<PAGE> 1
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): August 28, 1996
METRICOM, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19903 77-0294597
(State of jurisdiction) (Commission File No.) (IRS Employer
Identification No.)
980 University Avenue
Los Gatos, CA 95030-2375
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (408) 399-8200
1.
<PAGE> 2
Item 5. Other Events
- --------------------------------------------------------------------------------
On August 29, 1996, Metricom, Inc. issued a press release announcing
the private placement of $45,000,000 of its 8% convertible subordinated notes
due 2003, at 100 percent of their principal amount, which is filed herewith as
Exhibit 99.1 and incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- --------------------------------------------------------------------------------
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
- --------- -----------
<S> <C>
4.1 Form of Notes
4.2 Indenture
10.1 Registration Rights Agreement
10.2 Placement Agreement
99.1 Press Release, dated August 29, 1996.
</TABLE>
2.
<PAGE> 3
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.
Metricom, Inc.
Dated: September 11, 1996 By: /s/ Robert P. Dilworth
--------------------------------
Robert P. Dilworth
President and Chief
Executive Officer
3.
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- --------- -----------
<S> <C>
4.1 Form of Notes
4.2 Indenture
10.1 Registration Rights Agreement
10.2 Placement Agreement
99.1 Press Release, dated August 29, 1996.
</TABLE>
4.
<PAGE> 1
EXHIBIT 4.1
[FORM OF SECURITY]
(FACE OF SECURITY)
[For Global Security only:
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the Company or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.]
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT IS
THREE YEARS AFTER THE ORIGINAL ISSUE DATE HEREOF (OR ANY PREDECESSOR OF SUCH
SECURITY) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) PURSUANT TO RULE
144A, FOR SO LONG AS IT IS AVAILABLE, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) TO AN "ACCREDITED INVESTOR," WITHIN THE MEANING OF
RULE 501(a) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN "ACCREDITED INVESTOR," THAT PRIOR TO
SUCH TRANSFER DELIVERS AN OPINION OF COUNSEL, CERTIFICATION
A-1
<PAGE> 2
AND OTHER INFORMATION IN FORM REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
TRANSFEREE IS AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a) UNDER
THE SECURITIES ACT, THAT SUCH ACCREDITED INVESTOR IS ACQUIRING THE SECURITY FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT AND THAT SUCH
TRANSFER COMPLIES WITH THE SECURITIES ACT, (E) PURSUANT TO OFFERS AND SALES
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT AND ARE IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
METRICOM, INC.
8% CONVERTIBLE SUBORDINATED NOTE
DUE 2003
No. CUSIP No. ___________
$ _______
Metricom, Inc. a Delaware corporation (hereinafter called the
"Company", which term includes any successors under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _____, or
registered assigns, the principal sum of _____ Dollars, on September 15, 2003.
Interest Payment Dates: March 15 and September 15 commencing
March 15, 1997.
Record Dates: March 1 and September 1.
Reference is made to the further provisions of this Security
on the reverse side, which will, for all purposes, have the same effect as if
set forth at this place.
A-2
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this Instrument to
be duly executed under its corporate seal.
Dated:
METRICOM, INC.
a Delaware corporation
[Seal]
By:
------------------------------
Name:
Title:
Attest:
------------------------
A-3
<PAGE> 4
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the
within-mentioned Indenture.
U. S. Trust Company of California, N.A.
as Trustee
By:
--------------------------------
Authorized Signatory
Dated:
A-4
<PAGE> 5
(REVERSE OF SECURITY)
METRICOM, INC.
8% CONVERTIBLE SUBORDINATED NOTE
DUE 2003
1. Interest.
Metricom, Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successors under the Indenture hereinafter
referred to), promises to pay interest on the principal amount of this Security
at the rate of 8% per annum. To the extent it is lawful, the Company promises
to pay interest on any interest payment due but unpaid on such principal amount
at a rate of 8% per annum.
The Company will pay interest semi-annually on March 15 and September
15 of each year (each, an "Interest Payment Date"), commencing March 15, 1997.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities, from
the date of issuance. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of
business on the Record Date immediately preceding the Interest Payment Date.
Holders must surrender Securities to a Paying Agent to collect principal,
redemption or repurchase payments. Any such interest not so punctually paid,
and defaulted interest relating thereto, may be paid to the Persons who are
registered Holders at the close of business on a Special Record Date for the
payment of such defaulted interest, as more fully provided in the Indenture
referred to below. Except as provided below, the Company shall pay principal
and interest in such coin or currency of the United States of America as at the
time of payment shall be legal tender for payment of public and private debts
("U.S. Legal Tender"). However, the Company may pay principal and interest by
wire transfer of Federal funds, or interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or the Company may mail any such interest payment to a Holder at the
Holder's registered address.
The Securities will be payable as to principal, premium, interest and
Liquidated Damages, if any, at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or at the
option of the Company, payment of principal, premium, interest and Liquidated
Damages, if any, may be made by check mailed to the Holders at their addresses
set forth in the registry of Holders.
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<PAGE> 6
3. Paying Agent and Security Registrar.
Initially, U. S. Trust Company of California, N.A. (the "Trustee")
will act as Paying Agent and Security Registrar. The Company may change any
Paying Agent, Security Registrar or co-Security Registrar without notice to the
Holders. The Company or any of its Subsidiaries may, subject to certain
exceptions, act as Paying Agent, Security Registrar or co-Security Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
August 15, 1996 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the TIA. The
Securities are subject to all such terms, and Holders of Securities are
referred to the Indenture and said Act for a statement of them. The Securities
are general unsecured obligations of the Company limited in aggregate principal
amount to $45,000,000.
5. Redemption.
The Securities may be redeemed in whole or from time to time in part
at any time on and after September 15, 1999, at the option of the Company, at
the Redemption Price (expressed as a percentage of principal amount) set forth
below with respect to the indicated Redemption Date, in each case, plus any
accrued but unpaid interest to, but excluding, the Redemption Date (subject to
the right of Holders of a record on a Record Date to receive interest due on an
Interest Payment Date that is on or prior to such Redemption Date).
<TABLE>
<CAPTION>
If redeemed during the 12-month period
beginning on September 15 of the years indicated below Redemption Price
<S> <C>
1999 104.0%
2000 102.7
2001 101.3
</TABLE>
and 100% at September 15, 2002. Any such redemption will comply with Article
III of the Indenture.
6. Notice of Redemption.
Notice of redemption will be sent by first class mail, at least 30
days and not more than 60 days prior to the Redemption Date, to the Holder of
each Security to be redeemed at such Holder's last address as then shown upon
the registry books of the Security Registrar. Securities may be redeemed in
part in multiples of $1,000 only.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption
shall have been deposited with the Paying Agent
A-6
<PAGE> 7
on such Redemption Date and payment of the Securities called for redemption is
not prohibited under Article XII of the Indenture, the Securities called for
redemption will cease to bear interest and Liquidated Damages, if any, and the
only right of the Holders of such Securities will be to receive payment of the
Redemption Price, plus any accrued and unpaid interest and Liquidated Damages,
if any, to, but excluding, the Redemption Date.
7. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may
register the transfer of, or exchange Securities in accordance with, the
Indenture. The Security Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture. The Security Registrar
need not register the transfer of or exchange any Securities selected for
redemption.
8. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of it
for all purposes.
9. Unclaimed Money.
If money for the payment of principal, premium, interest, Liquidated
Damages, Repurchase Price or Redemption Price remains unclaimed for two years,
the Trustee and the Paying Agent(s) will pay the money back to the Company at
its written request. After that, all liability of the Trustee and such Paying
Agent(s) with respect to such money shall cease.
10. Amendment; Supplement; Waiver.
Subject to certain exceptions set forth in Section 9.2 and 11.1 of the
Indenture, the Indenture or the Securities may be amended or supplemented, and
any existing Default or Event of Default or compliance with any provision may
be waived, with the written consent of the Holders of a majority in aggregate
principal amount of the Securities then outstanding. Without notice to or
consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Securities to, among other things, cure any ambiguity, defect
or inconsistency, or make any other change that does not adversely affect the
rights of any Holder of a Security.
11. Conversion Rights.
Subject to the provisions of the Indenture, the Holders have the right
to convert the principal amount of the Securities into fully paid and
nonassessable shares of Common Stock of the Company at the initial conversion
price per share of Common Stock of $14.55, or at the adjusted conversion price
then in effect, if adjustment has been made as provided in the Indenture, upon
surrender of the Security to the Company, together with a fully executed notice
in substantially the form attached
A-7
<PAGE> 8
hereto and, if required by the Indenture, an amount equal to accrued interest
payable on such Security.
12. Ranking.
Payment of principal, premium, if any, and interest on, and Liquidated
Damages with respect to, and the Repurchase Price or Redemption Price, as
applicable, on the Securities is subordinated, in the manner and to the extent
set forth in the Indenture, to the prior payment in full of all Senior
Indebtedness.
13. Repurchase at Option of Holder.
If there is a Change of Control, the Company shall be required,
subject to certain exceptions, to offer to purchase on the Repurchase Date all
outstanding Securities at a Repurchase Price equal to 101% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the Repurchase
Date. Holders of Securities will receive a Repurchase Offer from the Company
prior to any related Repurchase Date and may elect to have such Securities
purchased by completing the form entitled "Option of Holder to Elect Purchase"
appearing below.
14. Successors.
When a successor assumes all the obligations of its predecessor under
the Securities and the Indenture, the predecessor will be released from those
obligations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing (other than as Event
of Default relating to certain events of bankruptcy, insolvency or
reorganization), then in every such case, unless the principal of all of the
securities shall have already become due and payable, either the Trustee or the
Holders of 25% in aggregate principal amount of Securities then outstanding may
declare all the Securities to be due and payable immediately in the manner and
with the effect provided in the Indenture. Holders of Securities may not
enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of a
majority in aggregate principal amount of the Securities then outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Securities notice of any continuing Default or Event
of Default (except a Default in payment of principal of, or premium, if any, or
interest on or Liquidated Damages, if any, with respect to any of the
Securities, including default in the payment of any redemption or repurchase
obligation), if it determines that withholding notice is in their interest.
16. Trustee Dealings with Company.
A-8
<PAGE> 9
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
17. No Recourse Against Others.
No stockholder, director, officer or employee, as such, past, present
or future, of the Company or any successor corporation shall have any personal
liability in respect of the obligations of the Company under the Securities or
the Indenture by reason of his, her, or its status as such stockholder,
director, officer or employee. Each Holder of a Security by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities.
No representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
21. Additional Rights of Holders of Restricted Securities.
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Securities shall have all the rights set forth in the
Registration Rights Agreement.
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<PAGE> 10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Article XI of the Indenture, check the box: / /
If you want to elect to have only part of this Security purchased by
the Company pursuant to Article XI of the Indenture, state the amount you want
to be purchased: $________
Date: Signature:
--------- -------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature(s) must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan
associations and credit unions) with membership in an
approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares of
Common Stock are to be issued, or Notes to be delivered,
other than to and in the name of the registered holder.
________________________________________________
Signature Guarantee
B-1
<PAGE> 11
CONVERSION NOTICE
To: Metricom, Inc.
The undersigned owner of this Note hereby: (i) irrevocably exercises
the option to convert this Note, or the portion hereof (which is $1,000
principal amount or an integral multiple thereof) below designated, for shares
of Common Stock of Metricom, Inc. in accordance with the terms of this
Indenture referred to in this Note and (ii) directs that such shares of Common
Stock deliverable upon the conversion, together with any check in payment for
fractional shares and any Note(s) representing any unconverted principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this Note
not converted are to be delivered registered in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account
of interest accompanies this Note.
Dated
------------- ----------------------------------------------------
Signature
Signature(s) must be guaranteed by an eligible
Guarantor Institution (banks, stock brokers, savings
and loan associations and credit unions) with
membership in an approved signature guarantee
medallion program pursuant to Securities and
Exchange Commission Rule 17Ad-15 if shares of
Common Stock are to be issued, or Notes to be
delivered, other than to and in the name of the
registered holder.
----------------------------------------------------
Signature Guarantee
Fill in for registration of shares if to be delivered, and of Note(s)
if to be issued, otherwise than to and in the name of the registered holder.
----------------------------------------------------
Social Security or other Taxpayer Identifying Number
- ----------------------------------
(Name)
- ----------------------------------
(Street Address)
- ----------------------------------
(City, State and Zip Code)
(Please print name and address)
Principal amount to be converted: (if less than all)
C-1
<PAGE> 12
$
--------------------------------
C-2
<PAGE> 13
ASSIGNMENT
For value received ____________________________ hereby sell(s),
assign(s) and transfer(s) unto _________________________________________
_______ (Please insert name, social security or other Taxpayer Identification
Number of assignee) the within Security, and hereby irrevocably constitutes and
appoints ___________________________________________________________ attorney
to transfer the said Security on the books of the Company, with full power of
substitution in the premises.
In connection with any transfer of the within Security within three
years of the date of original issuance of such Security, the undersigned
confirms that such Security is being transferred:
To Metricom, Inc. or a subsidiary thereof; or
Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"); or
To an "Accredited Investor" pursuant to and in compliance with
the Securities Act; or
Pursuant to and in compliance with Rule 144 under the
Securities Act; or
Pursuant to and in compliance with Regulation S under the
Securities Act;
and unless the box below is checked, the undersigned confirms that such
Security is not being transferred to an "affiliate" of the Company as defined
in Rule 144 under the Securities Act of 1933, as amended (an "Affiliate").
The transferee is an Affiliate of the Company.
Dated:
----------- ----------------------------------------------------------
----------------------------------------------------------
Signature(s)
Signature(s) must be guaranteed by an eligible Guarantor
Institution (banks, stock brokers, savings and loan
associations and credit unions) with membership in an
approved signature guarantee medallion program pursuant
to Securities and Exchange Commission Rule 17Ad-15 if
shares of Common Stock are to be issued, or Notes to be
delivered, other than to and in the name of the registered
holder.
----------------------------------------------------------
Signature Guarantee
C-3
<PAGE> 1
EXHIBIT 4.2
METRICOM, INC.,
ISSUER,
AND
U. S. TRUST COMPANY OF CALIFORNIA, N.A.
TRUSTEE
----------------
INDENTURE
Dated as of August 15, 1996
----------------
$45,000,000
8% Convertible Subordinated Notes due 2003
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I - DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Incorporation by Reference of TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 1.3 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE II - THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.1 Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.2 Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.3 Security Registrar; Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.4 Agent to Hold Assets in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.5 Holder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.6 Securities Restrictions on Transfer: Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.7 Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.8 Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.9 Treasury Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.10 Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.11 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.12 Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE III - REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.1 Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.2 Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.3 Selection of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.4 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.5 Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.6 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.7 Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.8 Conversion Arrangement on Call for Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV - COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.1 Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.2 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.3 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.4 Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.5 Maintenance of Properties and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.6 Certificate; Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.7 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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SECTION 4.8 Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.9 Rule 144A Information Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.10 Appointments to Fill Vacancies in Trustee's Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.11 Resale of Certain Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE V - SUCCESSOR CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.1 Limitation on Merger, Sale or Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.2 Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VI - EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.2 Acceleration of Maturity Date; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.3 Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.4 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.5 Trustee May Enforce Claims Without Possession of Securities . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.6 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.7 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.8 Unconditional Right of Holders to Receive Principal, Premium and Interest . . . . . . . . . . . . . . . . 36
SECTION 6.9 Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.10 Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.11 Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.12 Waiver of Past Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.13 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.14 Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VII - TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.1 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.2 Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.3 Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.4 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.6 Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.7 Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.8 Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.9 Successor Trustee by Merger, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.10 Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.11 Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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ARTICLE VIII - SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.1 Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.2 Repayment to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE IX - AMENDMENTS, SUPPLEMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 9.1 Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 9.2 Amendments, Supplemental Indentures and Waivers with Consent of Holders . . . . . . . . . . . . . . . . . 46
SECTION 9.3 Compliance with TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9.4 Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.5 Notation on or Exchange of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.6 Trustee to Sign Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE X - MEETINGS OF HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.1 Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.2 Manner of Calling Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.3 Call of Meetings by the Company or Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.4 Who May Attend and Vote at Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.5 Regulations May Be Made by Trustee; Conduct of the Meeting; Voting Rights; Adjournment . . . . . . . . . . 50
SECTION 10.6 Voting at the Meeting and Record to Be Kept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.7 Exercise of Rights of Trustee or Holders May Not Be Hindered or Delayed by Call of Meeting . . . . . . . 51
ARTICLE XI - RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.1 Repurchase of Securities at the Option of the Holder Upon a Change of Control . . . . . . . . . . . . . . 52
ARTICLE XII - SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 12.1 Securities Subordinated to Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 12.2 No Payment on Securities in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 12.3 Securities Subordinated to Prior Payment of All Senior Indebtedness on Dissolution,
Liquidation or Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 12.4 Holders to Be Subrogated to Rights of Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . 58
SECTION 12.5 Obligations of the Company Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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SECTION 12.6 Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice . . . . . . . . . . . . . . . . 59
SECTION 12.7 Application by Trustee of Assets Deposited with It . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 12.8 Subordination Rights Not Impaired by Acts or Omissions of the Company or Holders of
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 12.9 Holders Authorize Trustee to Effectuate Subordination of Securities . . . . . . . . . . . . . . . . . . . 60
SECTION 12.10 Right of Trustee to Hold Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 12.11 Article XII Not to Prevent Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 12.12 No Fiduciary Duty of Trustee to Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . 60
SECTION 12.13 Certain Conversions Deemed Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE XIII - CONVERSION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 13.1 Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 13.2 Exercise of Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 13.3 Fractional Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 13.4 Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 13.5 Adjustment of Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 13.6 Continuation of Conversion Privilege in Case of Reclassification, Change, Merger,
Consolidation or Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 13.7 Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 13.8 Taxes on Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 13.9 Company to Provide Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 13.10 Disclaimer of Responsibility for Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 13.11 Return of Funds Deposited for Converted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE XIV - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 14.1 TIA Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 14.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 14.3 Communications by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 14.4 Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 14.5 Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 14.6 Rules by Trustee, Paying Agent, Security Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 14.7 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 14.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 14.9 No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 14.10 No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 14.11 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 14.12 Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 14.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
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SECTION 14.14 Table of Contents, Headings, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 14.15 Qualification of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 14.16 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
EXHIBIT A - FORM OF SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
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INDENTURE, dated as of August 15, 1996, between METRICOM, INC., a
Delaware corporation (the "Company"), and U. S. TRUST COMPANY OF CALIFORNIA,
N.A., a national banking association duly organized and existing under the laws
of the State of California, as 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 8%
Convertible Subordinated Notes due 2003:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"Acceleration Notice" shall have the meaning specified in Section 6.2.
"Affiliate" means (a) any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, (b)
any spouse, immediate family member, or other relative who has the same
principal residence of any Person described in clause (a) above, and (c) any
trust in which any Person described in clause (a) or (b) above has a
beneficial interest. For purposes of this definition, the term "control" means
(x) the power to direct the management and policies of a Person, directly or
through one or more intermediaries, whether through the ownership of voting
securities, by contract, or otherwise, or (y) the beneficial ownership of 10%
or more of any class of voting Capital Stock of a Person (on a fully diluted
basis) or of any combination of shares, warrants or other rights to acquire
such amount of any class of Capital Stock (whether or not presently
exercisable).
"Agent" means any Security Registrar, Paying Agent or co-Security
Registrar.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal,
State or foreign law for the relief of debtors.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such Person.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
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"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Capitalized Lease Obligation" means rental obligations under a lease
that are required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations, as determined
in accordance with GAAP.
"Cash" means such coin or currency of the United States of America as
at the time of payment shall be legal tender for the payment of public and
private debts.
"Change of Control" means (a) an event or series of events as a result
of which any "person" or "group" (as such terms are used in Sections 13(d)(3)
and 14(d) of the Exchange Act) is or becomes, directly or indirectly, the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
whether or not applicable) of more than 50% of the combined voting power of the
then outstanding securities entitled to vote generally in elections of
directors, managers or trustees, as applicable, of the Company or any successor
entity ("Voting Stock"), (b) the completion of any consolidation with or merger
of the Company into any other Person, or conveyance, transfer or lease by the
Company of all or substantially all of its assets to any Person, or any merger
of any other Person into the Company in a single transaction or series of
related transactions, and, in the case of any such transaction or series of
related transactions, the outstanding Common Stock of the Company is changed or
exchanged as a result, unless the stockholders of the Company immediately
before such transaction own, directly or indirectly, immediately following such
transaction, at least 51% of the combined voting power of the outstanding
voting securities of the Person resulting from such transaction in
substantially the same proportion as their ownership of the Voting Stock
immediately before such transaction, or (c) such time as the Continuing
Directors do not constitute a majority of the Board of Directors of the Company
(or, if applicable, a successor corporation of the Company); provided that a
Change of Control shall not be deemed to have occurred if either (x) the last
sale price of the Common Stock for any five Trading Days during the 10 Trading
Days immediately preceding the Change of Control is at least equal to 105% of
the Conversion Price in effect on such day, or (y) with respect to a merger or
consolidation otherwise constituting a Change of Control described in clause
(b) above, at least 90% of the consideration in such transaction or
transactions consists of common stock or securities convertible into common
stock that are, or upon issuance will be, traded on a United States national
securities exchange or approved for quotation on the Nasdaq National Market.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Company's common stock, par value $.001 per
share, or as such stock may be reconstituted from time to time.
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"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to the Indenture, and thereafter means such
successor.
"Continuing Director" means at any date a member of the Company's
Board of Directors (a) who was a member of such board on August 15, 1996 or (b)
who was nominated or elected by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Company's Board of Directors was recommended or endorsed by at
least a majority of the directors who were Continuing Directors at the time of
such nomination or election.
"Conversion Price" shall have the meaning specified in Section 13.4.
"Corporate Trust Office" shall mean the principal office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 515 South Flower Street, Los Angeles, California
90071-2429, Attention: Corporate Trust Division (Metricom, Inc., 8% Convertible
Subordinated Notes due 2003).
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Date of Conversion" shall have the meaning specified in Section 13.2.
"Default" means any event or condition that is, or after notice or
passage of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning specified in Section 2.12.
"Depositary" means, with respect to the Securities issuable or issued
in whole or in part in global form, the Person specified in Section 2.6(c) as
the Depositary with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Indebtedness" means any Senior Indebtedness with an
aggregate principal amount in excess of $3 million that is designated in its
governing instrument as Designated Senior Indebtedness.
"Disqualified Capital Stock" means (a) except as set forth in (b),
with respect to any Person, Capital Stock of such Person that, by its terms or
by the terms of any security into which it is convertible, exercisable or
exchangeable, is, or upon the happening of an event or the passage of time
would be, required to be redeemed or repurchased (including at the option of
the holder thereof) by such Person or any of its Subsidiaries, in whole or in
part, on or prior to the Stated Maturity and (b) with respect to any Subsidiary
of such Person (including with respect to any Subsidiary of the
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Company), any Capital Stock (other than any common stock) with no preference,
privileges, or redemption or repayment provisions.
"Event of Default" shall have the meaning specified in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Expiration Time" shall have the meaning specified in Section 13.5(e).
"GAAP" means United States 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 ("FASB") or in such
other statements by such other entity as approved by a significant segment of
the accounting profession that are at the time in effect in the United States,
provided, however, that for purposes of determining compliance with covenants
in the Indenture, "GAAP" means such generally accepted accounting principles as
are in effect as of the Issue Date.
"Global Security" shall have the meaning specified in Section 2.6(a).
"Holder" means the Person in whose name a Security is registered on
the Security Register.
"Indebtedness" of any Person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such Person, (i)
in respect of borrowed money (whether or not the recourse of the lender is to
the whole of the assets of such Person or only to a portion thereof), (ii)
evidenced by bonds, notes, debentures or similar instruments, (iii) evidenced
by bankers' acceptances or similar instruments issued or accepted by banks,
(iv) for the payment of money relating to a Capitalized Lease Obligation, or
(v) evidenced by a letter of credit or a reimbursement obligation of such
Person with respect to any letter of credit; (b) all net obligations of such
Person under Interest Swap and Hedging Obligations; (c) all liabilities of
others of the kind described in the preceding (a) or (b) that such Person has
guaranteed or that is otherwise its legal liability and all obligations to
purchase, redeem or acquire any Capital Stock; and (d) any and all deferrals,
renewals, extensions, refinancings or refundings (whether direct or indirect)
of, or amendments, modifications or supplements to, any liability of the kind
described in any of the preceding clauses (a), (b) or (c), or this clause (d),
whether or not between or among the same parties.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Interest Payment Date" means the stated due date of an installment of
interest on the Securities.
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"Interest Swap and Hedging Obligation" means any obligation of any
Person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values including,
without limitation, any arrangement whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional
amount in exchange for periodic payments made by such Person calculated by
applying a fixed or floating rate of interest on the same notional amount.
"Issue Date" means the date of first issuance of the Securities under
this Indenture.
"Junior Security" means any Qualified Capital Stock and any
Indebtedness of the Company that is fully subordinated in right of payment to
the Securities and has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity.
"Last Sale Price" shall have the meaning specified in Section 13.3.
"Legal Holiday" shall have the meaning specified in Section 14.7.
"Lien" means any mortgage, lien, pledge, charge, security interest or
other encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement and any lease deemed to constitute a security interest and
any option or other agreement to give any security interest).
"Liquidated Damages" shall have the meaning specified in the
Registration Rights Agreement, insofar as it relates to the Notes.
"Non-Electing Share" shall have the meaning specified in Section 13.6.
"Notice of Default" means a written notice of the kind specified in
Section 6.1(d), 6.1(e) or 6.1(f).
"Offer" shall have the meaning specified in Section 13.5(e).
"Officer" means, with respect to the Company, the Chief Executive
Officer, the President, any Vice President (whether or not designated by a
number or numbers or word or words added before or after the title "Vice
President"), the Chief Financial Officer, the Treasurer, the Controller or the
Secretary of the Company.
"Officers' Certificate" means, with respect to the Company, a
certificate signed by two Officers or by an Officer and an Assistant Secretary
of the Company and otherwise complying with the requirements of Sections 14.4
and 14.5.
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"Opinion of Counsel" means a written opinion from legal counsel who or
that is reasonably acceptable to the Trustee and that complies with the
requirements of Sections 14.4 and 14.5.
"Paying Agent" shall have the meaning specified in Section 2.3.
"Payment Blockage Period" shall have the meaning specified in Section
12.2(b).
"Payment Default" shall have the meaning specified in Section 12.2(a).
"Payment Notice" shall have the meaning specified in Section 12.2(b).
"Person" means any corporation, individual, limited liability company,
joint stock company, joint venture, partnership, unincorporated association,
governmental regulatory entity, country, state or political subdivision
thereof, trust, municipality or other entity.
"PORTAL Market" shall mean the Private Offerings, Resales and Trading
through Automated Linkages Market operated by the National Association of
Securities Dealers, Inc. or any successor thereto.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.7 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Purchased Shares" shall have the meaning specified in Section 13.5.
"Qualified Capital Stock" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
"QIB" shall mean a "qualified institutional buyer" as defined in Rule
144A.
"Record Date" means a Record Date specified in the Securities whether
or not such Record Date is a Business Day.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraph 5 in the form of Security.
"Redemption Price," when used with respect to any Security to be
redeemed, means the redemption price for such redemption pursuant to Paragraph
5 in the form of Security, which shall include, without duplication, in each
case, accrued and unpaid interest and Liquidated Damages, if any, to but
excluding the Redemption Date.
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"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of August 26, 1996, by and among the Company and Furman
Selz LLC and Feshbach Brothers Investor Services, Inc., as such agreement may
be amended, modified, or supplemented from time to time in accordance with the
terms thereof.
"Repurchase Date" shall have the meaning specified in Section 11.1(a).
"Repurchase Offer" shall have the meaning specified in Section
11.1(b).
"Repurchase Price" shall have the meaning specified in Section
11.1(a).
"Restricted Securities" has the meaning specified in Section 2.6(c).
"Rule 144A" shall mean Rule 144A as promulgated under the Securities
Act.
"Rule 144(k)" shall mean Rule 144(k) as promulgated under the
Securities Act.
"SEC" means the Securities and Exchange Commission, and any successor
entity thereto.
"Securities" or "Security" means, collectively, the 8% Convertible
Subordinated Notes due 2003, as supplemented from time to time in accordance
with the terms hereof, issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Securities Custodian" means U. S. Trust Company of California, N.A.,
as custodian with respect to the Securities in global form, or any successor
entity thereto.
"Security Register" shall have the meaning set forth in Section 2.3.
"Security Registrar" shall have the meaning specified in Section 2.3.
"Senior Indebtedness" means all obligations of the Company to pay the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in any such
proceeding) and rent payable on or in connection with, and all fees, costs,
expenses and other amount accrued or due on or in connection with, any
Indebtedness of the Company, whether outstanding on the date of the Indenture
or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by
the Company, unless the instrument creating or evidencing such Indebtedness
provides that such Indebtedness is not senior or superior in right of payment
to the Securities or is pari passu with, or subordinated to, the Securities;
provided that in no event shall Senior Indebtedness include (a) Indebtedness of
the Company owed or owing to any Subsidiary of
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the Company or any officer, director or employee of the Company or of any
Subsidiary of the Company, (b) Indebtedness representing or with respect to any
account payable or other accrued current liability or obligation incurred in
the ordinary course of business in connection with the obtaining of materials
or services, or (c) any liability for taxes owed or owing by the Company or any
Subsidiary of the Company.
"Significant Subsidiary" shall have the meaning assigned to that term
under Regulation S-X promulgated by the Securities Act.
"Special Record Date" shall have the meaning set forth in Section
2.12.
"Stated Maturity," when used with respect to any Security, means
September 15, 2003.
"Subsidiary" with respect to any Person, means (a) a corporation a
majority of whose Capital Stock with voting power normally entitled to vote in
the election of directors is at the time, directly or indirectly, owned by such
Person, by such Person and one or more Subsidiaries of such Person or by one or
more Subsidiaries of such Person, (b) a partnership in which such Person or a
Subsidiary of such Person is, at the time, a general partner or (c) any other
Person (other than a corporation) in which such Person, one or more
Subsidiaries of such Person, or such Person and one or more Subsidiaries of
such Person, directly or indirectly, at the date of determination thereof has
at least majority ownership interest.
"TIA" means the Trust Indenture Act of 1939, as amended, as it was in
force at the date of execution of this Indenture, except as provided in
Sections 9.3, 11.1(d) and 13.6; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after the date hereof, the term "TIA" shall
mean, to the extent required by such amendment, the Trust Indenture Act of 1939
as so amended.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday, other than any day on which securities are not traded on the Nasdaq
National Market (or, if the Common Stock is not admitted to trading thereon, on
the principal national securities exchange, if any, on which the Common Stock
is listed or admitted to trading).
"Trigger Event" shall have the meaning specified in Section 13.5(b).
"Trustee" means U. S. Trust Company of California, N.A. and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee
at the time serving as successor trustee hereunder.
"Trust Officer" means any officer within the corporate trust division
(or any successor group) of the Trustee or any other officer of the Trustee
customarily performing functions similar to those performed by the Persons who
at that time shall be such officers, and also means, with respect to a
particular corporate trust matter, any other officer of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity with
the particular subject.
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"U.S. Government Obligations" means direct, non callable obligations
of, or noncallable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
SECTION 1.2 Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
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:
"indenture securities" means the Securities.
"indenture securityholder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA
or defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3 Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and words
in the plural include the singular;
(e) provisions apply to successive events and
transactions;
(f) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section
or other subdivision; and
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(g) references to Sections or Articles means reference to
such Section or Article in this Indenture, unless stated otherwise; and.
(h) with respect to references to the sufficiency of U.S.
Government Obligations, calculations shall be made without regard to
reinvestment.
ARTICLE II
THE SECURITIES
SECTION 2.1 Form and Dating.
The Securities and the Trustee's certificate of authentication in
respect thereof shall be substantially in the form of Exhibit A hereto, which
Exhibit is part of this Indenture. The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage. The Company
shall approve the form of the Securities and any notation, legend or
endorsement on them. Any such notations, legends or endorsements not contained
in the form of Security attached as Exhibit A hereto shall be delivered in
writing to the Trustee. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the forms of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and 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.
SECTION 2.2 Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Security for the Company by manual or facsimile signature.
The Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
In case any person who shall have signed any of the Securities shall
cease to be an Officer before the Securities so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Securities nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Securities had not ceased to be an Officer;
and any Security may be signed on behalf of the Company by such person as, at
the actual date of the execution of such Security, shall be an Officer although
at the date of the execution of this Indenture any such person was not an
Officer.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
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The Trustee shall authenticate the Securities for original issue in
the aggregate principal amount of up to $45,000,000 upon a written order of the
Company in the form of an Officers' Certificate. The Officers' Certificate
shall specify the amount of Securities to be authenticated and the date on
which the Securities are to be authenticated. The aggregate principal amount
of Securities outstanding at any time may not exceed $45,000,000, except as
provided in Section 2.7. Upon the written order of the Company in the form of
an Officers' Certificate, the Trustee shall authenticate Securities in
substitution of Securities originally issued to reflect any name change of the
Company.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the
appointment, 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 agent. An authenticating agent has the
same rights as an Agent to deal with the Company, any Affiliate, or any of
their respective Subsidiaries.
Securities shall be issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof.
SECTION 2.3 Security Registrar; Paying Agent.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 4.2 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of the Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Securities
and transfers of Securities as herein provided. The Company may have one or
more co-Security Registrars.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 4.2 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate
principal amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
that the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
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Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 2.10, 3.7 or 9.5 not involving any transfer.
The Company 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 3.3 and ending at the close of
business on the day of such mailing, or (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.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York where Securities may be presented for payment
("Paying Agent") and where notices and demands to or upon the Company in
respect of the Securities may be served. The Company may act as Paying Agent,
except that, for the purposes of Articles III, VIII and XI and as otherwise
specified in the Indenture, neither the Company nor any Affiliate shall act as
Paying Agent. The Company may have one or more additional Paying Agents. The
term "Paying Agent" includes any additional Paying Agent. The Company hereby
initially appoints the Trustee as Paying Agent, and the Trustee hereby
initially agrees so to act.
The Company shall enter into an appropriate written agency agreement
with any Agent not a party to this Indenture, which agreement shall implement
the provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such
Agent. If the Company fails to maintain a Security Registrar or Paying Agent,
the Trustee shall act as such.
SECTION 2.4 Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, premium, if any, interest on or Liquidated Damages with respect
to the Securities, including, if applicable, the Redemption Price or the
Repurchase Price (whether such assets have been distributed to it by the
Company or any other obligor on the Securities), and shall notify the Trustee
in writing of any Default in making any such payment. If either of the Company
or a Subsidiary of the Company acts as Paying Agent, it shall segregate such
assets and hold them as a separate trust fund for the benefit of the Holders or
the Trustee. The Company at any time may require a Paying Agent to distribute
all assets held by it to the Trustee and
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account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default or any Event of Default, upon written
request to a Paying Agent, require such Paying Agent to distribute all assets
held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by the
Company to the Paying Agent, the Paying Agent (if other than the Company or an
Affiliate) shall have no further liability for such assets.
SECTION 2.5 Holder Lists.
The Security Registrar shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Security Registrar, the Company shall furnish to the
Trustee on or before the third Business Day preceding 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 reasonably may require of the
names and addresses of Holders.
SECTION 2.6 Securities Restrictions on Transfer: Depositary.
(a) So long as the Securities are eligible for book-entry
settlement with the Depositary, unless otherwise required by law, all
Securities to be traded on the PORTAL Market shall be represented by a Security
in global form (the "Global Security"), the Global Security being registered in
the name of the Depositary or the nominee of the Depositary. The transfer and
exchange of beneficial interests in the Global Security that does not involve
the issuance of a Security in certificated form shall be effected through the
Depositary in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depositary therefor.
At any time at the request of the beneficial holder of an interest in
the Global Security to obtain a Security in certificated form, such beneficial
holder shall be entitled to obtain a Security in certificated form upon written
request to the Trustee and the Securities Custodian in accordance with the
standing instructions and procedures existing between the Securities Custodian
and Depositary for the issuance thereof. Upon receipt of any such request, the
Trustee, or the Securities Custodian at the direction of the Trustee, will
cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Securities Custodian, the aggregate principal
amount of the Global Security to be reduced by the principal amount of the
Security in certificated form issued upon such request to such beneficial
holder and, following such reduction, the Company will execute and the Trustee
will authenticate and deliver to such beneficial holder (or its nominee) a
Security or Securities in certificated form in the appropriate aggregate
principal amount in the name of such beneficial holder (or its nominee) and
bearing such restrictive legends as may be required by this Indenture.
Any transfer of a beneficial interest in the Global Security, or any
exchange of certificated Securities for an equal principal amount of
certificated Securities of other authorized denominations, that cannot be
effected through book-entry settlement must be effected by the delivery to the
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transferee (or its nominee) of a Security or Securities in certificated form
registered in the name of the transferee (or its nominee) on the Security
Register maintained by the Security Registrar in accordance with the transfer
restrictions set forth herein, provided however that the certificated form of
Security is surrendered. With respect to any such transfer, the Trustee, or
the Securities Custodian at the direction of the Trustee, will cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Securities Custodian, the aggregate principal amount of the
Global Security to be reduced by the principal amount of the respective
beneficial interest in the Global Security being transferred and, following
such reduction, the Company will execute and the Trustee will authenticate and
deliver to the transferee (or such transferee's nominee, as the case may be), a
Security or Securities in certificated form in the appropriate aggregate
principal amount in the name of such transferee (or its nominee) and bearing
such restrictive legends as may be required by this Indenture.
(b) A Security in certificated form may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. So long as the Securities are eligible for
book-entry settlement, unless otherwise required by law, upon any transfer of a
Security in certificated form to a QIB in accordance with Rule 144A, and upon
receipt of the Security or Securities in certificated form being so
transferred, together with certification from the transferee that the
transferee is a QIB (or other evidence satisfactory to the Trustee), the
Trustee shall make, or direct the Securities Custodian to make, an endorsement
on the Global Security to reflect an increase in the aggregate principal amount
of the Securities represented by the Global Security, and the Trustee shall
cancel such Security or Securities in certificated form and cause, or direct
the Securities Custodian to cause, in accordance with the standing instructions
and procedures existing between the Depositary and the Securities Custodian,
the aggregate principal amount of Securities represented by the Global Security
to be increased accordingly; provided that no Security in certificated form, or
portion thereof, in respect of which the Company or an Affiliate held any
beneficial interest shall be included in the Global Security until such
Security in certificated form is freely tradable in accordance with Rule
144(k); provided further that the Trustee shall issue Securities in
certificated form upon any transfer of a beneficial interest in the Global
Security to the Company or an Affiliate; provided further that whether or not
the Security in certificated form is a Restricted Security, the Trustee shall
have received written instructions directing the Trustee to make, or directing
the Securities Custodian to make, an endorsement on the Global Security to
reflect an increase in the aggregate principal amount of the Securities
represented by the Global Security.
Any Global Security may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Securities Custodian,
the Depositary or by the National Association of Securities Dealers, Inc. in
order for the Securities to be tradeable on the PORTAL Market or as may be
required for the Securities to be tradeable on any other market developed for
trading of securities pursuant to Rule 144A or required to comply with any
applicable law or any regulation thereunder or with the rules and regulations
of any securities exchange or automated quotation system upon which
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the Securities may be listed or traded or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to
which any particular Securities are subject.
(c) Every Security that bears or is required under this Section
2.6(c) to bear the legend set forth in this Section 2.6(c) (together with any
Common Stock issued upon conversion of the Securities and required to bear the
legend set forth in this Section 2.6(c), collectively, the "Restricted
Securities") shall be subject to the restrictions on transfer set forth in this
Section 2.6(c) (including those set forth in the legend set forth below) unless
such restrictions on transfer shall be waived by written consent of the
Company, and the holder of each such Restricted Security, by such holder's
acceptance thereof, agrees to be bound by all such restrictions on transfer.
As used in this Section 2.6(c), term "transfer" encompasses any sale, pledge,
transfer or other disposition whatsoever of any Restricted Security.
Until three years after the original issuance date of any Security,
any certificate evidencing such Security (and all securities issued in exchange
therefor or substitution thereof and all Common Stock issued upon conversion
thereof) shall bear a legend in substantially the following form, unless
otherwise agreed by the Company in writing, with written notice thereof to the
Trustee:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES
NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO THE DATE THAT IS THREE YEARS AFTER THE ORIGINAL ISSUE DATE
HEREOF (OR ANY PREDECESSOR OF SUCH SECURITY) EXCEPT (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) PURSUANT
TO RULE 144A, FOR SO LONG AS IT IS AVAILABLE, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN "ACCREDITED
INVESTOR," WITHIN THE MEANING OF RULE 501(a) UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE
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ACCOUNT OF SUCH AN "ACCREDITED INVESTOR," THAT PRIOR TO SUCH
TRANSFER DELIVERS AN OPINION OF COUNSEL, CERTIFICATION AND
OTHER INFORMATION IN FORM REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH TRANSFEREE IS AN "ACCREDITED INVESTOR"
WITHIN THE MEANING OF RULE 501(a) UNDER THE SECURITIES ACT,
THAT SUCH ACCREDITED INVESTOR IS ACQUIRING THE SECURITY FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR
SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT AND THAT SUCH TRANSFER COMPLIES WITH THE
SECURITIES ACT, (E) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT AND ARE IN COMPLIANCE WITH REGULATION
S UNDER THE SECURITIES ACT, (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E)
OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
Any Security (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to which the conditions for removal of the foregoing legend
set forth therein have been satisfied may, upon surrender of such Security for
exchange to the Security Registrar in accordance with the provisions of this
Section 2.6, be exchanged for a new Security or Securities, of like tenor and
aggregate principal amount that does not bear the restrictive legend required
by this Section 2.6(c).
Any Common Stock issued or issuable upon conversion of the Securities
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to which the conditions for removal of the foregoing legend
set forth therein have been satisfied may, upon surrender of the certificates
representing such shares of Common Stock issued upon conversion of the
Securities or the certificates representing such Securities upon conversion of
which such shares of Common Stock are issuable in accordance with Article XIII
for exchange in accordance with the procedures of the transfer agent for the
Common Stock, be exchanged for a new certificate or certificates for a like
number of shares of Common Stock, which shall not bear the restrictive legends
required by this Section 2.6(c).
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Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the second paragraph of Section 2.6(a) and in this
Section 2.6(c)), a Global Security may not be transferred as a whole or in part
except by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to
act as Depositary with respect to the Global Security. Initially, the Global
Security shall be issued to the Depositary, registered in the name of Cede &
Co., as the nominee of the Depositary, and deposited with the Securities
Custodian for Cede & Co.
If at any time the Depositary for the Global Security notifies the
Company that it is unwilling or unable to continue as Depositary for the
Security, the Company may appoint a successor Depositary with respect to such
Security. If a successor Depositary is not appointed by the Company within 90
days after the Company receives such notice, the Company will execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Securities, will authenticate and deliver, Securities in
certificated form, in an aggregate principal amount equal to the principal
amount of the Global Security, in exchange for the Global Security.
If a Security in certificated form is issued in exchange for any
portion of a Global Security after the close of business at the office or
agency where such exchange occurs on any record date and before the opening of
business at such office or agency on the next succeeding Interest Payment Date,
interest will not be payable on such Interest Payment Date in respect of such
Security, but will be payable on such Interest Payment Date only to the Person
to whom interest in respect of such portion of such Global Security is payable
in accordance with the provisions of this Indenture.
Securities in certificated form issued in exchange for all or a part
of a Global Security pursuant to this Section 2.6 shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such Securities in certificated form to the Persons in whose names such
Securities in certificated form are so registered.
At such time as all interests in a Global Security have been redeemed,
repurchased, converted, canceled, exchanged for Securities in certificated form,
or transferred to a transferee who receives Securities in certificated form
thereof, such Global Security shall, upon receipt thereof, be canceled by the
Trustee in accordance with standing procedures and instructions existing between
the Depositary and the Securities Custodian. At any time prior to such
cancellation, if any interest in a Global Security is exchanged for Securities
in certificated form, redeemed, converted, repurchased or canceled, or
transferred to a transferee who receives Securities in certificated form
therefor or any Security in certificated form is exchanged or transferred for
part of a Global Security, the principal amount of such Global Security shall,
in accordance with the standing procedures and instructions
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existing between the Depositary and the Securities Custodian, be appropriately
reduced or increased, as the case may be, and an endorsement shall be made on
such Global Security, by the Trustee or the Securities Custodian, at the
direction of the Trustee, to reflect such reduction or increase.
(d) Rule 144(k) Holding Period. Notwithstanding any provision of
Section 2.6 to the contrary, in the event Rule 144(k) (or any successor rule)
is amended to shorten the three-year period under Rule 144(k) (or the
corresponding period under any successor rule), from and after receipt by the
Trustee of the Officers' Certificate and Opinion of Counsel provided for in
this Section 2.6(d), (i) the references in the restrictive legend set forth in
the first sentence of the second paragraph to "THREE YEARS" in Section 2.6(c)
shall be deemed for all purposes hereof to be references to such shorter period
and (ii) all corresponding references to the Securities that are Restricted
Securities shall be deemed for all purposes hereof to be references to such
shorter period, provided that such changes shall not become effective if they
are otherwise prohibited by, or would otherwise cause a violation of, the
then-applicable Federal securities laws. As soon as practicable after the
Company has knowledge of the effectiveness of any such amendment to shorten the
three-year period under Rule 144(k) (or the corresponding period under any
successor rule), unless such changes would otherwise be prohibited by, or would
otherwise cause a violation of, the then- applicable securities laws, the
Company shall provide to the Trustee an Officers' Certificate and Opinion of
Counsel informing the Trustee of the effectiveness of such amendment and the
effectiveness of the foregoing changes to Section 2.6 and the restrictive
legends on the Securities that are Restricted Securities. This Section 2.6(d)
shall apply to successive amendments to Rule 144(k) (or any successor rule)
shortening the holding period thereunder.
(e) Affiliate Legend. Any certificate evidencing a Security that
has been transferred to the Company or an Affiliate within three years after
the original issuance date of the Security, as evidenced by a notation on the
Assignment Form for such transfer or in the representation letter delivered in
respect thereof (substantially in the form attached as an exhibit to the
Offering Memorandum), shall, until three years after the last date on which the
Company or any Affiliate was an owner of such Security, bear a legend in
substantially the following form, unless otherwise agreed by the Company (with
written notice thereof to the Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED, (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, 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 AGREES (1) THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE COMPANY OR
ANY SUBSIDIARY THEREOF, (B) IN A TRANSACTION REGISTERED UNDER THE
SECURITIES
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ACT OR (C) IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) AND (2) THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. THIS LEGEND SHALL BE REMOVED UPON THE TRANSFER
OF THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF SUCH SECURITY PURSUANT TO THE IMMEDIATELY PRECEDING
SENTENCE. IF THE PROPOSED TRANSFER IS IN ACCORDANCE WITH RULE 144 THE
SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH THE
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH
RULE 144 OF THE SECURITIES ACT.
Any stock certificate representing Common Stock issued upon conversion
of such Security shall also bear a legend in substantially the form indicated
above, unless otherwise agreed by the Company (with written notice thereof to
the Trustee). The Trustee shall be entitled to rely on the Assignment Form as
to whether any Person is an Affilliate.
SECTION 2.7 Replacement Securities.
If a mutilated Security is surrendered to the Security Registrar or if
the Holder of a Security claims and submits an affidavit or other evidence,
satisfactory to the Security Registrar and the Company, to the Trustee to the
effect that the Security has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Security
if the Security Registrar's requirements are met. If required by the Security
Registrar or the Company, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and the Security
Registrar, to protect the Company, the Trustee or any Agent from any loss which
any of them may suffer if a Security is replaced. The Company may charge such
Holder for its reasonable, out-of-pocket expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.8 Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee (including any Security represented by a
Global Security) except those canceled by the Securities Registrar, those
delivered to the Securities Registrar for cancellation, those reductions in the
interest in a Global Security effected by the Securities Registrar hereunder
and those described in this Section 2.8 as not outstanding. A Security does
not cease to be outstanding because the Company or an Affiliate holds the
Security, except as provided in Section 2.9.
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If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee and the Company receive proof satisfactory to them that the
replaced Security is held by a bona fide purchaser. A mutilated Security
ceases to be outstanding upon surrender of such Security and replacement
thereof pursuant to Section 2.7.
If on a Redemption Date the Paying Agent (other than the Company or an
Affiliate) holds Cash or U.S. Government Obligations sufficient to pay all of
the principal and interest due on the Securities payable on that date in
accordance with Section 3.6 hereof and payment of the Securities called for
redemption is not otherwise prohibited pursuant to Article XII hereof or
otherwise, then on and after that date such Securities cease to be outstanding
and interest on them ceases to accrue.
SECTION 2.9 Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company or an Affiliate shall be disregarded,
except that, for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, amendment, supplement, waiver or
consent, only Securities that a Trust Officer of the Trustee knows are so owned
shall be disregarded.
SECTION 2.10 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 variations that the Company reasonably and in good faith considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities (other than in the case of Global
Securities). Until so exchanged, the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as permanent
Securities authenticated and delivered hereunder.
SECTION 2.11 Cancellation.
The Company at any time may deliver Securities to the Security
Registrar for cancellation. The Trustee and the Paying Agent shall forward to
the Security Registrar any Securities surrendered to them for transfer,
exchange or payment. The Security Registrar, or at the direction of the
Security Registrar, the Trustee or the Paying Agent (other than the Company or
an Affiliate), and no one else, shall cancel and, at the written direction of
the Company, shall dispose of all Securities surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.7, the Company may not
issue new Securities to replace Securities that have been paid or delivered to
the Trustee for cancellation. No Securities shall be authenticated in lieu of
or in exchange for any Securities canceled as provided in this Section 2.11,
except as expressly permitted in the form of Securities and as permitted by
this Indenture.
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SECTION 2.12 Defaulted Interest.
Interest on any Security that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more predecessor Securities) is registered
at the close of business on the Record Date for such interest.
Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date plus, to the extent
lawful, any interest payable on the defaulted interest (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
holder on the relevant Record Date, and such Defaulted Interest may be paid by
the Company, at its election in each case, as provided in clause (a) or (b)
below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in
the following manner (the "Special Record Date"). The Company shall notify the
Trustee and the Paying Agent in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of Cash
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such Cash when deposited to
be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as provided in this clause (a). Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest that shall be
not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder at its address as it appears in the Security register not less
than 10 days prior to such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names the Securities (or their respective Predecessor Securities) are
registered on such Special Record Date and shall no longer be payable pursuant
to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
and the Paying Agent of the proposed payment pursuant to this clause, such
manner shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.12, each
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security. The
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provisions of this Section 2.12 shall also apply to Liquidated Damages, if any,
payable on the interest payment date that is not punctually paid or duly
provided for on any Interest Payment Date.
ARTICLE III
REDEMPTION
SECTION 3.1 Right of Redemption.
Redemption of Securities, as permitted by any provision of this
Indenture, shall be made in accordance with Paragraph 5 of the form of Security
attached as Exhibit A hereto and this Article III. The Company will not have
the right to redeem any Securities prior to September 15, 1999. On or after
September 15, 1999, the Company will have the right to redeem all or any part
of the Securities at the Redemption Prices specified in Paragraph 5 of the form
of Security attached as Exhibit A hereto under the caption "Redemption," in
each case including accrued and unpaid interest to, but excluding, the
Redemption Date (subject to the right of Holders of the redeemed Securities
registered on the relevant Record Date to receive interest and any Liquidated
Damages, if any, due on an Interest Payment Date that is on or prior to such
Redemption Date and subject to the provisions set forth in Section 3.5).
SECTION 3.2 Notice to Trustee.
If the Company elects to redeem Securities pursuant to Section 3.1 and
Paragraph 5 of the Securities, it shall notify the Trustee in writing, at least
35 days but more than 60 days before the Redemption Date, of the Redemption
Date, the Redemption Price, and the principal amount of Securities to be
redeemed and whether it wants the Trustee to give notice of redemption to the
Holders.
If the Company elects to reduce the principal amount of Securities to
be redeemed pursuant to Paragraph 5 of the Securities by crediting against any
such redemption Securities it has not previously delivered to the Trustee for
cancellation, it shall so notify the Trustee of the amount of the reduction and
deliver such Securities with such notice.
If fewer than all Securities are to be redeemed, the Company shall
give each notice to the Trustee provided for in this Section 3.2 at least 35
days but not more than 60 days before the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee). Any such notice may be canceled
at any time prior to notice of such redemption being mailed to any Holder and
shall thereby be void and of no effect.
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SECTION 3.3 Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof, the Trustee shall select the Securities to be redeemed on
a pro rata basis, by lot or by such other method as the Trustee shall determine
to be fair and appropriate and in such manner as complies with any applicable
depositary, legal and stock exchange requirements.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 may be redeemed only in whole.
The Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Securities that have denominations larger
than $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
SECTION 3.4 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first class mail to each
Holder whose Securities are to be redeemed. At the Company's request, the
Trustee shall give the notice of redemption in the Company's name and at the
Company's expense. Each notice for redemption shall identify the Securities to
be redeemed and shall state:
(a) the Redemption Date, and that the Securities called
for redemption may not be converted after the close of business on the
Business Day immediately prior to the Redemption Date;
(b) the Redemption Price;
(c) the Conversion Price;
(d) the last date on which the Securities may be
converted;
(e) the name, address and telephone number of the Paying
Agent;
(f) that Securities called for redemption must be
surrendered to the Paying Agent at the address specified in such
notice to collect the Redemption Price;
(g) that, unless (a) the Company defaults in its
obligation to deposit Cash with the Paying Agent in accordance with
Section 3.6 hereof or (b) such redemption payment is prohibited
pursuant to Article XII hereof or otherwise, interest on, and
Liquidated Damages, if any, with respect to, 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
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payment of the Redemption Price, upon surrender to the Paying Agent of
the Securities called for redemption and to be redeemed;
(h) if any Security is being 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, after the
Redemption Date, and upon surrender of such Security, a new Security
or Securities in aggregate principal amount equal to the unredeemed
portion thereof will be issued;
(i) if less than all the Securities are to be redeemed,
the identification of the particular Securities (or portion thereof)
to be redeemed, as well as the aggregate principal amount of such
Securities to be redeemed and the aggregate principal amount of
Securities to be outstanding after such partial redemption;
(j) the CUSIP number of the Securities to be redeemed; and
(k) that the notice is being sent pursuant to this
Section 3.4 and pursuant to the redemption provisions of Paragraphs 5
and 6 of the Securities.
SECTION 3.5 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.4,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price, including interest, if any, accrued and unpaid to
the Redemption date (and Liquidated Damages, if any). Upon surrender to the
Trustee or Paying Agent, such Securities called for redemption shall be paid at
the Redemption Price, including interest, if any, accrued and unpaid to the
Redemption date (and Liquidated Damages, if any) (subject to the right of
Holders of the redeemed Securities registered on the relevant Record Date to
receive interest due on an Interest Payment Date that is on or prior to such
Redemption Date); provided, that if a Redemption Date is a Legal Holiday,
payment shall be made on the next succeeding Business Day and no interest (or
Liquidated Damages, if any) shall accrue for the period from such Redemption
Date to such succeeding Business Day.
SECTION 3.6 Deposit of Redemption Price.
On or prior to the Redemption Date, the Company shall deposit with the
Paying Agent (other than the Company or an Affiliate) Cash sufficient to pay
the Redemption Price, including accrued and unpaid interest (and Liquidated
Damages, if any) on all Securities to be redeemed on such Redemption Date
(other than Securities or portions thereof called for redemption on that date
that have been delivered by the Company to the Registrar for cancellation).
The Paying Agent shall promptly return to the Company any Cash so deposited
which is not required for that purpose upon the written request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not prohibited under Article XII or
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otherwise, interest and Liquidated Damages, if any, on the Securities to be
redeemed will accrue through the close of business on the day immediately
preceding the applicable Redemption Date, whether or not such Securities are
presented for payment. Notwithstanding anything herein to the contrary, if any
Security surrendered for redemption in the manner provided in the Securities
shall not be so paid upon surrender for redemption because of the failure of
the Company to comply with the preceding paragraph, interest (or Liquidated
Damages, if any) shall continue to accrue and be paid from the Redemption Date
until such payment is made on the unpaid principal, and, to the extent lawful,
on any interest not paid on such unpaid principal, in each case at the rate and
in the manner provided in Section 4.1 hereof and the Security.
SECTION 3.7 Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part in
multiples of $1,000 only, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder, without service charge to the Holder, a
new Security or Securities equal in principal amount to the unredeemed portion
of the Security surrendered.
SECTION 3.8 Conversion Arrangement on Call for Redemption.
In connection with any redemption of Securities, the Company may
arrange for the purchase and conversion of any Securities by an agreement with
one or more investment bankers or other purchasers to purchase such Securities
by paying to the Trustee in trust for the holders of such Securities, on or
before the date fixed for redemption, an amount not less than the applicable
Redemption Price of such Securities. Notwithstanding anything to the contrary
contained in this Article III, the obligation of the Company to pay the
Redemption Price of such Securities shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers. If such an
agreement is entered into (a copy of which shall be filed with the Trustee
prior to the date fixed for redemption), any Securities not duly surrendered
for conversion by the holders thereof may, at the option of the Company, be
deemed, to the fullest extent permitted by law, acquired by such purchasers
from such holders and (notwithstanding anything to the contrary contained in
Article XIII) surrendered by such purchasers for conversion, all as of
immediately prior to the close of business on the date fixed for redemption
(and the right to convert any such Securities shall be extended through such
time), subject to payment of the above amount as aforesaid. At the direction
of the Company, the Trustee shall hold and dispose of any such amount paid to
it in the same manner as it would monies deposited with it by the Company for
the redemption of Securities. Without the Trustee's prior written consent, no
arrangement between the Company and such purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers to which the Trustee has not
consented in writing, including the costs and expenses, including reasonable
legal fees, incurred by the Trustee in
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the defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities.
The Company shall pay the principal of, premium, if any, including
without limitation any Redemption Price or Repurchase Price, and interest and
Liquidated Damages, if any, on the Securities on the dates and in the manner
provided in the Securities and the Registration Rights Agreement. An
installment of principal of, premium, if any, including without limitation any
Redemption Price or Repurchase Price, and interest and Liquidated Damages, if
any, on the Securities shall be considered paid on the date it is due if the
Trustee or Paying Agent (other than the Company or an Affiliate) holds for the
benefit of the Holders, on or before 10:00 a.m. New York City time on that
date, Cash deposited and designated for and sufficient to pay the installment.
The Company shall pay interest on overdue principal and premium, if
any, including without limitation any Redemption Price or Repurchase Price and
on overdue installments of interest or Liquidated Damages, if any, at the rate
specified in the Securities, to the extent lawful.
SECTION 4.2 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer
or exchange and 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 hereby designates the office of United States Trust Company of New
York, 114 West 47th Street, New York, New York 10036, as such office or agency
of the Company unless the Company shall designate and maintain some other
office or agency for one or more of such purposes. The Company shall give
prompt written notice to the Trustee and Paying Agent 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 and Paying Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office.
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
shall give prompt
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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 Trustee as Paying Agent,
Security Registrar and Securities Custodian, and the Corporate Trust Office of
the Trustee as such office or agency of the Company for each of the aforesaid
purposes.
SECTION 4.3 Corporate Existence.
Subject to Article V, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate or other existence of each of its Significant
Subsidiaries in accordance with the respective organizational documents of each
of them and the rights (charter and statutory) and corporate franchises of the
Company and each of its Significant Subsidiaries; provided, however, that the
Company shall not be required to preserve, with respect to itself, any right or
franchise, and with respect to any of its Significant Subsidiaries, any such
existence, right or franchise, if the Board of Directors of the Company or such
Significant Subsidiary, as the case may be, shall determine (a) that the
preservation thereof is no longer desirable in the conduct of the business of
such entity and (b) the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 4.4 Payment of Taxes and Other Claims.
Except with respect to immaterial items, the Company shall, and shall
cause each of its Significant Subsidiaries to, pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the Company
or any of its Significant Subsidiaries or any of their respective properties
and assets and (ii) all lawful claims, whether for labor, materials, supplies,
services or anything else, which have become due and payable and which by law
have or may become a Lien upon the property and assets of the Company or any of
its Significant Subsidiaries; provided, however, that neither the Company nor
any Significant Subsidiary shall be required to pay or discharge or cause to be
paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which disputed amounts adequate reserves have been
established in accordance with GAAP.
SECTION 4.5 Maintenance of Properties and Insurance.
The Company shall cause all material properties used or useful to the
conduct of its business and the business of each of its Significant
Subsidiaries to be maintained and kept in good condition, repair and working
order (reasonable wear and tear excepted) and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in their reasonable
judgment may be necessary, so that the business carried on in connection
therewith may be properly conducted at all times; provided, however, that
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nothing in this Section 4.5 shall prevent the Company or any Significant
Subsidiary from discontinuing any operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is
in the judgment of the Board of Directors of the Company or such Significant
Subsidiary, as the case may be, (a) desirable in the conduct of the business of
such entity and (b) the loss thereof is not disadvantageous in any material
respect to the Holders.
The Company shall provide, or cause to be provided, for itself and
each of its Significant Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Company is adequate and appropriate for the conduct
of the business of the Company and such Significant Subsidiaries in a prudent
manner, with (except for self-insurance) reputable insurers or with the
government of the United States of America or an agency or instrumentality
thereof, in such amounts, with such deductibles, and by such methods as shall
be customary, in the reasonable, good faith opinion of the Company and adequate
and appropriate for the conduct of the business of the Company and such
Significant Subsidiaries in a prudent manner for entities similarly situated in
the industry, unless failure to provide such insurance (together with all other
such failures) would not have a material adverse effect on the financial
condition or results of operations of the Company or such Significant
Subsidiary.
SECTION 4.6 Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee within 90 days after
the end of its fiscal year an Officers' Certificate complying with Section
314(a)(4) of the TIA and stating that a review of its activities and the
activities of its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing Officers with a view to determining
whether the Company has kept, observed, performed and fulfilled its obligations
under this Indenture and further stating, as to each such Officer signing such
certificate, whether or not the signer knows of any failure by the Company or
any Subsidiary of the Company to comply with any conditions or covenants in
this Indenture and, if such signor does know of such a failure to comply, the
certificate shall describe such failure with particularity. The Officers'
Certificate shall also notify the Trustee should the relevant fiscal year end
on any date other than the current fiscal year end date.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon becoming aware of any
Default, Event of Default or fact which would prohibit the making of any
payment to or by the Trustee in respect of the Securities, an Officers'
Certificate specifying such Default, Event of Default or fact and what action
the Company is taking or proposes to take with respect thereto. The Trustee
shall not be deemed to have knowledge of any Default, any Event of Default or
any such fact unless one of its Trust Officers receives written notice thereof
from the Company or any of the Holders.
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SECTION 4.7 Reports.
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee, within 15 days after it is or would have been required to file such
with the SEC, annual and quarterly consolidated financial statements
substantially equivalent to financial statements that would have been included
in reports filed with the SEC if the Company was subject to the requirements of
Section 13 or 15(d) of the Exchange Act, including, with respect to annual
information only, a report thereon by the Company's certified independent
public accountants as such would be required in such reports to the SEC and, in
each case, together with a management's discussion and analysis of financial
condition and results of operations which would be so required.
SECTION 4.8 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, 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 that would prohibit or forgive the Company from paying all or any
portion of the principal of, premium on, or interest on or Liquidated Damages,
if any, with respect to the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or that 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 or any Paying Agent, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.9 Rule 144A Information Requirement.
During the period beginning on the date of the original issuance of
the Securities and ending on the date that is three years from such date, the
Company covenants and agrees that it shall, during any period in which it is
not subject to Section 13 or 15(d) under the Exchange Act, furnish to the
Holders or beneficial holders of the Securities or the underlying Common Stock
and prospective purchasers of Securities or the underlying Common Stock
designated by the Holders of Securities or the underlying Common Stock, upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act until such time as such securities are no
longer "restricted securities" within the meaning of Rule 144 under the
Securities Act. Upon the request of any holder or any beneficial holder of the
Securities or the underlying Common Stock, the Company will deliver to such
holder a written statement as to whether it has complied with such
requirements.
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SECTION 4.10 Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 7.8, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 4.11 Resale of Certain Securities.
During the period beginning on the original issuance date of the
Securities and ending on the date that is three years from such date, the
Company will not resell, and will use all reasonable efforts to prevent any of
its Affiliates from reselling, (x) any Securities which constitute "restricted
securities" under Rule 144 and (y) any securities into which the Securities
have been converted under this Indenture which constitute "restricted
securities" under Rule 144.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 Limitation on Merger, Sale or Consolidation.
(a) The Company shall not, directly or indirectly, consolidate
with or merge with or into another Person or sell, lease, convey or transfer
all or substantially all of its assets (computed on a consolidated basis)
(other than the sale, lease, conveyance or transfer of all or substantially all
of the Company's assets to its Subsidiaries), whether in a single transaction
or a series of related transactions, to another Person or group of affiliated
Persons, unless (i) either (a) in the case of a merger or consolidation, the
Company is the surviving entity or (b) the resulting, surviving or transferee
entity is a corporation organized under the laws of the United States, any
State thereof or the District of Columbia and expressly assumes by supplemental
indenture all of the obligations of the Company in connection with the
Securities and the Indenture; (ii) no Default or Event of Default shall exist
or shall occur immediately after giving effect to such transaction; and (iii)
the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer of
all or substantially all of the assets and, if a supplemental indenture is
required, such supplemental indenture complies with the Indenture and that all
conditions precedent relating to such transactions have been satisfied, and
such supplemental indenture shall provide for the applicable conversion rights
set forth in Section 13.6.
(b) For purposes of clause (a) of this Section 5.1, the sale,
lease, conveyance, assignment, transfer, or other disposition of all or
substantially all of the properties and assets of one or more Subsidiaries of
the Company (other than to another Subsidiary of the Company or to the
Company), which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
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SECTION 5.2 Successor Corporation Substituted.
Upon any consolidation or merger or any sale, lease, conveyance or
transfer of all or substantially all of the assets of the Company in accordance
with the foregoing, the successor corporation formed by such consolidation or
into which the Company is merged or to which such sale, lease, conveyance or
transfer is made, shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under the Indenture with the same effect
as if such successor corporation had been named therein as the Company, and
when a successor corporation duly assumes all of the obligations of the Company
pursuant hereto and pursuant to the Securities, the predecessor shall be
released from such obligations (except with respect to any obligations that
arise from, or as a result of such transaction).
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation,
by operation of law or pursuant to any judgment, decree or order of any court
or any order, rule or regulation of any administrative or governmental body):
(a) failure by the Company to pay any installment of
interest upon, or Liquidated Damages, if any, with respect to, the
Securities as and when the same becomes due and payable and the
continuance of such failure for a period of 30 days, whether or not
such payment is prohibited by Article XII;
(b) failure by the Company to pay all or any part of the
principal of, or premium, if any, on the Securities when and as the
same become due and payable at maturity, redemption, repurchase, by
acceleration, or otherwise, including, without limitation, failure to
pay the Redemption Price on the Redemption Date in accordance with
Article III or failure to pay the Repurchase Price on the Repurchase
Date in accordance with Article XI, whether or not such payment is
prohibited by Article XII;
(c) failure to perform any conversion of the Securities
required under this Indenture and the continuance of such default for
a period of 30 days;
(d) failure by the Company to observe or perform any
covenant or agreement contained in the Securities or this Indenture
(other than a default in the performance of any covenant or agreement
that is specifically dealt with elsewhere in this Section 6.1), and
continuance of such failure for a period of 60 days after there has
been given to the Company by the Trustee, or to the Company and the
Trustee by Holders of at least 25% in aggregate
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principal amount of the then outstanding Securities, a written notice
specifying such default or breach, requesting it to be remedied and
stating that such notice is a "Notice of Default" hereunder;
(e) failure on the part of the Company or any Significant
Subsidiary to make any payment at maturity, including any grace
period, in respect of Indebtedness (other than non-recourse
obligations) in an amount in excess of $5 million, and continuance of
such failure for a period of 30 days after there has been given to the
Company by the Trustee, or to the Company and the Trustee by Holders
of at least 25% in aggregate principal amount of the then outstanding
Securities, a written notice specifying such default or breach,
requesting it to be remedied and stating that such notice is a "Notice
of Default " hereunder;
(f) default by the Company or any Significant Subsidiary
with respect to any Indebtedness (other than non-recourse obligations)
that results in the acceleration of any such Indebtedness in an amount
in excess of $5 million without such Indebtedness having been
discharged, or such acceleration having been rescinded or annulled,
for a period of 30 days after there has been given to the Company by
the Trustee, or to the Company and the Trustee by Holders of at least
25% in aggregate principal amount of the then outstanding Securities,
a written notice specifying such default or breach, requesting it to
be remedied and stating that such notice is a "Notice of Default"
hereunder;
(g) entrance of a decree, judgment, or order by a court
of competent jurisdiction adjudging the Company or any of its
Significant Subsidiaries as bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization of the Company or any
of its Significant Subsidiaries under any bankruptcy or similar law,
and the continuance of such decree or order as undischarged and
unstayed for a period of 60 days; or entrance of a decree or order of
a court of competent jurisdiction over the appointment of a receiver,
liquidator, trustee, or assignee in bankruptcy or insolvency of the
Company, any of its Significant Subsidiaries, or of the property of
any such Person, or for the winding up or liquidation of the affairs
of any such Person and the continuance of such decree, judgment, or
order as undischarged and unstayed for a period of 60 days;
(h) institution of proceedings by the Company or any of
its Significant Subsidiaries to be adjudicated a voluntary bankrupt,
or consent to the filing of a bankruptcy proceeding against it, or the
filing of a petition or answer or consent seeking reorganization under
any bankruptcy or similar law or similar statute, or consent to the
filing of any such petition, or consent to the appointment of a
Custodian, receiver, liquidator, trustee, or assignee in bankruptcy or
insolvency of it or any of its assets or property, or the making of a
general assignment for the benefit of creditors, or the admission in
writing of its inability to pay its debts generally as they become
due, or within the meaning of any Bankruptcy Law, becoming insolvent,
failing generally to pay its debts as they become due, or taking any
corporate action in furtherance of or to facilitate, conditionally or
otherwise, any of the foregoing; or
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(i) the issuance of final unsatisfied judgments not
covered by insurance for the payment of money, or any warrant of
attachment against any portion of the property or assets of the
Company or any of its Significant Subsidiaries, aggregating in excess
of $5,000,000 at any one time have not been stayed, bonded or
discharged for a period (during which execution shall not be
effectively stayed) of 60 days (or, in the case of any such final
judgment which provides for payment over time, which shall so remain
unstayed, unbonded or undischarged beyond any applicable payment date
provided therein).
Notwithstanding the 60-day period and notice requirement contained in
Section 6.1(d) above, with respect to a default under Article XI the 60-day
period referred to in Section 6.1(d) shall be deemed to have begun as of the
date the Change in Control notice is required to be sent in the event that the
Company has not complied with the provisions of Section 11.1 and the Trustee or
Holders of at least 25% in principal amount of the outstanding Securities
thereafter give the Notice of Default referred to in Section 6.1(d) to the
Company and, if applicable, the Trustee; provided, however, that if the breach
or default is a result of a default in the payment when due of the Repurchase
Price on the Repurchase Date, such Event of Default shall be deemed, for
purposes of this Section 6.1, to arise no later than on the Repurchase Date.
If a Default occurs and is continuing, the Trustee shall, within 90
days after the occurrence of such default, give to the Holders notice of such
default; provided that, except in the case of default in the payment of the
principal of, or premium, if any, or interest on or Liquidated Damages, if any,
with respect to any of the Securities, including default in the payment of any
redemption or repurchase obligation, the Trustee shall be protected in
withholding such notice if and so long as a trust committee of directors and/or
Trust Officers in good faith determine that the withholding of such notice is
in the interests of the holders of Securities.
SECTION 6.2 Acceleration of Maturity Date; Rescission and
Annulment.
If an Event of Default (other than an Event of Default specified in
Section 6.1(g) or (h) relating to the Company or any of its Significant
Subsidiaries) occurs and is continuing, then, and in every such case, unless
the principal of all of the Securities shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of then outstanding Securities, by a notice in writing to the
Company (and to the Trustee if given by Holders) (an "Acceleration Notice"),
may declare all of the principal of the Securities, determined as set forth
below, including in each case accrued interest thereon and Liquidated Damages,
if any, with respect thereto, to be due and payable immediately. If an Event
of Default specified in Section 6.1(g) or (h) relating to the Company or any
Significant Subsidiary occurs, all principal, premium, if any, accrued interest
thereon and Liquidated Damages, if any, with respect thereto will be
immediately due and payable on all outstanding Securities without any
declaration or other act on the part of Trustee or the Holders.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this
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Article VI, the Holders of no less than a majority in aggregate principal
amount of then outstanding Securities, by written notice to the Company and the
Trustee, may rescind, on behalf of all Holders, any such declaration of
acceleration if:
(a) the Company has paid or deposited with the Trustee
Cash sufficient to pay
(i) all overdue interest (and Liquidated Damages,
if any) on all Securities,
(ii) the principal of (and premium, if any,
applicable to) any Securities that would then
be due otherwise than by such declaration of
acceleration, and interest thereon at the
rate borne by the Securities,
(iii) to the extent that payment of such interest
is lawful, interest upon overdue principal,
premium, if any, and on overdue installments
of interest (and Liquidated Damages, if any)
at the rate borne by the Securities,
(iv) all sums paid or advanced by the Trustee
hereunder and the compensation, expenses,
disbursements and advances of the Trustee,
its agents and counsel and any other amounts
due the Trustee under Section 7.7, and
(b) all Events of Default, other than the non-payment of
the principal of, premium, if any, and interest on and Liquidated
Damages with respect to Securities that have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 6.12, including, if applicable, any Event of Default relating
to the covenants contained in Section 11.1.
Notwithstanding Section 6.2(b), no waiver shall be effective against any Holder
for any Event of Default or event which with notice or lapse of time or both
would be an Event of Default with respect to any covenant or provision that
cannot be modified or amended without the consent of the Holder of each
outstanding Security affected thereby, unless all such affected Holders agree,
in writing, to waive such Event of Default or other event. No such waiver
shall cure or waive any subsequent default or impair any right consequent
thereon.
SECTION 6.3 Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if an Event of Default in payment of
principal, premium, or interest (or Liquidated Damages, if any) specified in
clause (a) or (b) of Section 6.1 occurs and is continuing, the Company shall,
upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal, premium (if any), interest and Liquidated Damages, if any, and, to
the extent that payment of such interest shall be legally enforceable, interest
on any overdue principal (and premium, if any) and on any
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overdue interest and Liquidated Damages, if any, at the rate borne by the
Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including
compensation to, and expenses, disbursements and advances of the Trustee, its
agents and counsel and amounts due the Trustee under Section 7.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.4 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest and Liquidated
Damages, if any) shall be entitled and empowered, by intervention in such
proceeding or otherwise to take any and all actions under the TIA, including
(1) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest and Liquidated Damages,
if any, owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agent and counsel and all other amounts due the Trustee under Section
7.7) and of the Holders allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
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Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7.
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.
SECTION 6.5 Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust in favor of the Holders, and any recovery
of judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee, its agents and counsel and
all other amounts due the Trustee under Section 7.7, be for the ratable benefit
of the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 6.6 Priorities.
Any money collected by the Trustee pursuant to this Article VI shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money or property on account of
principal, premium (if any), interest or Liquidated Damages, if any, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7;
SECOND: To the holders of Senior Indebtedness of the Company to the
extent provided in Article XII;
THIRD: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any) and Liquidated Damages, if any, and interest
on the Securities in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal,
premium (if any) and interest and Liquidated Damages, if any, respectively; and
FOURTH: To the Company or to whomsoever may be lawfully entitled
thereto, the remainder, if any.
SECTION 6.7 Limitation on Suits.
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No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(A) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in principal amount
of then outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities to be incurred or reasonably probable to be incurred in
compliance with such request;
(D) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(E) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of then outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders. For the
protection and enforcement of this Section 6.7, each and every holder of a
Security and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Anything in this Indenture or the Securities to the contrary
notwithstanding, the holder of any Security, without the consent of either the
Trustee or the holder of any other Security, in his own behalf and for his own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.
SECTION 6.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any), interest on and
Liquidated Damages, if any, with respect to such Security when due (including,
in the case of redemption, the Redemption Price on the applicable Redemption
Date, and in the case of the Repurchase Price, on the applicable Repurchase
Date) and to convert such Security in accordance with Article XIII and to
institute suit for the enforcement of any such payment and
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right to convert after such respective dates, and such rights shall not be
impaired without the consent of such Holder.
SECTION 6.9 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.10 Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any Security
to exercise any right or remedy arising upon any Event of Default shall impair
the exercise of any such right or remedy or constitute a waiver of any such
Event of Default. Subject to the limitations contained in this Article VI,
every right and remedy given by this Article VI or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 6.11 Control by Holders.
The Holder or Holders of no less than a majority in aggregate
principal amount of then 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 upon the
Trustee, provided, that
(a) such direction shall not be in conflict with any rule
of law or with this Indenture,
(b) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Holders not taking part
in such direction, and
(c) the Trustee may take any other action deemed proper
by the Trustee that is not inconsistent with such direction.
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SECTION 6.12 Waiver of Past Default.
Prior to the declaration of acceleration of the maturity of the
Securities, the Holder or Holders of not less than a majority in aggregate
principal amount of then outstanding Securities may, on behalf of all Holders,
waive any past default hereunder and its consequences, except a default
(A) in the payment of the principal of, premium, if any,
interest on or Liquidated Damages, if any, with respect to any
Security as specified in clauses (a) and (b) of Section 6.1 not yet
cured, or
(B) in respect of a covenant or provision hereof that,
under Article IX, cannot be modified or amended without the consent of
the Holder of each outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
SECTION 6.13 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by its acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted to be taken by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 6.13 shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in aggregate principal amount of then outstanding Securities, or to
any suit instituted by any Holder for enforcement of the payment of principal
of, premium (if any) or interest or Liquidated Damages, if any, on, any
Security on or after the respective Stated Maturity (including, in the case of
redemption, on or after the Redemption Date).
SECTION 6.14 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall 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.
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ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
SECTION 7.1 Duties of Trustee.
(a) If a Default or 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 its exercise
as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no
covenants or obligations shall be implied in or read into this
Indenture that are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture as to the
truth of the statements and the correctness of the opinions expressed
therein. However, 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 examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section 7.1.
(2) 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.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.11.
(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 to take or omit to take any
action under this Indenture or at the request, order or direction of the
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Holders 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), (d) and (f) of this Section
7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
SECTION 7.2 Rights of Trustee.
Subject to Section 7.1:
(a) The Trustee may rely on any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may consult with counsel and may require an Officers' Certificate or an Opinion
of Counsel, which shall conform to Sections 14.4 and 14.5. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such certificate, opinion or advice of counsel.
(c) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent or
attorney appointed with due care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers conferred upon it by this Indenture, nor for any
action permitted to be taken or omitted hereunder by any agent.
(e) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, notice, request, direction, consent, order,
bond, debenture, note, or other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(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 reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby.
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(g) Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(h) The Trustee shall have no duty to inquire as to the
performance of the Company's covenants in Article IV hereof or as to the
performance by any agent of its duties hereunder. In addition, the Trustee
shall not be deemed to have knowledge of any Default or Event of Default except
any Default or Event of Default of which the Trustee shall have received
written notification or obtained actual knowledge.
(i) Whenever in the administration of this Indenture, the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed), may, in the absence of bad faith,
rely upon an Officers' Certificate of the Company.
SECTION 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, any of
its Subsidiaries, or their respective Affiliates with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.4 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities and it shall not be accountable for the
Company's use or application of the proceeds from the Securities, and it shall
not be responsible for any statement in the Securities, other than the
Trustee's certificate of authentication (if executed by the Trustee), or the
use or application of any funds received by a Paying Agent other than the
Trustee.
SECTION 7.5 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, in the
manner and to the extent provided in TIA Section 313(c), of the uncured Default
or Event of Default within 90 days after such Default or Event of Default
occurs provided that, except in the case of default in the payment of the
principal of, or premium, if any, or interest on or Liquidated Damages, if any,
with respect to any of the Securities including default in the payment of any
redemption or repurchase obligation, the Trustee shall be protected in
withholding such notice if and so long as a trust committee of directors and/or
Trust Officers in good faith determine that the withholding of such notice is
in the interests of the holders of Securities.
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SECTION 7.6 Reports by Trustee to Holders.
Within 60 days after May 15 of each year commencing with the year
1996, the Trustee shall, if required by law, mail to each Holder a brief report
dated as of May 15 of the year in which such reports are made that complies
with TIA Section 313(a). The Trustee also shall comply with TIA Sections
313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
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 stock exchange, if any,
on which the Securities are listed.
SECTION 7.7 Compensation and Indemnity.
The Company agrees to pay to 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 in accordance with this Indenture. Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee's agents, accountants, experts and counsel.
The Company agrees to indemnify the Trustee (in its capacity as
Trustee) and each of its officers, directors, attorneys-in-fact and agents for,
and hold it harmless against, any claim, demand, expense (including but not
limited to reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel), loss or liability incurred by it without negligence,
willful misconduct, recklessness or bad faith on the part of the Trustee,
arising out of or in connection with the administration of this trust and its
rights or duties hereunder including the reasonable costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Trustee shall
notify the Company promptly of any claim asserted against the Trustee for which
it may seek indemnity. The Trustee may have separate counsel and the Company
shall pay reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its written consent, provided however that
such consent may not be unreasonably withheld. The Company shall defend the
claim and the Trustee shall provide reasonable cooperation at the Company's
expense in the defense. The Company need not reimburse any expense or
indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, willful misconduct, recklessness or bad faith.
To secure the Company's payment obligations in this Section 7.7, 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 and premium, if any, of or interest on or Liquidated
Damages, if any, with respect to particular Securities.
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When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(f) or (g) occurs, 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 7.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the
discharge of the Company's obligations pursuant to Article VIII of this
Indenture and any rejection or termination of this Indenture under any
Bankruptcy Law.
SECTION 7.8 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
The Trustee may resign by so notifying the Company in writing. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment 60 days after the mailing of such notice of
resignation to the holders of Securities, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor trustee,
or any holder of Securities who has been a bona fide holder of a Security or
Securities for at least six months may, subject to the provisions of Section
6.13, on behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee. The Holder or Holders of a majority in principal amount of
then 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 consent. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian, or other public officer takes
charge of the Trustee or its property; or
(d) 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 promptly appoint a
successor Trustee by written instrument in duplicate. One copy of such
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. Within one year after the successor Trustee takes office,
the Holder or Holders of
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a majority in principal amount of then outstanding Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the retiring Trustee provided for in
Section 7.7 have been paid, the retiring Trustee shall transfer all property
held by it as trustee to the successor Trustee, subject to the lien provided in
Section 7.7, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee.
SECTION 7.9 Successor Trustee by Merger, Etc.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation or national banking association succeeding to all or
substantially all of the corporate trust business of the Trustee (including any
trust created by this Indenture), shall be the successor to the Trustee
hereunder without the execution or filing of any paper or any further act on
the part of any of the parties hereto, provided that in the case of any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee such corporation shall be qualified under the
provisions of Section 7.11 and eligible under the provisions of Section 7.10.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt
the certificate of authentication of any predecessor trustee or authenticating
agent appointed by such predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee or an authenticating agent
appointed by such successor trustee may authenticate such Securities either in
the name of any predecessor trustee hereunder or in the name of the successor
trustee; and in all such cases such certificates shall have the full force
which it is anywhere in the Securities or in this Indenture provided that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Securities in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
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SECTION 7.10 Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA Section
310(a)(1), (2) and (5). The Trustee shall have a combined capital and surplus
of at least $50,000,000 as set forth in its most recent published annual report
of condition. The Trustee shall comply with TIA Section 310(b).
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1 Satisfaction and Discharge of Indenture.
The Company may terminate its obligations under this Indenture
(subject to the provisions of this Article VIII) when it shall have delivered
to the Trustee for cancellation all Securities theretofore authenticated (other
than any Securities which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Article II hereof) and the
following conditions shall be satisfied:
(1) The Company has paid all sums payable under the
Indenture; and
(2) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel in the United States, each
stating that all conditions precedent have been complied with as contemplated
by this Section 8.1.
SECTION 8.2 Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, for the payment of the principal of, premium, if any, or
interest on or Liquidated Damages with respect to any Security and remaining
unclaimed for two years after such principal, and premium, if any, or interest
or Liquidated Damages has become due and payable shall be paid to the Company
on its request; and the Holder of such Security shall thereafter look only to
the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money shall thereupon cease.
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ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company, when authorized by
Board Resolutions delivered to the Trustee, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto,
in form satisfactory to the Trustee, for any of the following purposes:
(a) to make provision with respect to the conversion
rights of the Holders of Securities pursuant to the requirements of Section
13.6 or the repurchase obligations of the Company pursuant to the requirements
of Section 11.1(d);
(b) to cure any ambiguity, defect, or inconsistency, or
to make any other provisions with respect to matters or questions arising under
this Indenture that are not inconsistent with the provisions of this Indenture,
provided, that such action pursuant to this clause (2) does not adversely
affect the interests of any Holder in any respect;
(c) to create additional covenants of the Company for the
benefit of the Holders, or to surrender any right or power herein conferred
upon the Company or to make any other change that does not adversely affect the
rights of any Holder, provided, that the Company has delivered to the Trustee
an Opinion of Counsel stating that such change pursuant to this clause (c) does
not adversely affect the rights of any Holder;
(d) subject to Article XII, to provide for collateral for
or guarantors of the Securities;
(e) to evidence the succession of another Person to the
Company and the assumption by any such successor of the obligations of the
Company herein and in the Securities in accordance with Article V; or
(f) to comply with the TIA.
SECTION 9.2 Amendments, Supplemental Indentures and Waivers with
Consent of Holders.
Subject to Section 6.8 and the last sentence of this paragraph, with
the consent of the Holders of not less than a majority in aggregate principal
amount of then outstanding Securities, by written act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by Board
Resolutions delivered to the Trustee, and the Trustee may amend or supplement
this Indenture or the Securities or enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or the
Securities or of modifying in any manner the rights of the Holders under this
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Indenture or the Securities. Subject to Section 6.8 and the last sentence of
this paragraph, the Holder or Holders of not less than a majority in aggregate
principal amount of then outstanding Securities may, in writing, waive
compliance by the Company with any provision of this Indenture or the
Securities. Notwithstanding any of the above, however, no such amendment,
supplemental indenture or waiver shall, without the consent of the Holder of
each outstanding Security affected thereby:
(a) change the Stated Maturity or reduce the principal
amount thereof or the rate (or extend the time for payment) of interest thereon
or any premium or Liquidated Damages, if any, payable upon the redemption
thereof, or change the place of payment where, or the coin or currency in
which, any Security or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment or
the conversion of any Security on or after the due date thereof (including, in
the case of redemption, on or after the Redemption Date), or reduce the
Repurchase Price, or alter the Repurchase Offer (other than as set forth in
Section 11.1) or redemption provisions in a manner adverse to the Holders, or
(b) reduce the percentage in principal amount of the
outstanding Securities, the consent of whose Holders is required for any such
amendment, supplemental indenture or waiver provided for in the Indenture; or
(c) adversely affect the right of such Holder to convert
Securities; or
(d) modify any of the waiver provisions, except to
increase any required percentage or to provide that certain other provisions of
the Indenture cannot be modified or waived without the consent of the Holder of
each outstanding Security affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders affected thereby 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 such supplemental indenture or
waiver.
After an amendment, supplement or waiver under this Section 9.2 or
Section 9.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or (at the option of the
Company) to all Holders, consideration for consent to such amendment,
supplement or waiver.
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SECTION 9.3 Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA, as then in effect; provided that this
Section 9.3 shall not require such supplemental indenture or the Trustee to be
qualified under the TIA prior to the time such qualification is in fact
required under the terms of the TIA or the Indenture has been qualified under
the TIA, nor shall it constitute any admission or acknowledgment by any party
to such supplemental indenture that any such qualification is required prior to
the time such qualification is in fact required under the terms of the TIA or
the Indenture has been qualified under the TIA. Subject to Section 9.4, upon
the execution of any supplemental indenture pursuant to the provisions of this
Article IX, this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitation of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Securities shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
SECTION 9.4 Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every Person to
which such Holder transfers Securities in accordance with this Indenture or
portion of a 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 Person to which such Holder transfers Securities in
accordance with this Indenture may revoke the consent as to its Security or
portion of his Security by written notice to the Company or the Person
designated by the Company as the Person to whom consents should be sent if such
revocation is received by the Company or such Person before the date on which
the Trustee receives an Officers' Certificate certifying that the Holders of
the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
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, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 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 (d) of Section 9.2, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Security who has consented to it
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and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security; provided, that any
such waiver shall not impair or affect the right of any Holder to receive
payment of principal and premium of and interest on a Security, on or after the
respective dates set for such amounts to become due and payable expressed in
such Security, or to bring suit for the enforcement of any such payment on or
after such respective dates.
SECTION 9.5 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee
or require the Holder to put an appropriate notation on the Security. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Security shall issue and
the Trustee shall authenticate a new Security that reflects the changed terms.
Any failure to make the appropriate notation or to issue a new Security shall
not affect the validity of such amendment, supplement or waiver.
SECTION 9.6 Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officers' Certificate and Opinion of Counsel
stating that the execution of any amendment, supplement or waiver authorized
pursuant to this Article IX is authorized or permitted by this Indenture.
ARTICLE X
MEETINGS OF HOLDERS
SECTION 10.1 Purposes for Which Meetings May Be Called.
A meeting of Holders may be called at any time and from time to time
pursuant to the provisions of this Article X for any of the following purposes:
(a) to give any notice to the Company or to the Trustee,
or to give any directions to the Trustee, or to waive or to consent to the
waiving of any Default or Event of Default hereunder and its consequences, or
to take any other action authorized to be taken by Holders pursuant to any of
the provisions of Article VI;
(b) to remove the Trustee or appoint a successor Trustee
pursuant to the provisions of Article VII;
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(c) to consent to an amendment, supplement or waiver
pursuant to the provisions of Section 9.2; or
(d) to take any other action (i) authorized to be taken
by or on behalf of the Holder or Holders of any specified aggregate principal
amount of the Securities under any other provision of this Indenture, or
authorized or permitted by law or (ii) which the Trustee deems necessary or
appropriate in connection with the administration of this Indenture.
SECTION 10.2 Manner of Calling Meetings.
The Trustee may at any time call a meeting of Holders to take any
action specified in Section 10.1, to be held at such time and at such place in
the City of New York, New York or elsewhere as the Trustee shall determine.
Notice of every meeting of Holders, setting forth the time and place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be mailed by the Trustee, first-class postage prepaid, to the Company
and to the Holders at their last addresses as they shall appear on the Security
Register of the Security Registrar, not less than 10 nor more than 60 days
prior to the date fixed for a meeting.
Any meeting of Holders shall be valid without notice if the Holders of
all Securities then outstanding are present in Person or by proxy, or if notice
is waived before or after the meeting by the Holders of all Securities
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
SECTION 10.3 Call of Meetings by the Company or Holders.
In case at any time the Company or the Holders of not less than 10% in
aggregate principal amount of the Securities then outstanding, shall have
requested the Trustee to call a meeting of Holders to take any action specified
in Section 10.1, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or the Holders of Securities in the amount above specified may
determine the time and place in The City of New York, New York or elsewhere for
such meeting and may call such meeting for the purpose of taking such action,
by mailing or causing to be mailed notice thereof as provided in Section 10.2,
or by causing notice thereof to be published at least once in each of two
successive calendar weeks (on any Business Day during such week) in a newspaper
or newspapers printed in the English language, customarily published at least
five days a week of a general circulation in The City of New York, State of New
York, the first such publication to be not less than 10 nor more than 60 days
prior to the date fixed for the meeting.
SECTION 10.4 Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Holders, a Person shall (a)
be a registered Holder of one or more Securities, or (b) be a Person appointed
by an instrument in writing as proxy for the
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registered Holder or Holders of Securities. The only Persons who shall be
entitled to be present or to speak at any meeting of Holders shall be the
Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company, and its counsel.
SECTION 10.5 Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment.
Notwithstanding any other provision of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any action by or
any meeting of Holders, in regard to proof of the holding of Securities and of
the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, and submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think appropriate. Such regulations may fix
a record date and time for determining the Holders of record of Securities
entitled to vote at such meeting, in which case those and only those Persons
who are Holders of Securities at the record date and time so fixed, or their
proxies, shall be entitled to vote at such meeting whether or not they shall be
such Holders at the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders as provided in Section 10.3, in which case the Company or
the Holders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary
of the meeting shall be elected by vote of the Holders of a majority in
principal amount of the Securities represented at the meeting and entitled to
vote.
At any meeting each Holder or proxy shall be entitled to one vote for
each $1,000 principal amount of Securities held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Securities challenged as not outstanding and ruled by the
chairman of the meeting to be not then outstanding. The chairman of the
meeting shall have no right to vote other than by virtue of Securities held by
him or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Holders. Any meeting of Holders duly called pursuant
to the provisions of Section 10.2 or Section 10.3 may be adjourned from time to
time by vote of the Holder or Holders of a majority in aggregate principal
amount of the Securities represented at the meeting and entitled to vote, and
the meeting may be held as so adjourned without further notice.
SECTION 10.6 Voting at the Meeting and Record to Be Kept.
The vote upon any resolution submitted to any meeting of Holders shall
be by written ballots on which shall be subscribed the signatures of the
Holders of Securities or of their representatives by proxy and the principal
amount of the Securities voted by the ballot. The permanent chairman of the
meeting shall appoint two inspectors of votes, who shall count all votes cast
at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified
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written reports in duplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Holders shall be prepared by
the secretary of the meeting and there shall be attached to such record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more Persons having knowledge of the facts, setting
forth a copy of the notice of the meeting and showing that such notice was
mailed as provided in Section 10.2 or published as provided in Section 10.3.
The record shall be signed and verified by the affidavits of the permanent
chairman and the secretary of the meeting and one of the duplicates shall be
delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 10.7 Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting.
Nothing contained in this Article X shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any
rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Holders under any of the provisions of this
Indenture or of the Securities.
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL
SECTION 11.1 Repurchase of Securities at the Option of the Holder
Upon a Change of Control.
(a) In the event that a Change of Control occurs, each
Holder shall have the right, at such Holder's option, subject to the terms and
conditions of this Indenture, to require the Company to repurchase all or any
part of such Holder's Securities (provided, that the principal amount of such
Securities must be $1,000 or an integral multiple thereof) on the date (the
"Repurchase Date") that is no later than 40 Business Days after the occurrence
of such, at a cash price (the "Repurchase Price") equal to 101% of the
principal amount thereof, together with accrued and unpaid interest and
Liquidated Damages, if any, to, but excluding, the Repurchase Date.
(b) In the event that, pursuant to this Section 11.1, the
Company shall be required to commence an offer to purchase Securities (a
"Repurchase Offer"), the Company shall follow the procedures set forth in this
Section 11.1 as follows:
(1) the Repurchase Offer shall commence within
15 Business Days following the Change in Control;
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(2) the Repurchase Offer shall remain open for 20
Business Days following commencement (the "Repurchase Offer Period");
provided that if so required by applicable law, the Repurchase Date
and the Repurchase Offer Period may be extended as so required;
however, if so extended, such extension shall nevertheless constitute
an Event of Default if the Repurchase Date does not occur within 60
Business Days of the Change in Control;
(3) upon the expiration of a Repurchase Offer,
the Company shall purchase all Securities tendered in response to the
Repurchase Offer;
(4) if the Repurchase Date is on or after a
Record Date and on or before the related Interest Payment Date, any
accrued interest will be paid to the Person in whose name a Security
is registered at the close of business on such Record Date, and no
additional interest will be payable to Holders who tender Securities
pursuant to the Repurchase Offer;
(5) the Company shall provide the Trustee and the
Paying Agent with notice of the Repurchase Offer at least three
Business Days before the commencement of any Repurchase Offer;
(6) on or before the commencement of any
Repurchase Offer, the Company or the Trustee (upon the request and at
the expense of the Company) shall send, by first-class mail, a notice
to each of the Holders, which (to the extent consistent with this
Indenture) shall govern the terms of the Repurchase Offer and shall
state:
(i) that the Repurchase Offer is being
made pursuant to such notice and this Section 11.1 and that
all Securities, or portions thereof, tendered will be accepted
for payment;
(ii) the Repurchase Price (including the
amount of accrued and unpaid interest and Liquidated Damages,
if any) and the Repurchase Date;
(iii) that any Security, or portion
thereof, not tendered or accepted for payment will continue to
accrue interest or Liquidated Damages, if any;
(iv) that, unless the Company defaults in
depositing Cash with the Paying Agent in accordance with the
last paragraph of this clause (b) or such payment is prevented
pursuant to Article XII, any Security, or portion thereof,
accepted for payment pursuant to the Repurchase Offer shall
cease to accrue interest or Liquidated Damages, if any, after
the Repurchase Date;
(v) that Holders electing to have a
Security, or portion thereof, purchased pursuant to a
Repurchase Offer will be required to surrender the Security,
with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the
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Security completed, to the Trustee or Paying Agent (which may
not for purposes of this Section 11.1, notwithstanding
anything in this Indenture to the contrary, be the Company or
any Affiliate) at the address specified in the notice prior to
the close of business on the Repurchase Date;
(vi) that Holders will be entitled to
withdraw their election, in whole or in part, if the Trustee
or Paying Agent (which may not for purposes of this Section
11.1, notwithstanding anything in this Indenture to the
contrary, be the Company or any Affiliate) receives, up to the
close of business on the Repurchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Securities the Holder is
withdrawing and a statement that such Holder is withdrawing
his election to have such principal amount of Securities
purchased; and
(vii) a brief description of the events
resulting in such Change of Control.
Any such Repurchase Offer shall comply with all applicable provisions
of Federal and state laws, including those regulating tender offers, if
applicable, and any provisions of this Indenture which conflict with such laws
shall be deemed to be superseded by the provisions of such laws.
On or before the Repurchase Date, the Company shall (i) accept for
payment Securities or portions thereof properly tendered pursuant to the
Repurchase Offer, (ii) deposit with the Paying Agent Cash sufficient to pay the
Repurchase Price (together with accrued and unpaid interest and Liquidated
Damages, if any) for all Securities or portions thereof so tendered and (iii)
deliver to the Trustee Securities so accepted together with an Officers'
Certificate listing the Securities or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to Holders of Securities so
accepted payment in an amount equal to the Repurchase Price of the Securities
(including accrued and unpaid interest and Liquidated Damages, if any), and the
Trustee shall promptly authenticate and the Security Registrar shall mail or
deliver to such Holders a new Security or Securities equal in principal amount
to any unpurchased portion of the Securities surrendered. Any Securities not
so accepted shall be promptly mailed or delivered by the Company to the Holder
thereof.
(c) Except as described in this Section 11.1(c), no modification
of this Indenture regarding the provisions on repurchase at the option of any
Holder of a Security upon a Change of Control is permissible without the
consent of the Holder of the Security so affected. In the event of a Change in
Control, if Holders of an excess of two-thirds of the outstanding aggregate
principal amount of the Securities so determine at any time following the
occurrence of such Change of Control and before the close of business on the
Business Day immediately preceding the Repurchase Date, such event shall not be
treated as a Change in Control for purposes of this Indenture. In such event
the Company shall deliver to the Trustee prior to the Repurchase Date an
Officers' Certificate certifying that Holders in excess of two-thirds of the
outstanding aggregate principal amount of the
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Securities have determined that a Change in Control shall not be treated as a
Change in Control as provided in this Section 11.1(c) and the Trustee may
conclusively rely on such Officers' Certificate as to the truth of the
statements contained therein. In such event, (i) the Company shall not be
required to make the Repurchase Offer, (ii) to the extent the Repurchase Offer
has already been made, such Repurchase Offer shall be deemed revoked, and (iii)
to the extent any Securities have been tendered in response to any such revoked
Repurchase Offer, such tender shall be rescinded and the Securities so tendered
shall be promptly returned to the Holders thereof. For purposes of any such
determination by the Holders of the outstanding Securities, Securities held by
the Company or an Affiliate (including any Person that would become an
Affiliate (or its successor) as a consequence of the event or series of events
that otherwise would be treated as a Change of Control for purposes of this
Indenture) shall be disregarded. The Company shall promptly mail notice to
each of the Holders of such action by the Holders of two-thirds of the
outstanding principal amount.
(d) In the case of any reclassification, change, consolidation,
merger, sale, transfer or conveyance of all or substantially all of the assets
of the Company to which Section 13.6 applies, in which the Common Stock of the
Company is changed or exchanged as a result into the right to receive shares of
stock and other securities or property or assets (including cash) which
includes shares of Common Stock of the Company or common stock of another
Person that are, or upon issuance will be, traded on a United States national
securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares and other
securities, property, or assets (including cash) constitute at the time such
change or exchange becomes effective in excess of 50% of the aggregate fair
market value of such shares of stock and other securities, property and assets
(including cash) (as determined by the Company as evidenced by a Officer's
Certificate, which determination shall be conclusive and binding), then the
Person formed by such consolidation or resulting from such merger or
combination or which acquires the properties or assets (including cash) of the
Company, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture (which shall comply with the TIA as in force at the date
of execution of such supplemental indenture) modifying the provisions of this
Indenture relating to the right of holders of the Securities to cause the
Company to repurchase the Securities following a Change in Control, including
without limitation the applicable provisions of this Article XI and the
definitions of the Common Stock and Change in Control, as appropriate, and such
other related definitions set forth herein as determined in good faith by the
Company (which determination shall be conclusive and binding), to make such
provisions apply to the common stock and the issuer thereof if different from
the Company and Common Stock of the Company (in lieu of the Company and the
Common Stock of the Company).
(e) The Company shall promptly on the occurrence of a Change of
Control or an event which but for the proviso in the definition of Change of
Control constitutes a Change of Control deliver to the Trustee an Officers'
Certificate stating the Change of Control or the basis on which the proviso
applies. If there is a Change of Control the Officers' Certificate shall set
forth the date of the occurrence.
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ARTICLE XII
SUBORDINATION
SECTION 12.1 Securities Subordinated to Senior Indebtedness.
The Company and each Holder, by its acceptance of Securities, agree
that (a) the payment of the principal of and interest on, or Liquidated
Damages, if any, with respect to, the Securities and (b) any other payment in
respect of the Securities, including on account of the acquisition or
redemption of the Securities by the Company (including, without limitation,
pursuant to Article XI) for cash, property or securities (other than Junior
Securities or any cash payment required as a result of a deficiency of a number
of shares of Common Stock available for issuance upon conversion of Securities
required by Section 13.1) is subordinated, to the extent and in the manner
provided in this Article XII, to the prior payment in full of all Senior
Indebtedness of the Company, whether outstanding at the date of this Indenture
or thereafter created, incurred, assumed or guaranteed, and that these
subordination provisions are for the benefit of the holders of Senior
Indebtedness.
This Article XII shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the
holders of Senior Indebtedness, and such holders are made obligees hereunder
and any one or more of them may enforce such provisions.
SECTION 12.2 No Payment on Securities in Certain Circumstances.
(a) No payment may be made by the Company on account of the
principal of, premium, if any, or interest on, or Liquidated Damages, if any,
in respect to the Securities, or to acquire any of the Securities (including
repurchases of Securities at the option of the Holder) for cash, property or
securities (other than Junior Securities), or on account of the redemption
provisions of the Securities, (i) upon the maturity of any Designated Senior
Indebtedness of the Company by lapse of time, acceleration (unless waived) or
otherwise, unless and until all principal of, premium, if any, and interest on
such Designated Senior Indebtedness are first paid in full (or such payment is
duly provided for), or (ii) in the event of default in the payment of any
principal of, premium, if any, or interest on any Designated Senior
Indebtedness of the Company when it becomes due and payable, whether at
maturity or at a date fixed for prepayment or by acceleration or otherwise (a
"Payment Default"), unless and until such Payment Default has been cured or
waived or otherwise has ceased to exist.
(b) Upon (i) the happening of an event of default (other than a
Payment Default) that permits the holders of Designated Senior Indebtedness or
their representative immediately to accelerate its maturity and (ii) written
notice of such event of default given to the Company and the Trustee by the
holders of at least $3 million principal amount outstanding of such Designated
Senior Indebtedness or their representative (a "Payment Notice"), then, unless
and until such event of default has been cured or waived or otherwise has
ceased to exist, no payment (by set-off or otherwise) may be made by or on
behalf of the Company on account of the principal of, premium, if
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any, or interest on, or Liquidated Damages, if any, with respect to, the
Securities, or to acquire or repurchase any of the Securities for cash or
property, or on account of the redemption provisions of the Securities, in any
such case other than payments made with Junior Securities. Notwithstanding the
foregoing, unless (i) the Designated Senior Indebtedness in respect of which
such event of default exists has been declared due and payable in its entirety
within 179 days after the Payment Notice is delivered as set forth above (the
"Payment Blockage Period"), and (ii) such declaration has not been rescinded or
waived, at the end of the Payment Blockage Period, the Company shall be
required to pay all sums not paid to the Holders of the Securities during the
Payment Blockage Period due to the foregoing prohibitions and to resume all
other payments as and when due on the Securities. Any number of Payment
Notices may be given; provided, however, that (i) not more than one Payment
Notice shall be given within a period of any 365 consecutive days, and (ii) no
default that existed upon the date of such Payment Notice or the commencement
of such Payment Blockage Period shall be made the basis for the commencement of
any other Payment Blockage Period.
(c) In furtherance of the provisions of Section 12.1, in the event
that, notwithstanding the foregoing provisions of this Section 12.2, any
payment or distribution of assets of the Company (other than Junior Securities)
shall be received by the Trustee or the Holders at a time when such payment or
distribution is prohibited by the provisions of this Section 12.2, then, such
payment or distribution (subject to the provisions of Section 12.7) shall be
received and held in trust by the Trustee or such Holder or Paying Agent for
the benefit of the holders of Senior Indebtedness of the Company, and shall be
paid or delivered by the Trustee or such Holders or such Paying Agent, as the
case may be, to the holders of Senior Indebtedness of the Company remaining
unpaid or unprovided for or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Indebtedness of the Company may have been issued,
ratably, according to the aggregate amounts remaining unpaid on account of the
Senior Indebtedness of the Company held or represented by each, for application
to the payment of all Senior Indebtedness of the Company remaining unpaid, to
the extent necessary to pay or to provide for the payment of all such Senior
Indebtedness in full after giving effect to any concurrent payment or
distribution, or provision therefor, to the holders of such Senior
Indebtedness.
SECTION 12.3 Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or
Reorganization.
Upon any distribution of assets of the Company or upon any
dissolution, winding up, total or partial liquidation or reorganization of the
Company, whether voluntary or involuntary, in bankruptcy, insolvency,
receivership or a similar proceeding or upon assignment for the benefit of
creditors or any marshaling of assets or liabilities:
(a) the holders of all Senior Indebtedness of the Company
shall first be entitled to receive payments in full (or have such payment duly
provided for) before the Holders are entitled to receive any payment on account
of the principal of, premium, if any, and interest on, or Liquidated Damages,
if any, with respect to, the Securities (other than Junior Securities);
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(b) any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities (other than
Junior Securities), to which the Holders or the Trustee on behalf of the
Holders would be entitled (by set-off or otherwise), except for the provisions
of this Article XII, shall be paid by the liquidating trustee or agent or other
Person making such a payment or distribution directly to the holders of such
Senior Indebtedness of the Company or their representative to the extent
necessary to make payment in full of all such Senior Indebtedness remaining
unpaid after giving effect to any concurrent payment and distribution, or
provision therefor, to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than Junior Securities), shall
be received by the Trustee or the Holders or any Paying Agent (or, if the
Company or any Affiliate is acting as its own Paying Agent, money for any such
payment or distribution shall be segregated or held in trust) on account of the
principal of or interest on the Securities before all Senior Indebtedness of
the Company is paid in full, such payment or distribution (subject to the
provisions of Section 12.7) shall be received and held in trust by the Trustee
or such Holder or Paying Agent for the benefit of the holders of such Senior
Indebtedness, or their respective representative, ratably according to the
respective amounts of such Senior Indebtedness held or represented by each, to
the extent necessary to make payment as provided herein of all such Senior
Indebtedness remaining unpaid after giving effect to all concurrent payments
and distributions and all provisions therefor to or for the holders of such
Senior Indebtedness, but only to the extent that as to any holder of such
Senior Indebtedness, as promptly as practical following notice from the Trustee
to the holders of such Senior Indebtedness that such prohibited payment has
been received by the Trustee, Holder(s) or Paying Agent (or has been segregated
as provided above), such holder (or a representative therefor) notifies the
Trustee of the amounts then due and owing on such Senior Indebtedness, if any,
held by such holder and only the amounts specified in such notices to the
Trustee shall be paid to the holders of such Senior Indebtedness.
SECTION 12.4 Holders to Be Subrogated to Rights of Holders of
Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness of the
Company as provided herein, the Holders of Securities shall be subrogated to
the rights of the holders of such Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Securities shall be paid in full, and for the
purpose of such subrogation no such payments or distributions to the holders of
such Senior Indebtedness by the Company, or by or on behalf of the Holders by
virtue of this Article XII, which otherwise would have been made to the Holders
shall, as between the Company and the Holders, be deemed to be payment by the
Company to or on account of such Senior Indebtedness, it being understood that
the provisions of this Article XII are and are intended solely for the purpose
of defining the relative rights of the Holders, on the one hand, and the
holders of such Senior Indebtedness, on the other hand.
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If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article XII shall have been
applied, pursuant to the provisions of this Article XII, to the payment of
amounts payable under Senior Indebtedness of the Company, then the Holders
shall be entitled to receive from the holders of such Senior Indebtedness any
payments or distributions received by such holders of Senior Indebtedness in
excess of the amount sufficient to pay all amounts payable under or in respect
of such Senior Indebtedness in full.
SECTION 12.5 Obligations of the Company Unconditional.
Nothing contained in this Article XII or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Company and
the Holders, the obligation of each such Person, which is absolute and
unconditional, to pay to the Holders the principal of, premium, if any, and
interest on, or Liquidated Damages, if any, with respect to, the Securities as
and when the same shall become due and payable in accordance with their terms,
or is intended to or shall affect the relative rights of the Holders and
creditors of the Company other than the holders of the Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article XII, of
the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy. Notwithstanding
anything to the contrary in this Article XII or elsewhere in this Indenture or
in the Securities, upon any distribution of assets of the Company referred to
in this Article XII, the Trustee, subject to the provisions of Sections 7.1 and
7.2, and the Holders shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders for the purpose of ascertaining the Persons entitled
to participate in such 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 XII so long as such court has been apprised of the
provisions of, or the order, decree or certificate makes reference to, the
provisions of this Article XII. Nothing in this Article XII shall apply to the
claims of, or payments to, the Trustee under or pursuant to Section 7.7.
SECTION 12.6 Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee unless and until a Trust Officer of the Trustee or any Paying Agent
shall have received, no later than one Business Day prior to such payment,
written notice thereof from the Company or from one or more holders of Senior
Indebtedness or from any representative therefor and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Sections 7.1
and 7.2, shall be entitled in all respects conclusively to assume that no such
fact exists.
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SECTION 12.7 Application by Trustee of Assets Deposited with It.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of Holders and, to
the extent allocated for the payment of Securities, shall not be subject to the
subordination provisions of this Article XII. Otherwise, any deposit of assets
with the Trustee or the Agent (whether or not in trust) for the payment of
principal of, premium, if any, or interest on, or Liquidated Damages, if any,
with respect to, any Securities shall be subject to the provisions of Sections
12.1, 12.2, 12.3 and 12.4; provided, that, if prior to one Business Day
preceding the date on which by the terms of this Indenture any such assets may
become distributable for any purpose (including without limitation, the payment
of either principal of, premium, if any, or interest, or Liquidated Damages, if
any, with respect to, on any Security) the Trustee or such Paying Agent shall
not have received with respect to such assets the written notice provided for
in Section 12.6, then the Trustee or such Paying Agent shall have full power
and authority to receive such assets and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such date.
SECTION 12.8 Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness
to enforce subordination provisions contained in this Article XII 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 of this
Indenture, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with. The holders of Senior Indebtedness may extend,
renew, modify or amend the terms of the Senior Indebtedness or any security
therefor and release, sell or exchange such security and otherwise deal freely
with the Company, all without affecting the liabilities and obligations of the
parties to this Indenture or the Holders.
SECTION 12.9 Holders Authorize Trustee to Effectuate Subordination
of Securities.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained
in this Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors of
the Company), the immediate filing of a claim for the unpaid balance of his
Securities in the form required in said proceedings and cause said claim to be
approved. If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Indebtedness
or their representative are or is hereby authorized to have the right to file
and are or is hereby authorized
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to file an appropriate claim for and on behalf of the Holders of said
Securities. Nothing herein contained shall be deemed to authorize the Trustee
or the holders of Senior Indebtedness or their representative 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 or the holders
of Senior Indebtedness or their representative to vote in respect of the claim
of any Holder in any such proceeding.
SECTION 12.10 Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Article XII in respect of any Senior Indebtedness at any time held by it to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as
such holder.
SECTION 12.11 Article XII Not to Prevent Events of Default.
The failure to make a payment on account of principal of, premium, if
any, or interest on, or Liquidated Damages, if any, with respect to, the
Securities by reason of any provision of this Article XII shall not be
construed as preventing the occurrence of a Default or an Event of Default
under Section 6.1 or in any way prevent the Holders from exercising any right
hereunder other than the right to receive payment on the Securities.
SECTION 12.12 No Fiduciary Duty of Trustee to 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
(other than for its willful misconduct or negligence) if it shall in good faith
mistakenly pay over or distribute to the Holders of Securities or the Company
or any other Person, cash, property or securities to which any holders of
Senior Indebtedness shall be entitled by virtue of this Article XII or
otherwise. Nothing in this Section 12.12 shall affect the obligation of any
other such Person to hold such payment for the benefit of, and to pay such
payment over to, the holders of Senior Indebtedness or their representative.
SECTION 12.13 Certain Conversions Deemed Payment.
For the purposes of this Article XII only, (1) the issuance and
delivery of Junior Securities upon conversion of Securities in accordance with
Article XIII shall not be deemed to constitute a payment or distribution on
account of the principal of (or premium, if any) or interest on or Liquidated
Damages, if any, with respect to Securities or on account of the purchase or
other acquisition of Securities, and (2) the payment, issuance or delivery of
cash (except in satisfaction of fractional shares pursuant to Section 13.2),
property or securities (other than Junior Securities) upon conversion of a
Security shall be deemed to constitute payment on account of the principal of
such Security. Nothing contained in this Article XII or elsewhere in this
Indenture or in the Securities is
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intended to or shall impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Security, the right, which is absolute
and unconditional, of the Holder of any Security to convert such Security in
accordance with Article XIII.
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.1 Conversion Privilege.
Subject to and upon compliance with the provisions of this Indenture,
at the option of the Holder thereof, any Security may at any time be converted,
in whole, or in part at any time after the 90th day following the latest date
of original issuance of the Securities and prior to the close of business on
the Stated Maturity (except that, with respect to any Security or portion of a
Security which shall be called for redemption, such right shall terminate at
the close of business on the last Trading Day prior to the Redemption Date of
such Security or portion of a Security unless the Company shall default in
payment of the Redemption Price and with respect to any Security or portion of
a Security submitted for repurchase, such right shall terminate at the close of
business on the Repurchase Date unless the Company shall default in payment of
the Repurchase Price) in multiples of $1,000 principal amount, into fully paid
and non-assessable shares of Common Stock issuable upon conversion of the
Securities, at the conversion price in effect at the Date of Conversion (as
hereinafter defined). If a Security or some portion thereof shall have been
called for redemption or delivered for repurchase and no default is made in
making due provision for the payment of the Redemption Price or Repurchase
Price, as the case may be, in accordance with the terms of this Indenture, then
with respect to such Security or portion thereof as has been so called for
redemption or delivered for repurchase, such Security or portion thereof may be
so converted until and including, but not after, the close of business on the
Business Day immediately prior to the Redemption Date or Repurchase Date, as
applicable, for such Security, unless the Company subsequently fails to pay the
applicable Redemption Price or Repurchase Price, as the case may be.
SECTION 13.2 Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security to the Company at any
time during usual business hours at its office or agency maintained for the
purpose as provided in this Indenture, accompanied by a fully executed written
notice, in substantially the form set forth on the reverse of the Security,
that the Holder elects to convert such Security or a stated portion thereof
constituting a multiple of $1,000 principal amount, and, if such Security is
surrendered for conversion during the period between the close of business on
any Record Date and the opening of business on the next following Interest
Payment Date, such Security shall be accompanied also by payment of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of the Security being surrendered for conversion, notwithstanding such
conversion; provided, no such payment shall be required with respect to
interest payable on September 15, 1999. The Holder of any Security at the
close of
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business on a Record Date will be entitled to receive the interest payable on
such Security on the corresponding Interest Payment Date notwithstanding the
conversion thereof after such Record Date. Such notice of conversion shall
also state the name or names (with address) in which the certificate or
certificates for shares of Common Stock shall be issued. Securities
surrendered for conversion shall (if reasonably required by the Company or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company duly executed by,
the Holder or his attorney duly authorized in writing. As promptly as
practicable after the receipt of such notice and the surrender of such Security
as aforesaid, the Company shall, subject to the provisions of Section 13.8
hereof, issue and deliver at such office or agency to such Holder, or on his
written order, a certificate or certificates for the number of full shares of
Common Stock issuable on such conversion of Securities in accordance with the
provisions of this Article XIII and Cash, as provided in Section 13.3 hereof,
in respect of any fraction of a share of Common Stock otherwise issuable upon
such conversion. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the date (herein called the "Date
of Conversion") on which such Security shall have been surrendered as
aforesaid, and the Person or Persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become on the Date of Conversion the holder or holders
of record of the shares represented thereby; provided, however, that any such
surrender on any date when the stock transfer books of the Company shall be
closed shall cause the Person or Persons in whose name or names the certificate
or certificates for such shares are to be issued to be deemed to have become
the recordholder or holders thereof for all purposes at the opening of business
on the next succeeding day on which such stock transfer books are open but such
conversion shall nevertheless be at the conversion price in effect at the close
of business on the date when such Security shall have been so surrendered with
the conversion notice. In the case of conversion of a portion, but less than
all, of a Security, the Company shall as promptly as practicable execute, and
the Trustee shall authenticate and deliver to the Holder thereof, at the
expense of the Company, a Security or Securities in the aggregate principal
amount of the unconverted portion of the Security surrendered. Except as
otherwise expressly provided in this Indenture, no payment or adjustment shall
be made for interest accrued on any Security (or portion thereof) converted or
for dividends or distributions on any Common Stock issued upon conversion of
any Security.
In order to exercise the conversion privilege with respect to any
interest in a Global Security, the beneficial holder must complete the
appropriate instruction form for conversion pursuant to the Depositary's
book-entry conversion program, deliver by book-entry delivery an interest in
such Global Security, furnish appropriate endorsements and transfer documents
if required by the Company or the Trustee or conversion agent, and pay the
funds, if any, required by this Section 13.2 and any transfer taxes, if
required pursuant to Section 13.8.
Upon the conversion of an interest in a Global Security, the Trustee,
or the Securities Custodian at the direction of the Trustee, shall make a
notation on such Global Security as to the reduction in the principal amount
represented thereby.
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SECTION 13.3 Fractional Interests.
No fractions of shares or scrip representing fractions of shares 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 so surrendered. If
any fraction of a share of Common Stock would, except for the foregoing
provisions of this Section 13.3, be issuable on the conversion of any Security
or Securities, the Company shall make payment in lieu thereof in an amount of
Cash equal to the value of such fraction computed on the basis of the last sale
price of the Common Stock as reported on the Nasdaq National Market (or if not
admitted to trading thereon, then on the principal national securities exchange
on which the Common Stock is listed or admitted to trading) at the close of
business on the Date of Conversion or if no such sale takes place on such day,
the last sale price for such day shall be the average of the closing bid and
asked prices regular way on the Nasdaq National Market (or if not admitted to
trading thereon, on the principal national securities exchange on which the
Common Stock is listed or admitted to trading) for such day (any such last sale
price being hereinafter referred to as the "Last Sale Price"). If on such
Trading Day the Common Stock is not quoted by any such organization, the fair
value of such Common Stock on such day, as reasonably determined in good faith
by the Board of Directors of the Company, shall be used.
SECTION 13.4 Conversion Price.
The Conversion Price per share of Common Stock issuable upon
conversion of the Securities shall initially be $14.55 (the "Conversion
Price"), subject to adjustment from time to time as set forth in Section 13.5
hereof.
SECTION 13.5 Adjustment of Conversion Price.
The Conversion Price shall be subject to adjustment from time to time
as follows:
(a) In case the Company shall (l) make or pay a dividend
(or other distribution) in shares of Common Stock on any class of Capital Stock
of the Company, (2) subdivide its outstanding shares of Common Stock into a
greater number of shares or (3) combine or reclassify its outstanding shares of
Common Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such action shall be adjusted so that the Holder of any
Security thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock that he would have owned immediately following
such action had such Security been converted immediately prior thereto. An
adjustment made pursuant to this subsection (a) shall become effective
immediately, except as provided in subsection (h) below, after the record date
in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision or
combination.
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(b) In case the Company shall issue rights, options or
warrants to all holders of Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the then current
market price per share of the Common Stock (as determined pursuant to
subsection (f) below) on the record date mentioned below, the Conversion Price
shall be adjusted to a price, computed to the nearest cent, so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date of issuance of such rights, options or warrants
by a fraction, of which:
(i) the numerator shall be (A) the number of
shares of Common Stock outstanding on the date of issuance of such
rights, options or warrants, immediately prior to such issuance, plus
(B) the number of shares which the aggregate offering price of the
total number of shares so offered for subscription or purchase would
purchase at such current market price (determined by multiplying such
total number of shares by the exercise price of such rights, options
or warrants and dividing the product so obtained by such current
market price), and of which
(ii) the denominator shall be (A) the number of
shares of Common Stock outstanding on the date of issuance of such
rights, options or warrants, immediately prior to such issuance, plus
(B) the number of additional shares of Common Stock which are so
offered for subscription or purchase.
Such adjustment shall become effective immediately, except as provided
in subsection (h) below, after the record date for the determination of holders
entitled to receive such rights, options or warrants provided, such rights,
options or warrants will be treated as having been outstanding on the date of
distribution for purposes of any adjustments pursuant to the terms thereof.
(c) In case the Company or any subsidiary of the Company shall
distribute to all holders of Common Stock, any of its assets, evidences of
indebtedness, cash or other assets or shares of Capital Stock other than Common
Stock (including securities but other than (x) dividends or distributions
exclusively in cash or (y) any dividends, rights, options, warrants and
distributions for which an adjustment is required to be made in accordance with
subsection (a) or (b) above) then in each such case the Conversion Price shall
be adjusted so that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the date of such
distribution by a fraction of which the numerator shall be the then current
market price per share of the Common Stock (determined as provided in
subsection (f) below) on the record date mentioned below less the then fair
market value (as reasonably determined in good faith by the Board of Directors
of the Company) of the portion of the assets so distributed applicable to one
share of Common Stock, and of which the denominator shall be such current
market price per share of the Common Stock; provided, however, that in the
event the then fair market value (as so determined) of the portion of the
assets so distributed applicable to one share of Common Stock is equal to or
greater than the current market price of the Common Stock on the record date,
in lieu of the foregoing adjustment, adequate provision shall be made so that
each holder of a Security shall have the right to receive upon conversion the
amount of assets such holder would have received had such
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Holder converted each Security on the record date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 13.5(c) by reference to the actual or when issued trading market for
any securities, it must in doing so consider the prices in such market over the
same period used in computing the current market price of the Common Stock.
Such adjustment shall become effective immediately, except as provided in
subsection (h) below, after the record date for the determination of
stockholders entitled to receive such distribution.
In the event the Company implements a stockholder rights plan, such
rights plan shall provide that upon conversion of the Securities the holders
will receive, in addition to the Common Stock issuable upon such conversion,
the rights issued under such rights plan (notwithstanding the occurrence of an
event causing such rights to separate from the Common Stock at or prior to the
time of conversion).
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's Capital Stock (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 13.5 (and no adjustment to the Conversion Price under
this Section 13.5 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the
Conversion Price shall be made under this Section 13.5(b). If any such right
or warrant, including any such existing rights or warrants distributed prior to
the date of this Indenture, are subject to events, upon the occurrence of which
such rights or warrants become exercisable to purchase different securities,
evidences of indebtedness or other assets, then the date of the occurrence of
any and each such event shall be deemed to be the date of distribution and
record date with respect to new rights or warrants with such rights (and a
termination or expiration of the existing rights or warrants without exercise
by any of the holders thereof). In addition, in the event of any distribution
(or deemed distribution) of rights or warrants, or any Trigger Event or other
event (of the type described in the preceding sentence) with respect thereto
that was counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Price under this Section 13.5 was made, (1) in the
case of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder or holders of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all
holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of such rights or warrants which shall have expired or been
terminated
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without exercise by any holders thereof, the Conversion Price shall be
readjusted as if such rights and warrants had not been issued.
(d) In case the Company or any Subsidiary of the Company shall
make any distribution consisting exclusively of cash (excluding any cash
portion of distributions for which an adjustment is required to be made in
accordance with (c) above) to all holders of Common Stock in an aggregate
amount that, combined together with (i) all other such all-cash distributions
made within the then preceding 12 months in respect of which no adjustment has
been made and (ii) any cash and the fair market value of other consideration
paid or payable in respect of any tender offer by the Company or any of its
Subsidiaries for Common Stock concluded within the preceding 12 months in
respect of which no adjustment has been made, exceeds 15% of the Company's
market capitalization (defined as being the product of the then current market
price of the Common Stock (determined as provided in subsection (f) below)
times the number of shares of Common Stock then outstanding) on the record date
of such distribution, in each such case the Conversion Price shall be adjusted
so that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the date of such distribution by a
fraction of which the numerator shall be the then current market price per
share of the Common Stock on such record date less the amount of the cash so
distributed applicable to one share of Common Stock, and of which the
denominator shall be such current market price per share of the Common Stock.
Such adjustment shall become effective immediately, except as provided in
subsection (h) below, after the record date for the determination of
stockholders entitled to receive such distribution. Notwithstanding the
foregoing, in the event that the cash so distributed applicable to one share of
Common Stock equals or exceeds such current market price per share of Common
Stock or such current market price exceeds such amount of cash by less than
$0.10 per share, the Conversion Price shall not be adjusted pursuant to this
subsection (d).
(e) In case there shall be completed a tender offer made by the
Company or any Subsidiary of the Company for all or any portion of the Common
Stock (any such tender offer being referred to as an "Offer") that involves an
aggregate consideration having a fair market value as of the expiration of such
Offer (the "Expiration Time") that, together with (i) any cash and the fair
market value of any other consideration payable in respect of any other Offer,
as of the expiration of such other Offer, expiring within the 12 months
preceding the expiration of such Offer and in respect for which no Conversion
Price adjustment pursuant to this subsection (e) has been made and (ii) the
aggregate amount of any all-cash distributions referred to in subsection (d) of
this Section 13.5 to all holders of Common Stock within the 12 months preceding
the expiration of such Offer for which no Conversion Price adjustment pursuant
to such subsection (d) has been made, exceeds 15% of the Company's market
capitalization (defined as the product of the then current market price per
share (determined as provided in subsection (f) below) of the Common Stock on
the Expiration Time times the number of shares of Common Stock
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outstanding (including any tendered shares) on the Expiration Time, the
Conversion Price shall be reduced by multiplying such Conversion Price in
effect immediately prior to the Expiration Time) by a fraction of which the
numerator shall be (i) the product of the then current market price per share
(determined as provided in subsection (f) below) of the Common Stock on the
Expiration Time times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time minus (ii) the fair
market value of the aggregate consideration payable to stockholders based on
the acceptance (up to any maximum specified in the terms of the Offer) of all
shares validly tendered and not withdrawn as of the Expiration Time (the shares
deemed so accepted being referred to as the "Purchased Shares") and the
denominator shall be the product of (i) such current market price per share on
the Expiration Time times (ii) such number of outstanding shares on the
Expiration Time less the number of Purchased Shares, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time.
For purposes of this subsection (e), the fair market value of any
consideration with respect to an Offer shall be reasonably determined in good
faith by the Board of Directors of the Company and described in a Board
Resolution.
(f) For the purpose of any computation under subsections (b), (c),
(d) and (e) above, the current market price per share of Common Stock on any
date shall be deemed to be the average of the Last Sale Prices of a share of
Common Stock for the five consecutive Trading Days selected by the Company
commencing not more than 20 Trading Days before, and ending not later than, the
earlier of the date in question and the date before the "ex date", with respect
to the issuance, distribution or Offer requiring such computation. If on any
such Trading Day the Common Stock is not quoted by any organization referred to
in the definition of Last Sale Price in Section 13.3 hereof, the fair value of
the Common Stock on such day, as reasonably determined in good faith by the
Board of Directors of the Company described in a Board Resolution, shall be
used. For purposes of this paragraph, the term "ex date," when used with
respect to any issuance, distribution or payments with respect to an Offer,
means the first date on which the Common Stock trades regular way on the Nasdaq
National Market (or if not listed or admitted to trading thereon, then on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading) without the right to receive such issuance, distribution
or Offer.
(g) In addition the foregoing adjustments in subsections (a), (b),
(c), (d) and (e) above, the Company will be permitted to make such reductions
in the Conversion Price 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
will not be taxable to the holders of the shares of Common Stock.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if
the period is at least twenty (20) days, the reduction is irrevocable during
the period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to Holders a notice of the reduction
at least fifteen (15) days prior to the date the reduced Conversion Price takes
effect, and such notice shall state the reduced Conversion Price and the period
during which it will be in effect.
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(h) In any case in which this Section 13.5 shall require that an
adjustment (including by reason of the last sentence of subsection (a) or (c)
above) be made immediately following a record date, the Company may elect to
defer the effectiveness of such adjustment (but in no event until a date later
than the effective time of the event giving rise to such adjustment), in which
case the Company shall, with respect to any Security converted after such
record date and on and before such adjustment shall have become effective (i)
defer paying any Cash payment pursuant to Section 13.3 hereof or issuing to the
Holder of such Security the number of shares of Common Stock and other capital
stock of the Company (or other assets or securities) issuable upon such
conversion in excess of the number of shares of Common Stock and other Capital
Stock of the Company (or other assets or securities) issuable thereupon only on
the basis of the Conversion Price prior to adjustment, and (ii) not later than
five Business Days after such adjustment shall have become effective, pay to
such Holder the appropriate Cash payment pursuant to Section 13.3 hereof and
issue to such Holder the additional shares of Common Stock and other Capital
Stock of the Company (or other assets or securities) issuable on such
conversion.
(i) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1.0% of the
Conversion Price; provided, that any adjustments which by reason of this
subsection (i) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
XIII shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
(j) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly (i) file with the Trustee and each conversion agent
an Officers' Certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of the correctness
of such adjustment, and (ii) mail or cause to be mailed a notice of such
adjustment to each Holder at its address as the same appears on the registry
books of the Company. Failure to deliver such notice shall not affect the
legality or validity of any such adjustment.
SECTION 13.6 Continuation of Conversion Privilege in Case of
Reclassification, Change, Merger, Consolidation or
Sale of Assets.
If any of the following shall occur, namely: (a) any reclassification
or change of outstanding shares of Common Stock issuable upon conversion of the
Securities (other than a change in par value, or from par value to no par
value, or from no par value, to par value, or as a result of a subdivision or
combination), (b) any consolidation or merger of the Company with or into any
other Person, or the merger of any other Person with or into the Company (other
than a merger which does not result in any reclassification, change,
conversion, exchange or cancellation of outstanding shares of Common Stock) or
(c) any sale, transfer or conveyance of all or substantially all of the assets
of the Company, then the Company, or such successor or purchasing entity, as
the case may be, shall, as a condition precedent to such reclassification,
change, consolidation, merger, sale, transfer or conveyance, execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then outstanding shall have the right to convert such Security
only into the kind and
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amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, change, consolidation, merger, sale,
transfer or conveyance by a holder of the number of shares of Common Stock
issuable upon conversion of such Security immediately prior to such
reclassification, change, consolidation, merger, sale, transfer or conveyance
assuming such holder of Common Stock of the Company failed to exercise his
rights of an election, if any, as to the kind or amount of securities, cash and
other property receivable upon such reclassification, change, consolidation,
merger, sale, transfer or conveyance (provided that if the kind or amount of
securities, cash, and other property receivable upon such reclassification,
change, consolidation, merger, sale, transfer or conveyance is not the same for
each share of Common Stock of the Company held immediately prior to such
reclassification, change, consolidation, merger, sale, transfer or conveyance
in respect of which such rights of election shall not have been exercised
("Non-Electing Share"), then for the purpose of this Section 13.6 the kind and
amount of securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, sale, transfer or conveyance
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the Non-Electing Shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Article XIII. If, in the case of any such consolidation, merger, sale or
conveyance, the stock or other securities and property (including Cash)
receivable thereupon by a holder of shares of Common Stock includes shares of
stock or other securities and property (including Cash) of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or conveyance, then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders of the Securities
as the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing. The provisions of this Section 13.6 shall similarly
apply to successive consolidations, mergers, sales or conveyances.
Notice of the execution of each such supplemental indenture shall be
mailed to each Holder of Securities at his address as the same appears on the
registry books of the Company.
Neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or other securities or property (including cash) receivable by Holders of
Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger, sale or conveyance or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Article VIII hereof, may accept as conclusive evidence of the correctness of
any such provisions, and shall be protected in relying upon, the Officers'
Certificate (which the Company shall be obligated to file with the Trustee
prior to the execution of any such supplemental indenture) with respect
thereto.
If this Section 13.6 applies to any event or occurrence, Sections
13.5(a) through 13.5(e) shall not apply.
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SECTION 13.7 Notice of Certain Events.
In case:
(a) the Company shall declare a dividend (or any other
distribution) payable to the holders of Common Stock (other than cash
dividends); or
(b) the Company shall authorize the granting to the
holders of Common Stock of rights, warrants or options to subscribe for or
purchase any shares of stock of any class or of any other rights; or
(c) the Company shall authorize any reclassification or
change of the Common Stock (including a subdivision or combination of its
outstanding shares of Common Stock), or any consolidation or merger to which
the Company is a party and for which approval of any stockholders of the
Company is required, or the sale or conveyance of all or substantially all the
property or business of the Company; or
(d) there shall be proposed any voluntary or involuntary
dissolution, liquidation or winding-up of the Company; or
(e) the Company or any of its Subsidiaries shall complete
an Offer;
then, the Company shall cause to be filed at the office or agency maintained
for the purpose of conversion of the Securities as provided in Section 3.2
hereof, and shall cause to be mailed to each Holder of Securities, at his
address as it shall appear on the registry books of the Company, at least 20
days before the date hereinafter specified (or the earlier of the dates
hereinafter specified, in the event that more than one date is specified), a
notice stating the date on which (1) a record is expected to be taken for the
purpose of such dividend, distribution, rights, warrants or options or Offer,
or if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution, rights, warrants
or options or to participate in such Offer are to be determined, or (2) such
reclassification, change, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding-up is expected to become effective and the date, if any
is to be fixed, as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reclassification, change,
consolidation, merger, sale, conveyance, dissolution, liquidation or
winding-up.
SECTION 13.8 Taxes on Conversion.
The Company will pay any and all documentary, stamp or similar taxes
payable to the United States of America or any political subdivision or taxing
authority thereof or therein in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant thereto; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of
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any transfer involved in the issue or delivery of shares of Common Stock in a
name other than that of the Holder of the Securities to be converted and no
such issue or delivery shall be made unless and until the person requesting
such issue or delivery 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. The Company extends no protection with respect to any other taxes
imposed in connection with conversion of Securities.
SECTION 13.9 Company to Provide Stock.
The Company shall reserve, free from preemptive rights, out of its
authorized but unissued shares, sufficient shares to provide for the conversion
of the Securities from time to time as such Securities are presented for
conversion; provided however that nothing contained herein shall be construed
to preclude the Company from satisfying its obligations in respect of the
conversion of Securities by delivery of repurchased shares of Common Stock that
are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose of
conversion of Securities hereunder require registration with or approval of any
governmental authority under any Federal or state law before such shares may be
validly issued or delivered upon conversion, then the Company covenants that it
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be, provided, however, that nothing
in this Section 13.9 shall be deemed to limit in any way the obligations of the
Company provided in this Article XIII.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Company may validly and legally issue fully paid
and non-assessable shares of Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock that may be
issued upon conversion of Securities will upon issue be fully paid and
non-assessable by the Company and free of preemptive rights.
SECTION 13.10 Disclaimer of Responsibility for Certain Matters.
Neither the Trustee nor any agent of the Trustee shall at any time be
under any duty or responsibility to any Holder of Securities to determine
whether any facts exist which may require any adjustment of the Conversion
Price, or with respect to the Officers' Certificate referred to in Section 13.5
hereof, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. Neither the Trustee nor
any agent of the Trustee shall be accountable with respect to the validity or
value (or the kind or amount) of any shares of Common Stock, or of any
securities or property (including cash), which may at any time be issued or
delivered upon the
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conversion of any Security; and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Neither the Trustee nor any
agent of the Trustee shall be responsible for any failure of the Company to
issue, register the transfer of or deliver any shares of Common Stock or stock
certificates or other securities or property (including cash) upon the
surrender of any Security for the purpose of conversion or, subject to Article
VIII hereof, to comply with any of the covenants of the Company contained in
this Article XIII.
SECTION 13.11 Return of Funds Deposited for Converted Securities.
Any funds that at any time shall have been deposited by the Company or
on its behalf with the Trustee or any other Paying Agent for the purpose of
paying the principal of and interest on any of the Securities and which shall
not be required for such purposes because of the conversion of such Securities,
as provided in this Article XIII, shall after such conversion be repaid to the
Company by the Trustee or such other Paying Agent.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
SECTION 14.2 Notices.
Any notices or other communications to the Company or the Trustee
required or permitted hereunder shall be in writing, and shall be sufficiently
given if made by hand delivery, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as
follows:
if to the Company:
Metricom, Inc.
980 University Avenue
Los Gatos, California 95030
Attention: Chief Financial Officer
Telephone: (408) 399-8200
Telecopy: (408) 354-1024
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<PAGE> 81
with a copy to:
Cooley Godward Castro Huddleson & Tatum
One Maritime Plaza, 20th Floor
San Francisco, California 94111
Attention: Kenneth L. Guernsey, Esq.
Telephone: (415) 693-2000
Telecopy: (415) 951-3699
if to the Trustee:
U. S. Trust Company of California, N.A.
515 South Flower Street
Los Angeles, CA 90071-2429
Attention: Corporate Trust Division
(Metricom, Inc., 8% Convertible
Subordinated Notes due 2003)
Telephone: (213) 861-5000
Telecopy: (213) 488-1370
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; and five Business Days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed to him
by first class mail or other equivalent means at his address as it appears on
the Security Register of the Security Registrar and shall be sufficiently given
to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 14.3 Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The Company, the Trustee, the Security Registrar and any other Person shall
have the protection of TIA Section 312(c).
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<PAGE> 82
SECTION 14.4 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, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance
reasonably satisfactory to the Trustee) 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
(2) an Opinion of Counsel (in form and substance
reasonably satisfactory to the Trustee) stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 14.5 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:
(1) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of
each 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.
SECTION 14.6 Rules by Trustee, Paying Agent, Security Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Paying Agent or Security Registrar may make reasonable rules for
its functions.
SECTION 14.7 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close. If a payment date is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that is not a
Legal Holiday, and no interest shall accrue for the intervening period.
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<PAGE> 83
SECTION 14.8 Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING
IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE
SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE
COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE TRUSTEE OR ANY HOLDER TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
SECTION 14.9 No Adverse 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 respective Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 14.10 No Recourse Against Others.
No direct or indirect partner, employee, stockholder, director or
officer, as such, past, present, or future of the Company, shall have any
personal liability in respect of the obligations of the Company or any
successor corporation under the Securities or this Indenture by reason of his
or her status as such partner, stockholder, employee, director or officer.
Each Holder by accepting a Security waives and releases all such liability.
Such waiver and release are part of the consideration for the issuance of the
Securities.
SECTION 14.11 Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture
shall bind its successor.
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SECTION 14.12 Duplicate Originals.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
SECTION 14.13 Severability.
In case any one or more of the provisions in this Indenture or in the
Securities shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
SECTION 14.14 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of the
Articles and the 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.
SECTION 14.15 Qualification of Indenture.
The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall
pay all costs and expenses (including attorneys' fees for the Company and the
Trustee) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of the Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive
from the Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 14.16 Registration Rights.
Certain Holders of the Securities are entitled to certain registration
rights with respect to such Securities pursuant to, and subject to the terms
of, the Registration Rights Agreement.
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<PAGE> 85
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
METRICOM, INC.
a Delaware corporation
By:____________________________________
____________________________________
Name: ______________________________
Title: _____________________________
Attest: _________________________
U. S. TRUST COMPANY
OF CALIFORNIA, N.A.
as Trustee
By:____________________________________
Name: ______________________________
Title: _____________________________
Attest: __________________________
<PAGE> 1
EXHIBIT 10.1
8% CONVERTIBLE SUBORDINATED NOTES DUE 2003
REGISTRATION RIGHTS AGREEMENT
Dated as of August 28, 1996
by and among
METRICOM, INC.
as the Company,
and
FURMAN SELZ LLC
and
FESHBACH BROTHERS INVESTOR SERVICES INC.,
as Placement Agents
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as of
August 28, 1996, by and among Metricom, Inc., a Delaware corporation (the
"Company") and Furman Selz LLC and Feshbach Brothers Investor Services Inc.
(the "Placement Agents") for the benefit of the Holders (as herein defined) of
8% Convertible Subordinated Notes due 2003 (the "Notes") of the Company
pursuant to the Placement Agreement (as such term is defined below).
This Agreement is made pursuant to the Engagement Letter Agreement,
dated August 12, 1996, between the Company and the Placement Agents and the
Placement Agreement, dated August 20, 1996, between the Company and the
Placement Agents (the "Placement Agreement"). In order to induce the initial
purchasers of the Notes listed in Schedule I hereto (the "Initial Purchasers")
to enter into Subscription Agreements, the Company has agreed to provide the
registration rights provided for in this Agreement to the Initial Purchasers
and their respective direct and indirect transferees (i) for the benefit of the
Initial Purchasers, (ii) for the benefit of the holders from time to time of
the Notes (including the Initial Purchasers) and the holders from time to time
of the Common Stock issuable or issued upon conversion of the Notes and (iii)
for the benefit of the securities constituting the Transfer Restricted
Securities (as such term is defined below). The execution of this Agreement is
a condition to the closing of the transactions contemplated by the Placement
Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
Advice: As defined in the last paragraph of Section 2(d)
hereof.
Affiliate: An affiliate of any specified person shall mean
any other person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified person. For the purposes
of this definition, "control," when used with respect to any 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 "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
Agreement: This Registration Rights Agreement, as the same
may be amended, supplemented or modified from time to time in accordance with
the terms hereof.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
Closing Date: August 28, 1996.
Common Stock: Common Stock, $.001 par value per share, of the
Company and any other shares of common stock as may constitute "Common Stock"
for purposes of the Indenture, in each case, as issuable or issued upon
conversion of the Notes.
<PAGE> 3
Company: Metricom, Inc., a Delaware corporation, and any
successor corporation thereto.
controlling person: As defined in Section 6(a) hereof.
Damages Payment Date: Each of the semi-annual interest
payment dates provided in the Indenture.
Effectiveness Period: As defined in Section 2(a) hereof.
Effectiveness Target Date: The 120th day following the
Closing Date.
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
Filing Date: The 90th day after the Closing Date.
Holder: Each registered holder of any Transfer Restricted
Securities.
Indemnified Person: As defined in Section 6(a) hereof.
Indenture: The Indenture, dated the date hereof, between the
Company and the Trustee thereunder, pursuant to which the Notes are being
issued, as amended, modified or supplemented from time to time in accordance
with the terms thereof.
Initial Purchasers: As defined in the first paragraph hereof.
Liquidated Damages: As defined in Section 3(a) hereof.
Notes: Up to $45,000,000 aggregate principal amount of 8%
Convertible Subordinated Notes due 2003 of the Company being issued pursuant to
the Indenture.
Placement Agreement: As defined in the second paragraph
hereof.
Proceeding: An action, claim, suit or proceeding (including,
without limitation, an investigation or partial proceeding, such as a
deposition), whether commenced or threatened.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated pursuant to the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Transfer Restricted
Securities covered by such Registration Statement, and all other amendments and
supplements to any such prospectus, including post-effective amendments, and
all materials incorporated by reference or deemed to be incorporated by
reference, if any, in such prospectus.
Record Holder: (i) With respect to any Damages Payment Date
relating to any Note as to which any such Liquidated Damages have accrued, the
registered Holder of such Note on the record date with respect to the interest
payment date under the Indenture on which such Damages Payment Date shall occur
and
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<PAGE> 4
(ii) with respect to any Damages Payment Date relating to any shares of Common
Stock as to which any such Liquidated Damages have accrued, the registered
holder of such shares of Common Stock 15 days prior to the next succeeding
Damages Payment Date.
Registration Default: As defined in Section 3(a) hereof.
Registration Statement: Any registration statement of the
Company that covers any of the Notes pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post- effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.
Rule 144: Rule 144 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 144A: Rule 144A promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 158: Rule 158 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 174: Rule 174 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 415: Rule 415 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 424: Rule 424 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
Shelf Registration Statement: As defined in Section 2 hereof.
Special Counsel: Any special counsel to the holders of
Transfer Restricted Securities, for which holders of Transfer Restricted
Securities will be reimbursed pursuant to Section 5 hereof.
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<PAGE> 5
TIA: The Trust Indenture Act of 1939, as amended, and the
rules and regulations promulgated by the SEC thereunder.
Transfer Restricted Securities: The Notes and the shares of
Common Stock into which the Notes are converted or convertible (including any
shares of Common Stock issued or issuable thereon upon any stock split, stock
combinations, stock dividend or the like), upon original issuance thereof, and
at all times subsequent thereto, and associated related rights, if any, until,
in the case of any such Note or share (and associated rights, if any) (i) the
date on which it has been registered effectively pursuant to the Securities Act
and disposed of in accordance with the Registration Statement relating to it,
(ii) the date on which either such Note or the shares of Common Stock issued
upon conversion of such Note are distributed to the public pursuant to Rule 144
(or any similar provisions then in effect) or are saleable pursuant to
paragraph (k) of Rule 144 promulgated by the SEC pursuant to the Securities Act
(or any similar provisions then in force) or are otherwise freely transferable
under the Securities Act or (iii) the date on which it ceases to be
outstanding, whichever date is earliest; provided that for purposes of the
provisions hereof requiring the Company to register the resale of Transfer
Restricted Securities and related obligations, Common Stock issuable upon
conversion of outstanding Notes constituting Transfer Restricted Securities
shall be treated as outstanding (other than for purposes of Liquidated Damages
and approval, amendment and waiver provisions).
Trustee: The Trustee under the Indenture.
Underwritten registration or underwritten offering: A
registration in connection with which securities of the Company are sold to an
underwriter for reoffering to the public pursuant to an effective Registration
Statement.
References herein to the term "Holders of a majority in
aggregate principal amount of Transfer Restricted Securities" or words to a
similar effect shall mean, with respect to any request, notice, demand,
objection or other action by the Holders hereunder or pursuant hereto (each, an
"Act"), Holders of a number of shares of then outstanding Common Stock
constituting Transfer Restricted Securities and an aggregate principal amount
of then outstanding Notes constituting Transfer Restricted Securities, such
that the sum of such shares of Common Stock and the shares of Common Stock
issuable upon conversion of such Notes constitute in excess of 50% of the sum
of all of the then outstanding shares of Common Stock constituting Transfer
Restricted Securities and the number of shares of Common Stock issuable upon
conversion of the then outstanding Notes constituting Transfer Restricted
Securities. For purposes of the immediately preceding sentence, any Holder may
elect to take any Act with respect to all or any portion of Transfer Restricted
Securities held by it and only the portion as to which such Act is taken shall
be included in the numerator of the fraction described in the preceding
sentence.
2. Shelf Registration Statement
(a) The Company agrees to file with the SEC as promptly
as practicable after the Closing Date, but in no event later than the Filing
Date, a Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Transfer Restricted Securities (the
"Shelf Registration Statement"). The Shelf Registration Statement shall be on
Form S-3 under the Securities Act or another appropriate form permitting
registration of such Transfer Restricted Securities for resale by the Holders
in the manner or manners reasonably designated by them (including, without
limitation, one or more underwritten offerings). The Company shall not permit
any securities other than
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<PAGE> 6
the Transfer Restricted Securities to be included in the Shelf Registration
Statement. The Company shall use its reasonable best efforts to cause the
Shelf Registration Statement to be declared effective pursuant to the
Securities Act as promptly as practicable following the filing thereof, but in
no event later than the Effectiveness Target Date, and to keep the Shelf
Registration Statement continuously effective under the Securities Act for 36
months after the date on which the last of the Notes is sold (including those
sold, if any, by the Company in closings after the date of the first closing)
to the Initial Purchasers, or such shorter period ending when there cease to be
outstanding any Transfer Restricted Securities (subject to extension pursuant
to Section 2(b) hereof) (the "Effectiveness Period").
(b) Supplements and Amendments. The Company shall use
its reasonable best efforts to keep the Shelf Registration Statement
continuously effective by supplementing and amending the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used for such Shelf Registration Statement, if required
by the Securities Act, or if reasonably requested by the Holders of a majority
in aggregate principal amount of the Transfer Restricted Securities or by any
underwriter of such Transfer Restricted Securities; provided that the
Effectiveness Period shall be extended to the extent required to permit dealers
to comply with the applicable prospectus delivery requirements of Rule 174.
(c) Selling Securityholder Information. The Company may
require each Holder of Transfer Restricted Securities as to which any
registration is being effected to furnish to the Company, within 10 Business
Days after written request therefor has been made by the Company, such
information regarding the distribution of such Transfer Restricted Securities
as is required by any applicable provision of the Securities Act (or the rules
thereunder) to be disclosed in the applicable Registration Statement (the
"Requisite Information").
The Company shall provide to each Holder who sends a notice to
the Company with the Requisite Information with respect to such Holder, and
shall also provide to the Special Counsel, in both cases within five Business
Days of the Holder's notice, a copy of a Prospectus supplement pursuant to
Rule 424 to amend or supplement such Registration Statement to include in the
Registration Statement the Requisite Information as to such Holder (and the
Transfer Restricted Securities held by such Holder) in order to permit such
Holder to comply with the Prospectus delivery requirements of the Securities
Act in a timely manner with respect to any proposed disposition of such
Holder's Transfer Restricted Securities. In addition, the Company shall file
with the SEC, within the time period prescribed by Rule 424, a copy of such
Prospectus as so amended or supplemented containing the Requisite Information.
If any such Registration Statement refers to any
Holder by name or otherwise as the holder of any securities of the Company,
then such Holder shall have the right to require (i) the insertion therein of
language, in form and substance reasonably satisfactory to such Holder and the
Company, to the effect that the holding by such Holder of such securities is
not to be construed as a recommendation by such Holder of the investment
quality of the Company's securities covered thereby and that such holding does
not imply that such Holder will assist in meeting any future financial
requirements of the Company, or (ii) in the event that such reference to such
Holder by name or otherwise is not required by the Securities Act or any
similar Federal statute then in force, the deletion of the reference to such
Holder in any amendment or supplement to the Registration Statement filed or
prepared subsequent to the time that such reference ceases to be required.
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<PAGE> 7
No Holder shall be entitled to use the Prospectus
unless and until such Holder shall have furnished the information required by
this Section 2(c) in accordance with the first paragraph hereof.
(d) Certain Notices; Suspension of Sales. Each Holder of
Transfer Restricted Securities agrees by acquisition of such Transfer
Restricted Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(c)(ii), 4(c)(iii),
4(c)(v) or 4(c)(vi) hereof or notice from the Company that, in the judgment of
the Company's Board of Directors, Chief Executive Officer or Chief Financial
Officer, it is advisable, due to pending (but as yet undisclosed) material
corporate developments of a nature that would be required by the Securities Act
to be disclosed in a prospectus thereunder (including the Prospectus), to
suspend use of the Prospectus for a short period of time, such Holder will
forthwith discontinue disposition of such Transfer Restricted Securities
covered by such Registration Statement or Prospectus (other than in
transactions exempt from the registration requirements under the Securities
Act) until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 4(i) hereof, or until it is advised in
writing (the "Advice") by the Company that the use of the applicable Prospectus
may be resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus.
3. Liquidated Damages
(a) The Company and the Placement Agents agree that the
Holders of Transfer Restricted Securities will suffer damages if the Company
fails to fulfill its obligations pursuant to Section 2 hereof and that it would
not be possible to ascertain the extent of such damages. Accordingly, the
Company hereby agrees to pay liquidated damages ("Liquidated Damages") to each
Holder of Transfer Restricted Securities under the circumstances and to the
extent set forth below:
(i) if the Shelf Registration Statement has not
been filed with the SEC on or prior to the Filing Date; or
(ii) if the Shelf Registration Statement is not
declared effective by the SEC on or prior to the Effectiveness
Target Date; or
(iii) if the Shelf Registration Statement has been
declared effective by the SEC and such Shelf Registration
Statement ceases to be effective or usable at any time during
the Effectiveness Period (without being succeeded on the same
day immediately by a post-effective amendment to such
Registration Statement that cures such failure and that is
itself immediately declared effective) for a period of time
which shall exceed 90 days in the aggregate per year;
(any of the foregoing, a "Registration Default"). In the event of any such
Registration Default, the Company shall pay Liquidated Damages to each Holder
of Transfer Restricted Securities during the first 90-day period immediately
following the occurrence of such Registration Default in an amount equal to
$.05 per week per $1,000 principal amount of Notes and, if applicable, $.01 per
week per share (subject to adjustment in the event of stock splits, stock
recombinations, stock dividends and the like) of Common Stock constituting
Transfer Restricted Securities held by such holder for each week or portion
thereof that the Registration Default continues. The amount of such Liquidated
Damages will increase by an
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<PAGE> 8
additional $.05 per week per $1,000 principal amount of Notes and $.01 per week
per share (subject to adjustment as set forth above) of Common Stock
constituting Transfer Restricted Securities for each subsequent 90-day period
until all Registration Defaults have been cured; provided, however, that
Liquidated Damages shall not at any time exceed $.25 per week per $1,000
principal amount of Notes and $.05 per week per share (subject to adjustment as
set forth above) of Common Stock constituting Transfer Restricted Securities.
Following the cure of all Registration Defaults relating to any Transfer
Restricted Securities, the accrual of Liquidated Damages with respect to such
Transfer Restricted Securities will cease (without in any way limiting the
effect of any subsequent Registration Default). A Registration Default under
clause (i) above shall be cured on the date that the Shelf Registration
Statement is filed with the SEC; a Registration Default under clause (ii) above
shall be cured on the date that the Shelf Registration Statement is declared
effective by the SEC; and a Registration Default under clause (iii) above shall
be cured on the date the Shelf Registration Statement is declared effective or
usable.
(b) The Company shall notify the Trustee within one
Business Day after each and every date (i) on which a Registration Default
occurs and (ii) when all Registration Defaults have been cured. Liquidated
Damages shall be paid by or on behalf of the Company to the Record Holders on
each Damages Payment Date by wire transfer of immediately available funds to
the accounts specified by them or by mailing checks for immediately available
funds to their registered addresses as they appear in the Note register (as
defined in the Indenture), in the case of the Notes, and in the register of the
Company for the Common Stock, in the case of the Common Stock, if no such
accounts have been specified on or before the Damage Payment Date; provided,
however, that any Liquidated Damages accrued with respect to any Note or
portion thereof called for redemption on a redemption date, repurchased in
connection with a Change of Control (as defined in the Indenture) on a
repurchase date, or converted into Common Stock on a conversion date prior to
the record date for the next succeeding Damages Payment Date, shall, in any
such event, be paid instead to the holder who submitted such Note or portion
thereof for redemption, repurchase or conversion on the applicable redemption
date, repurchase date or conversion date, as the case may be, on such date
(promptly following the conversion date, in the case of conversion of a Note).
Each obligation to pay Liquidated Damages shall be deemed to commence accruing
on the date of the applicable Registration Default and to cease accruing when
all Registration Defaults have been cured. In no event shall the Company be
required to pay Liquidated Damages in excess of the applicable maximum weekly
amount set forth above, regardless of whether one or multiple Registration
Defaults exist.
(c) All of the Company's obligations set forth in this
Section 3 that are outstanding with respect to any Transfer Restricted
Securities at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to
such security have been satisfied in full.
(d) Any payments due and payable pursuant to this Section
3 shall be subject to the provisions of Article IV of the Indenture as if such
payments were additional interest on the Notes.
(e) Liquidated Damages that are payable hereunder shall
either be paid directly by the Company, if with respect to Holders of Common
Stock, or indirectly through the Trustee, if with respect to a Holder of Notes;
provided, however, that any amounts payable hereunder that are not paid by the
Trustee for any reason shall be payable by the Company and shall remain a
liability of the Company until paid.
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<PAGE> 9
4. Registration Procedures. In connection with the Company's
registration obligations hereunder, the Company shall use its best efforts to
effect such registrations on the appropriate form available for the sale of the
Transfer Restricted Securities to permit the sale of Transfer Restricted
Securities in accordance with the intended method or methods of disposition
thereof, and pursuant thereto the Company shall as expeditiously as possible:
(a) No fewer than five Business Days prior to the initial
filing of a Registration Statement or Prospectus and no fewer than two Business
Days prior to the filing of any amendment or supplement thereto (but, with
respect to any document that would be incorporated or deemed to be incorporated
therein by reference, substantially concurrently with, but not prior to, filing
thereof), furnish to the Holders, their Special Counsel and the managing
underwriters, if any, copies of all such documents proposed to be filed, which
documents (including, but not prior to filing, those incorporated or deemed to
be incorporated by reference) will be subject to the review of the Holders,
their Special Counsel and such underwriters, if any, and cause the officers and
directors of the Company, counsel to the Company and independent certified
public accountants to the Company to respond to such inquiries as shall be
necessary in connection with such Registration Statement, in the opinion of
respective counsel to the Holders and such underwriters, to conduct a
reasonable investigation within the meaning of the Securities Act; provided
that any supplement or amendment to the Registration Statement or Prospectus
filed pursuant to the second paragraph of Section 2(c) hereof need only be
furnished in accordance with time periods set forth in such paragraph;
provided, further, however, that the Company shall not be deemed to have kept a
Registration Statement effective during the applicable period if it voluntarily
takes or fails to take any action that results in selling Holders covered
thereby not being able to sell such Transfer Restricted Securities pursuant to
Federal securities laws during that period. The Company shall not file any
such Registration Statement or related Prospectus or any amendments or
supplements thereto to which the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities, their Special Counsel, or the
managing underwriters, if any, shall reasonably object on a timely basis;
(b) Prepare and file with the SEC such amendments,
including post-effective amendments, to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective for the
applicable time period set forth in Section 2(a) hereof; cause the related
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provisions then
in force) under the Securities Act and the Exchange Act with respect to the
disposition of all securities covered by such Registration Statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented (including, without limitation, the filing
of any Prospectus supplement pursuant to Rule 424 in order to add or change any
selling security holder information (including any such supplements or
amendments pursuant to Section 2(c) hereof, provided such Holder to which such
change applies complies with the information requirements of the first or
second paragraph of Section 2(c) hereof));
(c) Notify the Holders to be sold or their Special
Counsel and the managing underwriters, if any, promptly (and in the case of an
event specified by clause (i)(A) of this paragraph in no event fewer than two
Business Days prior to such filing), and (if requested by any such person),
confirm such notice in writing, (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment is proposed to be filed, and, (B) with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request of the SEC or any other Federal
or state governmental authority for amendments or supplements to a Registration
Statement or related Prospectus or
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<PAGE> 10
for additional information related thereto, (iii) of the issuance by the SEC,
any state securities commission, any other governmental agency or any court of
any stop order, order or injunction suspending or enjoining the use or the
effectiveness of a Registration Statement or the initiation of any proceedings
for that purpose, (iv) if at any time any of the representations and warranties
of the Company contained in any agreement (including any underwriting
agreement) contemplated by Section 4(m) hereof cease to be true and correct in
all material respects, (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of any of the Transfer Restricted Securities for sale in any
jurisdiction, or the initiation or threatening of any proceeding for such
purpose, and (vi) of the existence of any fact and the happening of any event
that makes any statement of material fact made in such Registration Statement
or related Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect, or that requires the
making of any changes in such Registration Statement, Prospectus or document so
that in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
that, in the case of the Prospectus, such Prospectus will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided,
however, that in the event of the existence of a fact or occurrence of an event
pursuant to this clause (vi) with respect to which the Company determines it is
necessary to suspend sales pursuant to Section 2(d) hereof, the Company must
notify the Holders of the suspension but need not disclose the specific fact or
event prompting such suspension;
(d) Use its reasonable best efforts to avoid the issuance
of, or, if issued, obtain the withdrawal of any order enjoining or suspending
the use or effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Transfer Restricted Securities for sale in any jurisdiction, at the earliest
practicable moment;
(e) If requested by the managing underwriters, if any, or
the Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities being sold in connection with such offering, (i) promptly
incorporate in a Prospectus supplement or post- effective amendment such
information as the managing underwriters, if any, and such Holders agree should
be included therein pursuant to applicable law, and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
provided, however, that the Company shall not be required to take any action
pursuant to this Section 4(e) that would, in the opinion of counsel for the
Company, violate applicable law or to include information to which the Company
reasonably objects;
(f) Furnish to each Holder, their Special Counsel and
each managing underwriter, if any, without charge, at least one conformed copy
of each Registration Statement and each amendment thereto, including financial
statements (but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits, unless requested in writing
by such Holder, counsel or managing underwriter);
(g) Deliver to each Holder, their Special Counsel, and
the underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such persons reasonably request; and the Company hereby
consents
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<PAGE> 11
to the use of such Prospectus and each amendment or supplement thereto by each
of the selling Holders and the underwriters, if any, in connection with the
offering and sale of the Transfer Restricted Securities covered by such
Prospectus and any amendment or supplement thereto, provided that no Holder
shall be entitled to use the Prospectus unless and until such Holder shall have
furnished to the Company any required information pursuant to the first or
second paragraph of Section 2(c) hereof;
(h) Prior to any public offering of Transfer Restricted
Securities, use its reasonable best efforts to register or qualify, or
cooperate with the Holders of Transfer Restricted Securities to be sold or
tendered for, the underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of, such Transfer Restricted Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions
within the United States as any Holder or underwriter reasonably requests in
writing, keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to be kept
effective and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the applicable Registration Statement; provided, however,
that the Company shall not be required to qualify to do business in any
jurisdiction where it is not then so qualified or take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or subject the Company to any tax in any such jurisdiction
where it is not then so subject;
(i) In connection with any sale or transfer of Transfer
Restricted Securities that will result in such securities no longer being
Transfer Restricted Securities, cooperate with the Holders and the managing
underwriters, if any, to (A) facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold, which
certificates shall not bear any restrictive legends, shall bear a CUSIP number
different from the CUSIP number or numbers for the Transfer Restricted
Securities and shall be in a form eligible for deposit with The Depository
Trust Company and (B) enable such Transfer Restricted Securities to be in such
denominations and registered in such names as the managing underwriters, if
any, or Holders may request at least two Business Days prior to any sale of
Transfer Restricted Securities;
(j) Use its reasonable best efforts to cause the offering
of the Transfer Restricted Securities covered by the Registration Statement to
be registered with or approved by such other governmental agencies or
authorities within the United States, except as may be required as a
consequence of the nature of such selling Holder's business, in which case the
Company will cooperate in all reasonable respects with the filing of such
Registration Statement and the granting of such approvals as may be necessary
to enable the seller or sellers thereof or the underwriters, if any, to
consummate the disposition of such Transfer Restricted Securities; provided,
however, that the Company shall not be required to register the Transfer
Restricted Securities in any jurisdiction that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
subject the Company to any tax in any such jurisdiction where it is not then so
subject or to require the Company to qualify to do business in any jurisdiction
where it is not then so qualified;
(k) Subject to Section 2(d), upon the occurrence of any
event contemplated by Section 4(c)(vi) hereof, as promptly as practicable,
prepare a supplement or amendment, including, if appropriate, a post-effective
amendment, to each Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, such Prospectus will not contain an untrue
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<PAGE> 12
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(l) Prior to the effective date of the first Registration
Statement relating to the Transfer Restricted Securities, to provide a CUSIP
number for the Transfer Restricted Securities to be sold pursuant to the
Registration Statement;
(m) Enter into such agreements (including an underwriting
agreement in form, scope and substance that is customary in underwritten
offerings) and take all such other reasonable actions in connection therewith
(including those reasonably requested by the managing underwriters, if any, or
the Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities being sold) in order to expedite or facilitate the
disposition of such Transfer Restricted Securities, and in such connection,
whether or not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration, (i) make such representations and
warranties to the Holders of such Transfer Restricted Securities and the
underwriters, if any, with respect to the business of the Company and its
subsidiaries (including with respect to businesses or assets acquired or to be
acquired by any of them), and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by reference
therein, 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 and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters, if any, and Special
Counsel to the Holders of the Transfer Restricted Securities being sold
(provided that such counsel may be any of the counsel identified in Section
9(f)(iii) hereof)), addressed to each selling Holder of Transfer Restricted
Securities and each of the underwriters, if any, covering the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Special Counsel and
underwriters; (iii) use its reasonable efforts to obtain customary "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data is, or is
required to be, included in the Registration Statement), addressed to each of
the representatives of the underwriters, if any, and permitting reliance on
such letter by all underwriters and all selling Holders, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings; (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable to the selling Holders of Transfer
Restricted Securities and the underwriters, if any, than those set forth in
Section 6 hereof (or such other provisions and procedures acceptable to Holders
of a majority in aggregate principal amount of the Transfer Restricted
Securities covered by such Registration Statement and the managing
underwriters); and (v) deliver such documents and certificates as may be
reasonably requested by the Holders of majority in aggregate principal amount
of the Transfer Restricted Securities being sold, their Special Counsel or the
managing underwriters, if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (i) of this Section 4(m)
and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company;
(n) Make available for inspection by a representative of
the Holders of Transfer Restricted Securities being sold, any underwriter
participating in any such disposition of Transfer Restricted Securities, if
any, and any attorney, consultant or accountant retained by such selling
Holders or underwriter, at the offices where normally kept, during reasonable
business hours, all financial and
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<PAGE> 13
other records, pertinent corporate documents and properties of the Company and
its subsidiaries as they may reasonably request (including with respect to
business and assets acquired or to be acquired to the extent that such
information is available to the Company), and cause the officers, directors,
agents and employees of the Company and its subsidiaries (including with
respect to business assets acquired or to be acquired to the extent that such
information is available to the Company) to supply all information in each case
reasonably requested by any such representative, underwriter, attorney,
consultant or accountant in connection with such Registration Statement
subsequent to the filing thereof and prior to its effectiveness, provided,
however, that such persons shall first agree in writing with the Company that
any information that is reasonably designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to Federal
securities laws in connection with the filing of any Registration Statement or
the use of any prospectus referred to in this Agreement), (iii) such
information becomes generally available to the public other than as a result of
a disclosure or failure to safeguard by any such person or (iv) such
information becomes available to any such person from a source other than the
Company and such source is not bound by a confidentiality agreement.
(o) Cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement relating to
the Transfer Restricted Securities; and in connection therewith, cooperate with
the Trustee under the Indenture and the Holders to effect such changes to the
Indenture, if any, as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute, and use all reasonable best
efforts to cause such trustee to execute, all customary documents as may be
required to effect such changes, and all other forms and documents (including
the Form T-1) required to be filed with the SEC to enable the Indenture to be
so qualified under the TIA in a timely manner.
(p) Comply with applicable rules and regulations of the
SEC and make generally available to its security holders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act), no later
than 45 days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) (i) commencing at the end
of any fiscal quarter in which Transfer Restricted Securities are sold to
underwriters in a firm commitment or reasonable efforts underwritten offering
and (ii) if not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter after the effective date of a
Registration Statement, which statement shall cover said period, consistent
with the requirements of Rule 158; and
(q) (i) list all Common Stock covered by such
Registration Statement on any securities exchange on which the Common Stock is
then listed or (ii) authorize for quotation on the National Association of
Securities Dealers Automated Quotation System ("Nasdaq") or the National Market
System of Nasdaq all Common Stock covered by such Registration Statement if the
Common Stock is then so authorized for quotation.
5. Registration Expenses
(a) All reasonable fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by it whether or not any Registration Statement is filed or
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<PAGE> 14
becomes effective and whether or not any securities are issued or sold pursuant
to any Registration Statement. The fees and expenses referred to in the
foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including without limitation, fees and expenses (A) with respect
to filings required to be made with the National Association of Securities
Dealers, Inc. and (B) in compliance with securities or Blue Sky laws
(including, without limitation and in addition to that provided for in (b)
below, fees and disbursements of counsel for the underwriters or Special
Counsel for the Holders in connection with Blue Sky qualifications of the
Transfer Restricted Securities and determination of the eligibility of the
Transfer Restricted Securities for investment under the laws of such
jurisdictions as the managing underwriters, if any, or Holders of a majority in
aggregate principal amount of Transfer Restricted Securities, may designate)),
(ii) printing expenses (including, without limitation, expenses of printing
certificates for Transfer Restricted Securities to be sold through the
Registration Statement and of printing Prospectuses if the printing of
Prospectuses is reasonably required by the managing underwriters, if any, or by
the Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities included in or tendered for in connection with any
Registration Statement), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company and Special Counsel for the
Holders in accordance with the provisions of Section 5(b) hereof, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 4(m)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such performance),
(vi) Securities Act liability insurance, if the Company so desires such
insurance, and (vii) fees and expenses of all other persons retained by the
Company. In addition, the Company shall pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of an annual audit, and the
fees and expenses incurred in connection with the listing of the securities to
be registered on any securities exchange. Notwithstanding the foregoing or
anything in this Agreement to the contrary, each Holder shall pay all
underwriting discounts and commissions of any underwriters with respect to any
Transfer Restricted Securities sold by it.
(b) In connection with any registration hereunder, the
Company shall reimburse the Holders of the Transfer Restricted Securities being
registered or tendered for in such registration for the reasonable fees and
disbursements of not more than one firm of attorneys representing the selling
Holders, which firm shall be chosen by the Holders of a majority in aggregate
principal amount of the Transfer Restricted Securities. Wilson Sonsini
Goodrich & Rosati, P.C., shall be Special Counsel for all purposes hereof
unless and until another Special Counsel shall have been selected by a majority
in aggregate principal amount of the Transfer Restricted Securities and notice
thereof shall have been given to the Company.
6. Indemnification
(a) The Company agrees to indemnify and hold harmless (i)
each of the Placement Agents, (ii) each of the Initial Purchasers, (iii) each
Holder of Transfer Restricted Securities, (iv) each person, if any, who
controls (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) any of the foregoing (any of the persons referred to in
this clause (iv) being hereinafter referred to as a "controlling person"), and
(v) the respective officers, directors, partners, employees, representatives
and agents of the Initial Purchasers, each Holder of Transfer Restricted
Securities, or any controlling person (any person referred to in clause (i),
(ii), (iii), (iv) or (v) may hereinafter be referred to as an "Indemnified
Person"), from and against any and all losses, claims, damages, liabilities,
expenses and judgments caused by any untrue statement or alleged untrue
statement
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<PAGE> 15
of a material fact contained in any Registration Statement, Prospectus or form
of Prospectus or in any amendment or supplement thereto or in any preliminary
Prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or form of Prospectus or supplement
thereto, in light of the circumstances under which they were made) not
misleading, except insofar as such losses, claims, damages, liabilities,
expenses or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Indemnified Person furnished in writing to the Company by or on behalf of such
Indemnified Person expressly for use therein; provided that the foregoing
indemnity with respect to any preliminary Prospectus (or Prospectus) shall not
inure to the benefit of any Indemnified Person from whom the person asserting
such losses, claims, damages, liabilities, expenses and judgments (the "Damaged
Purchaser") purchased securities if such untrue statement or omission or
alleged untrue statement or omission made in such preliminary Prospectus (or
Prospectus) is eliminated or remedied in the Prospectus (or a subsequently
dated amended or supplemented Prospectus), in either case that has been
delivered to the Indemnified Person prior to the time that such Prospectus (or
amended or supplemented Prospectus) is required to be delivered to such Damaged
Purchaser, and a copy of the Prospectus (or amended or supplemented Prospectus)
shall not have been furnished to the Damaged Purchaser in a timely manner due
to the wrongful action or wrongful inaction of such Indemnified Person, whether
as a result of negligence or otherwise.
(b) In case any action shall be brought against any
Indemnified Person, based upon any Registration Statement or any such
Prospectus or any amendment or supplement thereto and with respect to which
indemnity may be sought against the Company, such Indemnified Person shall
promptly notify the Company in writing and the Company shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Person and payment of all reasonable fees and expenses. Any
Indemnified Person shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person, unless (i) the
employment of such counsel shall have been specifically authorized in writing
by the Company, (ii) the Company shall have failed to assume the defense and
employ counsel or (iii) such Indemnified Person or Persons shall have been
advised in writing by counsel that there may be a conflict between the
positions of the indemnifying party or parties and of the Indemnified Person in
conducting the defense of such action or proceeding or that there may be legal
defenses available to such Indemnified Person or Persons different from or in
addition to those available to the indemnifying party or parties (in which case
the Company shall not have the right to assume the defense of such action on
behalf of such Indemnified Person, it being understood, however, that the
Company shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all such Indemnified Persons, which firm shall be
designated in writing by such Indemnified Persons, and that all such fees and
expenses shall be reimbursed as they are incurred). The Company shall not be
liable for any settlement of any such action effected without its written
consent but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Indemnified Person from and against
any loss or liability by reason of such settlement. No indemnifying party
shall, without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person 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 Person from all liability on claims
that are the subject matter of such proceeding.
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<PAGE> 16
(c) In connection with any Registration Statement in
which the Holder of Transfer Restricted Securities is participating, such
Holder of Transfer Restricted Securities agrees, severally and not jointly, to
indemnify and hold harmless (i) the Company, (ii) each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (any of the persons referred to in this clause
(ii) being hereinafter referred to as a "Company controlling person"), and
(iii) the respective officers, directors, partners, employees, representative
and agents of the Company or any Company controlling person (any person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as a
"Company Indemnified Person"), to the same extent as the foregoing indemnity
from the Company to each Indemnified Person but only with reference to
information relating to such Indemnified Person furnished in writing by or on
behalf of such Indemnified Person expressly for use in such Registration
Statement. In case any action shall be brought against a Company Indemnified
Person based on such Registration Statement and in respect of which indemnity
may be sought against any Indemnified Person, the Indemnified Person shall have
the rights and duties given to the Company (except that if the Company shall
have assumed the defense thereof, such Indemnified Person shall not be required
to do so, but may employ separate counsel therein and participate in defense
thereof but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person), and the Company Indemnified Person shall have the
rights and duties given to the Indemnified Person by Section 6(b) hereof.
(d) If the indemnification provided for in this Section 6
is unavailable to any party entitled to indemnification pursuant to Section
6(a) or 6(c) hereof in respect of any losses, claims, damages, liabilities,
expenses or judgments referred to therein, then each 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, expenses and judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company
Indemnified Persons, on the one hand, and each Indemnified Person, on the other
hand, from the offering of the Transfer Restricted Securities 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
Indemnified Persons and each such Indemnified Person in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities, expenses or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company Indemnified Persons and each
such Indemnified Person shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission to state a material fact relates to information supplied by the
Company Indemnified Persons or such Indemnified Person and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Placement Agents agree that it would not be just
and equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Indemnified Person or Company Indemnified
Person were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities,
expenses or judgments referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, no Indemnified Person shall be required to
contribute any amount in excess of the amount by which the total net profit
received by it in connection with the sale of the Transfer Restricted
Securities pursuant to this Agreement exceeds the amount of any damages that
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<PAGE> 17
such Indemnified Person 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 Indemnified Persons'
obligations to contribute pursuant to this Section 6(d) are several in
proportion to the respective amount of Transfer Restricted Securities included
in and sold pursuant to any such Registration Statement by each Indemnified
Person and not joint.
7. Rules 144 and 144A
The Company shall use all reasonable efforts to file the
reports required to be filed by it under the Securities Act and the Exchange
Act in a timely manner and, if at any time it is not required to file such
reports, it will, upon the request of any Holder, make available other
information as required by, and so long as necessary to permit sales of its
Transfer Restricted Securities pursuant to, Rule 144 and Rule 144A .
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
8. Underwritten Registrations
If any of the Transfer Restricted Securities covered by any
Shelf Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of such Transfer Restricted Securities included in
such offering, subject to the consent of the Company (which will not be
unreasonably withheld or delayed).
No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Transfer
Restricted Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
9. Miscellaneous
(a) Remedies. In the event of a breach by the Company,
or by a Holder of Transfer Restricted Securities, of any of their obligations
under this Agreement, each Holder of Transfer Restricted Securities or the
Company, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company and each Holder of Transfer
Restricted Securities agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agree that, in the event of any
action for specific performance in respect of such breach, they shall waive the
defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company shall not
enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders of Transfer Restricted Securities in
this Agreement or otherwise conflicts with the provisions hereof. Except for
such rights as have been waived in writing, the Company is not currently a
party to any agreement granting any registration rights, with respect to any of
its securities to any person, that conflict with the
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<PAGE> 18
Company's obligations hereunder or give any other party the right to include
any securities in any Registration Statement filed pursuant hereto. Without
limiting the generality of the foregoing, without the written consent of the
Holders of a majority in aggregate principal amount of the Transfer Restricted
Securities, the Company shall not grant to any person the right to request it
to register any of its securities under the Securities Act unless the rights so
granted are subject in all respect to the prior rights of the holders of
Transfer Restricted Securities set forth herein, and are not otherwise in
conflict or inconsistent with the provisions of this Agreement.
(c) No Adverse Action Affecting the Transfer Restricted
Securities. The Company will not take any action with respect to the Transfer
Restricted Securities that would adversely affect the ability of any of the
Holders of Transfer Restricted Securities to include such Transfer Restricted
Securities in a registration undertaken pursuant to this Agreement.
(d) No Piggyback on Registrations. The Company shall not
grant to any of its security holders (other than the Holders of Transfer
Restricted Securities in such capacity) the right to include any of its
securities in any Shelf Registration Statement other than Transfer Restricted
Securities.
(e) 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, without the written consent of the Holders
of a majority of the then outstanding Transfer Restricted Securities on a fully
converted basis; provided, however, that, for the purposes of this Agreement,
Transfer Restricted Securities that are owned. directly or indirectly, by
either the Company or an Affiliate of the Company are not deemed outstanding.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Transfer Restricted Securities whose securities are being
sold pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders of Transfer Restricted Securities
may be given by Holders of a majority of the Transfer Restricted Securities (on
a fully converted basis) being sold by such Holders pursuant to such
Registration Statement; provided, however, that the provisions of this sentence
may not be amended, modified, or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(f) Notices. All notices and other communications
provided for herein shall be made in writing by hand-delivery, next day air
courier, certified first-class mail, return receipt requested or telecopy:
(i) if to a Holder of Transfer Restricted
Securities, to the address of such Holder as
it appears in the Note or Common Stock
register of the Company, as applicable; and
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<PAGE> 19
(ii) if to the Company, to:
Metricom, Inc.
980 University Avenue
Los Gatos, CA 95030
Attention: Chief Financial Officer
Telecopy No.: (408) 354-1024
with a copy to:
Cooley Godward Castro Huddleson & Tatum
One Maritime Plaza, 20th Floor
San Francisco, CA 94111
Attention: Kenneth L. Guernsey, Esq.
Telecopy No.: (415) 951-3699
(iii) if to the Special Counsel, to:
Wilson, Sonsini, Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Ann Yvonne Walker, Esq.
Telecopy No.: (415) 493-6811
or such other Special Counsel at such other
address and telecopy number as a majority in
aggregate principal amount of the Transfer
Restricted Securities shall have given notice
to the Company as contemplated by Section
5(b) hereof.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given: when delivered by hand,
if personally delivered; one Business Day after being timely delivered to a
next-day air courier; five Business Days after being deposited in the mail,
postage prepaid, if mailed; and when receipt is acknowledged by the recipient's
telecopier machine, if telecopied.
(g) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon each existing and future Holder of
Transfer Restricted Securities for so long as any such person holds Transfer
Restricted Securities. This Agreement shall be binding upon any successor to
the Company, whether by operation of law or otherwise; provided, however, that
the Company may not assign its rights or obligations hereunder without the
prior written consent of each Holder of Transfer Restricted Securities.
(h) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same Agreement.
(i) Governing Law; Submission to Jurisdiction
-18-
<PAGE> 20
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF
NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY
OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
(j) Severability. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
(k) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. All references made in this Agreement to "Section" and
"paragraph" refer to such Section or paragraph of this Agreement, unless
expressly stated otherwise.
(l) Attorneys' Fees. In any action or proceeding brought
to enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the
court, shall be entitled to recover its reasonable attorneys' fees in addition
to any other available remedy.
(m) Third Party Beneficiaries. The Company and the
Placement Agents understand and agree that the Holders (including the Initial
Purchasers) (i) are third party beneficiaries of this Agreement and (ii) have
full rights and standing to sue to enforce the provisions of this Agreement.
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<PAGE> 21
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
METRICOM, INC.
By:
-------------------------------
Name:
Title:
The foregoing Registration Rights
Agreement is hereby confirmed and
agreed to as of the date first above
written:
Placement Agents:
FURMAN SELZ LLC
By:
-------------------------------
Name:
Title:
FESHBACH BROTHERS INVESTOR
SERVICES INC.
By:
-------------------------------
Name:
Title:
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<PAGE> 22
SCHEDULE 1
TO
REGISTRATION RIGHTS AGREEMENT
Name and Address of Initial Purchaser Principal Amount of Notes Purchased
<PAGE> 1
EXHIBIT 10.2
METRICOM, INC.
8% CONVERTIBLE SUBORDINATED NOTES DUE 2003
PLACEMENT AGREEMENT
August 20, 1996
FURMAN SELZ LLC
101 California Street
Suite 4300
San Francisco, CA 94111
FESHBACH BROTHERS INVESTOR SERVICES INC.
425 Sherman Avenue
Suite 220
Palo Alto, CA 94306
Ladies and Gentlemen:
Metricom, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the individuals or entities identified on
Schedule A (collectively, the "Purchasers") an aggregate of approximately
$45,000,000 principal amount of 8% Convertible Subordinated Notes due 2003 of
the Company (the "Notes"). The Company has engaged Furman Selz LLC and
Feshbach Brothers Investor Services Inc. (the "Placement Agents") to act as
exclusive placement agents to the Company in connection with the sale of the
Notes on a best efforts basis pursuant to the terms described in the letter
dated August 12, 1996 from the Placement Agents to the Company (the "Engagement
Letter") and in the Offering Memorandum (as defined herein). The Notes are to
be issued pursuant to the provisions of an Indenture (the "Indenture") to be
dated as of August 15, 1996, by and between the Company and U.S. Trust Company
of California, N.A., as Trustee (the "Trustee"), pursuant to which the Notes
will be convertible at the option of the holders thereof into the Company's
Common Stock, par value $.001 per share (the "Common Stock"). The Notes and
the shares of Common Stock into which the Notes are convertible are herein
collectively referred to as the "Securities." The Securities and the Indenture
are more fully described in the Offering Memorandum. Capitalized terms used
herein without definition have the respective meanings specified in the
Offering Memorandum.
The Securities will be offered and sold without being
registered under the Securities Act of 1933, as amended (the "1933 Act"), in
reliance on an exemption from registration thereunder. The Company has
prepared a preliminary offering memorandum dated August 6, 1996 (such
preliminary offering memorandum being hereinafter referred to as the
"preliminary offering memorandum") and an offering memorandum, dated August 20,
1996 (such offering memorandum, in the form first furnished to the Purchasers
for use in connection with the offering and the sale of the Securities by the
Company, including any documents and information incorporated by reference
therein, being hereinafter referred
<PAGE> 2
to as the "Offering Memorandum"), setting forth information regarding the
Company and the Securities. 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 sale of the Securities.
Holders (including the initial purchasers of the Notes from
the Company and subsequent transferees) of the Securities will have the
registration rights set forth in the Registration Rights Agreement (the
"Registration Rights Agreement"), to be dated the Closing Date (as hereinafter
defined), in substantially the form of Exhibit A hereto, for so long as such
Securities constitute "Registrable Securities" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
will agree to file with the Securities and Exchange Commission (the
"Commission") under the circumstances set forth therein within 90 days after
the Closing Date, and will use all reasonable efforts to cause to become
effective within 120 days after the Closing Date, a registration statement
pursuant to Rule 415 under the 1933 Act (the "Shelf Registration Statement")
with respect to the Securities. The Company will be required to pay liquidated
damages to the holders of the Notes or the underlying Common Stock, as the case
may be, under certain circumstances if the Company is not in compliance with
its registration obligations under the Registration Rights Agreement.
1. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement and made to the
Placement Agents for the benefit of the Purchasers, and subject to its terms
and conditions, the Company agrees to issue and sell to each of the Purchasers,
and each of the Purchasers agrees, pursuant to a separately executed
Subscription Agreement, severally and not jointly, to purchase from the
Company, the Notes in the respective principal amount set forth in each of
their Subscription Agreements, at a purchase price equal to the principal
amount thereof (the "Purchase Price"). The Placement Agents agree, subject to
the terms and conditions contained in the Engagement Letter and this Agreement,
to solicit offers to purchase the Securities on a "best efforts" basis.
The Company hereby agrees, and the Company shall, concurrently with
the execution of this Agreement, deliver an agreement executed by each of the
Company's directors and executive officers, pursuant to which each such person
agrees, not to, directly or indirectly, offer, sell, contract to sell, grant
any option to purchase or otherwise dispose of any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for, or
warrants, options or rights to purchase or acquire, Common Stock or in any
other manner transfer all or a portion of the economic consequences associated
with the ownership of any Common Stock, or enter into any agreement to do any
of the foregoing, except pursuant to this Agreement, subject to certain
exceptions, for a period of 90 days after the date of the Offering Memorandum
without the prior written consent of Furman Selz LLC. Notwithstanding the
foregoing, during such period (i) the Company (A) may grant stock options
pursuant to the Company's existing stock option plans, (B) may issue shares of
Common Stock pursuant to the Company's employee stock purchase plan and (C) may
grant options to purchase up to 39,000 shares of Common Stock to directors or
members of it Business Advisory Board outside of any plans, and (ii) the
Company may issue shares of its Common Stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof.
-2-
<PAGE> 3
2. Delivery and Payment. Delivery to each Purchaser of and
payment for the Notes shall be made at 10:00 A.M., New York City time, on
Monday, August 26, 1996 (the "Closing Date"), at such place as the Placement
Agents shall designate. The Closing Date and the location of delivery of and
the form of payment for the Notes may be varied by agreement among you and the
Company.
One or more of the Notes in definitive form, registered in the name of
Cede and Co., as nominee of The Depository Trust Company ("DTC"), or such other
name(s) as the Placement Agents may request in writing upon at least two
business days' notice to the Company, having an aggregate principal amount
corresponding to the aggregate principal amount of Notes to be sold by the
Company to qualified institutional buyers ("QIBs") within the meaning of Rule
144A promulgated under the 1933 Act, as such rule may be amended from time to
time ("Rule 144A") (such note is referred to herein as the "144A Global Note"
and the Securities represented thereby are referred to as the "Global
Securities"), one or more Notes in definitive form, registered in such names
and denominations as the Purchasers may so request, having an aggregate
principal amount corresponding to the aggregate principal amount of the Notes
to be sold by the Company to Accredited Investors (as defined herein) that are
not QIBs (the "Accredited Investor Note") and one or more Notes in definitive
form, registered in such names and denominations as the Purchasers may so
request, having an aggregate principal amount corresponding to the aggregate
principal amount of the Notes to be sold by the Company outside the United
States to certain persons in offshore transactions in reliance on Regulation S
promulgated under the 1993 Act, as such rule may be amended from time to time
("Regulation S") (the "Regulation S Note") (the Accredited Investor Note and
the Regulation S Note are referred to collectively as the "Certificated
Securities"), shall be issued and delivered by the Company to Placement Agents
on behalf of the Purchasers on the Closing Date, with any transfer taxes
thereon duly paid by the Company, against payment by the Purchasers of the
purchase price thereof in same day funds, to the order of the Company. The
144A Global Note and the Certificated Securities in definitive form shall be
made available to you at the offices of Furman Selz LLC (or at such other place
as shall be acceptable to you) for inspection not later than 9:30 A.M., New
York City time, on the business day next preceding the Closing Date.
3. Offering of the Securities and Placement Agents'
Representations.
(a) You have advised the Company that it is your
intention, as promptly as you deem appropriate after the Company shall
have furnished you with copies of the Offering Memorandum, to solicit
offers to purchase the Securities pursuant to the procedures and upon
the terms set forth in the Offering Memorandum.
(b) Each Placement Agent, severally and not jointly,
represents, warrants and agrees with respect to itself, that such
Placement Agent:
(i) will solicit offers to purchase Securities
only from, and will offer on behalf of the
Company Securities only to, persons that it
reasonably believes are (x) "qualified
institutional buyers" within the meaning of
Rule 144A ("QIBs"), (y) a limited number of
other "accredited investors" (as defined in
Rule 501(a) promulgated under the 1933 Act
("Accredited
-3-
<PAGE> 4
Investors")), or (z) institutions that are
outside the United States and are not U.S.
persons (and are not purchasing for the
account or benefit of a U.S. person within
the meaning of Regulation S);
(ii) has not offered, and will not offer or sell,
the Securities (A) to any persons other than
those described in Section 3(b)(i) hereof or
(B) by any form of general solicitation or
general advertising, including but not
limited to the methods described in Rule
502(c) promulgated under the 1933 Act;
(iii) has not and will not engage in any directed
selling efforts (within the meaning of
Regulation S under the 1933 Act) with respect
to any Notes, and such Placement Agent and
its Affiliates have complied and will comply
with the offering restriction requirements of
Regulation S under the 1933 Act.
(c) All of the representations of the Placement Agents
contained in this Agreement shall be true and correct as of the
Closing Date, and each of the Placement Agents agrees to deliver a
certificate to that effect dated the Closing Date.
4. Agreements of the Company. The Company agrees with each of
you that:
(a) It will advise you promptly, and, if requested by any
of you, confirm such advice in writing, of the happening of any event,
during such period that you, in your reasonable judgment after
consultation with counsel for the Placement Agents, are required to
deliver an Offering Memorandum in connection with the offer of the
Securities, which shall in no event extend beyond the Closing Date,
that makes any statement of a material fact made in the Offering
Memorandum untrue or that requires the making of any additions to or
changes in the Offering Memorandum (as amended or supplemented from
time to time) in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company
shall use its reasonable best efforts to prevent the issuance of any
order suspending the qualification or exemption of the Securities
under any state securities or Blue Sky laws and if, at any time, any
state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption of the Securities
under any state securities or Blue Sky laws, the Company shall use its
reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
(b) It will not make any amendment or supplement to the
preliminary offering memorandum or to the Offering Memorandum, of
which you shall not previously have been advised and provided a copy
within two business days prior to the delivery thereof or to which you
shall reasonably object.
-4-
<PAGE> 5
(c) During the period specified in Section 4(a), it will
furnish to you and to those persons whom you identify to the Company,
without charge, as many copies of the Offering Memorandum (and of any
amendments or supplements thereto) as you may reasonably request. The
Company consents to your use of the preliminary offering memorandum
and the Offering Memorandum, and any amendments and supplements
thereto, in connection with the solicitation of offers to purchase the
Securities contemplated hereunder.
(d) If, during the period specified in Section 4(a), any
event shall occur as a result of which, in your reasonable judgment,
it becomes necessary to amend or supplement the Offering Memorandum in
order to make the statements therein, in light of the circumstances
existing as of the date the Offering Memorandum is delivered to a
purchaser, not misleading, or if it is necessary to amend or
supplement the Offering Memorandum to comply with any law, it will
promptly prepare an appropriate amendment or supplement to the
Offering Memorandum so that the statements in the Offering Memorandum,
as so amended or supplemented, will not, in the light of the
circumstances existing as of the date the Offering Memorandum is so
delivered, be misleading, and will comply with applicable law, and
will furnish to you without charge such number of copies thereof as
you may reasonably request.
(e) It will cooperate with you and your counsel in
connection with the registration or qualification of the Securities
(or the exemption from such registration or qualification) for offer
and sale under the state securities or Blue Sky laws of such
jurisdictions as you may reasonably request, to continue such
registration or qualification (or exemption therefrom) in effect for
so long as required for the sale of the Securities and to file such
consents to service of process or other documents as may be necessary
in order to effect such registration or qualification (or exemption
therefrom); provided, however, that the Company shall not be
obligated in connection therewith to qualify as a foreign corporation
in any jurisdiction in which it would not otherwise be required to do
so, or to take any action that would subject it to service of process
in any jurisdiction in which it would not otherwise be subject or to
subject itself to taxation generally in respect of doing business in
any jurisdiction in which it would not otherwise be subject to
taxation. The Company will advise you promptly of the suspension of
the qualification of (or any such exemption relating to) the
Securities for offering, sale or trading in any jurisdiction or the
initiation or threat of any proceeding for any such purpose and in the
event of the issuance of any order suspending such qualification or
exemption, the Company, with your cooperation, will use its reasonable
best efforts to obtain the withdrawal thereof.
(f) After the Securities have been issued, it will, so
long as the Securities are outstanding, file on a timely basis with
the Commission, to the extent such filings are accepted by the
Commission, and whether or not the Company has a class of securities
registered under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), the annual reports, quarterly reports and other documents
that the Company would be required to file if it were subject to
Section 13 or Section 15 of the 1934 Act. During the period of five
(5) years from the date hereof and for so long thereafter as you are
making a market in the Securities, the Company will
-5-
<PAGE> 6
furnish to you as soon as available copies of all reports and
information as shall be furnished by the Company to the holders of the
Securities.
(g) For so long as and at any time that it is not subject
to Section 13 or 15(d) of the 1934 Act, the Company, upon request of
any holder of the Securities, will furnish to such holder, and to any
prospective purchaser or purchasers of the Securities designated by
such holder, information that is necessary to satisfy the requirements
of subsection (d)(4)(i) of Rule 144A.
(h) It will pay all costs, expenses and taxes in
connection with or incident to (i) the preparation by the Company,
printing and distribution of the preliminary offering memorandum and
the Offering Memorandum (including financial statements and exhibits)
and all amendments or supplements to either of them during the period
specified in Section 4(a), including such copies as may be reasonably
requested for use in connection with resales, (ii) the printing and
delivery of this Agreement, any preliminary and supplemental Blue Sky
memoranda and all other agreements, memoranda, correspondence and
other documents printed and delivered in connection with the offering
and sale of the Securities (including in each case any disbursements
of counsel for the Placement Agents relating to such printing and
delivery), (iii) the issuance and delivery of the Securities, (iv) the
registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of the jurisdictions referred to
in paragraph (e) above (including, in each case, any filing fees in
connection therewith and the reasonable fees and disbursements of
counsel for the Placement Agents relating to such registration and
qualification and memoranda relating thereto), (v) the inclusion of
the Notes on the National Association of Securities Dealers, Inc. (the
"NASD") Automatic Quotation System-PORTAL ("PORTAL"), (vi) the
approval of the Securities by DTC for "book-entry" transfer, (vii)
furnishing such copies of the Offering Memorandum and all amendments
and supplements thereto as may be reasonably requested for use in
connection with the offering of the Securities on behalf of the
Company by the Placement Agents during the period specified in Section
4(a), and (viii) the performance by the Company of its other
obligations under this Agreement, including (without limitation) the
fees of the Trustee, the cost of its personnel and other internal
costs, the cost of printing the certificates representing the Notes
and, upon conversion thereof, the Common Stock, and all expenses and
taxes incident to the sale and delivery of the Securities to you.
(i) It will use the proceeds from the sale of the
Securities in the manner described in the Offering Memorandum under
the caption "Use of Proceeds."
(j) It will use its reasonable best efforts to, and will
use its reasonable best efforts to cooperate with you to, cause the
Notes to be designated PORTAL securities in accordance with the rules
and regulations of the NASD.
(k) It will not voluntarily claim, and will actively
resist any attempts to claim, the benefit of any usury laws against
the holders of the Notes.
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<PAGE> 7
(l) It will do and perform all things required to be done
and performed under this Agreement by it prior to or after the Closing
Date and will use its reasonable best efforts to satisfy all
conditions precedent on its part to the delivery of the Notes.
(m) Except in connection with the filing of the Shelf
Registration Statement, it will not, and will not authorize or
knowingly permit any person acting on its behalf to, solicit any offer
to buy or offer to sell the Securities by means of any form of general
solicitation or general advertising (including, without limitation, as
such terms are used in Regulation D under the 1933 Act) or in any
manner involving a public offering within the meaning of Section 4(2)
of the 1933 Act.
(n) Neither the Company nor any affiliate (as such term
is defined in Rule 501(b) promulgated under the 1933 Act) of the
Company will offer, sell or solicit offers to buy or otherwise
negotiate in respect of any "security" (as defined in the 1933 Act) in
such a manner that could reasonably be expected to be integrated with
the sale of the Securities and that would require the registration of
the Securities under the 1933 Act.
(o) It will not, so long as the Securities are
outstanding, be or become an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(p) It will, prior to the Closing Date, furnish to the
Placement Agents, a copy of any unaudited interim consolidated
financial statements of the Company for any period subsequent to the
period covered by the most recent financial statements appearing or
incorporated by reference in the Offering Memorandum.
(q) Each Security will bear the following legend until
such legend shall no longer be necessary or advisable because the
Notes are no longer subject to the restrictions on transfer described
therein:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS THREE YEARS AFTER THE ORIGINAL
ISSUE DATE HEREOF (OR ANY PREDECESSOR OF SUCH SECURITY) EXCEPT (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
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<PAGE> 8
PURSUANT TO RULE 144A, FOR SO LONG AS IT IS AVAILABLE, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
TO AN "ACCREDITED INVESTOR," WITHIN THE MEANING OF RULE 501(a) UNDER
THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN "ACCREDITED INVESTOR," THAT PRIOR TO
SUCH TRANSFER DELIVERS AN OPINION OF COUNSEL, CERTIFICATION AND OTHER
INFORMATION IN FORM REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
ACCREDITED INVESTOR IS ACQUIRING THE SECURITY FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT AND THAT SUCH TRANSFER
COMPLIES WITH THE SECURITIES ACT, (E) PURSUANT TO OFFERS AND SALES
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT, (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING
CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE."
(r) During the period of three years after the Closing
Date, the Company will not, and will use its reasonable best efforts
not to permit any of its "affiliates" (as defined in Rule 144 under
the 1933 Act) to, resell any of the Securities that constitute
"restricted securities" under Rule 144 promulgated under the 1933 Act
that have been reacquired by any of them.
(s) The Company will at all times reserve and keep
available, free of preemptive rights, out of its authorized but
unissued Common Stock, for the purpose of effecting the conversion of
the Notes into Common Stock, the full number of shares of Common Stock
then issuable upon the conversion of all outstanding Notes.
5. Representations and Warranties. The Company represents and
warrants to each of you that:
(a) Each of the preliminary offering memorandum and the
Offering Memorandum, as of its date, contains all the information
that, if requested by a prospective purchaser, would be required to be
provided pursuant to Rule 144A(d)(4) promulgated under the 1933 Act.
The
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<PAGE> 9
Offering Memorandum does not, and at the Closing Date, the Offering
Memorandum and any amendment or supplement thereto will not, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and the preliminary offering memorandum, at the date
thereof, did not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading; except that the representations and
warranties contained in this paragraph (a) shall not apply to
statements in or omissions from the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in
conformity with information relating to you furnished to the Company
in writing by you expressly for use therein. The Company acknowledges
for all purposes under this Agreement (including this paragraph and
Section 6 of this Agreement) that the statements with respect to price
and discount and the last paragraph on the cover page of the Offering
Memorandum and the statements set forth in the first paragraph under
the caption "Plan of Distribution" in the Offering Memorandum (or any
amendment or supplement thereto) constitute the only written
information furnished to the Company by any of you expressly for use
in the Offering Memorandum (or any amendment or supplement thereto)
and that you shall not be deemed to have provided any other
information (and therefore are not responsible for any such statement
or omission) pertaining to any arrangement or agreement with respect
to any party other than the Placement Agents.
(b) The Company and each of its subsidiaries has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has
the corporate power and authority to carry on its business as it is
currently being conducted and to own, lease and operate its
properties, and each is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, cash flow,
business affairs or business prospects of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect").
(c) All of the outstanding shares of capital stock of, or
other ownership interests in, each of the Company's subsidiaries have
been duly authorized and validly issued and are fully paid and
nonassessable, and are owned by the Company (except as set forth in
Annex I hereto), free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature.
(d) All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and, except as otherwise set forth in Annex II
hereto, are not subject to any preemptive or similar rights; and the
full number of shares of Common Stock issuable upon conversion of the
Notes, when issued and delivered in accordance with the terms of the
Notes and the Indenture upon conversion of such Notes in accordance
with their terms and the terms of the Indenture, will be validly
issued, fully paid and
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<PAGE> 10
nonassessable and the issuance of such shares of Common Stock will not
be subject to any preemptive or other similar rights.
(e) Each of this Agreement, the Indenture and the
Registration Rights Agreement has been duly authorized, and when
executed and delivered by the Company, will constitute valid and
binding agreements of the Company, enforceable against the Company in
accordance with its terms except (i) as the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, (ii)
as rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability, and
(iii) to the extent that the enforceability of any of the
indemnification provisions of this Agreement or the Registration
Rights Agreement may be limited by applicable laws.
(f) The Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to the Purchasers against payment therefor as
provided by this Agreement, will be entitled to the benefits of the
Indenture, and will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
as (i) the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (ii) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability.
(g) The Securities conform to the description thereof in
the Offering Memorandum.
(h) As of August 15, 1996, the Company was authorized to
issue 50,000,000 shares of Common Stock, par value $.001 per share, of
which 13,488,035 shares were issued and outstanding, and 2,000,000
shares of preferred stock, par value $.001 per share, none of which
were issued and outstanding. Of the unissued shares of Common Stock,
275,000 shares were reserved for issuance upon the exercise of
outstanding warrants that are exercisable until September 27, 1998 at
exercise prices ranging from $13.75 to $37.50 per share and an
aggregate of 3,913,960 shares were reserved for issuance pursuant to
the Company's 1988 Stock Option Plan, 1991 Employee Stock Purchase
Plan, 1993 Directors' Stock Option Plan and options granted to certain
directors and advisors outside of the Company's plans. No other
shares of Common Stock are reserved for any purpose.
(i) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or other equivalent
instruments, as the case may be, or, except for such as would not have
a Material Adverse Effect, in default in the performance of any
obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any other agreement,
lease, contract, indenture or instrument to which the Company or any
of its subsidiaries is a party or by which it or any of its
subsidiaries or their respective property is bound, and there exists
no condition that, with the passage of time or otherwise, would
constitute such a default under any such document or instrument.
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<PAGE> 11
(j) The execution, delivery and performance of this
Agreement, the Indenture, the Registration Rights Agreement and the
Securities by the Company, compliance by the Company with all the
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not require any consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may
be required under the securities or Blue Sky laws of the various
states) and will not conflict with or constitute a breach of any of
the terms or provisions of, or a default (with the passage of time,
the giving of notice or otherwise) under, the charter or by-laws or
other equivalent instruments, as the case may be, of the Company or
any of its subsidiaries or any agreement, lease, contract, indenture
or other instrument to which it or any of its subsidiaries is a party
or by which it or any of its subsidiaries or their respective property
is bound, or violate or conflict with any laws, administrative
regulations or rulings or court decrees applicable to the Company, any
of its subsidiaries or their respective property.
(k) To the knowledge of the Company, (A) no action has
been taken and no statute, rule or regulation or order has been
enacted, adopted or issued by any governmental agency or body that
prevents the issuance of the Securities, prevents or suspends the use
of any preliminary offering memorandum or suspends the sale of the
Securities in any jurisdiction referred to in Section 4(e) hereof and
(B) no injunction, restraining order or order of any nature by a
Federal or state court of competent jurisdiction has been issued with
respect to the Company or any of its subsidiaries that would prevent
or suspend the issuance or sale of the Securities, or the use of the
preliminary offering memorandum or the Offering Memorandum in any
jurisdiction referred to in Section 4(e) hereof.
(l) Except as would not result in a Material Adverse
Effect, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which
any of their respective property is subject, and, to the Company's
knowledge, no such proceedings are threatened or contemplated.
(m) Neither the Company nor any of its subsidiaries nor,
to the knowledge of the Company, any other person or entity for whom
either is or may be liable is in violation of any federal, state,
local, provincial or foreign laws or regulations relating to pollution
or protection of human health or the environment (including, without
limitation, ambient air, surface water, ground water, land surface or
subsurface strata), including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products,
asbestos or asbestos-containing materials, or polychlorinated
biphenyls (collectively, "Materials of Environmental Concern"), or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, "Environmental Laws"), which
violation would have a Material Adverse Effect. "Violation" includes,
but is not limited to, noncompliance with any permit or other
governmental authorization required under applicable Environmental
Laws and noncompliance with the terms and conditions of any such
permit or authorization.
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<PAGE> 12
(n) Neither the Company nor any of its subsidiaries has
received any communication (written or, to the knowledge of the
Company, oral), whether from a governmental authority, citizens'
group, employee or otherwise, asserting that the Company or any of its
subsidiaries or any other person or entity for whom either is or may
be liable is not in full compliance with any Environmental Laws or
permit or authorization required under applicable Environmental Laws
where such failure to comply fully would have a Material Adverse
Effect, and there are no circumstances that to the knowledge of the
Company may prevent or interfere with such full compliance in the
future, except where failure to so comply would not have a Material
Adverse Effect.
(o) There is no claim, action, cause of action,
investigation or notice (written or, to the knowledge of the Company,
oral) by any person or entity alleging potential liability (including,
without limitation, potential liability for investigatory costs,
natural resources damages, property damages, personal injuries or
penalties) arising out of, based on or resulting from (i) the presence
in or release into the environment of any Materials of Environmental
Concern at any location owned, leased or operated, now or in the past,
by the Company or any of its subsidiaries or, to the knowledge of the
Company, any other person or entity for whom either is or may be
liable, or (ii) circumstances forming the basis of any violation or
alleged violation of any Environmental Law (collectively,
"Environmental Claims") pending or threatened against the Company or
any of its subsidiaries or, to the knowledge of the Company, any other
person or entity whose liability for any Environmental Claim the
Company or any of its subsidiaries has retained or assumed either
contractually or by operation of law, except any such matter that
would not have a Material Adverse Effect.
(p) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal of
any Materials of Environmental Concern, that to the knowledge of the
Company could form the basis of any Environmental Claim against the
Company or any of its subsidiaries with respect to property owned,
leased or operated by or for the Company or any of its subsidiaries,
now or in the past, or against any person or entity whose liability
for any Environmental Claim the Company or any of its subsidiaries has
retained or assumed either contractually or by operation of law,
except any such matter that would not have a Material Adverse Effect.
(q) Except as would not, singly or in the aggregate, have
a Material Adverse Effect, the Company and each of its subsidiaries
has good and marketable title, free and clear of all liens, claims,
encumbrances and restrictions, except liens for taxes not yet due and
payable, to all property and assets described in the Offering
Memorandum as being owned by it. All leases to which the Company or
any of its subsidiaries is a party are valid and binding and, except
as would not have a Material Adverse Effect, no default (or event or
condition that, with the passage of time, the giving of notice of
otherwise, would constitute such a default) has occurred or is
continuing thereunder; and the Company and its subsidiaries enjoy
peaceful and undisturbed possession under all such leases to which any
of them is a party as lessee.
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<PAGE> 13
(r) The Company and each of its subsidiaries maintains
insurance of the types and in the amounts generally deemed adequate
for its business.
(s) Each of the accountants who certified the financial
statements and supporting schedules included in the Offering
Memorandum is an independent public accountant as required by the 1933
Act for financial statements included in a registration statement on
Form S-3 under the 1933 Act.
(t) The financial statements, together with related
schedules and notes, as set forth or incorporated by reference in the
Offering Memorandum (and any amendment or supplement thereto), present
fairly the consolidated financial position, results of operations and
changes in financial position of the Company and its subsidiaries on
the basis stated in the Offering Memorandum at the respective dates or
for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein;
provided, however, that the unaudited financial statements are subject
to normal recurring year end audit adjustments (which are not expected
to be material), and do not contain all footnotes required under
generally accepted accounting principles; and the other financial and
statistical information and data set forth in the Offering Memorandum
(and any amendment or supplement thereto) is, in all material
respects, accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company and
its subsidiaries.
(u) Except as would not result in a Material Adverse
Effect, (i) the Company and each of its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including without limitation the Federal
Communications Commission ("FCC"), as are necessary to own, lease and
operate its respective properties and to conduct its business in the
manner described in the Offering Memorandum, subject to such
qualifications as may be set forth in the Offering Memorandum; (ii)
the Company and each of its subsidiaries has fulfilled and performed
all of its obligations with respect to such permits and no event has
occurred that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other 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;
and (iii) except as described in the Offering Memorandum, such permits
contain no restrictions that are burdensome to the Company or any of
its subsidiaries.
(v) The Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(w) Except for rights with respect to which waivers have
been (or will be prior to the Closing Date) obtained in writing with
respect to inclusion in this offering, no holder of any security of
the Company has any right to require registration of shares of Common
Stock or any other security of the Company in connection with this
offering.
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<PAGE> 14
(x) Application has been made to have the 144A Global
Note designated as PORTAL securities in accordance with the rules and
regulations of the NASD.
(y) Neither the Company nor any affiliate (as such term
is defined in Rule 501(b) promulgated under the 1933 Act, an
"Affiliate") has, directly or through any agent, sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the 1933 Act) in a transaction that is or
will be integrated with the sale of the Securities in a manner that
would require the registration of the Securities under the 1933 Act.
(z) Neither the Company, any of its subsidiaries, any
officer or director nor any other person (other than you, as to whom
the Company makes no representation) authorized to act on its behalf
has, in connection with the offering of the Securities, engaged in any
form of general solicitation or general advertising within the meaning
of Rule 502(c) promulgated under the 1933 Act.
(aa) Assuming the accuracy of your representations
contained in Section 3 hereof and your compliance with your agreements
therein set forth, it is not necessary, in connection with the sale
and delivery of the Securities by the Company, in the manner
contemplated by this Agreement and the Offering Memorandum, to
register the Securities under the 1933 Act or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended, and the rules and
regulations thereunder (collectively, the "TIA").
(bb) The Indenture, as of the date hereof and at the
Closing Date, will conform in all material respects to the
requirements of the TIA that are applicable to an indenture that is
qualified under the TIA.
(cc) There are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of sale
or liens related to or entitling any person to purchase or otherwise
to acquire any shares of the capital stock of, or other ownership
interest in, the Company or any subsidiary thereof from the Company or
any such subsidiary, except as otherwise disclosed herein.
(dd) Except as would not, singly or in the aggregate, have
a Material Adverse Effect, neither the Company nor any of its
subsidiaries has (A) violated any applicable federal, state,
provincial or foreign law relating to employment or employment
practices or the terms and conditions of employment, including,
without limitation, discrimination in the hiring, promotion or pay of
employees, wages, hours of work, plant closings and layoffs,
collective bargaining, and occupational safety and health, or any
applicable provision of ERISA or of the Internal Revenue Code or the
rules and regulations promulgated thereunder relating to or governing
the operation or maintenance of any plan or arrangement falling within
the definition of an "employee benefit plan" (as such term is defined
in Section 3(3) of ERISA) or (B) engaged in any unfair labor practice.
Except as would not, singly or in the aggregate, result in any
Material Adverse Effect, there is (i) no unfair labor practice charge
or complaint pending or threatened against the
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<PAGE> 15
Company or any of its subsidiaries before the National Labor Relations
Board or any corresponding state, local, provincial or foreign agency,
and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending or threatened against
the Company or any of its subsidiaries; and (ii) no union
representation claim or question existing with respect to the
employees of the Company or any of its subsidiaries and no union
organizing activities taking place. Except as would not, singly or in
the aggregate, result in any Material Adverse Effect, (i) no labor
dispute involving the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is threatened
or imminent; and (ii) the Company is not aware of any existing,
threatened or imminent labor disturbance by the employees of any
principal suppliers, manufacturers or contractors of the Company or
any of its subsidiaries.
(ee) The books, records and accounts of the Company and
its subsidiaries accurately and fairly reflect, in reasonable detail,
the transactions in and dispositions of the assets of the Company and
its subsidiaries. The Company and each of its subsidiaries maintains
a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; and (iii) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ff) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been
filed, other than those filings being contested in good faith, and all
material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges shown to be due and payable on
such returns or pursuant to any assessment received by the Company or
any of its subsidiaries have been paid or will be paid prior to the
time they become delinquent, other than those being contested in good
faith and for which adequate reserves have been provided. The Company
has not been advised that any deficiency or adjustment for any
material taxes has been proposed or assessed against the Company or
any of its subsidiaries.
(gg) The Company and its subsidiaries own, license or
possess the patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names presently
employed by them in connection with the businesses now operated by
them, and neither the Company nor any of its subsidiaries has received
any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing, which, singly or in the
aggregate, if the subject of any unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(hh) The Company has all requisite corporate power and
authority to enter into and perform its obligations under this
Agreement, the Indenture, the Registration Rights Agreement
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<PAGE> 16
and the Securities and to issue, sell and deliver the Securities; and
the Company has taken all necessary corporate action to authorize the
execution and the performance of its obligations under this Agreement,
the Indenture, the Registration Rights Agreement and the Securities.
(ii) Except as permitted by Rule 10b-6 promulgated under
the 1934 Act, no bid or purchase by the Company, and no bid or
purchase that could be attributed to the Company (as a result of bids
or purchases by an "affiliated purchaser" within the meaning of Rule
10b-6 under the 1934 Act) for or of the Common Stock, any securities
of the same class or series as the Common Stock or any securities
immediately convertible into or exchangeable for or that represent any
right to acquire Common Stock is now pending or in progress or will
have commenced at any time prior to the completion of the sale of the
Securities to the Purchasers.
(jj) Each of the Company and its subsidiaries is in
compliance with all laws, ordinances and regulations (domestic and
foreign) applicable to its properties (whether owned or leased) and
its business, as described in the Offering Memorandum, except where
noncompliance with such laws, ordinances and regulations would not,
singly or in the aggregate, have a Material Adverse Effect.
(kk) Any contract or document of a character that would be
required to be described in the Offering Memorandum if the Offering
Memorandum were a prospectus included in a registration statement on
Form S-3 under the 1933 Act is so described, and such description
accurately reflects the material terms of such contract or document.
(ll) None of the Company, its Affiliates or any person
acting on its or their behalf (other than the Placement Agents) has
engaged in any directed selling efforts (as that term is defined in
Regulation S) with respect to the Securities and the Company and its
Affiliates and any person acting on its or their behalf (other than
the Placement Agents) has complied with the offering restrictions and
requirements of Regulation S.
(mm) The Notes satisfy the eligibility requirements set
forth in Rule 144A (d)(3) promulgated under the 1933 Act.
6. Indemnification.
Pursuant to the Engagement Letter, the Company and the
Placement Agents have agreed to indemnify each other against certain
liabilities, including liabilities under the 1933 Act, and under certain
circumstances to contribute to payments the other party or parties may be
required to make in respect thereof. The agreement between the parties is set
forth in Schedule I to the Engagement Letter, attached hereto as Annex III, and
incorporated by reference herein.
7. Conditions of Purchasers' Obligations. The several
obligations of the Purchasers to purchase the Notes under this Agreement are
subject to the satisfaction of each of the following conditions:
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<PAGE> 17
(a) All of the representations and warranties of the
Company contained in this Agreement shall be true and correct on the
date hereof and on the Closing Date with the same force and effect as
if made on and as of the date hereof and the Closing Date,
respectively. The Company shall have performed or complied with all
of its obligations and agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and
copies distributed to the Placement Agents not later than 10:00 a.m.,
New York City time, on the date of this Agreement or at such later
date and time as to which you may agree; and no stop order suspending
the qualification or exemption from qualification of the Securities in
any jurisdiction referred to in Section 4(e) hereof shall have been
issued and no proceeding for that purpose shall have been commenced or
shall be pending or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency that would, as of the Closing Date, prevent the
issuance of the Securities; and no injunction, restraining order or
order of any nature by a Federal or state court of competent
jurisdiction shall have been issued as of the Closing Date that would
prevent the issuance of the Securities and no action, suit or
proceeding shall be pending against, or, to the knowledge of the
Company, threatened against the Company or any of its subsidiaries
before any court or arbitrator or any governmental body, agency or
official that, if adversely determined, would prohibit, interfere with
or adversely affect the issuance of the Securities or would have a
Material Adverse Effect, or in any manner draw into question the
validity of this Agreement, the Indenture, the Securities or the
Registration Rights Agreement; and no stop order preventing the use of
the Offering Memorandum, or any amendment or supplement thereto, and
no order asserting that any of the transactions contemplated by this
Agreement are subject to the registration requirements of the Act
shall have been issued.
(d) (i) Since the date hereof and since the dates as of
which information is given or incorporated by reference in the
Offering Memorandum, there shall not have been any material adverse
change, or any development involving a prospective material adverse
change, in the condition, financial or otherwise, or in the earnings,
cash flows, business affairs or business prospects, whether or not
arising in the ordinary course of business, of the Company (a
"Material Adverse Change"); (ii) except as set forth in the Offering
Memorandum, since the date of the latest balance sheet for the Company
included or incorporated by reference in the Offering Memorandum,
there shall not have been any material change, or any development that
is reasonably likely to result in a material change, in the capital
stock or long-term debt, or material increase in short-term debt, of
the Company or any of its consolidated subsidiaries taken as a whole;
(iii) since the date as of which information is given or incorporated
by reference in the Offering Memorandum, no dividend or distribution
of any kind shall have been declared, paid or made by the Company or
any of its subsidiaries on any class of its capital stock; and (iv)
since the date of the latest balance sheet included or incorporated by
reference in the Offering Memorandum, neither the Company nor any of
its subsidiaries shall have incurred any liabilities or obligations,
direct or contingent, that are material, individually or in the
aggregate, to the
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<PAGE> 18
Company and its subsidiaries, taken as a whole. On the Closing Date,
you shall have received a certificate dated the Closing Date, signed
by Robert Dilworth and William D. Swain, in their capacities as the
Chief Executive Officer and the Chief Financial Officer of the
Company, respectively, confirming the matters set forth in paragraphs
(a), (b), (c) and (d) of this Section 7.
(e) You shall have received on the Closing Date an
opinion (reasonably satisfactory to you and counsel for the Placement
Agents), dated the Closing Date, of Cooley, Godward, Castro, Huddleson
& Tatum, counsel for the Company, to the effect set forth in Annex IV
hereto.
(f) You shall have received on the Closing Date an
opinion, dated the Closing Date, of Ginsburg, Feldman & Bress in form
and substance reasonably satisfactory to the Placement Agents.
(g) You shall have received letters on and as of the date
hereof as well as on and as of the Closing Date (in the latter case
constituting an affirmation of the statements set forth in the former,
based on limited procedures), in form and substance reasonably
satisfactory to you, from Arthur Andersen & Co., independent public
accountants, with respect to the financial statements and certain
financial information contained in the Offering Memorandum.
(h) At the Closing Date, the Notes shall have been
designated as PORTAL securities in accordance with the rules and
regulations of the NASD, subject to official notice of issuance.
(i) Wilson, Sonsini, Goodrich & Rosati, Professional
Corporation, shall have been furnished with such documents and
opinions, in addition to those set forth above, as they may reasonably
require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 7 and in order to evidence the
accuracy, completeness or satisfaction in all material respects of any
of the representations, warranties or conditions herein contained.
(j) Prior to the Closing Date, the Company shall have
furnished to you or caused to be furnished to you such further
information, certificates, opinions and documents as you may
reasonably request.
(k) The Company and the Trustee shall have entered into
the Indenture and you shall have received counterparts, conformed as
executed, thereof.
(l) The Company shall have entered into the Registration
Rights Agreement and you shall have received counterparts, conformed
as executed, thereof.
8. Effective Date of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to
the Closing Date by the Placement Agents by notice to the Company if any of the
following has occurred: (i) subsequent to the
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<PAGE> 19
date of this Agreement, any Material Adverse Change occurs, which, in your
judgment, materially impairs the investment quality of any of the Notes or
makes it impracticable or inadvisable to market the Securities, (ii) any
outbreak or escalation of hostilities or other national or international
calamity or crisis or material adverse change in the financial markets of the
United States or elsewhere, or any other substantial national or international
calamity or emergency if the effect of such outbreak, escalation, calamity,
crisis or emergency would, in your reasonable judgment, make it impracticable
or inadvisable to market the Securities or to enforce contracts for the sale of
the Securities, (iii) any suspension or limitation of trading generally in
securities on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq Stock Market or in the over-the-counter markets or any setting of
minimum prices for trading on such exchange or markets, (iv) any declaration of
a general banking moratorium by either Federal or New York authorities, (v) the
taking of any action by any Federal, state or local government or agency in
respect of its monetary or fiscal affairs that in your judgment has a material
adverse effect on the financial markets in the United States, and would, in
your reasonable judgment, make it impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, (vi) the
enactment, publication, decree or other promulgation of any Federal or state
statute, regulation, rule or order of any court or other governmental authority
that would, in your reasonable judgment, have a Material Adverse Effect, or
(vii) the Securities or any securities of the Company shall have been
downgraded or placed on any "watch list" for possible downgrading by any
nationally recognized statistical rating organization, provided, that in the
case of such "watch list" placement, termination shall be permitted only if
such placement would, in the judgment of any Placement Agent, make it
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities or materially impair the investment quality of
the Securities.
The indemnities and contribution provisions of the Engagement
Letter and the other agreements, representations and warranties of the Company,
its respective officers and directors and the Placement Agents set forth in or
made pursuant to this Agreement shall remain operative and in full force and
effect, and will survive delivery of and payment for the Securities, regardless
of (i) any investigation, or statement as to the results thereof, made by or on
behalf of any of the Placement Agents or by or on behalf of the Company, its
officers or directors or any controlling person thereof, (ii) acceptance of the
Securities and payment for them hereunder and (iii) termination of this
Agreement.
If this Agreement shall be terminated by the Placement Agents
pursuant to clauses (i) or (vii) of the second paragraph of this Section 8 or
because of the failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, the Company agrees
to reimburse you for all out-of-pocket expenses (including the fees and
disbursements of your counsel) incurred by you. Notwithstanding any
termination of this Agreement, the Company shall be liable for all expenses
that it has agreed to pay pursuant to Section 4(h) hereof. If this Agreement
shall be terminated pursuant to Section 8, the Company shall not in such event
be liable to the Placement Agents for damages on account of loss of anticipated
profits arising out of the transactions contemplated by this Agreement.
Except as otherwise expressly provided herein, this Agreement
has been and is made solely for the benefit of and shall be binding upon the
Company, the Placement Agents, any Indemnified
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<PAGE> 20
Person referred to herein and their respective successors and assigns, and the
Purchasers, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement.
The terms "successors and assigns" shall not include a Holder of any of the
Securities who purchases such Securities from any of the Purchasers merely
because of such purchase. Notwithstanding the foregoing, it is expressly
understood and agreed that each Purchaser of the Securities from the Company is
intended to be a third-party beneficiary of the Company's representations,
warranties and covenants contained in this Agreement and in the Registration
Rights Agreement to the same extent as if such Purchaser were a party to such
agreements and those representations, warranties and covenants were made
directly to such Purchaser by the Company, and each such Purchaser shall have
the right to take action against the Company to enforce, and obtain damages for
any breach of, those provisions.
9. Notices. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to Metricom,
Inc., 980 University Avenue, Los Gatos, California, 95030, Attn: Chief
Financial Officer, with a copy to Cooley Godward Castro Huddleson & Tatum, One
Maritime Plaza, 20th Floor, San Francisco, California, 94111, Attn: Kenneth L.
Guernsey, Esq., and (b) if to any Placement Agent, to Furman Selz LLC, 101
California Street, Suite 4300, San Francisco, CA 94111, Attn: Eric W.
Edmondson, and to Feshbach Brothers Investor Services Inc., 425 Sherman Avenue,
Suite 220, Palo Alto, CA 94306, Attn: Matthew L. Feshbach, or in any case to
such other address as the person to be notified may have requested in writing.
10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH
OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE COMPANY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
11. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and other persons referred to in Sections 6 and 8, and
no other person will have any right or obligation hereunder.
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<PAGE> 21
12. Counterparts. This Agreement may be signed in various
counterparts, which together shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement between
the Company and the Placement Agents.
Very truly yours,
METRICOM, INC.
By:
------------------------------
Name:
Title:
FURMAN SELZ LLC
By:
----------------------
Name:
Title:
FESHBACH BROTHERS INVESTOR SERVICES INC.
By:
----------------------
Name:
Title:
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<PAGE> 22
ANNEX I
LIST OF PARTIALLY OWNED SUBSIDIARIES(1)
Name of Subsidiary Jurisdiction of Organization
Metricom DC, L.L.C.(2) Delaware
- --------------
(1) This Annex does not include Subsidiaries that (a) have issued a limited
number (less than 1%) of their outstanding shares to officers or directors
in order to comply with directors' qualify share requirements or similar
provisions of the law of the jurisdiction of incorporation, or (b) are
wholly owned by the Company by virtue of the Company or a Subsidiary and
one or more other Subsidiaries owning such Subsidiary's shares.
(2) Eighty percent (80%) of the membership interests of Metricom DC, L.L.C. is
indirectly held by the Company through its subsidiary Metricom Investments
DC, Inc.
I-1
<PAGE> 23
ANNEX II
PREEMPTIVE OR SIMILAR RIGHTS
Rights to acquire additional securities contained in the following
agreements, which have been waived in connection with the Offering:
Purchase Agreement dated October 3, 1993 between the Company and Vulcan
Ventures, Inc., as amended March 24, 1994.
Purchase Agreement dated February 18, 1994 between the Company and
Microsoft Corporation.
II-1
<PAGE> 24
ANNEX III
INDEMNIFICATION PROVISIONS
(SCHEDULE I to the Engagement Letter)
This Schedule I is a part of and is incorporated into that certain letter
agreement (together, the "Agreement"), dated August 5, 1996 by and between
Metricom, Inc. (the "Company"), Furman Selz LLC and Feshbach Brothers Investor
Services Inc. (collectively, the "Placement Agents").
The Company agrees to indemnify and hold harmless the Placement Agents,
their affiliates and their parents and their affiliates, and the respective
directors, officers, agents and employees of the Placement Agents, its
affiliates and their parents and their affiliates (the Placement Agents and
each such entity or person, an "Indemnified Person") from and against any
losses, claims, damages, judgments, assessments, costs and other liabilities
(collectively "Liabilities"), and will reimburse each Indemnified Person for
all reasonable fees and expenses (including the reasonable fees and expenses of
counsel) (collectively, "Expenses") as they are incurred in investigating,
preparing, pursuing or defending any claim, action, proceeding or
investigation, whether or not in connection with pending or threatened
litigation and whether or not any Indemnified Person is a party (collectively,
"Actions"), (i) caused by, or arising out of or in connection with, any untrue
statement or alleged untrue statement of a material fact contained in the
Offering Materials (including any amendments thereof and supplements thereto)
or 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 (other than untrue statements or alleged
untrue statements in, or omissions or alleged omissions from, information
relating to an Indemnified Person furnished in writing by or on behalf of such
Indemnified Person expressly for use in the Offering Materials), or (ii)
otherwise arising out of or in connection with advice or services rendered or
to be rendered by any Indemnified Person pursuant to this Agreement, the
transactions contemplated hereby or any Indemnified Person's actions or
inactions in connection with any such advice, services or transactions;
provided that, in the case of clause (ii) only, the Company will not be
responsible for any Liabilities or Expenses of any Indemnified Person that are
determined by a judgment of a court of competent jurisdiction that is no longer
subject to appeal or further review to have resulted solely from such
Indemnified Person's gross negligence or willful misconduct in connection with
any of the advice, actions, inactions or services referred to above. If
multiple claims are brought against an Indemnified Person in an arbitration,
with respect to at least one of which is permitted under applicable law and
provided for under this Agreement, the Company agrees that any arbitration
award shall be conclusively deemed to be based on claims as to which
indemnification is permitted and provided for, except to the extent the
arbitration award expressly states that the award, or any portion thereof, is
based solely on a claim as to which indemnification is not available.
Upon receipt by an Indemnified Person of actual notice of an Action
against such Indemnified Person with respect to which indemnity may be sought
under this Agreement, such Indemnified
III-1
<PAGE> 25
Person shall promptly notify the Company in writing; provided that failure so
to notify the Company shall not relieve the Company from any liability that the
Company may have on account of this indemnity or otherwise, except to the
extent the Company shall have been materially prejudiced by such failure. The
Company shall, if requested by the Placement Agents, assume the defense of any
such Action including the employment of counsel reasonably satisfactory to the
Company and the Placement Agents. Any Indemnified Person shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person, unless: (i) the Company has failed promptly to assume
the defense and employ counsel or (ii) the named parties to any such Action
(including any impleaded parties) include such Indemnified Person and the
Company, and such Indemnified Person shall have been advised by counsel that
there may be one or more legal defenses available to it that are different from
or in addition to those available to the Company; provided that the Company
shall not in such event be responsible hereunder for the fees and expenses of
more than one firm of separate counsel in connection with any Action in the
same jurisdiction, in addition to any local counsel. The Company shall not be
liable for any settlement of any Action effected without its written consent
(which shall not be unreasonably withheld). In addition, the Company will not,
without prior written consent of the Placement Agents, settle, compromise or
consent to the entry of any judgment in or otherwise seek to terminate any
pending or threatened Action in respect of which indemnification or
contribution may be sought hereunder (whether or not any Indemnified Person is
a party thereto) unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Person from all
Liabilities arising out of such Action.
In the event that the foregoing indemnity is judicially determined to be
unavailable to an Indemnified Person other than in accordance with the terms
hereof, the Company shall contribute to the Liabilities and Expenses paid or
payable by such Indemnified Person in such proportion as is appropriate to
reflect (i) the relative benefits to the Company, on the one hand, and to the
Placement Agents, on the other hand, of the matters contemplated by this
Agreement or (ii) if the allocation provided by the immediately preceding
clause is not permitted by the applicable law, not only such relative benefits
but also the relative fault of the Company, on the one hand, and the Placement
Agents, on the other hand, in connection with the matters as to which such
Liabilities or Expenses relate, as well as any other relevant equitable
considerations; provided that in no event shall the Company contribute less
than the amount necessary to ensure that all Indemnified Persons, in the
aggregate, are not liable for any Liabilities and Expenses in excess of the
amount of fees actually received by the Placement Agents pursuant to this
Agreement. For purposes of this paragraph, the relative benefits to the
Company, on the one hand, and to the Placement Agents, on the other hand, of
the matters contemplated by this Agreement shall be deemed to be in the same
proportion as (a) the total value paid or contemplated to be paid or received
or contemplated to be received by the Company in the transaction or
transactions that are within the scope of this Agreement, whether or not any
such transaction is consummated, bears to (b) the fees paid or to be paid to
the Placement Agents under this Agreement.
The Company also agrees that no Indemnified Person shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company for or in connection with advice or services
III-2
<PAGE> 26
rendered or to be rendered by any Indemnified Person pursuant to this
Agreement, the transactions contemplated hereby or any Indemnified Person's
actions or inactions in connection with any such advice, services or
transactions except for Liabilities (and related Expenses) of the Company that
are determined by a judgment of a court of competent jurisdiction or by binding
arbitration agreed to by the parties, in either case that is no longer subject
to appeal or further review to have resulted solely from such Indemnified
Person's gross negligence or willful misconduct in connection with any such
advice, actions, inactions or services; provided, that all Indemnified Persons
shall not, in the aggregate, have any liability to the Company for any amount
in excess of that amount of the fees actually received by the Placement Agents
pursuant to this Agreement.
If any term, provision, covenant or restrictions contained in this
Schedule I is held by a court of competent jurisdiction or other authority to
be invalid, void, unenforceable or against its regulatory policy, the remainder
of the terms, provisions, covenants and restrictions contained in this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
The reimbursement, indemnity and contribution obligations of the Company
set forth herein shall apply to any modification of this Agreement and shall
remain in full force and effect regardless of any termination of, or the
completion of any Indemnified Person's services under or in connection with,
this Agreement.
Each of the Company and the Placement Agents hereby irrevocably waives any
and all right to trial by jury in any legal proceeding arising out of or
relating to this Schedule I.
III-3
<PAGE> 27
ANNEX IV
FORM OF LEGAL OPINION TO BE
RENDERED BY COMPANY COUNSEL
1. Each of the Company and Metricom Investments DC, Inc. has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation. Metricom D.C., L.L.C. has
been duly formed and is validly existing as a limited liability company in good
standing under the laws of the jurisdiction of its formation.
2. To the best of our knowledge, the Company does not own or control,
directly or indirectly, any corporation, limited liability company,
partnership, association or other entity other than the subsidiaries listed on
Annex V of the Placement Agreement (the "Subsidiaries"). The Company owns of
record, directly or indirectly through other subsidiaries, the percentages set
forth on Exhibit A hereto of the outstanding capital stock or other securities
evidencing equity ownership of each of such Subsidiaries, to the best of our
knowledge, free and clear of any security interest, claim, lien, limitation on
voting rights or encumbrance (except such restrictions on transfer as may be
imposed by federal or state securities laws); and, all of such securities have
been duly authorized and validly issued, and, in the case of capital stock, are
fully paid and nonassessable; and, to the best of our knowledge, no options,
warrants, or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into shares of capital stock or
membership interests in the Subsidiaries are outstanding.
3. Each of the Company and its Subsidiaries has the corporate or limited
liability company power, as the case may be, to own or lease its property and
assets and to conduct its business as it is currently being conducted, and, to
the best of our knowledge, each is qualified and is in good standing as a
foreign corporation or limited liability company, as the case may be,
authorized to do business in each jurisdiction in the United States in which
its ownership of its property or the conduct of its business requires such
qualification and where any statutory fines or penalties or any disability
imposed for the failure to qualify would materially and adversely affect the
Company and its Subsidiaries taken as a whole.
4. The Indenture has been duly and validly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
rights to indemnity may be limited under applicable laws and except as
enforcement may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws affecting creditors'
rights and subject to general equity principles and to limitations on
availability of equitable relief, including specific performance.
5. The Notes have been duly authorized for issuance and sale by the
Company to the Purchasers, and when executed and authenticated in accordance
with the provisions of the Indenture
IV-1
<PAGE> 28
and when issued and delivered against payment therefor in accordance with the
provisions of the Placement Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding agreements of the Company enforceable
against the Company in accordance with their respective terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws affecting creditors'
rights and subject to general equity principles and to limitations on
availability of equitable relief, including specific performance, and, to the
best of our knowledge, will not be subject to any preemptive or similar rights.
6. The Notes conform as to legal matters to the description thereof in
the section of the Offering Memorandum captioned "Description of the Notes. "
7. The shares of Common Stock issuable upon conversion of the Notes have
been duly authorized and validly reserved for issuance upon conversion of the
Notes, and such shares of Common Stock, when issued and delivered by the
Company in accordance with the terms of the Notes, the Placement Agreement and
the Indenture, will be validly issued, fully paid and nonassessable. To the
best of our knowledge, there are no options, warrants, conversion privileges,
preemptive rights or other rights presently outstanding to purchase any of the
authorized but unissued capital stock of the Company that have not been waived,
other than rights created in connection with the transactions contemplated by
the Agreement, _______________ shares reserved for issuance under outstanding
warrants, ___________________ shares reserved for issuance under the Company's
1988 Stock Option Plan, 1993 Non-Employee Directors Stock Option Plan and the
1991 Employee Stock Purchase Plan and up to an additional
______________________ shares reserved for issuance under outstanding options
to certain directors and advisors of the Company.
8. The contracts, agreements and instruments summarized in the Offering
Memorandum under the captions "Risk Factors -- Risks Relating to Potential
Acquisition of Overall Wireless and Related Legal Proceedings," "Business --
Strategic Partnerships," "Business -- Research and Development" and "Certain
Transactions" are fairly summarized to the extent that would be required if the
Offering Memorandum were a prospectus included in a registration statement on
Form S-3 under the Securities Act of 1933, as amended (the "Act").
9. The sections of the Offering Memorandum captioned "Dividend Policy,"
"Description of Notes" and "Certain Federal Income Tax Consequences," insofar
as such statements constitute a summary of legal matters, agreements,
instruments or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, agreements, instruments and
proceedings to the extent that would be required if the Offering Memorandum
were a prospectus included in a registration statement on Form S-3 under the
Act.
10. The execution and delivery of the Subscription Agreements, the
Placement Agreement, the Registration Rights Agreement and the Indenture, and
the issuance of the Securities pursuant thereto by the Company, do not require
any consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except as such may be
required
IV-2
<PAGE> 29
under state securities or "Blue Sky" laws) and do not violate any provision of
the Company's Certificate of Incorporation or Bylaws, and do not constitute a
material default under the provisions of any material agreement that has been
filed as an exhibit to the Company's filings under the Securities Exchange Act
of 1934, as amended, and do not violate or contravene (a) any governmental
statute, rule or regulation applicable to the Company (subject to obtaining any
consents, approvals or authorizations or making any required filings under
state securities or "Blue Sky" laws) or (b) any order, writ, judgment,
injunction, decree, determination or award that has been entered against the
Company and of which we are aware, the violation or contravention of which
would materially and adversely affect the Company, its assets, financial
condition or operations.
11. We do not know of any legal or governmental proceeding pending or
threatened, to which the Company is a party or to which any of its properties
is subject or any contract or other agreement or instrument, that would be
required to be described in the Offering Memorandum if it were a prospectus
included in a registration statement on Form S-3 under the Act that is not so
described.
12. The Company has the corporate power and authority to execute, deliver
and perform its obligations under the Subscription Agreements, the Placement
Agreement, the Indenture, the Registration Rights Agreement and the Securities,
including the corporate power and authority to issue, sell and deliver the
Securities as provided in the Placement Agreement.
13. The Subscription Agreements, the Placement Agreement and Registration
Rights Agreement have been duly and validly authorized and each such agreement
constitutes a valid and binding agreement of the Company enforceable against
the Company in accordance with its terms, except as rights to indemnity or
contribution may be limited under applicable laws and except as enforcement may
be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting creditors' rights and
subject to general equity principles and to limitations on availability of
equitable relief, including specific performance.
14. Neither the Company nor any of its Subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
15. To the best of our knowledge, no holder of any security of the
Company has any right to require registration of shares of Common Stock or any
other security of the Company, except for those rights that have been waived,
in connection with the offering of Securities contemplated by the Placement
Agreement.
16. Assuming the accuracy of the representations and warranties of the
Company contained in Section 5 of the Placement Agreement, of your
representations and warranties contained in Section 3 of the Placement
Agreement, and of the Purchasers' representations in their respective
Subscription Agreements, and assuming compliance by the Company with the
covenants of the Company contained in Section 4 of the Placement Agreement and
by you with your agreements contained in Section 3 of the Placement Agreement,
the issuance and sale of the Securities to the Purchasers in the manner
contemplated by the Offering Memorandum, (A) are exempt from the registration
IV-3
<PAGE> 30
requirements of the Act and (B) do not require the qualification of the
Indenture under the Trust Indenture Act of 1939, as amended, it being
understood that no opinion is expressed as to any subsequent resale of the
Securities.
17. The outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable and were not issued in
violation of any preemptive or similar rights set forth in the Company's
charter documents or in agreements known to us. As of March 29, 1996, the
authorized and outstanding capital stock of the Company was as set forth under
the heading "Stockholders' Equity" in the table in the section of the Offering
Memorandum captioned "Capitalization."
*********************
In the course of the preparation of the Offering Memorandum, we have
participated in discussions and conferences with officers of the Company and
with representatives of its independent public accountants, as you and your
counsel have done, during which the contents of the Offering Memorandum were
reviewed and we have also reviewed and discussed with various of such persons
materials submitted for use in the Offering Memorandum and certain other data
and information furnished in support of the statements made therein. Although
we have not independently verified, and do not render any opinion upon, the
accuracy, completeness or fairness of the Offering Memorandum, we advise you
that nothing has come to our attention that caused us to believe that the
Offering Memorandum, as of its date and as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except, in each case, for the financial statements,
schedules and other financial and statistical data, included or incorporated
therein, or information concerning patents or any applicable Federal
Communications Commission law, rule or regulation, as to which we express no
view).
IV-4
<PAGE> 31
ANNEX V
LIST OF CERTAIN SUBSIDIARIES
<TABLE>
<CAPTION>
Name Jurisdiction of Organization
- ---- ----------------------------
<S> <C>
U.S. Subsidiaries
- -----------------
Metricom Investments DC, Inc. Delaware
Metricom DC, L.L.C. Delaware
Foreign Subsidiaries
- --------------------
None
</TABLE>
V-1
<PAGE> 32
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
<PAGE> 1
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: William D. Swain
Chief Financial Officer
Metricom, Inc.
(408) 399-8200
Los Gatos, Calif. August 29, 1996 -- Metricom, Inc. (NASDAQ/NMS: MCOM)
announced today the private placement of $45,000,000 of its 8% convertible
subordinated notes due 2003, at 100 percent of their principal amount. The
notes are convertible into shares of common stock of the Company at any time
from November 26, 1996 until maturity, unless previously redeemed or
repurchased, at a conversion price of $14.55 per share, subject to adjustment
under certain conditions. The notes are redeemable in whole or in part at the
option of the Company at any time on or after September 15, 1999, on terms
specified in the offering memorandum. Net proceeds to the Company from the
sale of the notes will be used to finance the development, deployment and
commercialization of the Company's Ricochet networks.
Furman Selz LLC and Feshbach Brothers Investor Services Inc. acted as
the placement agents of the issue.
About Metricom, Inc.
Founded in 1985, Metricom is a leading provider of wireless data
communications and network solutions for personal computer and industrial
applications. The firm, headquartered in Los Gatos, California, develops
license-free, high-performance products that feature advanced spread spectrum
packet radio technology, which sends data across a network of intelligent radio
nodes. Metricom's Ricochet division provides wireless Internet and other
service solutions for groups and individuals in the corporate, consumer and
educational market sectors. Ricochet networks are currently installed
throughout the greater San Francisco Bay Area and Seattle, and on corporate and
college campuses across the nation. The Ricochet Network will be available in
Washington, DC later in 1996.
The UtiliNet division of Metricom offers wireless network solutions to
the electric, oil, gas and waste management industries with over 40
installations to date.
For more information on Metricom and its products and services, visit
the Metricom World Wide Web site at http://www.metricom.com. Ricochet Wireless
Modems and Internet
<PAGE> 2
Services are available at retail stores in the greater San Francisco Bay Area
and Seattle, by contacting Metricom directly at (888) 4-NO-WIRES, or by
visiting its Web site.
Metricom is a registered trademark, and Ricochet is a trademark of Metricom,
Inc. All other trademarks are the property of their respective owners.
# # #
