
Trustee with the consent of the Holders of at least a majority in aggregate
principal amount of the Securities at the time outstanding. 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 the Pledge Agreements
and certain past Defaults under the Indenture and this Security and their
consequences. Any such consent or waiver by or on behalf of the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Security.
7. Denominations, Transfer and Exchange. The Securities are
issuable only in registered form without coupons in denominations of $1,000
principal amount at maturity and any integral multiple thereof. A Holder may
register the transfer or exchange of Securities in accordance with the
Indenture. No service charge shall be made for any registration of transfer
or exchange or redemption of Securities, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
8. Persons Deemed Owners. Prior to and at the time of due
presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security shall be overdue, and neither the Company, the
Trustee nor any agent thereof shall be affected by notice to the contrary.
9. Security. The Securities are secured by pledges of shares of
Capital Stock owned by the Company to the extent provided for in the
Indenture and the Pledge Agreements.
10. Guarantees. Payment of the Accreted Value, premium (if any)
and interest (including interest on overdue principal and overdue interest,
if lawful) will, to the extent provided for in the Indenture, be
unconditionally guaranteed by certain subsidiaries of the Company.
11. Governing Law. This Security shall be governed by and
construed in accordance with the laws of the State of New York, without
regard to conflicts of law principles.
B-5
<PAGE>
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- ----------------------------------
_________________________________________
_________________________________________
Please print or typewrite name and address including zip code of assignee
_________________________________________
the within Security and all rights thereunder, hereby irrevocably
constituting and appointing
_________________________________________
attorney to transfer said Security on the books of the Company with full
power of substitution in the premises.
Date:
NOTICE: The signature to
this assignment must
correspond with the name as
written upon the face of the
within-mentioned instrument
in every particular, without
alteration or any change
whatsoever.
B-6
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant
to Section 4.11, 4.12 or 10.12 of the Indenture, check the appropriate box:
Section 4.11 [ ]
Section 4.12 [ ]
Section 10.12 [ ]
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 4.11, 4.12 or 10.12 of the Indenture, state the
amount:
$ principal amount at maturity
-------------
Date: Your Signature:
---------------------
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guarantee:
------------------------------
B-7
<PAGE>
The following is a summary of all omitted Exhibits to the foregoing
Indenture.
Exhibit C Form of Certificaate of Non-US persons
Exhibit D Form of Opinion of Counsel for
Issuance of Series B Notes
Exhibit E Form of Certificate to be Delivered in Connection
with Transfers to Non-QIB Accredited Investors
Exhibit F Form of Certificate to be Delivered in Connection
with Transfers Pursuant to Regulation S
Exhibits
G-1, G-2, G-3 Forms of Pledge Agreements (filed as Exhibits
(c)(4), (c)(5) and (c)(6) to the Form 8-K).
The Registrant hereby agrees to furnish supplementally to the
Commission copies of Exhibits C-F upon request of the Commission.
<PAGE>
EXHIBIT (c)(3)
<PAGE>
NOTES REGISTRATION RIGHTS AGREEMENT
-----------------------------------
This NOTES REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into this July 6, 1995 between GEOTEK COMMUNICATIONS, INC., a
Delaware corporation (the "Company"), and SMITH BARNEY INC. (the "Initial
Purchaser").
This Agreement is made pursuant to the Purchase Agreement, dated
June 29, 1995, between the Company and the Initial Purchaser (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchaser of Senior Secured Discount Notes due 2005 of the Company (the
"Notes") having an aggregate principal amount of maturity of up to
$227,700,000 (after giving effect to the over-allotment option granted to the
Initial Purchaser pursuant to the Purchase Agreement). In order to induce
the Initial Purchaser to enter into the Purchase Agreement, the Company has
agreed to provide to the Initial Purchaser and its direct and indirect
transferees the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, capitalized terms
shall have the meanings set forth below, or to the extent not set forth
below, capitalized terms shall have the meanings set forth in the Purchase
Agreement:
"Closing Date" shall mean the Closing Date as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble and also
includes the Company's successors.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" shall mean the Series B Senior Secured Discount
Notes due 2005 to be offered to Holders of Notes in exchange for such
Notes pursuant to the Exchange Offer.
"Exchange Offer" shall mean the exchange offer by the Company of
Notes for Exchange Notes pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected in accordance with Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such
registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Holder" shall mean the Initial Purchaser, for so long as it owns
any Registrable Notes, and each of its successors, assigns and direct
and indirect transferees who become registered owners of Registrable
Notes under the Indenture; provided that for purposes of Sections 4 and
5 of this Agreement, the term "Holder" shall include Participating
Broker-Dealers (as defined in Section 4(a)).
"Indenture" shall mean the Indenture relating to the Notes and the
Exchange Notes, dated as of June 30, 1995, between the Company and IBJ
Schroder Bank and Trust Company, as trustee, as the same may be amended
from time to time in accordance with the terms thereof.
"Initial Purchaser" shall have the meaning set forth in the
preamble to this Agreement.
<PAGE>
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Notes; provided
that whenever the consent or approval of Holders of a specified
percentage of Registrable Notes is required hereunder, Registrable Notes
held by the Company or any of its affiliates (as such term is defined in
Rule 405 under the Securities Act) (other than the Initial Purchaser or
subsequent holders of Registrable Notes if such subsequent holders are
deemed to be such affiliates solely by reason of their holding of such
Registrable Notes or Warrants or Warrant Shares and other than
affiliates that control or are under common control with the Company)
shall not be counted in determining whether such consent or approval was
given by the Holders of such required percentage or amount.
"Notes" shall have the meaning set forth in the second paragraph of
this Agreement.
"Participating Broker-Dealer" shall have the meaning set forth in
Section 4(a) of this Agreement.
"person" shall mean an individual, partnership, corporation, trust
or unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus
as amended or supplemented by any prospectus supplement, and all other
amendments and supplements to such prospectus, including post-effective
amendments, and in each case including all material incorporated by
reference therein.
"Purchase Agreement" shall have the meaning set forth in the second
paragraph of this Agreement.
"Registrable Notes" shall mean the Notes; provided, however, that
Notes shall cease to be Registrable Notes when (i) as to Notes exchanged
for Exchange Notes, the Exchange Offer has been consummated, (ii) a
Registration Statement with respect to such Notes shall have been
declared effective under the Securities Act and such Notes shall have
been disposed of pursuant to such Registration Statement, (iii) such
Notes may be distributed to the public pursuant to Rule 144(k) (or any
similar provision then in force, but not Rule 144A under the Securities
Act) under the Securities Act or (iv) such Notes shall have ceased to be
outstanding.
<PAGE>
"Registration Expenses" shall mean any and all expenses incurred
incident to performance of or compliance by the Company with this
Agreement, including without limitation, (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance
with state securities or "blue sky" laws (including reasonable fees and
disbursements of one counsel for any underwriters in connection with
"blue sky" qualification of any of the Exchange Notes or Registrable
Notes), (iii) all expenses of any persons retained by the Company in
preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement or Prospectus, or, in each case
any amendments or supplements thereto, (iv) the reasonable fees and
expenses incurred by any underwriter in connection with the preparation
of any underwriting agreements, securities sales agreements and other
documents relating to the performance of and compliance with this
Agreement, (v) all rating agency fees, (vi) all fees and disbursements
relating to the qualification of the Indenture under applicable
securities laws, (vi) the fees and disbursements of the Trustee, (viii)
the fees and disbursements of counsel for the Company and, in the case
of a Shelf Registration Statement, the reasonable fees and disbursements
of one counsel for the Holders (which counsel, in the latter case, shall
be selected by the Majority Holders and which counsel also may be
counsel for the Initial Purchaser), and (ix) the fees and disbursements
of the independent public accountants of the Company and any partnership
or joint venture in which the Company or any of its subsidiaries is a
partner, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, but
excluding fees of counsel to the underwriters (other than fees and
expenses set forth in clause (ii) or (iv) above) or the Holders (other
than fees and expenses set forth in clause (viii) above) and
underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of Registrable Notes by a Holder.
"Registration Statement" shall mean any registration statement of
the Company that covers any of the Exchange Notes or Registrable Notes
pursuant to the provisions of this Agreement, and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, and in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shelf Registration" shall mean a registration effected in
accordance with Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) of
this Agreement that covers all of the Registrable Notes (but no other
securities unless approved by the person or persons who have requested
the Company to file the Shelf Registration Statement) on an appropriate
form under Rule 415 under the Securities Act, or any similar rule that
may be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, and in each
case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the Notes under
the Indenture.
"Underwriter" shall have the meaning set forth in Section 2(c) of
this Agreement.
"Underwritten Offering" shall mean a registration in which
Registrable Notes are sold to an Underwriter for reoffering to the
public.
"Warrant Shares" means any shares of Common Stock issued upon the
exercise of Warrants.
"Warrants" means the warrants to purchase Common Stock, par value
$.01 per share, of the Company issued pursuant to the Purchase
Agreement.
<PAGE>
2. Registration Under the Securities Act.
(a) To the extent not prohibited by any applicable law or
applicable interpretation of the staff of the SEC, the Company shall file
after the Closing Date and no later than September 4, 1995, an Exchange Offer
Registration Statement covering the offer by the Company to the Holders to
exchange all of the Registrable Notes for Exchange Notes and shall use its
best efforts to cause such Exchange Offer Registration Statement to be
declared effective by the SEC not later than November 3, 1995. The Company
shall use its best efforts to cause such Registration Statement to remain
effective until the closing of the Exchange Offer. The Company shall
commence the Exchange Offer promptly after the Exchange Offer Registration
Statement has been declared effective by the SEC and shall use its best
efforts to have the Exchange Offer consummated not later than the date that
is 45 days after the Exchange Offer Registration Statement is declared
effective. The Company shall commence the Exchange Offer by mailing an
exchange offer Prospectus and accompanying documents to each Holder stating,
in addition to such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Agreement and that all Registrable Notes that are eligible to be
exchanged in the Exchange Offer under applicable law and applicable
interpretations of the Staff of the SEC and are validly tendered will be
accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be each
business day during a period of at least 30 days from the date such
notice is mailed) (the "Exchange Dates");
(iii) that any Registrable Note not tendered will remain
outstanding and continue to accrete and accrue interest, but will not
retain any rights under this Agreement;
(iv) that Holders electing to have a Registrable Note exchanged
pursuant to the Exchange Offer will be required to surrender such
Registrable Note, together with the enclosed letters of transmittal, to
the institution and at the address (located in the Borough of Manhattan,
City of New York) specified in the notice prior to the close of business
on the last Exchange Date; and
(v) that Holders will be entitled to withdraw their election,
not later than the close of business on the last Exchange Date, by
sending to the institution and at the address (located in the Borough of
Manhattan, City of New York) specified in the notice, a telegram, telex,
facsimile transmission or letter setting forth the name of such Holder,
the principal amount of Registrable Notes delivered for exchange and a
statement that such Holder is withdrawing his election to have such
Notes exchanged.
As soon as practicable after the last Exchange Date, the Company or
its agent shall:
(i) accept for exchange Registrable Notes or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Notes or portions thereof so accepted for
exchange by the Company and issue, and cause the Trustee to promptly
authenticate and mail to each Holder, an Exchange Note equal in
principal amount at maturity to the principal amount at maturity of the
Registrable Notes surrendered by such Holder.
The Company shall use its best efforts to complete the Exchange
Offer as provided above and shall comply with the applicable requirements of
the Securities Act, the Exchange Act and other applicable laws and
regulations in connection with the Exchange Offer. The Exchange Offer shall
not be subject to any conditions, other than that the Exchange Offer does not
violate applicable law or any applicable interpretation of the staff of the
SEC and that no order of any governmental agency or court of competent
jurisdiction would be violated by consummating the Exchange Offer.
<PAGE>
(b) In the event that (i) any changes in law or the applicable
interpretations of the staff of the SEC do not permit the Company to effect
the Exchange Offer or the Exchange Offer is otherwise prohibited or (ii) the
Initial Purchaser holds any portion of the Notes purchased by it under the
Purchase Agreement, the Company shall use all reasonable best efforts to
cause to be filed no later than September 4, 1995 a Shelf Registration
Statement providing for the sale of the Registrable Notes and to have such
Shelf Registration Statement declared effective by the SEC no later than
November 3, 1995. In the event that the Company is required to file a Shelf
Registration Statement solely as a result of the matters referred to in
clause (ii) of the preceding sentence, the Company shall file and use its
best efforts to have declared effective by the SEC both an Exchange Offer
Registration Statement pursuant to Section 2(a) with respect to all
Registrable Notes held by Holders other than the Initial Purchaser and a
Shelf Registration Statement (which may be a combined Registration Statement
with the Exchange Offer Registration Statement to the extent permitted by
applicable law) with respect to offers and sales of Registrable Notes held by
the Initial Purchaser. The Company agrees to use all reasonable best efforts
to keep the Shelf Registration Statement continuously effective until the
third anniversary of the effective date thereof. The Company further agrees
to supplement or amend the Shelf Registration Statement, if required by the
rules, regulations or instructions applicable to the registration form used
by the Company for such Shelf Registration Statement or by the Securities Act
or by any other rules and regulations thereunder for shelf registration or if
reasonably requested by a Holder with respect to information relating to such
Holder in order to accurately reflect information regarding such Holder or
such Holder's plan of distribution as required by the Shelf Registration
Statement, and to use its best efforts to cause any such amendment to become
effective and such Shelf Registration Statement to become usable as soon as
thereafter practicable. The Company agrees to furnish to the Holders of
Registrable Notes copies of any such supplement or amendment promptly after
its being made available for use or filed with the SEC.
(c)(i) The Holders of Registrable Notes covered by a Shelf
Registration Statement who desire to do so may sell such Registrable Notes in
an Underwritten Offering subject to the limitations set forth in the proviso
to the first sentence of Section 3(q) hereunder (including the Company's
obligation to use its best efforts in connection therewith). In any such
Underwritten Offering, the investment banker or investment bankers and
manager or managers (the "Underwriters") that will administer the offering
will be selected by the Majority Holders of the Registrable Notes included in
such offering.
(ii) Each Holder whose Registrable Notes are covered by a Shelf
Registration Statement filed pursuant to Section 2(b) agrees, upon the
request of the Underwriter(s) in any Underwritten Offering permitted pursuant
to this Agreement, not to effect any public sale or distribution of
securities of the Company of the same class as the Registrable Notes included
in such Shelf Registration Statement (except as part of such registration),
including a sale pursuant to Rule 144 under the Securities Act, during the
10-day period prior to, and during the 90-day period beginning on, the
closing date of any such Underwritten Offering made pursuant to such Shelf
Registration Statement, to the extent timely notified in writing by the
Company or such Underwriter(s).
The foregoing provision shall not apply to any Holder if such
Holder is prevented by applicable statute or regulation from entering into
any such agreement; provided, however, that any such Holder shall undertake,
in its request to participate in any such Underwritten Offering, not to
effect any public sale or distribution of any of its Registrable Notes not
sold in such Underwritten Offering, commencing on the date of sale of such
Registrable Notes unless it has provided 45 days' prior written notice of
such sale or distribution to the Underwriter(s).
<PAGE>
(iii) The Company agrees not to effect any public or private
offer, sale or distribution of securities of the same quality and nature as
the Registrable Notes, including a sale pursuant to Regulation D under the
Act, during the 10-day period prior to, and during the 90-day period
beginning on, the closing date of each Underwritten Offering permitted
pursuant to Section 3(q) hereof made pursuant to the Shelf Registration
Statement, to the extent timely notified in writing by the Underwriter(s).
(d) The Company shall pay all Registration Expenses in connection
with any registration pursuant to Section 2(a) or 2(b). Each Holder shall
pay all underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Notes
pursuant to the Shelf Registration Statement.
(e) An Exchange Offer Registration Statement pursuant to Section
2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof
will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after a Shelf Registration
Statement has been declared effective, the offering of Registrable Notes
pursuant thereto is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court,
such Shelf Registration Statement will be deemed not to have been effective
during the period of such interference until the offering of Registrable
Notes pursuant to such Registration Statement may legally resume.
(f) Upon the occurrence or failure to occur of certain events
described in the Notes, additional interest will accrue on the Notes, as
provided for in the Notes.
(g) Without limiting the remedies available to the Initial
Purchaser and subsequent Holders, the Company acknowledges that any failure
by the Company to comply with its obligations under Section 2(a) and/or
Section 2(b) hereof may result in material irreparable injury to the Initial
Purchaser and/or subsequent Holders for which there is no adequate remedy at
law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial Purchaser
or any subsequent Holder may obtain such relief as may be required to
specifically enforce the Company's obligations under Section 2(a) and Section
2(b) hereof.
3. Registration Procedures. In connection with the obligations of
the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall, as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the Securities Act, which form shall, (x) be
selected by the Company, (y) in the case of a Shelf Registration, be
available for the sale of the Registrable Notes by the selling Holders
thereof and (z) comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith, and use all reasonable best
efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-
effective amendments to each Registration Statement as may be necessary
to (x) keep such Registration Statement effective for the applicable
period under this Agreement and (y) cause each Prospectus to be
supplemented by any required prospectus supplement and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities Act
and (z) keep each Prospectus current during the period described under
Section 4(3) and Rule 174 under the Securities Act that is applicable to
transactions by brokers or dealers with respect to the Registrable Notes
or Exchange Notes;
<PAGE>
(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Notes, to counsel for the Initial Purchaser, to counsel for
the Holders and to each Underwriter of an Underwritten Offering of
Registrable Notes, if any, and each such Underwriter's Counsel, without
charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other
documents as such Holder or Underwriter may reasonably request, in order
to facilitate the public sale or other disposition of the Registrable
Notes; the Company consents to the use of such Prospectus and any
amendment or supplement thereto in accordance with applicable law by
each of the selling Holders of Registrable Notes and any such
Underwriters in connection with the offering and sale of the Registrable
Notes covered by and in the manner described in such Prospectus or any
amendment or supplement thereto in accordance with applicable law;
(d) use its reasonable best efforts to register or qualify the
Registrable Notes or Exchange Notes under all applicable state
securities or "blue sky" laws of such jurisdictions as any Holder of
Registrable Notes or Exchange Notes covered by a Registration Statement
shall reasonably request in writing by the time the applicable
Registration Statement is declared effective by the SEC, to cooperate
with such Holders in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. and do any and
all other acts and things which may be reasonably necessary or advisable
to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Notes owned or Exchange Notes to be
owned by such Holder; provided, however, that the Company shall not be
required to (i) qualify as a foreign entity or as a dealer in securities
in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (ii) file any general consent to service of
process or (iii) subject itself to taxation in any such jurisdiction if
it is not so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Notes, counsel for the Holders and counsel for the Initial
Purchaser promptly and, if requested by any such Holder, confirm such
advice in writing, (i) when a Shelf Registration Statement has become
effective and when any post-effective amendments and supplements thereto
have been filed and become effective, (ii) of any request by the SEC or
any state securities authority for amendments and supplements to a Shelf
Registration Statement and Prospectus or for additional information
after the Shelf Registration Statement has become effective, (iii) of
the issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of a Shelf Registration Statement or
the initiation of any proceedings for that purpose, (iv) if, between the
effective date of a Shelf Registration Statement and the closing of any
sale of Registrable Notes covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating
to such offering cease to be true and correct in all material respects
or if the Company receives any notification with respect to the
suspension of the qualification of the Registrable Notes for sale in any
jurisdiction or the initiation of any proceeding for such purpose, (v)
of the happening of any event which makes any statement made in a Shelf
Registration Statement or the related Prospectus untrue in any material
respect or which requires the making of any changes in a Shelf
Registration Statement or Prospectus in order to make the statements
therein not misleading and (vi) of any determination by the Company that
a post-effective amendment to a Shelf Registration Statement would be
appropriate;
<PAGE>
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Shelf Registration Statement at
the earliest possible moment and provide prompt notice to each Holder of
the withdrawal of any such order;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Notes, without charge, at least one conformed copy of each
Shelf Registration Statement and any post-effective amendment thereto,
together with any documents incorporated therein by reference (in each
case, without exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Notes to facilitate the timely
preparation and delivery of certificates representing Registrable Notes
to be sold and not bearing any restrictive legends and enable such
Registrable Notes to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the selling
Holders may reasonably request at least two business days prior to the
closing of any sale of Registrable Notes;
(i) in the case of a Shelf Registration, upon the occurrence of
any event contemplated by Section 3(e)(v) hereof, use its reasonable
best efforts to prepare a supplement or post-effective amendment to a
Shelf Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Notes, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; the Company agrees to notify each Holder to
suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event and each Holder hereby agrees to suspend use
of the Prospectus until the Company has amended or supplemented the
Prospectus to correct such misstatement or omission;
(j) within a reasonable time prior to the filing of any Shelf
Registration Statement, Prospectus to be included therein, or amendment
or supplement therein, provide copies of such document to the Initial
Purchaser and its counsel, and the Holders and their counsel, and make
such of the representatives of the Company as shall be reasonably
requested by the Initial Purchaser or its counsel, and the Holders or
their counsel, available for discussion of such document, and shall not
at any time file or make any amendment or supplement to any such
document of which the Initial Purchaser and its counsel, and the Holders
and their counsel, shall not have previously been advised and furnished
a copy or in a form to which the Initial Purchaser or its counsel, and
the Majority Holders or their counsel, shall reasonably object;
provided, however, that any document incorporated by reference in any
such Prospectus by any amendment or supplement shall be provided to the
Initial Purchaser and its counsel and to the Holders and their counsel
at the time that such amendment or supplement is filed with the SEC;
(k) obtain a CUSIP number for all Exchange Notes or Registrable
Notes, as the case may be, not later than the effective date of a
Registration Statement;
(l) cause the Indenture to be qualified under the Trust Indenture
Act of 1939 (the "TIA") in connection with the registration of the
Exchange Notes or Registrable Notes, as the case may be, cooperate with
the Trustee and the Holders to effect such changes to the Indenture as
may be required for the Indenture to be so qualified in accordance with
the terms of the TIA and execute, and use its reasonable best efforts to
cause the Trustee to execute, all documents as may be required to effect
such changes, and all other forms and documents required to be filed
with the SEC to enable the Indenture to be so qualified in a timely
manner;
<PAGE>
(m) in the case of a Shelf Registration, make available for
inspection by a representative of all of the Holders of the Registrable
Notes, any Underwriter participating in any disposition pursuant to such
Shelf Registration Statement and attorneys and accountants designated by
the Holders or any Underwriter, at reasonable times and in a reasonable
manner, all financial and other records, pertinent documents and
properties of the Company, and cause the respective officers, directors
and employees of the Company to supply all information reasonably
requested by any such representatives, Underwriter, attorney or
accountant in connection with a Shelf Registration Statement; provided,
however, that such Underwriters, representatives, attorneys or
accountants agree to keep confidential any records, information or
documents that are designated by the Company in writing as confidential
and to use such information obtained pursuant to this provision only in
connection with the transaction for which such information was obtained,
and not for any other purpose, unless (i) such records, information or
documents (x) are available to the public, (y) were already in such
Underwriters', representatives', attorneys' or accountants' possession
prior to its receipt from the Company and they do not otherwise have any
obligation to keep such records, information or documents confidential
or (z) are obtained by such Underwriters, representatives, attorneys or
accountants from a third person who, insofar as is known to such
Underwriters, representatives, attorneys or accountants, is not
prohibited from transmitting the information to such Underwriters,
representatives, attorneys or accountants by a contractual, legal or
fiduciary obligation to the Company or a third party, or (ii) disclosure
of such records, information or documents is required by court or
administrative order after the exhaustion of appeals therefrom;
(n) in the case of a Shelf Registration, use its reasonable best
efforts to cause all Registrable Notes to be listed on any securities
exchange or any automated quotation system on which similar securities
issued by the Company are then listed if requested by the Majority
Holders, to the extent such Registrable Notes satisfy applicable listing
requirements;
(o) use its reasonable best efforts to cause the Exchange Notes or
Registrable Notes, as the case may be, to continue to be rated by two
nationally recognized statistical rating organizations (as such term is
defined in Rule 436(g)(2) under the Securities Act);
(p) if reasonably requested by any Holder of Registrable Notes
covered by a Registration Statement in order to accurately reflect
information regarding such Holder or such Holder's plan of distribution
as required by such Registration Statement, (i) promptly incorporate in
a Prospectus supplement or post-effective amendment such information
with respect to such Holder as such Holder reasonably requests to be
included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as the Company has
received satisfactory notification of the matters to be incorporated in
such filing; and
<PAGE>
(q) in the case of a Shelf Registration, use its best efforts to
enter into such customary agreements and take all such other reasonable
actions in connection therewith (including those requested by the
Holders of a majority in aggregate principal amount of the Registrable
Notes being sold) in order to expedite or facilitate the disposition of
such Registrable Notes including, but not limited to, an Underwritten
Offering and in such connection, (i) to the extent possible, make such
representations and warranties to the Holders and any Underwriters of
such Registrable Notes with respect to the business of the Company and
its subsidiaries and its or its subsidiaries' joint ventures, the
Registration Statement, Prospectus and documents incorporated by
reference or deemed incorporated by reference, if any, in each case, in
form, substance and scope as are customarily made by issuers to
underwriters in Underwritten Offerings and confirm the same if and when
requested, (ii) obtain opinions of counsel to the Company (which counsel
and opinions, in form, scope and substance, shall be reasonably
satisfactory to the Holders of a majority in aggregate principal amount
of the Registrable Notes to be sold in such Underwritten Offering and
any Underwriters and their respective counsel) addressed to each selling
Holder and any Underwriter of Registrable Notes, covering the matters
customarily covered in opinions requested in Underwritten Offerings,
(iii) obtain "cold comfort" letters from the independent certified
public accountants of the Company (and, if necessary, any other
certified public accountant of any subsidiary of the Company or any
joint venture in which the Company or any of its subsidiaries is a
partner, or of any business acquired by the Company for which financial
statements and financial data are or are required to be included in the
Registration Statement) addressed to each selling Holder and any
Underwriter of Registrable Notes, such letters to be in customary form
and covering matters of the type customarily covered in "cold comfort"
letters in connection with Underwritten Offerings, and (iv) deliver such
documents and certificates as may be reasonably requested by the Holders
of a majority in aggregate principal amount of the Registrable Notes
being sold or any Underwriter, and which are customarily delivered in
Underwritten Offerings, to evidence the continued validity of the
representations and warranties of the Company made pursuant to clause
(i) above and to evidence compliance with any customary conditions
contained in an underwriting agreement; provided that the Company shall
be required to use its best efforts to make an Underwritten Offering
only upon the request of Holders of at least 25 % of the Registrable
Notes outstanding at the time such request is delivered to the Company.
In the case of any Underwritten Offering, the Company shall provide
written notice to the Holders of all Registrable Notes of such
Underwritten Offering at least 30 days prior to the filing of a
prospectus supplement for such Underwritten Offering, (y) specify a
date, which shall be no earlier than 10 days following the date of such
notice, by which each such Holder must inform the Company of its intent
to participate in such Underwritten Offering and (z) include the
instructions such Holder must follow in order to participate in such
Underwritten Offering.
In the case of a Shelf Registration Statement, the Company may
require each Holder of Registrable Notes to furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder
of such Registrable Notes as the Company may from time to time reasonably
request in writing. Each such Holder shall provide the Company with any such
information within five business days after such information is requested and
shall provide to the Company, within five business days after such Holder
receives a draft of the Registration Statement or amendment thereto in which
such information is included, comments on such Registration Statement or
amendment thereto. A Holder of Registrable Notes shall not be entitled to
receive additional interest pursuant to Section 2 of the Notes to the extent
that such Holder fails to comply with any obligation under this paragraph and
the failure by such Holder to comply with such obligation is the sole reason
for the accrual of additional interest pursuant to Section 2 of the Notes.
<PAGE>
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 3(e)(iii), (v) or (vi) hereof, such
Holder will forthwith discontinue disposition of Registrable Notes pursuant
to such Shelf Registration Statement until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 3(i)
hereof and, if so directed by the Company, such Holder will deliver to the
Company (at its expense) all copies in its possession, other than permanent
file copies then in such Holder's possession, of the Prospectus covering such
Registrable Notes current at the time of receipt of such notice.
4. Participation of Broker-Dealers in Exchange Offer. (a) The
Staff of the SEC has taken the position that any broker-dealer that receives
Exchange Notes for its own account in the Exchange Offer in exchange for
Notes that were acquired by such broker-dealer as a result of market making
or other trading activities (a "Participating Broker-Dealer") may be deemed
to be an "underwriter" within the meaning of the Securities Act and must
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes.
The Company understands that it is the Staff's position that if the
Prospectus contained in the Exchange Offer Registration Statement includes a
plan of distribution containing a statement to the above effect and the means
by which Participating Broker-Dealers may resell the Exchange Notes, without
naming the Participating Broker-Dealers or specifying the amount of Exchange
Notes owned by them, such Prospectus may be delivered by Participating
Broker-Dealers to satisfy their prospectus delivery obligation under the
Securities Act in connection with resales of Exchange Notes for their own
accounts, so long as the Prospectus otherwise meets the requirements of the
Securities Act.
(b) In light of Section 4(a) above, notwithstanding the other
provisions of this Agreement, the Company agrees that the provisions of this
Agreement as they relate to a Shelf Registration shall also apply to an
Exchange Offer Registration to the extent, and with such reasonable
modifications thereto as may be reasonably requested by the Initial Purchaser
or by one or more Participating Broker-Dealers, in each case as provided in
clause (ii) below, in order to expedite or facilitate the disposition of any
Exchange Notes by Participating Broker-Dealers consistent with the positions
of the Staff recited in Section 4(a) above; provided that:
(i) the Company shall not be required to amend or supplement
the Prospectus contained in the Exchange Offer Registration Statement,
as would otherwise be contemplated by Section 3(i), for a period
exceeding one year after the last Exchange Date (as extended by the
number of days during such one-year period from, and including the date
of, the giving by the Company of a notice pursuant to Section 3(e)(iii),
(v) or (vi) of this Agreement to, and including the date when, the
Company shall have made available to the Holders copies of a
supplemented or amended Prospectus pursuant to Section 3(i) hereof) and
Participating Broker-Dealers shall not be authorized by the Company to
deliver and shall not deliver such Prospectus after such period in
connection with the resales contemplated by this Section 4; and
<PAGE>
(ii) the application of the Shelf Registration procedures set
forth in Section 3 of this Agreement to an Exchange Offer Registration,
to the extent not required by the positions of the Staff of the SEC or
the Securities Act and the rules and regulations thereunder, will be in
conformity with the reasonable request to the Company in writing by the
Initial Purchaser or with the reasonable request in writing to the
Company by one or more broker-dealers who certify to the Initial
Purchaser and the Company in writing that they are, or will be,
Participating Broker-Dealers; and provided further that in connection
with such application of the Shelf Registration procedures set forth in
Section 3 to an Exchange Offer Registration, (x) Section 3(n) shall not
be applicable and (y) the Company shall be obligated (A) to deal only
with one entity representing the Participating Broker-Dealers, which
shall be the Initial Purchaser unless it elects not to act as such
representative, (B) to pay reasonable fees and expenses of only one
counsel representing the Participating Broker-Dealers, which shall be
counsel to the Initial Purchaser unless such counsel elects not to so
act, and (C) to cause to be delivered only one, if any, "cold comfort"
letter with respect to the Prospectus in the form existing on the last
Exchange Date and with respect to each subsequent amendment or
supplement, if any, effected during the period specified in clause (i)
above.
(c) The Initial Purchaser shall have no liability to the Company
or any Holder with respect to any request that it may make pursuant to
Section 4(b) above.
5. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Initial Purchaser, each Holder and each
person, if any, who controls the Initial Purchaser or any Holder within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act or is under common control with or is controlled by the Initial
Purchaser or any Holder and each of their respective directors and officers
(each a "Non-Company Indemnitee") from and against any and all losses,
claims, damages, liabilities and expenses (including, without limitation, any
legal or other expenses reasonably incurred by the Non-Company Indemnitee in
connection with defending or investigating any such action or claim) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment or
supplement thereto) pursuant to which Exchange Notes or Registrable Notes
were registered under the Securities Act, including all documents
incorporated therein by reference, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
arising out of or based upon any untrue statement or alleged untrue statement
of a material fact contained in any Prospectus (as amended or supplemented,
if the Company shall have furnished any amendments or supplements thereto),
or caused by any omission or alleged omission to state therein a material
fact necessary to make the statements therein in light of the circumstances
under which they were made not misleading, except insofar as such losses,
claims, damages, liabilities or expenses arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted therefrom in reliance upon and in conformity
with information relating to the Initial Purchaser or any Holder furnished to
the Company in writing by the Initial Purchaser or any selling Holder
expressly for use therein; provided, however, that the indemnification
provided for in this paragraph (a) shall not inure to the benefit of any Non-
Company Indemnitee with respect to any sale or disposition of Registrable
Notes by such Holder in violation of the provisions of the last paragraph of
Section 3 hereof. In connection with any Underwritten Offering contemplated
by Section 3(q), the Company also shall indemnify the Underwriters, if any,
selling brokers, dealers and similar securities industry professionals
participating in the distribution, their officers and directors and each
person who controls such persons (within the meaning of the Securities Act
and the Exchange Act) to the same extent as provided above with respect to
the indemnification of the Holders, if requested in connection with any
Registration Statement. The indemnification obligation of the Company set
forth in this paragraph (a) shall be in addition to any liability which the
Company may otherwise have, including, without limitation, for any breach of
any covenant contained in this Agreement.
<PAGE>
(b) Each Holder agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Initial Purchaser, the other selling
Holders, each of their respective directors and officers and each person, if
any, who controls the Company, the Initial Purchaser, or any other selling
Holder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act or is under common control with or is
controlled by the Company, the Initial Purchaser or any other selling Holder
to the same extent as the foregoing indemnity from the Company to the Initial
Purchaser and the Holders, but only with reference to information relating to
such Holder furnished to the Company in writing by such Holder expressly for
use in the Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto).
(c) If any action, suit or proceeding shall be instituted
involving any person in respect of which such person is entitled to indemnity
pursuant to either paragraph (a) or (b) above, such person (the "indemnified
party") shall promptly notify the parties against whom indemnification is
being sought (the "indemnifying party") and such indemnifying parties shall
assume the defense thereof, including the employment of counsel and payment
of all fees and expenses. Such indemnified party, shall have the right to
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying parties have agreed in
writing to pay such fees and expenses, (ii) the indemnifying parties shall
have failed to assume the defense and employ counsel or (iii) the named
parties to any such action, suit, or proceeding (including any impleaded
parties) include both such indemnifying parties and such indemnified party
and such indemnified party shall have been advised by its counsel that
representation of such indemnified party and any indemnifying party by the
same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel
has been proposed due to actual or potential differing interests between them
(in which case the indemnifying parties shall not have the right to assume
the defense of such action, suit or proceeding on behalf of the indemnified
party). It is understood, however, that the indemnifying parties shall, in
connection with any one such action, suit or proceeding or but substantially
similar proceeding or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for the Initial
Purchaser and all persons, if any, who control the Initial Purchaser within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act or is under common control with or is controlled by the Initial
Purchaser, and each of their respective directors and officers, and the
reasonable fees and expenses of only one separate firm of attorneys (in
addition to any local counsel) at any time for all Holders and all persons,
if any, who control any Holders within the meaning of either such Section, or
are under common control with or are controlled by such Holders, and each of
their respective directors and officers. In such case involving the Initial
Purchaser, persons who control, are controlled by or under common control
with the Initial Purchaser, or their respective directors or officers, such
firm shall be designated in writing by the Initial Purchaser. In such case
involving the Holders and such persons who control, are controlled by or
under common control with Holders, or their respective directors or officers,
such firm shall be designated in writing by the Holders of a majority of the
aggregate principal amount of Registrable Notes sold under the applicable
Registration Statement. The indemnifying parties shall not be liable for any
settlement of any action, suit or proceeding effected without their written
consent, but if settled with such written consent or if there be a final
judgment for the plaintiff, the indemnifying parties agree to indemnify and
hold harmless the indemnified party from and against any loss, action,
damage, liability or expense by reason of such settlement or judgment.
<PAGE>
(d) If the indemnification provided for in this Section 5 is
unavailable to an indemnified party under paragraphs (a) or (b) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party or parties, on the one hand, and of the indemnified party
or parties, on the other hand, in connection with such statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses as well as any other relevant equitable consideration. The relative
fault of the Company, on the one hand, and any Holder, on the other hand,
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or by such Holder, on the other hand, and the
parties* relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Holders' respective
obligations to contribute pursuant to this Section 5(d) are several in
proportion to the respective principal amount of Registrable Notes of such
Holder that were registered pursuant to the applicable Registration
Statement.
(e) The Company, the Initial Purchaser and each Holder agree that
it would not be just or equitable if contribution pursuant to this Section 5
were determined by a pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating any claim or defending any
such action, suit or proceeding. Notwithstanding the provisions of this
Section 5, no Holder shall be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Notes sold by
such Holder exceeds the amount of any damages that such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 5
are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any indemnified party at law or in equity.
(f) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under
this Section 5 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 5 and the
representations of the Company contained in this Agreement shall remain
operative and in full force and effect, regardless of (i) any investigation
made by or on behalf any indemnified person, (ii) acceptance of any of the
Exchange Notes, (iii) any sale of Registrable Notes pursuant to a Shelf
Registration Statement and (iv) any termination of this Agreement. A
successor to any indemnified party shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this
Section 5.
(g) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
<PAGE>
6. Miscellaneous. (a) No Inconsistent Agreements. The Company
has not entered into, and on or after the date of this Agreement will not
enter into, any agreement that is inconsistent with the rights granted to the
Holders of Registrable Notes in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's other issued and outstanding securities under any
such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained the written consent
of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Notes affected by such amendment, modification,
supplement, waiver or departure; provided, however, that no amendment,
modification, supplement, waiver or consent to the departure with respect to
the provisions of Section 5 hereof shall be effective as against any person
unless consented to in writing by such person.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder
to the Company by means of a notice given in accordance with the provisions
of this Section 6(c), which address initially is, with respect to the Initial
Purchaser, the address set forth in the Purchase Agreement; and (ii) if to
the Company, initially at the Company's address set forth in the Purchase
Agreement, and, thereafter, at such other address, notice of which is given
in accordance with the provisions of this Section 6(c).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next business day, if timely delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications shall
be concurrently delivered by the person giving the same to the Trustee, at
the address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of
each of the parties, including, without limitation and without the need for
an express assignment, subsequent Holders; provided that nothing herein shall
be deemed to permit any assignment, transfer or other disposition of
Registrable Notes in violation of the terms of the Purchase Agreement. If
any transferee of any Holder shall acquire Registrable Notes, in any manner,
whether by operation of law or otherwise, such Registrable Notes shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Notes, such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such person shall be entitled to receive the benefits hereof.
The Initial Purchaser (in its capacity as Initial Purchaser) shall have no
liability or obligation to the Company with respect to any failure by any
other Holder to comply with, or any breach by any other Holder of, any of the
obligations of such other Holder under this Agreement.
(e) Purchases and Sale of Notes. The Company shall not, and shall
use its best efforts to cause its affiliates (as defined in Rule 405 under
the Securities Act) that it controls not to, purchase and then resell or
otherwise transfer any Notes.
(f) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Initial Purchaser, on the other hand, and the Initial
Purchaser and the Holders shall have the right to enforce such agreements
directly to the extent they deem such enforcement necessary or advisable to
protect the rights of the Initial Purchaser or the Holders hereunder.
<PAGE>
(g) Counterparts. This Agreement may be signed in various
counterparts which constitute one and the same instrument. If signed in
counterparts, this Agreement shall not become effective unless at least one
counterpart hereof shall have been executed and delivered on behalf of each
party hereto.
(h) Headings. The headings of the Sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Submission to Jurisdiction. The Company irrevocably submits
to the jurisdiction of any United States or State court located in the State
of New York in any suit or proceeding based on or arising under this
Agreement and irrevocably agrees that all claims in respect of such suit or
proceeding may be determined in any such court. The Company irrevocably
waives the defense of an inconvenient forum to the maintenance of such suit
or proceeding. The Company hereby agrees to designate and appoint CT
Corporation System as an agent upon whom process may be served in any suit or
proceeding based on or arising under this Agreement. The Company further
agrees that service of process upon the Company, or upon an agent appointed
pursuant to the preceding sentence accompanied with written notice of said
service to the Company, as the case may be, mailed by first class mail shall
be deemed in every respect effective service of process upon the Company in
any such suit or proceeding. Nothing herein shall affect the Initial
Purchaser's or any Holder's right to serve process in any other manner
permitted by law. The Company agrees that a final non-appealable judgment in
any such suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
GEOTEK COMMUNICATIONS,INC.
By:/s/ Yaron Eitan
---------------
Name: Yaron Eitan
Title: President
Confirmed and accepted as of
the date first above
written:
SMITH BARNEY INC.
By: /s/ Anthony S. Graham
------------------------
Name: Anthony S. Graham
Title: Vice President
<PAGE>
EXHIBIT (c)(4)
<PAGE>
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Agreement") is made as of July 6, 1995 by
and between GEOTEK COMMUNICATIONS, INC., a Delaware corporation ("Geotek" or
the "Pledgor"), and IBJ SCHRODER BANK & TRUST COMPANY, a New York banking
corporation, and its successors or nominees, as collateral agent (the
"Collateral Agent").
RECITALS
A. Geotek and the Collateral Agent are parties to an Indenture
dated as of the date hereof (as the same may be amended, modified, extended
or replaced from time to time, the "Indenture").
B. The Pledgor is the legal and beneficial owner of all of the
Pledged Securities (as hereinafter defined), which consists of the capital
stock issued by the Pledgor's subsidiaries listed in Schedule I hereto
(collectively, the "Issuer"), as such Schedule may be amended from time to
time.
C. The execution and delivery of this Agreement by Pledgor is a
condition precedent to the issuance of the Securities under the Indenture.
NOW, THEREFORE, for good and valuable consideration received, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1. DEFINITIONS
1.1 Terms Defined in Indenture. Capitalized terms used in this
Agreement without definition have the meanings set forth in the Indenture.
1.2 Other Definitions. The following terms used in this Agreement
have the meanings set forth below:
(a) "Acquisition Agreement" means the Acquisition Agreement
dated April 6, 1995, as amended, which provides for the acquisition by
EGAC of Geotek's interests in Speech Design and Bogen.
(b) "EGAC" means European Gateway Acquisition Corporation.
(c) "Permitted Pledge Agreement Indebtedness" means any of
the following: (i) Indebtedness permitted to be incurred pursuant to
clauses (b), (c), (e), (f), (g), (h) and (n) of the second paragraph of
Section 4.08 of the Indenture entitled "Limitation on Indebtedness";
(ii) Indebtedness of a Pledged Company owed to and held by Geotek or
another Pledged Company, to the extent provided for in clause (d) of
Section 4.08 of the Indenture entitled "Limitation on Indebtedness";
(iii) Indebtedness incurred to finance the construction or acquisition
of Telecommunications Assets to be utilized in Germany in an aggregate
amount at any time not exceeding DM 15,000,000 at any time on or prior
to the second anniversary of the Indenture and, thereafter
DM 30,000,000; (iv) Indebtedness existing or incurred pursuant to lines
of credit in existence on the date of the Indenture; (v) Indebtedness of
PowerSpectrum incurred in connection with government sponsored programs,
in an aggregate outstanding amount at any time not exceeding
$10,000,000; (vi) Indebtedness incurred by a joint venture contemplated
by clause (k) of the definition of "Permitted Investments" contained in
the Indenture; and (vii) Indebtedness incurred to finance the
construction or acquisition of Telecommunications Assets, to the extent
used in connection with the construction or operation of a digital
network, to be utilized in the United Kingdom in an aggregate amount at
any time not exceeding L 8,000,000. For purposes of determining whether
Indebtedness constitutes Permitted Pledge Agreement Indebtedness, in the
event that Indebtedness meets the criteria of more than one of the types
of Permitted Pledge Agreement Indebtedness described in the above
clauses, Geotek, in its sole discretion, shall classify such
Indebtedness and only be required to include the amount and type of such
Permitted Pledge Agreement Indebtedness in one of such clauses.
<PAGE>
(d) "Permitted Pledge Agreement Liens" shall mean (i) Liens
permitted by Section 4.10 of the Indenture entitled "Limitation on
Liens", other than Liens permitted by clauses (iv), (v) and (vi) of the
proviso thereto; (ii) Liens contemplated by clauses (iv) and (v) of the
proviso to Section 4.10 of the Indenture entitled "Limitation on Liens",
except that references therein to the Indenture shall be deemed, for
purposes hereof, to refer only to the Pledge Agreements and references
therein to Subsidiaries shall be deemed, for purposes hereof, to refer
only to the Pledged Companies; (iii) Liens contemplated by clauses (a),
(b), (c), (d), (e), (f), (g), (h), (j), (l), (m) and (n) of the
definition of "Permitted Liens" contained in the Indenture; and (iv)
Liens contemplated by clause (i) of the definition of "Permitted Liens"
contained in the Indenture, to the extent incurred by a Pledged Company,
and to the extent that such property or assets are first transferred to
such Pledged Company.
(e) "Pledge Agreements" means this Agreement and all other
Pledge Agreements as defined in and entered into pursuant to the
Indenture.
(f) "Pledged Companies" means (a) National Band Three
Limited, (b) all of Geotek's direct subsidiaries that, on the date of
this Agreement, directly or indirectly hold U.S. 900 MHz licenses,
including, without limitation, PowerSpectrum, Inc., (c) Geotek
Communications GmbH, (d) all of Geotek's direct subsidiaries that own
Geotek's indirect interest in Bogen Corporation, including, without
limitation, U.S.I. Venture Corp., Geotek Acquisition Corp. and Geotek
Subsidiary Industries, Inc., (e) EGAC (at such time as it becomes a
subsidiary of Pledgor) and (f) any subsidiary, the Capital Stock of
which is required to be pledged as security for the Securities pursuant
to the covenant contained in Section 4.1.10 of this Agreement entitled
"Additional Subsidiary Pledges."
(g) "Pledged Securities" means the shares of stock and other
securities, if any, as described in Schedule I annexed hereto as such
Schedule may be amended, together with all stock certificates, options
or rights of any nature which may be issued or granted by the Issuer to
the Pledgor while this Agreement is in effect.
<PAGE>
(h) "Proceeds" means all "proceeds" as such term is defined
in Section 9-306(1) of the UCC (as hereinafter defined) on the date
hereof and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Securities, collections
thereon or distributions with respect thereto.
(i) "Qualified GEONET Subscriber" means a user of GEONET
services who generates at least $28.00 in monthly billings for the two
most recently completed consecutive billing months.
(j) "Secured Obligations" means all presently existing or
hereafter arising indebtedness, debts, obligations, agreements,
liabilities, covenants and performance of Pledgor, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, under, arising out of or in connection with the Indenture,
the Securities and the Pledge Agreements, as the same may be amended,
modified, extended or replaced from time to time, including without
limitation, the entire principal of and interest (including, all accrued
and unpaid interest and any interest which, but for the provision of the
Bankruptcy Law, would have accrued) under the Securities and all fees,
costs and expenses, whether primary, secondary, direct, contingent,
fixed or otherwise, heretofore, now and/or from time to time hereafter
owing, due or payable under any of the Transaction Documents.
Notwithstanding the foregoing, Secured Obligations shall not include any
indebtedness, debts, obligations, agreements, liabilities, covenants and
performance of Pledgor under, arising out of or in connection with
(i) the Warrant Agreement of even date herewith by and between Pledgor
and IBJ Schroder Bank & Trust Company, as warrant agent, or the Warrants
issued pursuant thereto, (ii) the Registration Rights Agreement or
(iii) the Warrant Share Registration Rights Agreement of even date
herewith by and between Geotek and the Initial Purchaser.
(k) "Speech Design" means Speech Design GmbH.
(l) "Transaction Documents" means the Pledge Agreements, the
Indenture and the Securities.
1.3 UCC Terms. Unless otherwise defined in this Agreement or the
Indenture, or unless the context otherwise requires, all terms used in this
Agreement which are defined in the Uniform Commercial Code ("UCC") shall have
the meanings given in the UCC as adopted and from time to time in effect in
New York.
ARTICLE 2. PLEDGE, SECURITY INTEREST AND
DELIVERY OF CERTIFICATES
2.1 Pledge. In order to secure the full and punctual payment of
the Secured Obligations, Pledgor hereby pledges, hypothecates, assigns,
transfers, sets over and delivers to the Collateral Agent (on behalf of the
holders of the Securities), and grants to the Collateral Agent (on behalf of
the holders of the Securities) a first priority security interest in all of
the Pledgor's right, title, interest, claims, powers and privileges in, to
and under the following (collectively, "Pledged Collateral"):
(a) the Pledged Securities;
(b) all securities delivered under this Agreement by Pledgor
to the Collateral Agent in substitution for or in addition to the
Pledged Securities;
(c) all certificates, instruments and documents evidencing
any of the foregoing, and all entries on the books of any financial
intermediary pertaining to the Pledged Securities;
(d) subject to Section 2.5 hereof, all cash, securities,
dividends, warrants, options and other property at any time or from time
to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the foregoing; and
(e) all Proceeds of any of the foregoing (unless such
Proceeds are permitted to be released to Pledgor in accordance with the
terms of the Indenture or this Agreement prior to the occurrence of an
Event of Default).
<PAGE>
2.2 Security Agreement. This Agreement constitutes a security
agreement under the UCC. The Collateral Agent's rights and remedies under
this Agreement are in addition to and cumulative with all of the Collateral
Agent's rights and remedies under all of the other Transaction Documents.
2.3 Delivery of Certificates For Pledged Securities. Concurrently
herewith, Pledgor has delivered to the Collateral Agent, share certificates
evidencing all of the Pledged Securities, duly endorsed in blank or
accompanied by proper instruments of assignment or transfer (including,
without limitation, undated stock powers executed in blank with signatures
appropriately guaranteed).
2.4 Delivery of Other Certificates. Promptly upon receipt by
Pledgor and whether or not requested by the Collateral Agent, Pledgor shall
from time to time deliver to the Collateral Agent, all share certificates
evidencing any of the Pledged Collateral and hereafter received by Pledgor,
duly endorsed in blank or accompanied by proper instruments of assignment or
transfer duly executed in blank.
2.5 Pledgor's Voting Rights, Etc. Until notice is received by
Pledgor from the Collateral Agent after an Event of Default shall have
occurred and be continuing:
(a) Pledgor shall be entitled to exercise any and all voting
rights and to give consent, ratification and waivers with respect to or
pertaining to any of the Pledged Collateral for any purpose not
inconsistent with the terms of this Agreement or the Indenture;
(b) Pledgor shall be entitled to receive and retain dividends
and interest payable upon the Pledged Collateral; provided, however,
that any and all (i) dividends, interest and other distributions paid or
payable other than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in respect of, or
in exchange for, any Pledged Securities, (ii) dividends, interest and
other distributions paid or payable in cash in respect of any Pledged
Securities (other than out of surplus or net profits for the fiscal year
in which declared and/or the preceding fiscal years) in connection with
a partial or total liquidation or dissolution or in connection with a
reduction of capital or paid-in-surplus, and (iii) except as otherwise
provided in this Agreement, cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any Pledged Securities, shall be,
and shall be forthwith delivered to the Collateral Agent to hold as
Pledged Collateral and shall, if received by Pledgor, be received in
trust for the benefit of the Collateral Agent, be segregated from the
other property or funds of Pledgor, and be forthwith delivered to the
Collateral Agent as Pledged Collateral in the same form as so received
(with any necessary endorsement);
(c) The Collateral Agent shall execute and deliver (or cause
to be executed and delivered) to Pledgor all such proxies and other
instruments as Pledgor may reasonably request for the purpose of
enabling Pledgor to exercise the voting and other rights which it is
entitled to exercise pursuant to paragraph (a) above and to receive the
dividends and other distributions which it is authorized to receive and
retain pursuant to paragraph (b) above; and
(d) The rights of the Collateral Agent hereunder shall not be
conditioned or contingent upon the pursuit by the Collateral Agent of
any right or remedy against the Pledgor, any Issuer or any obligor or
against any other Person which may be or become liable in respect of all
or any part of the Secured Obligations or against any other collateral
security therefor, guaranty thereof or right of offset with respect
thereto.
<PAGE>
2.6 No Obligations Undertaken. Nothing contained in this
Agreement shall relieve Pledgor of, or except as otherwise expressly provided
in this Agreement or the Indenture, impose on the Collateral Agent, any
obligation or liability with respect to the Pledged Collateral. The
Collateral Agent shall not have any duty or responsibility for (a) taking
action with respect to calls, conversions, exchanges, maturities tenders or
other matters relating to any of the Pledged Collateral, whether or not the
Collateral Agent has or is deemed to have knowledge of such matters, or (b)
taking any necessary steps to preserve rights against third parties or
pertaining to the Pledged Collateral. The Collateral Agent may rely on any
information provided to it by any accountants or advisors of Pledgor or of
Collateral Agent in acting hereunder.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
3.1 Pledged Securities. The Pledged Securities constitute all the
issued and outstanding shares of all classes of the capital stock of each
Issuer owned by Pledgor, are validly issued, fully paid and non-assessable
and are not subject to any restriction on alienation or transfer (including,
without limitation, any transfer restrictions under any shareholder or
similar agreements) other than pursuant to this Agreement and applicable
securities and telecommunications laws.
3.2 Title. Pledgor is the legal and beneficial owner of all
right, title and interest in, to and under the Pledged Securities, and,
except for 75,000 shares of EGAC common stock to be hereafter acquired by
Pledgor, there are no outstanding rights (including, without limitation,
rights of first offer or refusal), options, warrants, conversion rights or
other commitments or agreements for the purchase or acquisition of the
Pledged Securities.
3.3 No Liens or Prior Pledges. Pledgor has not granted any other
security interest in or made any prior pledges of any of the Pledged
Collateral, except which was previously released, terminated and fully
extinguished, and the Pledged Collateral is (and as to any of the Pledged
Collateral hereafter acquired, will be upon acquiring same) free of all
liens, pledges, security interests and encumbrances other than those in favor
of the Collateral Agent, except for an option to be granted to certain
members of management of EGAC to purchase from Pledgor up to 75,000 shares of
EGAC common stock.
3.4 Authority, Etc. Pledgor has all requisite corporate power and
authority to execute and deliver this Agreement, and all necessary action has
been taken to duly authorize Pledgor's execution, delivery and performance of
this Agreement. The execution, delivery and performance of this Agreement by
Pledgor will not result in (a) a default under any contract, agreement or
instrument to which Pledgor is a party or by which Pledgor is bound, or (b) a
violation of any statutes, laws, rules or regulations (the "Legal
Requirements") applicable to Pledgor, except for such defaults or violations
which would not have a material adverse effect on Pledgor and its
subsidiaries taken as a whole or the Pledged Collateral. This Agreement is
the legal, valid and binding obligation of Pledgor enforceable against
Pledgor in accordance with its terms, except as such enforceability may be
limited by the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or general principles of equity.
3.5 Government Approvals. Except as otherwise provided in Section
5.4 hereof, no approval or action by, and no notice to, any governmental
authority or regulatory body is required in connection with the execution,
delivery and performance of this Agreement by Pledgor, except as may be
required under applicable securities laws and except as may be required by
the Federal Communications Commission (the "FCC") under certain
circumstances.
<PAGE>
3.6 Filings, Consents and Perfection. No filings are necessary
for the perfection of the security interest granted in the Pledged
Securities, and all necessary consents of third parties to the granting of
such security interest and the execution, delivery and performance of this
Agreement have been duly obtained. Upon possession (and assuming continued
possession thereof) of the Pledged Securities, the Collateral Agent will have
a valid, perfected, first priority security interest in all of Pledgor's
right, title, interest, claims, powers and privileges in, to and under the
Pledged Securities.
3.7 Name. The correct legal name of Pledgor is as set forth in
the preamble to this Agreement.
3.8 Chief Executive Office. The address for Pledgor set forth in
Section 7.1 is the location of Pledgor's chief executive office.
3.9 Accuracy. All information set forth herein relating to the
Pledged Collateral is accurate and complete in all material respects.
3.10 Regulations. The pledge of the Pledged Collateral
constituting margin stock pursuant to this Agreement does not violate
Regulations G or U or any other regulations of the Board of Governors (within
the meaning of Regulation G of the Board of Governors of the Federal Reserve
System) or any other material Legal Requirements, except for such violations
which would not have a material adverse effect on Pledgor and its
subsidiaries taken as a whole or the Pledged Collateral.
ARTICLE 4. COVENANTS
4.1 Covenants of Pledgor. Pledgor hereby covenants and agrees to
and with the Collateral Agent as follows:
4.1.1 Maintenance of Security Interests. Pledgor shall from
time to time execute and deliver to the Collateral Agent such financing
statements, continuation statements, financing statement amendments or other
filings or documents, and take such other steps, as the Collateral Agent may
reasonably require to further assure to the Collateral Agent its rights under
this Agreement.
4.1.2 No Other Pledge or Liens. Pledgor shall not permit the
Pledged Companies (other than EGAC) and their direct and indirect
subsidiaries (including any entities controlled by a Pledged Company through
the ownership of voting securities, by contract or otherwise) to, directly or
indirectly, create, incur, permit to exist, pledge or grant a security
interest in, or Lien on, any of their respective properties, assets or
proceeds therefrom (except for Permitted Pledge Agreement Liens). Except as
otherwise provided herein or in the Indenture, Geotek shall maintain and
defend the Pledged Collateral (and the collateral pledged to the Collateral
Agent pursuant to the other Pledge Agreements), and, shall cause the Pledged
Companies (other than EGAC) and their direct and indirect subsidiaries
(including any entities controlled by a Pledged Company (other than EGAC)
through the ownership of voting securities, by contract or otherwise) to
maintain and defend their respective properties, assets and proceeds
therefrom against any adverse claims (other than Permitted Pledge Agreement
Liens). If Geotek shall have (i) 50,000 Qualified GEONET Subscribers at the
end of the most recently completed billing month and (ii) positive Operating
Cash Flow in any two of its GEONET markets for the most recently completed
fiscal quarter, Geotek may, to the extent otherwise permitted in this
Agreement and the Indenture, grant a security interest, that is equal and
ratable to the security interest granted to the Collateral Agent, in the
Pledged Collateral consisting of capital stock of Pledged Companies that,
directly or indirectly, hold, or hold any rights in, Licenses for U.S. 900
MHz radio channels; provided that such security interest shall not secure
Indebtedness in an amount in excess of the product of $1,500 and the number
of Qualified GEONET Subscribers as of the end of the most recently completed
billing month.
<PAGE>
4.1.3 Indebtedness. Pledgor shall not permit the Pledged
Companies (other than EGAC) and their direct and indirect subsidiaries
(including any entities controlled by a Pledged Company (other than EGAC)
through the ownership of voting securities, by contract or otherwise) to
directly or indirectly, create, incur, issue, assume, guarantee or in any
manner become directly or indirectly liable (contingently or otherwise) for
any Indebtedness (including, without limitation, any Acquired Indebtedness)
other than Permitted Pledge Agreement Indebtedness; provided that the
aggregate outstanding Indebtedness of the Pledged Companies (excluding
Indebtedness owed to other Pledged Companies or Geotek and Indebtedness of
EGAC) at any time shall not exceed $62,000,000.
4.1.4 No Transfers. Except pursuant to the terms of this
Agreement or the Indenture (including, without limitation, transactions
contemplated by Section 7.14 hereof), Pledgor shall not sell, assign,
transfer or otherwise dispose of, or grant any option with respect to, the
Pledged Collateral (or the collateral pledged to the Collateral Agent
pursuant to the other Pledge Agreements). Notwithstanding the foregoing,
Pledgor shall be permitted to grant options covering up to 75,000 shares of
common stock of EGAC hereafter acquired by Pledgor to certain members of
management of EGAC.
4.1.5 Removal of Certain Legends. In the event any of the
certificates delivered by Pledgor to the Collateral Agent under Article 2 of
this Agreement bears any legend purportedly restricting transferability of
the Pledged Securities evidenced by such certificates (other than legends
with respect to restrictions imposed under applicable securities laws),
Pledgor shall, at the request of the Collateral Agent, use reasonable efforts
to obtain and deliver to the Collateral Agent certificates which do not bear
any legends (other than legends with respect to restrictions imposed under
applicable securities laws).
4.1.6 Change of Name. Upon any change of Pledgor's legal
name or location of its chief executive office, Pledgor shall notify the
Collateral Agent twenty (20) days prior to such change in writing and shall
take such action as the Collateral Agent may reasonably request to assure to
the Collateral Agent the continued perfection of the security interest
granted under this Agreement.
4.1.7 Notices. Pledgor will provide the Collateral Agent
with any and all notices or material items received by Pledgor relating to
the Pledged Securities.
4.1.8 Covenants in Indenture. Subject to Section 7.15
hereof, Pledgor agrees to comply (and to cause the Pledged Companies to
comply) with all covenants and agreements with respect to such person set
forth in the Indenture.
4.1.9 EGAC Shares. Pledgor covenants and agrees that, upon
the consummation of the acquisition by EGAC of Geotek's interest in Bogen and
Speech Design pursuant to the Acquisition Agreement, the Pledgor shall pledge
to the Collateral Agent all of the Capital Stock of EGAC owned by Geotek at
such time and such Capital Stock shall automatically constitute Pledged
Securities hereunder.
<PAGE>
4.1.10 Additional Subsidiary Pledges. (a) Pledgor covenants
and agrees that if Geotek transfers the Capital Stock of any Pledged Company
to any person in exchange for Capital Stock of such person (including
pursuant to a transaction described in clause (k) of the definition of
"Permitted Investments" contained in the Indenture) ("Non-Pledged Stock"), or
any Pledged Company transfers or causes to be transferred, directly or
indirectly, in one or a series of related transactions, property or assets
(including, without limitation, businesses, divisions, real property, assets
or equipment) having a fair market value (as determined in good faith by the
board of directors of Geotek evidenced by a resolution of the board of
directors of Geotek set forth in an Officers' Certificate delivered to the
Collateral Agent) exceeding $2.0 million to such person or any subsidiary of
Geotek that is not a Pledged Company, then Geotek shall (a) enter into a
pledge agreement (or an amendment to this Agreement) in order to pledge all
of such Non-Pledged Stock or the outstanding Capital Stock of such
subsidiary, as the case may be, owned by Geotek as security to the Collateral
Agent for the benefit of the holders of the Securities and (b) deliver to the
Collateral Agent an Opinion of Counsel reasonably satisfactory to the
Collateral Agent that such pledge agreement (or amendment to this Agreement)
has been duly authorized, executed and delivered, is enforceable and creates
a valid and perfected first priority security interest in such Non-Pledged
Stock or Capital Stock; provided, however, that the provisions of this
Section 4.1.10 will not apply to (A) transfers of property or assets (other
than cash) by a Pledged Company to Geotek or a subsidiary that is not a
Pledged Company in exchange for cash in an amount equal to the fair market
value (as determined in good faith by the board of directors of Geotek
evidenced by a resolution of the board of directors of Geotek set forth in an
Officers' Certificate delivered to the Collateral Agent) of such property or
assets or (B) Restricted Payments and Investments (other than a Permitted
Investment within the meaning of clause (k) of the definition of "Permitted
Investments" contained in the Indenture) permitted by the Indenture.
(b) In the event that any Pledged Company transfers or causes
to be transferred to any person directly or indirectly, in one or a
series of related transactions, property or assets (including, without
limitation, businesses, divisions, real property, assets or equipment)
having a fair market value (as determined in good faith by the board of
directors of Pledgor evidenced by a resolution of the board of directors
of Pledgor and set forth in an Officers' Certificate delivered to the
Collateral Agent) exceeding $2.0 million to any such person, the Net
Cash Proceeds resulting from the sale or other disposition of such
property or assets shall, to the extent permitted by law, be immediately
deposited in the Collateral Account (as hereinafter defined) and Pledgor
shall cause any non-cash proceeds from such sale or other disposition
(including securities) received by Pledgor or a subsidiary to
immediately become subject to a first priority perfected Lien in favor
of the Collateral Agent. Any Net Cash Proceeds resulting from such sale
or disposition shall be required to be applied in accordance with
Section 7.14 hereof.
(c) Notwithstanding any other provision contained herein, if
Pledgor transfers any FCC license to any wholly-owned subsidiary of
Pledgor that is not a Pledged Company, all of the Capital Stock of such
subsidiary shall be pledged to the Collateral Agent as additional
Pledged Collateral.
<PAGE>
ARTICLE 5. DEFAULT AND REMEDIES
5.1 Remedies. Subject to the receipt of any necessary approvals
from the FCC (as more particularly described in Section 5.4) or similar
foreign agency (and to the extent permitted by law), after the occurrence and
during the continuance of an Event of Default, the Collateral Agent shall
have, in addition to any other rights or remedies the Collateral Agent may
have under the Indenture or any of the other Transaction Documents or at law
or in equity or otherwise, any or all of the following rights and remedies:
5.1.1 Rights of Secured Party. The Collateral Agent may
exercise all of the rights and remedies of a secured party under the UCC and
under any other applicable laws.
5.1.2 Exercise of Rights Under Pledged Collateral. Pledgor's
rights under Section 2.5 shall automatically terminate, and the Collateral
Agent may exercise any or all of Pledgor's rights in respect of the Pledged
Collateral, including without limitation the right to vote any or all of the
shares included in the Pledged Collateral and to receive all cash or other
distributions in respect of such shares. Any cash or other distributions in
respect of the Pledged Collateral received by Pledgor after the occurrence
and during the continuance of an Event of Default shall be held in trust for
the Collateral Agent and promptly paid over to the Collateral Agent. Pledgor
agrees to execute any document or instrument reasonably required by the
Collateral Agent to effect the foregoing.
5.1.3 Sale of Pledged Collateral. The Collateral Agent may
sell any or all of the Pledged Collateral by public or private sale or at any
broker's board or on any securities exchange. The following provisions shall
apply with respect to any such sale:
(a) any such sale may be for cash, upon credit or for
future delivery, as the Collateral Agent in its sole discretion shall
deem appropriate;
(b) to the extent permitted by applicable law, the
Collateral Agent may, in its sole discretion, restrict the prospective
bidders or purchasers to a limited number of sophisticated investors who
represent and agree that they are purchasing for their own account for
investment and not with a view to distribution or resale, and any
purchaser of any of the Pledged Collateral shall hold same free from any
claim or right on the part of Pledgor;
(c) at any such sale the Collateral Agent may, to the
extent permitted by applicable law, bid for or purchase any or all of
the Pledged Collateral, free from any claim or right on the part of
Pledgor, and upon compliance with the terms of sale, may to the extent
permitted by applicable law, hold, retain and dispose of same without
further accountability therefor;
(d) the Collateral Agent shall give to Pledgor at least
10 days' written notice of any such sale, which is hereby agreed to be
reasonable notice;
(e) 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;
(f) at any such sale, any of the Pledged Collateral may
be sold in one lot or in separate parcels as the Collateral Agent may in
its sole discretion determine;
(g) the Collateral Agent shall not be obligated to make
any sale of any or all of the Pledged Collateral regardless of the fact
that notice of sale may have been given, and, to the extent permitted by
applicable law, the Collateral Agent may, without notice or publication,
adjourn any such sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for sale, and, to the
extent permitted by applicable law, such sale may without further notice
be made at the time and place to which the same shall have been so
adjourned;
<PAGE>
(h) in the event that the sale of any or all of the
Pledged Collateral is made on credit or for future delivery, the Secured
Obligations shall be reduced at the time of such payment by the full
amount thereof. The Pledged Collateral shall be retained by the
Collateral Agent until the selling price is paid. The Collateral Agent
shall incur no liability should purchaser not pay for the Pledged
Collateral. In such event, the Pledged Collateral may be resold as
herein provided;
(i) in the event compliance with any federal or state
laws or foreign law of pledges is required in connection with any such
sale, Pledgor shall take all reasonable steps as may be reasonably
required to enable the Collateral Agent to effect any such sale of any
or all of the Pledged Collateral in compliance with such federal or
state laws or foreign law of pledges; provided, however, that Pledgor
shall not be required to register the Pledged Securities under the
Securities Act of 1933, as amended (or any similar foreign law);
(j) Pledgor acknowledges and agrees that compliance with
any such federal or state laws or foreign law of pledges may severely
impair the Collateral Agent's ability to promptly dispose of any or all
of the Pledged Collateral, and thereby agrees that, notwithstanding the
existence of a public or private market upon which the quotation or
sales prices for any or all of the Pledged Collateral may exceed
substantially the price at which the Collateral Agent sells same, it
would be commercially reasonable for the Collateral Agent to:
(1) sell all or any part of the Pledged Collateral
to a purchaser without soliciting purchasers even if a higher price
could have been obtained pursuant to a broader solicitation;
(2) place all or any part of the Pledged Collateral
with an investment banking firm for sale by private placement; or
(3) sell all or any part of the Pledged Collateral
to an investment banking firm for its own account if otherwise
commercially reasonable.
5.1.4 Judicial Foreclosure. The Collateral Agent may proceed
by a suit or suits at law or in equity to foreclose on and to sell any or all
of the Pledged Collateral pursuant to a judgment decree of a court or courts
of competent jurisdiction.
5.1.5 Notices. The remedies herein do not require the
Collateral Agent to give any notice except as provided herein or required by
mandatory provisions of law.
5.2 Application of Proceeds. All proceeds realized by the
Collateral Agent in respect of any or all of the Pledged Collateral,
including the proceeds of any sale thereof or any cash distributed in respect
of any of the Pledged Collateral shall be applied against the Secured
Obligations in accordance with the Indenture. To the extent permitted by
applicable law, Pledgor shall be liable for any deficiency, and any surplus
shall be returned by the Collateral Agent to the person or persons legally
entitled thereto.
5.3 Cumulative Remedies. All rights and remedies of the
Collateral Agent are separate and cumulative, and no one of them, whether
exercised or not, shall be deemed to be to the exclusion of or to limit or
prejudice any other legal or equitable rights or remedies which the
Collateral Agent may have.
<PAGE>
5.4 FCC MATTERS.
(a) If an Event of Default shall have occurred and be
continuing, Pledgor shall take any action which the Collateral Agent may
request in the exercise of its rights and remedies under this Agreement
to transfer and assign to the Collateral Agent, or to such one or more
third parties as the Collateral Agent may designate, or to a combination
of the foregoing, the Pledged Collateral. To enforce the provisions of
this Section 5.4, the Collateral Agent is hereby empowered to seek from
the FCC an involuntary transfer of control of any Subsidiary for the
purpose of seeking a bona fide purchaser to whom control will ultimately
be transferred. If an Event of Default shall have occurred and be
continuing, Pledgor hereby agrees to authorize such an involuntary
transfer of control upon the request of the Collateral Agent. Upon the
occurrence and continuation of an Event of Default, Pledgor shall use
its best efforts to assist in obtaining approval of the FCC, if
required, for any action or transactions contemplated by this Agreement,
including, without limitation, the preparation, execution and filing
with the FCC of Pledgor's portion of any application or applications for
consent to transfer of control necessary or appropriate under the FCC's
rules and regulations for approval of the transfer or assignment of any
portion of the Pledged Collateral.
(b) Pledgor acknowledges that FCC authorization for the
transfer of control of the licenses of Pledgor and the subsidiaries is
integral to the Collateral Agent's realization of the value of the
Pledged Collateral for the benefit of the holders of the Securities,
that there is no remedy at law for failure by Pledgor to comply with the
provisions of this Section 5.4 and that such failure would not be
adequately compensable in damages, and therefore agrees that the
agreements of Pledgor contained in this Section 5.4 may be specifically
enforced.
(c) Notwithstanding anything to the contrary contained in
this Agreement, the Collateral Agent shall not, without first obtaining
approval of the FCC, take any action pursuant to this Agreement which
would constitute or result in any change of control of Pledgor or any
subsidiary if such change in control would require, under then existing
law (including the written rules and regulations of the FCC), the prior
approval of the FCC.
(d) Upon the occurrence and during the continuance of an
Event of Default and subject to the other provisions of Section 5,
Pledgor consents to the transfer of control or assignment of the Pledged
Collateral to a receiver, trustee, transferee, or similar official or to
any purchaser of the Pledged Collateral pursuant to any public or
private sale, judicial sale, foreclosure or exercise of other remedies
available to the Collateral Agent under this Agreement and as permitted
by applicable law.
(e) Notwithstanding anything to the contrary contained in
this Agreement, prior to the occurrence of an Event of Default and
compliance with all applicable laws by the Collateral Agent, this
Agreement and the transactions contemplated hereby do not, will not, and
are not intended to, constitute, create or have the effect of
constituting or creating, directly or indirectly, actual or practical
ownership of Pledgor, any Pledged Company or any of their respective
subsidiaries by the Collateral Agent or control, affirmative or
negative, direct or indirect, of Pledgor, any Pledged Company or any of
their respective subsidiaries, over the management or any other aspect
of the operations of Pledgor, any Pledged Company or any of their
respective subsidiaries, which ownership and control remain exclusively
and at all times in Pledgor, the Pledged Companies and their respective
subsidiaries.
<PAGE>
ARTICLE 6. INDEMNIFICATION AND EXPENSES
6.1 Indemnification. Pledgor hereby unconditionally covenants and
agrees to indemnify, protect, defend and hold harmless the Collateral Agent
and all of its past and present officers, directors, shareholders, employees,
agents, representatives, subsidiaries, parent and affiliate corporations and
successors, underwriters, counsel, and any person controlling any of the
foregoing ("Indemnities") from any and all claims, obligations, penalties,
liens, liabilities, losses, damages, causes of action (at law or in equity),
judgments, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) of any nature whatsoever, including, without
limitation, actions asserted against or suffered or incurred by the
Collateral Agent, by reason of or as a result of or in connection with or
arising out of any breach of this Agreement by Pledgor, any untrue statement
of a material fact or omission of a material fact in a registration
statement, prospectus or other document (regardless of any investigations
made by the Collateral Agent), or Pledgor's defense of any and all claims and
demands whatsoever which may be asserted against Pledgor in connection with
this Agreement, or any action taken by Pledgor under this Agreement.
6.2 Expenses. Pledgor shall reimburse the Collateral Agent on
demand for all reasonable costs and expenses (including reasonable attorneys'
fees and disbursements) incurred by the Collateral Agent in connection with
the enforcement of this Agreement or the exercise by the Collateral Agent of
its rights or remedies under this Agreement, and all sums owing to the
Collateral Agent under this Section 6.2 shall be included in the Secured
Obligations and secured by this Agreement.
ARTICLE 7. MISCELLANEOUS
7.1 Notices. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement shall be in writing and shall be delivered in
hand, or sent by telecopier or facsimile and confirmed by letter mailed by
United States registered or certified first-class mail, postage prepaid
addressed as follows:
To Collateral Agent:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attention: Corporate Trust and
Agency Administration
Telecopier: 212-858-2952
Telephone: 212-858-2529
To Pledgor:
Geotek Communications, Inc.
20 Craig Road
Montvale, New Jersey 07645
Attention: General Counsel
Telecopier: 201-930-9614
Telephone: 201-930-9305
<PAGE>
Any such notice or demand shall be deemed to have been duly given
or made and to have become effective (a) if delivered by hand to a
responsible officer of the party to which it is directed, at the time of the
receipt thereof by such officer, and (b) if sent by telecopier or facsimile,
at the time of the dispatch thereof, if in normal business hours in the
country of receipt, or otherwise at the opening of business on the following
business day.
7.2 Amendments, Supplements and Waivers. No amendment, supplement
or waiver of any provision of this Agreement or of any right, power or remedy
under this Agreement shall be effective unless made in accordance with
Article Nine of the Indenture. No failure by the Collateral Agent to
exercise, and no delay by the Collateral Agent in exercising, any right,
power or remedy granted under this Agreement shall operate as a waiver of any
such right, power or remedy. A waiver of any right, power or remedy to the
Collateral Agent on any one occasion shall not be construed as a bar to or
waiver of any right, power or remedy on any future occasion.
7.3 Assignments. This Agreement shall not be assignable in whole
or in part by Pledgor.
7.4 Successors and Assigns. This Agreement inures to the benefit
of and binds Pledgor and the Collateral Agent and their respective permitted
successors and assigns.
7.5 Governing Law. This Agreement shall be construed, interpreted
and governed by the laws of the State of New York, without giving effect to
the principles of conflicts of law.
7.6 Consent to Jurisdiction. The parties hereto irrevocably
consent to the jurisdiction of the courts of the State of New York and any
federal court located in such state in connection with any action, suit or
proceeding arising out of or relating to this Agreement and irrevocably waive
the defense of an inconvenient forum to the maintenance of such suit or
proceeding. Geotek hereby agrees to designate and appoint CT Corporation
System as an agent upon whom process may be served in any suit or proceeding
based on or arising under this Agreement. Geotek further agrees that service
of process upon Geotek, or upon an agent appointed pursuant to the preceding
sentence accompanied with written notice of said service to Geotek, as the
case may be, mailed by registered mail shall be deemed in every respect
effective service of process upon Geotek in any such suit or proceeding.
Nothing herein shall affect the Collateral Agent's right to serve process in
any other manner permitted by law. Geotek agrees that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.
7.7 Severability. If one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable in any
respect under applicable law, the validity, legality or enforceability of the
remaining provisions shall not in any way be affected or impaired. Any such
provision shall be applied in the jurisdiction where held invalid to the
extent it is legal and shall be applied in full in all other jurisdictions.
7.8 Headings. The titles and headings of the sections of this
Agreement have been inserted for convenience of reference only and are not
intended to summarize or otherwise describe the subject matter of such
sections and shall not be used in construing such section.
7.9 Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which together shall
constitute one and the same instrument.
7.10 Waiver of Jury Trial. Pledgor and the Collateral Agent hereby
knowingly, voluntarily and intentionally waive any rights they may have to a
trial by jury in respect of any litigation based hereon, or arising out of,
under or in connection with this Agreement, the Indenture, the Securities or
any other Transaction Document, of any course of conduct, course of dealing,
statements (whether verbal or written), or actions of Pledgor or the
Collateral Agent. This provision is a material inducement for Pledgor and
the Collateral Agent entering into this Agreement.
<PAGE>
7.11 Further Assurances and Power of Attorney.
(a) Subject to the provisions of Section 5.4 hereof, Pledgor
agrees to, as promptly as practicable, do such further acts and things, and
to execute and deliver such additional assignments, agreements and
instruments, as the Collateral Agent may at any time reasonably request in
connection with the administration or enforcement of this Agreement or with
respect to any or all of the Pledged Collateral, including, without
limitation, obtaining necessary governmental approvals referred to herein,
in order to assure and confirm to the Collateral Agent its rights, powers
and remedies under this Agreement. In connection with such governmental
approvals, the Pledgor hereby appoints the Collateral Agent and the
Collateral Agent's designees as the Pledgor's attorney-in-fact with power
to execute any and all documents, assignments, applications and other
instruments necessary for such approvals.
(b) Pledgor further agrees to do such further acts and
things, and to execute and deliver such additional assignments,
agreements, instruments and UCC financing statements as the Collateral
Agent may reasonably request to create, after the date hereof, in favor
of the Collateral Agent, a first priority perfected Lien in any and all
assets required to be pledged to the Collateral Agent hereunder,
including, without limitation, an account pledge agreement and a blocked
account agreement (each in form and substance satisfactory to the
Collateral Agent) with respect to the Collateral Account.
7.12 Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Pledgor
under this Agreement, shall be absolute and unconditional irrespective of (i)
any lack of validity or enforceability of any Secured Obligations or the
Transaction Documents; (ii) the absence of any attempt to collect any of the
Secured Obligations from the Pledgor or any other Person or of any other
action to enforce the same; (iii) any change of the time, manner or placement
of payment, or any other term, of any Secured Obligations; (iv) any exchange,
release or non-perfection of any collateral securing payment of any Secured
Obligations; (v) any law, regulation or order of any jurisdiction affecting
any term of any Secured Obligations or the Collateral Agents' rights with
respect thereto; and (vi) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Pledgor, any
guarantor or any other person.
7.13 Reasonable Care. The Collateral Agent shall use its best
efforts to exercise reasonable care with respect to the Pledged Collateral in
its possession; provided, however, that the Collateral Agent shall be deemed
to have exercised reasonable care if such Collateral is accorded treatment
substantially comparable to that which the Collateral Agent accords its own
property or treatment substantially in accordance with actions requested by
Pledgor in writing. It is agreed and understood that the Collateral Agent
shall have no responsibility for taking any necessary steps to preserve
rights against any Persons with respect to any Collateral.
<PAGE>
7.14 Termination of Agreement; Release of Collateral. Upon the
full and final indefeasible payment in full in cash and performance of the
Secured Obligations or upon a defeasance of the Securities in accordance with
the Indenture, this Agreement, and the covenants contained herein, shall
terminate (except for Article 1, Article 6 and Article 7 (other than Sections
7.12, 7.13 and 7.15)) and the Pledged Collateral shall be released by the
Collateral Agent to Pledgor and the Collateral Agent shall have no further
security interest in the Pledged Collateral. In addition, this Agreement
shall terminate (other than Article 1, Article 6 and Article 7 (other than
Sections 7.12, 7.13 and 7.15)) and the Pledged Collateral shall be released
upon the prior written consent of the holders of at least 66 2/3% of the
aggregate principal amount of the Securities then outstanding (the "Requisite
Vote") pursuant to a request (a "Collateral Release Request") made by Pledgor
to the holders. In the event that Pledgor does not receive the Requisite
Vote pursuant to any such Collateral Release Request, Pledgor may, at its
option, within five business days after the latest date on which such
consents are required to be delivered to Pledgor pursuant to the terms of the
Collateral Release Request, make an offer to purchase (a "Collateral Release
Repurchase Offer") all of the outstanding Securities at a purchase price of
101.5% of the Accreted Value thereof, plus accrued and unpaid interest, if
any, to the date of repurchase. Upon the consummation of such Collateral
Release Repurchase Offer, this Agreement automatically shall terminate and
the Pledged Collateral shall be released. If Pledgor shall at any time make
a Collateral Release Request, Pledgor shall pay to the voting holders an
amount in cash equal to .50% of the Accreted Value on such date as provided
in the Indenture. Any Collateral Release Request shall be made as provided
in the Indenture. Upon such termination, the Collateral Agent shall promptly
reassign and redeliver (or cause to be reassigned and redelivered) to
Pledgor, or to such person or persons as Pledgor shall designate or to
whomever may be lawfully entitled to receive such surplus, against receipt,
such of the Pledged Collateral (if any) as shall not have been sold or
otherwise applied by the Collateral Agent pursuant to the terms hereof and
shall still be held by it hereunder, together with appropriate instruments of
reassignment and release. Any such reassignment shall be without recourse
upon or warranty by the Collateral Agent (other than a warranty that the
Collateral Agent has not assigned or delivered the Pledged Collateral so
reassigned and redelivered or its rights and interests hereunder to any other
person) and at the expense of Pledgor.
In addition, in the event (a) that any Pledged Collateral is sold
and the Net Cash Proceeds thereof are applied in accordance with the terms of
Section 4.12 of the Indenture entitled "Disposition of Proceeds of Asset
Sales," (b) any Pledged Collateral is transferred to a subsidiary of Geotek
in accordance with Section 4.1.10 hereof, (c) Geotek sells Pledged Collateral
consisting of up to 75,000 shares of common stock of EGAC hereafter acquired
by it in conjunction with the exercise of options to purchase such common
stock to be issued to certain members of management of EGAC, or (d) any
Pledged Collateral is otherwise transferred in a transaction permitted by
this Agreement and the Indenture, the Collateral Agent shall release the
Liens in favor of the Collateral Agent in the Pledged Collateral so sold or
transferred; provided, that the Collateral Agent shall have received from
Geotek an Officers' Certificate and an Opinion of Counsel that such
Collateral has been sold or transferred in accordance with the terms hereof.
To the extent that any Pledged Collateral is sold and the Net Cash Proceeds
thereof are applied in accordance with the terms of Section 4.12 of the
Indenture, the Net Cash Proceeds resulting from the sale or other disposition
of such Pledged Collateral shall, to the extent permitted by law (including
any necessary FCC approval in regard to any radio licenses), be immediately
deposited in an account (the "Collateral Account") subject to a first
priority perfected Lien in favor of the Collateral Agent, and Pledgor shall
cause any non-cash proceeds from such sale or other disposition (including
securities) received by Pledgor or a subsidiary to immediately become subject
to a first priority perfected Lien in favor of the Collateral Agent.
<PAGE>
Within 180 days after consummation of any sale or disposition of
Pledged Collateral, Pledgor shall apply 100.0% of the Net Cash Proceeds
resulting from such sale or disposition to (i) the purchase of Replacement
Assets, provided, that, when acquired, such Replacement Assets are subject to
a first priority perfected Lien in favor of the Collateral Agent, or (ii) the
acquisition or formation of a subsidiary, provided, that, when acquired or
formed, all of the outstanding Capital Stock of such subsidiary is subject to
a first priority perfected Lien in favor of the Collateral Agent; provided,
that if Pledgor does not apply such Net Cash Proceeds in accordance with
(i) or (ii) above, such Net Cash Proceeds shall remain in the Collateral
Account and not be released until the obligations of Pledgor under the
Indenture and the Securities have been discharged, this Agreement shall have
otherwise been terminated (other than Article 1, Article 6 and Article 7
(other than Sections 7.12, 7.13 and 7.15)) or until distributed to the
holders of the Securities as Excess Proceeds. Subject to the proviso in the
preceding sentence, amounts in the Collateral Account shall be released
(i) upon the purchase of Replacement Assets, (ii) upon the acquisition or
formation of a subsidiary, all of whose Capital Stock has been pledged to the
Collateral Agent or (iii) when distributed to the holders of the Securities
as Excess Proceeds.
7.15 Terms of this Agreement Control. The parties hereto agree and
acknowledge that Article 4 of this Agreement contains certain covenants that
are more restrictive on Pledgor and its subsidiaries than certain of the
covenants contained in the Indenture. The parties hereto agree that if any
provisions of this Agreement shall be more restrictive on Pledgor or conflict
with any provisions of the Indenture, then the provisions of this Agreement
shall be controlling, subject to, the termination of this Agreement pursuant
to Section 7.14 hereof.
<PAGE>
IN WITNESS WHEREOF, the Collateral Agent and the Pledgor have duly
executed this Agreement as of the day and year first above written.
PLEDGOR:
GEOTEK COMMUNICATIONS, INC.
By: /s/ Yoram Bibring
----------------------------
Name: Yoram Bibring
Title: Chief Financial Officer
COLLATERAL AGENT:
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/ Barbara McCluskey
----------------------------
Name: Barbara McCluskey
Title: Asst. Vice President
<PAGE>
SCHEDULE I
1. Shares of Common Stock of Geotek Acquisition Corp.
Registered Certificate Number of
Holder Number Shares
- ------ ------ ------
Geotek Communications, Inc. 2 100
2. Shares of Common Stock of Geotek Subsidiary Industries, Inc.
Registered Certificate Number of
Holder Number Shares
- ------ ------ ------
Geotek Communications, Inc. 2 10
3. Shares of Common Stock of U.S.I. Venture Corp.
Registered Certificate Number of
Holder Number Shares
- ------ ------ ------
Geotek Communications, Inc. 22 57,500
4. Shares of Common Stock of Metro Net Systems, Inc.
Registered Certificate Number of
Holder Number Shares
- ------ ------ ------
Geotek Industries, Inc. 1 100
5. Shares of Common Stock of PowerSpectrum, Inc.
Registered Certificate Number of
Holder Number Shares
- ------ ------ ------
Geotek Communications, Inc. 1 1,000
<PAGE>
EXHIBIT (c)(5)
<PAGE>
Share Transfer Agreement
between
Geotek Communications, Inc.,
20 Craig Road, Montvale, N.J. 07645, USA
- hereinafter referred to as "Trustor"
and
IBJ Schroder Bank & Trust Company
One State Street, New York, New York 10015, USA
- hereinafter referred to as "Collateral Agent" -
Article I
Subject of the Transfer
1.1 Trustor is the sole shareholder in Geotek Communications GmbH, registered
in the commercial register of the County Court of Frankfurt am Main under
Reg. No. HR B 38594 (the "Company") with a share capital composed of one
share in the nominal amount of DM 50,000 (the "Shares").
1.2 Trustor warrants that it is the sole shareholder of the Company and the
share capital in the Company is fully paid and non-assessable. Trustor
warrants that no security interests, liens or other rights to the
<PAGE>
Shares have been granted to third parties, that the Shares are not subject
to any security interests, liens or other rights of third parties and that
it has the absolute right to dispose of the Shares.
Article 2
Transfer of Shares
2.1 In order to secure the prompt and complete satisfaction of all presently
existing or hereafter arising obligations of Trustor, whether voluntary or
involuntary, direct or indirect, absolute or contingent, under, arising
out of or in connection with the Indenture dated as of June 30, 1995
between Trustor and IBJ Schroder Bank & Trust Company, as Trustee
("Indenture"), the Securities (as defined in the Indenture), the Pledge
Agreements (as defined in the Indenture) and this Transfer Agreement, as
each of the Indenture, Securities, Pledge Agreements and this Transfer
Agreement may be amended, modified, extended or replaced from time to
time, including, without limitation, the entire principal of and interest
(including all accrued and unpaid interest and any interest which, but for
the provision of the Bankruptcy Law, would have accrued) under the
Securities and all fees, costs and expenses, direct, contingent, fixed or
otherwise, heretofore, now and/or from time to time hereafter owing, due
or payable under the Indenture, the Securities, the Pledge Agreements and
this Transfer Agreement (collectively the "Secured Obligations"), Trustor
hereby assigns the Shares with all ancillary rights (including without
limitation all cash, securities, dividends, distributions, warrants,
options and other property receivable and distributable in respect
thereof) to Collateral Agent, subject only to the issuance of the
Securities pursuant to the Indenture (aufschiebende Bedingung). A copy of
the Indenture is attached hereto as Appendix 1.
<PAGE>
2.2 Colliateral Agent hereby accepts the transfer of the Shares as security
for the Secured Obligations.
Article 3
Exercise of Shareholder Rights
3.1 Unless and until an event of default, as defined in the Indenture ("Event
of Default"), shall have occurred and then be continuing, Collateral Agent
shall exercise its shareholder rights under the Shares (i.e. voting
rights, rights to dividends, right to instruct the management and any
other right arising with respect to shares under German law) in accordance
with the instructions of Trustor, unless such instructions, or the
omission of such instruction, would be inconsistent with the terms of the
Indenture or this Transfer Agreement and/or prejudice the rights or
interests of Collateral Agent herein.
3.2 If an Event of Default shall have occurred and then be continuing,
Collateral Agent shall be entitled to exercise its shareholder rights
(i.e. voting rights, rights to dividends, rights to subscribe for new
shares (Bezugsrecht), right to instruct the management and any other right
arising with respect to shares under German law) under the Shares without
any restrictions and independently from any instructions from Trustor.
<PAGE>
Article 4
Covenants
4.1 Trustor, from time to time, shall execute and deliver to Collateral Agent
such filings or documents and take such other steps as Collateral Agent
may reasonably require to further assure to Collateral Agent its rights
under this Transfer Agreement or with respect to the additional security
required to be pledged to the Collateral Agent pursuant to the last two
paragraphs of the Section 7.14 of US Pledge Agreement (as defined in the
Indenture), provided that "Pledged Collateral" and "Pledgor" shall
respectively mean "Shares" and "Trustor" for the purpose of this Transfer
Agreement. Trustor shall provide Collateral Agent with any and all notices
or material items received by Trustor relating to the Shares.
4.2 Trustor shall not take or refrain from taking any action with respect to
the Shares which may be inconsistent with the terms of the Indenture or
this Transfer Agreement and/or prejudice the rights or interests of
Collateral Agent herein.
Article 5
Dividends
5.1 Unless and until an Event of Default shall have occurred and then be
continuing, Trustor shall be entitled to all profits related to the Shares
irrespective whether they are distributed as dividends, carried forward or
allocated to reserves.
<PAGE>
5.2 Unless and until an Event of Default shall have occurred and then be
continuing, in case of a distribution of profits as dividends upon a
respective shareholder resolution Collateral Agent shall he obligated to
forward them to the account of Trustor without undue delay.
5.3 Upon the occurrence of an Event of Default and during the continuance
thereof all dividends, distributions, and any and all other amounts paid
in respect of the Shares shall be paid directly to Collateral Agent and
Trustor shall no longer be entitled to receive any of the same.
Article 6
Representations and Warranties
In addition to the representations and warranties in Sections 1.1 and 1.2,
Trustor represents and warrants that
(a) it has all requisite corporate power and authority to execute and
deliver this Transfer Agreement, and all necessary actions have been
taken to duly authorize Trustor's execution, delivery (by the notary
of certified copies of this deed) and performance of this Transfer
Agreement;
(b) except with respect to the potential requirements to obtain approvals
from the Federal Ministry of Post and Telecommunication and the
Federal Office of Post and Telecommunication, the Federal Cartel
Office and the Commission of the European Union the execution,
delivery (by the notary of certified copies of this deed) and
performance of this Transfer Agreement by Trustor will not result in a
default under any contract, agreement or instrument to which Trustor
is a party or by which Trustor is bound, or a violation of any
statutes, laws, rules or regulations applicable to Trustor, except (i)
for such defaults or violations which would not have a material
adverse effect on Trustor and its subsidiaries taken as a whole or the
Shares and (ii) for the two provisos in the following clause (c). This
Transfer Agreement is the legal, valid and binding obligation of
Trustor enforceable against Trustor in accordance with its terms
except as such enforceability may be limited by the terms of
bankruptcy, insolvency and moratoriam laws and laws affecting the
rights of creditors generally and general equitable principles;
(c) except with respect to the potential requirements to obtain approvals
from the Federal Ministry of Post and Telecommunication and the
Federal Office of Post and Telecommunication, the Federal Cartel
Office and the Commission of the European Union, no approval or action
by, and no notice to or filing with, any governmental authority,
regulatory body or other person is required in connection with the
execution, delivery and performance of this Transfer Agreement by
Trustor provided, however, that the requirement to obtain approval
from the Federal Ministry of Post and Telecommunication and the
Federal Office of Post and Telecommunication shall not affect the
valid and binding nature of this Transfer Agreement as it relates to
Trustor; provided further, however, that any approvals from the
Federal Cartel Office and the Commission of the European Union shall
only be required if Collateral Agent shall exercise any of its rights
under Section 3.2 or 8 hereunder.
<PAGE>
Article 7
Indemnification and Expenses
7.1 Trustor hereby unconditionally covenants and agrees to indemnify protect,
defend and hold harmless Collateral Agent and all of its past and present
officers, directors, shareholders, employees, agents, representatives,
subsidiaries, parent and affiliate corporations and successors,
underwriters, counsels and any person controlling any of the foregoing
("Indemnitees") from any and all claims, obligations, penalties, liens,
liabilities, losses, damages, causes of action (at law or in equity),
judgments, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) of any nature whatsoever, including, without
limitation, actions asserted against or suffered or incurred by Collateral
Agent, by reason of or as a result of or in connection with or arising out
of any breach of this Transfer Agreement by Trustor, any untrue statement
of a material fact or omission of a material fact in a registration
statement, prospectus or other document (regardless of any investigations
made by Collateral Agent), or Trustor's defense of any and all claims and
demands whatsoever which may be asserted against Trustor in connection
with this Transfer Agreement, or any action taken by Trustor under this
Transfer Agreement.
7.2 Trustor shall reimburse Collateral Agent an demand for all reasonable
costs and expenses (including reasonable attorneys' fees and
disbursements) incurred by Collateral Agent in connection with the
enforcement of this Transfer Agreement or the exercise by Collateral Agent
of its rights or remedies under this Transfer Agreement, and all sums
owing to Collateral Agent under this Section 7.2 shall be included in the
Secured Obligations and secured by this Transfer Agreement.
<PAGE>
7.3 Collateral Agent shall be entitled to set off any amount payable under
Sections 7.1 and 7.2 with dividends to he paid to Truster in accordance
with Article 4.
Article 8
Realization of the Security
8.1 Without limitation to the terms of Section 5.3, upon occurrence of the
Event of Default, Collateral Agent shall, without the requirement of
notice to or any action in respect of Trustor, be entitled in the
exercise of its sole discretion to use, sell or otherwise dispose of
the Shares. All proceeds therefrom shall be applied to the payment of
the Secured Obligations. Any surplus with respect to the Shares after
the Secured Obligations have been paid in full in US Dollars shall be
paid to Trustor or such person or persons as Trustor shall designate
or whomever will be lawfully entitied to receive such surplus.
8.2 This Transfer Agreement is in addition to, and without prejudice to, any
other security which Collateral Agent may now or hereafter hold in respect
to the Secured Obligations.
8.3 In realizing the security, Collateral Agent may avail itself of all rights
arising in connection with the Shares under the laws of the Federal
Republic of Germany. Collateral Agent shall, in particular, be entitled to
privately sell the Shares or to have the Shares sold at public auction
without a prior court ruling/enforceable judgment.
<PAGE>
Article 9
Release of the Security
9.1 This Transfer Agreement and the covenants contained herein shall terminate
(other than those set forth in Articles 7, 9, 11, 12, 13 and 14 herein)
and the Shares shall be released by Collateral Agent to Trustor upon
written notice by Collateral Agent to Trustor of the occurrence of the
termination of the US Pledge Agreement, a copy of which is attached to the
Indenture. Upon the occurrence of any of the other relevant events (other
than a termination event) specified in Section 7.14 of the US Pledge
Agreement (except that references therein to the "Pledged Collateral" and
"Pledgor" shall respectively mean "Shares" and "Trustor" for the purpose
of this Transfer Agreement), the Shares that are the subject of such event
shall be released by Collateral Agent to Trustor upon written notice by
Collateral Agent to Truster of the occurrence of the relevant event.
9.2 The Collateral Agent hereby assigns the Shares with all ancillary rights
to Trustor upon written notice by Collateral Agent to Trustor that this
Transfer Agreement is terminated in its entirety (aufschiebende
Bedingung). The Trustor accepts such assignment and shall confirm receipt
to the Collateral Agent of such written notice thereof.
Any such reassignment shall be without recourse upon or warranty by
Collateral Agent (other than a warranty that Collateral Agent has not
assigned or delivered the Shares so reassigned and redelivered or its
rights and interests hereunder to any other person) and at the expense of
Trustor.
<PAGE>
Article 10
Currency
10.1 All amounts received by Collateral Agent pursuant to this Transfer
Agreement may be converted by Collateral Agent into any currency it deems
necessary or desirable to pay the Secured Obligations at the then
prevailing spot-rate of exchange of Collateral Agent for purchasing the
currency to be acquired with the existing currency. No payment to
Collateral Agent in a currency other than U.S. dollars shall satisfy the
repayment of the Secured Obligations unless such currency, when converted
into U.S. dollars as then provided, shall discharged the Secured
Obligations in full in U.S. doiiars.
10.2 Collateral Agent may, but shall not be obligated to, pay any calls or
other sums that may become due in respect cf the Shares.
Article 11
Miscellaneous
11.1 The notary recording this Transfer Agreement is hereby instructed by the
parties to notify the Company of the transfer of Shares pursuant to
Section 16 (1) German Limited Liability Companies Act by forwarding a copy
of this Transfer Agreement to the Company.
11.2 If any provision of this Transfer Agreement should be or become invalid or
unenforceable, this shall not affect the validity of the remaining
provisions hereof. The invalid or unenforceable provision shall be
replaced by such valid and enforceable provision which best meets the
purpose of the invalid or unenforceable provision.
<PAGE>
11.3 Changes and amendments of this Transfer Agreement, including this article,
must be made in writing by the partiess hereto, unless notarial form is
required.
11.4 Pursuant to the Company's Articles of Association the transfer of the
Shares does not require the Company's approval or the approval of any
other shareholder of the Company.
Article 12
Applicable Law, Jurisdiction
12.1 This Transfer Agreement shall be governed by and construed in accordance
with the laws of the Federal Republic of Germany.
12.2 The parties hereto irrevocably consent to the jurisdiction of the courts
of the State of New York and any federal court located in such state and
the courts in Frankfurt am Main in connection with any action, suit or
proceeding arising out of or relating to this Transfer Agreement and
irrevocably waive the defense of an inconvenient forum to the maintenance
of such suit or proceeding. Nothing herein shall affect Collateral Agent's
right to serve process in any other manner permitted by law. Trustor
agrees that a final non-appealable judgment in any suit or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on
such judgment or in any other lawful manner.
<PAGE>
Article 13
Notices
13.1 Except as otherwise expressly provided in this Agreement, all notices and
other communications made or required to be given pursuant to this
Transfer Agreement shall be in writing and shall be delivered in hand, or
sent by telecopier or facsimile and confirmed by letter mailed by United
States registered or certified first-class mai1, postage prepaid addressed
as follows:
To Trustor:
Geotek Communications, Inc.
20 Craig Road
Montvale, New Jersey 07645
Attention: General Counsel
Telecopier: 201-930-9614
Telephone: 201-930-9305
To Collateral Agent:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attention: Corporate Trust and Agency Administration
Telecopier: 212-858-2952
Telephone: 212-858-2529
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (a) if delivered by hand to a resocnsible
officer of the party to which it is directed, at the time of the receipt
<PAGE>
thereof by such officer, and (b) if sent by telecopier or facsimile, at
the time of the dispatch thereof with confirmation of receipt, if in
normal business hours in the country of receipt, or otherwise at the
opening of business on the following business day
13.2 Any notice or other communication under or in connection with this
Transfer Agreement shall be in the English language.
Article 14
Costs
Trustor shall bear all reasonable costs and expenses of this Transfer
Agreement, including notarial fees.
<PAGE>
The following is a summary of all omitted Exhibits to the foregoing Share
Transfer Agreement.
Appendix 1 Indenture (filed as Exhibit (c)(2) to the Form 8-K).
<PAGE>
EXHIBIT (c)(6)
<PAGE>
DATED 6 July 1995
BETWEEN
GEOTEK COMMUNICATIONS, INC. (1)
AND
IBJ SCHRODER BANK & TRUST COMTANY (2)
CHARGE OVER SHARES
in National Band Three Limited
__________________________________________
Bird & Bird
90 Fetter Lane
London EC4A 1JP
<PAGE>
CONTENTS
1 Interpretation...................................................... 1
2 Covenant to Pay and Secured Obligations............................. 3
3 Changing Clause..................................................... 3
4 Undertakings........................................................ 5
5 Dividends and Voting Rights......................................... 6
6 Further Assurance................................................... 7
7 Certain powers of the Collateral Agent.............................. 7
8 Enforcoment......................................................... 8
9 Appointment and Powers of Receiver.................................. 9
10 Application of proceeds: Purchasers................................ 11
11 Indemnities, costs and expenses.................................... 11
12 Power of Attorney.................................................. 12
13 Continuing Security and Other Matters.............................. 12
14 Currencies......................................................... 13
15 Miscellaneous...................................................... 14
16 Notices ........................................................... 15
17 Governing Law and Jurisdiction..................................... 15
18 Release of security................................................ 16
<PAGE>
THIS CHARGE OVER SHARES is dated 6 July 1995 and made BETWEEN:
(1) GEOTEK COMMUNICATIONS, INC. a Delaware corporation whose principal executive
offices are located at 20 Craig Road, Montvale, New Jersey 07645, USA (the
"Chargor") and
(2) IBJ SCHRODER BANK & TRUST COMTANY, a New York banking corporation whose
principal executive offices are located at One State Street, New York, New
York USA (the "Collateral Agent") as trustee for each of the Holders (as
hereinafter defined).
NOW THIS DEED WITNESSES as follows:
1 Interpretation
1.1. Definitions
Capitalized terms used in this Charge without definition have the meanings
set forth in the Indenture and the following terms used in this Charge have
the meanings set forth below:
"Charged Property" means the Shares and all other rights, moneys, benefits
and other property referred to in clause 3.1(b);
"Collateral Instruments" means negotiable and non-negotiable instruments,
guarantees, indemnities and other assurances against financial loss and any
other documents or instruments which contain or evidence an obligation
(with or without security) to pay, discharge or be responsible directly or
indirectly for, any liabilities of any person and includes any document or
instrument creating or evidencing an Encumbrance;
"Encumbrance" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, trust arrangement or security
interest of any kind securing any obligation of any person or any other
type of preferential arrangement (including without limitation title
transfer and/or retention arrangements having a similar effect) but does
not include liens arising in the ordinary course of trading by operation of
law and not by way of contract;
"Enforcement Date" means the date on which the Collateral Agent demands the
payment or discharge of all or any part of the Secured Obligations as a
result of the occurrence of an Event of Default;
"Holder" means the person in whose name a Security is registered on
Registrar's books;
"Indenture" means the Indenture dated as of 30th June 1995 between the
Chargor and the Collateral Agent;
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"NB3" means National Band Three Limited, a company incorporated in England
and Wales under company registration number 2672488;
"Pledge Agreement" means the U.S. Pledge Agreement as defined in the
Indenture;
"Receiver" means any one or more receivers and/or managers appointed by the
Collateral Agent pursuant to this Charge in respect of all or any of the
Charged Property;
"Secured Obligations" means all moneys, obligations and liabilities
covenanted to be paid or discharged by the Chargor under or pursuant to
clause 2;
"Securities" means the securities that are from time to time issued under
the Indenture, as amended or supplemented from time to time pursuant to the
Indenture; and
"Shares" means the Capital Stock of NB3 owned or hereafter acquired by the
Chargor which, as at the date hereof, consists of 9,000,000 ordinary shares
of (L)1 in NB3.
1.2 Successors
The expressions "Collateral Agent", "Holder" and "Chargor" include, where
the context admits, their respective successors whether immediate or
derivative and, in the case of the expression "Collateral Agent", includes
any person from time to time appointed as collateral agent under the terms
of the Indenture.
1.3 Headings
Clause headings and the Contents table are inserted for convenience of
reference only and shall be ignored in the interpretation of this Charge.
1.4 Construction of certain terms
In this Charge, unless the context otherwise requires:
(a) references to clauses are to be construed as references to the clauses
of this Charge;
(b) references to (or to any specified provision of) this Charge or any
other document shall be construed as references to this Charge, that
provision or that document as in force for the time being and as
amended in accordance with the terms thereof or, as the cast may be,
with the agreement of the relevant parties and (where such consent is,
by the terms of this Charge or the relevant document, required to be
obtained as a condition to such amendment being permitted) the prior
written consent of the Collateral Agent;
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(c) words importing the plural shall include the singular and vice versa;
(d) references to a person shall be construed as including references to
an individual, firm, company, corporation, unincorporated body of
persons or any State or any agency thereof;
(e) references to statutory provisions shall be construed as references to
those provisions as replaced, amended or re-enacted from time to time.
2 Covenant to Pay and Secured Obligations
The Chargor hereby covenants that it will on demand pay to the Collateral
Agent (as trustee for the Holders) all moneys and discharge all obligations
and liabilities now or hereafter due, owing or incurred to the Collateral
Agent and each of the Holders under or pursuant to the Securities and/or
the Indenture and/or this Charge when the same become due for payment or
discharge whether by acceleration or otherwise.
3 Charging Clause
3.1 Charge
The Chargor as sole beneficial owner as a continuing security for the
payment and discharge of the Secured Obligations hereby:
(a) mortgages and charges the Shares to the Collateral Agent by way of
first legal mortgage and a first fixed charge;
(b) mortgages and charges and agrees to mortgage and charge to the
Collateral Agent by way of first fixed mortgage and charge:
(i) (without prejudice to clause 5) all rights of the Chargor in
respect of any dividends and any other distributions or
payments arising in connection with the Shares;
(ii) all rights, shares, moneys, benefits and other property which
may at any time accrue or be offered or arise by way of
conversion, redemption, bonus, preference, option or otherwise
in respect of any of the Shares or in substitution or exchange
for any of the Shares; and
(iii) any proceeds derived in any way from the Shares or any of the
rights, shares, money, benefits and other property described in
sub-paragraphs (i) and (ii) above (unless such proceeds are
permitted to be released to the Chargor in accordance with the
terms of the Indenture or clause 5 or clause 18).
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3.2 Representations and Warranties
The Chargor represents and warrants to the Collateral Agent as follows:
(a) the Chargor is the sole legal and beneficial owner of and has full
right and title to the Shares (comprising the entire issued share
capital of NB3) and that the same are fully paid up and validly
allotted and are free from any Encumbrance (other than the mortgage
and charge hereby created) and are not subject to any calls or ay
option or other third party right;
(b) the Shares are not subject to any restrictions on alienation or
transfer (including without limitation any transfer restrictions under
any shareholder or similar agreements or any pre-emption rights under
the Articles of Association of the Company or otherwise howsoever
arising) other than pursuant to this Charge and applicable securities
and telecommunications laws;
(c) the Chargor has all requisite corporate power and authority to execute
and deliver this Charge, and all necessary action has been taken to
authorize the Chargor's execution, delivery and performance of this
Charge. The execution, delivery and performance of this Charge by the
Chargor will not result in (i) a default under any contract, agreement
or instrument to which the Chargor is a party or by which the Chargor
is bound, or (ii) a violation of any statutes, laws, rules or
regulations applicable to the Chargor, except for any such defaults or
violations which wuuld not have a material adverse effect on the
Chargor or on the Charged Property. This Charge constitutes legal,
valid and binding obligations of the Chargor enforceable in accordance
with their respective terms except as such enforceability may be
limited by the effect of any applicable bankruptcy, insolvency,
reorganisation, moratorium or other similar laws affecting creditors'
rights generally or general principles of equity;
(d) no approval or action by, and no notice to, any governmental authority
or regulatory body is required in connection with the execution and
delivery and performance of this Charge by the Chargor, except as may
be required under applicable securities laws and except as may be
required under the license held by NB3 under the Telecommunications
Act 1984;
(e) other than the filing of this Charge under Section 395 of the
Companies Act 1985, within 21 days of its creation, no filings are
necessary for the perfection of the security interest created by this
Charge and all necessary consents of third parties to the granting of
such security interest and the execution and delivery and performance
of this Charge have been duly obtained. Upon registration in the
register of members of NB3, the Collateral Agent will have a valid,
perfected, first priority legal mortgage over the Shares and all the
Chargor's right title, interest, claims, powers and privileges in, to
and under the Shares;
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(f) the correct legal name of the Chargor is as set forth in the preamble
to this Charge;
(g) the address for the Chargor set out in the preamble to this Charge is
the location of the Chargor's chief executive office; and
(h) all information set forth herein relating to the Shares and the
Charged Property is accurate and complete in all material respects.
4 Undertakings
4.1 Positive undertakings
The Chargor undertakes with the Collateral Agent that it will:
(a) Deposit of title documents: deposit with the Collateral Agent or its
nominee and permit the Collateral Agent or its nominee to hold and
retain (i) all stock and share certificates and documents of, or
evidencing, title or the right to title relating to the Charged
Property, (ii) such stock transfer forms or other instruments of
transfer in respect of the Charged Property, duly completed as the
Collateral Agent may direct and (iii) such other documents as the
Collateral Agent may from time to time require for perfecting its
title to the Charged Property (duly executed by or signed on behalf of
the registered holder) or for vesting or enabling it to vest the same
in itself or its nominees or in any purchaser to the intent that the
Collateral Agent may at any time without notice to the Chargor present
them for registration;
(b) Registration of transfers: procure that NB3 will forthwith on
presentation by the Collateral Agent or its nominee duly register all
transfers of the Shares and any other shares in NB3 for the time being
included in the Charged Property; and
(c) Calls: duly and promptly pay all calls, instalments or subscription
monies or other payments which from time to time become due in respect
of any of the Charged Property, and procure that the Collateral Agent
shall not in any circumstances incur any liability whatsoever in
respect of any calls, instalments, or otherwise in connection with the
Charged Property.
4.2 Negative undertakings in relation to the Charged Property
The Chargor further undertakes with the Collateral Agent that, except where
permitted to do so under the Indenture (with respect to sub-clause (b) and
(c) below) or where the relevant Charged Property has been released from
the security hereby created pursuant to clause 18, it will not without the
prior written consent of the Collateral Agent:
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(a) Registration of third party holders: permit any person other than the
Chargor, the Collateral Agent or nominees for either of them to be
registered as holder of the Charged Property or of any part thereof;
(b) Encumbrances: create or permit to subsist any Encumbrance (other than
in favour of the Collateral Agent) on or over the Charged Property or
any part thereof or any interest therein; or
(c) Disposals: sell, transfer, assign or otherwise dispose of the Charged
Properly or any part thereof or interest therein or attempt or agree
so to do.
5. Dividends and Voting Rights
5.1 The Collateral Agent agrees with the Chargor that so long as no Event of
Default under the Indenture has occurred and is continuing:
(a) Dividends: the Collateral Agent or its nominee, as the case may be,
will hold all dividends, interest and other moneys received by it in
respect of the Charged Property for the account of the Chargor and
will pay such dividends, interest and other moneys to the Chargor upon
request;
(b) Voting Rights: the Collateral Agent or its nominee, as the case may
be, will exercise all voting and other rights and powers attached to
the Charged Property and exercisable by the Collateral Agent or its
nominee, as the case may be, as the Chargor may from time to time in
writing direct provided that the relevant directions will not result
in any violation of any provision of this Charge or the Indenture and
so that the Collateral Agent (or its nominee as the case may be) will
from time to time if so requested by the Chargor provide a revocable
proxy to the Chargor, or a representative of the Chargor, to enable
the Chargor to exercise voting rights in respect of the Shares on its
behalf; and
(c) Notices: the Collateral Agent will, promptly after receipt, forward to
the Chargor copies of all material notices, documents or other
communications received by it in respect of the Charged Property.
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6 Further Assurance
6.1 Further assurance
The Chargor shall at any time if and when required by the Collateral Agent
execute such further Encumbrances and assurances in favour of the Collateral
Agent and do all such acts and things as the Collateral Agent shall from
time to time require over or in relation to all or any of the Charged
Property and all rights relating thereto both present and future and any
other transfers, financing statements, continuation statements, financing
statement amendments, filings or documents the Collateral Agent may from
time to time require for perfecting its title to the same or for vesting or
enabling it to vest the same in itself or its nominees or in any purchaser,
to secure the Secured Obligations or to facilitate realisation of the
Charged Property or the exercise of the powers conferred on the Collateral
Agent.
6.2 Certain documentary requirements
Such further Encumbrances or assurances shall be prepared by or on behalf of
the Collateral Agent at the cost of the Chargor and shall contain (a) an
immediate power of sale without notice; (b) a clause excluding section 93 of
the Law of Property Act 1925 and the restrictions contained in section 103
of the Law of Property Act 1925; and (c) such other clauses for the benefit
of the Collateral Agent as the Collateral Agent may reasonably require.
7 Certain powers of the Collateral Agent
7.1 Voting rights
The Collateral Agent and its nominees at the discretion of the Collateral
Agent may exercise in the name of the Chargor or otherwise at any time
whether before or after demand for payment and without any further consent
or authority on the part of the Chargor in respect of the Charged Property
any voting rights and all powers given to trustees by section 10(3) and (4)
of the Trustee Act 1925 (as amended by section 9 of the Trustee Investments
Act 1961) in respect of securities or property subject to a trust and any
powers or rights which may be exercisable by the person in whose name the
Shares or other Charged Property are registered but such power shall be
exercised subject to the provisions of clause 5.
7.2 Transfer of Charged Property
The Chargor will if so requested by the Collateral Agent transfer all or any
of the Charged Property to such nominees or agents as the Collateral Agent
may select and the Collateral Agent may hold all or any of such Charged
Property in any branch of the Collateral Agent or with any correspondents or
other agents whether in the United Kingdom, the United States or overseas
and all the Charged Property shall be held at the expense and risk of the
Chargor.
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7.3 Dividends
Unless otherwise agreed by the Collateral Agent, the Chargor shall procure
that all payments of dividends, distributions, intertest and other moneys in
respect of the Charged Property shall be paid to the Collateral Agent or as
the Collateral Agent may direct from time to time but subject to the
provisions of clause 5.
7.4 Subsequent Encumbrances
If the Collateral Agent receives notice of any subsequent Encumbrance,
assignment or other disposition affecting the Charged Property or any part
thereof or interest therein the Collateral Agent may open a new account for
the Chargor. If the Collateral Agent does not open a new account then unless
the Collateral Agent gives express written notice to the contrary to the
Chargor it shall nevertheless be treated as if it had done so at the time
when it received such notice and as from that time all payments made by or
on behalf of the Chargor to the Collateral Agent shall be credited or be
treated as having been credited to the new account and shall not operate to
reduce the amount due from the Chargor to the Collateral Agent at the time
when it received notice.
8 Enforcement
8.1 Exercise of powers
At any time on or after the Enforcement Date or if requested by the Chargor:
(a) Statutory powers of mortgagee: the Collateral Agent and any nominee of
the Collateral Agent wheresoever situate may exercise without further
notice and without the restrictions contained in section 103 of the Law
of Property Act 1925 in respect of all or any of the Charged Property
all the powers or rights which may be exercisable by the registered
holder or bearer of the Charged Property and all other powers coferred
on mortgages by the Law of Property Act 1925 as hereby varied or
extended;
(b) Application of dividends: any dividends or distributions, interest or
other payments which may be received or receivable by the Collateral
Agent or by any nominee in respect of any of the Charged Property may be
applied by the Collateral Agent as though they were proceeds of sale;
(c) Voting Rights: without prejudice to the provisions of clause 5.1(b), the
Collateral Agent may require the Chargor to exercise any such voting or
other rights and powers as are referred to in clause 5.1(b) in respect
of the Charged Property or any part thereof as the Collateral Agent may
direct from time to time.
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8.2 Terms of sale
In exercising the powers referred to in clause 8.1 the Charged Property or
any part thereof may be sold or disposed of at such times in such manner for
such consideration and generally on such terms and conditions as the
Collateral Agent may think fit. Any such sale or disposition may be for
cash, debentures or other obligations, shares, stock, securities or other
valuable consideration and be payable immediately or by instalments spread
over such period as the Collateral Agent shall think fit.
9 Appointment and Powers of Receiver
9.1 Appointment
At any time on or after the Enforcement Date or if requested by the Chargor,
the Collateral Agent may by instrument in writing executed as a deed or
under the hand of any director or other duly authorized officer appoint any
qualified person to be a Receiver of the Charged Property or any part
thereof. Where more than one Receiver is appointed, each joint Receiver
shall have power to act severally, independently of any other joint
Receivers, except to the extent that the Collateral Agent may specify to the
contrary in the appointment. The Collateral Agent may remove any Receiver so
appointed and appoint another in his place. In this clause 9 a "qualified
person" is a person who, under the Insolvency Act 1986, is qualified to act
as a receiver of the property with respect to which he is appointed.
9.2 Receiver as agent
A Receiver shall be the agent of the Chargor and the Chargor shall be solely
responsible for his acts or defaults and for his remuneration.
9.3 Powers of Receiver
A Receiver shall have all the powers conferred from time to time on
receivers by statute (in the case of powers conferred by the Law of
Property Act 1925, without the restrictions contained in section 103 of that
Act) and power on behalf and at the cost of the Chargor (notwithstanding
liquidation of the Chargor) to do or omit to do anything which the
Chargor could do or omit to do in relation to the Charged Property or any
part thereof. In particular (but without limitation) a Receiver shall have
power to do all or any of the following acts and things:
(a) Take possession: take possession of, collect and get in a11 or any of
the Charged Property and exercise all voting or other powers or rights
available to a registered holder thereof in such manner as he may think
fit;
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(b) Borrow money: raise or borrow any money from or incur any other
liability to the Collateral Agent or others on such terms with or
without security as he may think fit and so that any such security may
be or include a charge on the whole or any part of the Charged Property
ranking in priority to this security or otherwise;
(c) Dispose of assets: without the restrictions imposed by section 103 of
the Law of Property Act 1925, sell by public auction or private contract
or otherwise dispose of or deal with all or any of the Charged Property
or concur in so doing in such manner for such consideration and
generally on such terms and conditions as he may think fit any such sale
or disposition may be for cash, debentures or other obligations, shares,
stock, securities or other valuable consideration and be payable
immediately or by instalments spread over such period as he shall think
fit and so that any consideration received or receivable shall ipso
facto forthwith be and become charged with the payment of all the
Secured Obligations;
(d) Form subsidiaries: promote the formation of companies with a view to the
same becoming a subsidiary of the Chargor and purchasing or otherwise
acquiring interests in all or any of the Charged Property or otherwise,
arrange fur such companies to trade or cease to trade and to purchase or
otherwise acquire all or any of the Charged Property on such terms and
conditions whether or not including payment by instalments secured or
unsecured as he may think fit;
(e) Compromise conracts: make any arrangement or compromise or enter into
or cancel any contracts in connection with the Charged Property which he
shall think expedient;
(f) Legal proceedings: institute, continue, enforce, defend, settle or
discontinue any actions, suits or proceedings in relation to the Charged
Property or any part thereof or submit to arbitration as he may think
fit;
(g) Execute documents: sign any document, execute any deed and do all such
other acts and things as may be considered by him to be incidental or
conducive to any of the matters or powers aforesaid or to the
realisation of the security of the Collateral Agent and to use the name
of the Chargor for all the purposes aforesaid.
9.4 Remuneration
The Collateral Agent may from time to time determine the remuneration of any
Receiver and section 109(6) of the Law of Property Act 1925 shall be varied
accordingly. A Receiver shall be entitled to remuneration appropriate to the
work and responsibilities involved upon the basis of charging from time to
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time adopted by the Receiver in accordance with the current practice of his
firm.
10 Application of Proceeds: Purchasers
10.1 Application of proceeds
Subject to clause 5 and clause 18, all moneys received by the
Collateral Agent or by any Receiver in the exercise of any powers
conferred by this Charge shall be applied, after the discharge of the
remuneration and expenses of the Collateral Agent and/or any such
Receiver and all liabilities having priority to the Secured
Obligations, in accordance with the terms of the Indenture.
10.2 Protection of third parties
No purchaser or other person shall be bound or concerned to see or
enquire whether the right of the Collateral Agent to exercise any of
the powers hereby conferred has arisen or not or be concerned with
notice to the contrary or with the propriety of the exercise or
purported exercise of such powers.
11 Indemnities, costs and expenses
11.1 Enforcement costs
The Chargor covenants with the Collateral Agent to pay on demand all
costs, charges and expenses (including stamp duty, registration fees
and other documentary taxes and duties) incurred by the Collateral
Agent or any Receiver or which it or he shall properly incur in or
about the, enforcement, preservation or attempted preservation of this
security or of the Charged Property or any part thereof on a full
indemnity basis.
11.2 No liability as mortgagee in possession
The Collateral Agent shall not be liable to account as mortgagee in
possession in respect of all or any part of the Charged Property and
shall not be liable for any loss upon realisation or for any failure
to pay any call or instalment or to accept any offer or to notify the
Chargor of any such matter or for any other loss of any nature
whatsoever in connection with the Charged Property.
11.3 Indemnity from Charged Property
The Collateral Agent and any Receiver, attorney, agent or other person
appointed by the Collateral Agent under this Charge (each an
"Indemnified Party") shall be entitled to be indemnified out of the
Charged Property in respect of all costs, actions, claims, expenses,
demands and liabilities whether in contract, tort or otherwise and
whether arising at common law, in equity or by statute which may be
incurred by, or made against any of them (of by or against any agent,
officer or employee for whose liability act or omission any of them
may be answerable) at any time relating to or arising directly or
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indirectly out of or as a consequence of anything done or omitted in
the exercise or purported exercise of the powers contained in this
Charge or occasioned by any breach by the Chargor of any of its
covenants or other obligations under this Charge.
12 Power of Attorney
12.1 Power of attorney
The Chargor by way of security irrevocably appoints each of the
Collateral Agent and any Receiver severally to be its attorney in its
name and on its behalf:
(a) to execute and complete any documents or instruments which the
Collateral Agent or such Receiver may require for perfecting the
title of the Collateral Agent to the Charged Property or for
vesting the same in the Collateral Agent, its nominee or any
purchaser;
(b) to sign, execute, seal and deliver and otherwise perfect any
further security document referred to in clause 6; and
(c) otherwise generally to sign, seal, execute and deliver all deeds,
assurances, agreements and documents and to do all acts and
things which may be required for the full exercise of all or any
of the powers conferred on the Collateral Agent or a Receiver
under this Charge or which may be deemed expedient by the
Collateral Agent or a Receiver in connection with any
disposition, realisation or getting in by the Collateral Agent or
a Receiver of a Charged Property or any part thereof or in
connection with any other exercise of any power under this
Charge.
12.2 Ratification
The Chargor ratifies and confirms and agrees to ratify and confirm all
acts and things which any attorney as is mentioned in clause 12.1
shall do or purport to do in the exercise of his powers under such
clause.
13 Continuing Security and Other Matters
13.1 Continuing security
This Charge and the obligations of the Chargor under this Charge
shall:
(a) secure the amount of the Secured Obligations from time to time
outstanding to the Collateral Agent and the Holders by the
Chargor and shall be a continuing security until released
pursuant to clause 18;
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(b) be in addition to, and not prejudice or affect, any present or
future Collateral Instrument, right or remedy held by or
available to the Collateral Agent; and
(c) not merge with or be in any way prejudiced or affected by the
existence of any such Collateral Instruments, rights or remedies
or by the same being or becoming wholly or in part void, voidable
or unenforceable on any ground whatsoever or by the Collateral
Agent dealing with, exchanging, releasing, varying or failing to
perfect or enforce any of the same, or giving time for payment or
indulgence or compounding with any other person liable.
13.2 Collateral lnstruments
The Collateral Agent shall not be obliged to resort to any Collateral
Instrument or other means of payment now or hereafter held by or
available to it before enforcing this Charge and no action taken or
omitted by the Collateral Agent in connection with any such Collateral
Instrument or other means of payment shall discharge, reduce,
prejudice or affect the liability of the Chargor nor shall the
Collateral Agent be obliged to account for any money or other property
received or recovered in consequence of any enforcement or realisation
of any such Collateral Instrument or other means of payment.
13.3 Settlements conditional
Any release, discharge or settlement between the Chargor and the
Collateral Agent shall be conditional upon no security, disposition or
payment to the Collateral Agent by the Chargor or any other person
being void, set aside or ordered to be refunded pursuant to any
enactment or law relating to liquidation, administration or insolvency
or for any other reason whatsoever and if such condition shall not be
fulfilled the Collateral Agent shall be entitled to enforce this
Charge subsequently as if such release, discharge or settlement had
not occurred and any such payment had not been made.
14 Currencies
All moneys received or held by the Collateral Agent or by a Receiver
under this Charge at any time on or after the Enforcement Date in a
currency other than a currency in which the Secured Obligations are
denominated may from time to time be sold for such one or more of the
currencies in which the Secured Obligations are denominated as the
Collateral Agent or Receiver considers necessary or desirable and the
Charger hereby agrees to indemnify the Collateral Agent against the
full cost (including all costs, charges and expenses) incurred in
relation to such sale. Neither the Collateral Agent nor any Receiver
shall have any liability to the Charger in respect of any loss
resulting from any fluctuation in exchange rates after any such sale.
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15 Miscellaneous
15.1 Remedies cumulative
No failure or delay on the part of the Collateral Agent to exercise
any power, right or remedy shall operate as a waiver thereof nor shall
any single or any partial exercise or waiver of any power, right or
remedy preclude its further exercise or the exercise of any other
power, right or remedy.
15.2 Consolidation
Section 93 of the Law of Property Act 1925 shall not apply to the
security created by this Charge or to any security given to the
Collateral Agent pursuant to this Charge.
15.3 Reorganization of the Collateral Agent
This Charge shall remain binding on the Chargor notwithstanding any
change in the constitution of the Collateral Agent or its absorption
in, or amalgamation with, or the acquisition of all or part of its
undertaking by, any other person, or any reconstruction or
reorganization of any kind. The security granted by this Charge shall
remain valid and effective in all respects in favour of any assignee,
transferee or other successor in title of the Collateral Agent in the
same manner as if such assignee, transferee or other successor in
title had been named in this Charge as a party instead of, or in
addition to, the Collateral Agent.
15.4 Unfettered discretion
Any liability or power which may be excrcised or any determination
which may be made under this Charge by the Collateral Agent may be
exercised or made in its absolute and unfettered discretion and it
shall not be obliged to give reasons therefor.
15.5 Provisions severable
Each of the provisions of this Charge is severable and distinct from
the others and if any time in any jurisdiction one or more of such
provisions is or becomes invalid, illegal or unenforcable then such
event shall not:
(a) affect the validity, legality and enforceability of the remaining
provisions of this Charge in the relevant jurisdiction; or
(b) affect the validity, legality and enforceability of the relevant
provision or any other of the provisions of this Charge in any
other jurisdiction.
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15.6 Execution under hand only
This Charge is intended to take effect as a deed notwithstanding that
a party may only execute this Charge under hand.
16 Notices
All notices and other communications made or required to be given
under this Charge shall be in writing and shall be delivered by hand,
or sent by telecopier or facsimile and confirmed by letter malled by
United States registered or certified first-class mail, postage
prepaid addressed as follows:
To the Collateral Agent at: IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attention: Corporate Trust and Agency
Administration
Telecopier: 212-858 2952
Telephone: 212-858 2529
To the Chargor. Geotek Communications Inc.
20 Craig Road
Montvale
New Jersey 07645
Attention: General Counsel
Telecopier: 201-930-9614
Telephone: 201-930-9305
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (a) if delivered by hand to a
responsible officer of the party to which it is directed, at the time
of the receipt thereof by such officer, and (b) if sent by telecopier
or facsimile, at the time of the dispatch thereof, if in normal
business hours in the country of receipt, or otherwise at the opening
of business on the following business day.
17 Governing Law and Jurisdiction
17.1 Law
This Charge is governed by and shall be construed in accordance with
English law.
17.2 Submission to English courts
For the benefit of the Collateral Agent the Chargor hereby irrevocably
submits to the non-exclusive jurisdiction of the High Court of Justice
<PAGE>
in England but this Charge may be enforced in any court of competent
jurisdiction.
17.3 Appointment of process agent
The Chargor hereby irrevocably authorises and appoints NB3 (or such
other person being a firm of solicitors resident in England as it may
by notice to the Collateral Agent substitute) to accept service of all
legal process arising out of or connected with this Charge and service
on NB3 (or such substitute) shall be deemed to be service on the
Chargor.
17.4 Submission to New York Courts and appointment of agent for service
The parties hereto irrevocably consent to the jurisdiction of the
courts of the State of New York and any federal court located in such
state in connection with any action, suit or proceeding arising out of
or relating to this Charge and irrevocably waive the defense of an
inconvenient forum to the maintenance of such suit or proceeding.
Geotek hereby agrees to designate and appoint CT Corporation System as
an agent upon whom process may be served in any suit or proceeding
based on or arising under this Charge. Geotek further agrees that
service of process upon Geotek, or upon an agent appointed pursuant to
the proceding sentence accompanied with written notice of said service
to Geotek, as the case may be, mailed by first class mail shall be
deemed in every respect effective service of process upon Geotek in
any such suit or proceeding. Nothing herein shall affect the
Collateral Agent's right to serve process in any other manner
permitted by law. Gootek agrees that a non-appealable judgment in any
such suit or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on such judgment or in any other lawful
manner.
18 Release of security
18.1 The Collateral Agent undertakes to the Chargor that it will release
the security hereby created:
(a) upon the full, final and indefeasible payment and discharge of
the Secured Obligations, or
(b) if earlier, upon a defeasance of the Securities in accordance
with the Indenture; or
(c) if earlier, upon the prior written consent of the Holders of at
least 66 2/3% of the aggregate principal amount of the Securities
then outstanding (the "Requisite Vote") pursuant to a request (a
"Collateral Release Request") made by the Chargor to the Holders;
or
<PAGE>
(d) if earlier, upon the consummation of a Collateral Release
Repurchase Offer (as defined herein) in accordance with this
clause 18.l(d). In the event that the Chargor does not receive
the Requisite Vote pursuant to any such Collateral Release
Request, the Charger may, at its option, within five business
days after the latest date on which such consents are required to
be delivered to the Charger pursuant to the terms of the
Collateral Release Request, make an offer to purchase (a
"Collateral Release Repurchase Offer") all of the outstanding
Securities at a purchase price of 101.5% of the Accreted Value
thereof, plus accrued and unpaid interest, if any, to the date of
repurchase. If the Chargor shall at any time make a Collateral
Release Request, the Chargor shall pay to the voting Holders an
amount in cash equal to 0.50% of the Accreted Value on such date
as provided in the Indenture. Any Collateral Release Request
shall be made as provided in the Indenture.
In order to effect any such release, the Collateral Agent shall, at
the expense of the Chargor, promptly retransfer to such person as the
Chargor shall nominate, the Shares remaining held by it and execute a
deed of release in such form as the Charger shall reasonably request.
The retransfer of the Shares to (or to the nominee of) the Chargor
shall be without recourse to or warranty from the Collateral Agent
(other than a warranty that the Collateral Agent has not assigned or
delivered the Shares so retransferred to any other person).
18.2 In addition, in the event that any of the Charged Property is sold and
the Net Cash Proceeds thereof are applied in accordance with the terms
of Section 4.12 of the Indenture entitled "Disposition of Proceeds of
Asset Sales," or any of the Charged Property is otherwise transferred
in a transaction permitted by the Indenture, the Collateral Agent
shall release the security hereby created in favour of the Collateral
Agent over the Charged Property so sold or transfered; provided, that
the Collateral Agent shall have received from the Chargor an Officers'
Certificate and an Opinion of Counsel that such Charged Property has
been sold or transferred in accordance with the terms hereof. To the
extent that any Charged Property is sold and the Net Cash Proceeds
thereof are applied in accordance with the terms of Section 4.12 of
the Indenture, the Net Cash Proceeds resulting from the sale or other
disposition of such Charged Property shall, to the extent permitted by
law (including any necessary approval in regard to any radio
licenses), be immediately deposited in an account (the "Collateral
Account") subject to a first priority perfected security interest in
favour of a Collateral Agent, and the Chargor shall cause any non-cash
proceeds from such sale or other disposition (including securities)
received by the Chargor or a subsidiary to immediately become subject
to a first priority perfected security interest in favour of the
Collateral Agent.
<PAGE>
Within 180 days after consummation of any sale or disposition of
Charged Property, the Chargor shall apply 100.0% of the Net Cash
Procceeds resulting from such sale or disposition to (i) the purchase
of Replacement Assets, provided that, when acquired, such Replacement
Assets are subject to a first priority perfected security interest in
favour of the Collateral Agent, or (ii) the acquisition or formation
of a subsidiary, provided, that, when acquired or formed, all of the
outstanding Capital Stock or such subsidiary is subject to a first
priority perfected security interest in favour of the Collateral
Agent; provided that if the Chargor does not apply such Net Cash
Proceeds in accordance with (i) or (ii) above, such Net Cash Proceeds
shall remain in the Collateral Account and not be released until the
obligations of the Chargor under the Indenture and the Securities have
been discharged, the security hereby created shall otherwise have been
released or until distributed to the Holders of the Securities as
Excess Proceeds. Subject to the proviso in the preceding sentence,
amounts in the Collateral Account shall be released (i) upon the
purchase of Replacement Assets, (ii) upon the acquisition or formation
of a subsidiary, all of whose Capital Stock has been pledged to the
Collateral Agent or (iii) when distributed to the holders of the
Seurities as Excess Proceeds.
IN WITNESS whereof this Charge has been executed and delivered as a deed by or
on behalf of the parties on the date stated at the begining of this Charge.
EXECUTED and DELIVERED as a DEED
by GEOTEK COMMUNICATIONS, INC.
By: /s/ Yoram Bibring
------------------------------------
Name: Yoram Bibring
Title: Executive Vice President, Chief Operating
Officer and Chief Financial Officer
EXECUTED and DELIVERED as a DEED
by IBJ SCHRODER BANK & TRUST COMPANY
By: /s/ Barbara McCluskey
------------------------------------
Name: Barbara McCluskey
Title: Asstistant Vice President
EXHIBIT (c)(7)
<PAGE>
================================================================================
WARRANT AGREEMENT
Dated as of June 30, 1995
by and between
GEOTEK COMMUNICATIONS, INC.
and
IBJ SCHRODER BANK & TRUST COMPANY,
as Warrant Agent
================================================================================
<PAGE>
WARRANT AGREEMENT
TABLE OF CONTENTS*
Page
SECTION 1. Appointment of Warrant Agent ............. 2
SECTION 2. Issuance of Warrants ..................... 2
SECTION 3. Warrant Certificates ..................... 2
SECTION 4. Execution of Warrant Certificates ........ 3
SECTION 5. Transfers of Warrants .................... 4
(a) Prior to the Separation of Warrants and
Notes; Separation of Warrants and Notes . 4
(b) Restrictive Legend ....................... 6
(c) Global Warrant Legend .................... 7
SECTION 6. Registration and Countersignature ........ 8
SECTION 7. (a) Registration of Transfers and
Exchanges ............................... 8
(b) Book-Entry Provisions for the Global
Warrants ................................ 9
(c) Special Transfer Provisions .............. 11
SECTION 8. Terms of Warrants; Exercise of Warrants .. 16
SECTION 9. Reports .................................. 18
SECTION 10. Payment of Taxes ......................... 19
SECTION 11. Mutilated or Missing Warrant Certificates 19
SECTION 12. Reservation of Warrant Shares ............ 20
SECTION 13. Obtaining Stock Exchange Listings ........ 21
SECTION 14. Repurchase ............................... 21
SECTION 15. Adjustment of Exercise Price and Number
of Warrant Shares Issuable .............. 23
(a) Adjustment for Change in Capital Stock ... 23
(b) Adjustment for Rights Issue .............. 24
(c) Adjustment for Other Distributions ....... 25
(d) Adjustment for Common Stock Issue ........ 26
(e) Adjustment for Convertible
Securities Issue ........................ 28
(f) Adjustment for Tender or Exchange Offer .. 29
(g) Current Market Price ..................... 31
(h) Consideration Received ................... 31
(i) When De Minimis Adjustment May Be Deferred 32
(j) When No Adjustment Required .............. 32
(k) Notice of Adjustment ..................... 33
(l) Voluntary Reduction ...................... 33
(m) Reorganization of the Company ............ 34
(n) Company Determination Final .............. 34
(o) Warrant Agent's Disclaimer ............... 34
(p) When Issuance or Payment May Be Deferred . 35
(q) Adjustment in Number of Shares ........... 35
(r) Form of Warrants ......................... 36
SECTION 16. No Dilution or Impairment ................ 36
SECTION 17. Fractional Interests ..................... 37
SECTION 18. Notices to Warrant Holders ............... 37
- -----------
* This Table of Contents does not constitute a part of this Agreement or have
any bearing upon the interpretation of any of its terms or provisions.
<PAGE>
SECTION 19. Warrant Agent ............................ 39
SECTION 20. Merger, Consolidation or Change of Name
of Warrant Agent ........................ 42
SECTION 21. Change of Warrant Agent .................. 43
SECTION 22. Notices to the Company and Warrant Agent . 43
SECTION 23. Supplements and Amendments ............... 44
SECTION 24. Successors ............................... 45
SECTION 25. Termination .............................. 45
SECTION 26. Governing Law; Jurisdiction .............. 45
SECTION 27. Benefits of This Agreement ............... 46
SECTION 28. Counterparts ............................. 46
SECTION 29. Further Assurances ....................... 46
EXHIBIT A Form of Initial Warrant Certificate ...... A-1
EXHIBIT B Form of Certificate ...................... B-1
EXHIBIT C Form of Certificate to Be Delivered in
Connection with Transfers to Non-QIB
Accredited Investors .................... C-1
EXHIBIT D Form of Certificate to Be Delivered in
Connection with Transfers Pursuant to
Regulation S ............................ D-1
EXHIBIT E Form of Warrant Shares Legend ............ E-1
<PAGE>
WARRANT AGREEMENT (this "Agreement") dated as of June 30, 1995
between Geotek Communications, Inc., a Delaware corporation (the "Company"),
and IBJ Schroder Bank & Trust Company, a bank and trust company organized and
existing under the laws of the State of New York, as Warrant Agent (the
"Warrant Agent").
WHEREAS, the Company has entered into a purchase agreement, dated
June 29, 1995, with Smith Barney Inc. (the "Initial Purchaser") pursuant to
which the Company has agreed to sell to the Initial Purchaser 207,000 Units
(the "Firm Units") consisting of $207,000,000 aggregate principal amount at
maturity of 15% Senior Secured Discount Notes due 2005 (the "Firm Notes") and
warrants (the "Firm Warrants") to purchase up to an aggregate of 6,210,000
shares of common stock, par value $.01 per share, of the Company (the "Common
Stock"), plus up to an additional 20,700 Units (the "Additional Units"),
consisting of $20,700,000 aggregate principal amount at maturity of 15%
Senior Secured Discount Notes due 2005 (the "Additional Notes") and warrants
to purchase up to an aggregate of 621,000 shares of Common Stock (the
"Additional Warrants"), issuable pursuant to the Initial Purchaser's option
to cover overallotments. The Firm Notes and the Additional Notes are
hereinafter collectively referred to as the "Notes", the Firm Warrants and
the Additional Warrants are hereinafter collectively referred to as the
"Warrants" and the Firm Units and the Additional Units are hereinafter
collectively referred to as the "Units." Each Warrant entitles the holder
thereof, upon exercise, to purchase one fully paid and nonassessable share of
Common Stock at an exercise price of $9.90 per share (the "Exercise Price").
The Exercise Price and the number of shares are both subject to adjustment
under certain circumstances as provided herein. The shares of Common Stock
issuable upon exercise of the Warrants are referred to herein as "Warrant
Shares." The Notes will be issued under an indenture to be dated as of June
30, 1995 (the "Indenture"; unless otherwise defined herein, defined terms
therein shall have the same meanings when used herein) between the Company
and IBJ Schroder Bank & Trust Company, as trustee (the "Trustee"); and
WHEREAS, the Warrants shall bear the legend set forth in Exhibit A
attached hereto (the "Warrant Legend") and the Notes shall bear the legend
set forth in Exhibit A attached to the Indenture, in each case subject to the
terms of this Agreement and the Indenture, as the case may be. Unless
registered under the Securities Act of 1933, as amended, and any applicable
state securities laws, the Warrant Shares shall initially bear the legend set
forth in Exhibit E (the "Warrant Shares Legend"); and
WHEREAS, the Warrants and the Notes shall not be separately
transferable until the close of business upon the earliest to occur of (i)
January 6, 1996, (ii) the commencement of the Exchange Offer, (iii) such
earlier date as the Initial Purchaser may determine and specify to the
Warrant Agent in writing and (iv) in the event of a Change of Control, the
<PAGE>
date the Company mails notice thereof to the Holders of the Notes (the
"Separation Date"); and
WHEREAS, the Company desires the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing so to act, in connection with
the issuance of Warrant certificates and other matters as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
the instructions set forth hereinafter in this Agreement, and the Warrant
Agent hereby accepts such appointment.
SECTION 2. Issuance of Warrants. Warrants shall be originally
issued in connection with the issuance of the Notes and shall not be
separately transferable from the Notes until on or after the Separation Date
as provided in Section 5 hereof.
SECTION 3. Warrant Certificates. The Warrants shall be
substantially in the form annexed hereto as Exhibit A.
Warrants offered and sold in reliance on Rule 144A shall be issued
initially in the form of a single permanent global Warrant in definitive,
fully registered form, substantially in the form set forth in Exhibit A (the
"U.S. Global Warrant"), deposited with the Warrant Agent, as custodian for
the Depository and registered in the name of a nominee of the Depository,
duly executed by the Company and countersigned by the Warrant Agent as
hereinafter provided. The aggregate amount of the U.S. Global Warrant may
from time to time be increased or decreased by adjustments made on the
records of the Warrant Agent, as custodian for the Depository or its nominee,
as hereinafter provided.
Warrants offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of a single temporary
global Warrant in definitive, fully registered form substantially in the form
set forth in Exhibit A (the "Temporary Offshore Global Warrant") deposited
with the Warrant Agent, as custodian for the Depository and registered in the
name of a nominee of the Depository for the accounts of Euroclear and Cedel,
duly executed by the Company and countersigned by the Warrant Agent as
hereinafter provided. At any time on or after August 15, 1995, upon receipt
by the Warrant Agent and the Company of a duly executed certificate
substantially in the form of Exhibit B hereto, a single permanent global
Warrant in definitive, fully registered form substantially in the form set
forth in Exhibit A, except that such Warrant shall not bear the legend (the
"Private Placement Legend") set forth in Section 5(b) hereof (the "Permanent
Offshore Global Warrant," and together with the Temporary Offshore Global
Warrant, the "Offshore Global Warrants"), duly executed by the Company and
countersigned by the Warrant Agent as hereinafter provided shall be deposited
with the Warrant Agent, as custodian for the Depository, and the Warrant
Agent shall reflect on its books and records the date and a decrease in the
aggregate amount of the Temporary Offshore Global Warrant in an amount equal
<PAGE>
to the aggregate amount of the beneficial interest in the Temporary Offshore
Global Warrant transferred. The U.S. Global Warrant and the Offshore Global
Warrant are sometimes referred to herein individually as a "Global Warrant"
and collectively as the "Global Warrants."
Warrants originally purchased by or transferred to Institutional
Accredited Investors which are not QIB's ("Non-Global Purchasers") shall be
issued in the form of permanent certificated Warrants in registered form in
substantially the form set forth in Exhibit A (the "Physical Warrants").
Upon the transfer of Physical Warrants by a Non-Global Purchaser either to a
QIB or in accordance with Regulation S, such Physical Warrants shall, unless
the relevant Global Warrant has previously been exchanged in whole for
Physical Warrants pursuant to Section 7(b)(ii), be exchanged for an interest
in such Global Warrant.
SECTION 4. Execution of Warrant Certificates. Warrant
certificates shall be signed on behalf of the Company by its Chairman of the
Board, Chief Executive Officer, Chief Financial Officer, President or Senior
Vice President and Secretary or an Assistant Secretary. Each such signature
upon the Warrant certificates may be in the form of a facsimile signature of
the present or any future Chairman of the Board, Chief Executive Officer,
Chief Financial Officer, President or Senior Vice President and Secretary or
Assistant Secretary and may be imprinted or otherwise reproduced on the
Warrant certificates and for that purpose the Company may adopt and use the
facsimile signature of any person who shall have been Chairman of the Board,
Chief Executive Officer, Chief Financial Officer, President, Senior Vice
President, Secretary or Assistant Secretary, notwithstanding the fact that at
the time the Warrant certificates shall be countersigned and delivered or
disposed of he or she shall have ceased to hold such office. The seal of the
Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Warrant certificates.
In case any officer of the Company who shall have signed any of the
Warrant certificates shall cease to be such officer before the Warrant
certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not
ceased to be such officer of the Company; and any Warrant certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Warrant certificate, shall be a proper officer of the
Company to sign such Warrant certificate, although at the date of the
execution of this Agreement any such person was not such officer.
Warrant certificates shall be dated the date of countersignature by
the Warrant Agent.
SECTION 5. Transfers of Warrants.
(a) Prior to the Separation of Warrants and Notes; Separation of
Warrants and Notes. Notwithstanding the provisions of Section 7 hereof, on
<PAGE>
or after the Separation Date, the registered holder of a Warrant certificate
containing a Warrant Legend may surrender such Warrant certificate
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Warrant Agent, duly executed by the registered holder or
holders thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney to the Warrant Agent, at its corporate trust office
in the City of New York, State of New York (the "Warrant Agent Office") for
the exchange of such Warrant containing a Warrant Legend, in whole or in
part, for a new Warrant certificate or certificates not containing the first
paragraph of the Warrant Legend (such surrender and exchange being referred
to herein as a "Separation" and the related Warrants being referred to as
"Separated").
Until the Separation Date, no Warrant may be sold, assigned or
otherwise transferred to any person unless simultaneously with such transfer,
the Warrant Agent receives confirmation from the Trustee for the Notes that
the holder thereof has requested a transfer to such transferee of $1,000
principal amount at maturity of Notes for each 30 Warrants (subject to an
adjustment under Section 15 hereof) so transferred. In connection with the
foregoing, upon original issuance (if prior to the Separation Date) and,
thereafter (until Separation with respect to the first paragraph only), each
Warrant certificate will bear the following legend:
UNTIL THE CLOSE OF BUSINESS UPON THE EARLIEST TO OCCUR OF (i) JANUARY 6,
1996, (ii) THE COMMENCEMENT OF AN EXCHANGE OFFER RELATING TO THE 15%
SENIOR SECURED DISCOUNT NOTES DUE 2005 (THE "NOTES") OF GEOTEK
COMMUNICATIONS, INC. (THE "COMPANY"), (iii) SUCH EARLIER DATE AS SMITH
BARNEY INC., AS INITIAL PURCHASER OF THE NOTES AND WARRANTS, MAY
DETERMINE AND SPECIFY TO THE WARRANT AGENT IN WRITING, AND (iv) IN THE
EVENT OF A CHANGE OF CONTROL (AS DEFINED IN THE INDENTURE RELATING TO
THE NOTES), THE DATE THE COMPANY MAILS NOTICE THEREOF TO HOLDERS OF THE
NOTES, THE WARRANTS EVIDENCED HEREBY MAY NOT BE SOLD, ASSIGNED OR
OTHERWISE TRANSFERRED TO ANY PERSON UNLESS, SIMULTANEOUSLY WITH SUCH
TRANSFER, THE HOLDER HEREOF TRANSFERS TO SUCH TRANSFEREE $1,000
PRINCIPAL AMOUNT AT MATURITY OF NOTES FOR EACH 30 WARRANTS (SUBJECT TO
ADJUSTMENT UNDER SECTION 15 OF THE WARRANT AGREEMENT, DATED AS OF JUNE
30, 1995, BETWEEN THE COMPANY AND IBJ SCHRODER BANK & TRUST COMPANY, AS
WARRANT AGENT) SO TRANSFERRED.
THE COMMON STOCK, PAR VALUE $.01, OF THE COMPANY (THE "COMMON STOCK")
FOR WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. ACCORDINGLY,
NO WARRANT HOLDER SHALL BE ENTITLED TO EXERCISE SUCH HOLDER'S WARRANTS
AT ANY TIME UNLESS, AT THE TIME OF EXERCISE, (I) A REGISTRATION
STATEMENT UNDER THE ACT COVERING THE OFFER AND SALE OF THE SHARES OF
<PAGE>
COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS WARRANT (THE "WARRANT
SHARES") HAS BEEN FILED WITH, AND DECLARED EFFECTIVE BY, THE SECURITIES
AND EXCHANGE COMMISSION (THE "SEC"), AND NO STOP ORDER SUSPENDING THE
EFFECTIVENESS OF SUCH REGISTRATION STATEMENT HAS BEEN ISSUED BY THE SEC
OR (II) THE OFFER AND SALE OF THE WARRANT SHARES TO THE WARRANT HOLDERS
ARE EXEMPT FROM REGISTRATION UNDER THE ACT AND THE WARRANT HOLDER, IF SO
REQUESTED BY THE COMPANY, HAS DELIVERED TO THE COMPANY AN OPINION OF
COUNSEL TO SUCH EFFECT.
(b) Restrictive Legend. Except as otherwise provided in Section
7(c)(vi) hereof, the U.S. Global Warrant, the Temporary Offshore Global
Warrant and any Physical Warrant issued in exchange for interests therein
shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY OR THE LAST DATE ON WHICH
THIS SECURITY WAS HELD BY THE COMPANY OR ANY AFFILIATE OF THE COMPANY, RESELL
OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE WARRANT AGENT A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE WARRANT
AGENT) AND AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER
IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER
OF THIS SECURITY WITHIN THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE
OF THE SECURITY OR THE LAST DATE ON WHICH THIS SECURITY WAS HELD BY THE
COMPANY OR AN AFFILIATE OF THE COMPANY, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER
<PAGE>
AND SUBMIT THIS CERTIFICATE TO THE WARRANT AGENT. IF THE PROPOSED TRANSFEREE
IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE WARRANT AGENT AND THE COMPANY SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. 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 WARRANT AGREEMENT CONTAINS A PROVISION
REQUIRING THE WARRANT AGENT TO REFUSE TO REGISTER ANY TRANSFER OF THIS
SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.
(c) Global Warrant Legend. Each Global Warrant shall also bear
the following legend:
UNLESS THIS WARRANT IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY WARRANT ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 7(c) OF THE WARRANT AGREEMENT.
SECTION 6. Registration and Countersignature. The Warrant Agent,
on behalf of the Company, shall number and register the Warrant certificates
in a register as they are issued by the Company.
Warrant certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. The
Warrant Agent shall, upon written instructions of the Chairman of the Board,
Chief Executive Officer, Chief Financial Officer, President, a Senior Vice
President or Secretary of the Company, initially countersign and deliver
Warrants entitling the holders thereof to purchase not more than the number
of Warrant Shares referred to above in the first recital hereof and shall
countersign and deliver Warrants as otherwise provided in this Agreement.
The Company and the Warrant Agent may deem and treat the registered
holder(s) of the Warrant certificates as the absolute owner(s) thereof
<PAGE>
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for all purposes, and neither the Company nor the Warrant Agent
shall be affected by any notice to the contrary. The Company agrees to
arrange for the Trustee under the Indenture (or any other Registrar
thereunder) to act as registrar hereunder with respect to Warrants that are
not Separated.
SECTION 7. (a) Registration of Transfers and Exchanges. In
accordance with this Section 7, the Warrant Agent shall from time to time
register the transfer of any outstanding Warrant certificates upon the
records to be maintained by it for that purpose, upon surrender thereof
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Warrant Agent, duly executed by the registered holder or
holders thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney. Upon any such registration of transfer, a new
Warrant certificate shall be issued to the transferee(s) and the surrendered
Warrant certificate shall be canceled by the Warrant Agent. Canceled Warrant
certificates shall thereafter be disposed of by the Warrant Agent in a manner
consistent with the Warrant Agent's customary procedure and in accordance
with applicable law.
Warrant certificates may be exchanged at the option of the
holder(s) thereof, when surrendered to the Warrant Agent at its office for
another Warrant certificate or other Warrant certificates of like tenor and
representing in the aggregate a like number of Warrants. Warrant
certificates surrendered for exchange shall be canceled by the Warrant Agent.
Such canceled Warrant certificates shall then be disposed of by the Warrant
Agent in a manner consistent with the Warrant Agent's customary procedure and
in accordance with applicable law.
No service charge shall be made for any transfer or exchange of
Warrant certificates or any issuance of Warrant certificates in connection
with a Separation, but the Company may require payment of a sum sufficient to
cover any stamp or other governmental charge or tax that may be imposed in
connection with any such transfer or exchange.
The Warrant Agent is hereby authorized to countersign, in
accordance with the provisions of this Section 7 and Section 5, the new
Warrant certificates required pursuant to the provisions of this Section 7.
(b) Book-Entry Provisions for the Global Warrants. (i) The Global
Warrants initially shall (x) be registered in the name of the Depository or
the nominee of such Depository, (y) be delivered to the Warrant Agent as
custodian for the Depository and (z) bear legends as set forth in Section
5(b).
(ii) Transfers of any Global Warrant shall be limited to transfers
of such Global Warrant in whole, but not in part, to the Depository, its
successors or their respective nominees. Beneficial interests in any Global
Warrant may be transferred in accordance with the applicable rules and
procedures of the Depository and, if applicable, Euroclear and Cedel and the
provisions of Section 7(c). If, for any reason, a beneficial owner requires
<PAGE>
physical delivery of a Physical Warrant, such beneficial owner shall transfer
its interest in the Global Warrant in exchange for Physical Warrants in
accordance with the applicable rules and procedures of the Depository and, if
applicable, Euroclear and Cedel and the provisions of Section 7(c). In
addition, Physical Warrants shall be transferred to all beneficial owners in
exchange for their beneficial interests in any Global Warrant if (x) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for such Global Warrant, and a successor depository is not
appointed by the Company within 90 days of such notice or (y) an Event of
Default has occurred and is continuing and the Warrant Agent has received a
request from the Depository.
(iii) Any beneficial interest in one of the Global Warrants that
is transferred to a person who takes delivery in the form of an interest in
the other Global Warrant will, upon transfer, cease to be an interest in such
Global Warrant and become an interest in the other Global Warrant and,
accordingly, will thereafter be subject to all transfer restrictions, if any,
and other procedures applicable to beneficial interests in such other Global
Warrant for as long as it remains such an interest.
(iv) In connection with any transfer of a beneficial interest in
any Global Warrant to a transferee receiving Physical Warrants pursuant to
paragraph (b)(ii) of this Section 7, the Warrant Agent shall reflect on its
books and records the date and a decrease in the aggregate amount of such
Global Warrant in an amount equal to the aggregate amount of the beneficial
interest in such Global Warrant to be transferred, and the Company shall
execute, and the Warrant Agent shall countersign and deliver, one or more
Physical Warrants of like tenor and amount.
(v) In connection with the transfer of an entire Global Warrant to
beneficial owners pursuant to paragraph (b)(ii) of this Section 7, such
Global Warrant shall be deemed to be surrendered to the Warrant Agent for
cancellation, and the Company shall execute, and the Warrant Agent shall
countersign and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in such Global Warrant, an
equal aggregate amount of Physical Warrants of authorized denominations.
(vi) Any Physical Warrant delivered in exchange for an interest in
the U.S. Global Warrant or the Temporary Offshore Global Warrant pursuant to
paragraphs (b)(ii), b)(iv) or (b)(v) of this Section 7 shall, except as
otherwise provided by paragraph (c)(vi) of this Section 7, bear the legends
regarding transfer restrictions applicable to the Physical Warrant set forth
in Sections 5(a) and 5(b).
(vii) The registered holder of a Global Warrant may grant proxies
and otherwise authorize any person, including Agent Members and persons that
may hold interests through Agent Members, to take any action which a Warrant
holder is entitled to take under this Warrant Agreement or the Warrants.
<PAGE>
(c) Special Transfer Provisions.
(i) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Warrant to any Institutional Accredited Investor that
is not a QIB:
(x) The Warrant Agent shall register the transfer of any Warrant,
whether or not such Warrant bears the Private Placement
Legend, if (A) the requested transfer is at least three years
after the later of the Issue Date and the last date on which
such Warrant was held by an Affiliate of the Company or (B)
the proposed transferee has delivered to the Warrant Agent
(1) a certificate substantially in the form of Exhibit C
hereto and (2) an opinion of counsel acceptable to the
Company and the Warrant Agent that such transfer is in
compliance with the Securities Act.
(y) If the proposed transferor is an Agent Member holding a
beneficial interest in the Global Warrant, upon receipt by
the Warrant Agent of (A) the documents, if any, required by
paragraph (c)(i)(x) of this Section 7 and (B) instructions
given in accordance with the Depository's and the Warrant
Agent's procedures, the Warrant Agent shall reflect on its
books and records the date and a decrease in the aggregate
amount of the Global Warrant in an amount equal to the
aggregate amount of the beneficial interest in the Global
Warrant to be transferred, and the Company shall execute, and
the Warrant Agent shall countersign and deliver, one or more
Physical Certificates of like tenor and amount.
(ii) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of a Warrant
to a QIB:
(x) If the Warrant to be transferred consists of Physical
Warrants or an interest in the Temporary Offshore Global
Warrant, the Warrant Agent shall register the transfer if
such transfer is being made by a proposed transferor who has
checked the box provided for on the form of Warrant stating,
or has otherwise advised the Company and the Warrant Agent in
writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Warrant stating, or
has otherwise advised the Company and the Warrant Agent in
writing, that it is purchasing the Warrant for its own
<PAGE>
account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a
QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding
the Company as it has requested pursuant to Rule 144A or has
determined not to request such information and that it is
aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from
registration provided by Rule 144A.
(y) If the proposed transferee is an Agent Member and the Warrant
to be transferred consists of Physical Warrants or an
interest in the Temporary Offshore Global Warrant, upon
receipt by the Warrant Agent of the documents referred to in
clause (x) and instructions given in accordance with the
Depository's and the Warrant Agent's procedures, the Warrant
Agent shall reflect on its books and records the date and an
increase in the aggregate amount of the U.S. Global Warrant
in an amount equal to the aggregate amount of the Physical
Warrants or the interest in the Temporary Offshore Global
Warrant, as the case may be, to be transferred, and the
Warrant Agent shall cancel the Physical Warrants or decrease
the amount of the Temporary Offshore Global Warrant so
transferred.
(iii) Transfers of Interests in the Temporary Offshore Global
Warrant. The following provisions shall apply with respect to
registration of any proposed transfer of interests in the Temporary
Offshore Global Warrant:
(x) The Warrant Agent shall register the transfer of any Warrant
(A) if the proposed transferee is a Non-U.S. Person and the
proposed transferor has delivered to the Warrant Agent a
certificate substantially in the form of Exhibit D hereto or
(B) if the proposed transferee is a QIB and the proposed
transferor has checked the box provided for on the form of
Warrant stating, or has otherwise advised the Company and the
Warrant Agent in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee
who has signed the certification provided for on the form of
Warrant stating, or has otherwise advised the Company and the
Warrant Agent in writing, that it is purchasing the Warrant
for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such
<PAGE>
account is a QIB within the meaning of Rule 144A, and is
aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information
regarding the Company as it has requested pursuant to Rule
144A or has determined not to request such information and
that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
(y) If the proposed transferee is an Agent Member, upon receipt
by the Warrant Agent of the documents referred to in clause
(x)(A) above and instructions given in accordance with the
Depository's and the Warrant Agent's procedures, the Warrant
Agent shall reflect on its books and records the date and an
increase in the aggregate amount of the U.S. Global Warrant
in an amount equal to the aggregate amount of the Temporary
Offshore Global Warrant to be transferred, and the Warrant
Agent shall decrease the amount of the Temporary Offshore
Global Warrant.
(iv) Transfers of Interests in the Permanent Offshore Global
Warrant to U.S. Persons. The following provision shall apply with
respect to any transfer of interests in the Permanent Offshore Global
Warrant to U.S. Persons: The Warrant Agent shall register the transfer
of any Warrant without requiring any additional certification.
(v) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of a Warrant to a
Non- U.S. Person:
(x) Prior to August 15, 1995, the Warrant Agent shall register
any proposed transfer of a Warrant to a Non-U.S. Person upon
receipt of a certificate substantially in the form of Exhibit
D hereto from the proposed transferor.
(y) On and after August 15, 1995, the Warrant Agent shall
register any proposed transfer to any Non-U.S. Person if the
Warrant to be transferred is an interest in the U.S. Global
Warrant, upon receipt of a certificate substantially in the
form of Exhibit D from the proposed transferor.
(z) (A) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Warrant, upon receipt
by the Warrant Agent of (1) the documents, if any, required
by paragraph (c)(v)(y) and (2) instructions in accordance
with the Depository's and the Warrant Agent's procedures, the
<PAGE>
Warrant Agent shall reflect on its books and records the date
and a decrease in the aggregate amount of the U.S. Global
Warrant in an amount equal to the aggregate amount of the
beneficial interest in the U.S. Global Warrant to be
transferred, and (B) if the proposed transferee is an Agent
Member, upon receipt by the Warrant Agent of instructions
given in accordance with the Depository's and the Warrant
Agent's procedures, the Warrant Agent shall reflect on its
books and records the date and an increase in the aggregate
amount of the Offshore Global Warrant in an amount equal to
the aggregate amount of the U.S. Global Warrant to be
transferred, and the Warrant Agent shall decrease the amount
of the U.S. Global Warrant.
(vi) Private Placement Legend. Upon the transfer, exchange
or replacement of Warrants not bearing the Private Placement Legend, the
Warrant Agent shall deliver Warrants that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of
Warrants bearing the Private Placement Legend, the Warrant Agent shall
deliver only Warrants that bear the Private Placement Legend unless
either (x) the circumstances contemplated by the third paragraph of
Section 3 or paragraph (c)(i)(x)(A) or (c)(v)(y) of this Section 7 exist
or (y) there is delivered to the Warrant Agent an opinion of counsel
reasonably satisfactory to the Company and the Warrant Agent to the
effect that neither such legend nor the related restrictions on transfer
are required in order to maintain compliance with the provisions of the
Securities Act.
(vii) General. The provisions hereof shall be qualified in
their entirety by any applicable securities laws of the United States
and any other applicable jurisdiction and by the procedures of any
applicable clearing agency, in each case as in effect from time to time,
and all such laws and clearing procedures shall be deemed to be
incorporated herein by reference. By its acceptance of any Warrant
bearing the Private Placement Legend, each holder of such a Warrant
shall be deemed to acknowledge the restrictions on transfer of such
Warrant set forth in this Warrant Agreement and in the Private Placement
Legend and agrees that it will transfer such Warrant only as provided in
this Warrant Agreement. The Warrant Agent shall not register a transfer
of any Warrant unless such transfer complies with the restrictions on
transfer of such Warrant set forth in this Warrant Agreement. In
connection with any transfer of Warrants, each Warrant holder agrees by
its acceptance of the Warrants to furnish the Warrant Agent or the
Company such certifications, legal opinions or other information as
either of them may reasonably require to confirm that such transfer is
being made pursuant to an exemption from, or a transaction not subject
<PAGE>
to, the registration requirements of the Securities Act; provided that
the Warrant Agent shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of
any such certifications, legal opinions or other information.
SECTION 8. Terms of Warrants; Exercise of Warrants. Subject to
the terms of this Agreement, each Warrant holder shall have the right, which
may be exercised at any time on or after 9:00 a.m., New York, New York time
on January 6, 1996 until 5:00 p.m., New York, New York time on July 15, 2005
(the "Expiration Date") to exercise each Warrant and receive from the Company
the number of fully paid and nonassessable Warrant Shares which the holder
may at the time be entitled to receive on exercise of such Warrants and
payment of the Exercise Price (as herein defined) then in effect for such
Warrant Shares; provided that no Warrant holder shall be entitled to exercise
such holder's Warrants at any time unless, at the time of exercise, (i) a
registration statement under the Securities Act covering the offer and sale
of the Warrant Shares has been filed with, and declared effective by, the
Securities and Exchange Commission (the "SEC"), and no stop order suspending
the effectiveness of such registration statement has been issued by the SEC
or (ii) the offer and sale of the Warrant Shares to the Warrant holder are
exempt from registration under the Securities Act and the holder of the
Warrants, if so requested by the Company, has delivered to the Company an
opinion of counsel to such effect. Each Warrant, when exercised, will
entitle the holder thereof to purchase one fully paid and nonassessable share
of Common Stock at the Exercise Price. The Exercise Price and the number of
shares are both subject to adjustment under certain circumstances as provided
herein. Each Warrant not exercised prior to the Expiration Date shall become
void and all rights thereunder and all rights in respect thereof under this
Agreement shall cease as of such time.
A Warrant may be exercised at any time on or after January 6, 1996
upon surrender to the Company at the principal office of the Warrant Agent of
the certificate or certificates evidencing the Warrants to be exercised with
the form of election to purchase on the reverse thereof duly filled in and
signed, which signature shall be guaranteed by an "eligible guarantor" as
defined in the regulations promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and upon payment to the Warrant Agent
for the account of the Company of the Exercise Price, as adjusted as herein
provided, for each Warrant then exercised. Payment of the aggregate Exercise
Price shall be made in the form of cash or a certified or official bank check
payable to the order of the Company.
Subject to the provisions of Section 9 hereof, upon such surrender
of Warrants and payment of the Exercise Price, the Company shall issue and
cause to be delivered with all reasonable dispatch to or upon the written
order of the holder and in such name or names as the Warrant holder may
<PAGE>
designate, a certificate or certificates for the number of whole Warrant
Shares issuable upon the exercise of such Warrants together with any cash
which may be payable as provided in Section 17 hereof; provided that if any
consolidation, merger or lease or sale of assets is proposed to be effected
by the Company as described in subsection (l) of Section 15 hereof, or a
tender offer or an exchange offer for shares of Common Stock of the Company
shall be made, upon such surrender of Warrants and payment of the Exercise
Price as aforesaid, the Company shall, as soon as possible, but in any event
not later than two Business Days thereafter, issue and cause to be delivered
to the registered holder thereof or any person so designated to be named
therein the full number of Warrant Shares issuable upon the exercise of such
Warrants in the manner described in this sentence together with any cash
which may be payable as provided in Section 17 hereof. Such certificate or
certificates shall be deemed to have been issued and any person so designated
to be named therein shall be deemed to have become a holder of record of such
Warrant Shares as of the date of the surrender of such Warrants and payment
of the aggregate Exercise Price. No fractional shares shall be issued upon
exercise of any Warrants in accordance with Section 17 hereof.
The Warrants shall be exercisable at any time on or after January
6, 1996, at the election of the holders thereof, either in full or from time
to time in part (in whole shares) and, in the event that a certificate
evidencing Warrants is exercised in respect of fewer than all of the Warrant
Shares issuable on such exercise at any time prior to the date of expiration
of the Warrants, a new certificate evidencing the remaining Warrant or
Warrants will be issued, and the Warrant Agent is hereby irrevocably
authorized to countersign and to deliver the required new Warrant certificate
or certificates pursuant to the provisions of this Section and of Section 4
hereof, and the Company, whenever required by the Warrant Agent, will supply
the Warrant Agent with Warrant certificates duly executed on behalf of the
Company for such purpose.
All Warrant certificates surrendered upon exercise of Warrants
shall be canceled by the Warrant Agent. Such canceled Warrant certificates
shall then be disposed of by the Company in accordance with applicable law.
The Warrant Agent shall account promptly to the Company with respect to
Warrants exercised and concurrently pay to the Company all monies received by
the Warrant Agent for the purchase of the Warrant Shares through the exercise
of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder available for inspection by the holders
during normal business hours at its office. The Company shall supply the
Warrant Agent from time to time with such numbers of copies of this Agreement
as the Warrant Agent may request.
SECTION 9. Reports. So long as any of the Warrants remain
outstanding, the Company shall cause copies of all quarterly and annual
financial reports and of the information, documents and other reports (or
<PAGE>
copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) that the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act ("SEC Reports") to be
filed with the Warrant Agent and mailed to the holders of Warrants, in each
case, within 15 days after filing with the SEC. If the Company is not
subject to the requirements of Section 13 or 15(d) of the Exchange Act, the
Company shall nevertheless continue to cause SEC Reports, comparable to those
that it would be required to file pursuant to Section 13 or 15(d) of the
Exchange Act if it were then subject to the requirements of either such
Section, to be so filed with the SEC for public availability (unless the SEC
will not accept such a filing) and with the Warrant Agent and mailed to the
holders of Warrants, in each case, within the same time periods as would have
applied (including under the preceding sentence) had the Company then been
subject to the requirements of Section 13 or 15(d) of the Exchange Act. The
Company shall make available to investors and prospective investors of the
Warrants information that satisfies the requirements of Rule 144A(d)(4) under
the Securities Act.
SECTION 10. Payment of Taxes. No service charge shall be made to
any holder of a Warrant for any exercise, exchange or registration of
transfer of Warrant certificates, and the Company will pay all documentary
stamp taxes attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants or to any Separation; provided that the Company shall
not be required to pay any tax or taxes which may be payable in respect of
any transfer involved in the issue of any Warrant certificates or any
certificates for Warrant Shares in a name other than that of the registered
holder of a Warrant certificate surrendered upon the exercise of a Warrant,
and the Company shall not be required to issue or deliver such Warrant
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
SECTION 11. Mutilated or Missing Warrant Certificates. If any of
the Warrant certificates shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue and the Warrant Agent may countersign, in
exchange and substitution for and upon cancellation of the mutilated Warrant
certificate, or in lieu of and substitution for the Warrant certificate lost,
stolen or destroyed, a new Warrant certificate of like tenor and representing
an equivalent number of Warrants, but only upon receipt of evidence
satisfactory to the Company and the Warrant Agent of such loss, theft or
destruction of such Warrant certificate and indemnity and security therefor,
if requested, also satisfactory to them. Applicants for such substitute
Warrant certificates shall also comply with such other reasonable regulations
and pay such other reasonable charges as the Company or the Warrant Agent may
prescribe.
SECTION 12. Reservation of Warrant Shares. The Company will at
<PAGE>
all times reserve and keep available, free of preemptive rights and free from
all taxes, liens, charges and security interests with respect to the issuance
thereof, out of the aggregate of its authorized but unissued Common Stock,
for the purpose of enabling it to satisfy any obligation to issue Warrant
Shares upon exercise of Warrants, the maximum number of shares of Common
Stock which may then be deliverable upon the exercise of all outstanding
Warrants.
The Company or the transfer agent for the Common Stock (the
"Transfer Agent") and every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid will be irrevocably authorized and directed at all times
to reserve such number of authorized shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably
authorized to requisition from time to time from such Transfer Agent the
stock certificates required to honor outstanding Warrants upon exercise
thereof in accordance with the terms of this Agreement. The Company will
supply such Transfer Agent with duly executed certificates for such purposes
and will provide or otherwise make available to the Warrant Agent any cash
which may be payable as provided in Section 17 hereof. The Company will
furnish such Transfer Agent a copy of all notices of adjustments and
certificates related thereto transmitted to each holder pursuant to Section
18 hereof.
Before taking any action which would cause an adjustment pursuant
to Section 15 hereof to reduce the Exercise Price below the then par value
(if any) of the Warrant Shares, the Company will take all corporate action
necessary, in the opinion of its counsel (which may be counsel employed by
the Company), in order that the Company may validly and legally issue fully
paid and nonassessable Warrant Shares at the Exercise Price as so adjusted.
The Company covenants that all Warrant Shares which may be issued
upon exercise of Warrants will be, upon payment of the Exercise Price and
issuance thereof, duly and validly issued, fully paid, nonassessable, free of
preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issuance thereof.
SECTION 13. Obtaining Stock Exchange Listings. The Company shall
from time to time take all action necessary so that the Warrant Shares,
immediately upon their issuance upon the exercise of Warrants, will be listed
on the principal securities exchanges, interdealer quotation systems and
markets, if any, on which other shares of Common Stock are then listed or
quoted.
SECTION 14. Repurchase. For purposes of this Section 14, a
"Repurchase Event" is defined to occur on any date prior to July 15, 2005
when the Company consolidates with, merges into or with (but only where
holders of the Common Stock receive consideration in exchange for all or part
<PAGE>
of such shares of Common Stock) or sells all or substantially all of its
assets to, another person which does not have a class of equity securities
registered under the Exchange Act or a wholly-owned subsidiary of such
person, if the consideration for such transaction does not consist solely of
cash or such merger or consolidation is not effected solely for the purpose
of changing the Company's state of incorporation.
An "Independent Financial Expert" is a firm (a) which does not, and
whose directors, officers and employees or Affiliates do not, have a direct
or indirect financial interest in the Company and (b) which, in the judgment
of the Board of Directors, is otherwise independent and qualified to perform
the task for which it is to be engaged.
Following the occurrence of a Repurchase Event, the Company shall
be obligated to make an offer to holders of all outstanding Warrants to
repurchase for cash all outstanding Warrants (a "Repurchase Offer"). Until
5:00 p.m. (New York City time) on the final surrender date selected by the
Company (which such date shall be at least 60 but not more than 120 calendar
days following the date on which the Company gives notice of such Repurchase
Offer) (the "Final Surrender Time"), the holders of Warrants may surrender
all or part of their Warrants for repurchase by the Company. Warrants
received by the Warrant Agent in proper form for purchase during a Repurchase
Offer prior to the Final Surrender Time are to be repurchased by the Company
at a price in cash (the "Repurchase Price") equal to the value (the "Relevant
Value") on the date which is five business days prior to the date notice of
such Repurchase Offer is given (the "Valuation Date") of the Common Stock
issuable, and other securities which would have been delivered, upon exercise
of the Warrants had the Warrants been exercised, less the Exercise Price
therefor (regardless of whether the Warrants are then exercisable). The
Relevant Value of the Common Stock and other securities, assuming exercise of
all Warrants, on any Valuation Date shall be (i) if the Common Stock (or
other securities) is registered under the Exchange Act, the average of the
closing sales prices of the Common Stock (or other securities) for the 20
consecutive trading days immediately preceding such Valuation Date or, if the
Common Stock (or other securities) has been registered under the Exchange Act
for less then 20 consecutive trading days before such date, then the average
of the closing sales prices for all of the trading days before such date for
which closing sales prices are available or (ii) if the Common Stock (or
other securities) is not registered under the Exchange Act or if the value
cannot be computed under clause (i) above, the value determined (without
giving effect to any discount for lack of liquidity, the fact that the
Company has no class of equity securities registered under the Exchange Act
or the fact that the shares of Common Stock and other securities issuable
upon exercise of the Warrants represent a minority interest in the Company)
by an Independent Financial Expert.
<PAGE>
If the value of the Common Stock (or other securities) is
determined in the manner described in clause (ii) of the preceding paragraph,
the Board of Directors of the Company shall select an Independent Financial
Expert not more than five business days following any Repurchase Event.
Within two business days after its selection of the Independent Financial
Expert, the Company must deliver to the Warrant Agent a notice setting forth
the name of such Independent Financial Expert. The Company also must cause
the Independent Financial Expert to deliver to the Company, with a copy to
the Warrant Agent, a value report (the "Value Report") which states the
Relevant Value of the Common Stock and other securities or property of the
Company, if any, being valued as of the Valuation Date and contains a brief
statement as to the nature and scope of the examination or investigation upon
which the determination was made. The Warrant Agent shall have no duty with
respect to the Value Report of any Independent Financial Expert, except that
the Warrant Agent shall keep such Value Report on file and available for
inspection, during normal business hours, by the holders of the Warrants. In
the absence of manifest error, the determination of the Independent Financial
Expert as to Relevant Value shall be conclusive as to all persons.
SECTION 15. Adjustment of Exercise Price and Number of Warrant
Shares Issuable. The Exercise Price and the number of Warrant Shares
issuable upon the exercise of each Warrant are subject to adjustment from
time to time upon the occurrence of the events enumerated in this Section 15.
For purposes of this Section 15, "Common Stock" means the Common Stock and
any other stock of the Company, however designated, for which the Warrants
may be exercisable.
(a) Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
(4) makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any shares
of its capital stock, then the Exercise Price and the number and kind of
shares of capital stock of the Company issuable upon the exercise of a Warrant
(as in effect immediately prior to such action) shall be proportionately
adjusted so that the holder of any Warrant thereafter exercised may receive the
aggregate number and kind of shares of capital stock of the Company which he
would have owned immediately following such action if such Warrant had been
exercised immediately prior to such action.
The adjustment shall become effective immediately after the record
date, subject to subsection (p) of this Section 15, in the case of a dividend
<PAGE>
or distribution and immediately after the effective date in the case of a
subdivision, combination or reclassification.
If after an adjustment a holder of a Warrant upon exercise of it
may receive shares of two or more classes or series of capital stock of the
Company, the Company shall determine the allocation of the adjusted Exercise
Price between the classes or series of capital stock. After such allocation,
the exercise privilege and the Exercise Price of each class or series of
capital stock shall thereafter be subject to adjustment on terms comparable
to those applicable to Common Stock in this Section 15.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to all
holders of its Common Stock entitling them for a period expiring within 60
days after the record date mentioned below to purchase shares of Common Stock
or securities convertible into or exchangeable for shares of Common Stock at
a price per share less than the current market price per share on that record
date, the Exercise Price shall be adjusted in accordance with the following
formula:
O + N x P
-------
E' = E x M
-----------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the
record date.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after
the record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or
warrants shall have been exercised, the Exercise Price shall be immediately
readjusted to what it would have been if "N" in the above formula had been
the number of shares actually issued.
(c) Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Stock any
of its assets or debt securities or any rights or warrants to purchase debt
securities, assets or other securities of the Company, the Exercise Price
shall be adjusted in accordance with the following formula:
E' = E x M - F
-----
M
where:
<PAGE>
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price per share of Common Stock on the
record date mentioned in the immediately succeeding paragraph.
F = the fair market value on the record date of the assets,
securities, rights or warrants applicable to one share of
Common Stock. The Board of Directors shall determine the fair
market value.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the
distribution.
This subsection (c) does not apply to:
(1) rights, options or warrants referred to in subsection (b) of
this Section 15, or
(2) cash dividends or cash distributions paid out of consolidated
current or retained earnings as shown on the books of the Company prepared in
accordance with generally accepted accounting principles other than any
Extraordinary Cash Dividend (as defined below). An "Extraordinary Cash
Dividend" shall be that portion, if any, of the aggregate amount of all cash
dividends paid in any fiscal year which exceeds $25 million. In all cases,
the Company shall give the Warrant holders at least 30 days notice of a
record date for any dividend payment on its Common Stock.
(d) Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a consideration
per share less than the current market price per share on the date the
Company fixes the offering price of such additional shares, the Exercise
Price shall be adjusted in accordance with the formula:
P
-
E' = E x O + M
-----
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
M = the current market price per share on the date of issuance of
such additional shares.
A = the number of shares outstanding immediately after the
issuance of such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections (a),
(b)and (c) of this Section 15,
(2) the exercise of Warrants or other warrants outstanding on
<PAGE>
the date of this Agreement, or the conversion or exchange of other
securities convertible or exchangeable for Common Stock,
(3) Common Stock issued and issuable upon the exercise of
options issued to the Company's directors, officers and employees under
bona fide employee benefit plans adopted by the Board of Directors and
approved by the holders of Common Stock when required by law or
otherwise where such issuances have been approved by the Board of
Directors (but only to the extent that the aggregate number of shares
excluded hereby and issued after the date of this Agreement shall not
exceed 1% of the Common Stock outstanding at the time of issuance),
(4) Common Stock issuable upon the exercise of rights or
warrants issued to the holders of Common Stock,
(5) Common Stock issued to shareholders of any person which
merges into the Company in proportion to their stock holdings of such
person immediately prior to such merger, upon such merger,
(6) Common Stock issued in a bona fide public offering
pursuant to a firm commitment underwriting, or
(7) Common Stock issued in a bona fide private placement
through a placement agent which is a member firm of the National
Association of Securities Dealers, Inc. (except to the extent that any
discount from the current market price attributable to restrictions on
transferability of the Common Stock, as determined in good faith by the
Board of Directors and described in a Board resolution which shall be
filed with the Warrant Agent, shall exceed 20%).
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or
exchangeable for Common Stock (other than securities issued in transactions
described in subsections (a), (b) and (c) of this Section 15) for a
consideration per share (including the minimum consideration per share
payable upon conversion of any securities convertible into or exchangeable
for Common Stock) of Common Stock initially deliverable upon conversion or
exchange of such securities less than the current market price per share on
the date of issuance of such securities, the Exercise Price shall be adjusted
in accordance with this formula:
P
-
E' = E x O + M
-----
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the current market price per share on the date of issuance of
such securities.
D = the maximum number of shares deliverable upon conversion of or
<PAGE>
in exchange for such securities at the initial conversion or
exchange rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange
of such securities has not been issued when such securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such securities.
This subsection (e) does not apply to:
(1) convertible securities issued to shareholders of any
person which merges into the Company, or with a subsidiary of the
Company, in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger,
(2) convertible securities issued in a bona fide public
offering pursuant to a firm commitment underwriting,
(3) convertible securities issued in a bona fide private
placement through a placement agent which is a member firm of the
National Association of Securities Dealers, Inc. (except to the extent
that any discount from the current market price attributable to
restrictions on transferability of Common Stock issuable upon
conversion, as determined in good faith by the Board of Directors and
described in a Board resolution which shall be filed with the Trustee,
shall exceed 20% of the then current market price) or
(4) stock options issued to the Company's directors, officers
or employees.
(f) Adjustment for Tender or Exchange Offer.
If the Company or any Subsidiary of the Company consummates a
tender or exchange offer for all or any portion of the Common Stock or any
securities convertible into or exchangeable for Common Stock, to the extent
that the cash and value of any other consideration included in such payment
per share of Common Stock (determined on an as-converted basis in the case of
any such convertible or exchangeable securities so tendered or exchanged)
exceeds the average of the Quoted Prices (as defined in subsection (g) of
this Section 15) of the Common Stock for the five consecutive trading days
(the "Adjustment Period") commencing on the first trading day (such trading
day, the "First Trading Day") immediately following the last time tenders or
exchanges may be made pursuant to such tender or exchange offer (the
"Expiration Time"), the Exercise Price shall be adjusted in accordance with
this formula:
E' = E x O x M
-----------
P + (A x M)
E' = the adjusted Exercise Price.
<PAGE>
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding immediately
prior to the Expiration Time, including, in the case of any
tender or exchange offer in respect of securities convertible
into or exchangeable for Common Stock, any shares of Common
Stock issuable upon the conversion or exchange of such
securities.
M = the average of the Quoted Prices (as defined in subsection (g)
of this Section 15) of the Common Stock for the Adjustment
Period.
P = the aggregate cash consideration and the fair market value of
any non-cash consideration payable to stockholders based on
the number of shares of Common Stock (or securities
convertible into or exchangeable for Common Stock) tendered or
exchanged (and not withdrawn) in connection with the tender or
exchange offer and accepted by the Company. The Board of
Directors shall determine the fair market value of any non-
cash consideration.
A= the number of shares of Common Stock outstanding at the time
of acceptance by the Company of any shares of Common Stock (or
securities convertible into or exchangeable for Common Stock)
so tendered or exchanged and accepted by the Company,
including, in the case of any tender or exchange offer in
respect of securities convertible into or exchangeable for
Common Stock, any shares of Common Stock issuable upon the
conversion or exchange of such securities.
<PAGE>
The adjustment shall be made successively whenever any such tender
or exchange offer is made. To the extent a Warrant holder exercises such
holder's Warrant(s) prior to the conclusion of the Adjustment Period, any
adjustment in the number of Warrant Shares issuable upon exercise of such
Warrant(s) shall be for the benefit of the holder of record of such
Warrant(s) at the close of trading on the First Trading Day.
This subsection (f) does not apply to redemptions of securities
pursuant to redemption provisions contained in the certificate of designation
pertaining to such securities in effect at the time such securities were
issued, whether such redemptions are optional or mandatory.
(g) Current Market Price.
In subsections (b), (c), (d) and (e) of this Section 15, the
current market price per share of Common Stock on any date is the average of
the Quoted Prices of the Common Stock for 30 consecutive trading days
commencing 45 trading days before the date in question. The "Quoted Price"
of the Common Stock is the last reported sales price of the Common Stock on
any national securities exchange on which the Common Stock is listed which
shall be for consolidated trading if applicable to such exchange, or if not
so listed, the last reported bid price of the Common Stock. In the absence
of one or more such quotations, the Board of Directors of the Company shall
determine the current market price on such basis as it in good faith
considers appropriate.
(h) Consideration Received.
For purposes of any computation respecting consideration received
pursuant to subsections (d) and (e) of this Section 15, the following shall
apply:
(1) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash, provided that
in no case shall any deduction be made for any commissions, discounts or
other expenses incurred by the Company for any underwriting of the issue
or otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock for
a consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board of Directors (irrespective of the
accounting treatment thereof), whose determination shall be conclusive,
and described in a Board resolution which shall be filed with the
Warrant Agent; and
(3) in the case of the issuance of securities convertible
into or exchangeable for shares, the aggregate consideration received
therefor shall be deemed to be the consideration received by the Company
for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Company upon the conversion
or exchange thereof (the consideration in each case to be determined in
the same manner as provided in clauses (1) and (2) of this subsection).
<PAGE>
(i) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the
Exercise Price. Any adjustments that are not made shall be carried forward
and taken into account in any subsequent adjustment.
All calculations under this Section 15 shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
(j) When No Adjustment Required.
No adjustment need be made for a transaction referred to in
subsections (a), (b),(c), (d), (e) or (f) of this Section 15 if Warrant
holders are to participate in the transaction on a basis and with notice that
the Board of Directors determines to be fair and appropriate in light of the
basis and notice on which holders of Common Stock participate in the
transaction.
No adjustment need be made for (i) a transaction referred to in
subsections (b), (d) or (e) of this Section 15 if the below market portion of
such issuances, taken together with all other below market issuances and with
all above market tender or exchange offers described in clause (ii) of this
paragraph made on and after the date of this Agreement, is less than 2.0% of
the Total Market Capitalization of the Company (determined by reference to
the sum of the percentages of Total Market Capitalization of the Company
attributable to each such transaction on the date thereof) and (ii) a
transaction referred to in subsection (f) of this Section 15 if the above
market portion of such tender or exchange offers, taken together with all
other above market tender or exchange offers and with all below market
issuances described in clause (i) of this paragraph made on or after the date
of this Agreement, is less than 2.0% of the Total Market Capitalization of
the Company (determined by reference to the sum of the percentages of Total
Market Capitalization of the Company attributable to each such transaction on
the date thereof).
No adjustment need be made for a change in the par value, or from
par value to no par value, or from no par value to par value, of the Common
Stock.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue
on the cash.
(k) Notice of Adjustment.
Whenever the Exercise Price is adjusted, the Company shall provide
the notices required by Section 17 hereof.
(l) Voluntary Reduction.
The Company from time to time may, as the Board of Directors deems
appropriate, reduce the Exercise Price by any amount for any period of time
if the period is at least 20 days and if the reduction is irrevocable during
the period; provided that in no event may the Exercise Price be less than the
par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail to
<PAGE>
Warrant holders a notice of the reduction. The Company shall mail the notice
at least 15 days before the date the reduced Exercise Price takes effect.
The notice shall state the reduced Exercise Price and the period it will be
in effect.
A voluntary reduction of the Exercise Price pursuant to this
Section 15(k), other than a reduction which the Company has irrevocably
committed will be in effect for so long as any Warrants are outstanding, does
not change or adjust the Exercise Price otherwise in effect for purposes of
subsections (a), (b), (c), (d), (e) and (f) of this Section 15.
(m) Reorganization of the Company.
(1) If the Company consolidates or merges with or into, or
transfers or leases all or substantially all its assets to, any person,
upon consummation of such transaction any Warrants not surrendered for
repurchase by the Company pursuant to Section 14 hereof shall
automatically become exercisable for the kind and amount of securities,
cash or other assets which the holder of a Warrant would have owned
immediately after the consolidation, merger, transfer or lease if the
holder had exercised the Warrant immediately before the effective date
of the transaction. Concurrently with the consummation of such
transaction, the corporation formed by or surviving any such
consolidation or merger if other than the Company, or the person to
which such sale or conveyance shall have been made (any such person, the
"Successor Entity"), shall enter into a supplemental Warrant Agreement
so providing and further providing for adjustments which shall be as
nearly equivalent as may be practical to the adjustments provided for in
this Section 15. The Successor Entity shall mail to Warrant holders a
notice describing the supplemental Warrant Agreement. If the issuer of
securities deliverable upon exercise of Warrants under the supplemental
Warrant Agreement is an affiliate of the formed, surviving, transferee
or lessee corporation, that issuer shall join in the supplemental
Warrant Agreement.
(2) If this subsection (m) applies, subsections (a), (b),
(c), (d), (e) and (f) of this Section 15 do not apply.
(n) Company Determination Final.
Any determination that the Company or the Board of Directors must
make pursuant to subsection (a), (c), (d), (e), (f), (g), (h) or (j) of this
Section 15 is conclusive.
<PAGE>
(o) Warrant Agent's Disclaimer.
The Warrant Agent has no duty to determine when an adjustment under
this Section 15 should be made, how it should be made or what it should be.
The Warrant Agent has no duty to determine whether any provisions of a
supplemental Warrant Agreement under subsection (n) of this Section 15 are
correct. The Warrant Agent makes no representation as to the validity or
value of any securities or assets issued upon exercise of Warrants. The
Warrant Agent shall not be responsible for the Company's failure to comply
with this Section 15.
(p) When Issuance or Payment May Be Deferred.
In any case in which this Section 15 shall require that an
adjustment in the Exercise Price be made effective as of or immediately after
a record date for a specified event, the Company may elect to defer until the
occurrence of such event (i) issuing to the holder of any Warrant exercised
after such record date the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise over and above the Warrant
Shares and other capital stock of the Company, if any, issuable upon such
exercise on the basis of the Exercise Price prior to such adjustment and
(ii) paying to such holder any amount in cash in lieu of a fractional share
pursuant to Section 17 hereof; provided that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional Warrant Shares, other capital stock
and cash upon the occurrence of the event requiring such adjustment.
(q) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this Section
15, each Warrant outstanding prior to the making of the adjustment in the
Exercise Price shall thereafter evidence the right to receive upon payment of
the adjusted Exercise Price that number of shares of Common Stock (calculated
to the nearest hundredth) obtained from the following formula:
N' = N x E
--
E'
where:
N' = the adjusted number of Warrant Shares issuable upon exercise
of a Warrant by payment of the adjusted Exercise Price.
N = the number of Warrant Shares previously issuable upon exercise
of a Warrant by payment of the Exercise Price prior to
adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(r) Form of Warrants.
Irrespective of any adjustments in the Exercise Price or the number
or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
SECTION 16. No Dilution or Impairment. (a) If any event shall
occur as to which the provisions of Section 15 are not strictly applicable
<PAGE>
but the failure to make any adjustment would have the effect of depriving
holders of Warrants of the benefit of all or a portion of the purchase rights
evidenced by the Warrants in accordance with the essential intent and
principles of such Section, then, in each such case, the Company shall
appoint an Independent Financial Expert, which shall give its opinion upon
the adjustment, if any, on a basis consistent with the essential intent and
principles established in Section 15, necessary to preserve, without
dilution, the purchase rights, represented by this Warrant. Upon receipt of
such opinion, the Company will promptly mail a copy thereof to the holders of
the Warrants and shall make the adjustments described therein.
(b) The Company will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization, transfer
of assets, dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holder of the
Warrants against dilution or other impairment. Without limiting the
generality of the foregoing, the Company (i) will take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock on the exercise of
the Warrants from time to time outstanding and (ii) will not take any action
which results in any adjustment of the Exercise Price if the total number of
Warrant Shares issuable after the action upon the exercise of all of the
Warrants would exceed the total number of shares of Common Stock then
authorized by the Company's certificate of incorporation and available for
the purposes of issue upon such exercise. A consolidation, merger,
reorganization or transfer of assets involving the Company covered by
Section 15(m) shall not be prohibited by or require any adjustment under this
Section 16.
SECTION 17. Fractional Interests. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If
more than one Warrant shall be presented for exercise in full at the same
time by the same holder, the number of full Warrant Shares which shall be
issuable upon the exercise thereof shall be computed on the basis of the
aggregate number of Warrant Shares purchasable on exercise of the Warrants so
presented. If any fraction of a Warrant Share would, except for the
provisions of this Section 17, be issuable on the exercise of any Warrants
(or specified portion thereof), the Company shall notify the Warrant Agent in
writing of the amount to be paid in lieu of the fraction of a Warrant Share
and concurrently pay or provide to the Warrant Agent for payment to the
Warrant holder an amount in cash equal to the product of (i) such fraction of
a Warrant Share multiplied by (ii) the difference of the current market price
of a share of Common Stock over the Exercise Price.
SECTION 18. Notices to Warrant Holders. (a) Upon any adjustment
<PAGE>
of the Exercise Price pursuant to Section 15 hereof, the Company shall within
15 days thereafter (i) cause to be filed with the Warrant Agent a certificate
of a firm of independent public accountants of recognized standing selected
by the Board of Directors of the Company (who may be the regular auditors of
the Company) setting forth the Exercise Price after such adjustment and
setting forth in reasonable detail the method of calculation and the facts
upon which such calculations are based and setting forth the number of
Warrant Shares (or portion thereof) issuable after such adjustment in the
Exercise Price, upon exercise of a Warrant and payment of the adjusted
Exercise Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause to be given to
each of the registered holders of the Warrant certificates at such registered
holder's address appearing on the Warrant register written notice of such
adjustments by first-class mail, postage prepaid. Where appropriate, such
notice may be given in advance and included as a part of the notice required
to be mailed under the other provisions of this Section 18.
(b) In case:
(i) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for
or purchase shares of Common Stock or of any other subscription rights
or warrants; or
(ii) the Company shall authorize the distribution to all holders
of shares of Common Stock of evidences of its indebtedness or assets
(other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends payable in shares
of Common Stock or distributions referred to in subsection (a) of
Section 15 hereof; or
(iii) of any consolidation or merger to which the Company is a
party and for which approval of any shareholders of the Company is
required, or of the conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety, or of any
reclassification or change of Common Stock issuable upon exercise of the
Warrants (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a
subdivision or combination), or a tender offer or exchange offer for
shares of Common Stock; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Warrant
Agent and shall cause to be given to each of the registered holders of
the Warrant certificates at his address appearing on the Warrant
register, at least 20 days (or 10 days in any case specified in clauses
(i) or (ii) above) prior to the applicable record date hereinafter
specified, or promptly in the case of events for which there is no
record date, by first-class mail, postage prepaid, a written notice
stating (A) the date as of which the holders of record of shares of
Common Stock to be entitled to receive any such rights, options,
<PAGE>
warrants or distribution are to be determined, or (B) the initial
expiration date set forth in any tender offer or exchange offer for
shares of Common Stock or any securities convertible into or
exchangeable for Common Stock, or (C) the date on which any such
consolidation, merger, conveyance, transfer, lease, dissolution,
liquidation or winding up is expected to become effective or
consummated, and the date as of which it is expected that holders of
record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice
required by this Section 18 or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant, tender
offer or exchange offer, consolidation, merger, conveyance, transfer,
lease, dissolution, liquidation or winding up, or the vote upon any
action.
(c) If the Company takes any action that would require an
adjustment in the Exercise Price pursuant to subsections (a), (b), (c), (d),
(e) or (f) of Section 15 hereof and the Company does not arrange for Warrant
holders to participate pursuant to subsection (j) of Section 15 hereof, the
Company shall mail to Warrant holders a notice at least 15 days before such
date stating the proposed record date for a dividend or distribution or the
proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, conveyance, transfer, lease, dissolution, liquidation
or winding up or the Expiration Time of a tender or exchange offer. Failure
to mail the notice or any defect in the notice shall not affect the validity
of the transaction.
Nothing contained in this Agreement or in any of the Warrant
certificates shall be construed as conferring upon the holders thereof the
right to vote or to consent or to receive notice as shareholders in respect
of the meetings of shareholders or the election of Directors of the Company
or any other matter, or any rights whatsoever as shareholders of the Company.
SECTION 19. Warrant Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrants, by their
acceptance thereof, shall be bound.
(a) The statements contained herein and in the Warrant
certificates shall be taken as statements of the Company. The Warrant Agent
assumes no responsibility for the correctness of any of the same except such
as describe the Warrant Agent or action taken or to be taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of
the Warrant certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of
the Company to comply with any of the covenants contained in this Agreement
<PAGE>
or in the Warrant certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any holder of
any Warrant certificate in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with the opinion or the
advice of such counsel.
(d) The Warrant Agent shall incur no liability or responsibility
to the Company or to any holder of any Warrant certificate for any action
taken in reliance on any Warrant certificate, certificate of shares, notice,
resolution, waiver, consent, order, certificate, or other paper, document or
instrument believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties. The Warrant Agent shall not be
bound by any notice or demand, or any waiver, modification, termination or
revision of this Agreement or any of the terms hereof, unless evidenced by a
writing between the Company and the Warrant Agent.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution
of this Agreement, to reimburse the Warrant Agent for all expenses, taxes
(including withholding taxes) and governmental charges and other charges of
any kind and nature incurred by the Warrant Agent in the execution, delivery
and performance of its responsibilities under this Agreement and to indemnify
the Warrant Agent and save it harmless against any and all liabilities,
including judgments, costs and counsel fees, for anything done or omitted by
the Warrant Agent in the execution, delivery and performance of its
responsibilities under this Agreement except as a result of its negligence or
bad faith.
(f) The Warrant Agent shall be under no obligation to institute
any action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more registered holders of
Warrant certificates shall furnish the Warrant Agent with reasonable security
and indemnity for any costs and expenses which may be incurred, but this
provision shall not affect the power of the Warrant Agent to take such action
as it may consider proper, whether with or without any such security or
indemnity. All rights of action under this Agreement or under any of the
Warrants may be enforced by the Warrant Agent without the possession of any
of the Warrant certificates or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or proceeding
instituted by the Warrant Agent shall be brought in its name as Warrant Agent
and any recovery of judgment shall be for the ratable benefit of the
registered holders of the Warrants, as their respective rights or interests
may appear.
(g) Except as required by law, the Warrant Agent, and any
stockholder, director, officer or employee of the Warrant Agent, may buy,
sell or deal in any of the Warrants or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be
<PAGE>
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions hereof.
The Warrant Agent shall not be liable for anything which it may do or refrain
from doing in connection with this Agreement except for its own negligence or
bad faith.
(i) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of any Warrant certificate to make or cause to
be made any adjustment of the Exercise Price or number of the Warrant Shares
or other securities or property deliverable as provided in this Agreement, or
to determine whether any facts exist which may require any of such
adjustments, or with respect to the nature or extent of any such adjustments,
when made, or with respect to the method employed in making the same. The
Warrant Agent shall not be accountable with respect to the validity or value
or the kind or amount of any Warrant Shares or of any securities or property
which may at any time be issued or delivered upon the exercise of any Warrant
or with respect to whether any such Warrant Shares or other securities will
when issued be validly issued and fully paid and nonassessable, and makes no
representation with respect thereto.
SECTION 20. Merger, Consolidation or Change of Name of Warrant
Agent. Any corporation into which the Warrant Agent may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the business of the Warrant Agent, shall be the successor to
the Warrant Agent hereunder without the execution or filing of any paper or
any further act on the part of any of the parties hereto; provided that such
corporation would be eligible for appointment as a successor warrant agent
under the provisions of Section 21 hereof. To the extent practicable, the
Warrant Agent shall provide prior written notice to the Company of any such
merger, consolidation, succession or similar change with respect to the
Warrant Agent; provided, however, that the failure to deliver such notice
will not affect the rights of any of the parties hereto. In case at the time
such successor to the Warrant Agent shall succeed to the agency created by
this Agreement, and in case at that time any of the Warrant certificates
shall have been countersigned but not delivered, any such successor to the
Warrant Agent may adopt the countersignature of the original Warrant Agent;
and in case at that time any of the Warrant certificates shall not have been
countersigned, any successor to the Warrant Agent may countersign such
Warrant certificates either in the name of the predecessor Warrant Agent or
in the name of the successor to the Warrant Agent; and in all such cases such
<PAGE>
Warrant certificates shall have the full force and effect provided in the
Warrant certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed
and at such time any of the Warrant certificates shall have been
countersigned but not delivered, the Warrant Agent whose name has been
changed may adopt the countersignature under its prior name, and in case at
that time any of the Warrant certificates shall not have been countersigned,
the Warrant Agent may countersign such Warrant certificates either in its
prior name or in its changed name, and in all such cases such Warrant
certificates shall have the full force and effect provided in the Warrant
certificates and in this Agreement.
SECTION 21. Change of Warrant Agent. If the Warrant Agent shall
become incapable of acting as Warrant Agent or shall resign as provided
below, the Company shall appoint a successor to such Warrant Agent. If the
Company shall fail to make such appointment within a period of 30 days after
it has been notified in writing of such incapacity by the Warrant Agent or by
the registered holders of a majority of Warrant certificates, then the
registered holder of any Warrant certificate may apply to any court of
competent jurisdiction for the appointment of a successor to the Warrant
Agent. Pending appointment of a successor to such Warrant Agent, either by
the Company or by such a court, the duties of the Warrant Agent shall be
carried out by the Company. The holders of a majority of the unexercised
Warrants shall be entitled at any time to remove the Warrant Agent and
appoint a successor to such Warrant Agent. Such successor to the Warrant
Agent need not be approved by the Company or the former Warrant Agent. After
appointment the successor to the Warrant Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Warrant Agent without further act or deed; but the former Warrant
Agent shall deliver and transfer to the successor to the Warrant Agent any
property at the time held by it hereunder and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Failure to
give any notice provided for in Section 21, however, or any defect therein,
shall not affect the legality or validity of the appointment of a successor
to the Warrant Agent.
The Warrant Agent may resign at any time and be discharged from the
obligations hereby created by so notifying the Company in writing at least 30
days in advance of the proposed effective date of its resignation. If no
successor Warrant Agent accepts the engagement hereunder by such time, the
Company shall act as Warrant Agent.
SECTION 22. Notices to the Company and Warrant Agent. Any notice
or demand authorized by this Agreement to be given or made by the Warrant
Agent or by the registered holder of any Warrant certificate to or on the
Company shall be sufficiently given or made when and if deposited in the
mail, first class or registered, postage prepaid, addressed (until another
address is filed in writing by the Company with the Warrant Agent), as
follows:
<PAGE>
Geotek Communications, Inc.
20 Craig Road
Montvale, NJ 07645
Attention: General Counsel
with a copy to:
Klehr, Harrison, Harvey,
Branzburg & Ellers
1401 Walnut Street
Philadelphia, PA 19102
Attention: Leonard M. Klehr, Esq.
Any notice pursuant to this Agreement to be given by the Company or
by the registered holder(s) of any Warrant certificate to the Warrant Agent
shall be sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as
follows:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention: Corporate Trust and Agency Administration
Notice may also be given by facsimile transmission (effective when
receipt is acknowledged) (effective at the time of delivery) or by overnight
delivery service (effective the next business day).
SECTION 23. Supplements and Amendments. The Company and the
Warrant Agent may from time to time supplement or amend this Agreement
without the consent of any holders of Warrant certificates in order to cure
any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company and the Warrant Agent may deem necessary or desirable and
which shall not in any way materially adversely affect the interests of the
holders of Warrant certificates. Any amendment or supplement to this
Agreement that has a material adverse effect on the interests of holders
shall require the written consent of registered holders of a majority of the
then outstanding Warrants. The consent of each holder of a Warrant affected
shall be required for any amendment pursuant to which the Exercise Price
would be increased or the number of Warrant Shares purchasable upon exercise
of Warrants would be decreased (other than in accordance with Section 15 or
17 hereof).
SECTION 24. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 25. Termination. This Agreement shall terminate at 5:00
p.m., New York, New York time on July 15 , 2005. Notwithstanding the
foregoing, this Agreement will terminate on such earlier date on which all
<PAGE>
outstanding Warrants have been exercised. The provisions of Section 19
hereof shall survive such termination.
SECTION 26. Governing Law; Jurisdiction. This Agreement and each
Warrant certificate shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be
performed in the State of New York. The Company irrevocably consents to the
jurisdiction of any United States or State Court located in the State of New
York in any suit or proceeding based on or arising under this Agreement or
the Warrant certificates and irrevocably agrees that all claims in respect of
such suit or proceeding may be determined in any such court. The Company
irrevocably waives the defense of an inconvenient forum to the maintenance of
such suit or proceeding. The Company hereby agrees to designate and appoint
CT Corporation System, 1633 Broadway, New York, NY 10019 as an agent upon
whom process may be served in any suit or proceeding based on or arising
under this Agreement. The Company further agrees that service of process
upon the Company, or upon an agent appointed pursuant to the preceding
sentence accompanied with written notice of said service to the Company, as
the case may be, mailed by first class mail shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
Nothing herein shall affect the Warrant Agent's or any Warrant holder's right
to serve process in any other manner permitted by law. The Company agrees
that a final non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such
judgment or in any other lawful manner.
SECTION 27. Benefits of This Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Warrant Agent and the registered holders of the Warrant
certificates any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of
the Company, the Warrant Agent and the registered holders of the Warrant
certificates.
SECTION 28. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
SECTION 29. Further Assurances. From time to time on and after
the date hereof, the Company shall deliver or cause to be delivered to the
Warrant Agent such further documents and instruments and shall do and cause
to be done such further acts as the Warrant Agent shall reasonably request
(it being understood that the Warrant Agent shall have no obligation to make
such request) to carry out more effectively the provisions and purposes of
this Agreement, to evidence compliance herewith or to assure itself that it
is protected hereunder.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.
GEOTEK COMMUNICATIONS, INC.
By: /s/ Yaron Eitan
-----------------------------
Name: Yaron Eitan
Title: President
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/ Barbara McCluskey
-----------------------------
Name: Barbara McCluskey
Title: Assistant Vice President
<PAGE>
EXHIBIT A
EXERCISABLE ON OR AFTER JANUARY 6, 1996 AND ON OR BEFORE JULY 15, 2005
Form of Initial Warrant Certificate
[Face]
No. 16,210,000 Warrants
CUSIP 373654136
Warrant Certificate
GEOTEK COMMUNICATIONS, INC.
This Warrant Certificate certifies that CEDE & CO., or registered
assigns, is the registered holder of 6,210,000 warrants expiring July 15,
2005 (the "Warrants") to purchase shares of the Common Stock, par value $.01
per share (the "Common Stock"), of Geotek Communications, Inc., a Delaware
corporation ("the Company"). Each Warrant entitles the holder upon exercise
to receive from the Company, at any time on or after 9:00 a.m., New York, New
York time on January 6, 1996 to 5:00 p.m., New York, New York time on July
15, 2005, 6,210,000 fully paid and nonassessable shares of Common Stock (each
a "Warrant Share") at the initial exercise price (the "Exercise Price") of
$9.90 per share payable in the form of cash or certified or official bank
check payable to the order of the Company, upon surrender of this Warrant
Certificate and payment of the aggregate Exercise Price at the office or
agency of the Warrant Agent, but only subject to the conditions set forth
herein and in the Warrant Agreement referred to herein. The Exercise Price
and number of Warrant Shares issuable upon exercise of the Warrants are
subject to adjustment upon the occurrence of certain events set forth in the
Warrant Agreement. All capitalized terms not defined herein shall have the
meanings assigned to such terms in the Warrant Agreement.
No Warrant may be exercised after 5:00 p.m., New York, New York
time on July 15, 2005, and to the extent not exercised by such time such
Warrants shall become void.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this
place.
This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, Geotek Communications, Inc. has caused this
Warrant Certificate to be signed by its Chief Executive Officer and by its
Secretary, each by a facsimile of his signature, and has caused a facsimile
of its corporate seal to be affixed hereunto or imprinted hereon.
Dated:
GEOTEK COMMUNICATIONS, INC.
By: ----------------------------------------
Chief Executive Officer
By: ----------------------------------------
Secretary
(seal)
Countersigned:
IBJ SCHRODER BANK & TRUST COMPANY,
as Warrant Agent
By: ---------------------------------------
Authorized Signatory
<PAGE>
Form of Warrant Certificate
[Reverse]
UNTIL THE CLOSE OF BUSINESS UPON THE EARLIEST TO OCCUR OF (i) JANUARY 6,
1996, (ii) THE COMMENCEMENT OF AN EXCHANGE OFFER RELATING TO THE 15%
SENIOR SECURED DISCOUNT NOTES DUE 2005 (THE "NOTES") OF GEOTEK
COMMUNICATIONS, INC. (THE "COMPANY"), (iii) SUCH EARLIER DATE AS SMITH
BARNEY INC., AS INITIAL PURCHASER OF THE NOTES, MAY DETERMINE AND
SPECIFY TO THE WARRANT AGENT IN WRITING, AND (iv) IN THE EVENT OF A
CHANGE OF CONTROL (AS DEFINED IN THE INDENTURE RELATING TO THE NOTES),
THE DATE THE COMPANY MAILS NOTICE THEREOF TO HOLDERS OF THE NOTES, THE
WARRANTS EVIDENCED HEREBY MAY NOT BE SOLD, ASSIGNED OR OTHERWISE
TRANSFERRED TO ANY PERSON UNLESS, SIMULTANEOUSLY WITH SUCH TRANSFER, THE
HOLDER HEREOF TRANSFERS TO SUCH TRANSFEREE $1,000 PRINCIPAL AMOUNT AT
MATURITY OF NOTES FOR EACH 30 WARRANTS (SUBJECT TO ADJUSTMENT UNDER
SECTION 15 OF THE WARRANT AGREEMENT, DATED AS OF JUNE 30, 1995, BETWEEN
THE COMPANY AND IBJ SCHRODER BANK & TRUST COMPANY, AS WARRANT AGENT) SO
TRANSFERRED.
THE COMMON STOCK, PAR VALUE $.01, OF THE COMPANY (THE "COMMON STOCK")
FOR WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. ACCORDINGLY,
NO WARRANT HOLDER SHALL BE ENTITLED TO EXERCISE SUCH HOLDER'S WARRANTS
AT ANY TIME UNLESS, AT THE TIME OF EXERCISE, (I) A REGISTRATION
STATEMENT UNDER THE ACT COVERING THE OFFER AND SALE OF THE SHARES OF
COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS WARRANT (THE "WARRANT
SHARES") HAS BEEN FILED WITH, AND DECLARED EFFECTIVE BY, THE SECURITIES
AND EXCHANGE COMMISSION (THE "SEC"), AND NO STOP ORDER SUSPENDING THE
EFFECTIVENESS OF SUCH REGISTRATION STATEMENT HAS BEEN ISSUED BY THE SEC
OR (II) THE OFFER AND SALE OF THE WARRANT SHARES TO THE WARRANT HOLDERS
ARE EXEMPT FROM REGISTRATION UNDER THE ACT AND THE WARRANT HOLDER, IF SO
REQUESTED BY THE COMPANY, HAS DELIVERED TO THE COMPANY AN OPINION OF
COUNSEL TO SUCH EFFECT.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
<PAGE>
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS
NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT, WITHIN THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE OF THIS SECURITY OR THE LAST DATE ON WHICH THIS
SECURITY WAS HELD BY THE COMPANY OR ANY AFFILIATE OF THE COMPANY, RESELL
OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE WARRANT AGENT A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING
TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE WARRANT AGENT) AND AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE OF THE SECURITY OR THE LAST DATE ON WHICH THIS
SECURITY WAS HELD BY THE COMPANY OR AN AFFILIATE OF THE COMPANY, THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE WARRANT AGENT. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE WARRANT AGENT AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. 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 WARRANT AGREEMENT CONTAINS A
PROVISION REQUIRING THE WARRANT AGENT TO REFUSE TO REGISTER ANY TRANSFER
OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.
By accepting a Warrant certificate bearing the legend above, each holder
shall be bound by all of the terms and provisions of the Warrant Agreement (a
<PAGE>
copy of which is available on request to the Company or the Warrant Agent) as
fully and effectively as if such holder had signed the same.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants expiring July 15, 2005 entitling the holder
upon exercise to receive shares of Common Stock of the Company (the "Common
Stock"), and are issued or to be issued pursuant to a Warrant Agreement,
dated as of June 30, 1995 (the "Warrant Agreement"), duly executed and
delivered by the Company to IBJ Schroder Bank & Trust Company, as Warrant
Agent (the "Warrant Agent"), which Warrant Agreement is hereby incorporated
by reference in and made a part of this instrument and is hereby referred to
for a description of the rights, limitation of rights, obligations, duties
and immunities thereunder of the Warrant Agent, the Company and the holders
(the words "holders" or "holder" meaning the registered holders or registered
holder) of the Warrants.
Warrants may be exercised at any time on or after 9:00 a.m., New
York, New York time on January 6, 1996 to 5:00 p.m., New York, New York time
on July 15, 2005. The holder of Warrants evidenced by this Warrant
Certificate may exercise them by surrendering this Warrant Certificate, with
the form of election to purchase set forth hereon properly completed and
executed, together with payment of the Exercise Price in the form of cash or
certified or official bank check payable to the order of the Company, at the
office of the Warrant Agent. In the event that upon any exercise of Warrants
evidenced hereby the number of Warrants exercised shall be less than the
total number of Warrants evidenced hereby, there shall be issued to the
holder hereof or his assignee a new Warrant Certificate evidencing the number
of Warrants not exercised.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the
Warrant Agreement provides that the number of shares of Common Stock issuable
upon the exercise of each Warrant shall be adjusted. No fractions of a share
of Common Stock will be issued upon the exercise of any Warrant, but the
Company will pay the cash value thereof determined as provided in the Warrant
Agreement.
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative
or attorney duly authorized in writing, may be exchanged, in the manner and
subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or
<PAGE>
Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any
rights of a stockholder of the Company.
<PAGE>
Form of Election to Purchase
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive _________ shares of
Common Stock and herewith tenders payment for such shares to the order of
Geotek Communications, Inc. in the amount of $____ in accordance with the
terms hereof.
The undersigned requests that a certificate for such shares be
registered in the name of ____________________, whose address is
_____________________ and that such shares be delivered to _______________
whose address is ____________.
If said number of shares is less than all of the shares of Common
Stock purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of such shares be registered
in the name of ___________________, whose address is ________________, and
that such Warrant Certificate be delivered to _______________, whose address
is ___________________.
Date: _____________
Your Signature:___________________
(Sign exactly as your name appears on the face of this Warrant)
Signature Guarantee:
<PAGE>
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
_________________________________________
_________________________________________
Please print or typewrite name and address including zip code of assignee
_________________________________________
the within Warrant certificate and all rights thereunder, hereby irrevocably
constituting and appointing
_________________________________________
attorney to transfer the Warrants evidenced by said Warrant certificate (the
"Warrants") on the books of the Company with full power of substitution in
the premises.
In connection with any transfer of the Warrants occurring prior to
the date which is the earlier of (i) the date of an effective Registration or
(ii) three years after the later of the original issuance of the Warrants or
the last date on which the Warrants were held by an affiliate of the Company,
the undersigned confirms, that without utilizing any general solicitation or
general advertising:
[Check One]
[ ](a) the Warrants are being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule l44A thereunder.
or
[ ](b) the Warrants are being transferred other than in accordance with
(a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Warrant certificate and
the Warrant Agreement.
If none of the foregoing boxes is checked, the Warrant Agent shall not be
obligated to register the Warrants in the name of any Person other than the
holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 7(c) of the Warrant Agreement
shall have been satisfied.
Date: NOTICE: The signature to
this assignment must
correspond with the name as
written upon the face of the
within-mentioned instrument
in every particular, without
alteration or any change
whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
<PAGE>
Warrant for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:
NOTICE: To be executed by an
executive officer
<PAGE>
The following is a summary of all omitted Exhibits to the foregoing
Warrant Agreement.
Exhibit B Form of Certificate
Exhibit C Form of Certificate to Be Delivered in Connection
with Transfers to Non-QIB Accredited Investors
Exhibit D Form of Certificate to Be Delivered in Connection
with Transfers Pursuant to Regulation S
Exhibit E Form of Warrant Shares Legend
The Registrant agrees to furnish supplementally to the Commission
copies of Exhibits B-E upon request of the Commission.
<PAGE>
EXHIBIT (c)(8)
<PAGE>
WARRANT SHARE REGISTRATION RIGHTS AGREEMENT
This WARRANT SHARE REGISTRATION RIGHTS AGREEMENT (this "Agreement")
is made and entered into this July 6, 1995 between GEOTEK COMMUNICATIONS,
INC., a Delaware corporation (the "Company"), and SMITH BARNEY INC. (the
"Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement, dated
June 29, 1995, between the Company and the Initial Purchaser (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchaser of up to 6,831,000 warrants of the Company (the "Warrants") (after
giving effect to the over-allotment option granted to the Initial Purchaser
pursuant to the Purchase Agreement), each of which entitles the holder
thereof to purchase one share of Common Stock at an exercise price of $9.90
per share, subject to adjustment under certain circumstances. In order to
induce the Initial Purchaser to enter into the Purchase Agreement, the
Company has agreed to provide to the Initial Purchaser and its direct and
indirect transferees the registration rights set forth in this Agreement.
The execution of this Agreement is a condition to the closing under the
Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, capitalized terms
shall have the meanings set forth below, or to the extent not set forth
below, capitalized terms shall have the meanings set forth in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble and also
includes the Company's successors.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" shall mean the Series B 15% Senior Secured
Discount Notes due 2005 of the Company issued in exchange for the Notes.
"Expiration Date" means July 15, 2005.
"Holder" shall mean the Initial Purchaser, for so long as it owns
any Warrants or Registrable Securities, and each of its successors,
assigns and direct and indirect transferees who become registered owners
of Warrants or Registrable Securities.
"Initial Purchaser" shall have the meaning set forth in the
preamble to this Agreement.
"Majority Holders" shall mean the Holders holding a majority of the
Registrable Securities, determined on an as-converted basis; provided
that whenever the consent or approval of a specified percentage of
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Holders is required hereunder, Warrants or Registrable Securities held
by the Company or any of its affiliates (as such term is defined in Rule
405 under the Securities Act) (other than the Initial Purchaser or
subsequent holders of Warrants or Registrable Securities if such
subsequent holders are deemed to be such affiliates solely by reason of
their holding Warrants, Registrable Securities, Notes and/or Exchange
Notes and other than affiliates that control or are under common control
with the Company) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage
or amount.
"Notes" shall mean the 15% Senior Secured Discount Notes due 2005
of the Company.
"person" shall mean an individual, partnership, corporation, trust
or unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus
as amended or supplemented by any prospectus supplement, and all other
amendments and supplements to such prospectus, including post-effective
amendments, and in each case including all material incorporated by
reference therein.
"Purchase Agreement" shall have the meaning set forth in the second
paragraph of this Agreement.
"Registrable Securities" shall mean (i) if the Company is required
to file a Shelf Registration Statement, the Warrant Shares issuable upon
the exercise of the Warrants, or (ii) if the Company is required to file
a Resale Shelf Registration Statement, the Warrant Shares to be
registered for resale pursuant to such Resale Shelf Registration
Statement; provided, however, that Warrant Shares shall cease to be
Registrable Securities when (w) if the Company is required to file a
Shelf Registration Statement, a Shelf Registration Statement with
respect to the issuance of such Warrant Shares shall have been declared
effective under the Securities Act and such Warrant Shares shall have
been issued pursuant to such Shelf Registration Statement, (x) if the
Company is required to file a Resale Shelf Registration Statement, a
Resale Shelf Registration Statement with respect to the resale of such
Warrant Shares shall have been declared effective under the Securities
Act and such Warrant Shares shall have been resold pursuant to such
Resale Shelf Registration Statement, (y) such Warrant Shares may be
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distributed to the public pursuant to Rule 144(k) (or any similar
provision then in force, but not Rule 144A under the Securities Act)
under the Securities Act or (z) such Warrants Shares cease to be
outstanding or the Warrants underlying such Warrant Shares expire
unexercised.
"Registration Expenses" shall mean any and all expenses incurred
incident to performance of or compliance by the Company with this
Agreement, including without limitation, (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance
with state securities or "blue sky" laws (including reasonable fees and
disbursements of one counsel for any Underwriters in connection with
"blue sky" qualification of any of the Registrable Securities),
(iii) all expenses of any persons retained by the Company in preparing
or assisting in preparing, word processing, printing and distributing
any Registration Statement or any Prospectus, or, in each case any
amendments or supplements thereto, (iv) the reasonable fees and expenses
incurred by any Underwriter in connection with the preparation of any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement,
(v) the fees and disbursements of the Warrant Agent or any transfer
agent retained by the Company, (vi) the fees and disbursements of
counsel for the Company and reasonable fees and disbursements of one
counsel for the Holders (which counsel shall be selected by the Majority
Holders and which counsel also may be counsel for the Initial Purchaser)
and (vii) the fees and disbursements of the independent public
accountants of the Company and any partnership or joint venture in which
the Company or any of its subsidiaries is a partner, including the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, but excluding fees of
counsel to the Underwriters (other than fees and expenses set forth in
clause (ii) or (iv) above) or the Holders (other than fees and expenses
set forth in clause (vi) above) and underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or
disposition of Registrable Securities by a Holder.
"Registration Statement" shall mean a Shelf Registration Statement
or a Resale Shelf Registration Statement, as applicable.
"Resale Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company covering the resale of all of the
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Warrant Shares by the holders thereof (but no other securities unless
approved by the Majority Holders), on an appropriate form under Rule 415
under the Securities Act, or any similar rule that may be adopted by the
SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company covering the issuance of all of the Warrant
Shares by the holders thereof (but no other securities unless approved
by the Majority Holders) on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the SEC, and
all amendments and supplements to such registration statement, including
post-effective amendments, and in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Underwriter" shall have the meaning set forth in Section 2(b) of
this Agreement.
"Underwritten Offering" shall mean a registration in which
Registrable Securities are sold to an Underwriter for reoffering to the
public.
"Warrant Shares" means the shares of Common Stock issuable upon the
exercise of the Warrants.
"Warrants" means the warrants to purchase Common Stock issued
pursuant to the Purchase Agreement.
2. Registration Under the Securities Act.
(a) The Company shall file and shall use its best efforts to cause
the Shelf Registration Statement to be declared effective by the SEC no later
than January 6, 1996; provided, that, if due to applicable law, or any
applicable interpretation of the staff of the SEC, such registration does not
permit the public resale by all of the Holders of the Warrant Shares (other
than by any Holders that are affiliates (as such term is defined in Rule 405
under the Securities Act) of the Company (unless such Holders are affiliates
solely by reason of their holding Warrants, Registrable Securities, Notes
and/or Exchange Notes)) or is otherwise prohibited, the Company shall file
and use its best efforts to cause to be declared effective within such time
period a Resale Shelf Registration Statement. The Company agrees to use all
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reasonable best efforts to keep the Registration Statement continuously
effective until the date that is 30 days after the Expiration Date. The
Company further agrees to supplement or amend the Registration Statement, if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for the Registration Statement or by
the Securities Act or by any other rules and regulations thereunder for shelf
registration or if reasonably requested by a Holder with respect to
information relating to such Holder in order to accurately reflect
information regarding such Holder or such Holder's plan of distribution as
required by the Registration Statement, and to use its best efforts to cause
any such amendment to become effective and such Registration Statement to
become usable as soon as thereafter practicable. The Company agrees to
furnish to the Holders copies of any such supplement or amendment promptly
after its being made available for use or filed with the SEC. In addition to
the registration requirements of the Company provided for above, the Company
shall effect any other registration within the United States, within the time
period provided for in the first sentence of this paragraph, that may be
required in order to enable the holders of the Warrants to exercise their
right to purchase Warrant Shares thereunder.
(b)(i) The Holders whose Registrable Securities are covered by a
Resale Shelf Registration Statement who desire to do so may sell Registrable
Securities in an Underwritten Offering subject to the limitations set forth
in the proviso to the first sentence of Section 3(o) hereunder (including the
Company's obligation to use its best efforts in connection therewith). In
any such Underwritten Offering, the investment banker or investment bankers
and manager or managers (the "Underwriters") that will administer the
offering will be selected by the holders of a majority of the Registrable
Securities (determined on an as-converted basis) included in such offering.
(ii) Each Holder whose Registrable Securities are covered by a
Resale Shelf Registration Statement agrees, upon the request of the
Underwriter(s) in any Underwritten Offering permitted pursuant to this
Agreement, not to effect any public sale or distribution of securities of the
Company of the same class as the Registrable Securities included in such
Resale Shelf Registration Statement (except as part of such registration),
including a sale pursuant to Rule 144 under the Securities Act, during the
10-day period prior to, and during the 90-day period beginning on, the
closing date of any such Underwritten Offering made pursuant to such Resale
Shelf Registration Statement, to the extent timely notified in writing by the
Company or such Underwriter(s).
The foregoing provision shall not apply to any Holder if such
Holder is prevented by applicable statute or regulation from entering into
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any such agreement; provided, however, that any such Holder shall undertake,
in its request to participate in any such Underwritten Offering, not to
effect any public sale or distribution of any of its Registrable Securities
not sold in such Underwritten Offering, commencing on the date of sale of
Registrable Securities pursuant to such Underwritten Offering and ending on
the date that is 90 days after the closing date of such Underwritten
Offering, unless it has provided 45 days' prior written notice of such sale
or distribution to the Underwriter(s).
(iii) The Company agrees not to effect any public or private
offer, sale or distribution of securities of the same quality and nature as
the Registrable Securities, including a sale pursuant to Regulation D under
the Act, during the 10-day period prior to, and during the 90-day period
beginning on, the closing date of each Underwritten Offering permitted
pursuant to Section 3(o) hereof made pursuant to the Registration Statement,
to the extent timely notified in writing by the Underwriter(s).
(c) The Company shall pay all Registration Expenses in connection
with any registration pursuant to Section 2(a). Each Holder shall pay all
underwriting discounts and commissions and transfer taxes, if any, relating
to the sale or disposition of such Holder*s Registrable Securities pursuant
to the Registration Statement.
(d) Without limiting the remedies available to the Initial
Purchaser and subsequent Holders, the Company acknowledges that any failure
by the Company to comply with its obligations under Section 2(a) hereof may
result in material irreparable injury to the Initial Purchaser and/or
subsequent Holders for which there is no adequate remedy at law, that it will
not be possible to measure damages for such injuries precisely and that, in
the event of any such failure, the Initial Purchaser or any subsequent Holder
may obtain such relief as may be required to specifically enforce the
Company's obligations under Section 2(a) hereof.
3. Registration Procedures. In connection with the obligations of
the Company with respect to Section 2(a) hereof, the Company shall, as
expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the Securities Act, which form shall, (x) be
selected by the Company and (y) comply as to form in all material
respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith, and use
all reasonable best efforts to cause such Registration Statement to
become effective and remain effective in accordance with Section 2
hereof;
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(b) prepare and file with the SEC such amendments and post-
effective amendments to the Registration Statement as may be necessary
to (x) keep such Registration Statement effective for the applicable
period under this Agreement and (y) cause each Prospectus to be
supplemented by any required prospectus supplement and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities Act
and (z) keep each Prospectus current during the period described under
Section 4(3) and Rule 174 under the Securities Act that is applicable to
transactions by brokers or dealers with respect to the securities
covered by such Prospectus;
(c) in the case of a registration pursuant to a Resale Shelf
Registration Statement, furnish to each Holder, to counsel for the
Initial Purchaser, to counsel for the Holders and to each Underwriter of
an Underwritten Offering of Registrable Securities, if any, and each
such Underwriter's Counsel, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or
Underwriter may reasonably request, in order to facilitate the public
sale or other disposition of the Registrable Securities; the Company
consents to the use of such Prospectus and any amendment or supplement
thereto in accordance with applicable law by each of the Holders selling
Registrable Securities and any such Underwriters in connection with the
offering and sale of the Registrable Securities covered by and in the
manner described in such Prospectus or any amendment or supplement
thereto in accordance with applicable law;
(d) use its reasonable best efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue
sky" laws of such jurisdictions as any Holder with Registrable
Securities covered by a Registration Statement shall reasonably request
in writing by the time the Registration Statement is declared effective
by the SEC, to cooperate with such Holders in connection with any
filings required to be made with the National Association of Securities
Dealers, Inc. and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate
the disposition in each such jurisdiction of such Registrable
Securities; provided, however, that the Company shall not be required to
(i) qualify as a foreign entity or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for
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this Section 3(d), (ii) file any general consent to service of process
or (iii) subject itself to taxation in any such jurisdiction if it is
not so subject;
(e) in the case of the Resale Shelf Registration Statement, notify
each Holder, counsel for the Holders and counsel for the Initial
Purchaser promptly and, if requested by any such Holder, confirm such
advice in writing, (i) when the Resale Shelf Registration Statement has
become effective and when any post-effective amendments and supplements
thereto have been filed and become effective, (ii) of any request by the
SEC or any state securities authority for amendments and supplements to
the Resale Shelf Registration Statement and related Prospectus or for
additional information after the Resale Shelf Registration Statement has
become effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of
the Resale Shelf Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the effective date of the
Resale Shelf Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating
to such offering cease to be true and correct in all material respects
or if the Company receives any notification with respect to the
suspension of the qualification of the Registrable Securities for sale
in any jurisdiction or the initiation of any proceeding for such
purpose, (v) of the happening of any event which makes any statement
made in the Resale Shelf Registration Statement or the related
Prospectus untrue in any material respect or which requires the making
of any changes in the Resale Shelf Registration Statement or Prospectus
in order to make the statements therein not misleading and (vi) of any
determination by the Company that a post-effective amendment to the
Resale Shelf Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment and provide prompt notice to each Holder of the
withdrawal of any such order;
(g) in the case of any registration pursuant to a Resale Shelf
Registration Statement, furnish to each Holder, without charge, at least
one conformed copy of the Resale Shelf Registration Statement and any
post-effective amendment thereto, together with any documents
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incorporated therein by reference (in each case, without exhibits
thereto, unless requested);
(h) in the case of a registration pursuant to a Resale Shelf
Registration Statement, cooperate with the selling Holders of
Registrable Securities to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends and enable such Registrable Securities
to be in such amounts and registered in such names as such Holders may
reasonably request at least two business days prior to the closing of
any sale of Registrable Securities;
(i) in the case of a registration pursuant to a Resale Shelf
Registration Statement, upon the occurrence of any event contemplated by
Section 3(e)(v) hereof, use its reasonable best efforts to prepare a
supplement or post-effective amendment to the Resale Shelf Registration
Statement or the related Prospectus or any document incorporated therein
by reference or file any other required document so that, as thereafter
delivered to the purchasers of Registrable Securities, such Prospectus
will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; the
Company agrees to notify each Holder to suspend use of the Prospectus as
promptly as practicable after the occurrence of such an event and each
Holder hereby agrees to suspend use of the Prospectus until the Company
has amended or supplemented the Prospectus to correct such misstatement
or omission;
(j) in the case of a registration pursuant to a Resale Shelf
Registration Statement, within a reasonable time prior to the filing of
the Resale Shelf Registration Statement, Prospectus to be included
therein, or amendment or supplement to either of the foregoing, provide
copies of such document to the Initial Purchaser and its counsel, and
the Holders and their counsel, and make such of the representatives of
the Company as shall be reasonably requested by the Initial Purchaser or
its counsel and the Holders or their counsel available for discussion of
such document, and shall not at any time file or make any amendment or
supplement to any such document of which the Initial Purchaser and its
counsel and the Holders and their counsel, shall not have previously
been advised and furnished a copy or in a form to which the Initial
Purchaser or its counsel and the Majority Holders or their counsel shall
reasonably object; provided, however, that any document incorporated by
reference in any such Prospectus by any amendment or supplement shall be
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provided to the Initial Purchaser and its counsel and to the Holders and
their counsel at the time that such amendment or supplement is filed
with the SEC;
(k) obtain a CUSIP number for the Registrable Securities covered
by the Registration Statement not later than the effective date thereof;
(l) in the case of a registration pursuant to a Resale Shelf
Registration Statement, make available for inspection by a
representative of all of the Holders, any Underwriter participating in
any disposition pursuant to the Resale Shelf Registration Statement and
attorneys and accountants designated by the Holders or any Underwriter,
at reasonable times and in a reasonable manner, all financial and other
records, pertinent documents and properties of the Company, and cause
the respective officers, directors and employees of the Company to
supply all information reasonably requested by any such representative,
Underwriter, attorney or accountant in connection with the Resale Shelf
Registration Statement; provided, however, that such Underwriters,
representatives, attorneys or accountants agree to keep confidential any
records, information or documents that are designated by the Company in
writing as confidential and to use such information obtained pursuant to
this provision only in connection with the transaction for which such
information was obtained, and not for any other purpose, unless (i) such
records, information or documents (x) are available to the public,
(y) were already in such Underwriters', representatives', attorneys' or
accountants' possession prior to its receipt from the Company and they
do not otherwise have any obligation to keep such records, information
or documents confidential or (z) are obtained by such Underwriters,
representatives, attorneys or accountants from a third person who,
insofar as is known to such Underwriters, representatives, attorneys or
accountants, is not prohibited from transmitting the information to such
Underwriters, representatives, attorneys or accountants by a
contractual, legal or fiduciary obligation to the Company or a third
party, or (ii) disclosure of such records, information or documents is
required by court or administrative order after the exhaustion of
appeals therefrom;
(m) use its reasonable best efforts to cause all Registrable
Securities to be listed on any securities exchange or any automated
quotation system on which similar securities issued by the Company are
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then listed if requested by the Majority Holders, to the extent such
Registrable Securities satisfy applicable listing requirements;
(n) if reasonably requested by any Holder of Registrable
Securities covered by the Registration Statement in order to accurately
reflect information regarding such Holder or such Holder's plan of
distribution as required by such Registration Statement, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information with respect to such Holder as such Holder reasonably
requests to be included therein and (ii) make all required filings of
such Prospectus supplement or such post-effective amendment as soon as
the Company has received satisfactory notification of the matters to be
incorporated in such filing; and
(o) in the case of a registration pursuant to a Resale Shelf
Registration Statement, use its best efforts to enter into such
customary agreements and take all such other reasonable actions in
connection therewith (including those requested by the Holders of a
majority of the Registrable Securities being sold (determined on an as-
converted basis)) in order to expedite or facilitate the disposition of
such Registrable Securities including, but not limited to, an
Underwritten Offering and in such connection, (i) to the extent
possible, make such representations and warranties to the Holders and
any Underwriters of such Registrable Securities with respect to the
business of the Company and its subsidiaries and its or its
subsidiaries' joint ventures, the Resale Shelf Registration Statement,
Prospectus and documents incorporated by reference or deemed
incorporated by reference, if any, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in Underwritten
Offerings and confirm the same if and when requested, (ii) obtain
opinions of counsel to the Company (which counsel and opinions, in form,
scope and substance, shall be reasonably satisfactory to the Holders of
a majority of the Registrable Securities to be sold in such Underwritten
Offering (determined on an as-converted basis) and any Underwriters and
their respective counsel) addressed to each selling Holder and any
Underwriter of Registrable Securities, covering the matters customarily
covered in opinions requested in Underwritten Offerings, (iii) obtain
"cold comfort" letters from the independent certified public accountants
of the Company (and, if necessary, any other certified public accountant
of any subsidiary of the Company or any joint venture in which the
Company or any of its subsidiaries is a partner, or of any business
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acquired by the Company for which financial statements and financial
data are or are required to be included in the Shelf Registration
Statement) addressed to each selling Holder and any Underwriter of
Registrable Securities, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with Underwritten Offerings, and (iv) deliver such
documents and certificates as may be reasonably requested by the Holders
of a majority of the Registrable Securities being sold (determined on an
as-converted basis) or any Underwriter, and which are customarily
delivered in Underwritten Offerings, to evidence the continued validity
of the representations and warranties of the Company made pursuant to
clause (i) above and to evidence compliance with any customary
conditions contained in an underwriting agreement; provided that the
Company shall be required to use its best efforts to make an
Underwritten Offering only upon the request of Holders of the greater of
(x) at least 25% of the Registrable Securities outstanding (determined
on an as-converted basis) at the time such request is delivered to the
Company and (y) 621,000 shares of Common Stock (determined on an as-
converted basis after giving effect to any stock splits, combinations or
reclassifications). In the case of any Underwritten Offering, the
Company shall provide written notice to the Holders of such Underwritten
Offering at least 30 days prior to the filing of a prospectus supplement
for such Underwritten Offering, (y) specify a date, which shall be no
earlier than 10 days following the date of such notice, by which each
such Holder must inform the Company of its intent to participate in such
Underwritten Offering and (z) include the instructions such Holder must
follow in order to participate in such Underwritten Offering.
In the case of a Resale Shelf Registration Statement, the Company
may require each Holder to furnish to the Company such information regarding
the Holder and the proposed distribution by such Holder of Registrable
Securities as the Company may from time to time reasonably request in
writing. Each such Holder shall provide the Company with any such
information within five business days after such information is requested and
shall provide to the Company, within five business days after such Holder
receives a draft of the Registration Statement or amendment thereto in which
such information is included, comments on such Registration Statement or
amendment thereto.
Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in
Section 3(e)(iii), (v) or (vi) hereof, such Holder will forthwith discontinue
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disposition of Registrable Securities pursuant to the Resale Shelf
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof and,
if so directed by the Company, such Holder will deliver to the Company (at
its expense) all copies in its possession, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice.
4. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Initial Purchaser, each Holder and each
person, if any, who controls the Initial Purchaser or any Holder within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act or is under common control with or is controlled by the Initial
Purchaser or any Holder and each of their respective directors and officers
(each a "Non-Company Indemnitee") from and against any and all losses,
claims, damages, liabilities and expenses (including, without limitation, any
legal or other expenses reasonably incurred by the Non-Company Indemnitee in
connection with defending or investigating any such action or claim) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment or
supplement thereto) pursuant to which Registrable Securities were registered
under the Securities Act, including all documents incorporated therein by
reference, or arising out of or based upon any omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, or arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (as amended or supplemented, if the Company shall
have furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact necessary to
make the statements therein in light of the circumstances under which they
were made not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement
or omission or alleged untrue statement or omission which has been made
therein or omitted therefrom in reliance upon and in conformity with
information relating to the Initial Purchaser or any Holder furnished to the
Company in writing by the Initial Purchaser or any selling Holder expressly
for use therein; provided, however, that the indemnification provided for in
this paragraph (a) shall not inure to the benefit of any Non-Company
Indemnitee with respect to any sale or disposition of Registrable Securities
by such Holder in violation of the provisions of the last paragraph of
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Section 3 hereof. In connection with any Underwritten Offering contemplated
by Section 3(o), the Company also shall indemnify the Underwriters, if any,
selling brokers, dealers and similar securities industry professionals
participating in the distribution, their officers and directors and each
person who controls such persons (within the meaning of the Securities Act
and the Exchange Act) to the same extent as provided above with respect to
the indemnification of the Holders, if requested in connection with the
Resale Shelf Registration Statement. The indemnification obligation of the
Company set forth in this paragraph (a) shall be in addition to any liability
which the Company may otherwise have, including, without limitation, for any
breach of any covenant contained in this Agreement.
(b) Each Holder agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Initial Purchaser, the other selling
Holders, each of their respective directors and officers and each person, if
any, who controls the Company, the Initial Purchaser, or any other selling
Holder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act or is under common control with or is
controlled by the Company, the Initial Purchaser or any other selling Holder
to the same extent as the foregoing indemnity from the Company to the Initial
Purchaser and the Holders, but only with reference to information relating to
such Holder furnished to the Company in writing by such Holder expressly for
use in the Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto).
(c) If any action, suit or proceeding shall be instituted
involving any person in respect of which such person is entitled to indemnity
pursuant to either paragraph (a) or (b) above, such person (the "indemnified
party") shall promptly notify the parties against whom indemnification is
being sought (each an "indemnifying party") and such indemnifying parties
shall assume the defense thereof, including the employment of counsel and
payment of all fees and expenses. Such indemnified party, shall have the
right to counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying parties have
agreed in writing to pay such fees and expenses, (ii) the indemnifying
parties shall have failed to assume the defense and employ counsel or (iii)
the named parties to any such action, suit, or proceeding (including any
impleaded parties) include both such indemnifying parties and such
indemnified party and such indemnified party shall have been advised by its
counsel that representation of such indemnified party and any indemnifying
party by the same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by the same
<PAGE>
counsel has been proposed due to actual or potential differing interests
between them (in which case the indemnifying parties shall not have the right
to assume the defense of such action, suit or proceeding on behalf of the
indemnified party)). It is understood, however, that the indemnifying
parties shall, in connection with any one such action, suit or proceeding, or
substantially similar action, suit or proceeding or related actions, suits or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses
of only one separate firm of attorneys (in addition to any local counsel) at
any time for the Initial Purchaser and all persons, if any, who control the
Initial Purchaser within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act or is under common control with or is
controlled by the Initial Purchaser, and each of their respective directors
and officers, and the reasonable fees and expenses of only one separate firm
of attorneys (in addition to any local counsel) at any time for all other
Holders and all persons, if any, who control any such Holders within the
meaning of either such Section, or are under common control with or are
controlled by such Holders, and each of their respective directors and
officers. In such case involving the Initial Purchaser, persons who control,
are controlled by or under common control with the Initial Purchaser, or
their respective directors or officers, such firm shall be designated in
writing by the Initial Purchaser. In such case involving other Holders and
such persons who control, are controlled by or under common control with such
Holders, or their respective directors or officers, such firm shall be
designated in writing by such Holders holding a majority of the Registrable
Securities sold under the Resale Shelf Registration Statement by all such
Holders. The indemnifying parties shall not be liable for any settlement of
any action, suit or proceeding effected without their written consent, but if
settled with such written consent or if there be a final judgment for the
plaintiff, the indemnifying parties agree to indemnify and hold harmless the
indemnified party from and against any loss, action, damage, liability or
expense by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 4 is
unavailable to an indemnified party under paragraphs (a) or (b) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative fault of the
<PAGE>
indemnifying party or parties, on the one hand, and of the indemnified party
or parties, on the other hand, in connection with such statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses as well as any other relevant equitable consideration. The relative
fault of the Company, on the one hand, and any Holder, on the other hand,
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or by such Holder, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Holders' respective
obligations to contribute pursuant to this Section 4(d) are several in
proportion to the respective number of Registrable Securities of such Holders
that were registered pursuant to the Registration Statement.
(e) The Company, the Initial Purchaser and each Holder agree that
it would not be just or equitable if contribution pursuant to this Section 4
were determined by a pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating any claim or defending any
such action, suit or proceeding. Notwithstanding the provisions of this
Section 4, no Holder shall be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities sold
by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 4
are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any indemnified party at law or in equity.
(f) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under
this Section 4 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 4 shall
<PAGE>
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf any indemnified party, (ii) any sale of
Registrable Securities by an indemnified party and (iv) any termination of
this Agreement. A successor to any indemnified party shall be entitled to
the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 4.
(g) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
5. Miscellaneous. (a) No Inconsistent Agreements. The Company
has not entered into, and on or after the date of this Agreement will not
enter into, any agreement that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with
and are not inconsistent with the rights granted to the holders of the
Company's other issued and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained the written consent
of the Holders of at least a majority of the outstanding Registrable
Securities affected by such amendment, modification, supplement, waiver or
departure; provided, however, that no amendment, modification, supplement,
waiver or consent to the departure with respect to the provisions of
Section 4 hereof shall be effective as against any person unless consented to
in writing by such person.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder
to the Company by means of a notice given in accordance with the provisions
of this Section 5(c), which address initially is, with respect to the Initial
Purchaser, the address set forth in the Purchase Agreement; and (ii) if to
the Company, initially at the Company's address set forth in the Purchase
<PAGE>
Agreement, and, thereafter, at such other address, notice of which is given
in accordance with the provisions of this Section 5(c).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next business day, if timely delivered to an air courier
guaranteeing overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of
each of the parties, including, without limitation and without the need for
an express assignment, subsequent Holders; provided that nothing herein shall
be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement.
If any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking
and holding such Registrable Securities, such person shall be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement and such person shall be entitled to receive the
benefits hereof. The Initial Purchaser (in its capacity as Initial
Purchaser) shall have no liability or obligation to the Company with respect
to any failure by any other Holder to comply with, or any breach by any other
Holder of, any of the obligations of such other Holder under this Agreement.
(e) Purchases and Sale of Warrant Shares. The Company shall not,
and shall use its best efforts to cause its affiliates (as defined in Rule
405 under the Securities Act) that it controls not to, purchase and then
resell or otherwise transfer any Warrant Shares.
(f) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Initial Purchaser, on the other hand, and the Initial
Purchaser and the Holders shall have the right to enforce such agreements
directly to the extent they deem such enforcement necessary or advisable to
protect the rights of the Initial Purchaser or the Holders hereunder.
(g) Counterparts. This Agreement may be signed in various
counterparts which constitute one and the same instrument. If signed in
counterparts, this Agreement shall not become effective unless at least one
counterpart hereof shall have been executed and delivered on behalf of each
party hereto.
(h) Headings. The headings of the Sections of this Agreement have
<PAGE>
been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Submission to Jurisdiction. The Company irrevocably submits
to the jurisdiction of any United States or State court located in the State
of New York in any suit or proceeding based on or arising under this
Agreement and irrevocably agrees that all claims in respect of such suit or
proceeding may be determined in any such court. The Company irrevocably
waives the defense of an inconvenient forum to the maintenance of such suit
or proceeding. The Company hereby agrees to designate and appoint CT
Corporation System as an agent upon whom process may be served in any suit or
proceeding based on or arising under this Agreement. The Company further
agrees that service of process upon the Company, or upon an agent appointed
pursuant to the preceding sentence accompanied with written notice of said
service to the Company, as the case may be, mailed by first class mail shall
be deemed in every respect effective service of process upon the Company in
any such suit or proceeding. Nothing herein shall affect the Initial
Purchaser*s or any Holder's right to serve process in any other manner
permitted by law. The Company agrees that a final non-appealable judgment in
any such suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
GEOTEK COMMUNICATIONS, INC.
By: /s/ Yaron Eitan
---------------------
Name: Yaron Eitan
Title: President
Confirmed and accepted as of
the date first above written:
SMITH BARNEY INC.
By: /s/ Anthony S. Graham
--------------------------
Name: Anthony S. Graham
Title: Vice President
<PAGE>
EXHIBIT (c)(9)
<PAGE>
DEFEASANCE SECURITY AGREEMENT
THIS DEFEASANCE SECURITY AGREEMENT (the "Agreement") is made as of
July 6, 1995 by and among GEOTEK COMMUNICATIONS, INC., a Delaware corporation
("Geotek" or "Pledgor"), and SC FUNDAMENTAL INC., as agent for and on behalf
of THE SC FUNDAMENTAL VALUE FUND, L.P. and SC FUNDAMENTAL VALUE BVI, LTD.
("Pledgees").
RECITALS
A. Geotek and Pledgees are parties to a Note and Warrant Purchase
Agreement (as the same may be amended, modified, extended or replaced from
time to time, the "Note Agreement") dated as of March 20, 1995.
B. Geotek and Pledgees are parties to a Letter Agreement dated May 23,
1995 (the "May Letter") pursuant to which Geotek agreed (i) to grant to the
Pledgees a first priority security interest in, and to deliver to the
Pledgees to hold pursuant to this Agreement, an amount of Governmental
Obligations (as defined in the Note Agreement) the principal of and the
interest on which when due, and without any reinvestment thereof, will
provide a dollar amount equal to the interest payments when due in accordance
with the terms of the Notes (as defined in the Note Agreement) accrued from
the date hereof through September 30, 1996 (the "Final Conversion Date") plus
the principal amount as payable in accordance with the terms of the Notes
through the Final Conversion Date and (ii) to deliver to the Pledgees the
agreement attached hereto as Exhibit A (the "Prepayment Agreement") pursuant
to which Geotek has agreed to prepay, by wire transfer in accordance with
Section 1.3 of the Note Agreement on the first business day following the
Final Conversion Date, an amount equal to the outstanding unconverted
principal amount of the Notes as of the close of business on the Final
Conversion Date.
C. Pledgor has purchased (or, in the case of up to $9 million
principal amount (the "Additional Amount"), has placed executed orders to
purchase) the Governmental Obligations listed on Exhibit B hereto in the
principal amount of $42,218,000 (the "Pledged Securities"), the principal of
and the interest on which when due, and without any reinvestment thereof,
will provide a dollar amount equal to the interest payments when due in
accordance with the terms of the Notes accrued from the date hereof through
the Final Conversion Date plus the principal amount as payable in accordance
with the terms of the Notes through the Final Conversion Date plus the amount
to be paid to the Pledgees on the first business day following the Final
Conversion Date in accordance with the Prepayment Agreement, which amounts
satisfy the Pledgors' obligations pursuant to the May Letter as described in
Paragraph B above. Pursuant to the terms of the Prepayment Agreement,
simultaneously with (or prior to) the execution of this Agreement, Pledgor
has delivered to Pledgees an amount equal to $1,411,150.68, representing all
accrued and unpaid interest under the Notes through the date hereof.
<PAGE>
D. Pledgor is (or, in the case of Pledged Securities to be purchased
with the Additional Amount, at settlement of such purchase, will be) the
legal and beneficial owner of the Pledged Securities.
E. The parties to this Agreement have agreed to enter into this
Agreement to facilitate Geotek's offering of 207,000 Units consisting of
$207,000,000 15% Senior Discount Notes due 2005 and warrants to purchase
6,210,000 shares of Common Stock (the "Units").
F. Immediately upon execution of this Agreement and the Prepayment
Agreement and delivery of the Pledged Securities to the Pledged Account (as
defined in Section 2.3 below) in accordance with the terms hereof, the
Agreement Indebtedness (as defined in the Note Agreement) shall be deemed to
have been defeased in accordance with Section 1.12 of the Note Agreement and
(i) the Pledgees shall thereupon (A) release the security interest granted
pursuant to the Note Agreement, including the cancellation and discharge of
the Guarantees and the Pledge Agreement (in each case, as defined in the Note
Agreement), (B) execute and deliver to the Pledgor such instruments in
writing as shall be required to release the security interest granted
pursuant to the Note Agreement and (C) deliver the Pledged Shares (as defined
in the Note Agreement), together with any stock powers provided to the
Pledgees in connection therewith, to the Pledgor at the Closing of the
transaction pursuant to which the Units are issued and sold and (ii) the
provisions of Sections 3.2, 3.5(c), 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, and 3.13
and Articles 4 and 5 of the Note Agreement shall terminate.
NOW, THEREFORE, for good and valuable consideration received, the
receipt and sufficiency of which are hereby acknowledged, Pledgor hereby
agrees as follows:
ARTICLE 1. DEFINITIONS
1.1 Terms Defined in Note Agreement. Capitalized terms used in this
Agreement without definition have the meanings set forth in the Note
Agreement
1.2 Other Definitions: The following terms used in this Agreement
have the meanings set forth below:
(a) "Event of Default" means each of (i) the events set forth in
Sections 8.1(a), 8.1(b), 8.1(d), 8.1(e), 8.1(j) and, insofar as it relates to
the Pledgor, 8.1(f) of the Note Agreement, (ii) a default in the performance
of any obligation hereunder or under the Notes, the Warrants or Sections 3.1,
3.3, 3.4, 3.5(a), 3.5(b) or 3.12 of the Note Agreement and the default
continues for a period of ten (10) days after written notice by the Pledgees
to the Pledgor or any representation or warranty made by the Pledgor in this
Agreement shall be untrue as of the date made and (iii) this Agreement shall
at any time or for any reason cease to constitute a valid first priority
perfected lien in and on the Pledged Collateral. Section 8.1 of the Note
Agreement and Section 10 of the Notes are hereby amended so that the
references therein to "Event(s) of Default" are modified to conform to the
meaning set forth in this Section 1.2(a).
(b) "Interest Payment Date" means each of September 30, 1995,
December 31, 1995, March 31, 1996, June 30, 1996 and September 30, 1996.
<PAGE>
(c) "Pledged Securities" means the Governmental Obligations listed
on Schedule A hereto which have been delivered to the Pledged Account in
accordance with the terms of this Agreement for the purpose of defeasing the
Notes.
(d) "Principal Conversion Date" means (i) the last business day of
each calendar week during each Conversion Period (as defined in the Notes)
and (ii) each Conversion Period End Date (as defined in the Notes).
(e) "Principal Maturity Date" means each of June 30, 1996 and
September 30, 1996.
(f) "Secured Obligations" means the Pledgor's obligations to pay
to the Pledgees the principal amount of the Notes, together with interest
thereon, in accordance with the terms thereof and of the Note Agreement, as
modified by the May Letter. The Secured Obligations shall be reduced to the
extent of any Satisfied Obligations (as defined in Section 2.6 below).
(g) "Warrants" means the warrants to purchase 1,000,000 shares of
Common Stock issued by the Pledgor pursuant to (i) the Note Agreement and
(ii) the Note and Warrant Purchase Agreement by and between the Pledgor and
Pledgees dated June 15, 1994.
1.3 UCC Terms. Unless otherwise defined in this Agreement or the Note
Agreement, or unless the context otherwise requires, all terms used in this
Agreement which are defined in the Uniform Commercial Code ("UCC") shall have
the meanings given in the UCC as adopted and from time to time in effect in
New York.
ARTICLE 2. PLEDGE, SECURITY INTEREST AND
DELIVERY OF EVIDENCE OF PLEDGE
2.1 Pledge. In order to secure the full and punctual payment of the
Secured Obligations, Pledgor hereby pledges, hypothecates, assigns,
transfers, sets over and delivers to Pledgees to hold in the Pledged Account
pursuant to the terms set forth herein, and grants to Pledgees a security
interest in all of Pledgees's right, title, interest, claims, powers and
privileges in, to and under the following (collectively, "Pledged
Collateral"):
(a) the Pledged Securities;
(b) all certificates, instruments and documents evidencing the
foregoing, and all entries on the books of any financial intermediary
pertaining to the Pledged Securities;
(c) all cash, securities, interest and other property at any time
or from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the foregoing; and
(d) all proceeds of any of the foregoing.
<PAGE>
2.2 Security Agreement. This Agreement constitutes a security
agreement under the UCC.
2.3 Delivery of Evidence of Governmental Obligations; Irrevocable
Power-of-Attorney. Concurrently herewith, (i) Pledgor has caused appropriate
electronic transfers to be made effecting the transfer of the Pledged
Securities to a segregated account in the name of Pledgor (the "Pledged
Account") established at Neuberger & Berman, L.P. ("N&B") for purposes of
perfecting the security interest in the Pledged Collateral granted to the
Pledgees hereunder and (ii) N&B has caused there to be delivered to the
Pledgees an acknowledgement, in the form attached hereto as Exhibit B,
acknowledging and agreeing that (A) it has received a copy of this Agreement
signed by Pledgor notifying it of the security interest in the Pledged
Collateral granted hereunder, (B) it has made appropriate notations on its
books reflecting such security interest in favor of Pledgees and (C) it has
received a copy of and will honor the power-of-attorney described in the
following sentence (the "Power-of-Attorney"). For so long as and to the
extent that the security interest granted hereunder is in effect, for
purposes of exercising the Pledgees' rights hereunder with respect to the
Pledged Collateral, SC Fundamental Inc., as agent for the Pledgees, shall
have sole and exclusive authority over and control of the Pledged Account in
accordance with the terms of the Power-of-Attorney attached hereto as Exhibit
C. Pledgor agrees that the Power-of-Attorney shall be irrevocable for so
long as and to the extent that the security interest granted hereunder is in
effect. Upon execution of this Agreement, Pledgees shall provide written
notice to N&B instructing N&B to wire, no later than one (1) business day
following the date of this Agreement, from the Pledged Account to another of
Pledgor's accounts in accordance with Pledgor's written instructions, any
amounts, together with accrued interest thereon, contained in the Pledged
Account in excess of the Pledged Securities.
2.4 Delivery of Evidence of other Pledged Collateral. Promptly upon
receipt by Pledgor and whether or not requested by Pledgees, Pledgor shall
from time to time deliver to the Pledged Account all documents evidencing any
of the other Pledged Collateral or shall cause there to be made electronic
transfers effecting the transfer of the Pledged Collateral to the Pledged
Account.
2.5 No Obligations Undertaken. Nothing contained in this Agreement
shall relieve Pledgor of, or except as otherwise expressly provided in this
Agreement, impose on Pledgees, any obligation or liability with respect to
the Pledged Collateral. Except as otherwise expressly provided in this
Agreement, Pledgees shall not have any duty or responsibility for (a) taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any of the Pledged Collateral, whether or not
Pledgees have or are deemed to have knowledge of such matters, or (b) taking
any necessary steps to preserve rights against third parties or pertaining to
the Pledged Collateral.
2.6 Return of and Release of Security Interest in Pledged Collateral;
Cancellation of Notes. Upon full satisfaction of the Secured Obligations,
the security interest granted hereunder in the Pledged Collateral shall be
released and the Pledgees shall promptly deliver to Pledgor (i) the
certificates, instruments and documents evidencing all of the Pledged
Collateral (or shall cause there to be made appropriate electronic transfers
effecting the transfer of the Pledged Collateral for the account of the
Pledgor in accordance with the Pledgor's written instructions) and (ii) the
<PAGE>
Notes for Cancellation. To the extent the Pledgees convert all or any
portion of the principal amount of the Notes in accordance with the terms
thereof and of the Note Agreement into shares of Common Stock of Pledgor,
such converted principal amount (the "Satisfied Principal Obligations") and
all interest otherwise payable thereon from and after such date of conversion
(the "Satisfied Interest Obligations" and, together with Satisfied Principal
Obligations", the "Satisfied Obligations") shall be deemed satisfied and the
Pledgees shall promptly provide written notice to N&B to deliver to the
Pledgor the certificates, instruments and documents evidencing that portion
of the Pledged Collateral (or the cash proceeds issued at maturity thereof)
equal to the Satisfied Obligations (or to make appropriate electronic
transfers in respect of such Pledged Collateral as described above for the
account of Pledgor) as follows: (i) in the case of Satisfied Principal
Obligations, such delivery or electronic transfer shall be made within one
(1) business day following each Principal Conversion Date occurring on or
after the date(s) of conversion and (ii) in the case of Satisfied Interest
Obligations, such delivery or electronic transfer shall be made within one
(1) business day following each Interest Payment Date occurring on or after
the date(s) of conversion; provided, however, that the security interest
granted hereunder in such portion of the Pledged Collateral as is equal to
the Satisfied Obligations shall be deemed released immediately,
notwithstanding the date on which such Pledged Collateral is required to be
delivered or transferred to the Pledgor in accordance with the terms hereof.
The delivery of the notice by the Pledgees described in the preceding
sentence shall be a condition to delivery of certificates representing shares
of Common Stock issuable upon conversion of the Notes, and any provision of
the Notes to the contrary shall be deemed to be amended and modified hereby
in accordance with the terms thereof. As a condition to any transfer of the
Notes, the Pledgees agree to notify the proposed transferee of the
modifications to the Notes and Note Agreement effected by this Agreement.
2.7 Accounting for Return of Pledged Collateral upon Conversion of
Notes. Pledgor and Pledgees agree to cooperate and assist each other in
accounting for the deliveries to be made by Pledgees pursuant to Section 2.6
above.
2.8 Pledgor's Rights in the Event Pledgees Fail to Provide Notification
with respect to the Return of Pledged Collateral. In the event Pledgees'
shall default in their obligation to provide notification with respect to the
return of Pledged Collateral to the Pledgor as set forth in Section 2.6
above, in addition to any other rights or remedies the Pledgor may have
hereunder or at law or in equity, the parties agree that from and after and
during the continuation of any such default, until such default shall have
been remedied, the Warrants then outstanding shall not be exercisable by the
Pledgees or any transferee of the Pledgees. The provisions of this Section
2.8 are intended to modify and amend the Warrants in accordance with the
terms thereof, and, as a condition to any transfer of the Warrants, the
Pledgees agree to notify the proposed transferee of the provisions of this
Section 2.8.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
3.1 Pledged Collateral. The Pledged Collateral is not subject to any
restriction on alienation or transfer other than pursuant to this Agreement.
<PAGE>
3.2 Title. Pledgor is (or, in the case of Pledged Securities to be
purchased with the Additional Amount, at settlement of such purchase, will
be) the owner of all right, title and interest in, to and under the Pledged
Collateral.
3.3 No Liens or Prior Pledges. Pledgor has not granted any other
security interest in or made any prior pledges of any of the Pledged
Collateral, and the Pledged Collateral is free of all liens, security
interests and encumbrances other than in favor of Pledgees.
3.4 Authority, Etc. Pledgor has all requisite corporate power and
authority to execute and deliver this Agreement and the Power-of-Attorney,
and all necessary action has been taken to duly authorize Pledgor's
execution, delivery and performance of this Agreement and the Power-of-
Attorney. The execution, delivery and performance of this Agreement and the
Power-of-Attorney by Pledgor will not result in a material default under any
material contract, agreement or instrument to which Pledgor is a party or by
which Pledgor is bound. This Agreement and the Power-of-Attorney are the
legal, valid and binding obligations of Pledgor enforceable in accordance
with their terms.
3.5 Government Approvals. No approval or action by, and no notice to,
any governmental authority or regulatory body is required in connection with
the execution, delivery and performance of this Agreement and the Power-of-
Attorney by Pledgor, except as may be required under applicable securities
laws and except for such filings as may be required to perfect the security
interest granted under this Agreement, all of which filings have been duly
made.
3.6 Filings, Consents and Perfection. No filings are necessary for the
perfection of the security interest granted in the Pledged Collateral. Upon
delivery of the Pledged Collateral to the Pledged Account and receipt by N&B
of notification signed by Pledgor of the security interest granted in favor
of Pledgees hereunder (as described in detail in Section 2.3 above), Pledgees
will have a valid, perfected, first priority security interest in all of
Pledgor's right, title, interest, claims, powers and privileges in, to and
under the Pledged Collateral.
3.7 Name. The correct legal name of Pledgor is as set forth in the
preamble to this Agreement.
3.8 Chief Executive Office. The address for Pledgor set forth in
Section 7.1 is the location of Pledgor's chief executive office.
3.9 Accuracy. All information set forth herein relating to the Pledged
Collateral is accurate and complete in all material respects.
<PAGE>
ARTICLE 4. COVENANTS
4.1. Covenants of Pledgor. Pledgor hereby covenants and agrees to and
with Pledgees as follows:
4.1.1 Payment of Secured Obligations. The Pledgor agrees to pay the
principal amount of the Notes, together with interest thereon, in accordance
with the terms thereof and of the Note Agreement, as modified by the May
Letter.
4.1.2 Maintenance of Security Interests. Pledgor shall from time to
time execute and deliver to Pledgees such financing statements, continuation
statements, financing statement amendments or other filings or documents, and
take such other steps, as Pledgees may reasonably require to further assure
to Pledgees its rights under this Agreement.
4.1.3 No other Pledge or Liens. Pledgor shall not pledge or grant a
security interest in any of the Pledged Collateral to any third party and
shall maintain the Pledged Collateral free and clear of any liens,
encumbrances or security interests of any third party and defend the Pledged
Collateral against any adverse claims.
4.1.4 No Transfers. Except pursuant to the terms of this Agreement,
Pledgor shall not sell, assign, transfer or otherwise dispose of, or grant
any option with respect to, the Pledged Collateral.
4.1.5 Change of Name. Upon any change of Pledgor's legal name or
location of its chief executive office, Pledgor shall notify Pledgees twenty
(20) days prior to such change in writing and shall take such action as
Pledgees may reasonably request to assure to Pledgees the continued
perfection of the security interest granted under this Agreement.
4.1.6 Notices. Pledgor will provide Pledgees with any and all
notices or material items received by Pledgor relating to the Pledged
Collateral.
4.1.7 Reinvestment of Matured Governmental Obligations Pending
Principal Maturity Dates. The parties acknowledge the certain of the Pledged
Securities will mature into the principal amounts payable in accordance with
the Notes, as modified by the May Letter, prior to the applicable Principal
Maturity Dates. In that regard, to the extent the proceeds of such matured
Pledged Securities have not been delivered to the Pledgor in accordance with
Section 2.7 above on account of conversion of the Notes, at Pledgor's
direction, the parties agree that such proceeds shall be reinvested in
Governmental Obligations maturing on the Principal Maturity Dates in amounts
equal to the principal amounts due thereon (which amounts shall be paid to
the Pledgees on the Principal Maturity Dates in accordance with the terms of
the Notes, as modified by the May Letter) plus accrued interest, which
interest shall be for the account of, and at maturity shall be paid to,
Pledgor.
<PAGE>
ARTICLE 5. DEFAULT AND REMEDIES
5.1. Remedies. Subject to the receipt of any necessary approvals, after
the occurrence of an Event of Default, Pledgees shall have, in addition to
any other rights or remedies Pledgees may have at law or in equity, any or
all of the following rights and remedies:
5.1.1 Rights of Secured Party. Pledgees may exercise all of the rights
and remedies of a secured party under the UCC and under any other applicable
laws.
5.1.2 Sale of Pledged Collateral. Notwithstanding anything to the
contrary contained herein, Pledgees may sell any or all of the Pledged
Collateral by public or private sale. The following provisions shall apply
with respect to any such sale:
(a) any such sale may be for cash, upon credit or for future
delivery, as Pledgees in its sole discretion shall deem appropriate;
(b) at any such sale Pledgees may, to the extent permitted by
applicable law, bid for or purchase any or all of the Pledged Collateral,
free from any claim or right on the part of Pledgor, and upon compliance with
the terms of sale, may to the extent permitted by applicable law, hold,
retain and dispose of same without further accountability therefor;
(c) Pledgees shall not be required to give to Pledgor any
notice whatsoever pertaining to such sale;
(d) any such sale shall be held at such time or times as
Pledgees may determine;
(e) at any such sale, any of the Pledged Collateral may be
sold in one lot or in separate parcels as Pledgees may in its sole discretion
determine;
(f) Pledgees shall not be obligated to make any sale of any
or all of the Pledged Collateral;
(g) in the event that the sale of any or all of the Pledged
Collateral is made on credit or for future delivery, the Secured Obligations
shall be reduced at the time of such payment by the full amount thereof. The
Pledged Collateral shall be retained by Pledgees until the selling price is
paid. Pledgees shall incur no liability should purchaser not pay for the
Pledged Collateral. In such event, the Pledged Collateral may be resold as
herein provided; and
(h) In light of the nature of the Pledged Collateral, it is
expressly agreed that a sale of the Pledged Collateral or any part thereof
through a broker-dealer which is a member of the National Association of
Securities Dealers shall be a permitted sale hereunder.
5.1.3 Judicial Foreclosure. Pledgees may proceed by a suit or suits
at law or in equity to foreclose on and to sell any or all of the Pledged
<PAGE>
Collateral pursuant to a judgment decree of a court or courts of competent
jurisdiction. Pledgee agrees not to challenge any such foreclosure.
5.1.4 Notices. The remedies herein do not require Pledgees to give
any notice except as provided herein or required by mandatory provisions of
law.
5.2. Application of Proceeds. All proceeds realized by Pledgees in
respect of any or all of the Pledged Collateral, including the proceeds of
any sale thereof or any cash distributed in respect of any of the Pledged
Collateral shall be applied against the Secured Obligations (as reduced by
the Satisfied Obligations) in accordance with the Note Agreement, as modified
by the May Letter. Pledgor shall be liable for any deficiency, and any
surplus shall be returned by Pledgees to the person or persons legally
entitled thereto. To the extent the payment of the principal amount of the
Note is satisfied through the application of proceeds realized in respect of
the Pledged Collateral or otherwise, notwithstanding anything to the contrary
contained in the Note Agreement or the Notes, such principal amount shall no
longer be convertible (and the shares of Common Stock reserved for issuance
upon conversion of such principal amount shall no longer be so reserved) and
the Notes shall be deemed satisfied and cancelled to the extent of such
payments.
5.3. Cumulative Remedies. All rights and remedies of Pledgees are
separate and cumulative, and no one of them, whether exercised or not, shall
be deemed to be to the exclusion of or to limit or prejudice any other legal
or equitable rights or remedies which Pledgees may have.
ARTICLE 6. INDEMNIFICATION AND EXPENSES
6.1. Indemnification. Pledgor hereby unconditionally covenants and
agrees to indemnify, protect, defend and hold harmless Pledgees and all of
its past and present officers, directors, shareholders, employees, agents,
representatives, subsidiaries, parent and affiliate corporations and
successors, underwriters, counsel, and any person controlling any of the
foregoing ("Indemnitees") from any and all claims, obligations, penalties,
liens, liabilities, losses, damages, causes of action (at law or in equity),
judgments, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) of any nature whatsoever, asserted against or
suffered or incurred by Pledgees, by reason of or as a result of or in
connection with or arising out of any breach of this Agreement by Pledgor,
any untrue statement of a material fact or omission of a material fact in a
registration statement, prospectus or other document (regardless of any
investigations made by the Pledgees), or Pledgor's defense of any and all
claims and demands whatsoever which may be asserted against Pledgor in
connection with this Agreement, or any action taken by Pledgor under this
Agreement.
6.2. Expenses. Pledgor shall reimburse Pledgees on demand for all
reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) incurred by Pledgees in connection with the enforcement of
this Agreement or the exercise by Pledgees of its rights or remedies under
this Agreement.
<PAGE>
ARTICLE 7. MISCELLANEOUS
7.1. Notices. Except as otherwise expressly provided in this Agreement,
all notices and other communications made or required to be given pursuant to
this Agreement shall be in writing and shall be delivered in hand, or sent by
telecopier or facsimile and confirmed by letter mailed by United States
registered or certified first-class mail, postage prepaid addressed as
follows:
To Pledgees: SC Fundamental Inc.
c/o Siegler, Collery & Co.
712 Fifth Avenue
New York, New York 10022
Attention: Mr. Gary N. Siegler
Telecopier:212-957-3434
Telephone: 212-957-3500
To Pledgor: Geotek Communications, Inc.
20 Craig Road
Montvale, New Jersey 07645
Attention: Andrew D. Siegel, Esq.
Telecopier: 201-930-9614
Telephone: 201-930-9305
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (a) if delivered by hand to a responsible
officer of the party to which it is directed, at the time of the receipt
thereof by such officer, and (b) if sent by telecopier or facsimile, at the
time of the dispatch thereof, if in normal business hours in the country of
receipt, or otherwise at the opening of business on the following business
day.
7.2. Waiver, Amendment or Modification. No waiver, amendment or
modification of any provision of this Agreement or of any right, power or
remedy under this Agreement shall be effective unless in wiring and signed by
the party against whom such waiver, amendment or modification is sought to be
enforced. No failure by Pledgees to exercise, and no delay by Pledgees in
exercising, any right, power or remedy granted under this Agreement shall
operate as a waiver of any such right, power or remedy. A waiver of any
right, power or remedy to Pledgees on any one occasion shall not be construed
as a bar to or waiver of any right, power or remedy on any future occasion.
7.3. Assignments. This Agreement shall not be assignable in whole or in
part by Pledgor.
7.4. Successors and Assigns. This Agreement inures to the benefit of
and binds Pledgor and Pledgees and their respective permitted successors and
assigns.
7.5. Governing Law. This Agreement shall be construed, interpreted and
governed by the laws of the State of New York, without giving effect to the
principles of conflicts of law.
<PAGE>
7.6. Consent to Jurisdiction.
(a) Pledgor hereby irrevocably consents that any legal action or
proceeding against it or any of its properties or assets with respect to any
of its obligations arising under or relating to this Agreement may be brought
in any court of the City and State of New York or any Federal court of the
United States of America located in the City and State of New York, as
Pledgees may elect, and by execution and delivery of this Agreement, Pledgor
hereby submits to and accepts with regard to any such action or proceeding
for itself and in respect of its properties and assets, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts.
Pledgor hereby irrevocably designates, appoints and empowers The Corporation
Trust Company, New York office, as its agent to receive for and on its behalf
service of process in the State of New York in any legal action or proceeding
with respect to this Agreement. A copy of any such process served on such
agent shall be promptly forwarded by recognized courier service or airmail by
the person commencing such proceeding to Pledgor at its address set forth in
Section 7.1 of this Agreement, but the failure of Pledgor to receive such
copy shall not affect in any way the service of such process as aforesaid.
Pledgor further irrevocably consents to the service of process in any such
action or proceeding by the mailing of copies thereof by registered or
certified airmail, postage prepaid, to Pledgor at its address set forth in
Section 7.1 of this Agreement. The foregoing, however, shall not limit the
rights of Pledgees to serve process in any other manner permitted by law or
to bring any legal action or proceeding or to obtain execution of judgment in
any other jurisdiction. Pledgor further agrees that, to the extent permitted
by law, final judgment against it in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdiction within or outside
the United States of America by suit on the judgment, a certified or
exemplified copy of which shall be conclusive evidence of the fact and of the
amount of its indebtedness.
(b) To the fullest extent permitted by law, Pledgees hereby waives
any rights it may have under the laws of any jurisdiction requiring the
Pledgor to commence by publication any legal action or proceeding with
respect to this Agreement.
(c) To the fullest extent permitted by law, Pledgor hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of the venue of any legal action or proceeding arising out of or
relating to this Agreement in the City and State of New York and hereby
further irrevocably waives any claim that the State of New York is not a
convenient forum for any such legal action or proceeding.
7.7. Severability. If one or more of the provisions of this Agreement
shall be held to be invalid, illegal or unenforceable in any respect under
applicable law, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired. Any such provision
shall be applied in the jurisdiction where held invalid to the extent it is
legal and shall be applied in full in all other jurisdictions.
7.8. Headings. The titles and headings of the sections of this
Agreement have been inserted for convenience of reference only and are not
intended to summarize or otherwise describe the subject matter of such
sections and shall not be used in construing such section.
<PAGE>
7.9. Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original, but all of which together shall
constitute one and the same instrument.
7.10. Waiver of Jury Trial. Pledgor and Pledgees hereby knowingly,
voluntarily and intentionally waive any rights they may have to a trial by
jury in respect of any litigation based hereon, or arising out of, under or
in connection with this Agreement, the Note Agreement and any course of
conduct, course of dealing, statements (whether verbal or written), or
actions of Pledgor or Pledgees. This provision is a material inducement for
Pledgor and Pledgees entering into this Agreement.
7.11. Further Assurances and Power of Attorney. At Pledgor's expense,
Pledgor agrees to, as promptly as practicable, do such further acts and
things, and to execute and deliver such additional assignments, agreements
and instruments, as Pledgees may at any time reasonably request in connection
with the administration or enforcement of this Agreement or with respect to
any or all of the Governmental Obligations, including, without limitation,
obtaining necessary governmental approvals referred to herein, in order to
assure and confirm to Pledgees its rights, powers and remedies under this
Agreement. In connection with such governmental approvals, the Pledgor
hereby appoints the Pledgees and the Pledgees's designees as the Pledgor's
attorney-in-fact with power to execute any and all documents, assignments,
applications and other instruments necessary for such approvals.
7.12. Defeasance of Agreement Indebtedness. The Agreement Indebtedness
is hereby deemed to have been paid and the Pledgees hereby (A) release the
security interest granted pursuant to the Note Agreement, and in that regard,
hereby cancel and discharge the Guarantees and the Pledge Agreement and (B)
confirm that the provisions of Sections 3.2, 3.5(c), 3.6, 3.7, 3.8, 3.9,
3.10, 3.11 and 3.13 and Articles 4 and 5 of the Note Agreement are hereby
terminated.
<PAGE>
IN WITNESS WHEREOF, the Pledgor and the Pledgee have duly executed this
Agreement as of the day and year first above written.
PLEDGOR
GEOTEK COMMUNICATIONS, INC.
By: /s/ Andrew D. Siegel
-------------------------------------------
Name: Andrew D. Siegel
Title: General Counsel and Secretary
PLEDGEES
SC Fundamental Inc.
as agent for and on behalf of
The SC Fundamental Value Fund, L.P.
and SC Fundamental Value, BVI, Ltd.
By: /s/ Neil H. Koffler
-------------------------------------------
Name:
Title:
<PAGE>
The following is a summary of all omitted Exhibits to the foregoing
Defeasance Security Agreement.
Exhibit A Prepayment Agreement
Exhibit B Power of Attorney for Geotek Communications, Inc.
Exhibit C Acknowledgement Letter of Neuberger & Berman, L.P.
The Registrant hereby agrees to furnish supplementally to the
Commission copies of Exhibits A-C upon request of the Commission.
