Exhibit 4.44
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McLeodUSA Incorporated
$210,000,000
11-1/2% SENIOR NOTES DUE 2009
________________
INDENTURE
Dated as of [__________ __], 2000
________________
United States Trust Company of New York,
Trustee
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CROSS-REFERENCE TABLE
Reconciliation and tie between the Trust Indenture Act of 1939, as amended, and
the Indenture, dated as of [______________ __], 2000
Trust
Indenture
Act Indenture
Section Section
- --------- ---------
ss.310(a)(1)....................................................7.10
(a)(2)....................................................7.10
(a)(3)....................................................N.A.
(a)(4)....................................................N.A.
(a)(5)....................................................7.10
(b).................................................7.08; 7.10
(c).......................................................N.A.
ss.311(a).......................................................7.11
(b).......................................................7.11
(c).......................................................N.A.
ss.312(a)...........................................7.06(a); 7.06(b)
(b)....................................................7.06(c)
(c)....................................................7.06(d)
ss.313(a)....................................................7.06(e)
(b).......................................................N.A.
(c)...........................................7.06(e); 7.06(f)
(d).......................................................7.06
ss.314(a).................................................4.18; 4.19
(b).......................................................N.A.
(c)(1)...................................................10.03
(c)(2)...................................................10.03
(c)(3)....................................................N.A.
(d).......................................................N.A.
(e)......................................................10.04
(f).......................................................4.19
ss.315(a)....................................................7.01(b)
(b)....................................................7.05(a)
(c)....................................................7.01(a)
(d)....................................................7.01(c)
(e).................................... ..................6.10
ss.316(a).......................................................2.10
(a)(1)(A).................................................6.05
(a)(1)(B).................................................6.04
(a)(2)....................................................N.A.
(b).......................................................6.07
(c).......................................................9.05
ss.317(a)(1)....................................................N.A.
(a)(2)....................................................6.08
(b).......................................................2.07
ss.318(a)......................................................10.01
Note: This reconciliation and tie shall not, for any purpose,
be deemed to be part of the Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION 1
SECTION 1.01. DEFINITIONS 1
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE
ACT 21
SECTION 1.03. RULES OF CONSTRUCTION 21
SECTION 1.04. FORM OF DOCUMENTS DELIVERED TO TRUSTEE 22
SECTION 1.05. ACTS OF HOLDERS 22
SECTION 1.06. SATISFACTION AND DISCHARGE 23
ARTICLE II. THE NOTES 24
SECTION 2.01. FORM AND DATING 24
SECTION 2.02. FORM OF FACE OF NOTE 24
SECTION 2.03. FORM OF REVERSE OF NOTE 26
SECTION 2.04. FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION 30
SECTION 2.05. EXECUTION AND AUTHENTICATION 30
SECTION 2.06. NOTE REGISTRAR AND PAYING AGENT 31
SECTION 2.07. PAYING AGENT TO HOLD MONEY IN TRUST 32
SECTION 2.08. REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE 32
SECTION 2.09. REPLACEMENT NOTES 35
SECTION 2.10. OUTSTANDING NOTES 35
SECTION 2.11. TEMPORARY NOTES 36
SECTION 2.12. CANCELLATION 36
SECTION 2.13. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED 37
SECTION 2.14. AUTHORIZED DENOMINATIONS 38
SECTION 2.15. COMPUTATION OF INTEREST 38
SECTION 2.16. PERSONS DEEMED OWNERS 38
SECTION 2.17. CUSIP NUMBERS 38
SECTION 2.18. HOLDER LISTS 38
ARTICLE III. REDEMPTION 38
SECTION 3.01. NOTICE TO TRUSTEE 38
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED 39
SECTION 3.03. NOTICE OF REDEMPTION 39
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION 40
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE 40
SECTION 3.06. NOTES REDEEMED IN PART 40
ARTICLE IV. COVENANTS 41
SECTION 4.01. PAYMENT OF NOTES 41
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY 41
SECTION 4.03. MONEY FOR THE NOTE PAYMENTS TO BE HELD IN
TRUST 41
SECTION 4.04. CORPORATE EXISTENCE 42
SECTION 4.05. MAINTENANCE OF PROPERTY 42
SECTION 4.06. PAYMENT OF TAXES AND OTHER CLAIMS 42
SECTION 4.07. REPURCHASE AT THE OPTION OF HOLDERS UPON A
CHANGE OF CONTROL 43
SECTION 4.08. LIMITATION ON ASSET SALES 44
SECTION 4.09. LIMITATION ON CONSOLIDATED INDEBTEDNESS 47
SECTION 4.10. LIMITATION ON INDEBTEDNESS AND PREFERRED STOCK
OF RESTRICTED SUBSIDIARIES 50
SECTION 4.11. LIMITATION ON RESTRICTED PAYMENTS 52
i
SECTION 4.12. LIMITATION ON LIENS 55
SECTION 4.13. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS 57
SECTION 4.14. LIMITATION ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES 57
SECTION 4.15. LIMITATION ON ISSUANCE AND SALE OF CAPITAL
STOCK OF RESTRICTED SUBSIDIARIES 58
SECTION 4.16. TRANSACTIONS WITH AFFILIATES 59
SECTION 4.17. RESTRICTED AND UNRESTRICTED SUBSIDIARIES 61
SECTION 4.18. REPORTS 61
SECTION 4.19. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT OR
EVENT OF DEFAULT 61
ARTICLE V. CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR
TRANSFER 62
SECTION 5.01. MERGER, CONSOLIDATION OR SALE OF ASSETS 62
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED 63
ARTICLE VI. DEFAULTS AND REMEDIES 63
SECTION 6.01. EVENTS OF DEFAULT 63
SECTION 6.02. ACCELERATION 66
SECTION 6.03. OTHER REMEDIES 67
SECTION 6.04. WAIVER OF PAST DEFAULTS 67
SECTION 6.05. CONTROL BY MAJORITY 68
SECTION 6.06. LIMITATION ON SUITS 68
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT 69
SECTION 6.08. TRUSTEE MAY FILE PROOFS OF CLAIM 69
SECTION 6.09. PRIORITIES 69
SECTION 6.10. UNDERTAKING FOR COSTS 70
SECTION 6.11. WAIVER OF STAY OR EXTENSION LAWS 70
SECTION 6.12. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION
OF THE NOTES 70
SECTION 6.13. RESTORATION OF RIGHTS AND REMEDIES 71
SECTION 6.14. RIGHTS AND REMEDIES CUMULATIVE 71
SECTION 6.15. DELAY OR OMISSION NOT WAIVER 71
ARTICLE VII. TRUSTEE 71
SECTION 7.01. DUTIES OF TRUSTEE 71
SECTION 7.02. RIGHTS OF TRUSTEE 72
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE 73
SECTION 7.04. TRUSTEE'S DISCLAIMER 73
SECTION 7.05. NOTICE OF DEFAULTS 73
SECTION 7.06. PRESERVATION OF INFORMATION; REPORTS BY
TRUSTEE TO HOLDERS 74
SECTION 7.07. COMPENSATION AND INDEMNITY 75
SECTION 7.08. REPLACEMENT OF TRUSTEE 75
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER 78
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION 78
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY 79
ARTICLE VIII. DEFEASANCE 79
SECTION 8.01. COMPANY'S OPTION TO EFFECT LEGAL DEFEASANCE OR
COVENANT DEFEASANCE 79
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE 79
SECTION 8.03. COVENANT DEFEASANCE 80
SECTION 8.04. CONDITIONS TO DEFEASANCE OR COVENANT
DEFEASANCE 80
SECTION 8.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS
TO BE HELD IN TRUST; MISCELLANEOUS PROVISIONS 81
SECTION 8.06. REINSTATEMENT 82
ii
ARTICLE IX. AMENDMENTS 83
SECTION 9.01. WITHOUT CONSENT OF HOLDERS 83
SECTION 9.02. WITH CONSENT OF HOLDERS 83
SECTION 9.03. EFFECT OF SUPPLEMENTAL INDENTURES 84
SECTION 9.04. COMPLIANCE WITH TRUST INDENTURE ACT 84
SECTION 9.05. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS 84
SECTION 9.06. NOTATION ON OR EXCHANGE OF NOTES 85
SECTION 9.07. TRUSTEE TO EXECUTE SUPPLEMENTAL INDENTURES 85
ARTICLE X. MISCELLANEOUS 85
SECTION 10.01. TRUST INDENTURE ACT CONTROLS 85
SECTION 10.02. NOTICES 86
SECTION 10.03. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT 86
SECTION 10.04. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION 86
SECTION 10.05. RULES BY TRUSTEE, PAYING AGENT AND NOTE
REGISTRAR 86
SECTION 10.06. PAYMENTS ON BUSINESS DAYS 86
SECTION 10.07. GOVERNING LAW 87
SECTION 10.08. NO RECOURSE AGAINST OTHERS 87
SECTION 10.09. SUCCESSORS 87
SECTION 10.10. COUNTERPARTS 87
SECTION 10.11. TABLE OF CONTENTS; HEADINGS 87
SECTION 10.12. SEVERABILITY 87
SECTION 10.13. FURTHER INSTRUMENTS AND ACTS 87
iii
INDENTURE, dated as of [___________ __], 2000, between MCLEODUSA
INCORPORATED, a Delaware corporation (the "Company"), having its principal
office at 6400 C Street, S.W., Cedar Rapids, Iowa 52406, and UNITED STATES TRUST
COMPANY OF NEW YORK, a bank and trust company organized under the New York
banking law, as trustee hereunder (the "Trustee"), having its Corporate Trust
Office at 114 West 47th Street, New York, New York 10036.
RECITALS OF THE COMPANY
The Company has duly authorized the creation and issue of its 11-1/2%
Senior Notes Due 2009 (the "Notes") of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.
All things necessary to make the Notes, when executed by the Company
and authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid instrument of the Company, in accordance with their respective terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises and the acquisition of the Notes by the Holders
thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Notes, as follows:
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. DEFINITIONS. For all purposes of this Indenture, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular; and
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP.
"ACQUIRED INDEBTEDNESS" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person; PROVIDED that such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, but excluding Indebtedness which is
extinguished, retired or repaid in connection with such other Person merging
with or into or becoming a Subsidiary of such specified Person.
"ACT" when used with respect to any Holder, has the meaning set forth
in Section 1.05 hereof.
"AFFILIATE" means, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person; PROVIDED that each Unrestricted Subsidiary shall be deemed to be an
Affiliate of the Company and of each other Subsidiary of the Company; PROVIDED,
FURTHER, that neither the Company nor any of its Restricted Subsidiaries shall
be deemed to be Affiliates of each other. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling," "under
common control with" and "controlled by"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of Voting Stock, by agreement or otherwise.
"AFFILIATE TRANSACTION" has the meaning set forth in Section 4.16
hereof.
"AGENT MEMBER" means any member of, or participant in, the Depositary.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Note to the extent applicable to
such transaction and as in effect from time to time.
"ASSET SALE" by any Person means any transfer, conveyance, sale, lease
or other disposition by such Person or any of its Restricted Subsidiaries
(including a consolidation or merger or other sale of any such Restricted
Subsidiary with, into or to another Person in a transaction in which such
Restricted Subsidiary ceases to be a Restricted Subsidiary of the specified
Person, but excluding a disposition by a Restricted Subsidiary of such Person to
such Person or a Wholly-Owned Restricted Subsidiary of such Person or by such
Person to a Wholly-Owned Restricted Subsidiary of such Person) of (i) shares of
Capital Stock or other ownership interests of a Restricted Subsidiary of such
Person (other than as permitted by the provisions of Section 4.10 hereof), (ii)
substantially all of the assets of such Person or any of its Restricted
Subsidiaries representing a division or line of business (other than as part of
a Permitted Investment) or (iii) other assets or rights of such Person or any of
its Restricted Subsidiaries outside of the ordinary course of business and, in
each case, that is not governed by Article V hereof; PROVIDED that "Asset Sale"
shall not include (i) sales or other dispositions of inventory, receivables and
other current assets in the ordinary course of business, (ii) simultaneous
exchanges by the Company or any Restricted Subsidiary of Telecommunications
Assets for other Telecommunications Assets in the ordinary course of business;
PROVIDED that the applicable Telecommunications Assets received by the Company
or such Restricted Subsidiary have at least substantially equal Fair Market
Value to the Company or such Restricted Subsidiary (as determined by the Board
of Directors whose good faith determination shall be conclusive and evidenced by
a Board Resolution), and (iii) sales or other dispositions of assets with a Fair
Market Value (as certified in an Officers' Certificate) not in excess of $1
million.
2
"ASSET SALE OFFER" has the meaning set forth in Section 4.08(c) hereof.
"ASSET SALE PAYMENT DATE" has the meaning set forth in Section
4.08(d)(ii) hereof.
"ASSET SALE PURCHASE PRICE" has the meaning set forth in Section
4.08(c) hereof.
"ATTRIBUTABLE INDEBTEDNESS" means, with respect to any Sale and
Leaseback Transaction of any Person, as at the time of determination, the
greater of (i) the capitalized amount in respect of such transaction that would
appear on the balance sheet of such Person in accordance with GAAP and (ii) the
present value (discounted at a rate consistent with accounting guidelines, as
determined in good faith by the responsible accounting officer of such Person)
of the payments during the remaining term of the lease (including any period for
which such lease has been extended or may, at the option of the lessor, be
extended) or until the earliest date on which the lessee may terminate such
lease without penalty or upon payment of a penalty (in which case the rental
payments shall include such penalty).
"AVERAGE LIFE" means, as of any date, with respect to any debt security
or Disqualified Stock, the quotient obtained by dividing (i) the sum of the
products of (x) the number of years from such date to the dates of each
scheduled principal payment or redemption payment (including any sinking fund or
mandatory redemption payment requirements) of such debt security or Disqualified
Stock multiplied in each case by (y) the amount of such principal or redemption
payment, by (ii) the sum of all such principal or redemption payments.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of the Board of Directors.
"BOARD RESOLUTION" means a duly adopted resolution of the Board of
Directors in full force and effect at the time of determination.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law, executive order or regulation to close.
"CAPITAL LEASE OBLIGATION" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Indebtedness
arrangement conveying the right to use) real or personal property of such Person
which is required to be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person prepared in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a penalty.
"CAPITAL STOCK" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than
3
Indebtedness convertible into an equity interest), warrants or options to
subscribe for or acquire an equity interest in such Person.
"CASH PROCEEDS" means, with respect to any Asset Sale or issuance or
sale of Capital Stock by any Person, the aggregate consideration received in
respect of such sale or issuance by such Person in the form of cash and Eligible
Cash Equivalents.
"CHANGE OF CONTROL" shall be deemed to occur if (i) the sale,
conveyance, transfer or lease of all or substantially all of the assets of the
Company to 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 meaning of Rule 13d-5(b)(i) under the
Exchange Act), other than any Permitted Holder or any Restricted Subsidiary of
the Company, shall have occurred; or (ii) 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 meaning of Rule
13d-5(b)(i) under the Exchange Act), other than any Permitted Holder, becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more
than 35 percent of the total voting power of all classes of the Voting Stock of
the Company (including any warrants, options or rights to acquire such Voting
Stock), calculated on a fully diluted basis, and such voting power percentage is
greater than or equal to the total voting power percentage then beneficially
owned by the Permitted Holders in the aggregate; or (iii) during any period of
two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors (together with any directors whose election
or appointment by the Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office.
"CHANGE OF CONTROL OFFER" has the meaning set forth in Section 4.07(a)
hereof.
"CHANGE OF CONTROL PAYMENT DATE" has the meaning set forth in Section
4.07(b)(ii) hereof.
"CHANGE OF CONTROL PURCHASE PRICE" has the meaning set forth in Section
4.07(a) hereof.
"CLEARING AGENCY" has the meaning set forth in Section 3(a)(23) of the
Exchange Act.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of
4
this Indenture such commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, the body performing such duties at
such time.
"COMMON STOCK" means Capital Stock other than Preferred Stock.
"COMPANY" means the party named as such in the preamble to this
Indenture until a successor replaces it pursuant to the applicable provisions
hereof and, thereafter, means such successor.
"COMPANY ORDER" means a written order signed in the name of the Company
by (i) its Chairman of the Board, President, a Vice Chairman or a Vice
President, and (ii) its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary.
"CONSOLIDATED CAPITAL RATIO" of any Person as of any date means the
ratio of (i) the aggregate consolidated principal amount of Indebtedness of such
Person then outstanding to (ii) the aggregate consolidated paid-in capital of
such Person as of such date.
"CONSOLIDATED CASH FLOW AVAILABLE FOR FIXED CHARGES" for any period
means the Consolidated Net Income of the Company and its Restricted Subsidiaries
for such period increased by the sum of (i) Consolidated Interest Expense of the
Company and its Restricted Subsidiaries for such period, plus (ii) Consolidated
Income Tax Expense of the Company and its Restricted Subsidiaries for such
period, plus (iii) the consolidated depreciation and amortization expense
included in the income statement of the Company and its Restricted Subsidiaries
for such period, plus (iv) any non-cash expense related to the issuance to
employees of the Company or any Restricted Subsidiary of the Company of options
to purchase Capital Stock of the Company or such Restricted Subsidiary, plus (v)
any charge related to any premium or penalty paid in connection with redeeming
or retiring any Indebtedness prior to its stated maturity; and plus (vi) any
non-cash expense related to a purchase accounting adjustment not requiring an
accrual or reserve and separately disclosed in the Company's Consolidated Income
Statement, and decreased by the amount of any non-cash item that increases such
Consolidated Net Income, all as determined on a consolidated basis in accordance
with GAAP; PROVIDED that there shall be excluded therefrom the Consolidated Cash
Flow Available for Fixed Charges (if positive) of any Restricted Subsidiary of
the Company (calculated separately for such Restricted Subsidiary in the same
manner as provided above for the Company) that is subject to a restriction which
prevents the payment of dividends or the making of distributions to the Company
or another Restricted Subsidiary of the Company to the extent of such
restriction.
"CONSOLIDATED INCOME TAX EXPENSE" for any period means the aggregate
amounts of the provisions for income taxes of the Company and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means for any period the interest
expense included in a consolidated income statement (excluding interest income)
of the Company and its Restricted
5
Subsidiaries for such period in accordance with GAAP, including without
limitation or duplication (or, to the extent not so included, with the addition
of), (i) the amortization of Indebtedness discount; (ii) any payments or fees
with respect to letters of credit, bankers' acceptances or similar facilities;
(iii) fees with respect to interest rate swap or similar agreements or foreign
currency hedge, exchange or similar agreements; (iv) Preferred Stock dividends
of the Company and its Restricted Subsidiaries (other than dividends paid in
shares of Preferred Stock that is not Disqualified Stock) declared and paid or
payable; (v) accrued Disqualified Stock dividends of the Company and its
Restricted Subsidiaries, whether or not declared or paid; (vi) interest on
Indebtedness guaranteed by the Company and its Restricted Subsidiaries; and
(vii) the portion of any Capital Lease Obligation paid during such period that
is allocable to interest expense in accordance with GAAP.
"CONSOLIDATED NET INCOME" of any Person means, for any period, the
aggregate net income (or net loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis determined in accordance
with GAAP; PROVIDED that there shall be excluded therefrom, without duplication
(i) all items classified as extraordinary, (ii) any net income (or net loss) of
any Person other than such Person and its Restricted Subsidiaries, except to the
extent of the amount of dividends or other distributions actually paid to such
Person or its Restricted Subsidiaries by such other Person during such period,
(iii) the net income of any Person acquired by such Person or any of its
Restricted Subsidiaries in a pooling-of-interests transaction for any period
prior to the date of the related acquisition, (iv) any gain or loss, net of
taxes, realized on the termination of any employee pension benefit plan, (v) net
gains (or net losses) in respect of Asset Sales by such Person or its Restricted
Subsidiaries, (vi) the net income (or net loss) of any Restricted Subsidiary of
such Person to the extent that the payment of dividends or other distributions
to such Person is restricted by the terms of its charter or any agreement,
instrument, contract, judgment, order, decree, statute, rule, governmental
regulation or otherwise, except for any dividends or distributions actually paid
by such Restricted Subsidiary to such Person, (vii) with regard to a non-wholly
owned Restricted Subsidiary, any aggregate net income (or loss) in excess of
such Person's or such Restricted Subsidiary's PRO RATA share of such non-wholly
owned Restricted Subsidiary's net income (or loss) and (viii) the cumulative
effect of changes in accounting principles.
"CONSOLIDATED NET WORTH" of any Person means, at any date of
determination, the consolidated stockholders' equity or partners' capital
(excluding Disqualified Stock) of such Person and its subsidiaries, as
determined in accordance with GAAP.
"CONSOLIDATED TANGIBLE ASSETS" of any Person means the total amount of
assets (less applicable reserves and other properly deductible items) which
under GAAP would be included on a consolidated balance sheet of such Person and
its Subsidiaries after deducting therefrom all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, which in each case under GAAP would be included on such
consolidated balance sheet.
6
"CORPORATE TRUST OFFICE" means the principal office of the Trustee in
the Borough of Manhattan, The City of New York, New York which at any particular
time its corporate trust business shall be principally administered, which at
the date hereof is located at 114 West 47th Street, New York, New York 10036.
"COVENANT DEFEASANCE" has the meaning set forth in Section 8.03 hereof.
"DEFAULT" means any event, act or condition, the occurrence of which
is, or after notice or the passage of time or both would be, an Event of
Default.
"DEFAULT AMOUNT" means an amount equal to one hundred percent (100%) of
the originally issued principal amount of the Notes.
"DEFAULTED INTEREST" has the meaning set forth in Section 2.13 hereof.
"DEFEASANCE" has the meaning set forth in Section 8.02 hereof.
"DEPOSITARY" means, with respect to the Notes issuable or issued in
whole or in part in the form of one or more Global Securities, The Depository
Trust Company for so long as it shall be a clearing agency registered under the
Exchange Act, or such successor as the Company shall designate from time to time
in an Officers' Certificate delivered to the Trustee.
"DISQUALIFIED STOCK" means any Capital Stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, or otherwise, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, or is exchangeable for
Indebtedness at any time, in whole or in part, on or prior to the Stated
Maturity of the Notes.
"ELIGIBLE CASH EQUIVALENTS" means (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof, PROVIDED that the full faith and credit of the United
States of America is pledged in support thereof; (ii) time deposits and
certificates of deposit of any commercial bank organized in the United States
having capital and surplus in excess of $500,000,000 with a maturity date not
more than one year from the date of acquisition; (iii) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above; (iv) direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing, or subject to tender
at the option of the holder thereof within 270 calendar days after the date of
acquisition thereof and, at the time of acquisition, having a rating of A or
better from Standard & Poor's or A-2 or better from Moody's; (v) commercial
paper issued by the parent corporation of any commercial bank organized in the
United States having capital and surplus in excess of $500,000,000 and
commercial paper issued by others having one of the two highest ratings
obtainable from either Standard & Poor's or Moody's and
7
in each case maturing within 270 calendar days after the date of acquisition;
(vi) overnight bank deposits and bankers' acceptances at any commercial bank
organized in the United States having capital and surplus in excess of
$500,000,000; (vii) deposits available for withdrawal on demand with a
commercial bank organized in the United States having capital and surplus in
excess of $500,000,000; and (viii) investments in money market funds
substantially all of whose assets comprise securities of the types described in
clauses (i) through (vi).
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01 hereof.
"EXCESS PROCEEDS" has the meaning set forth in Section 4.08(b) hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"EXISTING INDEBTEDNESS" means Indebtedness outstanding on the date of
this Indenture (other than under any Senior Credit Facility).
"FAIR MARKET VALUE" means, with respect to any asset or Property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy, as determined in good faith by the
Board of Directors.
"GAAP" means United States generally accepted accounting principles,
consistently applied, as set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, that are applicable to the circumstances as of the date of
determination; PROVIDED that, except as otherwise specifically provided herein,
all calculations made for purposes of determining compliance with Article IV or
Section 5.01 hereof shall utilize GAAP as in effect on the Issue Date.
"GLOBAL SECURITY" or "GLOBAL SECURITIES" means the Note or Notes that
evidences all or part of the Notes and bears the legend set forth in Section
2.02 hereof.
"GUARANTEE" means any direct or indirect obligation, contingent or
otherwise, of a Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person in any manner. The terms
"Guaranteed," "Guaranteeing" and "Guarantor" shall have correlative meanings.
"HOLDER" means (i) in the case of any certificated Note, the Person in
whose name such certificated Note is registered in the Note Register and (ii) in
the case of any Global Security, the Depositary.
8
"INCUR" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, Guarantee or otherwise become liable in respect of such Indebtedness or
other obligation including by acquisition of Subsidiaries or the recording, as
required pursuant to GAAP or otherwise, of any such Indebtedness or other
obligation on the balance sheet of such Person (and "Incurrence," "Incurred,"
"Incurrable" and "Incurring" shall have meanings correlative to the foregoing);
PROVIDED that a change in GAAP that results in an obligation of such Person that
exists at such time becoming Indebtedness shall not be deemed an Incurrence of
such Indebtedness and that neither the accrual of interest nor the accretion of
original issue discount shall be deemed an Incurrence of Indebtedness.
Indebtedness otherwise incurred by a Person before it becomes a Subsidiary of
the Company (whether by merger, consolidation, acquisition or otherwise) shall
be deemed to have been incurred at the time at which such Person becomes a
Subsidiary of the Company.
"INDEBTEDNESS" means, at any time (without duplication), with respect
to any Person, whether recourse as to all or a portion of the assets of such
Person, and whether or not contingent, (i) any obligation of such Person for
money borrowed, (ii) any obligation of such Person evidenced by bonds,
debentures, notes, Guarantees or other similar instruments, including, without
limitation, any such obligations incurred in connection with the acquisition of
Property, assets or businesses, excluding trade accounts payable made in the
ordinary course of business, (iii) any reimbursement obligation of such Person
with respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person, (iv) any obligation of such Person issued
or assumed as the deferred purchase price of Property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business, which in either case are not more than 60 days overdue or which are
being contested in good faith), (v) any Capital Lease Obligation of such Person,
(vi) the maximum fixed redemption or repurchase price of Disqualified Stock of
such Person and, to the extent held by Persons other than such Person or its
Restricted Subsidiaries, the maximum fixed redemption or repurchase price of
Disqualified Stock of such Person's Restricted Subsidiaries, at the time of
determination, (vii) every obligation under Interest Rate and Currency
Protection Agreements of such Person, (viii) any Attributable Indebtedness with
respect to any Sale and Leaseback Transaction to which such Person is a party
and (ix) any obligation of the type referred to in clauses (i) through (viii) of
this definition of another Person and all dividends and distributions of another
Person the payment of which, in either case, such Person has Guaranteed or is
responsible or liable, directly or indirectly, as obligor, Guarantor or
otherwise. For purposes of the preceding sentence, the maximum fixed repurchase
price of any Disqualified Stock that does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Disqualified Stock as
if such Disqualified Stock were repurchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture; PROVIDED that, if
such Disqualified Stock is not then permitted to be repurchased, the repurchase
price shall be the book value of such Disqualified 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, with
9
respect to contingent obligations, the maximum liability upon the occurrence of
the contingency giving rise to the obligation; PROVIDED that the amount
outstanding at any time of any Indebtedness issued with original issue discount
(including, without limitation, the Senior Discount Notes) is the face amount of
such Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
GAAP.
"INDENTURE" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument, and any such supplemental indenture,
respectively.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Notes.
"INTEREST RATE OR CURRENCY PROTECTION AGREEMENT" of any Person means
any forward contract, futures contract, swap, option, future option or other
financial agreement or arrangement (including, without limitation, caps, floors,
collars and similar agreements) relating to, or the value of which is dependent
upon, interest rates or currency exchange rates or indices.
"INVESTMENT" in any Person means any direct, indirect or contingent (i)
advance or loan to, Guarantee of any Indebtedness of, extension of credit or
capital contribution to such Person, (ii) the acquisition of any shares of
Capital Stock, bonds, notes, debentures or other securities of such Person, or
(iii) the acquisition, by purchase or otherwise, of all or substantially all of
the business, assets or stock or other evidence of beneficial ownership of such
Person; PROVIDED that Investments shall exclude commercially reasonable
extensions of trade credit. The amount of any Investment shall be the original
cost of such Investment, PLUS the cost of all additions thereto and MINUS the
amount of any portion of such Investment repaid to such Person in cash as a
repayment of principal or a return of capital, as the case may be, but without
any other adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment. In determining the
amount of any Investment involving a transfer of any Property other than cash,
such Property or asset shall be valued at its Fair Market Value at the time of
such transfer.
"ISSUE DATE" means the date on which the Notes are first authenticated
and delivered under this Indenture.
"LIEN" means, with respect to any Property or other asset, any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien (statutory or other), charge, easement, encumbrance,
preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever on or with respect to such Property
10
or other asset (including, without limitation, any conditional sale or title
retention agreement having substantially the same economic effect as any of the
foregoing).
"MATURITY" means, when used with respect to a Note, the date on which
the principal of such Note becomes due and payable as provided therein or in
this Indenture, whether on the date specified in such Note as the fixed date on
which the principal of such Note is due and payable, on a Change of Control
Payment Date or an Asset Sale Payment Date, or by declaration of acceleration,
call for redemption or otherwise.
"MOODY'S" means Moody's Investors Service, Inc., or, if Moody's
Investors Service, Inc. shall cease rating the specified debt securities and
such ratings business with respect thereto shall have been transferred to a
successor Person, such successor Person; PROVIDED that if Moody's Investors
Service, Inc. ceases rating the specified debt securities and its ratings
business with respect thereto shall not have been transferred to any successor
Person or such successor Person is Standard & Poor's, then "Moody's" shall mean
any other nationally recognized rating agency (other than Standard & Poor's)
that rates the specified debt securities and that shall have been designated by
the Company in an Officers' Certificate.
"NASD" means the National Association of Securities Dealers, Inc.
"NET CASH PROCEEDS" means, with respect to the sale of any Property or
assets by any Person or any of its Restricted Subsidiaries, Cash Proceeds
received net of (i) all reasonable out-of-pocket expenses of such Person or such
Restricted Subsidiary incurred in connection with such sale, including, without
limitation, all legal, title and recording tax expenses, commissions and other
fees and expenses incurred (but excluding any finder's fee or broker's fee
payable to any Affiliate of such Person) and all federal, state, foreign and
local taxes arising in connection with such sale that are paid or required to be
accrued as a liability under GAAP by such Person or its Restricted Subsidiaries;
(ii) all payments made or required to be made by such Person or its Restricted
Subsidiaries on any Indebtedness which is secured by such Properties or other
assets in accordance with the terms of any Lien upon or with respect to such
Properties or other assets or which must, by the terms of such Lien, or in order
to obtain a necessary consent to such transaction or by applicable law, be
repaid in connection with such sale; (iii) all contractually required
distributions and other payments made to minority interest holders (but
excluding distributions and payments to Affiliates of such Person) in Restricted
Subsidiaries of such Person as a result of such transaction; and (iv)
appropriate amounts to be provided by such Person or any Restricted Subsidiary
thereof, as the case may be, as a reserve in accordance with GAAP against any
liabilities associated with such assets and retained by such Person or any
Restricted Subsidiary thereof, as the case may be, after such transaction,
including, without limitation, liabilities under any indemnification obligations
and severance and other employee termination costs associated with such
transaction, in each case as determined by the Board of Directors of such
Person, in its reasonable good faith judgment evidenced by a resolution of the
Board of Directors filed with the Trustee; PROVIDED that, in the event that any
consideration for a transaction (which would otherwise constitute Net Cash
Proceeds) is required to be held in
11
escrow pending determination of whether a purchase price adjustment will be
made, such consideration (or any portion thereof) shall become Net Cash Proceeds
only at such time as it is released to such Person or its Restricted
Subsidiaries from escrow; and PROVIDED, FURTHER, that any non-cash consideration
received in connection with any transaction, which is subsequently converted to
cash, shall be deemed to be Net Cash Proceeds at such time, and shall thereafter
be applied in accordance with the applicable provisions of this Indenture.
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings
specified in Section 2.06 hereof.
"NOTES" has the meaning set forth in the Recitals of the Company and
more particularly means any of the Notes authenticated and delivered under this
Indenture.
"OFFICER" means the Chairman of the Board of Directors, a Vice Chairman
of the Board of Directors, the President, the Chief Executive Officer, a Vice
President, the Chief Financial Officer, the Chief Accounting Officer, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary.
"OFFICERS' CERTIFICATE" means a certificate signed by (i) the Chairman
of the Board of Directors, a Vice Chairman of the Board of Directors, the
President, the Chief Executive Officer or a Vice President, and (ii) the Chief
Financial Officer, the Chief Accounting Officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, and delivered to the
Trustee, which certificate shall comply with the provisions of Section 10.04
hereof; PROVIDED that any Officers' Certificate delivered pursuant to the first
paragraph of Section 4.19 hereof shall be signed by the Chief Executive Officer,
the Chief Financial Officer or the Chief Accounting Officer.
"OPINION OF COUNSEL" means a written opinion from legal counsel (who
may be counsel to the Company or the Trustee) who is acceptable to the Trustee,
which opinion shall comply with the provisions of Section 10.04 hereof.
"PAYING AGENT" means any Person authorized by the Company to make
payments of principal, premium or interest with respect to the Notes on behalf
of the Company.
"PERMITTED HOLDERS" means Alliant Energy Corp., Media/Communications
Partners III Limited Partnership and Forstmann Little & Co. and their respective
successors and assigns, and Clark E. and Mary E. McLeod, Richard A. Lumpkin and
Kwok Li and foundations and trusts controlled by any of them, and Affiliates
(other than the Company and the Restricted Subsidiaries) of each of the
foregoing.
"PERMITTED INTEREST RATE OR CURRENCY PROTECTION AGREEMENT" of any
Person means any Interest Rate or Currency Protection Agreement entered into
with one or more financial institutions in the ordinary course of business that
is designed to protect such Person against
12
fluctuations in interest rates or currency exchange rates with respect to
Indebtedness Incurred and which shall have a notional amount no greater than the
payments due with respect to the Indebtedness being hedged thereby and not for
purposes of speculation.
"PERMITTED INVESTMENTS" means:
(i) Eligible Cash Equivalents;
(ii) Investments in Property used in the ordinary course of
business;
(iii) Investments in any Person as a result of which such
Person becomes a Restricted Subsidiary in compliance with Section 4.17
hereof;
(iv) Investments pursuant to agreements or obligations of the
Company or a Restricted Subsidiary, in effect on the Issue Date, to
make such Investments;
(v) Investments in prepaid expenses, negotiable instruments
held for collection and lease, utility and workers' compensation,
performance and other similar deposits;
(vi) Permitted Interest Rate or Currency Protection Agreements
with respect to any floating rate Indebtedness that is permitted under
Section 4.09 or Section 4.10 hereof to be outstanding;
(vii) bonds, notes, debentures or other debt securities
received as a result of Asset Sales permitted under Section 4.08
hereof;
(viii) Investments in existence at the Issue Date;
(ix) commission, payroll, travel and similar advances to
employees in the ordinary course of business to cover matters that are
expected at the time of such advances ultimately to be treated as
expenses in accordance with GAAP;
(x) stock, obligations or securities received in satisfaction
of judgments; and
(xi) Investments made pursuant to any deferred-compensation
plan, including any Investments made through a trust (including a
grantor trust) established in connection with any such plan, for the
benefit of employees of the Company or of any Restricted Subsidiary.
"PERMITTED LIENS" means (i) Liens for taxes, assessments, governmental
charges or claims which are not yet delinquent or which are being contested in
good faith by appropriate proceedings, if a reserve or other appropriate
provision, if any, as shall be required in conformity
13
with GAAP shall have been made therefor; (ii) other Liens incidental to the
conduct of the Company's and its Restricted Subsidiaries' business or the
ownership of its property and assets not securing any Indebtedness, and which do
not in the aggregate materially detract from the value of the Company's and its
Restricted Subsidiaries' property or assets when taken as a whole, or materially
impair the use thereof in the operation of its business; (iii) Liens with
respect to assets of a Restricted Subsidiary granted by such Restricted
Subsidiary to the Company to secure Indebtedness owing to the Company; (iv)
pledges and deposits made in the ordinary course of business in connection with
workers' compensation and unemployment insurance, statutory Liens of landlords,
carriers, warehousemen, mechanics, materialmen, repairmen and other types of
statutory obligations; (v) deposits made to secure the performance of tenders,
bids, leases, and other obligations of like nature incurred in the ordinary
course of business (exclusive of obligations for the payment of borrowed money);
(vi) zoning restrictions, servitudes, easements, rights-of-way, restrictions and
other similar charges or encumbrances incurred in the ordinary course of
business which, in the aggregate, do not materially detract from the value of
the property subject thereto or interfere with the ordinary conduct of the
business of the Company or its Restricted Subsidiaries; (vii) Liens arising out
of judgments or awards against the Company or any Restricted Subsidiary with
respect to which the Company or such Restricted Subsidiary is prosecuting an
appeal or proceeding for review and the Company or such Restricted Subsidiary is
maintaining adequate reserves in accordance with GAAP; (viii) any interest or
title of a lessor in the property subject to any lease other than a Capital
Lease; (ix) Liens (including extensions and renewals thereof) upon real or
personal property acquired after the Issue Date; PROVIDED that (a) such Lien is
created solely for the purpose of securing Indebtedness Incurred, in accordance
with Section 4.09 hereof, (1) to finance the cost (including the cost of
improvement or construction) of the item of property or assets subject thereto
and such Lien is created prior to, at the time of or within six months after the
later of the acquisition, the completion of construction or the commencement of
full operation of such property or (2) to refinance any Indebtedness previously
so secured, (b) the principal amount of the Indebtedness secured by such Lien
does not exceed 100% of such cost and (c) any such Lien shall not extend to or
cover any property or assets other than such item of property or assets and any
improvements on such item; (x) leases or subleases granted to others that do not
materially interfere with the ordinary course of business of the Company and its
Restricted Subsidiaries; (xi) Liens encumbering property or assets under
construction arising from progress or partial payments by a customer of the
Company or its Restricted Subsidiaries relating to such property or assets;
(xii) Liens arising from filing precautionary Uniform Commercial Code financing
statements regarding leases; (xiii) Liens on property of, or on shares of stock
or Indebtedness of, any corporation existing at the time such corporation
becomes, or becomes a part of, any Restricted Subsidiary; PROVIDED that such
Liens do not extend to or cover any property or assets of the Company or any
Restricted Subsidiary other than the property or assets acquired; (xiv) Liens in
favor of the Company or any Restricted Subsidiary; (xv) Liens securing
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the products
and proceeds thereof; (xvi) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods; (xvii) Liens encumbering customary initial
deposits and margin deposits, and other Liens that are either
14
within the general parameters customary in the industry and incurred in the
ordinary course of business, in each case, securing Indebtedness under Permitted
Interest Rate Agreements and Currency Agreements; and (xviii) Liens arising out
of conditional sale, title retention, consignment or similar arrangements for
the sale of goods entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business in accordance with the past
practices of the Company and its Restricted Subsidiaries prior to the Issue
Date.
"PERSON" means any individual, corporation, limited liability company,
partnership, limited liability partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"PREDECESSOR NOTE" of any particular Note means every previous Note
evidencing all or a portion of the same Indebtedness as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.09 hereof in exchange for or in lieu
of a mutilated, destroyed, lost or stolen Note shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Note.
"PREFERRED STOCK" of any Person means Capital Stock of such Person of
any class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
"PRO FORMA" means, with respect to any calculation made or required to
be made pursuant to the terms hereof, a calculation in accordance with Article
11 of Regulation S-X promulgated under the Securities Act (to the extent
applicable), as interpreted in good faith by the Board of Directors, or
otherwise, a calculation made in good faith by the Board of Directors, as the
case may be.
"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, excluding Capital Stock in any other Person.
"PUBLIC EQUITY OFFERING" means an underwritten primary public offering
of Common Stock (other than Disqualified Stock) of the Company or a Restricted
Subsidiary pursuant to an effective registration statement filed under the
Securities Act (excluding registration statements on Form S-8).
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness of the Company
(including Acquired Indebtedness and Capital Lease Obligations, mortgage
financings and purchase money obligations) incurred for the purpose of financing
all or any part of the cost of construction, acquisition, development or
improvement by the Company or any Restricted Subsidiary of any
Telecommunications Assets of the Company or any Restricted Subsidiary and
including any related notes, Guarantees, collateral documents, instruments and
agreements executed in
15
connection therewith, as the same may be amended, supplemented, modified or
restated from time to time.
"QUALIFIED RECEIVABLE FACILITY" means Indebtedness of the Company or
any Subsidiary Incurred from time to time pursuant to either (x) credit
facilities secured by Receivables or (y) receivable purchase facilities, and
including any related notes, Guarantees, collateral documents, instruments and
agreements executed in connection therewith, as the same may be amended,
supplemented, modified or restated from time to time.
"QUALIFIED RECEIVABLE SUBSIDIARY" means a Restricted Subsidiary formed
solely for the purpose of obtaining a Qualified Receivable Facility and
substantially all of the Property of which is Receivables.
"QUALIFIED STOCK" of any Person means a class of Capital Stock other
than Disqualified Stock.
"RECEIVABLES" means receivables, chattel paper, instruments, documents
or intangibles evidencing or relating to the right to payment of money and
proceeds and products thereof in each case generated in the ordinary course of
business.
"REDEMPTION DATE" means, when used with respect to any Note or part
thereof to be redeemed hereunder, the date fixed for redemption of such Notes
pursuant to the terms of the Notes and this Indenture.
"REDEMPTION PRICE" means, when used with respect to any Note or part
thereof to be redeemed hereunder, the price fixed for redemption of such Note
pursuant to the terms of the Notes and this Indenture, plus accrued and unpaid
interest thereon, if any, to the Redemption Date.
"REGULAR RECORD DATE" means, for the interest payable on any Interest
Payment Date, the date specified in Section 2.13 hereof.
"RESTRICTED PAYMENT" means (i) a dividend or other distribution
declared or paid on the Capital Stock of the Company or to the Company's
stockholders (in their capacity as such), or declared or paid to any Person
other than the Company or a Restricted Subsidiary of the Company on the Capital
Stock of any Restricted Subsidiary, in each case, other than dividends,
distributions or payments made solely in Qualified Stock of the Company or such
Restricted Subsidiary, (ii) a payment made by the Company or any of its
Restricted Subsidiaries (other than to the Company or any Restricted Subsidiary)
to purchase, redeem, acquire or retire any Capital Stock of the Company or of a
Restricted Subsidiary, (iii) a payment made by the Company or any of its
Restricted Subsidiaries (other than a payment made solely in Qualified Stock of
the Company) to redeem, repurchase, defease (including an in-substance or legal
defeasance) or otherwise acquire or retire for value (including pursuant to
mandatory repurchase covenants),
16
prior to any scheduled maturity, scheduled sinking fund or mandatory redemption
payment, Indebtedness of the Company or such Restricted Subsidiary which is
subordinate (whether pursuant to its terms or by operation of law) in right of
payment to the Notes and which was scheduled to mature on or after the maturity
of the Notes or (iv) an Investment in any Person, including an Unrestricted
Subsidiary or the designation of a Subsidiary as an Unrestricted Subsidiary,
other than (a) a Permitted Investment, (b) an Investment by the Company in a
Wholly-Owned Restricted Subsidiary of the Company or (c) an Investment by a
Restricted Subsidiary in the Company or a Wholly-Owned Restricted Subsidiary of
the Company.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company that has
not been designated as an Unrestricted Subsidiary pursuant to Section 4.17
hereof.
"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 Restricted Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Restricted Subsidiaries.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SENIOR CREDIT FACILITY" means Indebtedness of the Company and its
Subsidiaries Incurred from time to time pursuant to one or more credit
agreements or similar facilities made available from time to time to the Company
and its Subsidiaries, whether or not secured, and including any related notes,
Guarantees, collateral documents, instruments and agreements executed in
connection therewith, as the same may be amended, supplemented, modified or
restated from time to time.
"SENIOR DISCOUNT NOTES" means the Company's 10 1/2% Senior Discount
Notes due March 1, 2007.
"SPECIAL RECORD DATE" means a date fixed by the Trustee pursuant to
Section 2.13 hereof for the payment of Defaulted Interest.
"STANDARD & POOR'S" means Standard & Poor's Ratings Group, a division
of McGraw Hill Corporation, or, if Standard & Poor's Ratings Group shall cease
rating the specified debt securities and such ratings business with respect
thereto shall have been transferred to a successor Person, such successor
Person; PROVIDED that if Standard & Poor's Ratings Group ceases rating the
specified debt securities and its ratings business with respect thereto shall
not have been transferred to any successor Person or such successor Person is
Moody's, then "Standard & Poor's" shall mean any other nationally recognized
rating agency (other than Moody's) that rates the specified debt securities and
that shall have been designated by the Company in an Officers' Certificate.
17
"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 unless such contingency has occurred), and, when used with respect
to any installment of interest on such security, the fixed date on which such
installment of interest is due and payable.
"STRATEGIC EQUITY INVESTMENT" means the issuance and sale of Capital
Stock (other than Disqualified Stock) to a Person that has an equity market
capitalization, a net asset value or annual revenues of at least $1.0 billion
and owns and operates businesses primarily in a Telecommunications Business,
provided that such Telecommunications Business may be located anywhere in the
world.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company as to
which the payment of principal of (and premium, if any) and interest and other
payment obligations in respect of such Indebtedness shall be subordinate to the
prior payment in full of the Notes to at least the following extent: (i) no
payments of principal of (or premium, if any) or interest on or otherwise due in
respect of such Indebtedness may be permitted for so long as any default in the
payment of principal (or premium, if any) or interest on the Notes exists; (ii)
in the event that any other default that with the passing of time or the giving
of notice, or both, would constitute an event of default exists with respect to
the Notes, upon notice by 25% or more in principal amount of the Notes to the
Trustee, the Trustee shall give notice to the Company and the holders of such
Indebtedness (or trustees or agents therefor) of a payment blockage, and
thereafter no payments of principal of (or premium, if any) or interest on or
otherwise due in respect of such Indebtedness may be made for a period of 179
days from the date of such notice; and (iii) such Indebtedness may not (x)
provide for payments of principal of such Indebtedness at the stated maturity
thereof or by way of a sinking fund applicable thereto or by way of any
mandatory redemption, defeasance, retirement or repurchase thereof by the
Company (including any redemption, retirement or repurchase which is contingent
upon events or circumstances, but excluding any retirement required by virtue of
acceleration of such Indebtedness upon an event of default thereunder), in each
case prior to the final Stated Maturity of the Notes or (y) permit redemption or
other retirement (including pursuant to an offer to purchase made by the
Company) of such other Indebtedness at the option of the holder thereof prior to
the final Stated Maturity of the Notes, other than a redemption or other
retirement at the option of the holder of such Indebtedness (including pursuant
to an offer to purchase made by the Company) which is conditioned upon a change
of control of the Company pursuant to provisions substantially similar to those
contained in Section 4.07 hereof (and which shall provide that such Indebtedness
will not be repurchased pursuant to such provisions prior to the Company's
repurchase of the Notes required to be repurchased by the Company pursuant to
Section 4.07 hereof).
"SUBSIDIARY" means, with respect to any Person, (i) any corporation
more than 50 percent of the outstanding shares of Voting Stock of which is
owned, directly or indirectly, by such
18
Person, or by one or more other Subsidiaries of such Person, or by such Person
and one or more other Subsidiaries of such Person, (ii) any general partnership,
limited liability company, joint venture or similar entity, more than 50 percent
of the outstanding partnership, membership or similar interests of which are
owned, directly or indirectly, by such Person, or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries of such Person and (iii) any limited partnership of which such
Person or any Subsidiary of such Person is a general partner.
"SUCCESSOR NOTE" of any particular Note means every Note issued after,
and evidencing all or a portion of the same Indebtedness as that evidenced by,
such particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.09 hereof in exchange for or in lieu
of a mutilated, destroyed, lost or stolen Note shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Note.
"SURVIVING ENTITY" has the meaning set forth in Section 5.01(a) hereof.
"TELECOMMUNICATIONS ASSETS" means all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used or intended for
use in connection with a Telecommunications Business.
"TELECOMMUNICATIONS BUSINESS" means the business of (i) transmitting,
or providing services relating to the transmission of, voice, video or data
through owned or leased wireline or wireless transmission facilities, (ii)
creating, developing, constructing, installing, repairing, maintaining or
marketing communications-related systems, network equipment and facilities,
software and other products, (iii) creating, developing, producing or marketing
audiotext or videotext, (iv) publishing or distributing telephone (including
Internet) directories, whether in paper, electronic, audio or video format, (v)
marketing (including direct marketing and telemarketing), or (vi) evaluating,
participating in or pursuing any other business that is primarily related to
those identified in the foregoing clauses (i), (ii), (iii), (iv) or (v) above
(in the case of clauses (iii), (iv) and (v), however, in a manner consistent
with the Company's manner of business on the Issue Date), and shall, in any
event, include all businesses in which the Company or any of its Subsidiaries
are engaged on the Issue Date; PROVIDED that the determination of what
constitutes a Telecommunications Business shall be made in good faith by the
Board of Directors.
"TEMPORARY NOTES" has the meaning set forth in Section 2.11 hereof.
"TRADING DAY" means, with respect to a security traded on a securities
exchange, automated quotation system or market, a day on which such exchange,
system or market is open for a full day of trading.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss.77aaa-77bbbb) as in effect on the date of this Indenture except as
required by Section 9.04
19
hereof; PROVIDED that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939, as so amended.
"TRUST OFFICER" means any officer assigned to the Corporate Trust
Division (or any successor thereto), including any Vice President, Assistant
Vice President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Indenture.
"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 such successor.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company that the
Company has classified as an "Unrestricted Subsidiary" and that has not been
reclassified as a Restricted Subsidiary, pursuant to Section 4.17 hereof.
"U.S. GOVERNMENT OBLIGATIONS" means (x) securities that are (i) direct
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and (y) depository receipts issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any U.S. Government Obligation which is specified in clause (x) above and held
by such Bank for the account of the holder of such depository receipt, or with
respect to any specific payment of principal or interest on any U.S. Government
Obligation which is so specified and held, PROVIDED that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal or interest of the U.S. Government Obligation evidenced by such
depository receipt.
"VOTING STOCK" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or at the times that such class of Capital Stock has
voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such Person.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" of any Person means a Subsidiary
of such Person all of the outstanding Capital Stock or other ownership interests
(other than director's qualifying shares) of which shall at the time be owned by
such Person or by one or more other Wholly-Owned Restricted Subsidiary of such
Person or by such Person and one or more other Wholly-Owned Restricted
Subsidiary of such Person.
20
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms incorporated by reference in
this Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or other
obligor on the Notes, if any.
All other Trust Indenture Act terms used or incorporated by reference
in this Indenture that are defined by the Trust Indenture Act, defined by Trust
Indenture Act reference to another statute or defined by Commission rule have
the meanings assigned to them therein.
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(a) the words "herein," "hereof" and "hereunder," and other
words of similar import, refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision;
(b) "or" is not exclusive;
(c) "including" means including without limitation;
(d) the principal amount of any noninterest bearing or other
discount security, at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP;
(e) when used with respect to the Notes, the term "principal
amount" shall mean the principal amount thereof that would be shown on
a balance sheet of the issuer dated such date prepared in accordance
with GAAP; and
(f) unless otherwise expressly provided herein, the principal
amount of any Preferred Stock shall be the greater of (i) the maximum
liquidation value of such
21
Preferred Stock or (ii) the maximum mandatory redemption or mandatory
repurchase price with respect to such Preferred Stock.
SECTION 1.04. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous. Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 1.05. ACTS OF HOLDERS. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 7.01 hereof) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by an acknowledgment of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of the
22
signer's authority. The fact and date of the execution of any such instrument or
writing, or the authority of the person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
SECTION 1.06. SATISFACTION AND DISCHARGE. This Indenture shall cease to
be of further effect (except as to the rights of Holders under Sections 2.09,
2.11, 4.02, 4.03 and 4.04 hereof) and the Trustee, on receipt of a Company Order
requesting such action, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when (a) either (i) all
outstanding Notes have been delivered to the Trustee for cancellation or (ii)
all such Notes not theretofore delivered to the Trustee for cancellation (A)
have become due and payable, (B) will become due and payable at their Stated
Maturity within one year or (C) are to be called for redemption within one year
under irrevocable arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company, and the Company, in the case of (A), (B) or (C) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire indebtedness on
such Notes, for principal (and premium, if any) and interest to the date of such
deposit (in the case of Notes which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be, together with
irrevocable instructions from the Company in form and substance satisfactory to
the Trustee directing the Trustee to apply such funds to the payment thereof;
(b) the Company has paid or caused to be paid all other sums payable hereunder
by the Company; and (c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with. Notwithstanding the satisfaction and
discharge of this Indenture pursuant to this Section 1.06, the obligations of
the Company to the Trustee under Section 7.07 hereof, and, if money shall have
been deposited with the Trustee in trust for the Holders pursuant to this
Section 1.06, the obligations of the Trustee under this Section 1.06 and Section
4.03 hereof shall survive.
All money deposited with the Trustee pursuant to this Section 1.06
shall be held in trust and applied by it, in accordance with the provisions of
the Notes and this Indenture, to the payment, either directly or through any
Paying Agent, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for the payment of which such money has been deposited with
the Trustee. If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Section 1.06 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to this
Section 1.06 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
Section 1.06; PROVIDED that, if the Company has made any payment of interest on
or principal of any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the cash or U.S. Government Obligations held by the
Trustee or Paying Agent.
23
ARTICLE II.
THE NOTES
SECTION 2.01. FORM AND DATING. (a) The Notes and the certificate of
authentication of the Trustee thereon shall be substantially in the form
contained in this Article II, with such appropriate insertions, substitutions
and other variations as are required or permitted under this Indenture. Upon
issuance, any such Note shall be duly executed by the Company and authenticated
by the Trustee as hereinafter provided.
(b) The Notes may have such letters, numbers or other marks of
identification and such legends and endorsements, stamped, printed, lithographed
or engraved thereon, (i) as the Company may deem appropriate and as are not
inconsistent with the provisions of this Indenture, (ii) as may be required to
comply with this Indenture, any law or any rule of any securities exchange on
which the Notes may be listed and (iii) as may be necessary to conform to
customary usage. Each Note shall be dated the date of its authentication by the
Trustee.
(c) The Notes shall be issued in the form of one or more Global
Securities registered in the name of the Depositary or its nominee and deposited
with the Trustee, as custodian for the Depositary, for credit by the Depositary
to the respective accounts of beneficial owners of the Notes represented thereby
(or such other accounts as they may direct).
SECTION 2.02. FORM OF FACE OF NOTE.
[If a Global Security, then insert -- THIS NOTE IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGEABLE
IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE
OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.]
[If a Global Security to be held by the Depository, then insert --
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR
24
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
11-1/2% SENIOR NOTES DUE MAY 1, 2009
[CUSIP NO. ___________]
No. R-_____ $__________________
McLeodUSA Incorporated, a corporation duly organized and existing under
the laws of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _____________, or registered assigns, the
principal sum of ________________ Dollars [if this Note is a Global Security,
then insert: (which principal amount may from time to time be increased or
decreased to such other principal amounts (which, taken together with the
principal amounts of all other outstanding Notes, shall not exceed TWO HUNDRED
AND TEN MILLION DOLLARS ($210,000,000) in the aggregate at any time) by
adjustments made on the records of the Trustee hereinafter referred to in
accordance with the Indenture)] on May 1, 2009, and to pay interest thereon from
November 1, 2000, semi-annually in arrears on May 1 and November 1 of each year,
commencing May 1, 2001 at the rate of 11.5% per annum, until the principal
hereof is paid or made available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Notes) is registered at the close of business on the
Regular Record Date for such interest, which shall be April 15 or October 15
(whether or not a Business Day), as the case may be, immediately preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for, and interest on such Defaulted Interest at the applicable interest rate
borne by the Notes, to the extent lawful, will forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Notes not more than 15 calendar days and not less than 10 calendar days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this
Note will be made at the corporate trust office of the Trustee and at the office
or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, New York, and at any other office or agency
maintained by the Company for such purpose, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and
25
private debts; PROVIDED, HOWEVER, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Note Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
MCLEODUSA INCORPORATED
By________________________
SECTION 2.03. FORM OF REVERSE OF NOTE.
This Note is one of a duly authorized issue of Notes of the Company
designated as its 11-1/2% Senior Notes due May 1, 2009 (the "Notes") issued
under an Indenture, dated as of [__________ __], 2000 (herein called the
"Indenture"), between the Company and United States Trust Company of New York,
as trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture). The Notes are limited in aggregate principal
amount to $210,000,000. Reference is hereby made to the Indenture and all
indentures supplemental thereto for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Notes and of the terms upon which the Notes are,
and are to be, authenticated and delivered.
The Notes are subject to redemption upon not less than 30 nor more than
60 days' notice by mail to each Holder of Notes to be redeemed at such Holder's
address appearing in the Note Register, in amounts of $1,000 or an integral
multiple of $1,000, at any time on or after May 1, 2004 and prior to maturity,
as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount) plus
accrued interest to but excluding the Redemption Date (subject to the right of
Holder on the relevant Regular Record Date to receive interest due on an
Interest Payment Date that is on or prior to the
26
Redemption Date), if redeemed during the 12-month period beginning May 1 of each
of the years indicated below:
Redemption
Year Price
---- ----------
2004 105.750%
2005 103.834%
2006 101.917%
2007 100.000%
and thereafter at a Redemption Price equal to 100% of the principal amount,
together in the case of any such redemption with accrued interest to but
excluding the Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the Holders of such
Notes, or one or more Predecessor Notes, of record at the close of business on
the relevant Regular Record Dates referred to on the face hereof, all as
provided in the Indenture.
In addition, at any time or from time to time on or prior to May 1,
2002, the Company may, other than in any circumstances resulting in a Change of
Control, redeem, at its option, up to 35% of the aggregate principal amount of
the Notes with the proceeds of one or more additional Public Equity Offerings or
Strategic Equity Investments resulting in aggregate gross proceeds to the
Company of at least $25 million, at any time or from time to time in part, at a
Redemption Price (expressed as a percentage of principal amount) of 111.50%,
plus accrued and unpaid interest to the Redemption Date (subject to the right of
holders of record on the relevant record date that is prior to the Redemption
Date to receive interest due on an Interest Payment Date); provided that at
least 65% of the aggregate principal amount of Notes originally issued remain
outstanding after each such redemption. Any such redemption shall be made within
60 days after the consummation of such Public Equity Offering or Strategic
Equity Investment upon not less than 30 nor more than 60 days' prior notice.
The Notes do not have the benefit of any sinking fund obligations.
The Indenture provides that, subject to certain conditions, if (i) a
Change of Control (as defined in the Indenture) occurs or (ii) certain Excess
Proceeds are available to the Company as a result of any Asset Sale, the Company
shall be required to make a Change of Control Offer or an Asset Sale Offer, as
the case may be, for all or a specified portion of the Notes.
27
[If not a Global Security insert -- In the event of redemption or
purchase pursuant to an Asset Sale Offer of this Note in part only, a new Note
or Notes of like tenor for the unredeemed or unpurchased portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
[If a Global Security insert -- In the event of a deposit or withdrawal
of an interest in this Note (including upon an exchange, transfer, redemption or
repurchase of this Note in part only) effected in accordance with the Applicable
Procedures, the Note Registrar, upon receipt of notice of such event from the
Depositary's custodian for this Note, shall make an adjustment on its records to
reflect an increase or decrease of the outstanding principal amount of this Note
resulting from such deposit or withdrawal, as the case may be.]
If an Event of Default shall occur and be continuing, the principal of
all the Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of this Note, or (ii) certain restrictive covenants and
Events of Default with respect to this Note, in each case upon compliance with
certain conditions set forth therein.
Unless the context otherwise requires, the Notes shall constitute one
series for all purposes under the Indenture, including without limitation,
amendments, waivers, redemptions, Change of Control Offers and Asset Sale
Offers.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Notes at the time outstanding,
on behalf of the Holders of all the Notes, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Note Register, upon
surrender of this Note for
28
registration of transfer at the office or agency of the Company in the Borough
of Manhattan, The City of New York, New York, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Note Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and like tenor and for the same aggregate principal amount, will
be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like tenor and aggregate principal amount of Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
Interest on this Note shall be computed on the basis of a 360-day year
of twelve 30-day months.
THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.07 or 4.08 of the Indenture, check the box:
[ ]
29
If you want to elect to have only a part of this Note purchased by the
Company pursuant to Section 4.07 or 4.08 of the Indenture, state the amount:
$_________________
Dated:____________________ Your Signature:______________________
(Sign exactly as name appears
on the other side of this Note)
Signature Guarantee:____________________________________________________________
Notice: Signature(s) must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which
requirements will include membership or participation in STAMP or such
other "signature guarantee program" as may be determined by the Trustee
in addition to, or in substitution for STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
SECTION 2.04. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-mentioned Indenture.
Date:
_______________________,
as Trustee
By________________________________
Authorized Signatory
SECTION 2.05. EXECUTION AND AUTHENTICATION. The aggregate principal
amount of Notes outstanding at any time shall not exceed $210,000,000. The Notes
shall be executed on behalf of the Company by its Chief Executive Officer, its
President or any Executive Vice President and shall be attested by the Company's
Secretary or one of its Assistant Secretaries, in each case by manual or
facsimile signature.
The Notes shall be authenticated by manual signature of an authorized
officer of the Trustee and shall not be valid for any purpose unless so
authenticated.
In case any officer of the Company whose signature shall have been
placed upon any of the Notes shall cease to be such officer of the Company
before authentication of such Notes by the Trustee and the issuance and delivery
thereof, such Notes may, nevertheless, be authenticated by the Trustee and
issued and delivered with the same force and effect as though such Person had
not ceased to be such officer of the Company.
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Notwithstanding any other provision hereof, the Trustee shall
authenticate and deliver Notes only upon receipt by the Trustee of an Officers'
Certificate complying with Section 10.04 hereof with respect to satisfaction of
all conditions precedent contained in this Indenture to authentication and
delivery of such Notes.
Upon compliance by the Company with the provisions of the previous
paragraph, the Trustee shall, upon receipt of a Company Order requesting such
action, authenticate Notes for original issuance in an aggregate principal
amount not to exceed $210,000,000. Such Company Order shall specify the amount
of Notes to be authenticated and the date on which the Notes are to be
authenticated and shall further provide instructions concerning registration,
amounts for each Holder and delivery.
A Note shall not be valid or entitled to any benefit under this
Indenture or obligatory for any purpose unless executed by the Company and
authenticated by the manual signature of the Trustee as provided herein. The
signature of an authorized officer of the Trustee shall be conclusive evidence,
and the only evidence, that such Note has been authenticated and delivered under
this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. Any authenticating agent of the Trustee
shall have the same rights hereunder as any Registrar or Paying Agent. The
Trustee shall not be liable for any failure to act of the authenticating agent
in performing any duty either required herein or authorized herein to be
performed by such person in accordance with the Indenture.
SECTION 2.06. NOTE REGISTRAR AND PAYING AGENT. The Company shall
maintain, pursuant to Section 4.02 hereof, an office or agency where the Notes
may be presented for registration of transfer or for exchange. The Company shall
cause to be kept at such office a register (the register maintained in such
office being herein sometimes referred to as the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Notes and of transfers of Notes entitled to be
registered or transferred as provided herein. The Trustee, at its Corporate
Trust Office, is initially appointed "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. The Company may,
upon written notice to the Trustee, change the designation of the Trustee as
Note Registrar and appoint another Person to act as Note Registrar for purposes
of this Indenture. If any Person other than the Trustee acts as Note Registrar,
the Trustee shall have the right at any time, upon reasonable notice, to inspect
or examine the Note Register and to make such inquiries of the Note Registrar as
the Trustee shall in its discretion deem necessary or desirable in performing
its duties hereunder.
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The Company shall enter into an appropriate agency agreement with any
Person designated by the Company as Note Registrar or Paying Agent that is not a
party to this Indenture, which agreement shall incorporate the provisions of the
Trust Indenture Act and shall implement the provisions of this Indenture that
relate to such Note Registrar or Paying Agent. Prior to the designation of any
such Person, the Company shall, by written notice (which notice shall include
the name and address of such Person), inform the Trustee of such designation. If
the Company fails to maintain a Note Registrar or Paying Agent, the Trustee
shall act as such.
Upon surrender for registration of transfer of any Note at an office or
agency of the Company designated for such purpose, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any authorized denomination
or denominations, of like tenor and aggregate principal amount, all as requested
by the transferor.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company, the Trustee or the Note
Registrar) be duly endorsed, or be accompanied by a duly executed instrument of
transfer in form satisfactory to the Company, the Trustee and the Note
Registrar, by the Holder thereof or such Holder's attorney duly authorized in
writing.
SECTION 2.07. PAYING AGENT TO HOLD MONEY IN TRUST. On or prior to 10:00
a.m. on each due date of the principal, premium, or any payment of interest with
respect to any Note, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal, premium or interest when so becoming due.
The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that such Paying Agent, shall hold in trust for the benefit of
Holders or the Trustee all money held by such Paying Agent for the payment of
principal, premium, or interest with respect to the Notes, shall notify the
Trustee of any default by the Company in making any such payment and at any time
during the continuance of any such default, upon the written request of the
Trustee, shall forthwith pay to the Trustee all sums held in trust by such
Paying Agent.
The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by such Paying
Agent. Upon complying with this Section 2.07, the Paying Agent shall have no
further liability for the money delivered to the Trustee.
SECTION 2.08. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) At the option of the Holder, and subject to the other provisions of
this Section 2.08, Notes may be exchanged for other Notes of any authorized
denominations and of a like tenor and aggregate principal amount, upon surrender
of the Notes to be exchanged at such office or agency. Whenever any Notes are so
surrendered for exchange, the Company shall
32
execute, and the Trustee shall authenticate and deliver, the Notes which the
Holder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Note Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to the Holder for any registration of
transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Sections 2.11, 3.06 or 9.06 hereof or in accordance with
any offer pursuant to Section 4.07 or 4.08 hereof not involving any transfer.
Any holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected through a book entry system maintained by the holder of such
Global Security (or its agent) and the ownership of a beneficial interest in the
Note shall be reflected in a book entry.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Note during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
for redemption under Section 3.03 and ending at the close of business on the day
of such mailing, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
(b) [Intentionally deleted.]
(c) [Intentionally deleted.]
(d) The provisions of Clauses (1), (2), (3), (4) and (5) below shall
apply only to Global Securities:
(1) Each Global Security authenticated under this Indenture
shall be registered in the name of the Depositary or a nominee thereof
and delivered to the Depositary or a nominee thereof or custodian
therefor, and each such Global Security shall constitute a single Note
for all purposes of this Indenture.
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(2) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Notes
registered, and no transfer of a Global Security in whole or in part
may be registered, in the name of any Person other than the Depositary
or a nominee thereof unless (i) the Depositary notifies the Company
that it is unwilling or unable to continue as a depositary for such
Global Security or if at any time the Depositary ceases to be a
clearing agency registered under the Exchange Act, and a successor
depositary is not appointed by the Company within 90 days, (ii) the
Company executes and delivers to the Trustee a notice that such Global
Security shall be so transferable, registrable and exchangeable, and
such transfer shall be registrable or (iii) there shall have occurred
and be continuing an Event of Default with respect to the Notes
represented by such Global Security.
(3) If any Global Security is to be exchanged for other Notes
or canceled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Trustee, as Note Registrar, for
exchange or cancellation as provided in this Article II. If any Global
Security is to be exchanged for other Notes or canceled in part, or if
another Note is to be exchanged in whole or in part for a beneficial
interest in any Global Security, then either (i) such Global Security
shall be so surrendered for exchange or cancellation as provided in
this Article II or (ii) the principal amount thereof shall be reduced
or increased by an amount equal to the portion thereof to be so
exchanged or canceled, or equal to the principal amount of such other
Note to be so exchanged for a beneficial interest therein, as the case
may be, by means of an appropriate adjustment made on the records of
the Trustee, as Note Registrar, whereupon the Trustee, in accordance
with the Applicable Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its
records. Upon any such surrender or adjustment of a Global Security,
the Trustee shall, subject to Section 2.08(d)(2) hereof and as
otherwise provided in this Article II, authenticate and deliver any
Notes issuable in exchange for such Global Security (or any portion
thereof) to or upon the order of, and registered in such names as may
be directed by, the Depositary or its authorized representative. Upon
the request of the Trustee in connection with the occurrence of any of
the events specified in the preceding paragraph, the Company shall
promptly make available to the Trustee a reasonable supply of Notes
that are not in the form of Global Securities. The Trustee shall be
entitled to rely upon any order, direction or request of the Depositary
or its authorized representative which is given or made pursuant to
this Article II if such order, direction or request is given or made in
accordance with the Applicable Procedures.
(4) Every Note authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security or
any portion thereof, whether pursuant to this Section, Section 2.05,
2.09, 3.06, 4.07, 4.08 or 9.06 hereof or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global
Security, unless such Note is registered in the name of a Person other
than the Depositary or a nominee thereof.
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(5) None of the Company, the Trustee, any agent of the
Trustee, any Paying Agent or the Note Registrar will have any
responsibility or liability for any aspect of the Depository's records
(or the records of the participant of such Depository) relating to or
payments made on account of beneficial ownership interests of a Global
Security or for maintaining, supervising or reviewing any records of
the Depository relating to such beneficial ownership interests.
SECTION 2.09. REPLACEMENT NOTES. If any mutilated Note is surrendered
to the Trustee, the Company shall execute and upon its written request the
Trustee shall authenticate and deliver, in exchange for any such mutilated Note,
a new Note containing identical provisions and of like principal amount, bearing
a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Note and (ii)
such security or indemnity as may be required by them to save either of them and
any agent of each of them harmless, then, in the absence of notice to the
Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a
new Note containing identical provisions and of like principal amount, bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section 2.09, the Company
may require the payment by the Holder of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.09 in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
The provisions of this Section 2.09 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.10. OUTSTANDING NOTES. Notes outstanding at any time are all
Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section 2.10 as not
outstanding. A Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds such Note.
35
If a Note is replaced pursuant to Section 2.09 hereof, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that such replaced Note 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, premium, if any, and interest payable on that date with respect
to the Notes (or portions thereof) to be redeemed or maturing, as the case may
be, then on and after that date such Notes (or such portions thereof) shall
cease to be outstanding and interest on them shall cease to accrue.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent or any amendment,
modification or other change to this Indenture, Notes held or beneficially owned
by the Company or a Restricted Subsidiary of the Company or by an Affiliate of
the Company or a Restricted Subsidiary of the Company or by agents of any of the
foregoing shall be disregarded, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent or any amendment, modification or other change to this Indenture,
only Notes which a Trust Officer knows are so owned shall be so disregarded.
Notes so owned which have been pledged in good faith shall not be disregarded if
the pledgee establishes to the satisfaction of the Trustee such pledgee's right
so to act with respect to the Notes and that the pledgee is not the Company or
an Affiliate of the Company or any of their agents.
SECTION 2.11. TEMPORARY NOTES. Pending the preparation of definitive
Notes, the Company may execute, and the Trustee shall authenticate, temporary
notes ("Temporary Notes") which are printed, lithographed, or otherwise
produced, substantially of the tenor of the definitive Notes in lieu of which
they are issued and with such appropriate insertions, omissions, substitutions
and other variations.
If Temporary Notes are issued, the Company shall cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the Temporary Notes shall be exchangeable for definitive Notes upon
surrender of the Temporary Notes to the Trustee, without charge to the Holder.
Until so exchanged, Temporary Notes will evidence the same debt and will be
entitled to the same benefits under this Indenture as the definitive Notes in
lieu of which they have been issued.
SECTION 2.12. CANCELLATION. The Company at any time may deliver Notes
to the Trustee for cancellation. The Note Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange, purchase or payment. The Trustee shall cancel all Notes
surrendered for registration of transfer, exchange, purchase, payment or
cancellation and shall destroy such canceled Notes unless the Company shall by
Company Order otherwise direct. The Company may not issue new Notes to replace
Notes that have been delivered to the Trustee for cancellation.
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SECTION 2.13. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Interest
on any Note which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name such Note is
registered at the close of business on the Regular Record Date for such interest
payment, which shall be the April 15 or October 15 (whether or not a Business
Day) immediately preceding such Interest Payment Date.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder on the
relevant Regular Record Date, and, except as hereinafter provided, such
Defaulted Interest, and any interest payable on such Defaulted Interest, may be
paid by the Company, at its election, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest, and any interest payable on such Defaulted Interest, to the
Persons in whose names the Notes are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on the Notes and the date of the proposed payment,
and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as provided
in this Clause. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 calendar days and not less than 10 calendar days prior to the date
of the proposed payment and not less than 10 calendar days after the
receipt by a Trust Officer of the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be sent, first class mail, postage
prepaid, to each Holder at such Holder's address as it appears in the
Note Register, not less than 10 calendar days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the Persons in whose names the
Notes are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause
(b).
(b) The Company may make payment of any Defaulted Interest,
and any interest payable on such Defaulted Interest, on the Notes in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
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Subject to the foregoing provisions of this Section 2.13, each Note
delivered under this Indenture upon registration of transfer of, or in exchange
for, or in lieu of, any other Note, shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Note.
SECTION 2.14. AUTHORIZED DENOMINATIONS. The Notes shall be issuable in
minimum denominations of $1,000 and any integral multiple thereof.
SECTION 2.15. COMPUTATION OF INTEREST. Interest on the Notes shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.16. PERSONS DEEMED OWNERS. Prior to the due presentation for
registration of transfer of any Note, the Company, the Trustee, the Paying
Agent, the Note Registrar or any co-registrar may deem and treat the person in
whose name Note is registered as the absolute owner of such Note for the purpose
of receiving payment of principal of, premium, if any, and interest on such Note
and for all other purposes whatsoever, whether or not such Note is overdue, and
none of the Company, the Trustee, the Paying Agent, the Note Registrar or any
co-Registrar shall be affected by notice to the contrary.
SECTION 2.17. CUSIP NUMBERS. The Company, in issuing the Notes, may use
"CUSIP" and "ISIN" numbers for each series of Notes and, if so, the Trustee
shall use the relevant CUSIP and ISIN numbers in any notices to Holders as a
convenience to such Holders; PROVIDED that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP and ISIN
numbers printed in the notice or on the Notes and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in any CUSIP or "ISIN" numbers used.
SECTION 2.18. HOLDER LISTS. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders and shall otherwise comply with Trust Indenture
Act ss. 312(a). If the Trustee is not the Note Registrar, the Company shall
furnish to the Trustee as of each Regular Record 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 Holders,
including the aggregate principal amount of Notes held by each Holder.
ARTICLE III.
REDEMPTION
SECTION 3.01. NOTICE TO TRUSTEE. If the Company elects to redeem Notes
pursuant to paragraph two or three of the reverse side of the Notes, it shall
notify the Trustee in writing of the Redemption Date and the principal amount of
Notes to be redeemed. The Company shall give
38
each such notice to the Trustee at least 60 calendar days prior to the
Redemption Date unless the Trustee consents in writing 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 any
conditions to such redemption set forth herein and in the Notes.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED. If less than all the
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed by lot, on a PRO RATA or other basis as it shall deem fair and
appropriate; PROVIDED that the Trustee may select for redemption in part only
Notes in denominations larger than $1,000. In selecting Notes to be redeemed
pursuant to this Section 3.02, the Trustee shall make such adjustments,
reallocations and eliminations as it shall deem proper so that the principal
amount of each Note to be redeemed shall be $1,000 or an integral multiple
thereof, by increasing, decreasing or eliminating any amount less than $1,000
which would be allocable to any Holder. If the Notes to be redeemed are
certificated Notes, the certificated Notes to be redeemed shall be selected by
the Trustee by prorating, as nearly as may be, the principal amount of
certificated Notes to be redeemed among the Holders of certificated Notes
registered in their respective names. The Trustee in its discretion may
determine the particular Notes (if there are more than one) registered in the
name of any Holder which are to be redeemed, in whole or in part. Provisions of
this Indenture that apply to Notes called for redemption also apply to portions
of Notes called for redemption. The Trustee shall notify the Company promptly of
the Notes or portions of Notes to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 calendar days but not
more than 60 calendar days before a Redemption Date, the Company shall send a
notice of redemption, first class mail, postage prepaid, to Holders of Notes to
be redeemed at the addresses of such Holders as they appear in the Note
Register.
The notice shall identify the Notes to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price (and shall specify the portion of
such Redemption Price that constitutes the amount of accrued and unpaid
interest to be paid, if any);
(c) the name and address of the Paying Agent;
(d) that the Notes called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price;
(e) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date, a new Note or Notes in principal amount equal to the
unredeemed portion will be issued;
39
(f) if fewer than all the outstanding Notes are to be
redeemed, the identification and principal amounts of the particular
Notes to be redeemed;
(g) that, unless the Company defaults in making the redemption
payment, interest on the Notes (or portions thereof) called for
redemption shall cease and such Notes (or portions thereof) shall cease
to accrue interest on and after the Redemption Date;
(h) the paragraph of the Notes pursuant to which the Notes are
being called for redemption; and
(i) any other information necessary to enable Holders to
comply with the notice of redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 3.03 in a timely manner.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption
is mailed, Notes called for redemption shall become due and payable on the
Redemption Date and at the Redemption Price stated in such notice. Upon
surrender to the Paying Agent, such Notes shall be paid at the Redemption Price
stated in such notice. Failure to give notice or any defect in the notice to any
Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. On or prior to 10:00 a.m.,
New York City time, on each Redemption Date, the Company shall deposit with the
Paying Agent (or, if the Company, one of its Subsidiaries or any of their
Affiliates is the Paying Agent, the Paying Agent shall segregate and hold in
trust for the benefit of the Holders) money, in federal or other immediately
available funds, sufficient to pay the Redemption Price on all Notes to be
redeemed on that date other than Notes or portions of Notes called for
redemption on such date which have been delivered by the Company to the Trustee
for cancellation.
So long as the Company complies with the preceding paragraph and the
other provisions of this Article III, interest on the Notes to be redeemed on
the applicable Redemption Date shall cease to accrue from and after such date
and such Notes or portions thereof shall be deemed not to be entitled to any
benefit under this Indenture except to receive payment of the Redemption Price
on the Redemption Date. If any Note called for redemption shall not be so paid
upon surrender for redemption, then, from the Redemption Date until such
principal is paid, interest shall be paid on the unpaid principal and, to the
extent permitted by law, on any accrued but unpaid interest thereon, in each
case at the rate prescribed therefor by such Notes.
SECTION 3.06. NOTES REDEEMED IN PART. Upon surrender and cancellation
of a Note that is redeemed in part, the Company shall issue and the Trustee
shall authenticate and deliver to
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the surrendering Holder (at the Company's expense) a new Note equal in principal
amount to the unredeemed portion of the Note surrendered and canceled; PROVIDED
that each such Note shall be in a principal amount of $1,000 or an integral
multiple thereof.
ARTICLE IV.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES. The Company shall promptly pay the
principal of, premium, if any, and interest on, the Notes on the dates and in
the manner provided in the Notes and in this Indenture. Principal, premium and
interest shall be considered paid on the date due if, on such date, the Trustee
or the Paying Agent holds in accordance with this Indenture money sufficient to
pay all principal, premium and interest then due.
To the extent lawful, the Company shall pay interest on (i) any overdue
principal of (and premium, if any, on) the Notes, at the interest rate borne on
the Notes and (ii) Defaulted Interest (without regard to any applicable grace
period), at the same rate. The Company's obligation pursuant to the previous
sentence shall apply whether such overdue amount is due at its Stated Maturity,
as a result of the Company's obligations pursuant to Section 3.05, Section 4.07
or Section 4.08 hereof, or otherwise.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. The Company shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee its agent to
receive all presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all of such purposes, and may from time
to time rescind such designations; PROVIDED that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in The City of New York, for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation and any
change in the location of any such other office or agency.
SECTION 4.03. MONEY FOR THE NOTE PAYMENTS TO BE HELD IN TRUST. If the
Company, any Subsidiary of the Company or any of their respective Affiliates
shall at any time act as Paying
41
Agent with respect to the Notes, such Paying Agent shall, on or before each due
date of the principal of (and premium, if any) or interest on any of the Notes,
segregate and hold in trust for the benefit of the Persons entitled thereto
money sufficient to pay the principal (and premium, if any) or interest so
becoming due until such money shall be paid to such Persons or otherwise
disposed of as herein provided, and shall promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect
to the Notes, it shall, prior to or on each due date of the principal of (and
premium, if any) or interest on any of the Notes, deposit with a Paying Agent a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Paying Agent shall promptly notify the Trustee of the
Company's action or failure so to act.
SECTION 4.04. CORPORATE EXISTENCE. Subject to the provisions of Article
IV and Article V hereof, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect the corporate existence,
rights (charter and statutory) and franchises of the Company and each of its
Restricted Subsidiaries; PROVIDED that the Company and any such Restricted
Subsidiary shall not be required to preserve the corporate existence of any such
Restricted Subsidiary or any such right or franchise if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and PROVIDED FURTHER that any Restricted
Subsidiary may consolidate with, merge into, or sell, convey, lease or otherwise
dispose of all of its property and assets to the Company or any wholly owned
Restricted Subsidiary.
SECTION 4.05. MAINTENANCE OF PROPERTY. The Company shall cause all
Property used or useful in the conduct of its business or the business of any of
its Restricted Subsidiaries and material to the Company and its Restricted
Subsidiaries taken as a whole to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and shall
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the Company, may be necessary
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; PROVIDED that nothing in this Section
4.05 shall prevent the Company from discontinuing the operation or maintenance
of any of such Property if such discontinuance is, in the judgment of the
Company, desirable in the conduct of its business or the business of any of its
Restricted Subsidiaries.
SECTION 4.06. PAYMENT OF TAXES AND OTHER CLAIMS. The Company shall pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material taxes, assessments and governmental charges levied
or imposed upon the Company or any of its Restricted Subsidiaries or upon the
income, profits or Property of the Company or any of its Restricted Subsidiaries
and (b) all material lawful claims for labor, materials and supplies which, if
unpaid, might by law become a Lien upon the Property of the Company or any of
its
42
Restricted Subsidiaries; PROVIDED that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings upon stay of execution or the enforcement
thereof and for which adequate reserves in accordance with GAAP or other
appropriate provision has been made.
SECTION 4.07. REPURCHASE AT THE OPTION OF HOLDERS UPON A CHANGE OF
CONTROL. (a) Upon the occurrence of a Change of Control, each Holder shall have
the right to require the Company to purchase such Holder's Notes, in whole or in
part, in a principal amount that is an integral multiple of $1,000, pursuant to
the offer described in Section 4.07(b) hereof (the "Change of Control Offer"),
at a purchase price (the "Change of Control Purchase Price") in cash equal to
101 percent of the principal amount of such Notes (or portions thereof), plus
accrued and unpaid interest, if any, to the Change of Control Payment Date.
(b) Within 30 calendar days of the date of any Change of Control, the
Company, or the Trustee at the request and expense of the Company, shall send to
each Holder by first class mail, postage prepaid, a notice prepared by the
Company stating:
(i) that a Change of Control has occurred and a Change of
Control Offer is being made pursuant to this Section 4.07, and that all
Notes that are timely tendered will be accepted for payment;
(ii) the Change of Control Purchase Price, and the date Notes
are to be purchased pursuant to the Change of Control Offer (the
"Change of Control Payment Date"), which date shall be a date occurring
no earlier than 30 calendar days nor later than 60 calendar days
subsequent to the date such notice is mailed;
(iii) that any Notes or portions thereof not tendered or
accepted for payment will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the
Change of Control Purchase Price with respect thereto, all Notes or
portions thereof accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest from and after the Change of
Control Payment Date;
(v) that any Holder electing to have any Notes or portions
thereof purchased pursuant to a Change of Control Offer will be
required to surrender such Notes, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of such Notes completed, to
the Paying Agent at the address specified in the notice, prior to the
close of business on the third Business Day preceding the Change of
Control Payment Date;
(vi) that any Holder shall be entitled to withdraw such
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding
43
the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter, setting forth the name of the Holder, the
principal amount of Notes delivered for purchase, and a statement that
such Holder is withdrawing such Holder's election to have such Notes or
portions thereof purchased pursuant to the Change of Control Offer;
(vii) that any Holder electing to have Notes purchased
pursuant to the Change of Control Offer must specify the principal
amount that is being tendered for purchase, which principal amount must
be $1,000 or an integral multiple thereof;
(viii) that any Holder whose Notes are being purchased only in
part will be issued new Notes equal in principal amount to the
unpurchased portion of the Note or Notes surrendered, which unpurchased
portion will be equal in principal amount to $1,000 or an integral
multiple thereof; and
(ix) any other information necessary to enable any Holder to
tender Notes and to have such Notes purchased pursuant to this Section
4.07.
(c) On the Change of Control Payment Date, the Company shall (i) accept
for payment any Notes or portions thereof properly tendered pursuant to the
Change of Control Offer; (ii) irrevocably deposit with the Paying Agent, by
10:00 a.m., New York City time, on such date, in immediately available funds, an
amount equal to the Change of Control Purchase Price in respect of all Notes or
portions thereof so accepted; and (iii) deliver, or cause to be delivered, to
the Trustee the Notes so accepted together with an Officers' Certificate listing
the Notes or portions thereof tendered to the Company and accepted for payment.
The Paying Agent shall promptly send by first class mail, postage prepaid, to
each Holder of Notes or portions thereof so accepted for payment, payment in an
amount equal to the Change of Control Purchase Price for such Notes or portions
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
(d) Upon surrender and cancellation of a Note that is purchased in part
pursuant to a Change of Control Offer, the Company shall promptly issue and the
Trustee shall authenticate and deliver to the surrendering Holder of such Note,
a new Note equal in principal amount to the unpurchased portion of such
surrendered Note; PROVIDED that each such new Note shall be in a principal
amount of $1,000 or an integral multiple thereof.
(e) The Company shall comply with the requirements of Section 14(e)
under the Exchange Act and any other securities laws or regulations, to the
extent such laws and regulations are applicable, in connection with the purchase
of Notes pursuant to a Change of Control Offer.
SECTION 4.08. LIMITATION ON ASSET SALES. (a) The Company shall not, and
shall not permit any of its Restricted Subsidiaries, directly or indirectly, to,
consummate any Asset Sale, unless:
44
(i) the Company or such Restricted Subsidiary, as the case may
be, receives consideration for such Asset Sale at least equal to the
Fair Market Value (as evidenced by a Board Resolution delivered to the
Trustee) of the Property or assets sold or otherwise disposed of;
(ii) at least 75 percent of the consideration received in
respect of such Asset Sale by the Company or such Restricted
Subsidiary, as the case may be, for such Property or assets consists of
(a) Cash Proceeds and/or Telecommunications Assets; (b) shares of
publicly-traded Voting Stock of any Person engaged in the
Telecommunications Business in the United States; or (c) the assumption
of Indebtedness of the Company or such Restricted Subsidiary (other
than Indebtedness that is subordinated to the Notes) and the release of
the Company or the Restricted Subsidiary, as the case may be, from all
liability on the Indebtedness assumed; and
(iii) the Company or such Restricted Subsidiary, as the case
may be, uses the Net Cash Proceeds from such Asset Sale in the manner
set forth in Section 4.08(b) hereof.
(b) Within 360 calendar days after the closing of any Asset Sale, the
Company or such Restricted Subsidiary, as the case may be, may, at its option:
(i) reinvest an amount equal to the Net Cash Proceeds, or any
portion thereof, from such Asset Sale in Telecommunications Assets or
in Capital Stock of any Person engaged in the Telecommunications
Business; and/or
(ii) apply an amount equal to such Net Cash Proceeds, or
remaining Net Cash Proceeds, to the permanent reduction of Indebtedness
of the Company (other than Indebtedness to a Restricted Subsidiary of
the Company) that is senior to or PARI PASSU with the Notes or to the
permanent reduction of Indebtedness or Preferred Stock of any
Restricted Subsidiary of the Company (other than Indebtedness to, or
Preferred Stock owned by, the Company or another Restricted Subsidiary
of the Company).
Net Cash Proceeds from any Asset Sale that are not applied pursuant to clause
(i) or (ii) above within 360 calendar days of the closing of such Asset Sale
shall constitute "Excess Proceeds."
(c) If at any time the aggregate amount of Excess Proceeds calculated
as of such date exceeds $25 million, the Company shall use the then-existing
Excess Proceeds to make an offer, as described in Section 4.08(d) hereof (an
"Asset Sale Offer"), to purchase from all Holders, on a PRO RATA basis, Notes in
an aggregate principal amount equal to the maximum principal amount that may be
purchased out of the then-existing Excess Proceeds, at a purchase price (the
"Asset Sale Purchase Price") in cash equal to 100 percent of the principal
amount of such Notes, plus accrued and unpaid interest, if any, to the Asset
Sale Payment Date.
45
(d) Within 30 calendar days of the date the amount of Excess Proceeds
exceeds $25 million, the Company, or the Trustee at the request and expense of
the Company, shall send to each Holder by first class mail, postage prepaid, a
notice prepared by the Company stating:
(i) that an Asset Sale Offer is being made pursuant to this
Section 4.08, and that all Notes that are timely tendered will be
accepted for payment, subject to proration in the event the amount of
Excess Proceeds is less than the aggregate Asset Sale Purchase Price of
all Notes timely tendered pursuant to the Asset Sale Offer;
(ii) the Asset Sale Purchase Price, the amount of Excess
Proceeds that are available to be applied to purchase tendered Notes,
and the date Notes are to be purchased pursuant to the Asset Sale Offer
(the "Asset Sale Payment Date"), which date shall be a date no earlier
than 30 calendar days nor later than 40 calendar days subsequent to the
date such notice is mailed;
(iii) that any Notes or portions thereof not tendered or
accepted for payment will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the
Asset Sale Purchase Price with respect thereto, all Notes or portions
thereof accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest from and after the Asset Sale Payment Date;
(v) that any Holder electing to have any Notes or portions
thereof purchased pursuant to the Asset Sale Offer will be required to
surrender such Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of such Notes completed, to the Paying Agent
at the address specified in the notice, prior to the close of business
on the third Business Day preceding the Asset Sale Payment Date;
(vi) that any Holder shall be entitled to withdraw such
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Asset Sale Payment
Date, a telegram, telex, facsimile transmission or letter, setting
forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing such
Holder's election to have such Notes or portions thereof purchased
pursuant to the Asset Sale Offer;
(vii) that any Holder electing to have Notes purchased
pursuant to the Asset Sale Offer must specify the principal amount that
is being tendered for purchase, which principal amount must be $1,000
or an integral multiple thereof;
(viii) that any Holder whose Notes are being purchased only in
part will be issued new Notes equal in principal amount to the
unpurchased portion of the Note or Notes
46
surrendered, which unpurchased portion will be equal in principal
amount to $1,000 or an integral multiple thereof; and
(ix) any other information necessary to enable any Holder to
tender Notes and to have such Notes purchased pursuant to this Section
4.08.
(e) If the aggregate Asset Sale Purchase Price of the Notes surrendered
by Holders exceeds the amount of Excess Proceeds as indicated in the notice
required by Section 4.08(d) hereof, the Trustee shall select the Notes to be
purchased on a PRO RATA basis based on the principal amount of the Notes
tendered, with such adjustments as may be deemed appropriate by the Trustee, so
that only Notes in denominations of $1,000 or integral multiples thereof shall
be purchased.
(f) On the Asset Sale Payment Date, the Company shall (i) accept for
payment any Notes or portions thereof properly tendered and selected for
purchase pursuant to the Asset Sale Offer and Section 4.08(e) hereof; (ii)
irrevocably deposit with the Paying Agent, by 10:00 a.m., New York City time, on
such date, in immediately available funds, an amount equal to the Asset Sale
Purchase Price in respect of all Notes or portions thereof so accepted; and
(iii) deliver, or cause to be delivered, to the Trustee the Notes so accepted
together with an Officers' Certificate listing the Notes or portions thereof
tendered to the Company and accepted for payment. The Paying Agent shall
promptly send by first class mail, postage prepaid, to each Holder of Notes or
portions thereof so accepted for payment, payment in an amount equal to the
Asset Sale Purchase Price for such Notes or portions thereof. The Company shall
publicly announce the results of the Asset Sale Offer on or as soon as
practicable after the Asset Sale Payment Date.
(g) Upon surrender and cancellation of a Note that is purchased in
part, the Company shall promptly issue and the Trustee shall authenticate and
deliver to the surrendering Holder of such Note a new Note equal in principal
amount to the unpurchased portion of such surrendered Note; PROVIDED that each
such new Note shall be in a principal amount of $1,000 or an integral multiple
thereof.
(h) Upon completion of an Asset Sale Offer (including payment of the
Asset Sale Purchase Price for accepted Notes), any surplus Excess Proceeds that
were the subject of such offer shall cease to be Excess Proceeds, and the
Company may then use such amounts for general corporate purposes.
(i) The Company shall comply with the requirements of Section 14(e)
under the Exchange Act and any other securities laws or regulations, to the
extent such laws and regulations are applicable, in connection with the purchase
of Notes pursuant to an Asset Sale Offer.
SECTION 4.09. LIMITATION ON CONSOLIDATED INDEBTEDNESS. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, Incur any
Indebtedness after the Issue Date
47
unless either (a) the ratio of (i) the aggregate consolidated principal amount
of Indebtedness of the Company outstanding as of the most recent available
quarterly or annual balance sheet, after giving pro forma effect to the
Incurrence of such Indebtedness and any other Indebtedness Incurred since such
balance sheet date and the receipt and application of the proceeds thereof, to
(ii) Consolidated Cash Flow Available for Fixed Charges for the four full fiscal
quarters immediately preceding the Incurrence of such Indebtedness for which
consolidated financial statements of the Company have been filed with the
Commission or have otherwise become publicly available, determined on a PRO
FORMA basis as if any such Indebtedness had been Incurred and the proceeds
thereof had been applied at the beginning of such four fiscal quarters, would be
less than 5.5 to 1.0 for such four-quarter periods ending on or prior to
December 31, 2000 and 5.0 to 1.0 for such periods ending thereafter, or (b) the
Company's Consolidated Capital Ratio as of the most recent quarterly or annual
balance sheet of the Company that has been filed with the Commission or has
otherwise become publicly available, after giving PRO FORMA effect to (x) the
Incurrence of such Indebtedness and any other Indebtedness Incurred since such
balance sheet date and (y) paid-in capital received since such balance sheet
date or concurrently with the Incurrence of such Indebtedness, and in each case
the receipt and application of the proceeds thereof, is less than 2.0 to 1.0.
(b) Notwithstanding the foregoing limitation, the Company and any
Restricted Subsidiary may Incur each and all of the following:
(i) Indebtedness under Senior Credit Facilities in an
aggregate principal amount outstanding or available at any one time not
to exceed $100 million, and any renewal, extension, refinancing or
refunding thereof in an amount which, together with any principal
amount remaining outstanding or available under all Senior Credit
Facilities, does not exceed the aggregate principal amount outstanding
or available under all Senior Credit Facilities immediately prior to
such renewal, extension, refinancing or refunding;
(ii) Indebtedness under Qualified Receivable Facilities in an
aggregate principal amount outstanding or available at any one time not
to exceed the greater of (x) $150 million or (y) an amount equal to 85%
of net Receivables determined in accordance with GAAP, and any renewal,
extension, refinancing or refunding thereof in an amount which,
together with any principal amount remaining outstanding or available
under all Qualified Receivable Facilities, does not exceed the
aggregate principal amount outstanding or available under all Qualified
Receivable Facilities immediately prior to such renewal, extension,
refinancing or refunding;
(iii) Purchase Money Indebtedness, PROVIDED that the amount of
such Purchase Money Indebtedness does not exceed 90% of the cost of the
construction, acquisition or improvement of the applicable
Telecommunications Assets;
48
(iv) Indebtedness owed by the Company to any Wholly-Owned
Restricted Subsidiary of the Company or Indebtedness owed by a
Restricted Subsidiary of the Company to the Company or a Wholly-Owned
Restricted Subsidiary of the Company; PROVIDED that upon either (x) the
transfer or other disposition by such Wholly-Owned Restricted
Subsidiary or the Company of any Indebtedness so permitted to a Person
other than the Company or another Wholly-Owned Restricted Subsidiary of
the Company or (y) the issuance (other than directors' qualifying
shares), sale, lease, transfer or other disposition of shares of
Capital Stock (including by consolidation or merger) of such
Wholly-Owned Restricted Subsidiary to a Person other than the Company
or another such Wholly-Owned Restricted Subsidiary, the provisions of
this clause (iv) shall no longer be applicable to such Indebtedness and
such Indebtedness shall be deemed to have been Incurred at the time of
such transfer or other disposition;
(v) Indebtedness Incurred to renew, extend, refinance or
refund (each, a "refinancing") the Notes or Indebtedness outstanding at
the date of the Indenture or Purchase Money Indebtedness Incurred
pursuant to clause (iii) of this paragraph in an aggregate principal
amount not to exceed the aggregate principal amount of and accrued
interest on the Indebtedness so refinanced plus the amount of any
premium required to be paid in connection with such refinancing
pursuant to the terms of the Indebtedness so refinanced or the amount
of any premium reasonably determined by the Company as necessary to
accomplish such refinancing by means of a tender offer or privately
negotiated repurchase, plus the expenses of the Company incurred in
connection with such refinancing; PROVIDED that Indebtedness the
proceeds of which are used to refinance the Notes or Indebtedness which
is PARI PASSU to the Notes or Indebtedness which is subordinate in
right of payment to the Notes shall only be permitted under this clause
(v) if (A) in the case of any refinancing of the Notes or Indebtedness
which is PARI PASSU to the Notes, the refinancing Indebtedness is made
PARI PASSU to the Notes or constitutes Subordinated Indebtedness, and,
in the case of any refinancing of Subordinated Indebtedness, the
refinancing Indebtedness constitutes Subordinated Indebtedness and (B)
in any case, the refinancing Indebtedness by its terms, or by the terms
of any agreement or instrument pursuant to which such Indebtedness is
issued, (x) does not provide for payments of principal of such
Indebtedness at stated maturity or by way of a sinking fund applicable
thereto or by way of any mandatory redemption, defeasance, retirement
or repurchase thereof by the Company (including any redemption,
retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue of the
acceleration of any payment with respect to such Indebtedness upon any
event of default thereunder), in each case prior to the time the same
are required by the terms of the Indebtedness being refinanced and (y)
does not permit redemption or other retirement (including pursuant to
an offer to purchase made by the Company) of such Indebtedness at the
option of the Holder thereof prior to the time the same are required by
the terms of the Indebtedness being refinanced, other than a redemption
or other retirement at the option of the Holder of such Indebtedness
(including pursuant to an offer
49
to purchase made by the Company) which is conditioned upon a change of
control pursuant to provisions substantially similar to those described
in Section 4.07 hereof;
(vi) Indebtedness consisting of Permitted Interest Rate and
Currency Protection Agreements;
(vii) Indebtedness (A) in respect of performance, surety or
appeal bonds provided in the ordinary course of business or (B) arising
from customary agreements providing for indemnification, adjustment of
purchase price for closing balance sheet changes within 90 days after
closing, or similar obligations, or from Guarantees or letters of
credit, surety bonds or performance bonds securing any obligations of
the Company or any of its Restricted Subsidiaries pursuant to such
agreements, in each case Incurred in connection with the disposition of
any business, assets or Restricted Subsidiary of the Company (other
than Guarantees of Indebtedness Incurred by any Person acquiring all or
any portion of such business, assets or Restricted Subsidiary of the
Company for the purpose of financing such acquisition) and in an
aggregate principal amount not to exceed the gross proceeds actually
received by the Company or any Restricted Subsidiary in connection with
such disposition; and
(viii) Indebtedness not otherwise permitted to be Incurred
pursuant to clauses (i) through (vii) above, which, together with any
other outstanding Indebtedness Incurred pursuant to this clause (viii),
has an aggregate principal amount not in excess of $10 million at any
time outstanding.
(c) Notwithstanding any other provision of this Section 4.09, the
maximum amount of Indebtedness that the Company or a Restricted Subsidiary may
Incur pursuant to this Section 4.09, shall not be deemed to be exceeded due
solely as the result of fluctuations in the exchange rates of currencies.
(d) For purposes of determining any particular amount of Indebtedness
under this Section 4.09, (1) Guarantees, Liens or obligations with respect to
letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included and (2) any Liens
granted pursuant to the equal and ratable provisions referred to in Section 4.12
hereof shall not be treated as Indebtedness. For purposes of determining
compliance with this Section 4.09, in the event that an item of Indebtedness
meets the criteria of more than one of the types of Indebtedness described in
the above clauses, the Company, in its sole discretion, shall classify such item
of Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses.
SECTION 4.10. LIMITATION ON INDEBTEDNESS AND PREFERRED STOCK OF
RESTRICTED SUBSIDIARIES. The Company shall not permit any Restricted Subsidiary
of the Company to Incur any Indebtedness or issue any Preferred Stock except:
50
(i) Indebtedness or Preferred Stock outstanding on the date of
the Indenture after giving effect to the application of the proceeds of
the Notes;
(ii) Indebtedness Incurred or Preferred Stock issued to and
held by the Company or a Wholly-Owned Restricted Subsidiary of the
Company (PROVIDED that such Indebtedness or Preferred Stock is at all
times held by the Company or a Wholly-Owned Restricted Subsidiary of
the Company);
(iii) Indebtedness Incurred or Preferred Stock issued by a
Person prior to the time (A) such Person became a Restricted Subsidiary
of the Company, (B) such Person merges into or consolidates with a
Restricted Subsidiary of the Company or (C) another Restricted
Subsidiary of the Company merges into or consolidates with such Person
(in a transaction in which such Person becomes a Restricted Subsidiary
of the Company), which Indebtedness or Preferred Stock was not Incurred
or issued in anticipation of such transaction and was outstanding prior
to such transaction;
(iv) Indebtedness under a Senior Credit Facility which is
permitted to be outstanding under clause (i) of Section 4.09(b);
(v) in the case of a Restricted Subsidiary that is a Qualified
Receivable Subsidiary, Indebtedness under a Qualified Receivable
Facility which is permitted to be outstanding under clause (ii) of
Section 4.09(b);
(vi) Indebtedness consisting of Permitted Interest Rate and
Currency Protection Agreements;
(vii) Indebtedness (A) in respect of performance, surety and
appeal bonds provided in the ordinary course of business or (B) arising
from customary agreements providing for indemnification, adjustment of
purchase price for closing balance sheet changes within 90 days after
closing, or similar obligations, or from Guarantees or letters of
credit, surety bonds or performance bonds securing any obligation of
such Restricted Subsidiary pursuant to such agreements, in each case
Incurred in connection with the disposition of any business, assets or
Restricted Subsidiary of such Restricted Subsidiary (other than
Guarantees of Indebtedness Incurred by any Person acquiring all or any
portion of such business, assets or Restricted Subsidiary for the
purpose of financing such acquisition) and in an aggregate principal
amount not to exceed the gross proceeds actually received by such
Restricted Subsidiary in connection with such disposition;
(viii) Indebtedness or Preferred Stock which is exchanged for,
or the proceeds of which are used to refinance, refund or redeem, any
Indebtedness or Preferred Stock permitted to be outstanding pursuant to
clauses (i) and (iii) hereof or any extension or renewal thereof (for
purposes hereof, a "refinancing"), in an aggregate principal amount, in
the case of Indebtedness, or with an aggregate liquidation preference
in the case of
51
Preferred Stock, not to exceed the aggregate principal amount of the
Indebtedness so refinanced or the aggregate liquidation preference of
the Preferred Stock so refinanced, plus the amount of any premium
required to be paid in connection with such refinancing pursuant to the
terms of the Indebtedness or Preferred Stock so refinanced or the
amount of any premium reasonably determined by the Company as necessary
to accomplish such refinancing by means of a tender offer or privately
negotiated repurchase, plus the amount of expenses of the Company and
the applicable Restricted Subsidiary Incurred in connection therewith
and provided the Indebtedness or Preferred Stock Incurred or issued
upon such refinancing by its terms, or by the terms of any agreement or
instrument pursuant to which such Indebtedness or Preferred Stock is
Incurred or issued, (x) does not provide for payments of principal or
liquidation value at the stated maturity of such Indebtedness or
Preferred Stock or by way of a sinking fund applicable to such
Indebtedness or Preferred Stock or by way of any mandatory redemption,
defeasance, retirement or repurchase of such Indebtedness or Preferred
Stock by the Company or any Restricted Subsidiary of the Company
(including any redemption, retirement or repurchase which is contingent
upon events or circumstances, but excluding any retirement required by
virtue of acceleration of such Indebtedness upon an event of default
thereunder), in each case prior to the time the same are required by
the terms of the Indebtedness or Preferred Stock being refinanced and
(y) does not permit redemption or other retirement (including pursuant
to an offer to purchase made by the Company or a Restricted Subsidiary
of the Company) of such Indebtedness or Preferred Stock at the option
of the holder thereof prior to the stated maturity of the Indebtedness
or Preferred Stock being refinanced, other than a redemption or other
retirement at the option of the holder of such Indebtedness or
Preferred Stock (including pursuant to an offer to purchase made by the
Company or a Restricted Subsidiary of the Company) which is conditioned
upon the change of control of the Company pursuant to provisions
substantially similar to those described in Section 4.07 hereof and
provided, further, that in the case of any exchange or redemption of
Preferred Stock of a Restricted Subsidiary of the Company, such
Preferred Stock may only be exchanged for or redeemed with Preferred
Stock of such Restricted Subsidiary; and
(ix) Indebtedness Incurred or Preferred Stock issued by a
Restricted Subsidiary, PROVIDED that the Fair Market Value of the
Company's Investment in all Restricted Subsidiaries which Incur
Indebtedness or issue Preferred Stock pursuant to this clause (ix)
shall not exceed, at any time, $30,000,000 in the aggregate, and
PROVIDED FURTHER that such Indebtedness Incurred is otherwise permitted
pursuant to Section 4.09 hereof.
SECTION 4.11. LIMITATION ON RESTRICTED PAYMENTS. (a) The Company shall
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, make any Restricted Payment unless, at the time of and after giving
effect to such proposed Restricted Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
52
(ii) after giving effect, on a PRO FORMA basis, to such
Restricted Payment and the incurrence of any Indebtedness the net
proceeds of which are used to finance such Restricted Payment, the
Company could incur at least $1.00 of additional Indebtedness pursuant
to the first paragraph of Section 4.09 hereof; and
(iii) after giving effect to such Restricted Payment on a PRO
FORMA basis, the aggregate amount expended (the amount so expended, if
other than cash, to be determined in good faith by a majority of the
disinterested members of the Board of Directors, whose determination
shall be conclusive and evidenced by a resolution thereof) or declared
for all Restricted Payments after February 22, 1999 does not exceed the
sum of (A) 50% of the Consolidated Net Income of the Company (or, if
Consolidated Net Income shall be a deficit, minus 100% of such deficit)
for the period (taken as one accounting period) beginning on the last
day of the fiscal quarter immediately preceding February 22, 1999 and
ending on the last day of the fiscal quarter for which the Company's
financial statements have been filed with the Commission or otherwise
become publicly available immediately preceding the date of such
Restricted Payment, PLUS (B) 100% of the net reduction in Investments,
subsequent to February 22, 1999, in any Person, resulting from payments
of interest on Indebtedness, dividends, repayments of loans or
advances, or other transfers of Property (but only to the extent such
interest, dividends, repayments or other transfers of Property are not
included in the calculation of Consolidated Net Income), in each case
to the Company or any Restricted Subsidiary from any Person (including,
without limitation, from Unrestricted Subsidiaries) or from
redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of "Investments" in
Section 1.01 hereof), not to exceed in the case of any Person the
amount of Investments previously made subsequent to February 22, 1999
by the Company or any Restricted Subsidiary in such Person and which
was treated as a Restricted Payment; PROVIDED that the Company or a
Restricted Subsidiary of the Company may make any Restricted Payment
with the aggregate net proceeds received after February 22, 1999,
including the fair value of property other than cash (determined in
good faith by the Board of Directors as evidenced by a resolution of
the Board of Directors filed with the Trustee), (x) as capital
contributions to the Company, (y) from the issuance (other than to a
Restricted Subsidiary) of Capital Stock (other than Disqualified Stock)
of the Company and warrants, rights or options on Capital Stock (other
than Disqualified Stock) of the Company, or (z) from the conversion of
Indebtedness of the Company into Capital Stock (other than Disqualified
Stock and other than by a Restricted Subsidiary) of the Company after
February 22, 1999.
(b) The foregoing limitations shall not prevent the Company from:
(i) paying a dividend on its Capital Stock at any time within
60 days after the declaration thereof if, on the declaration date, the
Company could have paid such dividend in compliance with the preceding
paragraph of this Section 4.11;
53
(ii) retiring (A) any Capital Stock of the Company or any
Restricted Subsidiary of the Company, (B) Indebtedness of the Company
that is subordinated in right of payment to the Notes, or (C)
Indebtedness of a Restricted Subsidiary of the Company, in exchange
for, or out of the proceeds of the substantially concurrent sale of
Qualified Stock of the Company;
(iii) retiring any Indebtedness of the Company subordinated in
right of payment to the Notes in exchange for, or out of the proceeds
of, the substantially concurrent incurrence of Indebtedness of the
Company (other than Indebtedness to a Subsidiary of the Company),
PROVIDED that such new Indebtedness (A) is subordinated in right of
payment to the Notes at least to the same extent as, (B) has an Average
Life at least as long as, and (C) has no scheduled principal payments
due in any amount earlier than, any equivalent amount of principal
under the Indebtedness so retired;
(iv) retiring any Indebtedness of a Restricted Subsidiary of
the Company in exchange for, or out of the proceeds of, the
substantially concurrent incurrence of Indebtedness of the Company or
any Restricted Subsidiary that is permitted under Section 4.09 hereof
(in the case of Indebtedness of the Company) and Section 4.10 hereof
(in the case of Indebtedness of Restricted Subsidiaries) and that (A)
is not secured by any assets of the Company or any Restricted
Subsidiary to a greater extent than the retired Indebtedness was so
secured, (B) has an Average Life at least as long as the retired
Indebtedness, and (C) is subordinated in right of payment to the Notes
at least to the same extent as the retired Indebtedness;
(v) retiring any Capital Stock or options to acquire Capital
Stock of the Company or any Restricted Subsidiary of the Company held
by any directors, officers or employees of the Company or any
Restricted Subsidiary, PROVIDED that the aggregate price paid for all
such retired Capital Stock shall not exceed, in the aggregate, the sum
of $2 million plus the aggregate cash proceeds received by the Company
subsequent to the Issue Date from issuances of Capital Stock or options
to acquire Capital Stock by the Company to directors, officers or
employees of the Company and its Subsidiaries;
(vi) making payments or distributions to dissenting
stockholders pursuant to applicable law in connection with a
consolidation, merger or transfer of assets permitted in Article V
hereof;
(vii) retiring any Capital Stock of the Company to the extent
necessary (as determined in good faith by a majority of the
disinterested members of the Board of Directors, whose determination
shall be conclusive and evidenced by a resolution thereof) to prevent
the loss, or to secure the renewal or reinstatement, of any license or
franchise held by the Company or any Restricted Subsidiary from any
governmental agency;
54
(viii) making Investments in any Person primarily engaged in
the Telecommunications Business; PROVIDED, that the aggregate amount of
such Investments does not exceed at any time the sum of (A) $30,000,000
plus (B) the amount of Net Cash Proceeds received by the Company after
February 22, 1999 as a capital contribution or from the sale of its
Capital Stock (other than Disqualified Stock) to a Person who is not a
Subsidiary of the Company, except to the extent such Net Cash Proceeds
are used to make Restricted Payments permitted pursuant to clauses (x),
(y) and (z) of clause (iii) of Section 4.11(a) hereof or clause (ii) of
Section 4.11(b) hereof or this clause (viii), plus (C) the net
reduction in Investments made pursuant to this clause (viii) resulting
from distributions on or repayments of such Investments or from the Net
Cash Proceeds from the sale of any such Investment (except in each case
to the extent any such payment or proceeds are included in the
calculation of Consolidated Net Income) or from such Person becoming a
Restricted Subsidiary (valued in each case as provided in the
definition of "Investment" set forth in Section 1.01 hereof), PROVIDED
that the net reduction in any Investment shall not exceed the amount of
such Investment; and
(ix) making Investments not otherwise permitted in an
aggregate amount not to exceed $15 million at any time outstanding.
(c) In determining the amount of Restricted Payments permissible under
this Section 4.11, amounts expended pursuant to clauses (ii), (iii) and (iv) of
the foregoing paragraph shall not be included as Restricted Payments.
(d) Not later than the date of making any Restricted Payment (including
any Restricted Payment permitted to be made pursuant to the two previous
paragraphs), the Company shall deliver to the Trustee an Officers' Certificate
stating that such Restricted Payment is permitted and setting forth the basis
upon which the required calculations were computed, which calculations may be
based upon the Company's latest available financial statements.
SECTION 4.12. LIMITATION ON LIENS. (a) The Company shall not, and shall
not permit any Restricted Subsidiary of the Company to, Incur or suffer to exist
any Lien on or with respect to any property or assets now owned or hereafter
acquired to secure any Indebtedness without making, or causing such Restricted
Subsidiary to make, effective provision for securing the Notes (x) equally and
ratably with such Indebtedness as to such property for so long as such
Indebtedness will be so secured or (y) in the event such Indebtedness is
Indebtedness of the Company which is subordinate in right of payment to the
Notes, prior to such Indebtedness as to such property for so long as such
Indebtedness will be so secured.
(b) The foregoing restrictions shall not apply to:
(i) Liens existing on the date of the Indenture and securing
Indebtedness outstanding on the date of the Indenture or Incurred on or
after the Issue Date pursuant to any Senior Credit Facility or
Qualified Receivable Facility;
55
(ii) Liens securing Indebtedness in an amount which, together
with the aggregate amount of Indebtedness then outstanding or available
under all Senior Credit Facilities (or under refinancings or amendments
of such Senior Credit Facilities), does not exceed 1.5 times the
Company's Consolidated Cash Flow Available for Fixed Charges for the
four full fiscal quarters preceding the Incurrence of such Lien for
which the Company's consolidated financial statements have been filed
with the Commission or become publicly available, determined on a PRO
FORMA basis as if such Indebtedness had been Incurred and the proceeds
thereof had been applied at the beginning of such four fiscal quarters;
(iii) Liens in favor of the Company or any Wholly-Owned
Restricted Subsidiary of the Company;
(iv) Liens on Property of the Company or a Restricted
Subsidiary acquired, constructed or constituting improvements made
after the Issue Date of the Notes to secure Purchase Money Indebtedness
which is otherwise permitted under the Indenture, PROVIDED that (a) the
principal amount of any Indebtedness secured by any such Lien does not
exceed 100% of such purchase price or cost of construction or
improvement of the Property subject to such Lien, (b) such Lien
attaches to such property prior to, at the time of or within 180 days
after the acquisition, completion of construction or commencement of
operation of such Property and (c) such Lien does not extend to or
cover any Property other than the specific item of Property (or portion
thereof) acquired, constructed or constituting the improvements made
with the proceeds of such Purchase Money Indebtedness;
(v) Liens to secure Acquired Indebtedness, PROVIDED that (a)
such Lien attaches to the acquired asset prior to the time of the
acquisition of such asset and (b) such Lien does not extend to or cover
any other Property;
(vi) Liens to secure Indebtedness Incurred to extend, renew,
refinance or refund (or successive extensions, renewals, refinancings
or refundings), in whole or in part, Indebtedness secured by any Lien
referred to in the foregoing clauses (i), (ii), (iv) and (v) so long as
such Lien does not extend to any other Property and the principal
amount of Indebtedness so secured is not increased except as otherwise
permitted under clause (v) of Section 4.09(b) hereof (in the case of
Indebtedness of the Company) or clause (viii) of Section 4.10 hereof
(in the case of Indebtedness of Restricted Subsidiaries);
(vii) Liens not otherwise permitted by the foregoing clauses
(i) through (vi) in an aggregate amount not to exceed 5% of the
Company's Consolidated Tangible Assets;
(viii) Liens granted after the Issue Date pursuant to the
immediately preceding paragraph to secure the Notes; and
56
(ix) Permitted Liens.
SECTION 4.13. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into, assume, Guarantee or otherwise become liable
with respect to any Sale and Leaseback Transaction (other than a Sale and
Leaseback Transaction between the Company or a Restricted Subsidiary on the one
hand and a Restricted Subsidiary or the Company on the other hand), unless (i)
the Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Sale and Leaseback Transaction at least equal
to the Fair Market Value (as evidenced by a Board Resolution delivered to the
Trustee) of the Property subject to such transaction; (ii) the Attributable
Indebtedness of the Company or such Restricted Subsidiary with respect thereto
is included as Indebtedness and would be permitted by Section 4.09 hereof or
Section 4.10 hereof, as the case may be; (iii) the Company or such Restricted
Subsidiary would be permitted to create a Lien on such Property without securing
the Notes by Section 4.12 hereof; and (iv) the Net Cash Proceeds from such
transaction are applied in accordance with Section 4.08 hereof; PROVIDED that
the Company shall be permitted to enter into Sale and Leaseback Transactions for
up to $30 million with respect to construction of the Company's headquarters
buildings located in Cedar Rapids, Iowa, PROVIDED that any such transaction is
entered into within 180 days of the earlier of (x) substantial completion or (y)
occupation of the applicable phase of such headquarters building.
SECTION 4.14. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES. The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, cause or suffer to exist or
become effective, or enter into, any encumbrance or restriction (other than
pursuant to law or regulation) on the ability of any Restricted Subsidiary (i)
to pay dividends or make any other distributions in respect of its Capital Stock
or pay any Indebtedness or other obligation owed to the Company or any
Restricted Subsidiary; (ii) to make loans or advances to the Company or any
Restricted Subsidiary; or (iii) to transfer any of its Property to the Company
or any other Restricted Subsidiary, except:
(a) any encumbrance or restriction existing as of the Issue
Date or any other agreement relating to any Existing Indebtedness or
any Indebtedness under a Qualified Receivable Facility otherwise
permitted under this Indenture;
(b) any encumbrance or restriction pursuant to an agreement
relating to an acquisition of Property, so long as the encumbrances or
restrictions in any such agreement relate solely to the Property so
acquired;
(c) any encumbrance or restriction relating to any
Indebtedness of any Restricted Subsidiary existing on the date on which
such Restricted Subsidiary is acquired by the Company or another
Restricted Subsidiary (other than any such
57
Indebtedness Incurred by such Restricted Subsidiary in connection with
or in anticipation of such acquisition);
(d) any encumbrance or restriction pursuant to an agreement
effecting a permitted refinancing of Indebtedness issued pursuant to an
agreement referred to in the foregoing clauses (a) through (c), so long
as the encumbrances and restrictions contained in any such refinancing
agreement are not materially more restrictive than the encumbrances and
restrictions contained in such agreements;
(e) customary provisions (A) that restrict the subletting,
assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset; (B)
existing by virtue of any transfer of, agreement to transfer, option or
right with respect to, or Lien on, any property or assets of the
Company or any Restricted Subsidiary not otherwise prohibited by the
Indenture or (C) arising or agreed to in the ordinary course of
business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of property or
assets of the Company or any Restricted Subsidiary in any manner
material to the Company or any Restricted Subsidiary;
(f) in the case of clause (iii) above, restrictions contained
in any security agreement (including a Capital Lease Obligation)
securing Indebtedness of the Company or a Restricted Subsidiary
otherwise permitted under the Indenture, but only to the extent such
restrictions restrict the transfer of the property subject to such
security agreement; and
(g) any restriction with respect to a Restricted Subsidiary of
the Company imposed pursuant to an agreement which has been entered
into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Restricted Subsidiary, provided that
the consummation of such transaction would not result in an Event of
Default or an event that, with the passing of time or the giving of
notice or both, would constitute an Event of Default, that such
restriction terminates if such transaction is not consummated and that
the consummation or abandonment of such transaction occurs within one
year of the date such agreement was entered into.
Nothing contained in this Section 4.14 shall prevent the Company or any
other Restricted Subsidiary from (1) creating, incurring, assuming or suffering
to exist any Liens otherwise permitted under Section 4.12 hereof or (2)
restricting the sale or other disposition of property or assets of the Company
or any of its Restricted Subsidiaries that secure Indebtedness of the Company or
any of its Restricted Subsidiaries otherwise permitted under Section 4.09 hereof
or Section 4.10 hereof, as the case may be.
SECTION 4.15. LIMITATION ON ISSUANCE AND SALE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company (i) shall not permit any Restricted
Subsidiary to issue any Capital
58
Stock other than to the Company or a Wholly-Owned Restricted Subsidiary unless
immediately after giving effect thereto such Restricted Subsidiary would no
longer constitute a Restricted Subsidiary and any Investment of the Company or
any other Restricted Subsidiary in such Restricted Subsidiary would have been
permitted under Section 4.11 hereof if made on the date of such issuance and
(ii) shall not permit any Person other than the Company or a Wholly-Owned
Restricted Subsidiary to own any Capital Stock of any Restricted Subsidiary,
other than directors' qualifying shares and except for:
(a) a sale of 100% of the Capital Stock of a Restricted
Subsidiary sold in a transaction not prohibited by the covenant
described under Section 4.08 hereof;
(b) a sale of the Capital Stock of a Restricted Subsidiary
sold in a transaction not prohibited by the covenant described under
Section 4.08 hereof if, after giving effect thereto, greater than 50%
of the Capital Stock of such Restricted Subsidiary is owned by the
Company or by a Wholly-Owned Restricted Subsidiary;
(c) Capital Stock of a Restricted Subsidiary issued and
outstanding on the Issue Date and held by Persons other than the
Company or any Restricted Subsidiary;
(d) Capital Stock of a Restricted Subsidiary issued and
outstanding prior to the time that such Person becomes a Restricted
Subsidiary so long as such Capital Stock was not issued in anticipation
or contemplation of such Person's becoming a Restricted Subsidiary or
otherwise being acquired by the Company;
(e) any Preferred Stock permitted to be issued under Section
4.10 hereof; and
(f) ownership by any Person other than the Company or a
Subsidiary of the Company of less than 50% of the Capital Stock of a
Person (A) in which the Company or a Restricted Subsidiary has made a
Permitted Investment pursuant to clause (iii) of the definition of
"Permitted Investments" set forth in Section 1.01 hereof, (B) of which
more than 50% of such Person's Capital Stock is owned, directly or
indirectly, by the Company and (C) as to which the Company has the
power to direct the policies, management and affairs.
SECTION 4.16. TRANSACTIONS WITH AFFILIATES. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
sell, lease, transfer, or otherwise dispose of, any of its Properties or assets
to, or purchase any Property or assets from, or enter into any contract,
agreement, understanding, loan, advance or Guarantee with or for the benefit of,
any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (a)
such Affiliate Transaction or series of Affiliate Transactions is on terms that
are no less favorable to the Company or such Restricted Subsidiary than those
that would have been obtained in a comparable arm's-length transaction by the
Company or such Restricted Subsidiary with a Person that is not an Affiliate
(or, in the event that there are no comparable transactions involving
59
Persons who are not Affiliates of the Company or the relevant Restricted
Subsidiary to apply for comparative purposes, is otherwise on terms that, taken
as a whole, the Company has determined to be fair to the Company or the relevant
Restricted Subsidiary) and (b) the Company delivers to the Trustee (i) with
respect to any Affiliate Transaction involving aggregate payments in excess of
$1 million, a certificate of the chief executive, operating or financial officer
of the Company evidencing such officer's determination that such Affiliate
Transaction or series of Affiliate Transactions complies with clause (a) above
and is in the best interests of the Company or such Restricted Subsidiary and
(ii) with respect to any Affiliate Transaction or series of Affiliate
Transactions involving aggregate payments in excess of $5 million, a Board
Resolution certifying that such Affiliate Transaction or series of Affiliate
Transactions complies with clause (a) above and that such Affiliate Transaction
or series of Affiliate Transactions has been approved by a majority of the
disinterested members of the Board of Directors who have determined that such
Affiliate Transaction or series of Affiliate Transactions is in the best
interest of the Company or such Restricted Subsidiary; PROVIDED that the
following shall not be deemed Affiliate Transactions:
(i) any employment agreement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business
and consistent with industry practice;
(ii) any agreement or arrangement with respect to the
compensation of a director or officer of the Company or any Restricted
Subsidiary approved by a majority of the disinterested members of the
Board of Directors and consistent with industry practice;
(iii) transactions between or among the Company and its
Restricted Subsidiaries;
(iv) transactions permitted by Section 4.11 hereof;
(v) transactions pursuant to any agreement or arrangement
existing on the Issue Date; and
(vi) transactions with respect to wireline or wireless
transmission capacity, the lease or sharing or other use of cable or
fiberoptic lines, equipment, rights-of-way or other access rights,
between the Company or any Restricted Subsidiary and any other Person;
PROVIDED, in any case, that such transaction is on terms that are no
less favorable, taken as a whole, to the Company or the relevant
Restricted Subsidiary than those that could have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary
with Persons who are not Affiliates of the Company or the relevant
Restricted Subsidiary (or, in the event that there are no comparable
transactions involving Persons who are not Affiliates of the Company or
the relevant Restricted Subsidiary to apply for comparative purposes,
is otherwise on terms that, taken as a whole, the Company has
determined to be fair to the Company or the relevant Restricted
Subsidiary).
60
SECTION 4.17. RESTRICTED AND UNRESTRICTED SUBSIDIARIES. (a) The Company
may designate a Subsidiary (including a newly formed or newly acquired
Subsidiary) of the Company or any of its Restricted Subsidiaries as an
Unrestricted Subsidiary if such Subsidiary does not have any obligations which,
if in Default, would result in a cross default on Indebtedness of the Company or
a Restricted Subsidiary (other than Indebtedness to the Company or a
Wholly-Owned Restricted Subsidiary), and (i) such Subsidiary has total assets of
$1,000 or less, (ii) such Subsidiary has assets of more than $1,000 and an
Investment in such Subsidiary in an amount equal to the Fair Market Value of
such Subsidiary would then be permitted under Section 4.11(a) hereof or (iii)
such designation is effective immediately upon such Person becoming a
Subsidiary. Unless so designated as an Unrestricted Subsidiary, any Person that
becomes a Subsidiary of the Company or any of its Restricted Subsidiaries shall
be classified as a Restricted Subsidiary thereof.
(b) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, take any action or enter into any transaction or series of
transactions that would result in a Person (other than a newly formed Subsidiary
having no outstanding Indebtedness (other than Indebtedness to the Company or a
Restricted Subsidiary) at the date of determination) becoming a Restricted
Subsidiary (whether through an acquisition, the redesignation of an Unrestricted
Subsidiary or otherwise), unless, after giving effect to such action,
transaction or series of transactions on a pro forma basis, (i) the Company
could incur at least $1 of additional Indebtedness pursuant to Section 4.09(a)
hereof and (ii) no Default or Event of Default would occur.
(c) Subject to clause (b), an Unrestricted Subsidiary may be
redesignated as a Restricted Subsidiary. The designation of a Subsidiary as an
Unrestricted Subsidiary or the designation of an Unrestricted Subsidiary as a
Restricted Subsidiary in compliance with clause (b) shall be made by the Board
of Directors pursuant to a Board Resolution delivered to the Trustee and shall
be effective as of the date specified in such Board Resolution, which shall not
be prior to the date such Board Resolution is delivered to the Trustee.
SECTION 4.18. REPORTS. The Company shall file with the Trustee within
15 days after it files them with the Commission copies of the annual and
quarterly reports and the information, documents, and other reports that the
Company is required to file with the Commission pursuant to Section 13(a) or
15(d) of the Exchange Act ("SEC Reports"). In the event the Company shall cease
to be required to file SEC Reports pursuant to the Exchange Act, the Company
shall nevertheless continue to file such reports with the Commission (unless the
Commission shall not accept such a filing) and in any event with the Trustee.
The Company shall furnish copies of the SEC Reports to the Holders of Notes at
the time the Company is required to file the same with the Trustee and will make
such information available to investors who request it in writing.
SECTION 4.19. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT OR EVENT OF
DEFAULT. The Company shall deliver to the Trustee within 120 calendar days after
the end of each fiscal year of
61
the Company ending after the date hereof, an Officers' Certificate stating
whether or not, to the best knowledge of such officer, the Company has complied
with all conditions and covenants under this Indenture, and, if the Company
shall be in Default, specifying all such Defaults and the nature thereof of
which such officer may have knowledge.
For the purposes of this Section 4.19, compliance shall be determined
without regard to any period of grace or requirement of notice under this
Indenture.
The Company shall deliver written notice to the Trustee within 30
calendar days after any executive officer of the Company becomes aware of the
occurrence of any event which constitutes, or with the giving of notice or the
lapse of time or both would constitute, a Default or Event of Default,
describing such Default or Event of Default, its status and what action the
Company is taking or proposes to take with respect thereto.
ARTICLE V.
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.01. MERGER, CONSOLIDATION OR SALE OF ASSETS. The Company
shall not in any transaction or series of related transactions, consolidate
with, or merge with or into, any other Person or permit any other Person to
merge with or into the Company (other than a merger of a Restricted Subsidiary
of the Company into the Company in which the Company is the continuing
corporation), or sell, convey, assign, transfer, lease or otherwise dispose of
all or substantially all of the Property and assets of the Company and its
Restricted Subsidiaries taken as a whole to any other Person, unless:
(a) either (i) the Company shall be the continuing corporation
or (ii) the corporation (if other than the Company) formed by such
consolidation or into which the Company is merged, or the Person which
acquires, by sale, assignment, conveyance, transfer, lease or
disposition, all or substantially all of the Property and assets of the
Company and its Restricted Subsidiaries taken as a whole (any such
corporation or Person being the "Surviving Entity") shall be a
corporation organized and validly existing under the laws of the United
States of America, any political subdivision thereof, any state thereof
or the District of Columbia, and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form reasonably satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any) and interest on all
the Notes and the performance of every covenant and obligation in this
Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction or
series of related transactions on a PRO FORMA basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction
62
or series of related transactions), no Default or Event of Default
shall have occurred and be continuing;
(c) immediately after giving effect to such transaction or
series of related transactions on a PRO FORMA basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of
transactions), the Company (or the Surviving Entity, if the Company is
not continuing) would (A) be permitted to Incur $1.00 of additional
Indebtedness under Section 4.09(a) hereof and (B) have a Consolidated
Net Worth that is not less than the Consolidated Net Worth of the
Company immediately before such transaction or series of transactions;
and
(d) if, as a result of any such transaction, Property of the
Company would become subject to a Lien prohibited by the provisions of
the Indenture described under Section 4.12 hereof, the Company or the
successor entity to the Company shall have secured the Notes as
required thereby.
In connection with any consolidation, merger, conveyance, lease or
other disposition contemplated by this Section 5.01, the Company shall deliver,
or cause to be delivered, to the Trustee, in form reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, lease or disposition and any
supplemental indenture in respect thereto comply with this Article V and that
all conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation
with, or merger by the Company with or into, any other corporation, or any sale,
assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the Property and assets of the Company and its Restricted
Subsidiaries taken as a whole in accordance with Section 5.01 hereof, the
successor corporation formed by such consolidation or into which the Company is
merged, or the Person to which such sale, conveyance, assignment, transfer,
lease, conveyance or other disposition is made, shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person has been named
as the Company herein; and thereafter the predecessor corporation shall be
relieved of all obligations and covenants under this Indenture and the Notes,
EXCEPT for the obligation to pay the principal of (and premium, if any) and
interest on the Notes.
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. "Event of Default," wherever used
herein with respect to the Notes, means any one of the following events
(whatever the reason for such event, and whether it shall be voluntary or
involuntary, or be effected by operation of law, pursuant to
63
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(a) default in the payment of interest on any Note when the
same becomes due and payable, and the continuance of such Default for a
period of 30 calendar days; or
(b) default in the payment of the principal of (or premium, if
any, on) any Note when the same becomes due and payable whether upon
Maturity, optional redemption, required repurchase (including pursuant
to a Change of Control Offer or an Asset Sale Offer) or otherwise, or
the failure to make an offer to purchase any Note as herein required;
or
(c) default in the performance, or breach, of any covenant or
agreement contained in Section 4.07, Section 4.08 or Article V hereof;
or
(d) default in the performance, or breach, of any covenant or
warranty of the Company contained in this Indenture or the Notes (other
than a covenant or warranty addressed in Section 6.01(a), Section
6.01(b) or Section 6.01(c) hereof), and the continuance of such Default
or breach for a period of 60 calendar days after written notice thereof
has been given to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25 percent of the aggregate
principal amount of the outstanding Notes specifying such Default and
stating that such notice is a "Notice of Default" delivered in
connection with this Indenture; or
(e) a default or defaults under any bond, debenture, note or
other evidence of Indebtedness by the Company or any Restricted
Subsidiary of the Company (or under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness by the Company or any such
Restricted Subsidiary) having, individually or in the aggregate, a
principal or similar amount outstanding of at least $10 million,
whether such indebtedness now exists or shall hereafter be created,
which default or defaults shall have resulted in the acceleration of
the maturity of such Indebtedness prior to its express maturity or
shall constitute a failure to pay such Indebtedness when due and
payable after the expiration of any applicable grace period with
respect thereto or shall have resulted in such Indebtedness becoming or
being declared due and payable; or
(f) a final judgment or final judgments for the payment of
money (other than to the extent covered by insurance as to which the
insurance company has acknowledged coverage and other than to the
extent covered by an indemnity given by an insurance company) is
entered against the Company or any Restricted Subsidiary of the Company
in an aggregate amount in excess of $10 million by a court or courts of
competent jurisdiction, which judgment is not discharged, waived,
stayed, bonded or satisfied for a period of 45 consecutive calendar
days; or
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(g) the entry by a court having jurisdiction in the premises
of (i) a decree or order for relief in respect of the Company or any
Restricted Subsidiary of the Company in an involuntary case or
proceeding under United States bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state, or foreign
bankruptcy, insolvency, or other similar law or (ii) a decree or order
adjudging the Company or any Restricted Subsidiary of the Company a
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of, or
in respect of, the Company or any Restricted Subsidiary of the Company
under United States bankruptcy laws, as now or hereafter constituted,
or any other applicable Federal, state or foreign bankruptcy,
insolvency, or similar law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Restricted Subsidiary of the Company or of any
substantial part of the Property or assets of the Company or any
Restricted Subsidiary of the Company, or ordering the winding-up or
liquidation of the affairs of the Company or any Restricted Subsidiary
of the Company, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive calendar days; or
(h) (i) the commencement by the Company or any Restricted
Subsidiary of the Company of a voluntary case or proceeding under
United States bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal, state, or foreign bankruptcy, insolvency or
other similar law or of any other case or proceeding to be adjudicated
a bankrupt or insolvent; or (ii) the consent by the Company or any
Restricted Subsidiary of the Company to the entry of a decree or order
for relief in respect of the Company or any Restricted Subsidiary of
the Company in an involuntary case or proceeding under United States
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency, or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against the Company or any Restricted Subsidiary of the
Company; or (iii) the filing by the Company or any Restricted
Subsidiary of the Company of a petition or answer or consent seeking
reorganization or relief under United States bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law; or (iv) the
consent by the Company or any Restricted Subsidiary of the Company to
the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or any Restricted
Subsidiary of the Company or of any substantial part of the Property or
assets of the Company or any Restricted Subsidiary of the Company, or
the making by the Company or any Restricted Subsidiary of the Company
of an assignment for the benefit of creditors; or (v) the admission by
the Company or any Restricted Subsidiary of the Company in writing of
its inability to pay its debts generally as they become due; or (vi)
the taking of corporate action by the Company or any Restricted
Subsidiary of the Company in furtherance of any such action.
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SECTION 6.02. ACCELERATION. If any Event of Default (other than an
Event of Default specified in Section 6.01(g) or Section 6.01(h) hereof) occurs
and is continuing, then and in every such case, the Trustee by a notice in
writing to the Company may, and at the direction of the Holders of not less than
25 percent of the outstanding aggregate principal amount of Notes by a notice in
writing to the Company and the Trustee, shall declare the Default Amount and any
accrued and unpaid interest on all Notes then outstanding to be immediately due
and payable. Upon any such declaration, such Default Amount and any accrued and
unpaid interest on all Notes then outstanding will become and be immediately due
and payable.
If an Event of Default specified in Section 6.01(g) or Section 6.01(h)
hereof occurs, the Default Amount and any accrued and unpaid interest on all
Notes then outstanding shall IPSO FACTO become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder of Notes.
In the event of a declaration of acceleration because an Event of
Default set forth in Section 6.01(e) hereof has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the
event of default triggering such Event of Default pursuant to Section 6.01(e)
hereof shall be remedied, or cured, or waived by the holders of the relevant
Indebtedness, within 60 calendar days after such event of default; PROVIDED no
judgment or decree for the payment of the money due on the Notes has been
obtained by the Trustee as hereinafter in this Article VI provided.
At any time after a declaration of acceleration with respect to Notes
has been made and before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article VI provided, the
Holders of a majority in principal amount of the outstanding Notes, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if,
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all overdue installments of interest on all
Notes,
(ii) the principal of (and premium, if any, on) any
Notes which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates
prescribed therefor in such Notes,
(iii) to the extent that payment of such interest is
lawful, interest on the Defaulted Interest at the rate
prescribed therefor in the Notes and this Indenture, and
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(iv) all moneys paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel and all other amounts due to the Trustee pursuant to
Section 7.07 hereof; and
(b) all Events of Default with respect to the Notes, other
than the non-payment of the principal of Notes which have become due
solely by such declaration of acceleration, have been cured or waived
by the Holders as provided herein.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
SECTION 6.03. OTHER REMEDIES. The Company covenants that if an Event of
Default specified in Section 6.01(a) or Section 6.01(b) hereof occurs the
Company shall, upon demand of the Trustee, pay to the Trustee, for the benefit
of the Holders, the whole amount then due and payable on the Notes for principal
(and premium, if any) and interest and, to the extent that payment of such
interest shall be legally enforceable, interest upon the overdue principal (and
premium, if any) and upon Defaulted Interest, at the rate or rates prescribed
therefor in such Notes; and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts due to the Trustee pursuant to
Section 7.07 hereof.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may and, at the
direction of the Holders of not less than a majority of the outstanding
aggregate principal amount of the Notes, shall institute a judicial proceeding
for the collection of the sums so due and unpaid, and may prosecute such
proceeding to judgment or final decree, and may enforce the same against the
Company or any other obligor upon such Notes and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the Property and
assets of the Company or any other obligor upon such Notes, wherever situated.
If an Event of Default with respect to the Notes occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of not less than a
majority in principal amount of the outstanding Notes may, on behalf of the
Holders of all the Notes, waive any past Default and its consequences under this
Article VI, except a Default (a) in the payment of the principal of (or premium,
if any) or interest on, any Note, or (b) in respect of a covenant or
67
provision hereof which under Section 9.02 hereof cannot be modified or amended
without the consent of the Holders of each outstanding Note affected.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of not less than a
majority in principal amount of the outstanding Notes shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee; PROVIDED that
(a) such direction shall not be in conflict with any rule of
law or with this Indenture or unduly prejudicial to the rights of other
Holders and would not subject the Trustee to personal liability, and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.06. LIMITATION ON SUITS. No Holder of Notes shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Notes;
(b) the Holders of not less than 25 percent in principal
amount of the outstanding Notes shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(c) such Holder or Holders have offered and, if requested,
provided to the Trustee security or indemnity satisfactory to the
Trustee in its reasonable discretion against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 30 calendar days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has
been given to the Trustee during such 30-day period by the Holders of a
majority in principal amount of the outstanding Notes;
in any event, it being understood and intended that no one or more Holders of
Notes shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Holders of Notes, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all Holders of Notes.
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SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of (premium, if any) and interest on the Notes held by such Holder, on
or after the respective due dates expressed in the Notes or the redemption dates
or purchase dates provided for therein, or to bring suit for the enforcement of
any such payment on or after such respective dates, shall be absolute and
unconditional and shall not be impaired or affected without the consent of such
Holder.
SECTION 6.08. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceedings, or any
voluntary or involuntary case under United States bankruptcy laws, as now or
hereafter constituted, relative to the Company or any other obligor upon the
Notes or the Property and assets of the Company or of such other obligor or
their creditors, the Trustee (irrespective of whether the principal of such
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise, (i) to file and
prove a claim for the whole amount of principal (and premium, if any) and
interest owing and unpaid in respect of the Notes, to file such other papers or
documents and to take such other actions, including participating as a member or
otherwise in any official committee of creditors appointed in the matter, as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel and all other amounts due to the Trustee
pursuant to Section 7.07 hereof) and of the Holders allowed in such judicial
proceeding, and (ii) to collect and receive any moneys or other Property payable
or deliverable on any such claims and to distribute the same; and any receiver,
assignee, trustee, custodian, liquidator, sequestrator (or other similar
official) in any such proceeding is hereby authorized by each Holder to make
such payments to the Trustee, and in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. Nothing contained herein shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.09. PRIORITIES. Any money collected by the Trustee pursuant
to this Article VI shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal (premium, if any) or interest, upon presentation of the Notes and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 7.07 hereof;
69
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Notes, ratably,
without preference or priority of any kind, according to the amounts
due and payable on such Notes for principal (and premium, if any) and
interest, respectively; and
THIRD: To the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.09. At least 15 calendar days before such
record date, the Company shall mail to each Holder and the Trustee a notice that
states such record date, the payment date and amount to be paid. The Trustee may
mail such notice in the name and at the expense of the Company.
SECTION 6.10. UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10 percent in principal amount of
the outstanding Notes, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Note on or after its Stated Maturity.
SECTION 6.11. WAIVER OF STAY OR EXTENSION LAWS. The Company (to the
extent it may lawfully do 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.
SECTION 6.12. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF THE
NOTES. All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name, as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Notes.
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SECTION 6.13. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder of Notes has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case the Company, the Trustee and the Holders shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 6.14. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided in Section 2.09 hereof, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 6.15. DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder of any Note to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article VI or by law to the Trustee or to the Holders may
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
ARTICLE VII.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and shall use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default of which a
Trust Officer has actual knowledge: (i) the Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture against
the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; PROVIDED that in
the case of any such certificates or opinions that by any provision of this
Indenture are specifically required to be furnished to the Trustee, the Trustee
71
shall examine such certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct; PROVIDED that: (i) this paragraph (c) shall not limit the effect of
paragraph (b) of this Section 7.01; (ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and (iii) the
Trustee shall not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section
6.05 hereof.
(d) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk of liability is
not reasonably assured to it.
(f) 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 Article VII and to the provisions of the Trust
Indenture Act.
SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper Person. Except as provided in Section 7.01(b) hereof, the Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on any
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any such agent; PROVIDED that such agent was
appointed with due care by the Trustee.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided that the Trustee's conduct does not constitute willful
misconduct or gross negligence.
(e) The Trustee shall not be charged with knowledge of any Default or
Event of Default under Section 6.01(c), 6.01(d), 6.01(e) or 6.01(f) hereof, of
the identity of any Restricted Subsidiary or of the existence of any Change of
Control or Asset Sale unless either (i) a Trust
72
Officer shall have actual knowledge thereof, or (ii) the Trustee shall have
received notice thereof in accordance with Section 10.02 hereof from the Company
or any Holder of Notes.
(f) The Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.
(h) The Trustee shall not be liable for any action it takes or omits to
take in good faith in accordance with the direction of the Holders of a majority
of the aggregate outstanding principal amount of Notes relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee, any Paying
Agent or Note Registrar, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee, Paying
Agent or Note Registrar hereunder, as the case may be; PROVIDED that the Trustee
must in any event comply with Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible (a) for any
statement of the Company in this Indenture, including the recitals contained
herein, or in any document issued in connection with the sale of the Notes or in
the Notes other than the Trustee's certificate of authentication or (b) for
compliance by the Company with the Registration Agreement.
SECTION 7.05. NOTICE OF DEFAULTS. Within 90 calendar days after the
occurrence of any Default hereunder known to a Trust Officer with respect to the
Notes, the Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Note Register, notice of such Default hereunder known to
the Trustee, unless such Default shall have been cured or waived; PROVIDED that,
except in the case of a Default in the payment of the principal of (or premium,
if any) or interest on any Note, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors and/or
73
Trust Officers of the Trustee in good faith determine that the withholding of
such notice is in the interest of the Holders.
SECTION 7.06. PRESERVATION OF INFORMATION; REPORTS BY TRUSTEE TO
HOLDERS. (a) The Company shall furnish or cause to be furnished to the Trustee:
(i) semiannually, not less than 10 calendar days prior to each
Interest Payment Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of the
Regular Record Date immediately preceding such Interest Payment Date,
and
(ii) at such other times as the Trustee may request in
writing, within 30 calendar days after the receipt by the Company of
any such request, a list of similar form and content as of a date not
more than 15 calendar days prior to the time such list is furnished;
PROVIDED that if and so long as the Trustee shall be the Note Registrar for the
Notes, no such list need be furnished with respect to the Notes.
(b) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.06(a) hereof and the
names and addresses of Holders received by the Trustee in its capacity as Note
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 7.06(a) hereof upon receipt of a new list so furnished.
(c) Holders may communicate as provided in Section 312(b) of the Trust
Indenture Act with other Holders with respect to their rights under this
Indenture or under the Notes.
(d) Each Holder of Notes, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Holders in accordance with this Section 7.06,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under this Section 7.06.
(e) Within 60 calendar days after April 15 of each year commencing with
the year 1999, the Trustee shall transmit by mail to all Holders of Notes, a
brief report dated as of such April 15 if and to the extent required under
Section 313(a) of the Trust Indenture Act.
(f) The Trustee shall comply with Sections 313(b) and 313(c) of the
Trust Indenture Act.
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(g) A copy of each report described in Section 7.06(e) hereof shall, at
the time of its transmission to Holders, be filed by the Trustee with each stock
exchange, if any, upon which the Notes are then listed, with the Commission and
also with the Company. The Company shall promptly notify the Trustee of any
stock exchange upon which the Notes are listed.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The Company
shall reimburse the Trustee upon request for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents
and counsel. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust.
The Company shall indemnify the Trustee for, and hold it harmless
against, any and all loss, liability or expense (including reasonable attorneys'
fees) arising out of or incurred by it in connection with the acceptance or
administration of the trust created by this Indenture and the performance of its
duties hereunder, except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend any such claim and the
Trustee shall cooperate in the defense of such claim. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
willful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of, premium, if any, and interest on, particular Notes.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the resignation or removal of the Trustee and discharge of this
Indenture. Subject to any other rights available to the Trustee under applicable
bankruptcy law, when the Trustee incurs expenses after the occurrence of a
Default specified in Section 6.01(g) or Section 6.01(h) hereof, the expenses are
intended to constitute expenses of administration under bankruptcy law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. (a) No resignation or removal of
the Trustee and no appointment of a successor Trustee pursuant to this Article
VII shall become effective until the acceptance of appointment by the successor
Trustee under this Section 7.08.
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(b) The Trustee may resign at any time by giving written notice thereof
to the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 calendar days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the outstanding Notes, delivered to the Trustee
and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 310(b) of
the Trust Indenture Act after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a Note for at least
six months, unless the Trustee's duty to resign is stayed in accordance
with the provisions of Section 310(b) of the Trust Indenture Act; or
(ii) the Trustee shall cease to be eligible under Section 7.10
hereof and shall fail to resign after written request therefor by the
Company or by any such Holder; or
(iii) the Trustee shall become incapable of acting or a decree
or order for relief by a court having jurisdiction in the premises
shall have been entered in respect of the Trustee in an involuntary
case under the United States bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or state bankruptcy,
insolvency or similar law; or a decree or order by a court having
jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trustee or of its
Property and assets or affairs, or any public officer shall take charge
or control of the Trustee or of its Property and assets or affairs for
the purpose of rehabilitation, conservation, winding up or liquidation;
or
(iv) the Trustee shall commence a voluntary case under the
United States bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or state bankruptcy, insolvency or similar law
or shall consent to the appointment of or taking possession by a
receiver, custodian, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Trustee or its Property and assets or
affairs, or shall make an assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts generally as they
become due, or shall take corporate action in furtherance of any such
action,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Notes, or (ii) subject to Section 6.10 hereof, any
Holder who has been a bona fide Holder of a Note for at least six months may, on
behalf of such Holder and all others similarly
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situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee for the Notes.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by or pursuant to a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by the Holders of a majority in principal amount of the outstanding
Notes delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with this Section 7.08, become the successor Trustee and to that
extent replace any successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and shall
have accepted appointment in the manner hereinafter provided, any Holder that
has been a bona fide Holder of a Note for at least six months may, subject to
Section 6.10 hereof, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such resignation, removal and appointment by first class mail, postage
prepaid, to the Holders as their names and addresses appear in the Note
Register. Each notice shall include the name of the successor Trustee with
respect to the Notes and the address of its Corporate Trust Office.
(g) In the event of an appointment hereunder of a successor Trustee,
each such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all Property and money held by such former
Trustee hereunder, subject to its Lien, if any, provided for in Section 7.07
hereof.
(h) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in Section 7.08(g) hereof.
(i) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article VII and under the Trust Indenture Act.
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SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. Any corporation into which
the Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder; PROVIDED that such corporation shall be
otherwise qualified and eligible under this Article VII and under the Trust
Indenture Act, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes. In the event
that any Notes shall not have been authenticated by such predecessor Trustee,
any such successor Trustee may authenticate and deliver such Notes, in either
its own name or that of its predecessor Trustee, with the full force and effect
which this Indenture provides for the certificate of authentication of the
Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. There shall at all times
be a Trustee hereunder which shall be
(i) a corporation organized and doing business under the laws
of the United States of America, any State or Territory thereof or the
District of Columbia, authorized under such laws to exercise corporate
trust powers, and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority, or
(ii) a corporation or other Person organized and doing
business under the laws of a foreign government that is permitted to
act as Trustee pursuant to a rule, regulation or order of the
Commission, authorized under such laws to exercise corporate trust
powers, and subject to supervision or examination by authority of such
foreign government or a political subdivision thereof substantially
equivalent to supervision or examination applicable to United States
institutional trustees,
in either case having a combined capital and surplus of at least $25,000,000.
If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 7.10, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
Neither the Company nor any Affiliate of the Company shall serve as Trustee
hereunder. If at any time the Trustee shall cease to be eligible to serve as
Trustee hereunder pursuant to the provisions of this Section 7.10, it shall
resign immediately in the manner and with the effect specified in this Article
VII.
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with
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the provisions of Section 310(b) of the Trust Indenture Act. Nothing herein
shall prevent the Trustee from filing with the Commission the application
referred to in the penultimate paragraph of Section 310(b) of the Trust
Indenture Act.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act. A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.
ARTICLE VIII.
DEFEASANCE
SECTION 8.01. COMPANY'S OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE. The Company may elect, at its option, at any time, to have Section
8.02 or Section 8.03 hereof applied to the outstanding Notes (in whole and not
in part) upon compliance with the conditions set forth below in this Article
VIII. Such election shall be evidenced by a Board Resolution delivered to the
Trustee.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE. Upon the Company's
exercise of its option to have this Section 8.02 applied to the outstanding
Notes (in whole and not in part), the Company shall be deemed to have been
discharged from its obligations with respect to such Notes as provided in this
Section 8.02 on and after the date the conditions set forth in Section 8.04
hereof are satisfied (hereinafter called "Defeasance"). For this purpose, such
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by such Notes and to have satisfied all its
other obligations under such Notes and this Indenture insofar as such Notes are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder:
(a) the rights of Holders of such Notes to receive, solely from the
trust fund described in Section 8.04 hereof and as more fully set forth in such
Section 8.04, payments in respect of the principal of and any premium and
interest on such Notes when such payments are due,
(b) the Company's obligations with respect to such Notes under Sections
2.09, 2.10, 2.12, 4.02 and 4.03 hereof,
(c) the rights, powers, trusts, duties and immunities of the Trustee
under this Indenture,
(d) Article III hereof, and
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(e) this Article VIII.
Subject to compliance with this Article VIII, the Company may exercise
its option to have this Section 8.02 applied to the outstanding Notes (in whole
and not in part) notwithstanding the prior exercise of its option to have
Section 8.03 hereof applied to such Notes.
SECTION 8.03. COVENANT DEFEASANCE. Upon the Company's exercise of its
option to have this Section 8.03 applied to the outstanding Notes (in whole and
not in part), (i) the Company shall be released from its obligations under
Section 5.01(c) and (d), Sections 4.05 through 4.18, inclusive, and any covenant
added to this Indenture subsequent to the Issue Date pursuant to Section 9.01
hereof, (ii) the occurrence of any event specified in Section 6.01(c) or Section
6.01(d) hereof, with respect to any of Section 5.01(c) and (d), Sections 4.05
through 4.18, inclusive, and any covenant added to this Indenture subsequent to
the Issue Date pursuant to Section 9.01 hereof, shall be deemed not to be or
result in an Event of Default, in each case with respect to such Notes as
provided in this Section 8.03 on and after the date the conditions set forth in
Section 8.04 hereof are satisfied (hereinafter called "Covenant Defeasance").
For this purpose, such Covenant Defeasance means that, with respect to such
Notes, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such specified
Section (to the extent so specified in the case of Sections 6.01(c) and 6.01(d)
hereof), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document; but the remainder of this
Indenture and such Notes shall be unaffected thereby.
SECTION 8.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The
following shall be the conditions to the application of Section 8.02 or Section
8.03 hereof to the outstanding Notes:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to the benefits of the Holders of such Notes, (i) money in an amount, or (ii)
U.S. Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(iii) a combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or any such other qualifying trustee)
to pay and discharge, the principal of and any installment of interest on such
Notes on the respective Stated Maturities thereof, in accordance with the terms
of this Indenture and such Notes.
(b) In the event of an election to have Section 8.02 hereof apply to
the outstanding Notes, the Company shall have delivered to the Trustee an
Opinion of Counsel reasonably acceptable to the Trustee stating that (i) the
Company has received from, or there has been
80
published by, 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 (i) or (ii) to the effect that, and based thereon such
opinion shall confirm that, the Holders of such Notes will not recognize gain or
loss for Federal income tax purposes as a result of the deposit, Defeasance and
discharge to be effected with respect to such Notes and will be subject to
Federal income tax on the same amount, in the same manner and at the same times
as would be the case if such deposit, Defeasance and discharge were not to
occur.
(c) In the event of an election to have Section 8.03 hereof apply to
the outstanding Notes, the Company shall have delivered to the Trustee an
Opinion of Counsel reasonably acceptable to the Trustee to the effect that the
Holders of such Notes will not recognize gain or loss for Federal income tax
purposes as a result of the deposit and Covenant Defeasance to be effected with
respect to such Notes and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if such
deposit and Covenant Defeasance were not to occur.
(d) No Default or Event of Default with respect to the outstanding
Notes shall have occurred and be continuing at the time of such deposit after
giving effect thereto or at any time on or prior to the 91st calendar day after
the date of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 91st calendar day).
(e) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture Act
(assuming for the purpose of this clause (e) that all Notes are in default
within the meaning of such Act).
(f) Such Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(g) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder.
(h) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 8.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; MISCELLANEOUS PROVISIONS. All money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee pursuant
to Section 8.04 hereof in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any such
Paying Agent as the
81
Trustee may determine, to the Holders of such Notes, of all sums due and to
become due thereon in respect of principal and any premium and interest, but
money so held in trust need not be segregated from other funds except to the
extent required by law. The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company Order
any money or U.S. Government Obligations held by it as provided in Section 8.04
hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof that would then be required to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be,
with respect to the outstanding Notes.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal, premium, if any, or
interest that remains unclaimed for two years; PROVIDED that the Trustee or such
Paying Agent before being required to make any payment may cause to be published
at the expense of the Company once in a newspaper of general circulation in the
City of New York or mail to each Holder entitled to such money at such Holder's
address (as set forth in the Note Register) notice that such money remains
unclaimed and that after a date specified therein (which shall be at least 30
days from the date of such publication or mailing) any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Holders entitled to such money must look to the Company for payment as
general creditors unless an applicable law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is unable
to apply any money in accordance with this Article VIII with respect to any
Notes by reason of any order or judgement of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application then the
obligations under this Indenture and such Notes from which the Company has been
discharged or released pursuant to Sections 8.02 or 8.03 hereof shall be revived
and reinstated as though no deposit had occurred pursuant to this Article VIII
with respect to such Notes, until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust pursuant to Section 8.05 hereof with
respect to such Notes in accordance with this Article VIII; provided that if the
Company makes any payment of principal of or any premium or interest on any such
Note following such reinstatement of its obligations, the Company shall be
subrogated to the rights (if any) of the Holders of such Notes to receive such
payment from the money so held in trust.
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ARTICLE IX.
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee
may, at any time, and from time to time, without notice to or consent of any
Holder of Notes, enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by such successor of the covenants of the
Company herein and contained in the Notes; or
(b) to add to the covenants of the Company, for the benefit of
the Holders of all of the Notes, or to surrender any right or power
herein conferred upon the Company; or
(c) to add any additional Events of Default; or
(d) to provide for uncertificated Notes in addition to or in
place of certificated Notes; or
(e) to evidence and provide for the acceptance of appointment
hereunder of a successor Trustee; or
(f) to secure the Notes; or
(g) to cure any ambiguity herein, or to correct or supplement
any provision hereof which may be inconsistent with any other provision
hereof or to add any other provisions with respect to matters or
questions arising under this Indenture; PROVIDED that such actions
shall not adversely affect the interests of the Holders of Notes in any
material respect; or
(h) to comply with the requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the
Trust Indenture Act.
SECTION 9.02. WITH CONSENT OF HOLDERS. With the consent of the Holders
of not less than a majority in principal amount of the outstanding Notes, by Act
of said Holders delivered to the Company and the Trustee, the Company and the
Trustee may enter into one or more indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders; PROVIDED that no such supplemental indenture shall, without the
consent of the Holder of each outstanding Note,
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(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or alter the redemption
provisions thereof, or reduce the principal amount thereof (or any
premium, if any), or the interest thereon, that would be due and
payable upon Maturity thereof, or change the place of payment where, or
the coin or currency in which, any Note or any premium or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Maturity thereof; or
(b) reduce the percentage in principal amount of the
outstanding Notes, the consent of whose Holders is required for any
such supplemental indenture; or
(c) modify any of the provisions of Section 6.04 hereof,
except to increase any percentage set forth therein or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each outstanding Note affected
thereby; or
(d) subordinate in right of payment, or otherwise subordinate,
the Notes to any other Indebtedness; or
(e) modify any of the provisions of this Section 9.02, except
to increase any percentage set forth herein or to provide that certain
other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each outstanding Note affected thereby.
It shall not be necessary for any Act of Holders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Notes theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.04. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment or
supplement to this Indenture or the Notes shall comply with the Trust Indenture
Act as then in effect.
SECTION 9.05. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A consent
to an amendment, supplement or a waiver by a Holder of a Note shall bind the
Holder and every subsequent Holder of such Note or portion of such Note that
evidences the same debt as the consenting Holder's Note, even if notation of the
consent or waiver is not made on such Note; PROVIDED that any such Holder or
subsequent Holder may revoke the consent or waiver as to such
84
Holder's Note or portion of such Note if the Trustee receives the notice of
revocation at least one day prior to the date the amendment, supplement or
waiver becomes effective. After an amendment, supplement or waiver becomes
effective pursuant to this Article IX, it shall bind every Holder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders 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 Holders 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
calendar days after such record date.
SECTION 9.06. NOTATION ON OR EXCHANGE OF NOTES. If a supplemental
indenture changes the terms of a Note, the Trustee may require the Holder
thereof to deliver such Note to the Trustee. The Trustee may place an
appropriate notation on such Note regarding the changed terms and return it to
the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for such Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Note shall not affect the validity of such amendment
or supplement.
SECTION 9.07. TRUSTEE TO EXECUTE SUPPLEMENTAL INDENTURES. The Trustee
shall execute any supplemental indenture authorized pursuant to this Article IX
if such supplemental indenture does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but shall
not be required to, execute such supplemental indenture. In executing any
supplemental indenture, the Trustee shall be (subject to Section 7.01 hereof)
fully protected in relying upon an Officers' Certificate and an Opinion of
Counsel, which shall not be at the expense of the Trustee, stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS. If and to the extent that
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of, Sections 310 to 318, inclusive, of the Trust
Indenture Act, such imposed duties or incorporated provision shall control.
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SECTION 10.02. NOTICES. Any notice or communication shall be in writing
and delivered in person or mailed by first class mail, postage prepaid,
addressed as follows: if to the Company: McLeodUSA Incorporated, 6400 C Street,
S.W., Cedar Rapids, Iowa 52406, Attention: Clark E. McLeod; if to the Trustee:
United States Trust Company of New York, 114 West 47th Street, New York, New
York 10036, Attention: Corporate Trust Administration.
The Company or the Trustee, by notice to the other, may designate
additional or different addresses for subsequent notices or communications. Any
notice or communication mailed to a Holder shall be sent to the Holder by first
class mail, postage prepaid, at the Holder's address as it appears in the Note
Register and shall be duly given if so sent within the time prescribed. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders. If a notice or
communication is mailed to the Company, the Trustee or a Holder in the manner
provided above, it is duly given, whether or not the addressee receives it. In
case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail to Holders, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 10.03. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee: (a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and (b) an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
SECTION 10.04. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture (other than pursuant to Section 4.19 hereof)
shall include: (a) a statement that the individual making such certificate or
opinion has read such covenant or condition; (b) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based; (c) a statement
that, in the opinion of such individual, such person has made such examination
or investigation as is necessary to enable such person to express an informed
opinion as to whether or not such covenant or condition has been complied with;
and (d) a statement as to whether or not, in the opinion of such individual,
such covenant or condition has been complied with; provided that, with respect
to matters of fact, an Opinion of Counsel may rely on an Officers' Certificate
or certificates of public officials.
SECTION 10.05. RULES BY TRUSTEE, PAYING AGENT AND NOTE REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Holders, and any
Note Registrar and Paying Agent may make reasonable rules for their functions;
PROVIDED that no such rule shall conflict with terms of this Indenture or the
Trust Indenture Act.
SECTION 10.06. PAYMENTS ON BUSINESS DAYS. If a payment hereunder is
scheduled to be made on a date that is not a Business Day, payment shall be made
on the next succeeding day
86
that is a Business Day, and no interest shall accrue with respect to that
payment during the intervening period. If a regular record date is a date that
is not a Business Day, such record date shall not be affected.
SECTION 10.07. GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
SECTION 10.08. NO RECOURSE AGAINST OTHERS. No controlling Person,
director, officer, employee, incorporator or stockholder of the Company, as
such, shall have any liability for any obligations of the Company under the
Notes or this Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation, solely by reason of its past, present or
future status as a controlling Person, director, officer, employee, incorporator
or stockholder of the Company. By accepting a Note, each Holder waives and
releases all such liability (but only such liability) as part of the
consideration for issuance of such Note to such Holder.
SECTION 10.09. SUCCESSORS. All agreements of the Company in this
Indenture and the Notes shall bind its successors and assigns whether so
expressed or not. All agreements of the Trustee in this Indenture shall bind its
successors and assigns whether so expressed or not.
SECTION 10.10. COUNTERPARTS. This Indenture may be executed in any
number of counterparts and by the parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
SECTION 10.11. TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 10.12. SEVERABILITY. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 10.13. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
MCLEODUSA INCORPORATED
By_________________________________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By_________________________________________________
Name:
Title:
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