THIS DOCUMENT IS A COPY OF THE EXHIBIT 4(e)(2) TO FORM 10-Q
FILED ON MAY 15, 1996 PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
FIRST SUPPLEMENTAL INDENTURE, dated as of
April 1, 1996 (the "Supplement"), between VANGUARD
CELLULAR SYSTEMS, INC., a North Carolina corporation
(the "Company"), and THE BANK OF NEW YORK, a New York
banking corporation (the "Trustee"), as Trustee under
an Indenture, dated as of April 1, 1996 (the
"Indenture").
RECITALS OF THE COMPANY
The Company has previously executed and delivered to the
Trustee the Indenture. Sections 2.1, 2.2 and 12.1 of the Indenture provide,
among other things, that the Company, when authorized by its Board of Directors,
and the Trustee may at any time and from time to time enter into an indenture
supplemental to the Indenture for the purpose of authorizing a series of
Debentures and specifying the terms and form of each series of Debentures. The
Board of Directors of the Company has duly authorized the creation, issuance,
execution and delivery of a series of Debentures consisting of the 9-3/8% Senior
Debentures Due 2006 (the "9- 3/8% Debentures") in the aggregate principal amount
of $200,000,000. The Company and the Trustee are executing and delivering this
Supplement in order to provide for the 9- 3/8% Debentures.
All things necessary to make this Supplement a valid and
legally binding agreement of the Company have been done.
I. ADDITIONAL PROVISIONS RELATING TO THE 9-3/8% DEBENTURES
The additional terms provided for herein apply only to the
9-3/8% Debentures and do not apply to any other series of Debentures previously
issued or to be issued under the Indenture. Except as otherwise set forth
herein, all provisions of the Indenture apply to the 9-3/8% Debentures.
1. Provisions Supplemental to Article I of the Indenture.
A. Terms Defined in the Indenture.
All capitalized terms used in this Supplement that are defined
in the Indenture have the meanings assigned to them in the Indenture, except to
the extent that such terms
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are otherwise defined in this Supplement. To the extent that a term is defined
both in the Indenture and this Supplement, the definition appearing in this
Supplement shall govern with respect to the 9-3/8% Debentures.
B. Additional Definitions.
Section 1.1 of the Indenture is hereby supplemented for
purposes of the 9-3/8% Debentures to provide additional definitions in the
appropriate alphabetical sequence, as follows:
"Additional Assets" means (i) any Property (other than cash,
cash equivalents or securities) to be owned by the Company or a Restricted
Subsidiary and used in a Related Business, (ii) the costs of improving or
developing any Property owned by the Company or a Restricted Subsidiary which is
used in a Related Business and (iii) Investments in any other Person engaged
primarily in a Related Business (including the acquisition from third parties of
Capital Stock of such Person) as a result of which such other Person becomes a
Restricted Subsidiary or is merged or consolidated with or into the Company or
any Restricted Subsidiary.
"Affiliate" of any specified Person means (i) any other
Person, directly or indirectly, controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) any other Person who
is a director or executive officer (a) of such specified Person, (b) of any
Subsidiary of such specified Person or (c) of any Person described in clause (i)
above. 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 "controlling" and "controlled" have
meanings correlative to the foregoing. "Affiliate" shall also mean any
beneficial owner of shares representing 10% or more of the total voting power of
the Voting Stock (on a fully diluted basis) of the Company or of rights or
warrants to purchase such Voting Stock (whether or not currently exercisable)
and any Person who would be an Affiliate of any such beneficial owner pursuant
to the first sentence hereof.
"Annualized Pro Forma EBITDA" means, with respect to any
Person, the product of such Person's Pro Forma EBITDA for the two most recent
full fiscal quarters for which financial statements are available multiplied by
two.
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"Asset Sale" means, with respect to any Person, any transfer,
conveyance, sale, lease or other disposition (including, without limitation,
dispositions pursuant to any consolidation or merger or a Sale and Leaseback
Transaction) by such Person or any of its Restricted Subsidiaries in any single
transaction or series of transactions of (a) shares of Capital Stock or other
ownership interests in another Person (including, with respect to the Company
and its Restricted Subsidiaries, Capital Stock of Unrestricted Subsidiaries) or
(b) any other Property of such Person or any of its Restricted Subsidiaries;
provided, however, that the term "Asset Sale" shall not include: (i) the sale or
transfer of Temporary Cash Investments, inventory, accounts receivable or other
Property in the ordinary course of business; (ii) the liquidation of Property
received in settlement of debts owing to such Person or any of its Restricted
Subsidiaries as a result of foreclosure, perfection or enforcement of any Lien
or debt, which debts were owing to such Person or any of its Restricted
Subsidiaries in the ordinary course of business; (iii) when used with respect to
the Company, any asset disposition permitted pursuant to Section 10.1 which
constitutes a disposition of all or substantially all of the Company's Property;
(iv) the sale or transfer of any Property by such Person or any of its
Restricted Subsidiaries to such Person or any of its Restricted Subsidiaries;
(v) a disposition in the form of a Restricted Payment permitted to be made
pursuant to Section 4.10 or (vi) a disposition with a Fair Market Value and a
sale price of less than $5 million.
"Attributable Indebtedness" means (i) Indebtedness deemed to
be incurred in respect of a Sale and Leaseback Transaction and shall be, at the
date of determination, the present value (discounted at the actual rate of
interest implicit in such transaction, compounded annually), of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale and Leaseback Transaction (including any period for
which such lease has been extended) and (ii) the amount of any Indebtedness
incurred by any special purpose company or trust in connection with any
Permitted Receivables Facility.
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the numbers of years (rounded to the
nearest one-twelfth of one year) from the date of determination to the dates of
each successive scheduled principal payment of
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such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by (ii) the sum of all
such payments.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors, to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Capital Expenditure Indebtedness" means Indebtedness Incurred
by any Person to finance a capital expenditure so long as (i) such capital
expenditure is or should be included as an addition to "Property and Equipment,
at cost" in accordance with GAAP, and (ii) such Indebtedness is Incurred within
180 days of the date such capital expenditure is made.
"Capital Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP. For purposes of Section 4.11, a Capital Lease Obligation shall be
deemed secured by a Lien on the property being leased.
"Capital Stock" means, with respect to any Person, any and all
shares or other equivalents (however designated) of corporate stock, partnership
interests or any other participation, right, warrant, option or other interest
in the nature of an equity interest in such Person, but excluding any debt
security convertible or exchangeable into such equity interest.
"Capital Stock Sale Proceeds" means the aggregate Net Cash
Proceeds received by the Company from the issue or sale (other than to a
Subsidiary or an employee stock ownership plan or trust established by the
Company or any Subsidiary) by the Company of any class of its Capital Stock
(other than Redeemable Stock) after the Issue Date.
"Change of Control" means the occurrence of any of the
following events: (i) any "person" or "group" (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to either
of the foregoing, including any group acting for the purpose of acquiring,
holding or disposing of securities within the
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meaning of Rule 13d-5(b)(1) under the Exchange Act) other than one or more of
the Permitted Holders is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of 40% or more of the
total voting power of the Voting Stock (on a fully diluted basis) of the
Company, (ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by the Board of Directors of the
Company or whose nomination for election by the shareholders of the Company was
approved by a vote of 66 2/3% of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company then in
office, (iii) the Company consolidates or merges with or into any other Person
(other than one or more Permitted Holders) or any other Person (other than one
or more Permitted Holders) consolidates or merges with or into the Company, in
either case, other than a consolidation or merger (a) with a Wholly Owned
Subsidiary in which all of the Voting Stock of the Company outstanding
immediately prior to the effectiveness thereof is changed into or exchanged for
substantially the same consideration or (b) pursuant to a transaction in which
the outstanding Voting Stock of the Company is changed into or exchanged for
cash, securities or other Property with the effect that the "beneficial owners"
(as defined in Rule 13d- 3 under the Exchange Act) of the outstanding Voting
Stock immediately prior to such transaction, beneficially own, directly or
indirectly, more than 50% of the total voting power of the fully diluted Voting
Stock of the Surviving Corporation immediately following such transaction in
substantially the same proportions as owned prior to such transaction or (iv)
the Company sells, conveys, transfers or leases, directly or indirectly, all or
substantially all of its assets (other than a transfer of such assets as an
entirety or virtually as an entirety to a Wholly Owned Subsidiary or one or more
Permitted Holders).
"Change of Control Triggering Event" means the occurrence of
both a Change of Control and a Rating Decline with respect to the 9-3/8%
Debentures.
"Consolidated Interest Expense" means, for any Person (or in
the case of the Company, the Company and its Restricted Subsidiaries), for any
period, the amount of interest in respect of Indebtedness (including
amortization
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of original issue discount, fees payable in connection with financings,
including commitment, availability and similar fees, and amortization of debt
issuance costs, non-cash interest payments on any Indebtedness and the interest
portion of any deferred payment obligation and after taking into account the
effect of elections made under, and the net costs associated with, any Interest
Rate Agreement, however denominated, with respect to such Indebtedness), the
amount of Redeemable Dividends, the amount of Preferred Stock dividends in
respect of all Preferred Stock of Subsidiaries of such Person held other than by
such Person or a Subsidiary of such Person, commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, and the interest component of rentals in respect of any Capital Lease
Obligation or Sale and Leaseback Transaction paid, accrued or scheduled to be
paid or accrued by such Person during such period, determined on a consolidated
basis in accordance with GAAP. For purposes of this definition, interest on a
Capital Lease Obligation or a Sale and Leaseback Transaction shall be deemed to
accrue at an interest rate reasonably determined by such Person to be the rate
of interest implicit in such Capital Lease Obligation or Sale and Leaseback
Transaction in accordance with GAAP consistently applied.
"Consolidated Net Income" of a Person means for any period,
the net income (loss) of such Person and its Subsidiaries; provided, however,
that there shall not be included in such Consolidated Net Income (i) with
respect to the Company, any net income (loss) of any Person if such Person is
not a Restricted Subsidiary, except that (a) subject to the limitations
contained in clause (iv) below, the Company's equity in the net income of any
such Person for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash actually distributed by such Person during such
period to the Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution to a
Restricted Subsidiary, to the limitations contained in clause (iii) below) and
(b) the Company's equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period shall be included in determining such
Consolidated Net Income, (ii) any net income (loss) of any Person acquired by
such Person or a Subsidiary of such Person in a pooling of interests transaction
for any period prior to the date of such acquisition, (iii) with respect to the
Company, any net income (loss) of any Restricted Subsidiary if such
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Subsidiary is subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Restricted Subsidiary, directly
or indirectly, to the Company, except that (a) subject to the limitations
contained in clause (iv) below, the Company's equity in the net income of any
such Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash that could have been
distributed by such Restricted Subsidiary during such period to the Company or
another Restricted Subsidiary as a dividend (subject, in the case of a dividend
to another Restricted Subsidiary, to the limitation contained in this clause)
and (b) the Company's equity in a net loss of any such Restricted Subsidiary for
such period shall be included in determining such Consolidated Net Income, (iv)
any gain (but not loss) realized upon the sale or other disposition of any
Property of such Person or its consolidated Subsidiaries (including pursuant to
any Sale and Leaseback Transaction) which is not sold or otherwise disposed of
in the ordinary course of business, (v) any extraordinary gain or loss and (vi)
the cumulative effect of a change in accounting principles.
Notwithstanding the provisions of clause (iii) in the
proceeding paragraph, in the event that Consolidated Net Income is being
calculated with respect to the Company or any Surviving Entity (a) for purposes
of determining whether the Company or any Surviving Entity could incur at least
$1.00 of additional Indebtedness pursuant to clause (i) of Section 4.9(a) for
purposes of (i) clause (ii) of the first sentence of Section 4.10(a), (ii)
clause (iv) under Section 10.01 or (iii) the definition of "Unrestricted
Subsidiary" or (b) for purposes of calculating Cumulative EBITDA pursuant to
clause (iii) of the first sentence of Section 4.10(a), restrictions on the
payment of dividends or the making of distributions to the Company by Vanguard
Cellular Financial Corp. referred to in clause (1)(iii) of the second sentence
of Section 4.13 shall be disregarded.
Notwithstanding the provisions of clause (iii) in the first
paragraph of this definition, in the event that Consolidated Net Income is being
calculated with respect to the Company for purposes of determining whether the
Incurrence of Indebtedness proposed to be Incurred is permissible under clause
(i) of Section 4.9(a), then (i) if such proposed Indebtedness is proposed to be
Incurred by Vanguard Cellular Financial Corp. or any Subsidiary thereof that is
a Restricted Subsidiary, restrictions on the payment
8
of dividends or the making of distributions to the Company by Vanguard Cellular
Financial Corp. referred to in clause (1)(iii) of the second sentence of
Section 4.13 shall be disregarded and (ii) if such proposed Indebtedness is
proposed to be Incurred by the Company or any Subsidiary of the Company (other
than Vanguard Cellular Financial Corp. and its Subsidiaries) that is a
Restricted Subsidiary, restrictions on the payment of dividends or the making
of distributions to the Company by Vanguard Cellular Financial Corp. referred
to in clause (1)(iii) of the second sentence of Section 4.13 shall be
disregarded, provided that the lenders pursuant to the Credit Facility modify
the Credit Facility to allow for the payment of dividends or the making of
distributions to the Company in amounts sufficient to pay the scheduled
principal and interest payments on such proposed Indebtedness when due
and payable or, in the case of a proposed Incurrence of Indebtedness by a
Subsidiary, in an amount sufficient to fund capital contributions or other
Investments to or in such Subsidiary in amounts sufficient to pay the scheduled
principal and interest payments on such proposed Indebtedness when due and
payable so long as there does not exist an event which after notice or passage
of time or both would permit the lenders under the Credit Facility to declare
all amounts thereunder due and payable.
"Credit Facility" means the $675 million credit facility
pursuant to the Amended and Restated Loan Agreement dated as of December 23,
1994 among the Company, various lenders, and The Toronto-Dominion Bank and The
Bank of New York and any extensions, revisions, refinancings or replacements
thereof by a lender or syndicate of lenders.
"Cumulative EBITDA" means at any date of determination the
cumulative EBITDA of the Company from and after the last day of the fiscal
quarter of the Company immediately preceding the Issue Date to the end of the
fiscal quarter immediately preceding the date of determination or, if such
cumulative EBITDA for such period is negative, the amount (expressed as a
negative number) by which such cumulative EBITDA is less than zero.
"Cumulative Interest Expense" means at any date of
determination the aggregate amount of Consolidated Interest Expense paid,
accrued or scheduled to be paid or accrued by the Company and its Restricted
Subsidiaries from the last day of the fiscal quarter of the Company immediately
preceding the Issue Date to the end of the fiscal quarter immediately preceding
the date of determination.
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"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Dollar Equivalent" means, with respect to any monetary amount
in a currency other than U.S. dollars, at any time for the determination
thereof, the amount of U.S. dollars obtained by converting such foreign currency
involved in such computation into U.S. dollars at the spot rate for the purchase
of U.S. dollars with the applicable foreign currency as quoted by Bankers Trust
Company in New York City at approximately 11:00 a.m. (New York time) on the date
two Business days prior to such determination.
"EBITDA" means, for any Person, for any period, an amount
equal to (A) the sum of (i) Consolidated Net Income for such period, plus (ii)
the provision for taxes for such period based on income or profits to the extent
such income or profits were included in computing Consolidated Net Income and
any provision for taxes utilized in computing net loss under clause (i) hereof,
plus (iii) Consolidated Interest Expense for such period, plus (iv) depreciation
for such period on a consolidated basis, plus (v) amortization of intangibles
for such period on a consolidated basis, plus (vi) any other non-cash items
reducing Consolidated Net Income for such period, minus (B) all non-cash items
increasing Consolidated Net Income for such period, all for such Person and its
Subsidiaries determined in accordance with GAAP consistently applied, except
that with respect to the Company each of the foregoing items shall be determined
on a consolidated basis with respect to the Company and its Restricted
Subsidiaries only.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"Fair Market Value" means with respect to any Property, the
price which could be negotiated in an arm's- length free market transaction, for
cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair Market Value will
be determined, except as otherwise provided, (i) if such property or asset has a
Fair Market Value of less than $15 million, by any Officer of the Company or
(ii) if such property or asset has a Fair Market Value in excess of $15 million,
by a majority of the Board of Directors of the Company and evidenced by a Board
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Resolution, dated within 30 days of the relevant transaction.
"GAAP" means United States generally accepted accounting
principles as in effect on the Issue Date, unless stated otherwise.
"Geotek Management Consulting Agreement" means the management
consulting agreement between the Company and Geotek Communications, Inc. as in
effect on the Issue Date and renewals or extensions thereof on terms no less
favorable to the Company and its Restricted Subsidiaries.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any other
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligation" of any Person means any obligation of
such Person pursuant to any Interest Rate Agreement, foreign exchange contract,
currency swap agreement, currency option or any other similar agreement or
arrangement.
"Holder" or "Debentureholder" means the Person in whose name a
9-3/8% Debenture is registered on the Registrar's books.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by merger, conversion,
exchange or otherwise), extend, assume, Guarantee or become liable in respect of
such Indebtedness or other obligation or the recording, as required pursuant to
GAAP or otherwise, of any such Indebtedness or obligation on the balance sheet
of such Person (and "Incurrence", "Incurred", "Incurrable" and "Incurring" shall
have meanings
11
correlative to the foregoing); provided, however, that a change in
GAAP that results in an obligation of such Person that exists at such time, and
is not theretofore classified as Indebtedness, becoming Indebtedness shall not
be deemed an Incurrence of such Indebtedness; provided further, that solely for
purposes of determining compliance with Section 4.9, amortization of debt
discount shall not be deemed to be the Incurrence of Indebtedness, provided that
in the case of Indebtedness sold at a discount, the amount of such Indebtedness
Incurred shall at all times be the aggregate principal amount at Stated
Maturity.
"Indebtedness" means (without duplication), with respect to
any Person, any indebtedness, secured or unsecured, contingent or otherwise,
which is for 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), or evidenced
by bonds, notes, debentures or similar instruments or representing the balance
deferred and unpaid of the purchase price of any property (excluding any
balances that constitute customer advance payments and deposits, accounts
payable or trade payables, and other accrued liabilities arising in the ordinary
course of business) if and to the extent any of the foregoing indebtedness would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, and shall also include, to the extent not otherwise included (i) any
Capital Lease Obligations, (ii) Indebtedness of other Persons secured by a Lien
to which the Property owned or held by such first Person is subject, whether or
not the obligation or obligation secured thereby shall have been assumed (the
amount of such Indebtedness being deemed to be the lesser of the value of such
property or assets or the amount of the Indebtedness so secured), (iii)
Guarantees of Indebtedness of other Persons, (iv) any Redeemable Stock
(provided, however, that Redeemable Stock of the Company shall not constitute
Indebtedness if such Redeemable Stock may not be redeemed prior to the first
anniversary of the Stated Maturity of the 9-3/8% Debentures), (v) any
Attributable Indebtedness, (vi) all reimbursement obligations of such Person in
respect of letters of credit, bankers' acceptances or other similar instruments
or credit transactions issued for the account of such Person, (vii) in the case
of the Company, Preferred Stock of its Restricted Subsidiaries and (viii) to the
extent not otherwise included in clauses (i) through (vii) of this paragraph,
any payment obligations of any such Person at the time of determination under
any Hedging Obligation. For purposes of this
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definition, the maximum fixed repurchase price of any Redeemable Stock that does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Redeemable Stock as if such Redeemable Stock were repurchased on
any date on which Indebtedness shall be required to be determined pursuant to
the Indenture; provided, however, that if such Redeemable Stock is not then
permitted to be repurchased, the repurchase price shall be the book value of
such Redeemable Stock. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above and the maximum liability of any contingent obligations in
respect thereof at such date. For purposes of this definition, the amount of the
payment obligation with respect to any Hedging Obligation shall be an amount
equal to (i) zero, if such obligation is an Interest Rate Obligation permitted
pursuant to clause (vi) of Section 4.9(b) or (ii) the notional amount of such
Hedging Obligation, if such Hedging Obligation is not an Interest Rate Agreement
so permitted.
"Interest Rate Agreement" means, for any Person, any interest
rate swap agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement.
"Investment" by any Person means any direct or indirect loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other Property to others or payments for Property or
services for the account or use of others, or otherwise) to, or Incurrence of a
Guarantee of any obligation of, or purchase or acquisition of Capital Stock,
bonds, notes, debentures or other securities or evidence of Indebtedness issued
by, any other Person. In determining the amount of any Investment made by
transfer of any Property other than cash, such Property shall be valued at its
Fair Market Value at the time of such Investment.
"Investment Grade Rating" means a rating equal to or higher
than Baa3 (or the equivalent) by Moody's Investors Service, Inc. (or any
successor to the rating agency business thereof) and BBB- (or the equivalent) by
Standard & Poor's Ratings Group (or any successor to the rating agency business
thereof).
"Issue Date" means the date on which the 9-3/8% Debentures are
initially issued.
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"Leverage Ratio" is defined as the ratio of (i) the
outstanding Indebtedness of a Person and its Subsidiaries (or in the case of the
Company, its Restricted Subsidiaries) divided by (ii) the Annualized Pro Forma
EBITDA of such Person.
"Lien" means, with respect to any Property of any Person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness or marketability), encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including any Capital
Lease Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction).
"Net Available Cash" from an Asset Sale means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring person of Indebtedness or other
obligations relating to such Properties or assets or received in any other
noncash form) in each case net of all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be accrued as a liability
under GAAP, as a consequence of such Asset Sale, and in each case net of all
payments made on any Indebtedness which is secured by any assets subject to
such Asset Sale, in accordance with the terms of any Lien upon or other
security agreement of any kind with respect to such assets, or which must by
its terms, or in order to obtain a necessary consent to such Asset Sale, or by
applicable law be repaid out of the proceeds from such Asset Sale, and net of
all distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Sale.
"Net Cash Proceeds" with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale, net of
attorney's fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees
14
actually incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
"Officer" means the Chief Executive Officer, the
President, the Chief Financial Officer or any Executive Vice
President of the Company.
"Permitted Holders" means Haynes G. Griffin, Stephen R.
Leeolou, L. Richardson Preyer, Jr., Stuart S. Richardson, their estates,
spouses, ancestors, and lineal descendants, the legal representatives of any of
the foregoing and the trustee of any bona fide trust of which the foregoing are
the sole beneficiaries or the grantors, or any Person of which the foregoing
"beneficially owns" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act)
voting securities representing at least 662/3% of the total voting power of all
classes of Capital Stock of such Person (exclusive of any matters as to which
class voting rights exist) and the Richardson Family.
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in (i) a Restricted Subsidiary or a Person which will,
upon the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a Related
Business; (ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related Business;
(iii) Temporary Cash Investments; (iv) receivables owing to the Company or any
Restricted Subsidiary, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; (v)
payroll, travel and similar advances to cover matters that are expected at the
time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; (vi) loans and
advances to employees made in the ordinary course of business consistent with
past practice of the Company or such Restricted Subsidiary, as the case may be,
provided that such loans and advances do not exceed $15 million at any one time
outstanding; and (vii) stock, obligations or securities received in settlement
of debts created in the ordinary course of business and owing to the Company or
any Restricted Subsidiary or in satisfaction of judgments.
15
"Permitted Liens" means (i) Liens on the Property of the
Company or any Restricted Subsidiary existing on the Issue Date; (ii) Liens to
secure Indebtedness permitted to be Incurred under clause (ii) of Section
4.9(b); (iii) Liens on the Property of the Company or any Restricted Subsidiary
to secure any extension, renewal, refinancing, replacement or refunding (or
successive extensions, renewals, refinancings, replacements or refundings), in
whole or in part, of any Indebtedness secured by Liens referred to in any of
clauses (i), (ii), (vii) or (x); provided, however, that any such Lien will be
limited to all or part of the same Property that secured the original Lien (plus
improvements on such Property) and the aggregate principal amount of
Indebtedness that is secured by such Lien will not be increased to an amount
greater than the sum of (A) the outstanding principal amount, or, if greater,
the committed amount, of the Indebtedness secured by Liens described under
clauses (i), (ii), (vii) or (x) at the time the original Lien became a Permitted
Lien under the Indenture and (B) an amount necessary to pay any premiums, fees
and other expenses incurred by the Company in connection with such refinancing,
refunding, extension, renewal or replacement; (iv) Liens for taxes, assessments
or governmental charges or levies on the Property of the Company or any
Restricted Subsidiary if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good faith and
by appropriate proceedings; (v) Liens imposed by law, such as carriers',
warehousemen's and mechanics' Liens and other similar Liens on the Property of
the Company or any Restricted Subsidiary arising in the ordinary course of
business and securing payment of obligations which are not more than 60 days
past due or are being contested in good faith and by appropriate proceedings;
(vi) Liens on the Property of the Company or any Restricted Subsidiary Incurred
in the ordinary course of business to secure performance of obligations with
respect to statutory or regulatory requirements, performance or return-of-money
bonds, surety bonds or other obligations of a like nature and Incurred in a
manner consistent with industry practice; (vii) Liens on Property at the time
the Company or any Restricted Subsidiary acquired such Property, including any
acquisition by means of a merger or consolidation with or into the Company or
any Restricted Subsidiary; provided, however, that such Lien shall not have been
Incurred in anticipation or in connection with such transaction or series of
related transactions pursuant to which such Property was acquired by the Company
or any Restricted Subsidiary; (viii) other Liens on the Property of
16
the Company or any Restricted Subsidiary incidental to the conduct of their
respective businesses or the ownership of their respective Properties which were
not created in connection with the Incurrence of Indebtedness or the obtaining
of advances or credit and which do not in the aggregate materially detract from
the value of their respective Properties or materially impair the use thereof in
the operation of their respective businesses; (ix) pledges or deposits by the
Company or any Restricted Subsidiary under workmen's compensation laws,
unemployment insurance laws or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (other than for the payment of
Indebtedness) or leases to which the Company or any Restricted Subsidiary is
party, or deposits to secure public or statutory obligations of the Company, or
deposits for the payment of rent, in each case Incurred in the ordinary course
of business; (x) Liens on the Property of a Person at the time such Person
becomes a Restricted Subsidiary; provided, however, that any such Lien may not
extend to any other Property of the Company or any other Restricted Subsidiary
which is not a direct Subsidiary of such Person; provided further, however, that
any such Lien was not Incurred in anticipation of or in connection with the
transaction or series of related transactions pursuant to which such Person
became a Restricted Subsidiary, or (xi) utility easements, building restrictions
and such other encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character.
"Permitted Receivables Facility" means a receivables financing
facility pursuant to which any Restricted Subsidiary sells accounts receivable
to a special purpose company or trust and in connection therewith such company
or trust incurs Indebtedness secured by, or issues interests supported by, such
accounts receivable.
"Permitted Refinancing Indebtedness" means any renewals,
extensions, substitutions, refinancings or replacements of any Indebtedness,
including any successive extensions, renewals, substitutions, refinancings or
replacements so long as (i) the aggregate amount of Indebtedness represented
thereby is not increased by such renewal, extension, substitution, refinancing
or replacement (other than to finance fees and expenses, including any premium
and defeasance costs), (ii) the Average Life of such Indebtedness is equal to or
greater than the Average Life of the Indebtedness being refinanced, (iii) the
Stated Maturity
17
of such Indebtedness is no earlier than the Stated Maturity of the Indebtedness
being refinanced and (iv) the new Indebtedness shall not be senior in right of
payment to the Indebtedness that is being extended, renewed, substituted,
refinanced or replaced; provided that Permitted Refinancing Indebtedness shall
not include (a) Indebtedness of a Subsidiary that refinances Indebtedness of the
Company or (b) Indebtedness of the Company or a Restricted Subsidiary that
refinances Indebtedness of an Unrestricted Subsidiary.
"Person" means any individual, corporation, company (including
any limited liability company), partnership, joint venture, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"Pro Forma EBITDA" means for any Person, for any period, the
EBITDA of such Person as determined on a consolidated basis in accordance with
GAAP consistently applied after giving effect to the following: (i) if, during
or after such period, such Person or any of its Subsidiaries shall have made any
disposition of any Person or business, Pro Forma EBITDA of such Person and its
Subsidiaries shall be computed so as to give pro forma effect to such
disposition and (ii) if, during or after such period, such Person or any of its
Subsidiaries completes an acquisition of any Person or business which
immediately after such acquisition is a Subsidiary of such Person or whose
assets are held directly by such Person or a Subsidiary of such Person, Pro
Forma EBITDA shall be computed so as to give pro forma effect to the acquisition
of such Person or business; provided, however, that, with respect to the
Company, all of the foregoing references to "Subsidiary" or "Subsidiaries" shall
be deemed to refer only to the "Restricted Subsidiaries" of the Company.
"Property" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including, without limitation, Capital Stock in, and
other securities of, any other Person (but excluding Capital Stock or other
securities issued by such first mentioned Person).
18
"Rating Agencies" mean Standard & Poor's Ratings Group, a
division of McGraw Hill, Inc., and Moody's Investors Service, Inc. or any
successor to the respective rating agency businesses thereof.
"Rating Date" means the date which is 90 days prior to the
earlier of (i) a Change of Control and (ii) public notice of the occurrence of a
Change of Control or of the intention of the Company to effect a Change of
Control.
"Rating Decline" means, with respect to the 9-3/8% Debentures,
the occurrence of the following on, or within 90 days after, the date of public
notice of the occurrence of a Change of Control or of the intention by the
Company to effect a Change of Control (which period shall be extended so long as
the rating of such 9-3/8% Debentures is under publicly announced consideration
for possible downgrade by any of the Rating Agencies): (a) in the event the
9-3/8% Debentures are assigned an Investment Grade Rating by both Rating
Agencies on the Rating Date, the rating of the 9-3/8% Debentures by one of the
Rating Agencies shall be below an Investment Grade Rating; or (b) in the event
the 9-3/8% Debentures are rated below an Investment Grade Rating by at least one
of the Rating Agencies on the Rating Date, the rating of the 9-3/8% Debentures
by at least one of the Rating Agencies shall be decreased by one or more
gradations (including gradations within rating categories as well as between
rating categories).
"Redeemable Dividend" means, for any dividend with regard to
Redeemable Stock, the quotient of the dividend divided by the difference between
one and the maximum statutory federal income tax rate (expressed as a decimal
number between 1 and 0) then applicable to the issuer of such Redeemable Stock.
"Redeemable Stock" means, with respect to any Person, any
Capital Stock that by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable) or otherwise (i) matures or is
mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (ii)
is or may become redeemable or repurchaseable at the option of the holder
thereof, in whole or in part, or (iii) is convertible or exchangeable for
Indebtedness.
19
"Registrar" means the office or agency established pursuant to
Section 4.2 where 9-3/8% Debentures may be presented for registration of
transfer or for exchange.
"Related Business" means any business directly related to the
ownership, development, operation and acquisition of telecommunications systems.
"Related Entity" means a Person substantially all of whose
Property consists of Subsidiaries and Investments in Persons, the primary
businesses of which are Related Businesses.
"Restricted Payment" means (i) any dividend or distribution
(whether made in cash, property or securities) declared or paid on or with
respect to any shares of Capital Stock of the Company or Capital Stock of any
Restricted Subsidiary except for any dividend or distribution which is made
solely to the Company or a Restricted Subsidiary (and, if such Restricted
Subsidiary is not a Wholly Owned Subsidiary, to the other shareholders of such
Restricted Subsidiary on a pro rata basis) or dividends or distributions payable
solely in shares of Capital Stock (other than Redeemable Stock) of the Company;
(ii) a payment made by the Company or any Restricted Subsidiary to purchase,
redeem, acquire or retire any Capital Stock of the Company or Capital Stock of
any Affiliate of the Company (other than a Restricted Subsidiary) or any
warrants, rights or options to directly or indirectly purchase or acquire any
such Capital Stock or any securities exchangeable for or convertible into any
such Capital Stock; (iii) a payment made by the Company or any Restricted
Subsidiary to redeem, repurchase, defease or otherwise acquire or retire for
value, prior to any scheduled maturity, scheduled sinking fund or mandatory
redemption payment (other than the purchase, repurchase, or other acquisition of
any Indebtedness subordinate in right of payment to the 9-3/8% Debentures
purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
acquisition), Indebtedness of the Company which is subordinate (whether pursuant
to its terms or by operation of law) in right of payment to the 9-3/8%
Debentures; or (iv) an Investment (other than Permitted Investments) in any
Person.
"Restricted Subsidiary" means (i) any Subsidiary of the
Company after the Issue Date unless such Subsidiary shall have been designated
an Unrestricted Subsidiary as
20
permitted or required pursuant to the definition of "Unrestricted Subsidiary"
and (ii) an Unrestricted Subsidiary which is redesignated as a Restricted
Subsidiary as permitted pursuant to the definition of "Unrestricted
Subsidiary".
"Richardson Family" means, collectively, the descendants of
Lunsford Richardson, Sr., and any of their respective spouses, estates, lineal
descendants, heirs, executors, personal representatives, administrators, trusts
for any of their benefit and charitable foundations to which shares of the
Company's Capital Stock beneficially owned by any of the foregoing have been
transferred.
"Sale and Leaseback Transaction" means, with respect to any
Person, any direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Subsidiaries.
"SEC" means the Securities and Exchange Commission.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subsidiary" of any specified Person means any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which at least 50% of the total voting power of the Voting Stock is held by
such first-named Person or any of its Subsidiaries and such first-named Person
or any of its Subsidiaries has the power to direct the management, policies and
affairs thereof; or (ii) in the case of a partnership, joint venture,
association, or other business entity, with respect to which such first-named
Person or any of its Subsidiaries has the power to direct or cause the direction
of the management and policies of such entity by contract or otherwise if in
accordance with generally accepted accounting principles such entity is
consolidated
21
with the first-named Person for financial statement purposes.
"Temporary Cash Investments" means any of the following: (i)
Investments in U.S. Government Obligations maturing within 90 days of the date
of acquisition thereof, (ii) Investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 90 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America or any state thereof having capital,
surplus and undivided profits aggregating in excess of $500,000,000 and whose
long-term debt is rate "A-3" or "A-" or higher according to Moody's Investors
Service, Inc. or Standard & Poor's Ratings Group (or such similar equivalent
rating by at least one "nationally recognized statistical rating organization"
(as defined in Rule 436 under the Securities Act)), (iii) repurchase obligations
with a term of not more than 7 days for underlying securities of the types
described in clause (i) entered into with a bank meeting the qualifications
described in clause (ii) above, and (iv) Investments in commercial paper,
maturing not more than 90 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Company) organized and in existence
under the laws of the United States of America with a rating at the time as of
which any Investment therein is made of "P-1" (or higher) according to Moody's
Investors Service, Inc. or "A-1" (or higher) according to Standard & Poor's
Ratings Group (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436 under the
Securities Act)).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.
77aaa-77bbbb) as in effect on the date of this Indenture; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act of 1939, as so amended.
"Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and, thereafter, means the successor.
"Unrestricted Subsidiary" means (a) Vanguard Cellular
Services, Inc. and any other Subsidiary of the Company in existence on the Issue
Date that is not a
22
Restricted Subsidiary and (b) any Subsidiary of an Unrestricted Subsidiary.
The Company's Board of Directors may designate any Subsidiary of the Company
or any Restricted Subsidiary to be an Unrestricted Subsidiary if (i) the
Subsidiary to be so designated does not own any Capital Stock or Indebtedness
of, or own or hold any Lien on any Property of, the Company or any other
Restricted Subsidiary, (ii) the Subsidiary to be so designated is not obligated
under any Indebtedness or other obligation that, if in default, would result
(with the passage of time or notice or otherwise) in a default on any
Indebtedness of the Company or any Restricted Subsidiary and (iii) either (A)
the Subsidiary to be so designated has total assets of $1,000 or less or (B)
such designation is effective immediately upon such entity becoming a Subsidiary
of the Company or any Restricted Subsidiary. Unless so designated as an
Unrestricted Subsidiary, any Person that becomes a Subsidiary of the Company
or of any Restricted Subsidiary will be classified as a Restricted Subsidiary;
provided, however, that such Subsidiary shall not be designated a Restricted
Subsidiary and shall be automatically classified as an Unrestricted Subsidiary
if the Company would be unable to Incur at least $1.00 of additional
Indebtedness pursuant to clause (i) of Section 4.9(a). Except as provided in
the second sentence of this paragraph, no Restricted Subsidiary may be
redesignated as an Unrestricted Subsidiary. The Company's Board of Directors
may designate any Unrestricted Subsidiary to be a Restricted Subsidiary if,
immediately after giving pro forma effect to such designation, (x) the Company
could Incur at least $1.00 of additional indebtedness pursuant to clause (i) of
Section 4.9(a) and (y) no Default or Event of Default shall have occurred and be
continuing or would result therefrom. Any such designation by the Company's
Board of Directors will be evidenced to the Trustee by filing with the Trustee a
copy of the Board Resolution giving effect to such designation and an Officers'
Certificate certifying (i) that such designation complies with the foregoing
provisions and (ii) giving the effective date of such designation, such filing
with the Trustee to occur within 75 days after the end of the fiscal quarter of
the Company in which such designation is made (or in the case of a designation
made during the last fiscal quarter of the Company's fiscal year, within 120
days after the end of such fiscal year).
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of
23
America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled to vote in the
election of directors.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the
Company all the Capital Stock of which (other than directors' qualifying shares)
is owned by the Company and/or one or more other Wholly Owned Subsidiaries.
C. Other Definitions.
The following terms are defined in this Supplement in the
Sections indicated:
Defined in
Term Section
Affiliate Transaction 4.14
Bankruptcy Law 7.1
covenant defeasance option 6.1(b)
Custodian 7.1
9-3/8% Debentures Recitals
Depository I2E
DTC I2E
Event of Default 7.1
Excess Proceeds 4.12(c)
Global Securities I2E
Indenture Preliminary Statement
Interest Payment Date I2E
legal defeasance option 6.1(b)
Notice of Default 7.1
Prepayment Date 4.12(c)
Purchase Offer 4.12(c)
Record Date I2F
Successor Company 10.1
24
2. Terms of the 9-3/8% Debentures.
A. Designation.
The 9-3/8% Debentures are hereby created and shall be issuable
in one series. The 9-3/8% Debentures shall be designated as the "9-3/8% Senior
Debentures Due 2006".
B. Dating of the 9-3/8% Debentures.
All 9-3/8% Debentures shall be dated the date of
authentication.
C. Maximum Aggregate Outstanding Amount.
The maximum aggregate principal amount of the 9- 3/8%
Debentures that may be authenticated and delivered under this Supplement is
limited to $200,000,000, except for 9-3/8% Debentures authenticated and
delivered upon transfer of, or in exchange for, or in lieu of, other 9-3/8%
Debentures pursuant to Sections 2.6, 2.8, 2.9, 2.10, 2.11, 2.17, 5.2 or 12.5 of
the Indenture.
D. Stated Maturity.
The principal amount of the 9-3/8% Debentures shall be due and
payable on April 15, 2006.
E. Denomination of 9-3/8% Debentures.
The 9-3/8% Debentures shall initially be represented by one or
more global securities (the "Global Securities") deposited with The Depository
Trust Company ("DTC"), as depositary, and registered in the name of a nominee of
DTC. Except as set forth in the Indenture, the 9-3/8% Debentures will be
available for purchase in denominations of $1,000 and integral multiples thereof
in book-entry form only. The term "Depository" refers to DTC or any successor
depository, as depositary.
F. Payments of Principal and Interest, Record Dates
Each 9-3/8% Debenture shall bear interest on its outstanding
principal balance from April 10, 1996 at 9-3/8% per annum until payment of the
principal thereof has been made or duly provided for. Interest on the 9-3/8%
Debentures shall be paid semi-annually on October 15 and April 15, commencing on
October 15, 1996 (each an "Interest
25
Payment Date"). Interest on the 9-3/8% Debentures shall be computed on the
basis of a 360-day year of twelve 30-day months, from the later of: (1) April
10, 1996 or (2) the most recent Interest Payment Date to which interest has
been paid or duly provided for to the end of the next Interest Payment Date.
Interest on the 9-3/8% Debentures shall be payable in lawful money of the
United States of America.
The principal of each 9-3/8% Debenture shall be payable on the
date due upon delivery and surrender of such 9-3/8% Debenture to the Trustee at
the principal office of the Trustee in lawful money of the United States of
America by check or by wire transfer of immediately available funds.
The record date ("Record Date") for each Interest Payment Date
shall be the close of business on the October 1 and April 1 next preceding each
Interest Payment Date, whether or not such date shall be a Business day.
G. Form of 9-3/8% Debentures.
The 9-3/8% Debentures shall all be issued in global form. The
form of the 9-3/8% Debentures and the Trustee's certificate of authentication
are attached hereto as Exhibit A, which is hereby incorporated in and expressly
made a part of the Indenture. Each of the 9-3/8% Debentures shall be numbered
consecutively from A-1 upward. The 9-3/8% Debentures shall bear a CUSIP number,
but any failure to indicate or any error in such CUSIP number shall not in any
way affect the validity of the 9-3/8% Debentures. The terms of the 9-3/8%
Debentures set forth in Exhibit A are part of the terms of this Indenture.
H. Ranking.
The 9-3/8% Debentures shall constitute unsecured and
unsubordinated indebtedness of the Company and shall rank pari passu with any
other unsecured and unsubordinated indebtedness of the Company.
I. Sinking Fund.
There will be no mandatory sinking fund payments for the
9-3/8% Debentures.
26
3. Provisions Supplemental to Article II of Indenture.
A. For purposes of the 9-3/8% Debentures only, the
word "and" at the end of the fourth paragraph of Section 2.4
is hereby deleted.
B. Article II of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final word of the fifth paragraph of
Section 2.4, the following:
and; (4) neither the execution and delivery of the Indenture
nor the issue and sale of the Debentures will conflict with, result in
a breach or violation of, or constitute a default under the Articles of
Incorporation or Bylaws of the Company or the terms of any indenture or
other agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound or any law,
judgment, order or decree known to us to be applicable to the Company
or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries.
C. For purposes of the 9-3/8% Debentures only, the phrase "deliver
them" in the first sentence of Section 2.5 of the Indenture is hereby superseded
in its entirety and replaced by the phrase "make available to them".
D. For purposes of the 9-3/8% Debentures only, the phrase "authenticate
and deliver" in the first sentence of Section 2.6 of the Indenture is hereby
superseded in its entirety and replaced by the phrase "authenticate and make
available for delivery".
E. For purposes of the 9-3/8% Debentures only, the phrase
"authenticate and deliver" in the first sentence of Section 2.7 of the Indenture
is hereby superseded in its entirety and replaced by the phrase "authenticate
and make available for delivery".
F. For purposes of the 9-3/8% Debentures only, the phrase "authenticate
and deliver" in the second and last sentences of Section 2.8 of the Indenture is
hereby superseded in its entirety and replaced by the phrase "authenticate and
make available for delivery".
27
G. For purposes of the 9-3/8% Debentures only, the phrase "authenticate
and deliver" in the first sentence of Section 2.9 of the Indenture is hereby
superseded in its entirety and replaced by the phrase "authenticate and make
available for delivery".
H. For purposes of the 9-3/8% Debentures only, the phrase "authenticate
and deliver" in the second sentence of Section 2.10 of the Indenture is hereby
superseded in its entirety and replaced by the phrase "authenticate and make
available for delivery".
I. For purposes of the 9-3/8% Debentures only, the
final sentence of Section 2.11 of the Indenture is hereby
superseded in its entirety and replaced by the following:
Unless otherwise directed in writing by the Company, the
Trustee shall return all cancelled Debentures to the Company.
J. Article II of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final sentence of Section 2.6, the following:
The 9-3/8% Debentures shall be issued in registered form and
shall be transferable only upon the surrender of a 9-3/8% Debenture for
registration of transfer. When a 9-3/8% Debenture is presented to the
Registrar or a co-registrar with a request to register a transfer, the
Registrar shall register the transfer as requested if the requirements
of Section 8-401(1) of the Uniform Commercial Code are met. When 9-3/8%
Debentures are presented to the Registrar or a co-registrar with a
request to exchange them for an equal principal amount of 9-3/8%
Debentures of other denominations, the Registrar shall make the
exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate 9-3/8% Debentures at the Registrar's or
co-registrar's request.
K. Article II of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the phrase "of evidence" in the
first sentence of Section 2.9, the phrase "that the requirements of Section 8-
405 of the Uniform Commercial Code have been met and evidence".
28
L. Article II of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the first sentence of Section 2.11, the following:
The Company may not issue new 9-3/8% Debentures to replace
9-3/8% Debentures it has redeemed, paid or delivered to the Trustee for
cancellation.
M. Article II of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final sentence of Section 2.13, the following:
SECTION 2.14. Registrar and Paying Agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provi sions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Regis trar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
11.2. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the 9-3/8% De bentures.
SECTION 2.15. Debentureholder Lists. The Trustee shall
preserve in as current a form as is reasonably prac ticable the most recent list
available to it of the names and addresses of Debentureholders. If the Trustee
is not the Registrar, the Company shall furnish to the Trustee, in writing at
least five Business days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Debentureholders.
SECTION 2.16. Outstanding 9-3/8% Debentures. 9- 3/8%
Debentures outstanding at any time are all 9-3/8% Debentures authenticated by
the Trustee except for those canceled by it, those paid pursuant to Section 2.9,
those delivered to it for cancellation and those described in this
29
Section as not outstanding. A 9-3/8% Debenture does not cease to be outstanding
because the Company or an Affiliate of the Company holds the 9-3/8% Debenture.
If a 9-3/8% Debenture is replaced pursuant to Section 2.9, it
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that the replaced 9-3/8% Debenture is held by a bona fide
purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the 9-3/8% Debentures (or portions thereof) to be redeemed or maturing,
as the case may be, then on and after that date such 9-3/8% Debentures (or
portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.17. Temporary 9-3/8% Debentures. Until definitive
9-3/8% Debentures are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary 9-3/8% Debentures. Temporary 9-3/8%
Debentures shall be substantially in the form of definitive 9-3/8% Debentures
but may have variations that the Company considers appropriate for temporary
9-3/8% Debentures. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive 9-3/8% Debentures and deliver them in
exchange for temporary 9-3/8% Debentures.
SECTION 2.18. Record Date. The Company may set a record date
for purposes of determining the identity of Debentureholders entitled to vote or
to consent to any action by vote of consent authorized or permitted by Sections
3.15, 7.5 and 7.6. Unless this Indenture provides otherwise, such record date
shall be the later of 30 days prior to the first solicitation of such consent or
the date of the most recent list of Holders furnished to the Trustee pursuant to
Section 2.15 prior to such solicitation.
SECTION 2.19. CUSIP Numbers. The Company in issuing the 9-3/8%
Debentures may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Debentureholders; provided that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the
Debentures or as contained in any notice of a redemption and that reliance may
be
30
placed only on the other identification numbers printed on the Debentures, and
any such redemption shall not be affected by any defect in or omission of such
numbers. The Company will promptly notify the Trustee of any change in the CUSIP
numbers.
4. Provisions Supplemental to Article III of the
Indenture.
A. For purposes of the 9-3/8% Debentures only, the
phrase "and acceptable to the Trustee in the exercise of
reasonable care" in the first sentence of Section 3.2 is
hereby deleted.
B. For purposes of the 9-3/8% Debentures only, the phrase "which the
Trustee knows" in the first sentence of Section 3.3 of the Indenture is hereby
superseded in its entirety and replaced by the phrase "which the Trustee
actually knows".
C. Article III of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the phrase "to take any action" in
the first sentence of Section 3.8, the phrase "(other than with respect to the
initial issuance of the Debentures)".
D. Article III of the Indenture is hereby
supplemented with respect to the 9-3/8% Debentures by
inserting, following the final word of the first sentence of
Section 3.9, the following:
, Attention: Corporate Trust Trustee
Administration
E. For purposes of the 9-3/8% Debentures only,
Section 3.12 of the Indenture is hereby superseded in its
entirety and replaced by the following:
SECTION 3.12. Governing Law. The Indenture and each 9-3/8%
Debenture issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of New York but without giving effect to applicable
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
31
F. Article III of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the final sentence of Section
3.13, the following:
SECTION 3.14. Communication by Holders with Other Holders.
Debentureholders may communicate pursuant to TIA ss. 312(b) with other
Debentureholders with respect to their rights under this Indenture or the 9-3/8%
Debentures. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 3.15. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Debentureholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
5. Provisions Supplemental to Article IV of the Indenture.
A. For purposes of the 9-3/8% Debentures, Section 4.4
of the Indenture is hereby superseded in its entirety and
shall not apply to the 9-3/8% Debentures.
B. Article IV of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final sentence of Section 4.6, the following:
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of
such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein,
including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
C. Article IV of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final sentence of Section 4.8, the following:
SECTION 4.9. Limitation on Indebtedness. (a) The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
Incur any Indebtedness unless after giving pro forma effect to the application
of the proceeds thereof, no Default or Event of Default would occur as a
consequence of such Incurrence or be continuing following such Incurrence and
either (i) after
32
giving effect to the Incurrence of such Indebtedness and the receipt and
application of the proceeds thereof, the Leverage Ratio of the Company and the
Restricted Subsidiaries (on a consolidated basis) would not exceed (1) 8.5 from
the Issue Date until March 31, 1998 and (2) 7.5 after March 31, 1998 or (ii)
such Indebtedness is Permitted Indebtedness.
(b) Permitted Indebtedness is defined to include any and all
of the following: (i) Indebtedness pursuant to the revolving loan portion of the
Credit Facility in an aggregate amount outstanding at any time not to exceed $75
million; (ii) Indebtedness in respect of Capital Lease Obligations and/or
Capital Expenditure Indebtedness, provided, that (a) the aggregate principal
amount of such Indebtedness does not exceed the Fair Market Value (on the date
of such Incurrence) of the property or asset acquired or constructed and (b) the
aggregate principal amount of all Indebtedness Incurred under this clause (ii)
during any calendar year does not exceed $25 million; (iii) Indebtedness of the
Company evidenced by the 9-3/8% Debentures; (iv) Indebtedness of the Company
owing to and held by a Restricted Subsidiary and Indebtedness of a Restricted
Subsidiary owing to and held by the Company or any Restricted Subsidiary;
provided, however, that any event that results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of any such
Indebtedness (except to the Company or a Restricted Subsidiary) shall be deemed,
in each case, to constitute the Incurrence of such Indebtedness by the issuer
thereof; (v) Indebtedness (other than Indebtedness permitted by the immediately
preceding paragraph or elsewhere in this paragraph) in an aggregate principal
amount outstanding at any time not to exceed $25 million; (vi) Indebtedness
under Interest Rate Agreements entered into for the purpose of limiting interest
rate risks, provided, that the obligations under such agreements are related to
payment obligations on Indebtedness otherwise permitted by the terms of this
covenant; (vii) Indebtedness in connection with one or more standby letters of
credit or performance bonds issued in the ordinary course of business or
pursuant to self-insurance obligations and not in connection with the borrowing
of money or the obtaining of advances or credit; (viii) Indebtedness outstanding
on the Issue Date not otherwise described in clauses (i) through (vii) above;
and (ix) Permitted Refinancing Indebtedness Incurred in respect of Indebtedness
Incurred pursuant to clause (i) of
33
Section 4.9(a) and clauses (ii), (iii) and (viii) of this Section 4.9(b).
SECTION 4.10. Limitation on Restricted Payments. (a) The
Company shall not make, and shall not permit any Restricted Subsidiary to make,
any Restricted Payment if at the time of, and after giving effect to, such
proposed Restricted Payment, (i) a Default or Event of Default shall have
occurred and be continuing, (ii) the Company could not Incur at least $1.00 of
additional Indebtedness pursuant to clause (i) of Section 4.9(a) or (iii) the
aggregate amount of such Restricted Payment and all other Restricted Payments
made since the Issue Date (the amount of any Restricted Payment, if made other
than in cash, to be based upon Fair Market Value) would exceed an amount equal
to the sum of (1) the excess of (A) Cumulative EBITDA over (B) the product of
1.5 and Cumulative Interest Expense, (2) Capital Stock Sale Proceeds, (3) the
amount by which Indebtedness of the Company or any Restricted Subsidiary is
reduced on the Company's balance sheet upon the conversion or exchange (other
than by a Subsidiary) subsequent to the Issue Date of any Indebtedness of the
Company or any Restricted Subsidiary convertible or exchangeable for Capital
Stock (other than Redeemable Stock) of the Company (less the amount of any cash
or other Property distributed by the Company or any Restricted Subsidiary upon
conversion or exchange) and (4) an amount equal to the net reduction in
Investments made by the Company and its Restricted Subsidiaries subsequent to
the Issue Date in any Person resulting from (A) dividends, repayment of loans or
advances, or other transfers or distributions of Property (but only to the
extent the Company excludes such transfers or distributions from the calculation
of EBITDA for purposes of clause (iii)(1) above), in each case to the Company or
any Restricted Subsidiary from any Person or (B) the redesignation of any
Unrestricted Subsidiary as a Restricted Subsidiary, not to exceed, in the case
of (A) or (B), the amount of such Investments previously made by the Company and
its Restricted Subsidiaries in such Person or such Unrestricted Subsidiary, as
the case may be, which were treated as Restricted Payments.
(b) Notwithstanding Section 4.10(a), the Company may (i) pay
dividends on its Capital Stock within 60 days of the declaration thereof if, on
the declaration date, such dividends could have been paid in compliance with the
Indenture, (ii) redeem, repurchase, defease, acquire or retire for value, any
Indebtedness subordinate (whether
34
pursuant to its terms or by operation of law) in right of payment to the 9-3/8%
Debentures with the proceeds of any Permitted Refinancing Indebtedness, (iii)
acquire, redeem or retire Capital Stock of the Company or Indebtedness
subordinate (whether pursuant to its terms or by operation of law) in right of
payment to the 9-3/8% Debentures in exchange for, or in connection with a
substantially concurrent issuance of, Capital Stock of the Company (other than
Redeemable Stock and other than Capital Stock issued or sold to a Subsidiary or
an employee stock ownership plan or other trust established by the Company or
any Subsidiary), (iv) consummate an exchange of Investments in Persons, the
primary businesses of which are Related Businesses, but only if such exchange
complies with clauses (i) and (ii)(B) of Section 4.12(a), (v) receive Capital
Stock of Geotek Communications, Inc. pursuant to the Geotek Management
Consulting Agreement and (vi) make Investments in Persons the primary businesses
of which are Related Businesses (other than Investments in the Capital Stock of
the Company) in an amount at any time outstanding not to exceed in the aggregate
for all such Investments made in reliance upon this clause (vi), the sum of (1)
$50 million and (2) an amount equal to the net reduction in Investments made by
the Company and its Restricted Subsidiaries subsequent to the Issue Date in any
Person resulting from payments of dividends, repayment of loans or advances, or
other transfers or distributions of Property to the Company or any Restricted
Subsidiary from any Person (but only to the extent such net reduction in
Investments has not been utilized to permit a Restricted Payment pursuant to
clause (iii)(1) or (iii)(4) in Section 4.10(a)) not to exceed, in the case of
clause (vi)(2), the amount of such Investments previously made by the Company
and its Restricted Subsidiaries in such Person which were treated as Restricted
Payments; provided, however, that no more than $25 million of the aggregate
Investments permitted to be made pursuant to this clause (vi) may be utilized to
make Investments in Inter(Bullet)Act Systems, Inc.
(c) Any payments made pursuant to clauses (ii), (iii), (iv)
and (v) of Section 4.10(b) shall be excluded from the calculation of the
aggregate amount of Restricted Payments made after the Issue Date; provided,
however, that the proceeds from the issuance of Capital Stock pursuant to clause
(iii) of Section 4.10(b) shall not constitute Capital Stock Sale Proceeds for
purposes of clause (iii)(2) of Section 4.10(a).
35
SECTION 4.11. Limitation on Liens. The Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, Incur or
suffer to exist, any Lien (other than Permitted Liens) upon any of its Property,
whether now owned or hereafter acquired, including any Lien on any interest in,
or any income or profits from, its Property unless (a) with respect to any
Restricted Subsidiary, such Lien secures Indebtedness other than Guarantees of
Indebtedness of the Company or (b) effective provision has been or will be made
whereby the 9-3/8% Debentures will be secured by such Lien; provided, however,
that no Lien may be granted with respect to Indebtedness of the Company that is
subordinated to the 9-3/8% Debentures.
SECTION 4.12. Limitation on Asset Sales. (a) The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
consummate any Asset Sale after the Issue Date unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value of the Property subject
to such Asset Sale and (ii) (A) at least 80% of the consideration paid to the
Company or such Restricted Subsidiary in connection with such Asset Sale is in
the form of cash or cash equivalents or (B) the consideration paid to the
Company or such Restricted Subsidiary is determined in good faith by the Board
of Directors of the Company, as evidenced by a Board Resolution, to be
substantially comparable in type to the assets being sold.
(b) The Net Available Cash (or any portion thereof) from Asset
Sales may be applied by the Company or a Restricted Subsidiary, to the extent
the Company or such Restricted Subsidiary elects, (i) to prepay, repay or
purchase Indebtedness under the Credit Facility or Indebtedness of a Restricted
Subsidiary (excluding Indebtedness owed to the Company or an Affiliate of the
Company); or (ii) to reinvest in Additional Assets (including by means of an
Investment in Additional Assets by a Restricted Subsidiary with Net Available
Cash received by the Company or another Restricted Subsidiary). Any Net
Available Cash from an Asset Sale not applied in accordance with the first
sentence of this Section 4.12(b) within one year from the date of such Asset
Sale or the receipt of such Net Available Cash shall constitute "Excess
Proceeds". When the aggregate amount of Excess Proceeds exceeds $15 million
(taking into account income earned on such Excess Proceeds), the Company will be
required to make an offer to purchase
36
(the "Prepayment Offer") the 9-3/8% Debentures, on a pro rata basis according to
principal amount, at a purchase price equal to 100% of the principal amount
thereof plus accrued and unpaid interest thereon (if any) to the date of
purchase in accordance with the procedures (including prorating in the event of
oversubscription) set forth in the Indenture. If the aggregate principal amount
of 9-3/8% Debentures surrendered for purchase by holders thereof exceeds the
amount of Excess Proceeds, then the Trustee shall select the 9-3/8% Debentures
to be purchased pro rata according to principal amount or by lot with such
adjustments as may be deemed appropriate by the Company so that only 9-3/8%
Debentures in denominations of $1,000, or integral multiples thereof, shall be
purchased. To the extent that any portion of the amount of Net Available Cash
remains after compliance with the preceding sentence and provided that all
holders of 9-3/8% Debentures have been given the opportunity to tender their
9-3/8% Debentures for purchase as described in Section 4.12(c), the Company or
such Restricted Subsidiary may use such remaining amount for general corporate
purposes and the amount of Excess Proceeds will be reset to zero.
(c) Within five Business days after one year from the date of
an Asset Sale or the receipt of Net Available Cash therefrom, the Company shall,
if it is obligated to make a Prepayment Offer, send a written notice, by
first-class mail, to the holders of the 9-3/8% Debentures (the "Prepayment Offer
Notice"), accompanied by such information regarding the Company and its
Subsidiaries as the Company in good faith believes will enable such holders of
the 9-3/8% Debentures to make an informed decision with respect to the
Prepayment Offer. The Prepayment Offer Notice will state, among other things,
(i) that the Company is offering to purchase 9-3/8% Debentures pursuant to the
provisions of this Section 4.12, (ii) that any Debenture (or any portion
thereof) accepted for payment (and duly paid on the Purchase Date) pursuant to
the Prepayment Offer shall cease to accrue interest after the Purchase Date,
(iii) the purchase price and purchase date, which shall be, subject to any
contrary requirements of applicable law, no less than 30 days nor more than 60
days from the date the Prepayment Offer Notice is mailed (the "Purchase Date"),
(iv) the aggregate principal amount of 9-3/8% Debentures (or portions thereof)
to be purchased and (v) a description of the procedure which holders of 9-3/8%
Debentures must follow in order to tender their 9-3/8% Debentures (or portions
thereof) and the procedures that holders of 9-3/8% Debentures must follow in
37
order to withdraw an election to tender their 9-3/8% Debentures (or portions
thereof) for payment.
SECTION 4.13 Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective, or enter into any agreement with
any Person that would cause to become effective, any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to (a) pay dividends, in
cash or otherwise, or make any other distributions on or in respect of its
Capital Stock, or pay any Indebtedness or other obligation owed, to the Company
or any other Restricted Subsidiary, (b) make any loans or advances to the
Company or any other Restricted Subsidiary or (c) transfer any of its Property
to the Company or any other Restricted Subsidiary. Such limitation will not
apply (1) with respect to clauses (a), (b) and (c), to encumbrances and
restrictions (i) in existence under or by reason of any agreements (not
otherwise described in clause (iii)) in effect on the Issue Date, (ii) relating
to Indebtedness of a Restricted Subsidiary and existing at such Restricted
Subsidiary at the time it became a Restricted Subsidiary if such encumbrance or
restriction was not created in connection with or in anticipation of the
transaction or series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the Company,
(iii)(a) any encumbrance or restriction pursuant to the Credit Facility,
provided that such restrictions or encumbrances are no less favorable to the
holders of the 9-3/8% Debentures than those restrictions or encumbrances
pursuant to the Credit Facility as in effect on the date of the Indenture;
provided further, however, that the provisions of the Credit Facility permit
distributions to the Company for the purpose of, and in an amount sufficient to
fund, the payment of principal due at maturity and interest in respect of the
9-3/8% Debentures (provided, in either case, that such payment is due or to
become due within 30 days from the date of such distribution) at a time when
there does not exist an event which after notice or passage of time or both
would permit the lenders under the Credit Facility to declare all amounts
thereunder due and payable or (iv) which result from the renewal, refinancing,
extension or amendment of an agreement referred to in the immediately preceding
clauses (1)(i) and (ii) above and in clauses (2)(i) and (ii) below, provided,
such encumbrance or restriction is no more restrictive to
38
such Restricted Subsidiary and is not materially less favorable to the holders
of 9-3/8% Debentures than those under or pursuant to the agreement evidencing
the Indebtedness so extended, renewed, refinanced or replaced, and (2) with
respect to clause (c) only, to (i) any encum brance or restriction relating to
Indebtedness that is permitted to be Incurred and secured pursuant to the
provisions under Section 4.9 and Section 4.11 that limits the right of the
debtor to dispose of the assets or Property securing such debt, (ii) any
encumbrance or restriction in connection with an acquisition of Property, so
long as such encumbrance or restriction relates solely to the Property so
acquired and was not created in connection with or in anticipation of such
acquisition, (iii) customary provisions restricting subletting or assignment of
leases and customary provisions in other agreements that restrict assignment of
such agreements or rights thereunder or (iv) customary restrictions contained in
asset sale agreements limiting the transfer of such assets pending the closing
of such sale.
SECTION 4.14. Limitation on Transactions with Affiliates. (a)
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, conduct any business or enter into or suffer to exist
any transaction or series of transactions (including the purchase, sale,
transfer, lease or exchange of any Property or the rendering of any service)
with, or for the benefit of, any Affiliate of the Company (an "Affiliate
Transaction") unless (i) the terms of such Affiliate Transaction are (1) set
forth in writing, (2) in the best interest of the Company or such Restricted
Subsidiary, as the case may be, and (3) no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could be obtained in
a comparable arm's-length transaction with a Person that is not an Affiliate of
the Company or such Restricted Subsidiary, (ii) with respect to an Affiliate
Transaction involving aggregate payments or value in excess of $15 million, the
Board of Directors of the Company (including a majority of the disinterested
members of the Board of Directors of the Company) approves such Affiliate
Transaction and, in its good faith judgment, believes that such Affiliate
Transaction complies with clauses (i)(2) and (3) of this paragraph as evidenced
by a Board Resolution and (iii) with respect to an Affiliate Transaction
involving aggregate payments or value in excess of $25 million, the Company
obtains a written opinion from an independent appraisal firm to the effect that
such
39
Affiliate Transaction is fair, from a financial point of view.
(b) Notwithstanding Section 4.14(a), the Company may enter
into or suffer to exist the following: (i) any transaction pursuant to any
contract in existence on the Issue Date; (ii) any transaction or series of
transactions between the Company and one or more of its Restricted Subsidiaries
or between two or more of its Restricted Subsidiaries; (iii) any Restricted
Payment permitted to be made pursuant to Section 4.10; (iv) the payment of
compensation (including, amounts paid pursuant to employee benefit plans) for
the personal services of officers, directors and employees of the Company or any
of its Restricted Subsidiaries, so long as the Board of Directors of the Company
in good faith shall have approved the terms thereof and deemed the services
theretofore or thereafter to be performed for such compensation or fees to be
fair consideration therefor; and (v) loans and advances to employees made in the
ordinary course of business and consistent with past practice of the Company or
such Restricted Subsidiary, as the case may be, provided that such loans and
advances do not exceed $15 million at any one time outstanding.
SECTION 4.15. Ownership of Vanguard Cellular Financial Corp.
The Company will at all times maintain its direct 100% ownership of the Capital
Stock of Vanguard Cellular Financial Corp., the primary obligor with respect to
the Credit Facility, and any other Subsidiary serving as primary obligor with
respect to the Credit Facility prior to the assumption of the Credit Facility by
Vanguard Cellular Financial Corp.
SECTION 4.16. SEC Reports. The Company shall file with the
Trustee and provide Debentureholders, within 15 days after it files them with
the SEC, copies of its annual report and the information, documents and other
reports which the Company is required to file with the SEC pursuant to Section
13 or 15(d) of the Exchange Act. Notwithstanding that the Company may not be
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Company shall continue to file with the SEC and provide
the Trustee and Debentureholders with the annual reports and the information,
documents and other reports which are specified in Sections 13 and 15(d) of the
Exchange Act. The Company also shall comply with the other provisions of TIA ss.
314(a).
40
6. Provisions Supplemental to Article V of the Indenture.
A. Article V of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the first appearance of the word
"Debentures" in the second sentence of the second paragraph of Section 5.2, the
phrase "(including CUSIP number)".
B. Article V of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the final sentence of Section 5.7,
the following (which, to the extent inconsistent therewith, shall supersede
Section 5.2 of the Indenture with respect to the 9-3/8% Debentures):
SECTION 5.8. Notices to Trustee. If the Company elects to
redeem 9-3/8% Debentures pursuant to paragraph 5 of the 9-3/8% Debentures, it
shall notify the Trustee in writing of the redemption date, the principal amount
of 9- 3/8% Debentures to be redeemed and the paragraph of the 9- 3/8% Debentures
pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for
in this Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. If fewer than all the 9-3/8%
Debentures are to be redeemed, the record date relating to such redemption shall
be selected by the Company and given to the Trustee, which record date shall be
not less than 15 days after the date of notice to the Trustee.
7. Provisions Supplemental to Article VI of the Indenture.
A. For purposes of the 9-3/8% Debentures only,
Section 6.1 of the Indenture is hereby superseded in its
entirety and replaced by the following:
SECTION 6.1. Discharge of Liability on 9-3/8% Debentures;
Defeasance. (a) When (i) the Company delivers to the Trustee all outstanding
9-3/8% Debentures (other than 9-3/8% Debentures replaced pursuant to Section
2.9) for
41
cancellation or (ii) all outstanding 9-3/8% Debentures have become due and
payable, whether at maturity or as a result of the mailing of a notice of
redemption pursuant to Article V of the Indenture, and the Company irrevocably
deposits with the Trustee funds sufficient to pay at maturity or upon redemption
all outstanding 9-3/8% Debentures, including interest thereon (other than 9-3/8%
Debentures replaced pursuant to Section 2.9), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Sections 6.1(c) and 6.5, cease to be of further effect with respect
to the 9-3/8% Debentures. The Trustee shall acknowledge satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company.
(b) Subject to Sections 6.1(c), 6.1A and 6.5, the Company at
any time may terminate (i) all its obligations under the 9-3/8% Debentures and
this Indenture with respect to the 9-3/8% Debentures ("legal defeasance option")
or (ii) its obligations under Sections 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15,
4.16 (to the extent that failure to comply with such Section 4.16 shall not
violate the TIA), and Section 10.1(a)(iv) and the related operation of Section
7.1(4) and the operation of Sections 7.1(6), 7.1(7) (with respect to Restricted
Subsidiaries), 7.1(8) (with respect to Restricted Subsidiaries) and 7.1(9)
("covenant defeasance option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the 9-3/8% Debentures may not be accelerated because of an Event of Default.
If the Company exercises its covenant defeasance option, payment of the 9- 3/8%
Debentures may not be accelerated because of an Event of Default specified in
Sections 7.1(4), 7.1(5) (with respect to Section 10.1(a)(iv)), 7.1(6), 7.1(7)
(with respect to Restricted Subsidiaries), 7.1(8) (with respect to Restricted
Subsidiaries) and 7.1(9) (except to the extent covenants or agreements
referenced in such Sections remain applicable).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
42
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.7, 2.9, 2.10, 2.14, 2.15, 4.8, 6.2, 6.4, 6.5, 11.2 and
11.6 shall survive until the 9-3/8% Debentures have been paid in full.
Thereafter, the Company's obligations in Sections 6.2, 6.4 and 11.2 shall
survive.
SECTION 6.1A. Conditions to Defeasance. The
Company may exercise its legal defeasance option or its
covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal and
interest on the 9-3/8% Debentures to maturity or redemption, as the
case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the 9-3/8% Debentures to maturity or redemption, as the
case may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 7.1(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) no Default has occurred and is continuing on the date of
such deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other
agreement binding on the Company;
(6) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(7) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an
43
Opinion of Counsel stating that (i) the Company has received from the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Debentureholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(8) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Debentureholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(9) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the 9-3/8% Debentures as
contemplated by this Article VI have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of 9-3/8% Debentures at a future
date in accordance with Article V.
B. Article VI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final sentence of Section 6.3, the following:
SECTION 6.4. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 6.5. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article VI by reason of
44
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the 9-3/8%
Debentures shall be revived and reinstated as though no deposit had occurred
pursuant to this Article VI until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article VI.
8. Provisions Supplemental to Article VII of the
Indenture.
A. For purposes of the 9-3/8% Debentures only,
Section 7.1 of the Indenture is hereby superseded in its
entirety and replaced by the following:
SECTION 7.1. Events of Default. An "Event of
Default" occurs if:
(1) the Company fails to make any payment of interest on any
9-3/8% Debenture when the same becomes due and payable, and such
failure continues for a period of 30 days;
(2) the Company (i) fails to make the payment of the principal
of any 9-3/8% Debenture when the same becomes due and payable at its
Stated Maturity, upon redemption, upon declaration, or otherwise, or
(ii) fails to redeem or purchase 9-3/8% Debentures when
required pursuant to this Indenture or the 9-3/8%
Debentures;
(3) the Company fails to comply with Section 10.1;
(4) the Company fails to comply with Section 4.2, 4.3, 4.5,
4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15 or 4.16 (other
than a failure to purchase 9- 3/8% Debentures when required under
Section 4.12 or 14.1) and such failure continues for 30 days after the
notice specified below, or the Company fails to give the notice
specified below;
(5) the Company fails to comply with any of its agreements in
the 9-3/8% Debentures or this Indenture (other than those referred to
in (1), (2), (3) or (4) above) and such failure continues for 60 days
after the
45
notice specified below or the Company fails to give the notice
specified below;
(6) Indebtedness for borrowed money of the Company or any
Restricted Subsidiary is not paid within any applicable grace period
after final maturity or is accelerated by the holders thereof, the
total amount of such Indebtedness unpaid or accelerated exceeds
$15,000,000 or its Dollar Equivalent at the time and such default or
acceleration continues for 10 days after notice specified below;
(7) the Company or any Restricted Subsidiary
pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for
relief against it in an involuntary case;
(C) consents to the appointment of a
Custodian of it or for any substantial part of its
property; or
(D) makes a general assignment for the
benefit of is creditors;
or takes any comparable action under any foreign laws
relating to insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Restricted Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or
any Restricted Subsidiary or for any substantial
part of its property; or
(C) orders the winding up or liquidation of
the Company or any Restricted Subsidiary;
or any similar relief is granted under any foreign laws, and any order
or decree described in this Section 7.1(8) remains unstayed and in
effect for 60 days; or
46
(9) any judgment or decree for the payment of money in excess
of $15,000,000 or its Dollar Equivalent at the time is entered against
the Company or any Restricted Subsidiary and is not discharged and
either (A) an enforcement proceeding has been commenced by any creditor
upon such judgment or decree or (B) there is a period of 30 consecutive
days following the entry of such judgment or decree during which, in
the case of (A) or (B), such enforcement proceeding, judgment or decree
is not discharged, waived or the execution thereof stayed and such
default continues for 10 days after the notice specified below.
The foregoing will constitute Events of Default
whatever the reason for any such Event of Default and whether it is voluntary or
involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
The term "Bankruptcy Law" means Title 11, United States Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (4), (5), (6) or (9) is not an Event of
Default until the Trustee or the Holders of at least 25% in principal amount of
the 9-3/8% Debentures notify the Company of the Default and the Company does not
cure such Default within the time specified after receipt of such notice. Such
notice must specify the Default, demand that it be remedied and state that such
notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of (a) any event which with the giving of notice and the lapse of time would
become an Event of Default under clause (4), (5), (6) or (9), or (b) any other
Event of Default or Default, and, in either case, its status and what action the
Company is taking or proposes to take with respect thereto.
B. For purposes of the 9-3/8% Debentures only, the
first two sentences of Section 7.2 of the Indenture are
hereby superseded in their entirety and replaced by the
following:
47
If an Event of Default (other than an Event of Default
specified in Section 7.1(7) or (8) with respect to the Company) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the 9-3/8% Debentures by notice to the Company and
the Trustee, may declare the principal of and accrued interest on all the 9-3/8%
Debentures to be due and payable. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 7.1(7) or (8) with respect to the Company occurs, the principal of
and interest on all the 9-3/8% Debentures shall become and be immediately due
and payable without any declaration or other action the part of the Trustee or
any Debentureholders. The Holders of a majority in principal amount of the
9-3/8% Debentures by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
C. Article VII of the Indenture is hereby
supplemented with respect to the 9-3/8% Debentures by
inserting, following the final sentence of Section 7.2, the
following:
The Trustee may fix a record date and payment date for any payment to
Debentureholders pursuant to this Section. At least 15 days before such
record date, the Company shall mail to each Debentureholder and the
Trustee a notice that states the record date, the payment date and
amount to be paid.
D. Article VII of the Indenture is hereby
supplemented with respect to the 9-3/8% Debentures by
inserting, following the final word of the first sentence of
the second paragraph of Section 7.5, the following:
or a Default in respect of a provision that under
Section 12.2 cannot be amended without the consent of
each Debentureholder affected
E. For purposes of the 9-3/8% Debentures only, the
term "a majority" in the first sentence of Section 7.7 of the Indenture is
hereby superseded and replaced by the phrase "at least 25%".
48
F. Article VII of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the phrase "attorneys' fees" in
the first sentence of the third paragraph of Section 7.7, the phrase "and
expenses".
G. Article VII of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the final sentence of Section 7.9,
the following:
SECTION 7.10. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 7.7
or a suit by Holders of more than 10% in principal amount of the 9-3/8%
Debentures.
SECTION 7.11. Waiver or Stay or Extension Laws. The Company
(to the extent it may lawfully refrain from doing so) shall not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
9. Provisions Supplemental to Article X of the Indenture.
A. For purposes of the 9-3/8% Debentures only,
Section 10.1 of the Indenture is hereby superseded in its
entirety and replaced by the following:
49
SECTION 10.1. When Company May Merge or Transfer Property. (a)
The Company shall not consolidate with or merge with or into any Person, or
convey, transfer or lease all or substantially all its Property, unless: (i)
either (a) the Company shall be the continuing Person in the case of a merger or
consolidation or (b) the resulting, surviving or transferee Person if other than
the Company (the "Successor Company") shall be a corporation organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia and the Successor Company shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the 9-3/8%
Debentures and this Indenture; (ii) in the case of a sale, transfer, assignment,
lease, conveyance or other disposition of all or substantially all of the
Company's Property, such Property shall have been transferred as an entirety or
virtually as an entirety to the Successor Company; (iii) immediately before and
after giving effect to such transaction on a pro forma basis (and treating any
Indebtedness which becomes an obligation of the Successor Company or any
Restricted Subsidiary as a result of such transaction as having been Incurred by
the Successor Company or such Restricted Subsidiary at the time of such
transaction), no Default or Event of Default shall have occurred and be
continuing; (iv) immediately after giving effect to such transaction on a pro
forma basis (and treating any Indebtedness which becomes an obligation of the
Company, the Successor Company or any Restricted Subsidiary as a result of such
transaction as having been Incurred by the Company, the Successor Company or
such Restricted Subsidiary at the time of such transaction), the Company or the
Successor Company, as the case may be, could incur an additional $1.00 of
Indebtedness pursuant to clause (i) of Section 4.9(a); and (v) the Company shall
have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with this Indenture.
(b) The Successor Company shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture, but the predecessor Company in the case of a lease shall not be
released from the obligation to pay the principal of and interest on the 9-3/8%
Debentures.
50
(c) Notwithstanding clauses (ii), (iii) and (iv) of Section
10.1(a), any Restricted Subsidiary may consolidate with, merge into or transfer
all or part of its Property to the Company.
10. Provisions Supplemental to Article XI of the Indenture.
A. Article XI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting, following the final sentence
of the first paragraph of Section 11.1, the following:
Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the
TIA.
B. For purposes of the 9-3/8% Debentures only, the
second paragraph of Section 11.1 of the Indenture is hereby
superseded in its entirety and replaced by the following:
In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether they conform to the requirements of this Indenture
(but need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein).
C. Article XI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the phrase "may consult with counsel" in
Section 11.1(d)(ii), the phrase "of its selection".
D. For purposes of the 9-3/8% Debentures only, the phrase "reasonable
compensation" in the first sentence of Section 11.2 of the Indenture is hereby
superseded in its entirety and replaced by the phrase "such compensation as the
Company and the Trustee shall agree in writing".
51
E. For purposes of the 9-3/8% Debentures only, the phrase "harmless
against loss, liability or expense" in the second sentence of Section 11.2 of
the Indenture is hereby superseded in its entirety and replaced by the phrase
"harmless against any and all loss, liability, damage, claim or expense
(including taxes (other than taxes based on the income of the Trustee))".
F. Article XI of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the phrase "shall be entitled" in
the third sentence of Section 11.2, the phrase ",but not obligated".
G. Article XI of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the phrase "as otherwise agreed"
in the third paragraph of Section 11.2, the phrase "in writing".
H. For purposes of the 9-3/8% Debentures only, the phrase "and by
giving notice thereof to the Debentureholders of such series" in the first
sentence of Section 11.6(a) of the Indenture is hereby superseded in its
entirety and shall be of no effect with respect to the 9-3/8% Debentures.
I. Article XI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the penultimate sentence of Section 11.1(b), the
following:
If no successor trustee shall have been so appointed and
accepted appointment within 60 days after the removal of such trustee,
the removed trustee may petition any court of competent jurisdiction
for the appointment of a successor trustee.
J. Article XI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the penultimate sentence of Section 11.5, the
following:
The Trustee shall at all times satisfy the requirements of TIA
ss. 310(a). No obligor upon the 9- 3/8% Debentures or Person directly
controlling, controlled by, or under common control with such obligor
shall serve as Trustee upon the 9-3/8% Debentures. The Trustee shall
comply with TIA ss. 310(b); provided, however, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any
52
indenture or indentures under which other securities or certificates of
interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
K. Article XI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting, following the first
appearance of the word "will" in the second sentence of Section 11.10(d), the
word "promptly".
L. For purposes of the 9-3/8% Debentures only, the
fourth paragraph of Section 11.14 of the Indenture is hereby
superseded in its entirety replaced by the following"
The Company agrees to pay each Authenticating Agent from time
to time reasonable compensation for its services under this Section.
M. Article XI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final sentence of Section 11.14, the
following:
SECTION 11.15. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
11. Provisions Supplemental to Article XII of the
Indenture.
A. Article XII of the Indenture is hereby
supplemented with respect to the 9-3/8% Debentures by
inserting, following the final sentence of Section 12.1, the
following:
After an amendment under this Section becomes effective, the Company
shall mail to Debentureholders a notice briefly describing such
amendment. The failure to give such notice to all Debentureholders, or
any defect therein, shall not impair or affect the validity of an
amendment under this Section.
53
B. For purposes of the 9-3/8% Debentures only, Section 12.2 of the
Indenture is hereby superseded in its entirety and replaced by the following:
SECTION 12.2. Modification of Indenture With Consent of
Holders. The Company and the Trustee may amend this Indenture or the 9-3/8%
Debentures without notice to any Debentureholders but with the written consent
of the Holders of at least a majority in principal amount of the 9- 3/8%
Debentures. However, without the consent of each Debentureholder affected, an
amendment may not:
(1) reduce the amount of 9-3/8% Debentures whose
Holders must consent to an amendment;
(2) reduce the rate of or extend the time for
payment of interest on any 9-3/8% Debenture;
(3) reduce the principal of or extend the Stated
Maturity of any 9-3/8% Debenture;
(4) reduce the premium payable upon the redemption of any
9-3/8% Debenture or change the time at which any 9-3/8% Debenture may
be redeemed in accordance with Article V;
(5) make any 9-3/8% Debenture payable in money
other than that stated in the 9-3/8% Debenture;
(6) subordinate in right of payment, or otherwise
subordinate, the 9-3/8% Debentures to any other
obligation of the Company; or
(7) make any change in Section 7.5, 7.6 or 7.7 or
the second sentence of this Section.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the
Company shall mail to Debentureholders a notice briefly describing such
amendment. The failure to give such notice to all Debentureholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section.
54
C. Article XII of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the final sentence of Section
12.5, the following:
SECTION 12.6. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a 9-3/8% Debenture shall bind
the Holder and every subsequent Holder of that 9-3/8% Debenture or portion of
the 9-3/8% Debenture that evidences the same debt as the consenting Holder's
9-3/8% Debenture, even if notation of the consent or waiver is not made on the
9-3/8% Debenture. However, any such Holder or subsequent Holder may revoke the
consent or waiver as to such Holder's 9-3/8% Debenture or portion of the 9-3/8%
Debenture if the Trustee receives the notice of revocation before the date the
amendment or waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Debentureholder.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Debentureholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons, who were
Debentureholders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 12.7. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article XII if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 11.1) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such (i) amendment is authorized or permitted by this Indenture and
that all conditions precedent to execution, delivery and performance of such
amendment have been satisfied; (ii) the Company has all necessary corporate
power and authority to execute and
55
deliver the amendment and that the execution, delivery and performance of such
amendment has been duly authorized by all necessary corporate action; (iii) such
amendment has been duly and validly executed and delivered by the Company; and
(iv) the Indenture together with such amendment complies with the TIA. Any
opinion of counsel with respect to the foregoing may (i) be based upon such
counsel's knowledge of the Company, (ii) be limited to the laws of the State of
North Carolina and the Federal laws of the United States of America and (iii)
contain such other qualifications as shall be reasonably acceptable to the
Trustee.
SECTION 12.8. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the 9-3/8% Debentures unless such
consideration is offered to be paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.
56
D. The Indenture is hereby supplemented with respect
to the 9-3/8% Debentures by inserting, following the final
sentence of Section 13.12, the following:
ARTICLE XIV
Right to Require Repurchase
SECTION 14.1. Purchase of the Option of Holders Upon a Change
of Control. (a) Upon a Change of Control Triggering Event, each Holder shall
have the right to require that the Company repurchase such Holder's 9-3/8%
Debentures at a purchase price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date), in accordance with
the terms contemplated in Section 14.1(b).
(b) Within 30 days following any Change of Control Triggering
Event, the Company shall cause a notice of the offer required by this Section
14.1 to be sent at least once to the Dow Jones News Service or similar business
news service in the United States and send, by first-class mail to each Holder,
a notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control Triggering Event has occurred and
that such Holder has the right to require the Company to purchase such
Holder's 9-3/8% Debentures at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest, if any,
to the date of purchase;
(2) the circumstances and relevant facts regarding such Change
of Control Triggering Event which the Company in good faith believes
will enable Holders to make an informed decision (which at a minimum
will include (i) the most recently filed Annual Report on
Form 10-K (including audited financial statements) of the Company, the
most recent subsequently filed Quarterly Report on Form 10-Q and any
Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report, (ii) a description of material business developments
in the Company's business subsequent to the date of the latest of such
Reports and (iii) information with respect to pro forma
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historical income, cash flow and capitalization, each after giving
effect to the Change of Control;
(3) the date such Change of Control Triggering
Event is deemed to have occurred;
(4) the purchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
(5) the instructions determined by the Company, consistent
with this Section, that a Holder must follow in order to have its
9-3/8% Debentures purchased, together with the information contained in
Section 14.1(c) (and including any related materials).
(c) Not later than the date upon which written notice required
by Section 14.1(b) is delivered to the Trustee, the Company shall irrevocably
deposit with the Trustee or with a paying agent (or, if the Company is acting as
its own paying agent, segregate and hold in trust) in Temporary Cash Investments
an amount equal to the purchase price plus accrued and unpaid interest, if any,
to the Holders entitled thereto, to be held for payment in accordance with the
provisions of this Section. Holders electing to have a 9-3/8% Debenture
purchased will be required to surrender the 9-3/8% Debenture, with an appro
priate form duly completed, to the Company at the address specified in the
notice at least five Business days prior to the purchase date. Holders will be
entitled to withdraw their election if the Trustee or the Company receives not
later than three Business days prior to the purchase date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the 9-3/8% Debenture which was delivered for purchase by the Holder,
the certificate number of such 9-3/8% Debenture and a statement that such Holder
is withdrawing his election to have such 9- 3/8% Debenture purchased.
(d) On the purchase date, the Company shall deliver to the
Trustee the 9-3/8% Debentures or portions thereof which have been properly
tendered to and are to be accepted by the Company. The Trustee shall, on the
purchase date, mail or deliver payment of the purchase price to each tendering
Holder. In the event that the aggregate purchase price of the 9-3/8% Debentures
delivered by the Company to the Trustee is less than the amount deposited with
the
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Trustee, the Trustee shall deliver the excess to the Company immediately
after the end of the payment date.
SECTION 14.2. Covenant to Comply with Securities Laws upon
Purchase of 9-3/8% Debentures. In connection with any purchase of securities
under Section 4.12 or Section 14.1 by the Company, the Company shall, to the
extent then applicable and required by law, (i) comply with Rule 14e-1 (which
term, as used herein, includes any successor provisions thereto) under the
Exchange Act and (ii) otherwise comply with all Federal and state securities
laws so as to permit the rights and obligations under Section 4.12 or Section
14.1 to be exercised in the time and in the manner specified in such Sections.
To the extent that the provisions of any such securities laws or regulations
conflict with the provisions of Section 4.12 or Section 14.1, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations described in such Section 4.12 or
Section 14.1 by virtue thereof.
II. GENERAL PROVISIONS OF THIS SUPPLEMENT
A. Governing Law
THIS SUPPLEMENT AND EACH 9-3/8% DEBENTURE ISSUED HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
B. Counterparts
This Supplement may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but both of which
shall together constitute but one and the same instrument.
C. Miscellaneous
(a) Except as expressly supplemented by this Supplement, the
Indenture shall remain unchanged and in full force and effect.
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(b) This Supplement shall be construed as supplemental to the
Indenture and shall form a part thereof with respect to the 9-3/8% Debentures.
(c) All references in the Indenture to any Section of the
Indenture shall be deemed, for purposes of the 9-3/8% Debentures, to refer to
such Section of the Indenture as supplemented by the relevant provisions of this
Supplement.
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IN WITNESS WHEREOF, the Company and the Trustee have caused
this Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
VANGUARD CELLULAR SYSTEMS, INC.,
by
/s/ Haynes G. Griffin
Name: Haynes G. Griffin
Title: President
by
/s/ Richard C. Rowlenson
Name: Richard C. Rowlenson
Title: Assistant Secretary
THE BANK OF NEW YORK,
AS TRUSTEE
by
/s/Byron Merino
Name: Byron Merino
Title: Assistant Treasurer