<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) March 4, 1996
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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 juris- (Commission File Number) (IRS Employer
diction 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 March 5, 1996, Geotek Communications, Inc. (the "Company"), pursuant
to a purchase agreement dated March 4, 1996 (the "Purchase Agreement"), issued
and sold to Smith Barney Inc. (the "Initial Purchaser") $67.5 million aggregate
principal amount of its 12% Senior Subordinated Convertible Notes due 2001 (the
"Notes"). Each Note is in the principal amount of $1,000, and beginning on March
5, 1997, will be convertible into shares of the Company's common stock, par
value $.01 per share (the "Common Stock"), at a conversion price equal to the
lower of (i) $9.50 per share and (ii) the weighted average market price of a
share of Common Stock for the ten Trading Day period immediately following the
90th day after the issuance date of the Notes, but shall in no event be less
than $8.25 per share. The Initial Purchaser has the option (the "Over-allotment
Option"), exercisable at any time and from time to time prior to April 3, 1996,
to purchase up to an additional $7.5 million aggregate principal amount of
Notes. A copy of the Purchase Agreement is attached hereto as Exhibit (c)(1).
The net proceeds to the Company from the March 5, 1996 sale of Notes were
approximately $65.2 million.
The Notes were issued under an indenture (the "Indenture") meeting the
requirements of the Trust Indenture Act of 1939, as amended. Each capitalized
term used herein and not otherwise defined shall have the meaning ascribed to it
in the Indenture. The maximum aggregate principal amount of Notes issuable under
the Indenture is $67.5 million (plus the aggregate principal amount of any Notes
issued pursuant to the Over-allotment Option). Cash interest on the Notes will
accrue at the rate of 12% per annum and will be payable semiannually on each
February 15 and August 15 commencing August 15, 1996. The Notes mature on
February 15, 2001. In addition, the Company has the option to redeem the Notes,
on or after February 15, 1999, in whole or in part, at a redemption price equal
to 110% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the redemption date, for the 12 month period beginning February 15,
1999, and at a redemption price equal to 105% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the redemption date, on or after
February 15, 2000. The Company also has the option, at any time on or after
September 1, 1997, to require the conversion of all, but not less than all, of
the then outstanding Notes into Common Stock at the conversion price then in
effect if the Closing Price of the Common Stock for 20 of the 30 Trading Days
and for the five Trading Days immediately preceding the expiration of the
Mandatory Conversion Calculation Period equals or exceeds 160% of the conversion
price then in effect. In the event of a Change of Control, each holder of a Note
may require the Company to repurchase all of such holder's Notes at a price
equal to 101% (or 100% in the case of certain Changes of Control specified in
the Indenture) of the principal amount thereof, plus accrued and unpaid
interest, if any, to the purchase date. The Notes are unsecured senior
subordinated obligations of the Company that rank senior in right of payment to
all subordinated indebtedness of the Company. The Notes will rank pari passu in
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right of payment to all existing and future senior subordinated indebtedness of
the Company and subordinate in right of payment to all senior indebtedness of
the Company. In addition, the Indenture contains certain covenants that, subject
to certain exceptions, restrict the ability of the Company and its Subsidiaries
to engage in mergers and acquisitions. A copy of the Indenture is attached
hereto as Exhibit (c)(2).
Pursuant to a registration rights agreement (the "Registration Rights
Agreement"), the Company has agreed to file registration statements under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
resale of the Notes and the issuance, or to the extent the registration of such
issuance is not permitted by applicable law the resale, of the Common Stock
issuable upon conversion of the Notes. If the Company fails to register the
Notes or the shares of Common Stock issuable upon the conversion thereof or
otherwise comply with the procedures set forth in the Registration Rights
Agreement within the time periods prescribed by the Registration Rights
Agreement, the Company will be subject to substantial monetary penalties. A copy
of the Registration Rights Agreement is attached hereto as Exhibit (c)(3).
The summaries of the Purchase Agreement, the Indenture and the
Registration Rights Agreement are qualified in their entirety by reference to
the copy of the applicable document included as an exhibit to this filing.
On March 4, 1996, the Company and S-C Rig Investments - III, L.P. ("S-C
Rig"), a significant stockholder of the Company, reached an agreement in
principle pursuant to which S-C Rig will make a $40.0 million unsecured credit
facility available to the Company. It is anticipated that all borrowings under
the credit facility will be required to be made within two years from the
establishment of the credit facility, will accrue interest at a rate of 10% per
annum and will mature four years from the date of the final borrowing
thereunder. It also is anticipated that the Company will be obligated to pay S-C
Rig a fee equal to 3% of each borrowing under the credit facility at the time of
such borrowing. Borrowings under the credit facility will constitute senior
indebtedness of the Company. In connection with the establishment of the credit
facility, it is anticipated that the Company will issue to S-C Rig a five-year
warrant to purchase 4.2 million shares of Common Stock (subject to adjustment in
certain circumstances) at an exercise price of $9.50 per share (subject to
adjustment in certain circumstances). The transactions contemplated by the
credit facility are subject to a number of conditions, including the negotiation
and execution of definitive agreements and the authorization at the Company's
next annual meeting of sufficient additional shares of Common Stock to permit
the exercise in full of the warrant. There can be no assurances that the Company
will consummate the transactions contemplated by the agreement in principal on
the terms described above, or at all.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
(1) Purchase Agreement, dated March 4, 1996
(2) Indenture, dated March 5, 1996
(3) Registration Rights Agreement, dated March 5, 1996
(4) Press Release of Geotek Communications, Inc., dated March 5,
1996
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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: March 6, 1996 By: /s/ Michael McCoy
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Name: Michael McCoy
Title: Chief Financial Officer
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EXHIBIT INDEX
Exhibit No.
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(c)(1) Purchase Agreement, dated March 4, 1996
(c)(2) Indenture, dated March 5, 1996
(c)(3) Registration Rights Agreement, dated March 5, 1996
(c)(4) Press Release of Geotek Communications, Inc., dated March 5,
1996
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<PAGE>
EXHIBIT (c)(1)
GEOTEK COMMUNICATIONS, INC.
$75,000,000
12% Senior Subordinated Convertible Notes due 2001
PURCHASE AGREEMENT
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March 4, 1996
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"), $67,500,000
principal amount of its 12% Senior Subordinated Convertible Notes due 2001 (the
"Firm Notes"). The Company also proposes, upon the terms and conditions set
forth herein, to issue and sell to the Initial Purchaser up to an additional
$7,500,000 principal amount of its 12% Senior Subordinated Convertible Notes due
2001 (the "Additional Notes"). The Firm Notes and the Additional Notes are
hereinafter collectively referred to as the "Notes." The Notes will be issued
pursuant to the provisions of an Indenture, to be dated as of March 5, 1996 (the
"Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee").
The Company wishes to confirm as follows its agreement with
the Initial Purchaser in connection with the purchase and resale of the Notes.
1. Preliminary Offering Memorandum and Offering Memorandum.
The Notes 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 February 29, 1996 (the "Preliminary
Offering Memorandum") and an Offering Memorandum, dated March 4, 1996 (the
"Offering Memorandum"), setting forth information regarding the Company and the
Notes. Any references herein to the Preliminary Offering Memorandum and the
Offering Memorandum shall be deemed to include all amendments and supplements
thereto and, unless the context otherwise requires, any information incorporated
by reference therein. 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 Notes by the Initial Purchaser.
The Company understands that the Initial Purchaser proposes to
make offers and sales (the "Exempt Resales") of the Notes 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 a limited
number of other institutional "accredited investors" (as defined in Rule
501(a)(1), (2), (3) and (7) under Regulation D ("Regulation D") under the
Act)("Accredited Investors") in private sales exempt from registration under the
Act and (ii) 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) and (ii) 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 shall bear the legends set forth
in paragraph 6 under the section of the Offering Memorandum entitled "Transfer
Restrictions."
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It also is understood and acknowledged that holders (including
subsequent transferees) of the Notes and, if such Notes are subsequently
converted into Common Stock, the Common Stock, will have the registration rights
set forth in the registration rights agreement (the "Registration Rights
Agreement"), to be dated as of the Closing Date (as hereinafter defined), in
substantially the form of Exhibit A hereto. This Agreement, the Indenture and
the Registration Rights 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 97% of the principal
amount thereof, $67,500,000 aggregate principal amount of the Notes.
(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 $7,500,000 aggregate principal amount of
Additional Notes at a purchase price per Note equal to 97% of the principal
amount thereof on the date of delivery and payment of the Additional Notes, plus
accrued interest, if any, from the date of issuance of the Firm Notes to the
date of delivery of and payment for the Additional Notes; provided, however,
that such over-allotment option may only be exercised for the purpose of selling
up to $3,000,000 aggregate principal amount of Additional Notes to Vanguard
Cellular Systems, Inc. and/or up to $4,500,000 aggregate principal amount of
Additional Notes to S-C Rig Investments-III, L.P. (or such additional aggregate
principal amount, not to exceed $7,500,000, of Additional Notes as may be agreed
to by the parties hereto or to such other parties as the Company may permit in
its sole discretion).
(c) The Initial Purchaser has advised the Company that it
proposes to offer the Notes 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 Notes pursuant to a private sale exempt from
registration under the Act, (ii) will not solicit offers for, or offer or sell,
the Notes 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 and (iii) will solicit offers for the Notes only from, and will offer,
sell or deliver the Notes as part of its initial offering only (A) 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 (B) outside the United States
to persons other than U.S. persons in reliance on Regulation S. The Initial
Purchaser has advised the Company that it will offer the Notes to Eligible
Purchasers at a price initially equal to 100% of the principal amount thereof,
plus accrued interest, if any, from the date of issuance of the Notes. Such
price may be changed by the Initial Purchaser at any time thereafter without
notice.
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(d) The Initial Purchaser represents and warrants that it has
offered and sold the Notes and agrees that it will offer and sell the Notes (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 Notes 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 Notes, 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 Notes, it will
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Notes 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 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 Notes and Payment Therefor. Delivery to the
Initial Purchaser of and payment for the Firm Notes 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 March 5, 1996 (the "Closing Date"). The place of closing
for the Firm Notes 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 Notes 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 aggregate principal amount of Additional Notes
specified in such notice. The place of closing for any Additional Notes and the
Option Closing Date for such Additional Notes may be varied by agreement between
the Initial Purchaser and the Company.
The Firm Notes will be delivered to the Initial Purchaser
against payment of the purchase price for the Firm Notes therefor 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). Any Additional Notes that the
Initial Purchaser may elect to purchase will be paid for as provided above. The
Notes will be in definitive or global form and registered in such names and in
<PAGE>
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 Notes 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 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 Notes 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 Notes are offered by the Initial Purchaser and
by all dealers to whom Notes may be sold in connection with the offering and
sale of the Notes.
(e) If, at any time prior to completion of the distribution of
the Notes 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 Securities
Exchange Act of 1934, as amended (the "Exchange Act") any document which upon
filing becomes an Incorporated Document, to comply with any law, the Company
<PAGE>
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 Notes hereunder.
(f) The Company will cooperate with the Initial Purchaser and
with its counsel in connection with the qualification of the Notes 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 Notes, in any jurisdiction where it is not now so subject.
(g) So long as any of the Notes 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 Notes 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 the 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 Notes to facilitate the sale or resale of the Notes. Except as
permitted by the Act, the Company will not distribute any offering material in
connection with the Exempt Resales.
(k) The Company has complied and will comply with all
provisions of Florida Statutes Section 517.075 relating to issuers doing
business with Cuba.
<PAGE>
(l) 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 Notes in a manner that
would require the registration under the Act of the sale to the Initial
Purchaser or the Eligible Purchasers of the Notes.
(m) The Company agrees to comply with all of the terms and
conditions of the Registration Rights Agreement.
(n) 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.
(o) The Company shall, and shall use its best efforts to cause
the transfer agent with respect to the Notes and the shares of Common Stock, par
value $.01 per share, of the Company (the "Common Stock") issuable upon
conversion of the Notes (the "Shares") to, refuse to register any transfer of
such securities sold pursuant to Regulation S if such transfer is not made in
accordance with the provisions of Regulation S.
(p) The Company shall not, without the prior consent of the
Initial Purchaser, offer, sell, contract to sell or otherwise dispose of any
securities the offer and sale of which could reasonably be expected to be
integrated with the offer and sale of the Notes offered hereby.
(q) During the period commencing on the first Trading Day
after the 85th day immediately following the issuance of the Notes and ending
upon the close of business on the 10th Trading Day immediately following the
90th day after the issuance thereof, the Company shall not bid for or purchase
any Common Stock or engage in any other activity with respect thereto for the
purpose of creating actual, or apparent, active trading in or raising the price
thereof.
5. Representations and Warranties of the Company. The Company
represents and warrants to the Initial Purchaser that:
(a) The Preliminary Offering Memorandum and the 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 or 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 or the 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
<PAGE>
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 Registration Rights Agreement and this 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 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.
(e) The Company has duly authorized and reserved a sufficient
number of shares of Common Stock for issuance upon the conversion of the Notes,
and such shares, when issued and delivered upon conversion of the Notes, will be
validly issued, fully paid and nonassessable and, except as set forth in the
Offering Memorandum, free of any preemptive or similar rights.
(f) 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. 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, except as may pertain to the Company's 15% Senior Secured
Discount Notes due 2005.
(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 Notes 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 under "Risk Factors - Dependence on Third Party Providers"
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
<PAGE>
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.
(l) Neither the issuance, offer, sale or delivery by the
Company of the Notes, the issuance and delivery by the Company of the Shares,
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 in accordance with the 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.
<PAGE>
(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.
(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, 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 Notes, will not distribute any offering material in
connection with the offering and sale of the Notes 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 Gardner, Carton & Douglas, special counsel to the Company for
telecommunications regulatory matters, a copy of which is included as a part of
Exhibit B hereto, are valid, legal and binding agreements enforceable against
<PAGE>
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).
(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 Shares)
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 Agreement. 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) The Company is not and, upon the sale of the Notes 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.
<PAGE>
(y) 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 Notes in a
manner that would require the registration of the Notes 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 Notes.
(z) 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 Notes is 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 Notes pursuant hereto (including the Initial Purchaser's
proposed offering of the Notes 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 Notes 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.
(aa) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Notes 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 the Employee Retirement Income
Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code
of 1986, as amended. 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."
(ab) 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 Notes.
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 the Offering Memorandum or in any 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
<PAGE>
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 Notes 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 Notes to that person without sending or giving at or prior to 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 havin 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
<PAGE>
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.
(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 the 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 the 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 Notes 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 Notes hereunder, any determination
of the relative benefits received by the Company or the Initial Purchaser from
the offering of the Notes shall include the net proceeds (before deducting
expenses and after discounts and commissions received by the Initial Purchaser)
<PAGE>
received by the Company, and the discounts and commissions received by the
Initial Purchaser, from the sale of such Additional Notes, 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.
(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 Notes resold by it in the initial placement of
such Notes 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 Notes 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 Notes hereunder are
subject to the following conditions:
<PAGE>
(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 Notes 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 Notes 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 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 Notes or make it impracticable to market the Notes 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) Gardner, Carton & Douglas, special counsel to the Company for
telecommunications regulatory matters and (iii) 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
<PAGE>
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 Company and the Initial Purchaser shall have entered
into the other Operative Documents.
(j) 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.
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 (j)
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
Notes.
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 the 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
<PAGE>
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 Notes; (iii)
the preparation, printing, authentication, issuance and delivery of certificates
for the Notes, including any stamp taxes in connection with the original
issuance and sale of the Notes; (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 Notes; (v) the qualification of the Notes
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); (vi) the performance by the Company of
its obligations under the Registration Rights Agreement; and (vii) 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 and its counsel. The Company hereby agrees
that it will pay in full on the Closing Date the fees and expenses referred to
in clause (v) 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.
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 Notes on the terms set forth on the cover page of the Offering Memorandum or
to enforce contracts for the resale of the Notes 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 the 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.
<PAGE>
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: 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/ Yaron Eitan
------------------------
Name: Yaron Eitan
Title: President
Confirmed and accepted as of
the date first above written:
SMITH BARNEY INC.
By: /s/ Sean P. Crowley
----------------------------
Name: Sean P.Crowley
Title: Managing Director
<PAGE>
The following is a summary of all omitted Exhibits to the foregoing
Purchase Agreement.
Exhibit A Registration Rights Agreement (filed as Exhibit (c)(3) to
the form 8-K).
Exhibit B Opinion of Gardner, Carton & Douglas.
The Registrant hereby agrees to furnish supplementally to the Commission a
copy of Exhibit B upon request of the Commission.
<PAGE>
EXHIBIT (c)(2)
Geotek Communications, Inc., as Issuer
and
The Bank of New York, as Trustee
INDENTURE
Dated as of March 5, 1996
Up to $75,000,000
12% Senior Subordinated Convertible Notes due 2001
<PAGE>
Reconciliation and tie between
Trust Indenture Act of 1939 and Indenture
Trust Indenture Indenture
Act Section Section
- --------------- ----------
ss.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; 12.02
(c)..........................................................N.A.
ss.311 (a)..........................................................7.12
(b)..........................................................7.12
(c)..........................................................N.A.
ss.312 (a)..........................................................2.15
(b).........................................................12.03
(c).........................................................12.03
ss.313 (a)..........................................................7.07
(b)(1).......................................................7.07
(b)(2).......................................................7.07
(c)...................................................7.07; 12.02
(d)..........................................................7.07
ss.314 (a)...................................................4.05; 12.02
(b)..........................................................N.A.
(c)(1)......................................................12.04
(c)(2)......................................................12.04
(c)(3).......................................................N.A.
(d)..........................................................N.A.
(e).........................................................12.05
(f)..........................................................N.A.
ss.315 (a).......................................................7.01(b)
(b)...................................................7.05; 12.02
(c).......................................................7.01(a)
(d).......................................................7.01(c)
(e)..........................................................6.11
ss.316 (a)(1)(A)....................................................6.05
(a)(1)(B)....................................................6.04
(a)(2).......................................................N.A.
(b)..........................................................6.07
(c)..........................................................2.17
ss.317 (a)(1).......................................................6.08
(a)(2).......................................................6.09
(b)..........................................................2.05
ss.318 (a).........................................................12.01
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<PAGE>
(b)..........................................................N.A.
(c).........................................................12.01
------------------------
Note: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of the Indenture.
-2-
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Page
----
Section 1.01. Definitions 1
Section 1.02. Incorporation by Reference of Trust Indenture
Act 14
Section 1.03. Rules of Construction 15
ARTICLE TWO
THE SECURITIES
Section 2.01. Form and Dating 15
Section 2.02. Restrictive Legends 17
Section 2.03. Execution, Authentication and Denominations 20
Section 2.04. Registrar and Paying Agent 21
Section 2.05. Paying Agent to Hold Money in Trust 22
Section 2.06. Transfer and Exchange 22
Section 2.07. Book-Entry Provisions for the Global Securities 23
Section 2.08. Special Transfer Provisions 25
Section 2.09. Replacement Securities 30
Section 2.10. Outstanding Securities 31
Section 2.11. Temporary Securities 31
Section 2.12. Cancellation 32
Section 2.13. CUSIP Numbers 32
Section 2.14. Defaulted Interest 32
Section 2.15. Securityholder Lists 33
Section 2.16. Other Transfers 33
Section 2.17. Record Date 33
ARTICLE THREE
REDEMPTION OF SECURITIES
Section 3.01. Notices to the Trustee 33
Section 3.02. Selection of Securities to Be Redeemed 34
Section 3.03. Notice of Redemption 34
Section 3.04. Effect of Notice of Redemption 36
Section 3.05. Deposit of Redemption Price 36
Section 3.06. Securities Redeemed or Purchased in Part 36
Section 3.07. Conversion Arrangements on Call for Redemption 37
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<PAGE>
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Securities 37
Section 4.02. Maintenance of Office or Agency 38
Section 4.03. Corporate Existence 38
Section 4.04. Compliance Certificate 39
Section 4.05. SEC Reports 39
Section 4.06. Change of Control 40
Section 4.07. Waiver of Stay, Extension or Usury Laws 42
Section 4.08. Prohibition on Incurrence of Senior Subordinated
Debt 43
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, etc. 43
Section 5.02. Successor Substituted 44
ARTICLE SIX
REMEDIES
Section 6.01. Events of Default 44
Section 6.02. Acceleration 46
Section 6.03. Other Remedies 47
Section 6.04. Waiver of Past Defaults 48
Section 6.05. Control by Majority 48
Section 6.06. Limitation on Suits 48
Section 6.07. Right of Holders to Receive Payment 49
Section 6.08. Collection Suit by Trustee 49
Section 6.09. Trustee May File Proofs of Claims 49
Section 6.10. Priorities 50
Section 6.11. Undertaking for Costs 50
Section 6.12. Restoration of Rights and Remedies 51
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties 51
Section 7.02. Rights of Trustee 52
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<PAGE>
Section 7.03. Individual Rights of Trustee 54
Section 7.04. Trustee's Disclaimer 54
Section 7.05. Notice of Default 54
Section 7.06. Money Held in Trust 54
Section 7.07. Reports by Trustee to Holders 54
Section 7.08. Compensation and Indemnity 55
Section 7.09. Replacement of Trustee 56
Section 7.10. Successor Trustee by Merger, etc. 57
Section 7.11. Eligibility; Disqualification 57
Section 7.12. Preferential Collection of Claims Against
Company 58
ARTICLE EIGHT
SATISFACTION AND DISCHARGE
Section 8.01. Satisfaction and Discharge 58
Section 8.02. Application of Trust Money 59
Section 8.03. Repayment to Company 60
Section 8.04. Reinstatement 60
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders 61
Section 9.02. With Consent of Holders 61
Section 9.03. Compliance with Trust Indenture Act 63
Section 9.04. Revocation and Effect of Consents 63
Section 9.05. Notation on or Exchange of Securities 63
Section 9.06. Trustee May Sign Amendments, etc. 64
ARTICLE TEN
SUBORDINATION OF SECURITIES
Section 10.01. Securities Subordinated to Senior Indebtedness 64
Section 10.02. Payment Over of Proceeds Upon Dissolution, Etc 64
Section 10.03. Prior Payment to Senior Indebtedness upon
Acceleration of Securities 66
Section 10.04. No Payment When Senior Indebtedness in Default 67
Section 10.05. Payment Permitted If No Default 67
Section 10.06. Subrogation to Rights of Holders of Senior
Indebtedness 68
Section 10.07. Provisions Solely to Define Relative Rights 68
Section 10.08. Trustee to Effectuate Subordination 69
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<PAGE>
Section 10.09. No Waiver of Subordination Provisions 69
Section 10.10. Notice to Trustee 70
Section 10.11. Reliance on Judicial Order or Certificate of
Liquidating Agent 70
Section 10.12. Trustee Not Fiduciary for Holders of Senior
Indebtedness 71
Section 10.13. Rights of Trustee as Holder of Senior
Indebtedness; Preservation of Trustee's
Rights 71
Section 10.14. Article Applicable to Paying Agents 71
Section 10.15. Certain Conversions Deemed Payment 72
ARTICLE ELEVEN
CONVERSION OF SECURITIES
Section 11.01. Conversion Privilege and Conversion Price 72
Section 11.02. Exercise of Conversion Privilege 73
Section 11.03. Fractions of Shares 75
Section 11.04. Adjustment of Conversion Price 75
Section 11.05. Notice of Adjustments of Conversion Price 87
Section 11.06. Notice of Certain Corporate Action 87
Section 11.07. Company to Reserve Common Stock 89
Section 11.08. Taxes on Conversions 89
Section 11.09. Covenant as to Common Stock 89
Section 11.10. Cancellation of Converted Securities 89
Section 11.11. Provisions as to Consolidation, Merger or Sale
of Assets 89
Section 11.12. Mandatory Conversion 90
ARTICLE TWELVE
MISCELLANEOUS
Section 12.01. Trust Indenture Act of 1939 91
Section 12.02. Notices 91
Section 12.03. Communication by Holders with Other Holders 92
Section 12.04. Certificate and Opinion as to Conditions
Precedent 92
Section 12.05. Statements Required in Certificate or Opinion 93
Section 12.06. Rules by Trustee, Paying Agent, Registrar 93
Section 12.07. Governing Law; Jurisdiction 93
Section 12.08. No Interpretation of Other Agreements 94
Section 12.09. No Recourse Against Others 94
Section 12.10. Successors 94
Section 12.11. Counterparts; Duplicate Originals 94
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<PAGE>
Section 12.12. Separability 94
Section 12.13. Table of Contents, Headings, etc. 95
Section 12.14. Benefits of Indenture 95
SIGNATURES
EXHIBIT A Form of 12% Senior Subordinated Convertible
Note due 2001 A-1
EXHIBIT B Form of Certificate of Non-U.S. Persons B-1
EXHIBIT C Form of Certificate to be Delivered in
Connection with Certain Transfers to
Accredited Investors C-1
EXHIBIT D Form of Certificate to be Delivered in
Connection with Transfers Pursuant to
Regulation S D-1
-7-
<PAGE>
INDENTURE, dated as of March 5, 1996, between GEOTEK COMMUNICATIONS, INC.,
a corporation incorporated under the laws of the State of Delaware ("the
Company"), and THE BANK OF NEW YORK, 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 12% Senior
Subordinated Convertible Notes due 2001 (the "Securities").
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
1.01. Definitions.
"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.
"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.
"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
-8-
<PAGE>
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 the Indenture pertaining to the
Company's 15% Senior Secured Discount Notes due 2005, 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
-9-
<PAGE>
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 the definition of "Total Common Equity"); (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; or (d) the Common Stock of the Company shall be
neither listed on any national securities exchange nor authorized to be quoted
on an inter-dealer quotation system of any registered national securities
association.
"Change of Control Date" shall have the meaning set forth in
Section 4.06.
"Change of Control Offer" shall have the meaning set forth
in Section 4.06.
"Change of Control Purchase Date" shall have the meaning set
forth in Section 4.06.
"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.
-10-
<PAGE>
"Common Stock" includes any stock of any class of any person
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
such person and which is not subject to redemption by such person. However,
subject to the provisions of Section 11.11, shares issuable on conversion of
Securities shall include only shares of the class designated as Common Stock of
the Company at the date of this Indenture or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which are not subject to redemption by the Company; provided, that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all such
reclassifications.
"Company" means the 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.
"Constituent Person" shall have the meaning set forth in
Section 11.11.
"conversion price" shall have the meaning set forth in
Section 11.01.
"Conversion Shares Shelf Registration Statement" shall mean a
"shelf" registration statement of the Company pursuant to the provisions of the
Registration Rights Agreement that covers the issuance, or to the extent not
permitted by applicable law, the resale of all of the shares of Common Stock
issuable upon conversion of the Securities to the extent and in the manner
provided therein 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.
"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 101 Barclay
Street, 21-W, New York, New York 10286.
-11-
<PAGE>
"Current Market Price" shall have the meaning set forth in
Section 11.04(h).
"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.
"Depository" shall mean The Depository Trust Company, its
nominees, and their respective successors.
"Event of Default" shall have the meaning set forth in
Section 6.01.
"'ex' date," (i) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
on the relevant exchange or in the relevant market from which the Closing Prices
were obtained without the right to receive such issuance or distribution, (ii)
when used with respect to any subdivision or combination of shares of Common
Stock, means the first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective, and (iii) when used with respect to any tender or
exchange offer means the first date on which the Common Stock trades regular way
on such exchange or in such market after the last time that tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have been
amended).
"Exchange Act" means the U.S. Securities Exchange Act of
1934, as amended.
"Expiration Time" shall have the meaning set forth in
Section 11.04(f).
"Extraordinary Cash Dividend" shall have the meaning set
forth in Section 11.04(d).
"Final Maturity Date" means February 15, 2001.
"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.
"Global Securities" means any of (i) the U.S. Global Security,
(ii) the Offshore Global Securities or (iii) any other global form in which any
of the Securities may be held from time to time.
"Holder" or "Securityholder" means the person in whose name a
Security is registered on the Registrar's books.
"Indenture" means this Indenture, as amended, modified or
supplemented from time to time.
"Independent Financial Advisor" shall have the meaning set
forth in Section 11.04(i).
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"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.
"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.
"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 March 5, 1996.
"junior securities" shall have the meaning set forth in
Section 10.15.
"Mandatory Conversion Calculation Period" shall have the
meaning set forth in Section 11.12.
"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.
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"nonelecting share" shall have the meaning set forth in
Section 11.11.
"Non-Global Purchasers" shall have the meaning set forth in
Section 2.01.
"Notes Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of the
Registration Rights Agreement that covers the resale of all of the Securities to
the extent and in the manner provided therein 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.
"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 and (other than if provided pursuant to
TIA ss. 314(a)(4)) containing the statements provided for in Section 12.05.
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"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.
"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. Each such Opinion of Counsel shall
include the statements provided for in Section 12.05.
"Paying Agent" has the meaning set forth in Section 2.04,
except that, for the purposes of Section 4.06 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.
"person" means (except as otherwise provided herein) 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.
"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.
"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).
"Purchased Shares" shall have the meaning set forth in
Section 11.04(f).
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
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"Redeemable Capital Stock" means, with respect to any
person, any shares of any class or series of Capital Stock 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 repurchase or redemption of 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 issuer thereof will not repurchase
or redeem any such stock pursuant to such provisions prior to the repurchase of
the Securities as are required to be purchased under Section 4.06 or the 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 Securities and the
Common Stock issuable upon the conversion thereof; provided, however, that the
Securities and such Common Stock shall cease to be Registrable Securities when
(i) in the case of Securities, a Notes Shelf Registration Statement with respect
to the Securities shall have been declared effective under the Securities Act
and the Securities shall have been disposed of pursuant to such Notes Shelf
Registration Statement, (ii) (A) in the case of the Common Stock, except as
otherwise provided in clause (ii)(B), a Conversion Shares Shelf Registration
Statement with respect to such Common Stock shall have been declared effective
under the Securities Act and such Common Stock shall have been disposed of
pursuant to such Conversion Shares Shelf Registration Statement, or (B) in the
case of any Common Stock actually issued upon conversion of Securities, a
Conversion Shares Shelf Registration Statement with respect to the issuance of
such Common Stock shall have been declared effective under the Securities Act
and, following the issuance thereof, such Common Stock is not subject to
restrictions on transfer pursuant to the Securities Act, (iii) the Securities or
such Common Stock 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) the Securities or such Common Stock shall have
ceased to be outstanding.
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"Registrar" shall have the meaning set forth in Section 2.04.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of March 5, 1996 between the Company and Smith Barney Inc.,
and certain permitted assigns specified therein.
"Regulation S" means Regulation S under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"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 notes 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 Register" shall have the meaning set forth in
Section 2.04.
"Senior Indebtedness" means the principal of and premium, if
any, and interest on (a) all indebtedness of the Company for money borrowed,
other than the Securities, whether outstanding on the date of execution of this
Indenture or thereafter created, incurred or assumed, except indebtedness that
by the terms of the instrument or instruments (as such instrument or instruments
may be amended from time to time pursuant to the terms thereof) by which such
indebtedness was created or incurred expressly provides that it (i) is junior in
right of payment to the Securities or (ii) ranks pari passu with the Securities,
and (b) amendments, renewals, extensions, modifications, refinancings and
refundings of any such indebtedness. For the purposes of this definition,
"indebtedness for money borrowed" when used with respect to the Company means
(w) any obligation of, or any obligation guaranteed by, the Company for the
repayment of borrowed money, whether or not evidenced by bonds, debentures,
notes or other written instruments, (x) any deferred payment obligation of, or
any such obligation guaranteed by, the Company for the payment of the purchase
price of property or assets evidenced by a note or similar instrument, (y) any
obligation of, or any such obligation guaranteed by, the Company for the payment
of rent or other amounts under a lease of property or assets which obligation is
required to be classified and accounted for as a capitalized lease on the
balance sheet of the Company under GAAP and (z) any reimbursement obligation
under bank letters of credit.
"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.
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"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 (including Redeemable Capital Stock), 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 (or, in the case of Redeemable Capital Stock, the
first date on which such Redeemable Capital Stock is required to be redeemed).
"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 by foreign nationals
mandated by applicable law shall be disregarded in determining the ownership of
a Subsidiary.
"Surviving Entity" shall have the meaning set forth in
Section 5.01.
"Suspension Event" means any event which makes any statement
made in the Notes Shelf Registration Statement or the related prospectus untrue
in any material respect or which requires the making of any changes in the Notes
Shelf Registration Statement or prospectus in order to make the statements
therein not misleading.
"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
ss.ss. 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.
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"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 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 Company's 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.
"Trigger Event" shall have the meaning set forth in
Section 11.04(g).
"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.
"U.S. Global Security" shall have the meaning set forth in
Section 2.01.
"U.S. person" has the meaning given to such term under
Regulation S.
"U.S. Physical Securities" shall have the meaning set forth
in Section 2.01.
"Voting Stock" means any class or classes of Capital Stock
pursuant to which the holders thereof have the general voting power (either
separately or together with any other class or classes of Capital Stock) under
ordinary circumstances to elect at least a majority of the board of directors,
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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).
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.
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ARTICLE TWO
THE SECURITIES
2.01. Form and Dating. The Securities and the Trustee's certificate of
authentication with respect thereto shall be substantially in the form annexed
hereto as Exhibit A. The Securities shall be in an aggregate principal amount no
greater than $67,500,000 (plus the aggregate principal amount of any Notes
issued pursuant to the Initial Purchaser's option (as such option may be
extended or otherwise amended from time to time) to purchase up to an additional
$7,500,000 aggregate principal amount of Securities). 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 Exhibit A 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.
Any Securities 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.
Any Securities 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 April 14, 1996
upon receipt by the Trustee and the Company of a duly executed certificate
substantially in the form of Exhibit B hereto, a single permanent global
Security in definitive, fully registered form, without interest coupons,
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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.
Any Securities originally purchased by or transferred to
Institutional Accredited Investors which are not QIBs or which are purchased by
or transferred to Institutional Accredited Investors which are QIBs, in the
event that the Securities cannot be offered and sold in reliance on Rule 144A
(collectively, "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 (assuming that the Securities can be offered and sold in reliance on Rule
144A) 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 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 Securities are transferred pursuant to an effective Notes Shelf 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
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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 (IF AVAILABLE), (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 A PRINCIPAL AMOUNT 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 THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR (INCLUDING AN INSTITUTIONAL ACCREDITED INVESTOR THAT IS A
QUALIFIED INSTITUTIONAL BUYER, IN THE EVENT THAT THE SECURITIES CANNOT BE
OFFERED AND SOLD IN RELIANCE ON RULE 144A), 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. THIS SECURITY MAY BE CONVERTED AT ANY TIME ON OR AFTER 9:00 A.M.
NEW YORK CITY TIME ON MARCH 5, 1997, AS SET FORTH IN SECTION 11.01 OF THE
INDENTURE, DATED AS OF MARCH 5, 1996, BETWEEN THE COMPANY AND THE BANK OF NEW
YORK, AS TRUSTEE.
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THE COMMON STOCK, PAR VALUE $.01, OF THE COMPANY (THE "COMMON STOCK") ISSUABLE
UPON THE CONVERSION OF THIS SECURITY (THE "SHARES") MAY NOT BE OFFERED OR SOLD
IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS. ACCORDINGLY, NO HOLDER SHALL BE ENTITLED TO CONVERT
SUCH HOLDER'S SECURITIES AT ANY TIME UNLESS, AT THE TIME OF CONVERSION, (I) A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING THE OFFER AND SALE OF
THE 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 SHARES TO THE HOLDER ARE EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT AND THE HOLDER, IF SO REQUESTED BY THE COMPANY, HAS DELIVERED TO
THE COMPANY AN OPINION OF COUNSEL TO SUCH EFFECT.
(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.
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.
The Trustee or an authenticating agent shall upon receipt of a
Company Order authenticate for original issue Securities in the aggregate
principal amount not to exceed $67,500,000 (subject to any increase as provided
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in Section 2.01 hereof). 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. 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 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 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
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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 for
purposes of Section 4.06 and Articles Three and Eight.
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
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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
toeach Holder's registered address as reflected in the Security Register.
2.06. Transfer and Exchange. The Securities are issuable only in
registered form. 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 of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested if its
requirements for such transactions are met. 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.
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2.07. Book-Entry Provisions for the Global Securities. (a) The Global
Securities (if any) 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.
(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
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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 Securities are
transferred pursuant to an effective Notes Shelf Registration Statement in
accordance with the Registration Rights Agreement, the following provisions
shall apply:
(a) Transfers to Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of
any proposed transfer of a Security to any Institutional Accredited
Investor that is not a QIB or that is a QIB in the event that the
Securities cannot be offered and sold in reliance on Rule 144A:
(i) The Registrar shall register the transfer of any
Security, whether or not such Security 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 Security was held by an Affiliate of the Company or
(y)(A) a certificate substantially in the form of Exhibit C
hereto, as applicable, and (B) if the principal amount of the
Securities 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.
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(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
Security to a QIB if the Securities are being offered and sold in
reliance on Rule 144A:
(i) If the Security 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 Security 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 Security stating, or
has otherwise advised the Company and the Registrar in
writing, that it is purchasing the 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
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 Security 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
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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 Security (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 D
hereto or (y) if the proposed transferee is a QIB relying on
the exemption from registration provided by Rule 144A (if
available) and the proposed transferor has checked the box
provided for on the form of Security 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 Security stating, or has otherwise advised
the Company and the Registrar in writing, that it is
purchasing the 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 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.
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(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
Security to a non-U.S. person:
(i) Prior to April 14, 1996, the Registrar shall
register any proposed transfer of a Security to a non-U.S.
person upon receipt of a certificate substantially in the form
of Exhibit D hereto from the proposed transferor.
(ii) On and after April 14, 1996, the Registrar shall
register any proposed transfer to any non-U.S. person if the
Security to be transferred is an interest in the U.S. Global
Security, upon receipt of a certificate substantially in the
form of Exhibit D 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 Securities not bearing the Private Placement Legend,
the Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of
Securities bearing the Private Placement Legend, the Registrar shall
deliver only Securities that bear the Private Placement Legend unless
either (i) the circumstances contemplated by the second sentence of 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
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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 Security bearing the Private
Placement Legend, each Holder of such a Security shall be deemed to
acknowledge the restrictions on transfer of such Security set forth in
this Indenture and in the Private Placement Legend and agrees that it
will transfer such Security only as provided in this Indenture. The
Registrar shall not register a transfer of any Security unless such
transfer complies with the restrictions on transfer of such Security
set forth in this Indenture. In connection with any transfer of
Securities, each Holder agrees by its acceptance of the Securities 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.
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,
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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. Securities shall cease
to be outstanding and interest thereon shall cease to accrue upon the conversion
thereof pursuant to Section 11.12 (including any deemed conversion of any
Securities not tendered pursuant to such conversion).
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
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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.
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, conversion or cancellation and shall dispose of
them in accordance with its normal procedure or the written instructions of the
Company; provided, however, that the Trustee shall not be required to destroy
such Securities.
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.
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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 ss. 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 ss. 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 ss. 316(c).
ARTICLE THREE
REDEMPTION OF SECURITIES
3.01. Notices to the Trustee. If the Company elects to redeem
Securities pursuant to Paragraph 3(a) 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 or any integral multiple thereof.
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If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed shall
be treated by the Trustee as outstanding for the purpose of such selection.
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) the conversion price, the date on which the right to
convert the Securities to be redeemed will terminate and the place or
places where such Securities may be surrendered for conversion;
(f) 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;
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(g) 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
(h) the paragraph of the Securities pursuant to which the
Securities are being redeemed.
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 if the Company gives such notice to the Holders, the
Company shall concurrently deliver to the Trustee an Officers' Certificate
stating that such notice has been given, together with a copy 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. No later than 10:30 a.m. New York
City time on 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 any Securities called for redemption
on that date which have been converted prior to the date of such deposit.
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.
If any Security called for redemption is converted, any money
deposited with the Paying Agent for the redemption of such Security shall
(subject to any right of the Holder of such Security or any Predecessor Security
to receive interest as provided in the third paragraph of the Security) be paid
to the Company upon a Company Order.
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
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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.
3.07. Conversion Arrangements on Call for Redemption. In
connection with any redemption of Securities, the Company may arrange
for the purchase and conversion of any Securities surrendered for
redemption by an agreement with one or more investment banking firms or
other purchasers to purchase such Securities by paying to the Holders
thereof, or to the Trustee or Paying Agent in trust for such Holders, no
later than 10:30 a.m. New York City time on the date fixed for
redemption, an amount not less than the redemption price, together with
interest accrued to the date fixed for redemption, payable by the
Company on redemption of such Securities. Notwithstanding anything to
the contrary contained in this Article Three, the obligation of the
Company to pay the redemption price of such Securities, together with
interest accrued to the date fixed for redemption, shall be satisfied
and discharged to the extent such amount is so paid by such purchasers,
and the only remaining right of the Holders of such Securities will be
to receive payment of the redemption price of such Securities, together
with interest accrued to the date fixed for redemption, upon surrender
to the Paying Agent of the Securities to be redeemed. Pursuant to such
an agreement, any Securities tendered by the Holder thereof for
redemption or not duly surrendered for conversion by such Holder shall
be deemed acquired by such purchasers from such Holders and surrendered
by such purchasers for conversion, all as of immediately prior to the
close of business on the date fixed for redemption, subject to payment
of the above amount as aforesaid.
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 by such time 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.
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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, for
presentation for payment or for conversion 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 12.02.
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 Corporate Trust
Office of the Trustee, The Bank of New York, located in the Borough of
Manhattan, City of New York, 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. 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
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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,
such compliance to be determined without regard to any period of grace or
requirement of notice provided herein.
(b) 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.
4.05. 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 ss. 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 quarterly reports and of the information,
documents and other 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 ss. 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.
4.06. 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
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outstanding at a purchase price equal to 101% of the principal amount thereof
plus accrued and unpaid interest to the Change of Control Purchase Date;
provided, however, that upon the occurrence of a Change of Control of the type
specified in clause (d) of the definition of Change of Control, the purchase
price shall be equal to 100% of the principal amount thereof plus accrued and
unpaid interest 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 4.06 and that all Securities validly tendered into the
Change of Control Offer and not withdrawn will be accepted for payment;
(b) the purchase price (including the amount of accrued
interest) 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;
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(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 4.05), 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.
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 4.06.
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4.07. 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.
4.08. Prohibition on Incurrence of Senior Subordinated Debt. The
Company shall not incur or suffer to exist any indebtedness that is senior in
right of payment to the Securities and subordinated in right of the payment to
any other indebtedness of the Company.
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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") (A) shall be a corporation organized and existing under the
laws of the United States of America, any state thereof or the District of
Columbia, (B) 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 (C)
shall have provided for conversion rights in accordance with Section 11.11; and
(b) immediately before and immediately after giving effect to such transaction
or series of transactions, no Default or Event of Default shall have occurred
and be continuing.
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.
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
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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.
ARTICLE SIX
REMEDIES
6.01. Events of Default. An "Event of Default" means any of the
following events:
(a) a default by the Company 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), whether
or not such payment is prohibited by the provisions of Article Ten; or
(b) a default by the Company 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, whether or
not such payment is prohibited by the provisions of Article Ten; or
(c) a failure of the Company to perform or observe any other
term, covenant or agreement contained in the Securities or this
Indenture (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 by the Company or any Subsidiary of
the Company 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
(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
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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.
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 principal 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 principal
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.
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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 hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, (ii) all overdue interest on all Securities,
(iii) the principal of and premium, if any, on any 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 principal 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, in its own name or as trustee of an express trust, 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 or this Indenture.
All rights of action and claims under this Indenture and the
Securities 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
6.02, 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.
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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 indemnity satisfactory to the Trustee in its sole discretion
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 or the
Securities unless:
(a) Holders of at least 25% in aggregate principal amount of
the outstanding Securities shall have made a written request to the
Trustee to institute such proceeding or pursue such remedy;
(b) such Holders have offered and, if requested, have provided
to the Trustee indemnity reasonably satisfactory to the Trustee against
any loss, liability or expense;
(c) the Trustee has failed 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 has not received a
direction which is inconsistent with the request from the Holders of a
majority in aggregate principal amount of the outstanding Securities;
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 convert such
Security, or to bring suit for the enforcement of any such payment on or after
the respective Stated Maturities, or the right to convert such Security, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
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6.08. Collection Suit by Trustee. If an Event of Default specified in
clause (a), (b) or (c) 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
principal 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,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
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 or otherwise. 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; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors' or other similar committee.
6.10. Priorities. If the Trustee collects any money pursuant to this
Article Six, it shall, subject to Article Ten, 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;
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Third: to Holders for amounts of principal (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 principal (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.
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 (other than the Trustee) 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 (other than the Trustee). 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
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(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
Sections 6.02, 6.04 or 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.
(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 ss. 315:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper person. The Trustee need not investigate any
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fact or matter stated in any such document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matter as it may see fit.
(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 12.04 and 12.05.
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 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
security or indemnity reasonably satisfactory to the Trustee against
the costs, expenses and liabilities which may be incurred therein or
thereby.
(g) for all purposes under this Indenture, the Trustee shall
not be deemed to have notice of any Event of Default unless a Trust
Officer of the Trustee has actual knowledge thereof or unless written
notice of any event which is in fact such a default is received by the
Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Securities and this Indenture.
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 ss.ss. 310(b) 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.
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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 unless such Default or Event of Default has been
cured; 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 the board of directors, the executive
committee or a trust committee of directors and/or Trust Officers in good faith
determines that the withholding of such notice is in the interest of the
Holders.
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 ss. 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 ss. 313(a).
The Trustee also shall comply with TIA ss.ss. 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 promptly 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.
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The Company shall indemnify the Trustee and its officers and
directors for, and hold it harmless against, any loss, liability or expense
incurred by it arising out of or in connection with the acceptance or
administration of this trust and its rights or duties hereunder, including the
costs and expenses, including reasonable attorneys' fees, of enforcing this
Indenture against the Company (including, without limitation, this Section 7.08)
and of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. 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. The Trustee's right to receive payment of any amounts due under this
Section 7.08 shall not be subordinate to any other liability or indebtedness of
the Company (even though the Securities may be so subordinated).
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 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 at any time 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 in writing and may appoint a successor trustee with the Company's
prior written consent. The Company may remove the Trustee if:
1. the Trustee ceases to be eligible under Section 7.11 and
shall fail to resign after written request therefor by the Company;
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
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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 such
delivery, (i) the retiring Trustee shall, subject to the lien provided in
Section 7.08, transfer all property held by it as Trustee to the successor
Trustee, (ii) the resignation or removal of the retiring Trustee shall become
effective, and (iii) 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 ceases to be eligible under 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 ss.ss.
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 ss. 310(b).
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7.12. Preferential Collection of Claims Against Company. If and when
the Trustee shall become a creditor of the Company (or any other obligor upon
the Securities), the Trustee shall be subject to the provisions of the TIA
regarding the collection of claims against the Company (or any such other
obligor).
ARTICLE EIGHT
SATISFACTION AND DISCHARGE
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 8.03) 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):
(A) have become due and payable, or
(B) will become due and payable at their Stated
Maturity within one year, or
(C) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the
Company, or
(D) are delivered to the Trustee for conversion in
accordance with Article Eleven, and 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, together
with irrevocable instructions from the Company directing the Trustee to
apply such funds to the payment thereof at maturity or redemption,
funds in an amount sufficient (in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee), without
consideration of reinvestment of interest, to pay and discharge the
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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 (in the case of
Securities which have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be;
(b) 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;
(c) the Company shall have paid all other sums payable by it
hereunder; and
(d) 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 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 4.01,
4.02, 7.08, 8.02, 8.03 and 8.04 and any surviving rights of conversion expressly
provided for herein, 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, 8.02, 8.03 and 8.04
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. Application of Trust Money. The Trustee shall hold in trust
money deposited with it pursuant to Section 8.01 and shall apply the deposited
money in accordance with this Indenture to the payment of principal of, premium,
if any, and interest on the Securities. All moneys deposited with the Trustee
pursuant to Section 8.01 for the payment of Securities subsequently converted
shall be returned to the Company upon a Company Order.
8.03. Repayment to Company. Subject to Sections 7.08 and 8.01, the
Trustee shall promptly pay to the Company, upon receipt by the Trustee of an
Officers' Certificate, any excess money held by it at any time, as determined by
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee. 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,
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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.
8.04. Reinstatement. If the Trustee or Paying Agent is unable to apply
any money 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 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 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
resolution of its Board of Directors, and the Trustee may amend, waive or
supplement this Indenture or the Securities 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 provision with respect to the conversion rights of
Holders pursuant to the requirements of Section 11.11; or
(f) 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.
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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 (f) 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 resolution of its Board of Directors, and the Trustee may
amend this Indenture or the Securities 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 or
the Securities.
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 or the Securities;
(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;
(f) reduce or change the rate or time for payment of interest
on any Security;
(g) adversely affect the right to convert any Security (but
not to make an adjustment to the conversion price) as provided in
Article Eleven (except as permitted by Section 9.01(e)); or
(h) modify the provisions of this Indenture with respect to
the subordination of the Securities in a manner adverse to the Holders.
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.
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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 ss. 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 (h) 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.
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
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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
SUBORDINATION OF SECURITIES
10.01. Securities Subordinated to Senior Indebtedness. The Company
covenants and agrees, and each Holder of a Security, by his, her or its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the indebtedness represented
by the Securities and the payment of the principal of and premium, if any, and
interest on each and all of the Securities, and the amount, if any, of the
repurchase price payable in respect of Securities pursuant to Section 4.06, are
hereby expressly made subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness.
10.02. Payment Over of Proceeds Upon Dissolution, Etc. In the event of
(a) any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding, relative to the
Company or to its creditors, as such, or to a substantial part of its assets, or
(b) any proceeding for the liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company, then and in any
such event the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Indebtedness, or provision shall be made for such payment in money or
money's worth, before the Holders of the Securities are entitled to receive any
payment or distribution of any kind or character, whether in cash, property or
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securities, on account of principal of or premium, if any, or interest on the
Securities, or the amount, if any, of the repurchase price payable in respect of
Securities pursuant to Section 4.06, and to that end the holders of Senior
Indebtedness shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, including any such payment or distribution which may be
payable or deliverable by reason of the payment of any other indebtedness of the
Company being subordinated to the payment of the Securities, which may be
payable or deliverable in respect of the Securities in any such case,
proceeding, dissolution, liquidation or other winding up, assignment for the
benefit of creditors or other marshalling of assets and liabilities of the
Company.
In the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, prohibited by the foregoing, including
any such payment or distribution which may be payable or deliverable by reason
of the payment of any other indebtedness of the Company being subordinated to
the payment of the Securities, before all Senior Indebtedness is paid in full or
payment thereof provided for, and if such fact shall, at or prior to the time of
such payment or distribution, have been made known to a Trust Officer of the
Trustee in writing or such Holder, as the case may be, then and in such event
such payment or distribution shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent
or other person making payment or distribution of assets of the Company for
application to the payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all Senior Indebtedness in full, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness.
For purposes of this Article only, the words "cash, property
or securities" shall not be deemed to include securities of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment which are subordinated
in right of payment to all Senior Indebtedness which may at the time be
outstanding to substantially the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
person or the liquidation or dissolution of the Company following the conveyance
or transfer of its properties and assets substantially as an entirety to another
person upon the terms and conditions set forth in Article Five shall not be
deemed a dissolution, winding up, liquidation, reorganization, assignment for
the benefit of creditors or marshalling of assets and liabilities of the Company
for the purposes of this Section if the person formed by such consolidation or
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into which the Company is merged or which acquires by conveyance or transfer
such properties and assets substantially as an entirety, as the case may be,
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions set forth in Article Five.
10.03. Prior Payment to Senior Indebtedness upon Acceleration of
Securities. In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of Senior Indebtedness
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Indebtedness before the Holders of the Securities are entitled to receive
any payment (including any payment which may be payable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment of
the Securities) by the Company on account of the principal of or premium, if
any, or interest on the Securities or on account of the purchase or other
acquisition of Securities.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Security prohibited
by the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to a Trust Officer of the
Trustee in writing, or such Holder, as the case may be, then and in such event
such payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment
with respect to which Section 10.02 would be applicable.
10.04. No Payment When Senior Indebtedness in Default.
(a) In the event (i) and during the continuation of any
default in the payment of principal of, premium, if any, or interest on
any Senior Indebtedness, whether at the date of a required payment,
maturity, upon mandatory prepayment redemption or otherwise, or (ii)
that any event of default with respect to any Senior Indebtedness shall
have occurred and be continuing and shall have resulted in such Senior
Indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable unless and
until such event of default shall have been cured or waived in writing
or shall have ceased to exist and such acceleration shall have been
rescinded or annulled, then no payment (including any payment which may
be payable by reason of the payment of any other indebtedness of the
Company being subordinated to the payment of the Securities) shall be
made by the Company on account of the principal of or premium, if any,
or interest on the Securities or on account of the purchase, redemption
or other acquisition of Securities.
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(b) In the event that, notwithstanding the foregoing, the
Company shall make any payment to the Trustee or the Holder of any
Security prohibited by the foregoing provisions of this Section, and if
such fact shall, at or prior to the time of such payment, have been
made known to a Trust Officer of the Trustee in writing or to such
Holder, as the case may be, then and in such event such payment shall
be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment
with respect to which Section 10.02 would be applicable.
10.05. Payment Permitted If No Default. Nothing contained in this
Article or elsewhere in this Indenture or in any of the Securities shall prevent
(a) the Company, at any time except during the pendency of any case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshalling of assets and liabilities of the Company referred
to in Section 10.02 or under the conditions described in Section 10.03 or 10.04,
from making payments at any time of principal of and premium, if any, or
interest on the Securities, or (b) the application by the Trustee of any money
deposited with it hereunder to the payment of or on account of the principal of
or premium, if any, or interest on the Securities or the retention of such
payment by the Holders, if, at the time of such application by the Trustee, it
did not have knowledge that such payment would have been prohibited by the
provisions of this Article.
10.06. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the prior payment in full of all amounts due on or in respect of
Senior Indebtedness, the Holders of the Securities shall be subrogated to the
extent of the payments or distributions made to the holders of such Senior
Indebtedness pursuant to the provisions of this Article (equally and ratably
with the holders of all indebtedness of the Company which by its express terms
is subordinated to other indebtedness of the Company to substantially the same
extent as the Securities are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of and premium, if any, and interest on
the Securities shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article, and no payments
over pursuant to the provisions of this Article to the holders of Senior
Indebtedness by Holders of the Securities or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Indebtedness and the Holders
of the Securities, be deemed to be a payment or distribution by the Company to
or on account of the Senior Indebtedness.
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10.07. Provisions Solely to Define Relative Rights. The provisions of
this Article are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities on the one hand and the holders
of Senior Indebtedness on the other hand. Nothing contained in this Article or
elsewhere in this Indenture or in the Securities is intended to or shall (a)
impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders of the Securities the
principal of and premium, if any, and interest on the Securities as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Holders of the Securities and
creditors of the Company other than the holders of Senior Indebtedness; or (c)
prevent the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article of the holders of Senior Indebtedness
to receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
10.08. Trustee to Effectuate Subordination. Each Holder of a Security
by his acceptance thereof authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes.
10.09. No Waiver of Subordination Provisions. No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other person.
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10.10. Notice to Trustee. The Company shall give prompt written notice
to the Trustee of any fact known to the Company which would prohibit the making
of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until a Trust Officer of the Trustee shall
have received written notice thereof from the Company or a holder of Senior
Indebtedness or from any trustee therefor; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Section 7.01, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if a Trust Officer of the Trustee shall not have received the notice
provided for in this Section at least three Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of and premium, if
any, or interest on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within three Business Days prior to such date.
Subject to the provisions of Section 7.01, the Trustee shall
be entitled to rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such person to
furnish evidence to the satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such person, the extent to which such person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such person under this Article, and if such evidence is not furnished,
the Trustee may defer any payment to such person pending judicial determination
as to the right of such person to receive such payment.
10.11. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in this
Article, the Trustee, subject to the provisions of Section 7.01, and the Holders
of the Securities shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or
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similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered in writing to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article.
10.12. Trustee Not Fiduciary for Holders of Senior Indebtedness. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders if it shall in good
faith mistakenly pay over or distribute to Holders of Securities or to the
Company or to any other person cash, property or securities to which holders of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
10.13. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.08.
10.14. Article Applicable to Paying Agents. In case at any time any
Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article shall in
such case (unless the context otherwise requires) be construed as extending to
and including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article in addition to or in
place of the Trustee; provided, however, that Section 10.13 shall not apply to
the Company or any Affiliate of the Company if it or such Affiliate acts as
Paying Agent.
10.15. Certain Conversions Deemed Payment. For the purposes of this
Article only, (a) the issuance and delivery of junior securities upon conversion
of Securities in accordance with Article Eleven shall not be deemed to
constitute a payment or distribution on account of the principal of or premium,
if any, or interest on Securities or on account of the purchase or other
acquisition of Securities, and (b) the payment, issuance or delivery of cash,
property or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of the principal of
such Security. For the purposes of this Section, the term "junior securities"
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means (i) shares of any class of Capital Stock of the Company and (ii)
securities of the Company which are subordinated in right of payment to all
Senior Indebtedness which may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the right,
which is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article Eleven.
ARTICLE ELEVEN
CONVERSION OF SECURITIES
11.01. Conversion Privilege and Conversion Price. Subject to and upon
compliance with the provisions of this Article, at the option of the Holder
thereof, any Security or any portion of the principal amount thereof which
equals $1,000 or any integral multiple thereof may be converted at any time on
or after 9:00 a.m. New York City time on March 5, 1997 at the principal amount
thereof, or of such portion thereof, into fully paid and nonassessable shares
(calculated as to each conversion to the nearest 1/100 of a share) of Common
Stock, at the conversion price, determined as hereinafter provided, in effect at
the time of conversion. Such conversion right shall expire at the close of
business on the Business Day next preceding the Stated Maturity of principal. In
case a Security or portion thereof is called for redemption, such conversion
right in respect of the Security or portion so called shall expire at the close
of business on the Business Day next preceding the Redemption Date, unless the
Company defaults in making the payment due upon redemption.
The price at which shares of Common Stock of the Company shall
be delivered upon conversion (herein called the "conversion price") shall be
equal to the lower of (i) $9.50 per share of such Common Stock and (ii) the
weighted average price per share of Common Stock for the ten Trading Day period
immediately following the 90th day after the Issue Date, as calculated by
Bloomberg Financial Markets through its "Volume at Price" function; provided,
however, that in no event shall the conversion price be less than $8.25 per
share of such Common Stock (subject to the next sentence hereof). From and after
the date hereof, the conversion price (including the conversion prices set forth
in the first sentence of this paragraph) shall be adjusted in certain instances
as provided in paragraphs (a), (b), (c), (d), (e), (f), (i) and (j) of Section
11.04. Upon the occurrence of any event of a type contemplated by Section 11.04
or otherwise, the "Volume at Price" contemplated by the first sentence of this
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paragraph shall be adjusted in a manner consistent with Section 11.04(i)(i)
hereof. Within five Business Days after the determination of the initial
conversion price (as provided for in the first sentence of this paragraph), the
Company shall mail to each Holder and to the Trustee a notice setting forth such
initial conversion price.
Notwithstanding anything to the contrary contained herein, no Holder
shall be entitled to convert any of its Securities into Common Stock to the
extent that any such conversion would constitute a violation of any applicable
securities laws of the United States or any other applicable jurisdiction. Any
certificates evidencing shares of Common Stock issued upon the conversion of
Securities shall bear such legends, including legends reflecting restrictions on
transfer required in order to maintain compliance with the provisions of the
Securities Act, as the Company shall deem to be necessary or appropriate.
11.02. Exercise of Conversion Privilege. In order to exercise the
conversion privilege, the Holder of any Security shall surrender such Security,
duly endorsed or assigned to the Company or in blank, at any office or agency of
the Company maintained pursuant to Section 4.02, accompanied by written notice
to the Company in the form provided in the Security (or such other notice as is
acceptable to the Company) at such office or agency that the Holder elects to
convert such Security or, if less than the entire principal amount thereof is to
be converted, the portion thereof to be converted. In the case of any Security
which is surrendered for conversion during the period from the close of business
on any regular record date through and including the next succeeding Interest
Payment Date (other than any Security whose Maturity Date is prior to such
Interest Payment Date), interest whose Stated Maturity is on such Interest
Payment Date shall be payable on such Interest Payment Date notwithstanding such
conversion, and such interest (whether or not punctually paid or duly provided
for) shall be paid to the person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on such regular
record date; provided, however, that Securities so surrendered for conversion
shall (except in the case of Securities or portions thereof which have been
called for redemption on a Redemption Date within such period) be accompanied by
payment in New York Clearing House funds or other funds acceptable to the
Company of an amount equal to the interest payable on such Interest Payment Date
on the principal amount being surrendered for conversion. Except as provided in
the immediately preceding sentence, in the case of any Security which is
converted (a) interest whose Stated Maturity is after the date of conversion of
such Security shall not be payable and (b) no payment or adjustment shall be
made upon conversion on account of any dividends on the Common Stock issued upon
conversion.
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Securities shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of
such Securities for conversion in accordance with the foregoing provisions, and
at such time the rights of the Holders of such Securities as Holders shall
cease, and the person or persons entitled to receive the Common Stock issuable
upon conversion shall be treated for all purposes as the record holder or
holders of such Common Stock as and after such time. As promptly as practicable
on or after the conversion date, the Company shall issue and shall deliver at
any office or agency of the Company maintained pursuant to Section 4.02 a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, together with payment in lieu of any fraction of a
share, as provided in Section 11.03.
In the case of any Security which is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company, a
new Security or Securities of authorized denominations in aggregate principal
amount equal to the unconverted portion of the principal amount of such
Security.
11.03. Fractions of Shares. No fractional share of Common Stock shall
be issued upon conversion of Securities. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities (or specified portions
thereof) so surrendered. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fractional share in an amount equal to such fraction multiplied by the
Closing Price at the close of business on the day of conversion (or, if such day
is not a Trading Day, on the Trading Day immediately preceding such day).
11.04. Adjustment of Conversion Price.
(a) In case the Company shall make a dividend or other
distribution on the Common Stock exclusively in Common Stock (other
than a distribution referred to in paragraph (c) of this Section), the
conversion price in effect at the opening of business on the day
following the date fixed for the determination of shareholders entitled
to receive such dividend or other distribution shall be reduced by
multiplying such conversion price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
reduction to become effective immediately after the opening of business
on the day following the date fixed for such determination. In case the
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Company shall make a dividend or other distribution on the Common Stock
in shares of its Capital Stock other than Common Stock, and such
dividend or distribution would not otherwise require reduction of the
conversion price pursuant to paragraph (d), then the conversion price
and the number and kind of shares of Capital Stock of the Company
issuable upon the conversion of a Security (as in effect immediately
prior to such dividend or distribution) shall be proportionately
adjusted so that the Holder of any Security thereafter converted may
receive the aggregate number and kind of shares of Capital Stock of the
Company that such Holder would have owned immediately following such
dividend or distribution if such Security had been converted
immediately prior thereto. For the purpose of this paragraph (a), the
number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company shall not pay any
dividend or make any distribution on shares of Common Stock held in the
treaury of the Company.
(b) Subject to the last sentence of paragraph (g) of this
Section, in case the Company shall make a dividend or other
distribution on the Common Stock consisting exclusively of, or shall
otherwise issue to all holders of the Common Stock, rights, options or
warrants entitling the holders thereof to subscribe for or purchase
shares of Common Stock or securities convertible into or exchangeable
for shares of Common Stock at a price per share (determined on an
as-converted or as-exercised basis if the rights, options or warrants
pertain to securities convertible into or exchangeable for Common
Stock) less than the Current Market Price (determined as provided in
paragraph (h) of this Section) on the date fixed for the determination
of shareholders entitled to receive such rights, options or warrants,
the conversion price in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate of the offering price
(including the minimum consideration payable upon conversion or
exchange of securities convertible into or exchangeable for Common
Stock) of the total number of shares of Common Stock so offered for
subscription or purchase would purchase at such Current Market Price
and the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective
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immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this paragraph (b),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company shall not issue any
rights, options or warrants in respect of shares of Common Stock held
in the treasury of the Company.
(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
conversion price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately reduced, and, conversely, in case outstanding shares
of Common Stock shall be combined into a smaller number of shares of
Common Stock, the conversion price in effect at the opening of business
on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which subdivision
or combination becomes effective.
(d) (i) Subject to the last sentence of this paragraph (d)(i)
and the last sentence of paragraph (g) of this Section, in case the
Company shall, by dividend or otherwise, distribute to all holders of
the Common Stock evidences of its indebtedness, shares of any class of
its Capital Stock, cash or other assets (including securities, but
excluding any rights, options or warrants referred to in paragraph (b)
of this Section, excluding any dividend or distribution paid
exclusively in cash out of consolidated current or retained earnings as
shown on the books of the Company prepared in accordance with GAAP
(other than any Extraordinary Cash Dividend (as hereinafter defined))
and excluding any dividend or distribution referred to in paragraph (a)
or (c) of this Section), the conversion price shall be reduced by
multiplying the conversion price in effect immediately prior to the
close of business on the date fixed for the determination of
shareholders entitled to such distribution by a fraction of which the
numerator shall be the Current Market Price (determined as provided in
paragraph (h) of this Section) on such date less the fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors) on
such date of the portion of the evidences of indebtedness, shares of
Capital Stock, cash and other assets to be distributed applicable to
one share of Common Stock and the denominator shall be such Current
Market Price, such reduction to become effective immediately prior to
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the opening of business on the day following such date. If the Board of
Directors determines the fair market value of any distribution for
purposes of this paragraph (d)(i) by reference to the actual or
when-issued trading market for any securities comprising part or all of
such distribution, it must in doing so consider the prices in such
market over the same period used in computing the Current Market Price
pursuant to paragraph (h) of this Section, to the extent possible. For
purposes of this paragraph (d)(i), an "Extraordinary Cash Dividend"
shall be that portion, if any, of the aggregate amount of all cash
dividends paid in any fiscal year which exceed $25,000,000. For
purposes of this paragraph (d)(i), any dividend or distribution that
includes shares of Common Stock, rights, options or warrants to
subscribe for or purchase shares of Common Stock or securities
convertible into or exchangeable for shares of Common Stock shall be
deemed to be (x) a dividend or distribution of the evidences of
indebtedness, cash, assets or shares of Capital Stock other than such
shares of Common Stock, such rights, options or warrants or such
convertible or exchangeable securities (making any conversion price
reduction required by this paragraph (d)(i)) immediately followed by
(y) in the case of such shares of Common Stock or such rights, options
or warrants, a dividend or distribution thereof (making any further
conversion price reduction required by paragraph (a) and (b) of this
Section, except any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business
on the date fixed for such determination" within the meaning of
paragraph (a) of this Section), or (z) in the case of such convertible
or exchangeable securities, a dividend or distribution of the number of
shares of Common Stock as would then be issuable upon the conversion or
exchange thereof, whether or not the conversion or exchange of such
securities is subject to any conditions (making any further conversion
price reduction required by paragraph (a) of this Section, except the
shares deemed to constitute such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of paragraph (a) of this Section).
(ii) In case the Company shall issue shares of Common Stock
for a consideration per share less than the Current Market Price
(determined as provided in paragraph (h) of this Section), the
conversion price shall be reduced by multiplying the conversion price
in effect immediately prior to the close of business on the date on
which the Company fixes the offering price of such additional shares by
a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
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such determination plus a fraction equal to the aggregate consideration
received by the Company from the issuance of such additional shares of
Common Stock over the Current Market Price on the date on which the
Company fixes the offering price of such additional shares (determined
as provided in paragraph (h) of this Section), and the denominator of
which shall be the number of shares of Common Stock outstanding
immediately after giving effect to such issuance. The reduction in the
conversion price provided for in the preceding sentence shall not apply
to (i) securities issued in transactions described in paragraphs (a),
(b), (c), (d)(i), (d)(iii) or (f) of this Section or pursuant to the
conversion or exchange of any such securities (to the extent
applicable); (ii) the conversion or exchange of securities (including
options) convertible or exchangeable for Common Stock outstanding on
the date of this Indenture, or issuable pursuant to binding agreements
in effect on the date of this Indenture; (iii) 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 Indenture shall not exceed 1% of the Common Stock
outstanding at the time of issuance); (iv) Common Stock issued to
shareholders of any person that merges into the Company in proportion
to their stock holdings of such person immediately prior to such
merger, upon such merger; (v) Common Stock issued in a bona fide
underwritten public offering; (vi) Common Stock issued in a bona fide
private placement through a placement agent that is a member firm of
the National Association of Securities Dealers, Inc. (except to the
extent that any discount from the Current Market Price (determined as
provided in paragraph (h) of this Section) attributable to restrictions
on transferability of the Common Stock, as determined in good faith by
the Board of Directors and described in a resolution thereof which
shall be filed with the Trustee, shall exceed 20%), or issuable
pursuant to a binding agreement in effect on the date of this
Indenture; or (vii) Common Stock issued as a dividend on any securities
outstanding on the date of this Indenture required to be made pursuant
to the certificate of designation pertaining to such securities in
effect at the time such securities were issued.
(iii) In case the Company shall issue any securities
convertible into or exchangeable for Common Stock for a consideration
per share (including the minimum consideration per share payable upon
conversion or exchange of any securities convertible into or
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exchangeable for Common Stock) of Common Stock initially deliverable
upon conversion or exchange of such securities less than the Current
Market Price (determined as provided in paragraph (h) of this Section),
the conversion price shall be reduced by multiplying the conversion
price in effect immediately prior to the close of business on the date
on which the Company fixes the offering price of such additional shares
by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such
securities plus a fraction equal to the aggregate consideration
received for the issuance of such securities (including the minimum
consideration per share payable upon conversion or exchange of any
securities convertible into or exchangeable for Common Stock) over the
Current Market Price on the date on which the Company fixes the
offering price of such additional shares (determined as provided in
paragraph (h) of this Section), and the denominator of which shall be
the number of shares outstanding immediately prior to the issuance of
such securities plus the maximum number of shares deliverable upon
conversion of or in exchange for such securities at the initial
conversion or exchange rate. The reduction in the conversion price
provided for in the preceding sentence shall not apply to (i)
securities issued in transactions described in paragraphs (a), (b) or
(d)(i) of this Section; (ii) convertible securities issued to
shareholders of any person that 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; (iii)
convertible securities issued in a bona fide underwritten public
offering; (iv) convertible securities issued in a bona fide private
placement through a placement agent that is a member firm of the
National Association of Securities Dealers, Inc. (except to the extent
that any discount from the Current Market Price (determined as provided
in paragraph (h) of this Section) 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 resolution
thereof which shall be filed with the Trustee, shall exceed 20% of the
then Current Market Price, or issuable pursuant to a binding agreement
in effect on the date of this Indenture; or (iv) stock options issued
to the Company's directors, officers or employees.
(e) In case the Company shall, by dividend or otherwise, at
any time distribute to all holders of the Common Stock cash (excluding
any cash that is distributed as part of a distribution referred to in
paragraph (d)(i) of this Section or in connection with a transaction to
which Section 11.11 applies) in an aggregate amount that, together with
(i) the aggregate amount of any other distributions to all holders of
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the Common Stock made exclusively in cash within the 12 months
preceding the date fixed for the determination of shareholders entitled
to such distribution and in respect of which no conversion price
adjustment pursuant to paragraph (d)(i) or this paragraph (e) has been
made previously and (ii) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors) as of such date of determination of consideration payable in
respect of any tender offer by the Company or a Subsidiary for all or
any portion of the Common Stock, and any purchase by the Company of
shares of Common Stock in the open market, consummated within the 12
months preceding such date of determination and in respect of which no
conversion price adjustment pursuant to paragraph (f) of this Section
has been made previously, exceeds 12.5% of the product of the Current
Market Price (determined as provided in paragraph (h) of this Section)
on such date of determination times the number of shares of Common
Stock outstanding on such date, the conversion price shall be reduced
by multiplying the conversion price in effect immediately prior to the
close of business on such date of determination by a fraction of which
the numerator shall be the Current Market Price (determined as provided
in paragraph (h) of this Section) on such date less the amount of cash
to be distributed at such time applicable to one share of Common Stock
and the denominator shall be such Current Market Price, such reduction
to become effective immediately prior to the opening of business on the
day after such date.
(f) In case a tender or exchange offer made by the Company or
any Subsidiary for all or any portion of the Common Stock shall be
consummated, or in case the Company shall purchase shares of Common
Stock in the open market, the conversion price shall be reduced by
multiplying the conversion price in effect immediately prior to the
Expiration Time by a fraction of which the numerator shall be (x) the
product of the Current Market Price (determined as provided in
paragraph (h) of this Section) times the number of shares of Common
Stock outstanding (including any tendered or exchanged shares) at the
Expiration Time and the denominator shall be the sum of (A) the fair
market value (determined as aforesaid) of the aggregate consideration
payable to shareholders upon consummation of such tender or exchange
offer, or upon such purchase, and (B) the product of such Current
Market Price times such number of outstanding shares at the Expiration
Time minus the number of shares accepted for payment in such tender or
exchange offer, or so purchased (the "Purchased Shares"). For the
purpose of this paragraph, "Expiration Time" means either the last time
that tenders may be made pursuant to a tender offer or exchanges may
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be made pursuant to an exchange offer, or the time of an agreement to
purchase shares in the open market, as the case may be. Any reduction
in the conversion price pursuant to this paragraph shall be made
immediately following the close of business on the last Trading Day
used to compute Current Market Price; provided, that, such reduction
shall be deemed to have become effective immediately prior to the
opening of business on the day following the Expiration Time. To the
extent that a Holder converts Securities prior to the conclusion of the
period for which Current Market Price is to be calculated, any
adjustment in the number of shares of Common Stock issuable upon
exercise of such Security shall inure to the benefit of the holder of
record of such Security at the close of business on the first Trading
Day following the Expiration Time.
(g) The reclassification of Common Stock into securities which
include securities other than Common Stock (other than any
reclassification upon a consolidation or merger to which Section 11.11
applies) shall be deemed to involve (i) a distribution of such
securities other than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be deemed to be "the
date fixed for the determination of shareholders entitled to such
distribution" within the meaning of paragraph (d)(i) of this Section),
and (ii) a subdivision or combination, as the case may be, of the
number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification
shall be deemed to be "the day upon which such subdivision becomes
effective" or "the day upon which such combination becomes effective,"
as the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of paragraph (c) of
this Section). Rights, options or warrants issued by the Company to all
holders of the Common Stock entitling the holders thereof to subscribe
for or purchase shares of Common Stock (either initially or under
certain circumstances), which rights, options or warrants (i) are
deemed to be transferred with such shares of Common Stock, (ii) are not
exercisable and (iii) are also issued in respect of future issuances of
Common Stock, in each case in clauses (i) through (iii) until or upon
the occurrence of a specified event or events ("Trigger Event"), shall
for purposes of this Section 11.04 not be deemed issued until the
occurrence of the earliest Trigger Event.
(h) For the purpose of any computation under this paragraph
and paragraphs (b), (d) and (e) of this Section, the current market
price per share of Common Stock (the "Current Market Price") on any
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date shall be deemed to be the average of the daily Closing Prices for
the 30 consecutive Trading Days commencing 45 Trading Days before the
date in question. For the purpose of any computation under paragraph
(f) of this Section, the Current Market Price on any date shall be
deemed to be the average of the daily Closing Prices for the 5
consecutive Trading Days commencing on the first Trading Day
immediately following the Expiration Time. Notwithstanding anything to
the contrary contained in this paragraph, (i) if the "ex" date for any
event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion price
pursuant to paragraph (a), (b), (c), (d) or (e) above occurs on or
after the 15th Trading Day prior to the date in question and prior to
the "ex" date for the issuance or distribution requiring such
computation, the Closing Price for each Trading Day prior to the "ex"
date for such other event shall be adjusted by multiplying such Closing
Price by the same fraction by which the conversion price is so required
to be adjusted as a result of such other event, (ii) if the "ex" date
for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion price
pursuant to paragraph (a), (b), (c), (d), (e) or (f) above occurs on or
after the "ex" date for the issuance or distribution requiring such
computation and on or prior to the date in question, the Closing Price
for each Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the reciprocal
of the fraction by which the conversion price is so required to be
adjusted as a result of such other event, and (iii) if the "ex" date
for the issuance or distribution requiring such computation is on or
prior to th date in question, after taking into account any adjustment
required pursuant to clause (ii) of this proviso, the Closing Price for
each Trading Day on or after such "ex" date shall be adjusted by adding
thereto the amount of any cash and the fair market value on the date in
question (as determined by the Board of Directors in a manner
consistent with any determination of such value for purposes of
paragraph (d) or (e) of this Section, whose determination shall be
conclusive and described in a resolution of the Board of Directors) of
the evidences of indebtedness, shares of Capital Stock or assets being
distributed applicable to one share of Common Stock as of the close of
business on the day before such "ex" date.
(i) (i) If any event shall occur as to which the other provisions
of this Section 11.04 are not strictly applicable but the failure to
make any adjustment would have the effect of depriving Holders of the
benefit of all or a portion of the conversion rights in respect of any
Security in accordance with the essential intent and principles of this
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Section 11.04, 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 this Section 11.04 necessary to preserve,
without dilution, such conversion rights. Upon receipt of such opinion,
the Company will promptly mail a copy thereof to the Holders and shall
make the adjustments described therein. As used herein, 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.
(ii) 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 Securities, 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 Holders thereof 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 conversion
of the Securities from time to time outstanding and (ii) will not take
any action which results in any adjustment of the conversion price if
the total number of shares of Common Stock issuable after the action
upon the conversion of all of the Securities 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.
(j) The Company may, but shall not be obligated to, make such
reductions in the conversion price, in addition to those required by
paragraphs (a), (b), (c), (d), (e), (f) and (g) of this Section, as it
considers to be advisable in order that any event treated for federal
income tax purposes as a dividend of stock or stock rights shall not be
taxable to the recipients or, if that is not possible, to diminish any
income taxes that are otherwise payable because of such event.
(k) No adjustment in the conversion price shall be required
unless such adjustment (plus any other adjustments not previously made
by reason of this paragraph (k)) would require an increase or decrease
of at least 1% in the conversion price; provided, however, that any
adjustments which by reason of this paragraph (k) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment.
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(l) Notwithstanding any other provision of this Section 11.04,
no adjustment to the conversion price shall reduce the conversion price
below the then par value per share of the Common Stock, and any such
purported adjustment shall instead reduce the conversion price to such
par value. The Company hereby covenants not to take any action to
increase the par value per share of the Common Stock.
(m) In any case in which this Section 11.04 shall require that
an adjustment in the conversion 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 Security exercised after such record date the shares of
Common Stock and other Capital Stock of the Company, if any, issuable
upon such exercise over and above the shares of Common Stock and other
Capital Stock of the Company, if any, issuable upon such exercise on
the basis of the conversion price prior to such adjustment and (ii)
paying to such Holder any amount in cash in lieu of a fractional share
pursuant to Section 11.03 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 shares of
Common Stock, other Capital Stock and cash upon the occurrence of the
event requiring such adjustment.
(n) When No Adjustment Required.
(i) No adjustment need be made for a transaction
referred to in subsections (a), (b), (c), (d), (e) or (f) of this
Section 11.04 if 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 of the Company participate in the transaction.
(ii) No adjustment need be made for (x) a
transaction referred to in subsections (b), (d)(ii) or (d)(iii) of this
Section 11.04 if the below market portion of such issuances, taken
together with the below market portion of all other below market
issuances and with the above market portion of all above market tender
or exchange offers described in clause (y) of this paragraph made on
and after the date of this Indenture, 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 (y) a
transaction referred to in subsection (f) of this Section 11.04 if the
above market portion of such tender or exchange offers, taken together
with the above market portion of all other above market tender or
exchange offers and with the below market portion of all below market
issuances described in clause (x) of this paragraph made on or after
the date of this Indenture, 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).
(iii) 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.
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11.05. Notice of Adjustments of Conversion Price. Whenever the
conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price in
accordance with Section 11.04 and shall prepare a certificate signed by
the Treasurer or Chief Financial Officer of the Company setting forth
the adjusted conversion price and showing in reasonable detail the
facts upon which such adjustment is based, and such certificate shall
forthwith be filed (with a copy to the Trustee) at each office or
agency maintained for the purpose of conversion of Securities pursuant
to Section 4.02; and
(b) a notice stating that the conversion price has been
adjusted and setting forth the adjusted conversion price shall
forthwith be prepared, and as soon as practicable after it is prepared,
such notice shall be furnished by the Company to the
Trustee and mailed by the Company at its expense to all Holders at
their last addresses as they shall appear in the Security Register.
11.06. Notice of Certain Corporate Action. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable (i) otherwise than
exclusively in cash or (ii) exclusively in cash in an amount that would
require a conversion price adjustment pursuant to paragraph (e) of
Section 11.04; or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights, options or warrants to subscribe for or
purchase any shares of Capital Stock of any class or of any other
rights (excluding shares of Capital Stock or options for Capital Stock
issued pursuant to a benefit plan for employees, officers or directors
of the Company); or
(c) of any reclassification of the Common Stock (other than a
subdivision or combination of the outstanding shares of Common Stock),
or of any consolidation, merger or share exchange to which the Company
is a party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(e) the Company or any Subsidiary of the Company shall
commence a tender or exchange offer (other than an exchange offer
contemplated by clause (c) above) for all or a portion of the
outstanding shares of Common Stock (or shall amend any such tender or
exchange offer to change the maximum number of shares being sought or
the amount or type of consideration being offered (including by
exchange) therefor);
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then the Company shall cause to be filed at each office or agency maintained
pursuant to Section 4.02, and shall cause to be mailed to all Holders at their
last addresses as they shall appear in the Security Register, at least 21 days
(or 11 days in any case specified in clause (a), (b) or (e) above) prior to the
applicable record, effective or expiration date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or granting of rights, options or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record who will be entitled to such dividend, distribution, rights, options or
warrants are to be determined, (y) the date on which such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, share exchange, sale,
transfer, dissolution, liquidation or winding up, or (z) the date on which such
tender or exchange offer (other than an exchange offer contemplated by clause
(y) above) commenced, the date on which such tender or exchange offer is
scheduled to expire unless extended, the consideration offered and the other
material terms thereof (or the material terms of any amendment thereto). Neither
the failure to give any such notice nor any defect therein shall affect the
legality or validity of any action described in clauses (a) through (e) of this
Section 11.06.
11.07. Company to Reserve Common Stock. The Company shall at all times
reserve and keep available, free from preemptive rights, out of the authorized
but unissued Common Stock or out of the Common Stock held in treasury, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock then issuable upon the conversion of all outstanding Securities.
11.08. Taxes on Conversions. The Company will pay any and all original
issuance, transfer, stamp and other similar taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Security or Securities to be converted, and no such issue or delivery shall
be made unless and until the person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.
11.09. Covenant as to Common Stock. (a) The Company covenants that
all shares of Common Stock which may be issued upon conversion of Securities
will upon issue be validly issued, fully paid and nonassessable.
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(b) The Company shall from time to time take all action
necessary so that the shares of Common Stock which may be issued upon conversion
of Securities, immediately upon their issuance (or, if such shares of Common
Stock are subject to restrictions on transfer under the Securities Act, upon
their resale pursuant to an effective Conversion Shares Shelf Registration
Statement), 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.
11.10. Cancellation of Converted Securities. All Securities delivered
for conversion shall be delivered to the Trustee to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in Section
2.12.
11.11. Provisions as to Consolidation, Merger or Sale of Assets. In
case of any consolidation of the Company with, or merger of the Company into,
any other person, any merger of another person into the Company (other than a
merger which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock) or any sale or transfer of
all or substantially all of the assets of the Company, the person formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall have
the right thereafter, during the period such Security shall be convertible as
specified in Section 11.01, to convert such Security only into the kind and
amount of securities, cash and other property, if any, receivable upon such
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock into which such Security might have been converted immediately
prior to such consolidation, merger, sale or transfer, assuming such holder of
Common Stock (i) is not a person with which the Company consolidated or into
which the Company merged or which merged into the Company or to which such sale
or transfer was made, as the case may be (a "Constituent Person"), or an
Affiliate of a Constituent Person and (ii) failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer (provided
that if the kind or amount of securities, cash and other property receivable
upon such consolidation, merger, sale or transfer is not the same for each share
of Common Stock held immediately prior to such consolidation, merger, sale or
transfer by other than a Constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been exercised
("nonelecting share"), then for the purpose of this Section the kind and amount
of securities, cash and other poperty receivable upon such consolidation,
merger, sale or transfer by each nonelecting share shall be deemed to be the
kind and amount so receivable per share by a plurality of the nonelecting
shares). Such supplemental indenture shall provide for adjustments which, for
events subsequent to the effective date of such supplemental indenture, shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article. The above provisions of this Section shall similarly apply to
successive consolidations, mergers, sales or transfers.
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11.12. Mandatory Conversion. From and after September 1, 1997, the
Company may, in its sole discretion, require the conversion of all, but not less
than all, of the then outstanding Securities following a Mandatory Conversion
Calculation Period. "Mandatory Conversion Calculation Period" shall be any
period during which (i) for twenty of the thirty immediately preceding Trading
Days, the Closing Price of the Common Stock equaled or exceeded 160% of the
conversion price and (ii) for the five immediately preceding Trading Days, the
Closing Price of the Common Stock equaled or exceeded 160% of the conversion
price. On the Business Day immediately following the conclusion of a Mandatory
Conversion Calculation Period in respect of which the Company determines to
convert the Securities pursuant to this Section 11.12, the Company shall cause
to be filed at each office or agency maintained pursuant to Section 4.02 and
shall cause to be mailed to all Holders at their last addresses as they shall
appear in the Security Register a notice notifying such Holders that the Company
has exercised its conversion right pursuant to this Section 11.12. Such notice
shall set forth the date fixed for such conversion, which shall be a date not
less than five nor more than ten Business Days following the conclusion of such
Mandatory Conversion Calculation Period, the applicable conversion price and the
procedures applicable to such conversion (as may reasonably be determined by the
Company and the Trustee).
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<PAGE>
ARTICLE TWELVE
MISCELLANEOUS
12.01. 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.
12.02. 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:
The Bank of New York
101 Barclay Street
21-W
New York, NY 10286
Attention: Corporate Trust 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 ss. 310(b), TIA
ss. 313(c), TIA ss. 314(a) and TIA ss. 315(b), shall be mailed by first class
mail to such Holder at the address of such Holder as it appears on the
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<PAGE>
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.
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.
12.03. Communication by Holders with Other Holders. Holders may
communicate pursuant to TIA ss. 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 ss. 312(c).
12.04. 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.
12.05. 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 and the definitions
herein relating thereto;
(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.
12.06. 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.
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<PAGE>
12.07. 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.
12.08. 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.
12.09. 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.
12.10. 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.
12.11. 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.
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<PAGE>
12.12. 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.
12.13. 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.
12.14. Benefits of Indenture. Except as provided in Article Ten with
respect to the holders of Senior Indebtedness, 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.
-88-
<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: /s/ Andrew Siegel By: /s/ Michael McCoy
-------------------- ------------------------
Name: Michael McCoy
Title: Chief Financial Officer
(SEAL)
THE BANK OF NEW YORK, as Trustee
Attest: By: /s/ Mary Jane Morrissey
--------------------------------
Name: Mary Jnae Morrissey
Title: Vice President
(SEAL)
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<PAGE>
EXHIBIT A
GEOTEK COMMUNICATIONS, INC.
12% SENIOR SUBORDINATED CONVERTIBLE NOTE DUE 2001
No. [ ] $[ ]
CUSIP [ ]
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 [ ] on February 15, 2001, 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 March 5, 1996 at the rate of 12% per annum (subject
to adjustment, as provided on the reverse hereof) and will be payable on
February 15 and August 15, in each year, 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 March 5, 1996, 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.
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 February 1 or August 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.
In the case of any Security which is converted after any
regular record date and on or prior to the next succeeding Interest Payment Date
(other than any Security whose Maturity Date is prior to such Interest Payment
Date), interest whose Stated Maturity is on such Interest Payment Date shall be
<PAGE>
payable on such Interest Payment Date notwithstanding such conversion, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the person in whose name that Security (or one or more Predecessor Securities)
is registered at the close of business on such regular record date; provided,
however, that Securities so surrendered for conversion shall (except in the case
of Securities or portions thereof which have been called for redemption on a
Redemption Date within such period) be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Company of an amount equal
to the interest payable on such Interest Payment Date on the principal amount
being surrendered for conversion. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security which is converted,
interest whose Stated Maturity is after the date of conversion of such Security
shall not be payable.
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--2-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
GEOTEK COMMUNICATIONS, INC.
By:
Name:
Title:
Attest: [SEAL]
Authorized Signature
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the
within-mentioned Indenture.
Date: THE BANK OF NEW YORK
-------------------------
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 12% Senior Subordinated
Convertible Notes due 2001, limited in aggregate principal amount to $75,000,000
(as contemplated by Section 2.01 of the Indenture), which may be issued under an
indenture (herein called the "Indenture") dated as of March 5, 1996, between
Geotek Communications, Inc., a Delaware corporation, as issuer (the "Company"),
and The Bank of New York, 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 or to convert this Security as provided in
the Indenture.
2. Additional Interest.
(a) if the Notes Shelf 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 Securities 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 the Notes Shelf 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
Securities 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 the Notes 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 for a period of more than 90 days, in each case under this
clause (c) prior to the first date on which any of the Securities cease to
A--4-
<PAGE>
constitute Registrable Securities, then Additional Interest shall accrue on the
Securities at a rate of 0.50% per annum for the first 60 days immediately
following the day such Notes Shelf Registration Statement ceases to be effective
or a Suspension Event has lasted for more than 90 days, such Additional Interest
rate increasing by an additional 0.25% per annum at the beginning of each
subsequent 60-day period.
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 August 15 and February 15, commencing August
15, 1996, and shall be calculated at the rates noted above as a percentage of
the principal amount of the Securities; provided, however, that such Additional
Interest rate on the Securities may not exceed 1.0% per annum; and, provided,
further, that (1) upon the filing of the Notes Shelf Registration Statement (in
the case of clause (a) above) or (2) upon the effectiveness of the Notes Shelf
Registration Statement (in the case of clause (b) above) or (3) upon the
effectiveness of the Notes Shelf Registration Statement that had ceased to
remain effective prior to the first date on which any of the Securities cease to
constitute Registrable Securities or the end of the Suspension Event (in the
case of clause (c) above), Additional Interest on the Securities as a result of
such clause (a), (b) or (c) shall cease to accrue. Interest shall only accrue
under one of clause (a), (b) or (c) at any given time.
As provided for in the penultimate paragraph of Section 3 of
the Registration Rights Agreement, a Holder of Registrable Securities shall not
be entitled to receive Additional Interest pursuant to this Section 2 to the
extent that such Holder fails to comply with any obligation to furnish the
Company certain information regarding the Holder and the proposed distribution
by such Holder for inclusion in the Notes Shelf Registration Statement within
the applicable time period set forth in the Registration Rights Agreement and
such failure by such Holder would otherwise be the sole reason for the accrual
of Additional Interest hereunder or to the extent that any action or inaction on
the part of any Underwriter (as defined in the Registration Rights Agreement) or
regulatory agency in connection with any Underwritten Offering would otherwise
be the primary reason or reasons for the accrual of Additional Interest
hereunder.
Upon the failure by the Company to satisfy the requirements of
either clause (i) or (ii) of Section 5(1) of the Registration Rights Agreement,
the Company shall pay Additional Interest on the Notes to the extent provided
for in such Section 5(1).
A--5-
<PAGE>
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
January 15, 1999 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 January 15 of the years indicated
below:
Redemption
Year Price
---- ----------
1999 110.000%
2000 105.000%
Any Securities called for redemption, unless surrendered for
conversion by the close of business on the Business Day immediately preceding
the date fixed for redemption, are subject to being purchased from the Holder of
such Securities at the redemption price by one or more investment banking firms
or other purchasers who may agree with the Company to purchase such Securities
and convert them into Common Stock.
(b) 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.
(c) 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.
4. Offer to Purchase. Section 4.06 of the Indenture provides
that upon the occurrence of a Change of Control, 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 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. Amendments and Waivers. The Indenture permits, with certain
exceptions as provided in the Indenture, the amendment of the Indenture and the
modification of the rights and obligations of the Company and the rights of the
A--6-
<PAGE>
Holders under the Indenture 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 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 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. Governing Law. This Security 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.
10. Subordination. The indebtedness evidenced by this Security
is, to the extent provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness, and this
Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided, and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.
11. Conversion Rights. Subject to and upon compliance with the
provisions of the Indenture, the Holder of this Security is entitled, at his,
her or its option, at any time on or after 9:00 a.m. New York City time on March
5, 1997 and before the close of business on the Business Day next preceding the
A--7-
<PAGE>
Stated Maturity of principal, or in case this Security or a portion hereof is
called for redemption, then in respect of this Security or such portion hereof
until and including, but (unless the Company defaults in making the payment due
upon redemption) not after, the close of business on the Business Day next
preceding the Redemption Date, to convert this Security (or any portion of the
principal amount hereof which is $1,000 or an integral multiple thereof), at the
principal amount hereof, or of such portion, into fully paid and non-assessable
shares (calculated as to each conversion to the nearest 1/100th of a share) of
Common Stock of the Company at a conversion price equal to the lower of (i)
$9.50 per share of such Common Stock and (ii) the weighted average price per
share of Common Stock for the ten Trading Day period immediately following the
90th day after the Issue Date, as calculated by Bloomberg Financial Markets
through its "Volume at Price" function; provided, however, that in no event
shall the conversion price be less than $8.25 per share of such Common Stock (or
in each case at the current adjusted conversion price if an adjustment has been
made as provided in the Indenture) by surrender of this Security, duly endorsed
or assigned to the Company or in blank, to the Company at its office or agency
maintained for that purpose pursuant to Section 4.02 of the Indenture,
accompanied by written notice to the Company in the form provided in this
Security (or such other notice as is acceptable to the Company) that the Holder
hereof elects to convert this Security, or if less than the entire principal
amount hereof is to be converted, the portion hereof to be converted, and, in
case such surrender shall be made during the period from the close of business
on any regular record date next preceding any Interest Payment Date to the close
of business on such Interest Payment Date (unless this Security or the portion
thereof being converted has been called for redemption on a Redemption Date
within such period), also accompanied by payment in New York Clearing House
funds, or other funds acceptable to the Company of an amount equal to the
interest payable on such Interest Payment Date on the principal amount of this
Security then being converted. Subject to the aforesaid requirement for payment
and, in the case of a conversion after the regular record date next preceding
any Interest Payment Date and on or before such Interest Payment Date, to the
right of the Holder of this Security (or any Predecessor Security) of record at
such regular record date to receive an installment of interest (with certain
exceptions provided in the Indenture), no payment or adjustment is to be made
upon conversion on account of any interest accrued hereon or on account of any
dividends on the Common Stock issued upon conversion. No fractional shares or
scrip representing fractions of shares will be issued on conversion, but instead
of any fractional share the Company shall pay a cash adjustment as provided in
the Indenture. The conversion price is subject to adjustment as provided in the
Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party or the sale or
A--8-
<PAGE>
transfer of all or substantially all of the assets of the Company, the Indenture
shall be amended, without the consent of any Holders of Securities, so thatthis
Security, if then outstanding, will be convertible thereafter, during the period
this Security shall be convertible as specified above, only into the kind and
amount of securities, cash and other property receivable upon the consolidation,
merger, sale or transfer by a holder of the number of shares of Common Stock
into which this Security was convertible immediately prior to such
consolidation, merger, sale or transfer (assuming such holder of Common Stock
failed to exercise any rights of election and received per share the kind and
amount received per share by a plurality of nonelecting shares).
12. Mandatory Conversion. From and after September 1, 1997,
the Company may in its sole discretion, require the conversion of all, but not
less than all, of the then outstanding Securities following a Mandatory
Conversion Calculation Period in accordance with the procedures set forth in the
Indenture.
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<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.
A--10-
<PAGE>
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--11-
<PAGE>
[FORM OF CONVERSION NOTICE]
The undersigned registered owner of this Security hereby
irrevocably exercises the option to convert this Security, or the portion hereof
(which is $1,000 or a multiple thereof) designated below, into shares of Common
Stock in accordance with the terms of the Indenture referred to in this
Security, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for a fractional share and any
Security representing any unconverted principal amount hereof, be issued and
delivered to the registered owner hereof unless a different name has been
provided below. If this Notice is being delivered on a date after the close of
business on a regular record date and prior to the close of business on the
related Interest Payment Date, this Notice is accompanied by payment in New York
Clearing House funds, or other funds acceptable to the Company, of an amount
equal to the interest payable on such Interest Payment Date on the principal of
this Security to be converted. If shares or any portion of this Security not
converted are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Dated:
NOTICE: This signature must
correspond with the name as
written upon the face of the
within-mentioned instrument in
every particular, without
alternation or any change
whatsoever.
Fill in for registration of
shares of Common Stock if
they are to be delivered,
or Securities if they are to
be issued, other than to
and in the name of the
registered owner:
- ---------------------------
(Name)
- ---------------------------
(Street Address)
- ---------------------------
(City, State and zip code)
(Please print name and address)
Register: Common Stock
-----
Securities
-----
(Check appropriate line(s)).
Principal amount to be converted
(if not less than all):
$ ,000
--------
--------------------------
Social Security or other
Taxpayer Identification Number
of owner
A--12-
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company
pursuant to Section 4.06 of the Indenture, check the box: [ ]
If you wish to have a portion of this Security purchased by
the Company pursuant to Section 4.06 of the Indenture, state the amount:
$ principal amount
-------------
Date: Your Signature:
----------------------
-------------------------------
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee:
---------------------
A--13-
<PAGE>
EXHIBIT B
Form of Certificate
---------------, -----
The Bank of New York
101 Barclay Street
21-W
New York, New York 10286
Attention: Corporate Trust Administration
Re: Geotek Communications, Inc. (the "Company")
12% Senior Subordinated Convertible Notes
due 2001 (the "Securities")
Dear Sirs:
This letter relates to U.S. $______________ principal amount
of Securities represented by a Note (the "Legended Note") which bears a legend
outlining restrictions upon transfer of such Legended Note. Pursuant to Section
2.01 of the Indenture (the "Indenture") dated as of March 5, 1996 relating to
the Securities, we hereby certify that we are (or we will hold such securities
on behalf of) a person outside the United States to whom the Securities could be
transferred in accordance with Rule 904 of Regulation S promulgated under the
U.S. Securities Act of 1933, as amended. Accordingly, you are hereby requested
to exchange the Legended Note for an unlegended certificate representing an
identical principal amount of Securities, all in the manner provided for in the
Indenture.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly
yours,
[Name of
Transferor]
By:____________
-------------
Authorized Signature
<PAGE>
EXHIBIT C
Form of Certificate to Be
Delivered in Connection with
Certain Transfers to Accredited Investors
---------------, -----
The Bank of New York
101 Barclay Street
21-W
New York, New York 10286
Attention: Corporate Trust Administration
Re: Geotek Communications, Inc. (the "Company")
12% Senior Subordinated Convertible Notes
due 2001 (the "Securities")
Dear Sirs:
In connection with our proposed purchase of $_____________
aggregate principal amount of the Securities, we confirm that:
1. We understand that any subsequent transfer of the
Securities is subject to certain restrictions and conditions set forth in the
Indenture dated as of March 5, 1996 relating to the Securities (the "Indenture")
and the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Securities except in compliance with, such restrictions
and conditions and the Securities Act of 1933, as amended (the "Securities
Act").
2. We understand that the offer and sale of the Securities
have not been registered under the Securities Act, and that the Securities may
not be offered or sold except as permitted in the following sentence. We agree,
on our own behalf and on behalf of any accounts for with we are acting as
hereinafter stated, that if we should sell any Securities, we will do so only
(A) to the Company or any subsidiary thereof, (B) to the extent available, in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter, and if such transfer is in respect of
a principal amount of Securities at the time of such 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
accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant
to the exemption from registration provided by Rule 144 under the Securities
Act, or (F) pursuant to an effective registration statement under the Securities
Act. We further agree to provide to any person purchasing any of the Securities
from us a notice advising such purchaser that resales of the Securities are
restricted as stated herein.
3. We understand that, in connection with any proposed
resale of any Securities, we will be required to furnish to you and the
<PAGE>
Company such certifications, legal opinions and other information as you and
the Company may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Securities
purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or their investment.
5. We are acquiring the Securities purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Very truly
yours,
[Name of
Transferee]
By:____________
-------------
Authorized Signature
C--2-
<PAGE>
EXHIBIT D
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
---------------, -----
The Bank of New York
101 Barclay Street
21-W
New York, New York 10286
Attention: Corporate Trust Administration
Re: Geotek Communications, Inc. (the "Company")
12% Senior Subordinated Convertible Notes
due 2001 (the "Securities")
Dear Sirs:
In connection with our proposed sale of $_____________
aggregate principal amount of the Securities, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the Securities
Act of 1933, as amended (the "Securities Act"), and, accordingly, we represent
that:
(1) the offer of the Securities was not made to a person
in the United States;
(2) at the time the buy order was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us, any of
our affiliates or any person acting on behalf of either in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable; and
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the U.S. Securities Act.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of
Transferor]
By:_______________
----------
Authorized Signature
<PAGE>
EXHIBIT (C)(3)
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into this March 5, 1996 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 March
4, 1996, between the Company and the Initial Purchaser (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial Purchaser
of 12% Senior Subordinated Convertible Notes of the Company (the "Notes") having
an aggregate principal amount of up to $75,000,000 (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 convert such Note into
shares of Common Stock at the conversion price set forth in the Indenture, dated
as of March 5, 1996, between the Company and The Bank of New York, as Trustee.
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.
"Common Stock" shall mean the Common Stock, par value $.01 per share,
of the Company.
"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.
"Holder" shall mean the Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable
Securities.
"Indenture" shall mean the Indenture relating to the Notes, dated as of
March 5, 1996, between the Company and The Bank of New York, 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.
"Liquidated Damages" shall have the meaning set forth in Section 5(l)
of 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
<PAGE>
Holders is required hereunder, 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
Registrable Securities, or securities that were previously Registrable
Securities, if such subsequent holders are deemed to be such affiliates
solely by reason of their holding Registrable Securities, securities that
were previously Registrable Securities, Senior Secured Notes, Warrants
and/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 mean the 12% Senior Subordinated Convertible Notes due
2001 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 the Notes and the Shares; provided,
however, that the Notes and the Shares shall cease to be Registrable
Securities when (i) in the case of Notes, a Shelf Registration Statement
with respect to the Notes shall have been declared effective under the
Securities Act and the Notes shall have been disposed of pursuant to such
Shelf Registration Statement, (ii) (A) in the case of the Shares, except as
otherwise provided in clause (ii)(B), a Resale Shelf Registration Statement
with respect to the Shares shall have been declared effective under the
Securities Act and such Shares shall have been disposed of pursuant to such
Shelf Registration Statement, or (B) in the case of any Shares actually
issued upon conversion of Notes, a Shelf Registration Statement with
respect to the issuance of such Shares shall have been declared effective
under the Securities Act and, following the issuance thereof, such Shares
are not subject to restrictions on transfer pursuant to the Securities Act,
(iii) the Notes or the Shares 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) the Notes or the
Shares shall have ceased to be outstanding.
"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
<PAGE>
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) all rating agency fees, (vi) all
fees and disbursements relating to the qualification of the Indenture under
applicable securities laws, (vii) the fees and disbursements of the Trustee
or any transfer agent retained by the Company, (viii) 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 (or, in the case of an Underwritten
Offering, a majority of the Holders participating in such Underwritten
Offering) 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
Securities by a Holder.
"Registration Statement" shall mean a Shelf Registration Statement or a
Resale Shelf Registration Statement, as applicable; provided, that, if more
than one Registration Statement is required in order to satisfy the
registration requirements set forth in this Agreement, the term
"Registration Statement" shall refer to all such Registration Statements
prepared pursuant to this Agreement, unless the context otherwise requires.
"Resale Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(a) of this
Agreement covering the resale of all of the Notes and the Shares (in the
case of the Shares, to the extent that the Shares are not covered by a
<PAGE>
Shelf Registration Statement) by the holders thereof (but no other
securities, except to the extent otherwise provided in Section 2(f) hereof,
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; provided, that, if the Notes and the Shares are not
permitted to be registered on the same registration statement, the term
"Resale Registration Statement" shall refer to all such registration
statements prepared pursuant to this Agreement, unless the context
otherwise requires.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Senior Secured Notes" shall mean the 15% Senior Secured Discount Notes
due 2005 of the Company.
"Shares" means the shares of Common Stock issuable upon the
conversion of the Notes.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(a) of this
Agreement covering the issuance of all of the Shares (but no other
securities, except to the extent otherwise provided in Section 2(f) hereof,
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" shall mean the shares of Common Stock issued upon
exercise of the Warrants.
"Warrants" shall mean the warrants to purchase Common Stock issued
pursuant to the Warrant Agreement dated as of June 30, 1995 between the
Company and IBJ Schroder Bank & Trust Company, as Warrant Agent.
2. Registration Under the Securities Act.
(a) The Company shall file and shall use its best efforts to cause a
Resale Shelf Registration Statement pertaining to the Notes, to be declared
effective by the SEC no later than July 3, 1996. The Company shall file and
shall use its best efforts to cause a Shelf Registration Statement pertaining
<PAGE>
to the Shares to be declared effective by the SEC prior to the first date upon
which the Notes become convertible; provided, that, if due to applicable law, or
any applicable interpretation of the staff of the SEC, a Shelf Registration
Statement does not permit the public resale by all of the Holders of the 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 Registrable Securities, securities that were
previously Registrable Securities, Senior Secured Notes, Warrants and/or Warrant
Shares)), 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 covering the Shares. The Company agrees to use all
reasonable best efforts to keep the Registration Statement continuously
effective for so long as any of the Notes or Shares covered thereby (in the case
of the Shares, without regard to whether such Shares actually have been issued)
shall constitute Registrable Securities. 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 Notes to exercise their right
to convert the Notes into 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(p) hereunder (including the Company's
obligation to use its best efforts in connection therewith); provided, that,
such Underwritten Offering shall be required to be consummated as promptly as
reasonably practicable and in no event later than 30 days following the
commencement of the marketing of such Underwritten Offering. In any such
Underwritten Offering, the investment banker or investment bankers and manager
or managers (the "Underwriters") that will administer the offering will be
<PAGE>
selected by the Holders of a majority of the Registrable Securities (determined
on an as-converted basis) included in such offering, with the consent of the
Company, which shall not be unreasonably withheld. Notwithstanding anything to
the contrary set forth in this paragraph, the Holders shall not have the right
to sell Registrable Securities in an Underwritten Offering (i) at any time
during which the Company is engaged in a registration of securities for its own
account which are to be sold pursuant to an underwritten offering with respect
to which an underwriter has been selected, to the extent so requested by such
underwriter, or, to the extent that, prior to or as of the date of any request
for an Underwritten Offering pursuant to this Section 2(b)(i), the Company has
engaged (and continues to be engaged as of the date of such request) in
discussions with an underwriter, so long as, no later than 30 days after such
request, the Company is in registration, and (ii) during any customary "lock-up"
period thereafter (not to last beyond the 90-day period beginning on the closing
date of such underwritten offering) required by such underwriter in connection
with such underwritten offering. Notwithstanding anything to the contrary set
forth herein, nothing contained in this Agreement shall require the Company to
effect an Underwritten Offering pursuant to this Section 2(b)(i) to the extent
that the offer and sale of Registrable Securities in connection with such
Underwritten Offering would jeopardize (in the reasonable good faith advice of
outside counsel to the Company) any exemption from the registration requirements
of the Securities Act being relied on by the Company in connection with any
prior offer and sale of securities or that is to be relied on by the Company in
connection with any proposed sale to a specific identified investor or through a
placement agent that, prior to or as of the date of any request for an
Underwritten Offering pursuant to this Section 2(b)(i), has engaged (and
continues to be engaged as of the date of such request) in discussions with the
Company concerning the placeent of securities of the Company by such agent, so
long as, no later than 30 days after such request, the Company has entered into
an engagement letter with such agent.
(ii) Each Holder whose Registrable Securities are covered by a Resale
Shelf Registration Statement and are of the same class or type as any
Registrable Securities being sold in an Underwritten Offering 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 or type 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).
<PAGE>
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 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) Unless otherwise agreed to by the Underwriter(s), 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 being
sold in the Underwritten Offering, including a sale pursuant to Regulation D
under the Act, during the 10-day period prior to, and during the 60-day period
beginning on, the closing date of each Underwritten Offering permitted pursuant
to Section 3(p) hereof made pursuant to the Registration Statement, to the
extent timely notified in writing by the Underwriter(s). Notwithstanding the
foregoing, the Company may effect a private offer, sale or distribution of
securities of the same quality and nature as the Registrable Securities being
sold in the Underwritten Offering to the extent that, at the time that the price
of such securities is determined, the price of such securities (on an as
converted basis, if applicable) is in excess of the market price of the
applicable Registrable Securities; provided, that, the limitation on private
offers, sales and distributions set forth in this sentence shall apply only to
the extent so requested by the Underwriter(s) in the Underwritten Offering
within 3 Business Days following notice of such proposed offer, sale or
distribution (which notice shall be provided by the Company at least 7 Business
Days prior to any such proposed offer, sale or distribution).
(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) Upon the occurrence or failure to occur of certain events
described in the Notes or in this Agreement, additional interest, or Liquidated
Damages, as the case may be, will accrue on the Notes or the Shares, as provided
in the Notes and in this Agreement.
(e) Without limiting the remedies available to the Initial
Purchaser and subsequent Holders, the Company acknowledges that any failure
<PAGE>
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.
(f) Notwithstanding anything to the contrary contained in this
Agreement, any securityholders of the Company that have "piggyback" registration
rights pursuant to any agreement in effect on the date hereof, shall be entitled
to include any securities to which such "piggyback" right applies in any
Registration Statement filed pursuant to this Agreement, and shall be entitled
to participate in any Underwritten Offering, in each case to the extent provided
in the agreement containing such "piggyback" rights.
3. Registration Procedures. In connection with the obligations
of the Company with respect to Section 2(a) hereof, the Company shall, to the
extent required by Section 2(a), as expeditiously as practicable:
(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;
(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 of securities registered
thereunder, to counsel for the Initial Purchaser, to counsel for such
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
<PAGE>
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 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) 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 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 Registration Statement and related Prospectus or
for additional information after the 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
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
<PAGE>
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
Registration Statement or the related Prospectus untrue in any material
respect or which requires the making of any changes in the 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 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 practicable 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
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 (in the case of the Notes, consistent
with the provisions of the Indenture) 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) 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 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 included
in a Resale Shelf Registration Statement as promptly as practicable
<PAGE>
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 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) cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA") in connection with the
registration of the Notes that are Registrable Securities, 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;
(m) 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
<PAGE>
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 (A)
any regulatory agency or (B) any court or administrative order after
the exhaustion of appeals therefrom;
(n) use its reasonable best efforts to cause all Registrable
Securities to be listed at the time of resale or issuance, as
applicable, 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 Securities satisfy applicable listing requirements;
(o) 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
(p) in the case of a registration pursuant to a Resale Shelf
Registration Statement, use its best efforts to enter into such
<PAGE>
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 connection with any such Underwritten
Offering, (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 their counsel 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
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
<PAGE>
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) 710,526 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;
provided, that no Holder shall be required to comment on any information not
provided to the Company by such Holder. A Holder of Registrable Securities shall
not be entitled to receive additional interest pursuant to Section 2 of the
Notes or Liquidated Damages pursuant to Section 5(l) of this Agreement to the
extent that such Holder fails to comply with any obligation under this
paragraph, and such failure by such Holder would otherwise be the sole reason
for the accrual of additional interest pursuant to Section 2 of the Notes or
Liquidated Damages pursuant to Section 5(l) of this Agreement or to the extent
that any action or inaction on the part of any Underwriter or regulatory agency
in connection with any Underwritten Offering would otherwise be the primary
reason or reasons for the accrual of additional interest pursuant to Section 2
of the Notes or Liquidated Damages pursuant to Section 5(l) of this Agreement.
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 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.
<PAGE>
4. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Initial Purchaser, each Holder, 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 any investment advisor otherwise affiliated with 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 Section 3 hereof. In connection with any
Underwritten Offering contemplated by Section 3(p), 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
<PAGE>
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, 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 and any investment
advisor affiliated with any of the foregoing 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 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
<PAGE>
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, any investment advisor affiliated with any of the foregoing 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, any investment advisor affiliated with any of
the foregoing 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, any investment advisor affiliated
with any of the foregoing 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 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
<PAGE>
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 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
<PAGE>
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. Notwithstanding
anything to the contrary set forth in this paragraph, no agreement contemplated
in Section 2(f) hereof shall be deemed to be inconsistent with the rights
granted to the Holders in this Agreement or otherwise to conflict with the
provisions hereof to the extent provided for in such Section 2(f).
(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
(determined on an as-converted basis) 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 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.
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.
<PAGE>
(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 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.
(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.
<PAGE>
(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.
(l) Liquidated Damages.
If, at any time during which any of the Notes are
outstanding, the Company shall fail to comply with the registration requirements
provided for in Section 2 of the Notes, additional interest on the Notes shall
accrue and be payable to the extent provided in such Section. Following the
conversion of any Notes into Shares, to the extent that any such Shares
constitute Registrable Securities, liquidated damages ("Liquidated Damages")
shall be payable on such Shares to the extent provided below:
(i) if the Registration Statement pertaining to the issuance or
resale of such Shares, as applicable, is not declared effective prior to the
first date upon which the Notes become convertible, then, commencing on such
date, Liquidated Damages shall accrue on such Shares at a rate of $.001 per week
per Share for the first 90 days immediately following such date, such Liquidated
Damages increasing by an additional $.001 per week per Share at the beginning of
each subsequent 90-day period; and
(ii) if the Registration Statement pertaining to the issuance or
resale of such Shares, as applicable, ceases to be effective or the Prospectus
which is a part thereof cannot be used as a result of a Suspension Event for a
period of more than 90 days, in each case under this clause (ii) prior to the
last date as of which such Registration Statement is required to remain
effective pursuant to this Agreement, then Liquidated Damages shall accrue on
such Shares at a rate of $.001 per week per Share for the first 60 days
<PAGE>
immediately following the day such Registration Statement ceases to be effective
or a Suspension Event has lasted for more than 90 days, such Liquidated Damages
increasing by an additional $.001 per week per Share at the beginning of each
subsequent 60-day period.
In the case of each of clauses (i) and (ii) of the preceding
paragraph, such Liquidated Damages will be payable in cash semi-annually in
arrears on each August 15 and February 15, commencing August 15, 1997, and shall
be calculated at the rates noted above; provided, however, that such Liquidated
Damages may not exceed $.005 per week per Share; and, provided, further, that
(1) upon the effectiveness of the Registration Statement (in the case of clause
(i) above) or (2) upon the effectiveness of the Registration Statement that had
ceased to remain effective prior to the last date as of which such Registration
Statement is required to remain effective or the end of the Suspension Event (in
the case of clause (ii) above), Liquidated Damages on the Shares as a result of
such clause (i) or (ii) shall cease to accrue. Liquidated Damages shall only
accrue under one of clause (i) or (ii) at any given time.
If the Company shall fail to satisfy the requirements of
either of clause (i) or (ii) above, each Holder of Notes shall be entitled to
receive Additional Interest under the Notes at the rates set forth in either
Section 2(b) of the Notes (in case of a failure under clause (i) above) or
Section 2(c) of the Notes (in the case of a failure under clause (ii) above);
provided, that Additional Interest shall not accrue on the Notes under this
Section 5(l) at any time that Additional Interest is accruing on the Notes
pursuant to Section 2 of the Notes. Following the conversion of any Notes into
Shares, to the extent that such failure is continuing, Liquidated Damages shall
be paid in respect of such Shares to the extent and at the rates provided
herein.
All of the Company's obligations set forth in the preceding
paragraph which are outstanding with respect to any Shares that constitute
Registrable Securities at the time such Shares cease to be Registrable
Securities shall survive until such time as all such obligations with respect to
such Shares shall have been satisfied in full.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
GEOTEK COMMUNICATIONS, INC.
By:/s/ Andrew Siegel
Name: Andrew Siegel
Title: Secretary
Confirmed and accepted as of
the date first above written:
SMITH BARNEY INC.
By: /s/ Sean P. Crowley
Name: Sean P. Crowley
Title: Managing Director
<PAGE>
EXHIBIT (c)(4)
GEOTEK COMMUNICATIONS, INC. NEWS
Contact: Randy Miller, Geotek Communications, Inc. 201-930-9305
Andrea Mabel, Morgen-Walke Associates, Inc. 212-850-5600
GEOTEK TO RECEIVE $115 MILLION IN ADDITIONAL FINANCING
SOROS INVESTMENT PARTNERSHIP TO INCREASE
INVESTMENT IN GEOTEK TO $100 MILLION
Montvale, New Jersey, March 5, 1996 - Geotek Communications, Inc.
(NASDAQ:NNM:GOTK) (Pacific:GEO) announced today that it has raised $75 million
in private financing from a group of investors. In a separate transaction, the
Company obtained a commitment for a $40 million credit facility from a Soros
Investment Partnership, which upon execution of a definitive agreement, will
bring the Soros Group's total investment in the Company to $100 million.
In the first transaction, the Company issued $75 million 5 year 12%
senior subordinated convertible notes to a group of investors. The notes are
convertible by the holders thereof, after the first anniversary of the closing,
into common stock at a conversion price of $9.50, subject to adjustment, and are
callable at the option of the Company under certain circumstances, after 18
months. Also participating in the transaction was CIP Capital, a $50 million
venture capital fund managed by Geotek Chairman Winston Churchill.
In a separate transaction, the Company received a commitment for a $40
million credit facility, from a Soros Investment Partnership. The credit
facility will be structured as a series of 10% 6-year senior notes. In
connection with this facility, the Company will grant the lender 5-year
<PAGE>
detachable warrants to purchase 4.2 million shares of the Company's common
stock, exercisable at $9.50. The closing of this facility is subject to a number
of conditions including the execution of definitive agreements.
Geotek will use the funds raised to finance the continued expansion of
its FHMA(TM) networks in the United States. Since the beginning of the year,
Geotek has launched networks in Philadelphia, Washington, D.C. and Baltimore and
is scheduled to begin offering commercial service in New York, Boston, Miami and
Dallas by the spring. By the end of 1997, Geotek intends to deploy FHMA (TM)
networks in at least 35 U.S. markets, including Atlanta, Chicago and San
Francisco.
Geotek Communications, Inc. Is an international wireless
telecommunications company that focuses on technology, equipment and network
development and operation.
# # #
MEDIA CONTACTS:
Lee Foley Alan Penchansky
(national/financial press) (technology/industry/trade)
Morgen-Walke Associates, Inc. Edelman Public Relations
212-850-5600 212-704-8285
