14% SENIOR DISCOUNT NOTES DUE 2010
INDENTURE
Dated as of September 26, 2000
By and Among
HORIZON PCS, INC.
As Issuer,
HORIZON PERSONAL COMMUNICATIONS, INC.
and
BRIGHT PERSONAL COMMUNICATIONS SERVICES, LLC
As Guarantors
And
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
As Trustee
CROSS-REFERENCE TABLE*
TRUST INDENTURE ACT
SECTION INDENTURE
- ------- ---------
310 (a)(1)......................................................7.10
(a)(2) .....................................................7.10
(a)(3)......................................................N.A.
(a)(4)......................................................N.A.
(a)(5)......................................................7.10
(b).........................................................7.10
(c).........................................................N.A.
311 (a).........................................................7.11
(b).........................................................7.11
(c).........................................................N.A.
312 (a).........................................................2.05
(b)........................................................10.03
(c)........................................................10.03
313 (a).........................................................7.06
(b)(2)......................................................7.06;
............................................................7.07
(c).........................................................7.06;
...........................................................10.02
314 (a).........................................................4.03;
...........................................................10.02
(c)(1).....................................................10.04
(c)(2).....................................................10.04
(c)(3)......................................................N.A.
(e)........................................................10.05
(f).........................................................NA
315(a)...........................................................7.01
(b).........................................................7.05,
...........................................................10.02
(c).........................................................7.01
(d).........................................................7.01
(e).........................................................6.11
316(a)(last sentence)............................................2.09
(a)(1)(A)...................................................6.05
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(a)(1)(B)...................................................6.04
(a)(2)......................................................N.A.
(b).........................................................6.07
(c).........................................................2.12
317 (a)(1)......................................................6.08
(a)(2)......................................................6.09
(b).........................................................2.04
318 (a)........................................................10.01
(b).........................................................N.A.
(c)........................................................10.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
ii
TABLE OF CONTENTS
-----------------
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.................................................1
Section 1.02 Other Definitions..........................................30
Section 1.03 Incorporation by Reference of Trust Indenture Act..........30
Section 1.04 Rules of Construction......................................31
ARTICLE II THE NOTES
Section 2.01 Form and Dating ...........................................32
Section 2.02 Execution and Authentication ..............................33
Section 2.03 Registrar and Paying Agent.................................34
Section 2.04 Paying Agent to Hold Money in Trust........................34
Section 2.05 Holder Lists ..............................................35
Section 2.06 Transfer and Exchange .....................................35
Section 2.07 Replacement Notes..........................................54
Section 2.08 Outstanding Notes..........................................55
Section 2.09 Treasury Notes.............................................55
Section 2.10 Temporary Notes ...........................................56
Section 2.11 Cancellation ..............................................56
Section 2.12 Defaulted Interest ........................................56
Section 2.13 CUSIP Numbers .............................................57
Section 2.14 Issuance of Additional Notes ..............................57
ARTICLE III REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee ........................................57
Section 3.02 Selection of Notes to Be Redeemed .........................57
Section 3.03 Notice of Redemption ......................................58
Section 3.04 Effect of Notice of Redemption ............................59
Section 3.05 Deposit of Redemption Price ...............................59
Section 3.06 Notes Redeemed in Part ....................................60
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Section 3.07 Optional Redemption .......................................60
Section 3.08 Mandatory Redemption ......................................61
Section 3.09 Offer to Purchase .........................................61
ARTICLE IV COVENANTS
Section 4.01 Payment of Notes ..........................................63
Section 4.02 Maintenance of Office or Agency ...........................64
Section 4.03 Reports ..................................................65
Section 4.04 Compliance Certificate ....................................65
Section 4.05 Taxes .....................................................66
Section 4.06 Stay, Extension and Usury Laws ...........................66
Section 4.07 Limitation on Restricted Payments ........................67
Section 4.08 Dividend and Other Payment Restrictions Affecting
Subsidiaries ..............................................71
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.73
Section 4.10 Asset Sales ..............................................77
Section 4.11 Transactions with Affiliates ..............................79
Section 4.12 Liens ....................................................81
Section 4.13 Corporate Existence .......................................82
Section 4.14 Offer to Repurchase Upon Change of Control ................82
Section 4.15 Payments for Consent .....................................84
Section 4.16 Sale and Leaseback Transactions ...........................84
Section 4.17 Limitation on Layering Indebtedness ......................85
Section 4.18 Limitation On Issuances and Sales of Equity Interests in
Wholly-Owned Restricted Subsidiaries ......................85
Section 4.19 Business Activities ......................................86
Section 4.20 Designation of Restricted and Unrestricted Subsidiaries ...86
ARTICLE V SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets ..................86
Section 5.02 Successor Corporation Substituted .........................88
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ARTICLE VI DEFAULTS AND REMEDIES
Section 6.01 Events of Default ........................................89
Section 6.02 Acceleration ..............................................91
Section 6.03 Other Remedies ............................................92
Section 6.04 Waiver of Past Defaults ...................................92
Section 6.05 Control by Majority .......................................93
Section 6.06 Limitation on Suits ......................................93
Section 6.07 Rights of Holders of Notes to Receive Payment .............94
Section 6.08 Collection Suit by Trustee ................................94
Section 6.09 Trustee May File Proofs of Claim ......................... 94
Section 6.10 Priorities ................................................95
Section 6.11 Undertaking for Costs .....................................95
ARTICLE VII TRUSTEE
Section 7.01 Duties of Trustee ........................................96
Section 7.02 Rights of Trustee .........................................97
Section 7.03 Individual Rights of Trustee ..............................98
Section 7.04 Trustee's Disclaimer ......................................98
Section 7.05 Notice of Defaults ........................................99
Section 7.06 Reports by Trustee to Holders of the Notes ................99
Section 7.07 Compensation and Indemnity ................................99
Section 7.08 Replacement of Trustee ...................................100
Section 7.09 Successor Trustee by Merger, etc..........................102
Section 7.10 Eligibility; Disqualification ...........................102
Section 7.11 Preferential Collection of Claims Against Company ........102
ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance..102
Section 8.02 Legal Defeasance and Discharge ...........................103
Section 8.03 Covenant Defeasance ......................................103
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Section 8.04 Conditions to Legal or Covenant Defeasance ...............104
Section 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions ....................106
Section 8.06 Repayment to Company .....................................106
Section 8.07 Reinstatement ............................................107
ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes ......................107
Section 9.02 With Consent of Holders of Notes .........................108
Section 9.03 Compliance with Trust Indenture Act ......................110
Section 9.04 Revocation and Effect of Consents ........................110
Section 9.05 Notation on or Exchange of Notes .........................111
Section 9.06 Trustee to Sign Amendments, etc. .........................111
ARTICLE X MISCELLANEOUS
Section 10.01 Trust Indenture Act Controls .............................111
Section 10.02 Notices .................................................111
Section 10.03 Communication by Holders of Notes with Other
Holders of Notes .........................................113
Section 10.04 Certificate and Opinion as to Conditions Precedent .......113
Section 10.05 Statements Required in Certificate or Opinion ............114
Section 10.06 Rules by Trustee and Agents ..............................114
Section 10.07 No Personal Liability of Directors, Officers, Employees
and Stockholders .........................................114
Section 10.08 Governing Law ............................................115
Section 10.09 No Adverse Interpretation of Other Agreements ............115
Section 10.10 Successors ...............................................115
Section 10.11 Severability .............................................115
Section 10.12 Counterpart Originals ....................................115
Section 10.13 Table of Contents, Headings, etc. ........................115
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ARTICLE XI SUBORDINATION OF NOTE GUARANTEES
Section 11.01 Agreement To Subordinate .................................116
Section 11.02 Liquidation; Dissolution; Bankruptcy .....................116
Section 11.03 Default On Designated Senior Debt ........................117
Section 11.04 Payment Permitted if No Default ..........................118
Section 11.05 Acceleration of Notes ....................................118
Section 11.06 When Distribution Must be Paid Over ......................118
Section 11.07 Notice By The Company ....................................119
Section 11.08 Subrogation ..............................................119
Section 11.09 Relative Rights ..........................................120
Section 11.10 Subordination May Not Be Impaired By The Guarantors ......120
Section 11.11 Distribution Or Notice To Representative .................121
Section 11.12 Rights Of Trustee And Paying Agent .......................121
Section 11.13 Article XI Not To Prevent Events of Default Under A
Note Guarantee or Limit Right to Demand Payment ..........122
Section 11.14 Authorization To Effect Subordination ....................122
Section 11.15 Article Applicable to Paying Agents ......................122
Section 11.16 Amendments ...............................................122
Section 11.17 Payment in Full ..........................................122
ARTICLE XII GUARANTEES
Section 12.01 Guarantees ...............................................123
Section 12.02 Additional Guarantees ....................................125
Section 12.03 Limitation on Guarantor Liability .......................125
Section 12.04 Execution and Delivery of Note Guarantee .................126
Section 12.05 Guarantors May Consolidate, etc., on Certain Terms .......126
Section 12.06 Releases of Note Guarantees ..............................128
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EXHIBITS
- --------
Exhibit A - FORM OF NOTE
Exhibit B - FORM OF CERTIFICATE OF TRANSFER
Exhibit C - FORM OF CERTIFICATE OF EXCHANGE
Exhibit D - FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEE
Exhibit E - FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY GUARANTORS
Exhibit F - FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
viii
INDENTURE dated as of September 26, 2000 between Horizon PCS, Inc., a
Delaware corporation (the "Company"), as issuer, Horizon Personal Communica
tions, Inc. an Ohio corporation, and Bright Personal Communications Services,
LLC, an Ohio limited liability company (each a "Guarantor"), as guarantors, and
Wells Fargo Bank Minnesota, National Association, a national association, as
trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the 14% Senior Discount
Notes due 2010 (the "Initial Notes") and the 14% Senior Discount Notes due 2010
to be used in exchange for such Initial Notes in the Exchange Offer (the
"Exchange Notes" and, together with the Initial Notes, the "Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a global note in substantially the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that shall be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Accounts Receivables Subsidiary" means a Subsidiary of the Company to
which the Company or any of its Restricted Subsidiaries sells any of their
accounts receivable pursuant to a Receivables Facility.
"Accreted Value" of any outstanding Note as of or to any date of
determination means an amount equal to the sum of (1) the issue price of such
Note as determined in accordance with Section 1273 of the Code, plus (2) the
aggregate of the portions of the original issue discount, i.e., the excess of
the amounts considered as part of the "stated redemption price at maturity" of
such Note within the meaning of Section 1273(a)(2) of the Code or any successor
provisions, whether denominated as principal or interest, over the issue price
of such Note, that shall theretofore have accrued pursuant to Section 1272 of
the Code, without regard to Section 1272(a)(7) of the Code, from the date of
issue of such Note (a) for each six-month or shorter period ending April 1 or
October 1 prior to the date of determination and (b) for the shorter period, if
any, from the end of the immediately preceding six-month or shorter period, as
the case may be, to the date of determination, plus (3) accrued and unpaid
interest to the date such Accreted Value is paid (without duplication of any
amount set forth in (2) above), minus all amounts theretofore paid in respect of
such Note, which amounts are considered as part of the "stated redemption price
at maturity" of such Note within the meaning of Section 1273(a)(2) of the Code
or any successor provisions whether such amounts paid were denominated principal
or interest.
"Acquired Debt" means, with respect to any specified Person, (1)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebted ness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person; and (2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
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 securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Annualized Operating Cash Flow" means Operating Cash Flow, for the latest
two full fiscal quarters for which consolidated financial statements of the
Company are publicly available multiplied by two.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary that apply to such transfer or exchange.
"Apollo Management" means Apollo Management IV, L.P. and affiliated funds.
"Asset Sale" means (a) the sale, lease, conveyance or other disposition of
any assets or rights, other than sales of inventory and sales of obsolete
2
equipment in the ordinary course of business consistent with past practices;
provided that the sale, conveyance or other disposition of all or substantially
all of the assets of the Company and its Restricted Subsidiaries taken as a
whole shall be governed by Section 4.14 and/or Section 5.01 hereof and not by
Section 4.10 hereof, (b) the issuance of Equity Interests by any of the
Company's Restricted Subsidiaries or the sale of Equity Interests in any of its
Restricted Subsidiaries, and (c) sales of accounts receivable, or participations
therein, in connection with any Receivables Facility. Notwithstanding the
preceding, none of the following shall be deemed an Asset Sale: (A) any single
transaction or series of related transactions that: (i) involves assets having a
Fair Market Value of less than $1.0 million, or (ii) results in net proceeds to
the Company and its Restricted Subsidiaries of less than $1.0 million, (B) a
sale, lease, conveyance or other disposition of assets between or among the
Company and/or its Wholly Owned Restricted Subsidiaries that are Guarantors, (C)
an issuance of Equity Interests by a Wholly Owned Restricted Subsidiary to the
Company or to another Wholly Owned Restricted Subsidiary, (D) a Restricted
Payment that is permitted under Section 4.07, (E) any transfer by the Company or
a Subsidiary of property or equipment with a Fair Market Value of less than $5.0
million to a Person who is not an Affiliate of the Company in exchange for
property or equipment that has a Fair Market Value at least equal to the Fair
Market Value of the property so transferred, provided that, in the event of a
transfer described in this clause (E), the Company shall deliver to the Trustee
an Officers' Certificate certifying that such exchange complies with this clause
(E), (F) the issuance of directors' qualifying shares of Preferred Capital Stock
of such Restricted Subsidiary (other than Preferred Capital Stock convertible or
exchangeable into common stock) that is otherwise permitted by this Indenture,
and (G) the transfer or sale of Equity Interests required by applicable laws or
regulations.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
saleand leaseback transaction including any period for which such lease has been
extended or may, at the option of the lessor, be extended. Such present value
shall be calculated using a discount rate equal to the rate of interest implicit
in such transaction, determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
3
ownership of any particular "person," as such term is used in Section 13(d)(3)
of the Exchange Act, such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire, whether such
right is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition.
"Board of Directors" means the board of directors of the Company, or any
authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors unless the context specifically requires that such resolution be
adopted by a majority of the disinterested directors, in which case by a
majority of such directors, and to be in full force and effect on the date of
such certification and delivered to the Trustee.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents, however designated, of
corporate stock; (3) in the case of a partnership or limited liability company,
partnership or membership interests, whether general or limited; and (4) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Cash Equivalents" means (1) United States dollars; (2) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof, provided that the full faith and credit
of the United States is pledged in support thereof, having maturities of less
than one year from the date of acquisition; (3) certificates of deposit and
Eurodollar time deposits with maturities of less than one year from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case, with any domestic commercial bank having
4
capital and surplus in excess of $500.0 million and a Thompson Bank Watch Rating
of "B" or better; (4) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the qualifications
specified in clause (3) above; (5) commercial paper having the highest rating
obtainable from Moody's Investors Service, Inc. or Standard & Poor's Ratings
Group and in each case maturing prior to one year after the date of acquisition;
and (6) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"Cedel" means Cedel Bank, S.A.
"Change of Control" means the occurrence of any of the following: (a) the
sale, transfer, conveyance or other disposition, other than by way of merger or
consolidation, in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" or "group" as such terms are used in Section 13(d)(3) of
the Exchange Act; (b) the adoption of a plan relating to the liquidation or
dissolution of the Company; (c) the consummation of any transaction, including,
without limitation, any merger or consolidation, the result of which is that any
"person" or "group", (as such terms are used in Section 13(d)(3) of the Exchange
Act), other than the Principals or any of their Affiliates, becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock
of the Company (measured by voting power rather than the number of shares);
provided, that so long as the surviving Person in such a transaction is a
Subsidiary of a parent Person, no Person shall be deemed under this clause (c)
of this "Change of Control" definition to be or become a Beneficial Owner of
more than 50% of the Voting Stock of such surviving Person unless such Person
(or any "group," as defined above, to which such Person is a member) shall be or
become a Beneficial Owner of more than 50% of the Voting Stock of such parent
Person; (d) the first day on which more than a majority of the members of the
Board of Directors are not Continuing Directors; or (e) the Company consolidates
with, or merges with or into, any Person, or any Person consolidates with, or
merges with or into, the Company, in any such event pursuant to a transaction in
which any of the outstanding Voting Stock of the Company is converted into or
exchanged for cash, securities or other property, other than any such
transaction where the Voting Stock of the Company outstanding immediately prior
to such transaction is converted into or exchanged for Voting Stock, other than
Disqualified Stock, of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person immediately after giving effect to such issuance.
Notwithstanding anything to the contrary contained in clauses (d) and (e) above,
5
a "Change of Control" shall not be deemed to occur as the result of a merger or
consolidation of the Company or a Subsidiary of the Company with or into a
Sprint PCS Affiliate (including a Wholly Owned Subsidiary or Sprint PCS
Affiliate Parent of a Sprint PCS Affiliate) if:
(x) after the announcement of the merger or consolidation and prior to
the consummation thereof:
(i) there shall not have occurred any downgrad ing nor shall any
notice have been given (that is not subsequently removed prior to the
consummation thereof) of any potential or intended downgrading of any
rating of the Notes to a rating that is lower than the rating that
existed or was indicated prior to the announcement of the merger or
consolidation, in any case by a Rating Organization, or their
successors that is not subsequently removed prior to such consumma
tion;
(ii) there shall not have occurred any suspension or withdrawal
of, nor shall any notice have been given of any potential or intended
suspension or withdrawal of, any review (or of any potential or
intended review) for a possible change that does not indicate the
direction of the possible change in, any rating of the Notes
(including, without limitation, the placing of any of the Notes on
credit watch with negative or developing implications or under review
with an uncertain direction) by any Rating Organization, in each case
that is not subse quently removed prior to the consummation of such
merger or consolida tion;
(iii) there shall not have occurred any change, nor shall any
notice have been given of any potential or intended change, in the
outlook for any rating of the Notes to a rating that is lower than the
rating that existed or was indicated prior to the announcement of the
merger or consolidation, in any case by any Rating Organization, that
is not subsequently removed prior to the consummation of such merger
or consolidation;
(iv) no Rating Organization shall have given notice that it has
assigned (or is considering assigning) a rating to the Notes that is
lower than the rating that existed or was indicated prior to the
6
announcement of the merger or consolidation that is not subsequently
removed prior to such consummation; and
(y) the Beneficial Owners of Voting Stock of the Company
immediately preceding such merger or consolidation shall continue to
be the Beneficial Owners of at least 25% of the outstanding Voting
Stock, other than Disqualified Stock, of the Company (or the surviving
or transferee Person referred to in clause (e) above or sole
stockholder of such surviving or transferee Person) immediately after
giving effect to the merger or consolidation.
"Code" means the United States Internal Revenue Code of 1986, as amended,
together with the rules and regulations promulgated thereunder.
"Company" means Horizon PCS, Inc., a Delaware corporation, and any and all
successors thereto.
"Consolidated Debt" means the aggregate amount of Indebtedness of the
Company and its Restricted Subsidiaries on a Consolidated basis outstanding at
the date of determination; provided, that in the event of a merger or
consolidation (unless as a result of such transaction, such other Person becomes
an Unrestricted Subsidiary) otherwise permitted under the terms of this
Indenture, Consolidated Debt shall include the aggregate amount of Indebtedness
outstanding at the time of such transaction of such other Person party to such
merger or consolidation.
"Consolidated Debt to Annualized Operating Cash Flow Ratio" means, as at
any date of determination, the ratio of (i) Consolidated Debt to (ii) the
Annualized Operating Cash Flow of the Company as of its most recently completed
fiscal quarter of the Company for which financial statements are publicly
available.
"Consolidated Interest Expense" of any Person means, for any period, the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of (1) the aggregate interest expense and fees and other financing
costs in respect of Indebtedness (including amortization of original issue
discount and non-cash interest payments and accruals), (2) the interest
component in respect of Capital Lease Obligations and any deferred payment
obligations of such Person and its Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP, (3) all commissions, discounts,
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs (including amortization of discounts)
associated with interest rate swap and similar agreements and with foreign
7
currency hedge, exchange and similar agreements and (4) the product of (a) all
dividend accruals or payments (or guarantees), whether or not in cash, on any
series of Preferred Capital Stock of such Person or any of its Restricted
Subsidiaries, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state and
local statutory tax rate of such Person, expressed as a decimal, in each case,
on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (1) all gains (but not losses) which are either
extraordinary (as determined in accordance with GAAP) or are nonrecurring
(including any gain from the sale or other disposition of assets outside the
ordinary course of business or from the issuance or sale of any capital stock)
shall be excluded; (2) the Net Income, if positive, of any Person that is not a
Wholly Owned Restricted Subsidiary or that is accounted for by the equity method
of accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Wholly-Owned Restricted
Subsidiary thereof; (3) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval that has
not been obtained or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders; (4) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded; (5) the Net Income, if positive, of any Unrestricted Subsidiary
shall be excluded, whether or not distributed to the specified Person or one of
its Subsidiaries and (6) the cumulative effect of change in accounting
principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the aggregate consolidated stockholders' equity of such Person (plus amounts of
equity attributable to preferred stock) and its consolidated Restricted
Subsidiaries, as would be shown on the consolidated balance sheet of such Person
prepared in accordance with GAAP, adjusted to exclude (to the extent included in
calculating such equity), (a) the amount of any such stockholders' equity
attributable to Disqualified Stock or treasury stock of such Person and its
Consolidated Restricted Subsidiaries, (b) all upward revaluations and other
8
write-ups in the book value of any asset of such Person or a Consolidated
Restricted Subsidiary of such Person subsequent to the Issue Date, and (c) all
investments in Persons that are not Consolidated Restricted Subsidiar ies.
"Consolidation" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of the Company, if and to the extent that the
accounts of each such Restricted Subsidiary would normally be consolidated with
those of the Company in accordance with GAAP; provided, however, that
"Consolidation" shall not include consolidation of the accounts of any
Unrestricted Subsidiary, but the interest of the Company or any Restricted
Subsidiary in any Unrestricted Subsidiary shall be accounted for as an
investment. The term "Consolidated" has a correlative meaning.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors who (a) was a member of the Board of Directors on the
Issue Date; (b) was appointed or nominated to the Board of Directors by the
holders of the Convertible Preferred Stock in accordance with the agreements
governing the sale of $126.5 million of Convertible Preferred Stock on the Issue
Date; or (b) was nominated for election to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of the Board
of Directors at the time of such nomination or election.
"Convertible Preferred Stock" means the Company's Series A Preferred Stock
and Series A-1 Preferred Stock.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 10.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facilities" means, with respect to the Company or any Guarantor,
one or more debt facilities or commercial paper facilities, in each case with
banks, vendors and other institutional lenders providing for revolving credit
loans, term loans, receivables financing, including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables, or letters of credit, and shall include
the Senior Financing, in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time.
9
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, in
substantially the form of Exhibit A hereto except that such Note shall not bear
the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Senior Debt" means (a) Indebtedness under the Senior Financing
and (b) any other Senior Debt in excess of $25.0 million of the Guarantors that
has been designated by the Company in writing to the Trustee as "Designated
Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms, or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof, or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstand ing the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with Section 4.07. In
addition, for purposes hereof, (i) Equity Interests in the form of $126.5
million of Convertible Preferred Stock issued on the Issue Date, and (ii) Equity
Interests issued as payment of dividends on the Convertible Preferred Stock,
10
which dividends shall be paid in additional shares of Convertible Preferred
Stock, shall not be considered to be Disqualified Stock.
"Domestic Subsidiary" means any Subsidiary other than (a) a Foreign
Subsidiary or (b) a Subsidiary of a Foreign Subsidiary.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock, but excludes any debt security that is
convertible into, or exchangeable for, Capital Stock.
"Equity Offering" means any public offering or private sale of Capital
Stock of the Company in which the net proceeds to the Company are at least $35.0
million.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear systems.
"Event of Termination" means any of the events described in (1) Section
11.3 of the Management Agreement; (2) Section 13.2 of the Trademark Agreement or
(3) Section 13.2 of the Spectrum Trademark Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes to be issued in the Exchange Offer
pursuant to Section 2.06(e) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Fair Market Value" means, with respect to any Property, the price that
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value shall be
determined, except as otherwise provided, (a) if such Property has a Fair Market
Value equal to or less than $5.0 million, by any Officer of the Company, or (b)
if such Property has a Fair Market Value in excess of $5.0 million, by a
majority of the Board of Directors and evidenced by a Board Resolution, dated
within 30 days of the relevant transaction, delivered to the Trustee.
11
"Foreign Subsidiary" means any Subsidiary which is not organized under the
laws of the United States of America or any State thereof or the District of
Columbia.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes in the form of Exhibit A hereto
issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(ii) or 2.06(f)
hereof.
"Government Securities" means (1) any security which is (a) a direct
obligation 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 (b) an obligation
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 of the United
States of America, which, in either case, is not callable or redeemable at the
option of the issuer thereof, and (2) any depository receipt issued by a bank,
as defined in the Securities Act, as custodian with respect to any Government
Securities and held by such bank for the account of the holder of such
depository receipt, or with respect to any specific payment of principal of or
interest on any Government Securities 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 Government Securities or
the specific payment of principal or interest evidenced by such depository
receipt.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
12
indirect, in any manner (including by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof), of all or any
part of any Indebtedness.
"Guarantee Obligations" means the obligation, executed pursuant to the
provisions of Article XII of this Indenture, of each Guarantor pursuant to its
Guarantee of (a) the full and punctual payment of principal, interest and
Liquidated Damages, if any, on the Notes when due, whether at maturity, by
acceleration, by redemption or otherwise, and all other monetary obligations of
the Company under the Notes, and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under the
Notes.
"Guarantors" means Horizon Personal Communications, Inc. and Bright
Personal Communications Services, LLC, initially and each Restricted Subsidiary
formed or organized under the laws of any state of the United States or District
of Columbia that executes a Note Guarantee pursuant to Article XII of this
Indenture.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (1) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements; and (2) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Holder" means a Person in whose name a Note is registered.
"Horizon Telcom" means Horizon Telcom, Inc., an Ohio corporation.
"IAI Global Note" means a global note in substantially the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that shall be initially issued in a denomination equal to $0, but
shall thereafter be revised to represent the outstanding principal amount of the
Notes transferred to Institutional Accredited Investors.
"incur" means create, incur, issue, assume, Guarantee or otherwise become
liable, directly or indirectly, contingently or otherwise, for any Indebtedness.
The term "incurrence" when used as a noun shall have a correlative meaning. The
accretion of principal of a non-interest bearing or other discount security
shall not be deemed the incurrence of Indebtedness.
13
"Indebtedness" of any Person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of such Person, to the
extent such liabilities and obligation would appear as a liability upon the
consolidated balance sheet of such Person in accordance with GAAP, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, or (iii) representing the
balance deferred and unpaid of the purchase price of any property or services,
except (other than accounts payable or other obligations to trade creditors
which have remained unpaid for greater than 60 days past their original due
date) those incurred in the ordinary course of its business that would
constitute ordinarily a trade payable to trade creditors; (b) all liabilities
and obligations, contingent or otherwise, of such Person (i) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (ii)
relating to Capital Lease Obligations, or (iii) evidenced by a letter of credit
or a reimbursement obligation of such Person with respect to any letter of
credit; (c) all net obligations of such Person under Hedging Obligations; (d)
all liabilities and obligations of others of the kind described in the preceding
clause (a), (b) or (c) that such Person has guaranteed or provided credit
support or that is otherwise its legal liability or which are secured by any
assets or property of such Person and all obligations to purchase, redeem or
acquire any third party Equity Interests; (e) any and all deferrals, renewals,
extensions, refinancing and refundings (whether direct or indirect) of, or
amendments, modifications or supplements to, any liability of the kind described
in any of the preceding clauses (a), (b), (c) or (d), or this clause (e),
whether or not between or among the same parties; and (f) all Disqualified Stock
of such Person (measured at the greater of its voluntary or involuntary maximum
fixed repurchase price plus accrued and unpaid dividends); provided, that any
indebtedness which has been defeased in accordance with GAAP or defeased
pursuant to the deposit of cash or Governmental Securities (in an amount
sufficient to satisfy all such indebtedness obligations at maturity or
redemption, as applicable, and all payments of interest and premium, if any) in
a trust or account created or pledged for the sole benefit of the holders of
such indebtedness, and subject to no other Liens, and the other applicable terms
of the instrument governing such indebtedness, shall not constitute "Indebted
ness." The amount of any Indebtedness outstanding as of any date shall be (1)
the accreted value thereof, in the case of any Indebtedness issued with original
issue discount but the accretion of original issue discount in accordance with
the original terms of Indebtedness issued with an original issue discount will
not be deemed to be an incurrence; and (2) the principal amount thereof,
together with any interest thereon that is more than 30 days past due, in the
case of any other Indebtedness. For purposes of this definition, Indebtedness
shall not include any amounts representing contributions from investors in the
investor group led by Apollo Management in exchange for Convertible Preferred
Stock issued on the Issue Date.
14
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with Article IX hereof.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means $295.0 million in aggregate principal amount of Notes
issued under this Indenture on the date hereof.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette Securities
Corporation and First Union Securities, Inc.
"Institutional Accredited Investor" means an "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons, including Affiliates, in the forms of direct or
indirect loans, including guarantees of Indebtedness or other obligations,
advances or capital contributions, excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business,
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Restricted Subsidiary sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary such that,
after giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary, the Company shall be deemed to have made an Investment on
the date of any such sale or disposition equal to the Fair Market Value of the
Equity Interests of such Restricted Subsidiary not sold or disposed of in an
amount determined as provided in the penultimate paragraph of Section 4.07.
"Issue Date" means September 26, 2000.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a paymentdate is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue on such
payment for the intervening period.
15
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code, or equivalent statutes, of any jurisdiction.
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement and Section 8 of the Warrant
Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person and its Restricted Subsidiaries, determined in accordance with GAAP
and before any reduction in respect of preferred stock dividends, excluding,
however (1) any gain, but not loss, together with any related provision for
taxes on such gain, but not loss, realized in connection with (a) any Asset
Sale; or (b) the disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person
or any of its Restricted Subsidiaries; and (2) any extraordinary gain, but not
loss, together with any related provision for taxes on such extraordinary gain,
but not loss.
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of (i) the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in each
case after taking into account any available tax credits or deductions and any
tax sharing arrangements, and (ii) amounts required to be applied to the
repayment of Indebtedness, other than Senior Debt, Indebtedness secured by a
Lien on the asset or assets that were the subject of such Asset Sale and
16
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP against any
liabilities associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmen tal matters and liabilities under any
indemnification obligations associated with such Asset Sale.
"Non-Recourse Debt" means Indebtedness (1) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind,
including any undertaking, agreement or instrument that would constitute
Indebtedness, (b) is directly or indirectly liable as a guarantor or otherwise,
or (c) constitutes the lender; (2) no default with respect to which, including
any rights that the holders thereof may have to take enforcement action against
an Unrestricted Subsidiary, would permit upon notice, lapse of time or both any
holder of any other Indebtedness, other than the Notes, of the Company or any of
its Restricted Subsid iaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and (3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Guarantee" means a Guarantee on the terms set forth in this Indenture
by a Guarantor of the Company's obligations with respect to the Notes.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
"Obligations" means any principal, interest, penalties, fees, indemnifica
tions, reimbursements, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company pursuant to the
Offering Memorandum.
"Offering Memorandum" means the offering memorandum of the Company, dated
September 19, 2000, relating to the Initial Notes.
17
"Officer" means the Chief Executive Officer, the Chief Operations Officer,
the Chief Financial Officer or the Chief Technology Officer of the Company.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary, or an Assistant Secretary and delivered to the
Trustee.
"Operating Cash Flow" means, for any fiscal quarter, the Company's
Consolidated Net Income (Loss), plus (to the extent deducted from net revenues
in determining Consolidated Net Income (Loss) for such period), the sum of (i)
depreciation, amortization and other non-cash charges in respect thereof for
such fiscal quarter, and (ii) all amounts deducted in calculating Consolidated
Net Income (Loss) for such fiscal quarter in respect of Consolidated Interest
Expense, and all income taxes, whether or not deferred, applicable to such
income period, all as determined on a consolidated basis in accordance with
GAAP, less the amount of all cash payments made by the Company or any of its
Restricted Subsidiaries during such period to the extent such payments relate to
non-cash charges that were added back in determining Operating Cash Flow for
such period or any prior period; provided, that consolidated income tax expense
and depreciation and amortization of a Restricted Subsidiary that is less than a
Wholly Owned Subsidiary shall only be added to the extent of the equity interest
of the Company in such Restricted Subsidiary. For purposes of calculating
Operating Cash Flow for the fiscal quarter or quarters most recently completed
for which financial statements are publicly available prior to any date on which
an action is taken that requires a calculation of Operating Cash Flow to
Consolidated Interest Expense Ratio or Consolidated Debt to Annualized Operating
Cash Flow Ratio, (1) any Person that is a Restricted Subsidiary on such date (or
would become a Restricted Subsidiary in connection with the transaction that
requires the determination of such ratio) will be deemed to have been a
Restricted Subsidiary at all times during such fiscal quarter or quarters, (2)
any Person that is not a Restricted Subsidiary on such date (or would cease to
be a Restricted Subsidiary in connection with the transaction that requires the
determination of such ratio) will be deemed not to have been a Restricted
Subsidiary at any time during such fiscal quarter or quarters and (3) if the
Company or any Restricted Subsidiary shall have in any manner acquired
(including through commencement of activities constituting such operating
business) or disposed of (including through termination or discontinuance of
activities constituting such operating business) any operating business during
or subsequent to the most recently completed two fiscal quarters, such
calculation will be made on a pro forma basis (to the extent permitted by
Regulation S-X) on the assumption that such acquisition or disposition had been
18
completed on the first day of the first of such completed fiscal quarter.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Sections 10.04 and
10.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or Cedel, a
Person who has an account with the Depositary, Euroclear or Cedel, respectively,
and, with respect to the Depository Trust Company, shall include Euroclear and
Cedel.
"Permitted Business" means the business primarily involved in the
ownership, design, construction, development, acquisition, installation,
integration, management and/or provision of Telecommunications Assets or any
business or activity reasonably related or ancillary thereto, including, without
limitation, any business conducted by the Company or any Restricted Subsidiary
of the Company on the Issue Date.
"Permitted Indebtedness" is defined in Section 4.09(b).
"Permitted Investments" means (1) any Investment by the Company in a
Wholly-Owned Restricted Subsidiary of the Company that is a Guarantor; (2) any
Investment in Cash Equivalents; (3) any Investment by the Company or any
Restricted Subsidiary of the Company in a Person, if as a result of or in
connection with such Investment (a) such Person becomes a Wholly-Owned
Restricted Subsidiary of the Company that is a Guarantor; or (b) such Person is
merged, consolidated or amalgam ated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Wholly-Owned Restricted Subsidiary of the Company that is a Guarantor; (4) any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.10; (5)
any acquisition of assets solely in exchange for the issuance of Equity
Interests of the Company, other than Disqualified Stock; (6) Investments, the
payment of which consists only of Equity Interests, other than Disqualified
Stock; and (7) other Investments in any Person having an aggregate Fair Market
Value, measured on the date each such Investment was made and without giving
effect to subsequent changes in value, when taken together with all other
Investments made pursuant to this clause (7) since the Issue Date, not to exceed
$50.0 million.
19
"Permitted Junior Securities" means, with respect to any Guarantor, Equity
Interests in such Guarantor or its Subsidiaries or debt securities of such
Guarantor or its Subsidiaries that are subordinated to all Senior Debt of such
Guarantor (and any debt securities issued in exchange for such Senior Debt) to
substantially the same extent as, or to a greater extent than, the Note
Guarantees are subordinate to such Senior Debt.
"Permitted Liens" means (1) Liens on the assets of the Company and any
Guarantor securing Indebtedness and other Obligations under Credit Facilities
that were permitted by the terms of this Indenture to be incurred; (2) Liens in
favor of the Company or the Guarantors; (3) Liens on property of a Person
existing at the time such Person is merged with or into or consolidated with the
Company or any Restricted Subsidiary; provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
Company or the Restricted Subsidiary; (4) Liens on property existing at the time
of acquisition thereof by the Company or any Restricted Subsidiary of the
Company, provided that such Liens were in existence prior to the contemplation
of such acquisition; (5) Liens and deposits made to secure the performance of
statutory obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business; (6)
Liens to secure Purchase Money Indebtedness and Capital Lease Obligations,
permitted by Section 4.09(b)(iv) covering only the assets acquired with such
Purchase Money Indebtedness and Capital Lease Obligations; (7) Liens existing on
the Issue Date; (8) Liens on assets of Guarantors to secure Senior Debt of such
Guarantor that was permitted by the Indenture to be incurred; (9) Liens for
taxes, assessments or governmental charges or claims that are not yet delinquent
or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; and (10) Liens incurred in the ordinary course of business
of the Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed $5.0 million at any one time outstanding.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries,
other than intercompany Indebtedness; provided that (1) the principal amount, or
accreted value, if applicable, of such Permitted Refinancing Indebtedness does
20
not exceed the principal amount of, or accreted value, if applicable, plus the
amount of any premium required to be paid in connection with such refinancing
pursuant to the terms of the Indebtedness refinanced or the amount of any
premium reasonably determined by the Company as necessary to accomplish such
refinancing, plus accrued interest on, the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded, plus the amount of reasonable expenses
incurred in connection therewith; (2) such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (3) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (4) such
Indebtedness is incurred either by the Company or by its Restricted Subsidiary
who is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
"Permitted Tower Sale and Leaseback Transactions" means the sale and
leaseback transactions contemplated by the Tower Sale and Leaseback Agreement
between Horizon Personal Communications, Inc. and SBA and Tower Sale and
Leaseback Agreement between Bright Personal Communications Services, LLC and SBA
and other tower sale and leaseback transactions entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business and
consistent with past practice.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Preferred Capital Stock," as applied to the Capital 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.
"Principals" means Horizon Telcom, Inc., members of the McKell family and
Apollo Management.
21
"Private Placement Legend" means the legend set forth in Section 2.06(g)(i)
to be placed on all Notes issued under this Indenture except where otherwise
permitted by the provisions of this Indenture.
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including Capital Stock in, and other securities of, any other
Person. For purposes of any calculation required pursuant to this Indenture, the
value of any Property shall be its Fair Market Value.
"Purchase Money Indebtedness" of any Person means any Indebtedness of such
Person to any seller or other Person incurred solely to finance the acquisition
(including in the case of a Capital Lease Obligation, the lease), construction,
installation or improvement of any acquired real or personal property which is
incurred within 90 days following such acquisition, construction, installation
or improvement and is secured only by the assets so financed.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Receivables" means, at any time, net Receivables of the Company
and its Restricted Subsidiaries, as evidenced on the most recent quarterly
consolidated balance sheet of the Company as at a date at least 45 days prior to
such time, arising in the ordinary course of business of the Company or any of
its Restricted Subsidiaries. "Rating Organization" means Standard & Poor's
Ratings Group and Moody's Investors Service, Inc. and their successors.
"Receivables" means receivables, chattel paper, instruments, documents or
intangibles evidencing or relating to the right of payment of money and proceeds
and products thereof in each case generated in the ordinary course of business.
"Receivables Facility" means one or more receivables financing facilities,
as amended from time to time, pursuant to which the Company or any of its
Restricted Subsidiaries sells their accounts receivable to an Accounts
Receivable Subsidiary.
"Receivables Fees" means distributions or payments made directly or by
means of discounts with respect to any participation interests issued or sold in
connection with, and other fees paid to a Person that is not a Restricted
Subsidiary in connection with, any Receivables Facility. "Registration Rights
Agreement" means the Registration Rights Agreement, dated as of September 26,
2000, by and among the Company, the Guarantors and the Initial Purchasers, as
such agreement may be amended, modified or supplemented from time to time.
22
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Global Note in substantially the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that shall be initially issued in a denomination equal to$0, but
shall thereafter be revised to represent the outstanding principal amount of the
Notes transferred or sold in reliance on Rule 903 of Regulation S.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Department of the Trustee (or any successor
group of the Trustee) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Investment" means any Investment that is not a Permitted
Investment.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary. Unless the context otherwise
requires, a Restricted Subsidiary means a Subsidiary of the Company that is not
an Unrestricted Subsidiary. In addition, unless consented to by the Holders of a
majority in Accreted Value of Notes, Horizon Personal Communications, Inc. and
Bright Personal Communications Services, LLC shall at all times be Restricted
Subsidiaries.
23
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"Sale and Leaseback Transaction" of any Person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property or asset of such Person which has
been or is being sold or transferred by such Person more than 365 days after the
acquisition thereof or the completion of construction or commencement of
operation thereof to such lender or investor or to any Person to whom funds have
been or are to be advanced by such lender or investor on the security of such
property or asset. The stated maturity of such arrangement is the date of the
last payment of rent or any other amount due under such arrangement prior to the
first date on which such arrangement may be terminated by the lessee without
payment of a penalty.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means (1) all Indebtedness outstanding under Credit
Facilities and all Hedging Obligations with respect thereto; and (2) all
Obligations with respect to items listed in the preceding clause (1).
Notwithstanding anything to the contrary in the preceding, Senior Debt will not
include: (1) any liability for federal, state, local or other taxes owed or
owing by the Company; (2) any Indebtedness of the Company to any of its
Subsidiaries or other Affiliates; (3) any trade payables; or (4) any
Indebtedness that is incurred in violation of this Indenture.
"Senior Financing" means the Credit Agreement dated as of September 26,
2000 by and among Horizon Personal Communications, Inc. and Bright Personal
Communications, LLC, as borrowers, the Company and certain of its Subsidiaries,
as guarantors, First Union National Bank, as administrative agent, WestDeutsche
Landesbank Girozentrale, as syndication agent and arranger, Fortis Capital
Corp., as documentation agent, First Union Securities, Inc., as sole lead
24
arranger and sole book runner, and the lenders named therein, as such may be
amended, restated, modified, renewed, refunded, replaced, increased (as may be
permitted by this Indenture) or refinanced in whole or in part from time to
time.
"Separability Legend" has the meaning specified in Section 2.06(g).
"Separation Date" means the earliest of (i) October 1, 2001, (ii) the
commencement of the Exchange Offer, (iii) the effective date of a Shelf
Registration Statement, (iv) the commencement of a Change of Control Offer or
upon the delivery by the Company to the Trustee of a notice of redemption in
accordance with Section 3.01, (v) the occurrence of an Event of Default, and
(vi) such date as Donaldson, Lufkin & Jenrette Securities Corporation in its
sole discretion shall determine.
"Series A Preferred Stock" means the series of Preferred Capital Stock
designated as Series A Preferred Stock of the Company pursuant to its
Certificate of Incorporation filed with the Delaware Secretary of State.
"Series A-1 Preferred Stock" means the series of Preferred Capital Stock
designated as Series A-1 Preferred Stock of the Company pursuant to its
Certificate of Incorporation filed with the Delaware Secretary of State.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Sprint Agreements" means (1) the Management Agreement between SprintCom,
Inc. and Horizon Personal Communications, Inc. and the Management Agreement
between SprintCom, Inc. and Bright Personal Communications, LLC, dated as of
June 8, 1998 and October 13, 1999, respectively, and any exhibits, schedules or
addendum thereto, as such agreements may be amended, modified or supplemented
from time to time (collectively, the "Management Agreement"); (2) the Sprint PCS
Services Agreement between Sprint Spectrum L.P. and Horizon Personal Communica
tions, Inc. and the Sprint PCS Services Agreement between Sprint Spectrum L.P.
and Bright Personal Communications, LLC, dated as of June 8, 1998 and October
25
13, 1999, respectively, and any exhibits, schedules or addendum thereto, as such
agreements may be amended, modified or supplemented from time to time; (3) the
Sprint Trademark and Service Mark License Agreement between Sprint
Communications Company, L.P. and Horizon Personal Communications, Inc. and the
Sprint Trademark and Service Mark License Agreement between Sprint
Communications Company, L.P. and Bright Personal Communications, LLC, dated as
of June 8, 1998 and October 13, 1999, respectively, and any exhibits, schedules
or addendum thereto, as such agreements may be amended, modified or supplemented
from time to time (collectively, the "Trademark Agreement"); and (4) the Sprint
Trademark and Service mark License Agreement between Sprint Spectrum L.P. and
Horizon Personal Communications, Inc. and the Sprint Trademark and Service mark
License Agreement between Sprint Spectrum L.P. and Bright Personal
Communications, LLC, dated as of June 8, 1998 and October 13, 1999 respectively,
and any exhibits, schedules or addendum thereto, as such agreements may be
amended, modified or supplemented from time to time (collectively, the "Spectrum
Trademark Agreement").
"Sprint PCS Affiliate" means any Person whose sole or predominant business
is operating a personal communications services business pursuant to
arrangements with Sprint Spectrum L.P. and/or its Affiliates, or their
successors, similar to the Sprint Agreements.
"Sprint PCS Affiliate Parent" means any Person that owns 75% or more of the
issued and outstanding common stock, calculated on a fully diluted basis, of a
Sprint PCS Affiliate (other than the Company, Horizon Personal Communications,
Inc. and Bright Personal Communications Services, LLC) and whose primary
business is either being a Sprint PCS Affiliate and/or holding the Capital Stock
of one or more Sprint PCS Affiliates.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to a Person, (a) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
26
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (b) any partnership (i) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (ii)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Telecommunications Assets" means, with respect to any Person, any asset
that is utilized by such Person, directly or indirectly, for the design,
development, construction, installation, integration, operation, management or
provision of wireless telecommunications equipment, inventory, technology,
systems and/or services. Telecommunications Assets shall include stock, joint
venture or partnership interests of an entity where substantially all the assets
of the entity consist of Telecommunications Assets.
"Total Invested Capital" means at any time of determination, the sum of,
without duplication, (i) the total amount of equity contributed to the Company
or any Restricted Subsidiary as of the Issue Date (being $167.0 million minus
fees and expenses payable on the sale of $126.5 million of Convertible Preferred
Stock to an investor group led by Apollo Management concurrent with this
offering), plus (ii) the sum of (x) the aggregate net cash proceeds received by
the Company from capital contributions or any other issuance or sale of Capital
Stock (other than Disqualified Stock but including Capital Stock issued upon the
conversion of convertible Indebted ness or from the exercise of options,
warrants or rights to purchase Capital Stock (other than Disqualified Stock)),
subsequent to the Issue Date, other than to a Restricted Subsidiary, and (y) in
the case of any consolidation or merger of the Company with or into another
Sprint PCS Affiliate, the aggregate net cash proceeds received by such Sprint
PCS Affiliate from capital contributions or any other issuance or sale of
Capital Stock (other than Disqualified Stock but including Capital Stock issued
upon the conversion of convertible Indebtedness or from the exercise of options,
warrants or rights to purchase Capital Stock (other than Disqualified Stock))
through and including the date of consummation of any such consolidation or
merger, other than to a Subsidiary of such other Sprint PCS Affiliate, plus
(iii) the aggregate net repayment of any Investment made after the Issue Date
and constituting a Restricted Payment in an amount equal to the lesser of (a)
the return of capital with respect to such Investment and (b) the initial amount
27
of such Investment, in either case, less the cost of the disposition of such
Investment, plus (iv) an amount equal to the Consolidated net Investment (as of
the date of determination) the Company and/or any of its Restricted Subsidiaries
has made in any Subsidiary that has been designated as an Unrestricted
Subsidiary after the Issue Date upon its redesignation as a Restricted
Subsidiary in accordance with Section 4.20," plus (v) Consolidated Debt, minus
(vi) the sum of (x) the aggregate amount of all Restricted Payments declared or
made on or after the Issue Date and (y) in the case of any consolidation or
merger of the Company with or into another Sprint PCS Affiliate, the aggregate
amount of all payments which, if such other Sprint PCS Affiliate were governed
by the terms of this Indenture, would have constituted Restricted Payments
declared or made by such Sprint PCS Affiliate through and including the date of
consummation of any such consolidation or merger.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unit Warrants" means warrants to purchase 12.90 shares of the Company's
Class A common stock, par value $0.001 per share, issued pursuant to the Warrant
Agreement.
"Unrestricted Global Note" means a permanent Global Note in substantially
the form of Exhibit A attached hereto that bears the Global Note Legend and that
has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company or a
Guarantor that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only to the extent that such
Subsidiary (1) has no Indebtedness other than Non-Recourse Debt; (2) is not
party to any agreement, contract, arrangement or understanding with the Company
or any Restricted Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understand ing are no less favorable to the
Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company; (3) is a Person with
28
respect to which neither the Company nor any of its Restricted Subsidiaries has
any direct or indirect obligation (a) to subscribe for additional Equity
Interests or (b) to maintain or preserve such Person's financial condition or to
cause such Person to achieve any specified levels of operating results; (4) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries; and (5)
has at least one director on its board of directors that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries and has
at least one executive officer that is not a director or executive officer of
the Company or any of its Restricted Subsidiaries. Any designation of a
Subsidiary of the Company or a Guarantor as an Unrestricted Subsidiary shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution making such designation and an Officers' Certificate certifying
that such designation complied with the preceding conditions and was permitted
by Section 4.07. If, at any time, any Unrestricted Subsidiary would fail to meet
the preceding require ments as an Unrestricted Subsidiary, it shall thereafter
cease to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.09, the Company shall
be in Default of such covenant. The Board of Directors may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (1) such Indebtedness
is permitted under Section 4.09 calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period;
and (2) no Default or Event of Default would be in existence following such
designation.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the board of
directors or other governing body of such Person.
"Warrant Agreement" means the Warrant Agreement, dated as of September 26,
2000, by and between the Company and Wells Fargo Bank Minnesota, National
Association, in its capacity as warrant agent, relating to the Unit Warrants.
29
"Warrant Registration Rights Agreement" means the Warrant Registration
Rights Agreement, dated as of September 26, 2000, by and among the Company and
the Initial Purchasers, as such agreement may be amended, modified or supple
mented from time to time.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (1) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years, calculated to the nearest one-twelfth, that will elapse between
such date and the making of such payment; by (2)the then outstanding principal
amount of such Indebtedness.
"Wholly-Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which, other than directors' qualifying shares, shall at
the time be owned by such Person or by one or more Wholly-Owned Restricted
Subsidiaries of such Person.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which,
other than directors' qualifying shares, shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person.
Section 1.02 Other Definitions.
-----------------
Defined in
Term Section
- ---- -------
"Affiliate Transaction".................................................4.11
"Asset Sale Offer"......................................................4.10
"Authentication Order"..................................................2.02
"Change of Control Offer"...............................................4.14
"Change of Control Payment".............................................4.14
"Change of Control Payment Date" .......................................4.14
"Covenant Defeasance"...................................................8.03
"DTC" ..................................................................2.03
"Event of Default"......................................................6.01
"Excess Proceeds".......................................................4.10
30
"Legal Defeasance" ....................................................8.02
"Offer Amount".........................................................3.09
"Offer Period".........................................................3.09
"Paying Agent".........................................................2.03
"Payment Blockage Period".............................................11.03
"Payment Default"......................................................6.01
"Permitted Indebtedness"...............................................4.09
"Purchase Date"........................................................3.09
"Registrar"............................................................2.03
"Regulation S Global Note Legend"......................................2.06
"Representative"......................................................11.03
"Repurchase Offer".....................................................3.09
"Restricted Payments"..................................................4.07
"Surviving Entity".....................................................5.01
Section 1.03 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
(a) Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
(b) The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes means the Company and any successor obligor
upon the Notes.
(c) All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
31
Section 1.04 Rules of Construction.
---------------------
(a) Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in
the plural include the singular;
(5) "including" means "includ ing without limitation";
(6) provisions apply to succes sive events and
transactions; and
(7) references to sections of or rules under the
Securities Act shall be deemed to include substitute,
replacement or successor sections or rules adopted by the
SEC from time to time.
ARTICLE II
THE NOTES
---------
Section 2.01 Form and Dating.
---------------
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof. The terms and
provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture and the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby. However, to the extent any provision of any
Note conflicts with the express provisions of this Indenture, the provisions of
this Indenture shall govern and be controlling.
32
(b) Form of Notes. Notes issued in global form shall be substantially in
the form of Exhibit A attached hereto (including the Global Note Legend thereon
and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such portion of the outstanding Notes
as shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
(c)Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in Global Notes that are held by Participants through
Euroclear or Cedel Bank.
Section 2.02 Execution and Authentication.
----------------------------
(a) One Officer shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal may be reproduced on the Notes and may be in
facsimile form.
(b) If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
33
(c) A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
(d) The Trustee shall, upon a written order of the Company signed by at
least one Officer (an "Authentication Order"), authenticate Notes for original
issue up to the aggregate principal amount stated in paragraph 4 of the Notes.
The aggregate principal amount of Notes outstanding at any time may not exceed
such amount except as provided in Section 2.07 hereof.
(e)The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. 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. An
authenticat ing agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
--------------------------
(a) The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
(b) The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
(c) The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
34
Section 2.04 Paying Agent to Hold Money in Trust.
-----------------------------------
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent shall hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium or Liquidated Damages, if any, or interest on the Notes, and shall
notify the Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall
have no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent for the Notes.
Section 2.05 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
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date or such
shorter time as the Trustee may allow, as the Trustee may reasonably require of
the names and addresses of the Holders of Notes and the Company shall otherwise
comply with TIA ss. 312(a).
Section 2.06 Section Transfer and Exchange.
-----------------------------
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes shall be exchanged
by the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 90 days after the date of such notice from the Depositary or (ii)
the Company in its sole discretion determines that the Global Notes (in whole
35
but not in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), although beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (d) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Regulation S Global Note may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other than the
Initial Purchasers). Beneficial interests in any Unre stricted Global Note
may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
36
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause
to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer
or exchange referred to in (1) above. Upon consummation of an Exchange
Offer by the Company in accordance with Section 2.06(f) hereof, the require
ments of this Section 2.06(b)(ii) shall be deemed to have been satisfied
upon receipt by the Registrar of the instructions contained in the Letter
of Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes. Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Notes contained in
this Indenture and the Notes or otherwise applicable under the Securities
Act, the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee shall take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifica tions in item (1) thereof; and
37
(B) if the transferee shall take delivery in the form of a
beneficial interest in the Regula tion S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and
(C) if the transferee shall take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifica tions in item (3) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accor dance with the Registration Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
38
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a beneficial interest
in an Unrestricted Global Note, a certificate from such holder in the
form of Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar or the Company so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably acceptable to the
Registrar or the Company, if applicable to the effect that such
exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
39
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. Restricted Global Notes and beneficial interests therein
shall be exchangeable for Definitive Notes if (i) the Depositary (x)
notifies the Company that it is unwilling or unable to continue as
depositary for the Restricted Global Notes and the Company thereupon fails
to appoint a successor depositary or (y) has ceased to be a clearing agency
registered under the Exchange Act and the Company fails to appoint a
successor, (ii) the Company, at its option, notifies the Trustee in writing
that it elects to cause the issuance of the Definitive Notes or (iii) there
shall have occurred and be continuing a Default with respect to the Notes.
In all cases, Definitive Notes delivered in exchange for any Restricted
Global Note or beneficial interests therein shall be registered in the
names, and issued in any approved denomina tions, requested by or on behalf
of the Depositary (in accordance with the Applicable Procedures).
In such event, the Trustee shall cause the Restricted Global Notes to
be canceled accordingly pursuant to Section 2.11 hereof, and the Company
shall execute and upon receipt of an Authentication Order the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note
issued in exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c) shall be registered in such name or names
and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from
the Depositary and the Partici pant or Indirect Participant. The Trustee
shall deliver such Definitive Notes to the Persons in whose names such
Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section
2.06(c)(i) shall bear the Private Placement Legend and shall be subject to
all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
40
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the Letter of Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the Exchange Notes or (3)
a Person who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accor dance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Regis tration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the
Private Placement Legend, a certificate from such holder in
the form of Exhibit C hereto, including the certifications
in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form
of Exhibit B hereto, includ ing the certifications in item
(4) thereof;
41
and, in each such case set forth in this subparagraph (D),
if the Registrar or the Company so requests or if the
Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar or the Company,
if applicable to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. Unrestricted Global Notes and
beneficial interests therein shall be exchangeable for Definitive
Notes if (i) the Depositary (x) notifies the Company that it is
unwilling or unable to continue as depositary for the
Unrestricted Global Notes and the Company thereupon fails to
appoint a successor depositary or (y) has ceased to be a clearing
agency registered under the Exchange Act and the Company fails to
appoint a successor, (ii) the Company, at its option, notifies
the Trustee in writing that it elects to cause the issuance of
the Definitive Notes or (iii) there shall have occurred and be
continuing a Default with respect to the Notes. In all cases,
Definitive Notes delivered in exchange for any Unrestricted
Global Note or beneficial interests therein shall be registered
in the names, and issued in any approved denominations, requested
by or on behalf of the depositary (in accor dance with the
Applicable Procedures). In such event, the Trustee shall cause
the Unrestricted Global Notes to be canceled accordingly pursuant
to Section 2.11 hereof, and the Company shall execute and the
Trustee shall authenticate and deliver to the Person designated
in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii) shall
be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from
the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in
whose names such Notes are so registered. Any Definitive Note
issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall not bear the Private Placement Legend.
42
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note,
then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Defini tive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Defini tive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
43
(E) if such Restricted Definitive Note is being transferred to
an Institutional Accred ited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such Restricted Definitive Note is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certifi cate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the
case of clause (B) above, the 144A Global Note, in the case of clause
(C) above, the Regulation S Global Note, and in all other cases, the
IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
44
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Trans mittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Regis tration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to exchange
such Notes for a beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to transfer
such Notes to a Person who shall take delivery thereof in the form of
a beneficial interest in the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
45
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase
or cause to be increased the aggregate principal amount of the Unrestricted
Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unre stricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
46
(A) if the transfer shall be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof; and
(B) if the transfer shall be made pursuant to Rule 903 or Rule
904, then the trans feror must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer shall be made pursuant to any other exemption
from the registra tion requirements of the Securities Act, then the
trans feror must deliver a certificate in 9 the form of Exhibit B
hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Trans mittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
47
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes proposes to
exchange such Notes for an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit C hereto, including the
certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar or the Company so requests, an Opinion of Counsel in form
reasonably acceptable to the Registrar and the Company, if applicable,
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(ii) Unrestricted Definitive Notes to Unre stricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note. Upon receipt of a request to register such a transfer, the Registrar
shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
48
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance
with the Registration Rights Agreement, the Company shall issue and, upon
receipt of an Authentication Order in accordance with Section 2.02, the Trustee
shall authenticate (i) one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of the beneficial interests in
the Restricted Global Notes tendered for acceptance by Persons that certify in
the applicable Letters of Transmittal that (x) they are not broker-dealers, (y)
they are not participating in a distribution of the Exchange Notes and (z) they
are not affiliates (as defined in Rule 144) of the Company, and accepted for
exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted Definitive
Notes accepted for exchange in the Exchange Offer. Concurrently with the
issuance of such Notes, the Trustee shall cause the aggregate principal amount
of the applicable Restricted Global Notes to be reduced accordingly, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
49
(1) REPRESENTS THAT (i) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE ACT)(A "QIB"), (ii) IT HAS ACQUIRED
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
S UNDER THE ACT OR (iii) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE ACT (AN "IAI")),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (i) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (ii) TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSAC TION MEETING
THE REQUIREMENTS OF RULE 144A, (iii) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE ACT, (iv) IN A
TRANSACTION MEET ING THE REQUIREMENTS OF RULE 144 UNDER THE ACT, (v)
TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTA TIONS AND AGREEMENTS RELATING TO
THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
ACT, (vi) IN ACCORDANCE WITH ANOTHER EXEMP TION FROM THE REGISTRATION
50
REQUIRE MENTS OF THE ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY) OR (vii) PURSUANT TO AN EFFEC TIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANS FERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE ACT. THE
INDENTURE AND WARRANT AGREEMENT CONTAIN A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THESE SECURITIES IN VIOLA TION OF THE
FOREGOING."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii),
(d)(ii), (d)(iii), (e)(ii) or (f) to this Section 2.06 (and all Notes
issued in exchange therefor or substitution thereof) shall not bear
the Private Placement Legend.
(i) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUM STANCES EXCEPT THAT (i) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON
AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (ii) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.06(a) OF THE INDENTURE, (iii) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
51
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (iv)
THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY."
(ii) Separability Legend. Until the Separation Date, each Global Note
shall bear a legend in substantially the following form (the "Separability
Legend"):
"UNTIL THE SEPARATION DATE (AS DEFINED), THIS NOTE HAS BEEN ISSUED AS, AND
MUST BE TRANSFERRED AS, A UNIT TO GETHER WITH THE ASSOCIATED WARRANTS TO
PURCHASE CLASS A COMMON STOCK OF HORIZON PCS, INC. EACH UNIT CONSISTS OF
$1,000 PRINCIPAL AMOUNT OF NOTES AND A WARRANT TO PURCHASE 12.90 SHARES OF
COMMON STOCK OF HORIZON PCS, INC., SUBJECT TO ADJUSTMENT UNDER CERTAIN
CIRCUMSTANCES. A COPY OF THE WARRANT AGREEMENT PURSUANT TO WHICH THE
WARRANTS HAVE BEEN ISSUED IS AVAILABLE FROM THE COM PANY UPON REQUEST."
(iii) Original Issue Discount Legend. Each Global Note shall bear a
legend in substantially the following form:
"FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR
PURPOSES OF SECTION 1273 OF THE CODE, THE ISSUE PRICE IS $507.39 AND THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $561.27, IN EACH CASE PER $1,000
PRINCIPAL AMOUNT OF THIS SECURITY. FOR PURPOSES OF SECTION 1275 OF THE
CODE, THE YIELD TO MATURITY COM POUNDED SEMIANNUALLY IS 16.84%."
(h) Cancellation or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who shall take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
52
reduced accordingly and an endorsement shall be made on such Global Note by
theTrustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who shall take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.14
and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or
in part, except the unredeemed portion of any Note being redeemed in
part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required (a) to issue, to register
the transfer of or to exchange any Notes during a period beginning at
the opening of business 15 days before the day of any selection of
53
Notes for redemption under Section 3.02 hereof and ending at the close
of business on the day of selection, (b) to register the transfer of
or to exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part
or (c) to register the transfer of or to exchange a Note between a
record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registra tion of a transfer
of any Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered as the absolute owner
of such Note for the purpose of receiving payment of principal of and
interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section
2.06 to effect a registration of transfer or exchange may be submitted
by facsimile.
(j) Separation of Notes and Unit Warrants
(i) Prior to the Separation Date, no Notes may be sold, assigned
or otherwise transferred to any Person unless, simultaneously with
such transfer, the Trustee receives confirmation from the Warrant
Agent for the Unit Warrants that the Holder of the Notes has requested
a transfer of the related Unit Warrants to the same transferee.
(ii) On or after the Separation Date, the Holder of a Note
containing a Separability Legend may surrender such Note accompanied
by a written application to the Trustee, duly executed by the Holder,
for a new Note or Notes not containing a Separability Legend. Whether
or not the Holder obtains a new Note, from and after the Separation
Date, the Separability Legend shall have no further force and effect.
54
Section 2.07 Replacement Notes.
-----------------
(a) If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
require ments are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
(b) Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
-----------------
(a) The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
(b) If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.If the principal amount of any
Note is considered paid under Section 4.01 hereof, it ceases to be outstanding
and interest on it ceases to accrue.
(c) If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
55
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.09 Treasury Notes.
--------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
Section 2.10 Temporary Notes.
---------------
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
Section 2.11 Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee upon direction by the Company and no one else shall cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy cancelled Notes (subject to the record retention
requirements of the Exchange Act). Certification of the destruction of all
cancelled Notes shall be delivered to the Company. The Company may not issue new
Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
Section 2.12 Defaulted Interest.
------------------
56
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date; provided, however, that no such special
record date shall be less than 5 days prior to the related payment date for such
defaulted interest. At least 10 days before the special record date, the Company
(or, upon the written request of the Company, the Trustee in the name and at the
expense of the Company) shall mail or cause to be mailed to Holders a notice
that states the special record date, the related payment date and the amount of
such interest to be paid.
Section 2.13 CUSIP Numbers.
-------------
The Company in issuing the Notes may use "CUSIP" numbers (if then generally
in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders; provided, however, that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
Section 2.14 Issuance of Additional Notes.
----------------------------
The Company may, subject to Article IV of this Indenture and applicable
law, issue additional Notes under this Indenture. The Notes issued on the Issue
Date and any additional Notes subsequently issued shall be treated as a single
class for all purposes under this Indenture.
57
ARTICLE III
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed.
---------------------------------
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee shall select the Notes to be redeemed or
purchased among the Holders of the Notes in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03 Notice of Redemption.
--------------------
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
58
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) 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 upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes or Section of this Indenture pursuant
to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days, or such shorter period
allowed by the Trustee, prior to the redemption date, an Officers' Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
59
Section 3.05 Deposit of Redemption Price.
---------------------------
On or one Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.
Section 3.06 Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon the Company's written request, the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
Section 3.07 Optional Redemption.
-------------------
(a) On or after October 1, 2005, the Company may redeem the Notes at any
time, in whole or in part, upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date fixed for redemption, if redeemed during the twelve-month
period beginning on October 1 of the year indicated below:
60
YEAR PERCENTAGE
---- -----------------
2005 107.000%
2006 104.667%
2007 102.333%
2008 and thereafter 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section 3.07, on
or prior to October 1, 2003, the Company shall be permitted to redeem up to 35%
of the Accreted Value of the Notes issued on the Issue Date at a redemption
price of 114% of the Accreted Value thereof, plus Liquidated Damages, if any,
thereon to the date fixed for redemption, with the net cash proceeds of one or
more Equity Offerings; provided, however, that (1) at least 65% of the Accreted
Value of the Notes issued on the Issue Date remains outstanding immediately
after the occurrence of the redemption, excluding Notes held by the Company or
any of its Subsidiaries; and (2) each redemption occurs within 90 days after the
date of the closing of such Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
--------------------
The Company shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
Section 3.09 Offer to Purchase.
-----------------
In the event that, pursuant to Section 4.10 or 4.14 hereof, the Company
shall be required to commence an offer to all Holders to purchase Notes (a
"Repurchase Offer"), it shall follow the procedures specified below.
The Repurchase Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 or 4.14 hereof (the "Offer Amount") or, if
less than the Offer Amount has been tendered, all Notes tendered in response to
the Asset Sale Offer or Change of Control Offer, as applicable. Payment for any
Notes so purchased shall be made in the same manner as interest payments are
made.
61
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Repurchase Offer.
Upon the commencement of an Repurchase Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall state:
(a) that the Repurchase Offer is being made pursuant to this Section 3.09
and Section 4.10 or 4.14 hereof and the length of time the Repurchase Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest and Liquidated Damages, if any;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Repurchase Offer shall cease to accrue
interest and Liquidated Damages, if any, after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Repurchase Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
(f) that Holders electing to have a Note purchased pursuant to any
Repurchase Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a depositary, if
appointed by the Company, or a Paying Agent at the address specified in the
notice at least three days before the Purchase Date;
62
(g) that Holders shall be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by Holders
exceeds the Offer Amount, the Company shall select the Notes to be purchased on
a pro rata basis (with such adjustments as may be deemed appropriate by the
Company so that only Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer or
Change of Control Offer, as applicable, or if less than the Offer Amount has
been tendered, all Notes tendered, and shall deliver to the Trustee an Officers'
Certificate stating the Accreted Value or aggregate principal amount, as
applicable, of Notes or portions thereof which were accepted for payment by the
Company in accordance with the terms of this Section 3.09. The Company, the
Depositary or the Paying Agent, as the case may be, shall promptly (but in any
case not later than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Notes tendered by
such Holder and accepted by the Company for purchase, and the Company shall
promptly issue a new Note, and the Trustee, upon written request from the
Company shall authenticate and mail or deliver such new Note to such Holder, in
a principal amount equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results of the Asset
Sale Offer on the Purchase Date.
63
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE IV
COVENANTS
---------
Section 4.01 Payment of Notes.
----------------
(a) The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
(b) The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
-------------------------------
(a) The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for 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.
64
(b) The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
(c) The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
Section 4.03 Reports.
-------
(a) Whether or not the Company is required to do so by the rules and
regulations of the SEC, so long as any Notes are outstanding, the Company shall
furnish to the Holders of the Notes, within the time periods specified in the
SEC's rules and regulations (i) all quarterly and annual financial and other
information with respect to the Company and its consolidated Subsidiaries that
would be required to be contained in a filing with the SEC on Forms 10-Q and
10-K if the Company were required to file such forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" that
describes the financial condition and results of operations of the Company and
its consolidated Subsidiaries, showing in reasonable detail, either on the face
of the financial statements or in the footnotes thereto and in Management's
Discussion and Analysis of Financial Condition and Results of Operations, the
financial condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial information and results of operations
of the Unrestricted Subsidiaries of the Company and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants, and (ii) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such reports.
(b) After the Exchange Offer or the effectiveness of the Shelf Registration
Statement, whether or not required by the rules and regulations of the SEC, the
Company shall file a copy of all of the information and reports required to be
delivered pursuant to clause (a) of this Section 4.03 with the SEC for public
65
availability, unless the SEC shall not accept such a filing, and make such
information available to securities analysts and prospective investors upon
request.
Section 4.04 Compliance Certificate.
----------------------
(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommenda tions of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article IV or Article V hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon any Officer (excluding for purposes hereof any
Assistant Treasurer, Secretary or Assistant Secretary) becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.
66
Section 4.05 Taxes.
-----
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that 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 covenants that it shall not, by resort to any such law, 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 has
been enacted.
Section 4.07 Limitation on Restricted Payments.
---------------------------------
(a) Prior to and including December 31, 2003, the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's Equity Interests (including,
without limitation, any payment in connection with any merger or
consolidation involving the Company or any of its Restricted
Subsidiaries), or to the direct or indirect holders of the Company's
or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable solely
in Equity Interests (other than Disqualified Stock) of the Company and
other than dividends or distributions payable to the Company or any
Wholly-Owned Restricted Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or
consolidation involving the Company or any of its Subsidiar ies) any
Equity Interests of the Company or any of its Subsidiaries or any
direct or indirect parent of the Company or any of its Subsidiaries;
67
(iii) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinate, whether pursuant to its terms or by
operation of law, in right of payment to the Notes or the Note
Guarantees except a payment of interest or principal at the Stated
Maturity thereof; or
(iv) make any Restricted Investment (each of the foregoing
actions set forth in clauses (i) through (iv) being referred to as a
"Restricted Payment").
(b) After December 31, 2003, the Company and its Restricted Subsidiaries
shall not, directly or indirectly, make any Restricted Payment unless, at the
time thereof, and after giving effect thereto,
(i) no Default or Event of Default shall have occurred and be
continuing;
(ii) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable period, have
been permitted to incur at least $1.00 of additional Indebtedness,
other than Permitted Indebtedness, pursuant to Section 4.09(a)(i); and
(iii) after giving effect to such Restricted Payment on a pro
forma basis (other than the items permitted by clauses (ii), (iii),
(iv), (v) and (vi) of paragraph (c) of this Section 4.07), the
aggregate amount of all Restricted Payments made on or after the Issue
Date shall not exceed the sum of, without duplication (A) the amount
of (x) the Operating Cash Flow of the Company after December 31, 2003
through the end of the latest full fiscal quarter for which
consolidated financial statements of the Company are publicly
available preceding the date of such Restricted Payment, treated as a
single accounting period, less (y) 150% of the cumulative Consolidated
Interest Expense of the Company after December 31, 2003 through the
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end of the latest full fiscal quarter for which consolidated financial
statements of the Company are publicly available preceding the date of
such Restricted Payment, treated as a single accounting period, plus
(B) 100% of the aggregate net cash proceeds received by the Company
since the Issue Date as a contribution to the Company's common equity
capital or from the issuance or sale of the Company's Equity Interests
(other than Disqualified Stock) or from the issuance or sale of
convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted
into or exchanged for such Equity Interests (other than Equity
Interests, Disqualified Stock or debt securities sold to a Restricted
Subsidiary of the Company) plus (C) the amount by which Indebtedness
of the Company or any of its Restricted Subsidiaries is reduced on the
Company's consolidated balance sheet upon the conversion or exchange
(other than by a Subsidiary of the Company) subsequent to the Issue
Date of any Indebtedness of the Company or any of its Restricted
Subsidiaries convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of the Company (less the amount of any cash, or
the fair value of any other property, distributed by the Company upon
such conversion or exchange), plus (D) to the extent that any
Restricted Investment that was made after the Issue Date is sold for
cash or otherwise liquidated or repaid for cash, the lesser of (x) the
cash return of capital with respect to such Restricted Investment
(less the cost of disposition, if any) and (y) the initial amount of
such Restricted Investment.
(c) The foregoing limitations in this Section 4.07 do not limit or restrict
the making of any Permitted Investment, and a Permitted Investment shall not be
counted as a Restricted Payment for purposes of Section 4.07(b)(iii)(D) above.
In addition, so long as no Default or Event of Default shall have occurred and
be continuing, the foregoing limitations shall not prevent the Company from:
(i) paying a dividend on the Company's Equity Interests within 60
days after the declaration thereof if, on the date when the dividend
was declared, the Company could have paid such dividend in accordance
with the provisions of this Indenture;
(ii) repurchasing the Company's Equity Interests, including
options, warrants or other rights to acquire such Equity Interests,
from former employees or directors of the Company or any Subsidiary
69
thereof, or from option holders who have received options under an
option plan or agreement previously approved by the Board of
Directors, for consideration not to exceed $3.0 million in the
aggregate in any fiscal year; provided that any unused amount in any
fiscal year may be carried forward to one or more future periods;
provided, further, that the aggregate amount of all such repurchases
made pursuant to this Section 4.07(c)(ii) does not exceed $15.0
million;
(iii) redeeming, repurchasing, defeasing or otherwise acquiring
or retiring for value Indebtedness that is subordi nated in right of
payment to the Notes, including premium, if any, and accrued and
unpaid interest, with the proceeds of, or in exchange for:
(A) the net cash proceeds of a capital contribution or a
substantially concurrent offering of, shares of Equity Interests
of the Company (other than Disqualified Stock of the Company and
other than Equity Interests sold to a Restricted Subsidiary of
the Company), provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase,
defeasance or other acquisition shall be excluded from Section
4.07(b)(iii)(B) above, or
(B) Indebtedness that is at least as subordinated in right
of payment to the Notes, includ ing premium, if any, and accrued
and unpaid interest, as the Indebtedness being purchased, with
Restricted Payments made pursuant to this clause not being
counted as Restricted Payments for purposes of Section
4.07(b)(iii)(D) above;
(iv) repurchasing, redeeming or otherwise acquiring Equity
Interests of the Company in exchange for, or out of the net cash
proceeds from a substantially concurrent issuance of Equity Interests
of the Company (other than Disqualified Stock of the Company and other
than Equity Interests sold to a Restricted Subsidiary of the Company),
provided that the amount of any such net cash proceeds that are
utilized for any such repurchase, redemption or other acquisition
shall be excluded from Section 4.07(b)(iii)(B) above;
70
(v) making other Restricted Payments not to exceed $5.0 million
in the aggregate at any time outstanding, with Restricted Payments
made pursuant to this clause not being counted as Restricted Payments
for purposes of Section 4.07(b)(iii)(D) above; or
(vi) making distributions or payments of Receivables Fees.
In addition, if any Person in which an Investment is made, which Investment
constituted a Restricted Payment when made, thereafter becomes a Wholly- Owned
Restricted Subsidiary, such Investments previously made in such Person shall no
longer be counted as Restricted Payments for purposes of calculating the
aggregate amount of Restricted Payments pursuant to clause (b)(iii)(D) of this
Section 4.07 to the extent such Investments would not have been Restricted
Payments had such Person been a Wholly-Owned Restricted Subsidiary at the time
such Investments were made.
For purposes of clauses (iii) and (iv) above, (i) the net cash proceeds
received by the Company from the issuance or sale of its Equity Interests either
upon the conversion of, or in exchange for, Indebtedness of the Company or any
Restricted Subsidiary shall be deemed to be an amount equal to (A) the sum of
(1) the principal amount or accreted value, whichever is less, of such
Indebtedness on the date of such conversion or exchange and (2) the additional
cash consideration, if any, received by the Company upon such conversion or
exchange, less any payment on account of fractional shares, minus (B) all
expenses incurred in connection with such issuance or sale; and (ii) the net
proceeds received by the Company from the issuance or sale of its Equity
Interests upon the exercise of any options or warrants of the Company or any
Restricted Subsidiary shall be deemed to be an amount equal to (A) the
additional cash consider ation, if any, received by the Company upon such
exercise, minus (B) all expenses incurred in connection with such issuance or
sale.
For purposes of this Section 4.07, if a particular Restricted Payment
involves a non-cash payment, including a distribution of assets, then such
Restricted Payment shall be deemed to be an amount equal to the cash portion of
such Restricted Payment, if any, plus an amount equal to the Fair Market Value
of the non-cash portion of such Restricted Payment, as determined by the
Company's Board of Directors, whose good-faith determination shall be conclusive
and evidenced by a Board Resolution and, in the case of Fair Market Value of
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such non-cash portion in excess of $5.0 million, accompanied by an opinion of an
accounting, appraisal or investment banking firm of national standing. Not later
than the Business Day after the making of any Restricted Payment, 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
calculations required by this Section 4.07 covenant were computed, together with
a copy of any Board Resolution, fairness opinion or appraisal required by this
Indenture.
The amount of any Investment outstanding at any time shall be deemed to be
equal to the amount of such Investment on the date made, less the return of
capital, repayment of loans and return on capital, including interest and
dividends, in each case, received in cash, up to the amount of such Investment
on the date made.
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.
--------------------------------------------------------------
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries, directly or indirectly, to create or permit to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to (1) pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Restricted Subsidiaries, or with respect to
any other interest or participation in, or measured by, its profits, or pay any
Indebtedness owed to the Company or any of its Restricted Subsidiaries; (2) make
loans or advances to the Company or any of its Restricted Subsidiaries; or (3)
transfer any of its properties or assets to the Company or any of its Restricted
Subsidiaries.
(b) The provisions of clause (a) above shall not apply to encumbrances or
restrictions existing under or by reason of:
(i) Existing Indebtedness or Credit Facilities as in effect on the
Issue Date and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof,
provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacement or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such Existing Indebtedness or
Credit Facilities, as in effect on the Issue Date;
(ii) this Indenture, the Notes and the Note Guarantees;
72
(iii) applicable law;
(iv) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition, except to the extent such Indebted
ness was incurred in connection with or in contemplation of such
acquisition, which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired, provided that, in the
case of Indebtedness, such Indebtedness was permitted by the terms of this
Indenture to be incurred;
(v) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices;
(vi) Purchase Money Indebtedness for property acquired in the ordinary
course of business that impose restrictions on the property so acquired of
the nature described in clause (3) of paragraph(a) of this Section 4.08;
(vii) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by such Restricted Subsidiary
pending its sale or other disposition;
(viii) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
refinanced;
(ix) Liens securing Indebtedness otherwise permitted to be incurred
pursuant to the provisions of Section 4.12 that limit the right of the
Company or any of its Restricted Subsidiaries to dispose of the assets
subject to such Lien;
(x) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business; and
73
(xi) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
----------------------------------------------------------
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, incur any Indebtedness, including Acquired Debt,
other than Permitted Indebtedness, and the Company shall not issue any
Disqualified Stock and shall not permit any of its Restricted Subsidiaries to
issue any shares of Preferred Capital Stock, in each case unless immediately
after giving effect to the incurrence of such Indebtedness or the issuance of
such Disqualified Stock or Preferred Capital Stock and the receipt and
application of the net proceeds therefrom, including, without limitation, the
application or use of the net proceeds therefrom to repay Indebtedness or make
any Restricted Payment, (i) the Consolidated Debt to Annualized Operating Cash
Flow Ratio would be (A) less than 7.0 to 1.0, if prior to December 31, 2005 and
(B) less than 6.0 to 1.0, if on or after December 31, 2005 or (ii) in the case
of any incurrence of Indebtedness prior to December 31, 2005 only, Consolidated
Debt would be equal to or less than 75% of Total Invested Capital.
(b) So long as no Default or Event of Default shall have occurred and be
continuing or would be caused thereby, paragraph (a) of this Section 4.09 will
not prohibit the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Indebtedness"):
(i) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes and the related Note Guarantees to be issued on
the Issue Date;
(ii) the incurrence by the Company and any Guarantor of Indebtedness
under Credit Facilities; provided that the aggregate principal amount of
all Indebtedness of the Company and the Guarantors outstanding under all
Credit Facilities at any time outstanding, after giving effect to such
incurrence, does not exceed the sum of (A) $330.0 million less any amounts
outstanding under paragraph (iii) below, plus (B) 80% of Qualified
Receivables, which sum shall be permanently reduced by the aggregate amount
of all Net Proceeds of Asset Sales applied since the Issue Date to repay
Indebtedness under a Credit Facility pursuant to Section 4.10;
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(iii) the incurrence by the Company or any Guarantor of Indebtedness
represented by Capital Lease Obligations or Purchase Money Indebtedness, in
each case, (A) incurred for the purpose of leasing or financing all or any
part of the purchase price or cost of construction or improvement of
inventory, property, plant or equipment used in the business of the Company
or any of its Restricted Subsidiaries, including telephone and computer
systems and operating facilities, in an aggregate principal amount not to
exceed $5.0 million at any time outstanding and (B) such Indebtedness shall
not constitute more than 100% (determined in accordance with GAAP in good
faith by the Board of Directors) to the Company or such Restricted
Subsidiary, as applicable, of the cost of the property so purchased,
constructed, improved or leased;
(iv) the incurrence by the Company or any Guarantor of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are
used to refund, refinance or replace, Indebtedness, other than intercompany
Indebtedness, that was permitted to be incurred under paragraph (a) of this
Section 4.09 or clause (i) of this paragraph;
(v) the incurrence of intercompany Indebtedness between or among the
Company and any of its Wholly-Owned Restricted Subsidiaries that are
Guarantors; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all Obligations with respect to the
Notes, in the case of the Com pany, or the Note Guarantee of such
Guarantor, in the case of a Guarantor; and
(B) (1) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other
than the Company or one of its Wholly- Owned Restricted Subsidiaries
and (2) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or one of its Wholly-Owned
Restricted Subsidiaries, shall be deemed, in each case, to constitute
an incurrence of such Indebtedness by the Company or such Wholly-Owned
Restricted Subsidiary, as the case may be, that was not permitted by
this clause (v);
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(vi) the incurrence by the Company or any Guarantor of Hedging
Obligations that are incurred for the purpose of fixing or hedging interest
rate risk with respect to any floating rate Indebtedness that is permitted
by the terms of this Indenture to be outstanding;
(vii) the Guarantee by the Company or any of the Guarantors of
Indebtedness that was permitted to be incurred by another provision of this
Section 4.09;
(viii) the accrual of interest and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock;
(ix) Indebtedness (A) in respect of performance, surety or appeal
bonds or bankers' acceptances provided in the ordinary course of business
and (B) arising from agreements providing for indemnification, adjustment
of purchase price 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 any case incurred in connection with the disposition of any business,
assets or Restricted Subsidiary (other than Guarantees of Indebtedness
incurred by a Person acquiring all or any portion of such business, assets
or Restricted Subsidiary for the purpose of financing such acquisition), in
a principal amount not to exceed the gross proceeds actually received by
the Company or any Restricted Subsidiary in connection with such
disposition;
(x) the incurrence by the Company or any Restricted Subsidiary of any
Indebtedness under any unsecured deferred promissory note payable to Sprint
PCS pursuant to the deferral of collected revenues provisions of the
Consent and Agreement between Sprint PCS and the lenders under the Credit
Facilities;
(xi) the incurrence by the Company or any Restricted Subsidiary of
additional Indebtedness in an aggregate principal amount, or accreted
value, as applicable, at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebted ness incurred pursuant to this clause (xi), not to exceed $50.0
million; and
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(xii) the incurrence by the Company or any Guarantor of Acquired Debt,
but only to the extent that immediately after giving effect to the
incurrence of such Indebtedness (A) in the event of any incurrence of
Acquired Debt on or after December 31, 2005 only, the Consolidated Debt to
Annualized Operating Cash Flow Ratio would decrease as compared to the
Consolidated Debt to Annualized Operating Cash Flow Ratio immediately prior
to such incurrence or (B) in the event of any incurrence of Acquired Debt
prior to December 31, 2005 only, the ratio of Consolidated Debt to Total
Invested Capital would decrease as compared to the ratio of Consolidated
Debt to Total Invested Capital immediately prior to such incurrence.
(c) For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Indebtedness described in clauses (i) through
(xii) of paragraph (b) of this Section 4.09, or is entitled to be incurred
pursuant to paragraph (a) of this Section 4.09, the Company will be permitted to
classify such item of Indebted ness on the date of its incurrence, or later
reclassify all or a portion of such item of Indebtedness, in any manner that
complies with this Section 4.09 and such item of Indebtedness will be treated as
having been incurred pursuant to only one of such clauses or pursuant to Section
4.09(a) at any given time. Accrual of interest, the accretion of accreted value
and the payment of interest in the form of additional Indebtedness will not be
deemed to be an incurrence of Indebtedness for purposes of this Section 4.09.
(d) Notwithstanding anything to the contrary contained in this Section
4.09, (i) the Company shall not, and shall not permit any Guarantor to, incur
any Indebtedness pursuant to this Section 4.09 if the proceeds thereof are used,
directly or indirectly, to refinance any subordinated Indebtedness unless such
newly-incurred Indebtedness shall be subordinated to the Notes or the applicable
Note Guarantee, as the case may be, to at least the same extent as such
refinanced subordinated Indebtedness, and (ii) the Company shall not permit any
Restricted Subsidiary that is not a Guarantor to incur any Indebtedness pursuant
to this Section 4.09 if the proceeds thereof are used, directly or indirectly,
to refinance any Indebtedness of the Company or any Guarantor.
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Section 4.10 Asset Sales.
-----------
(a) Neither the Company nor any of its Restricted Subsidiar ies shall
consummate an Asset Sale unless:
(i) the Company or its Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the
Fair Market Value of the assets sold, leased, conveyed or otherwise
disposed of or of the Equity Interests issued or sold;
(ii) such Fair Market Value is determined by the Company's Board of
Directors and evidenced by a resolution of such Board of Directors set
forth in an Officers' Certificate delivered to the Trustee; and
(iii) at least 75% of the consideration therefor received by the
Company or its Restricted Subsidiary is in the form of cash or Cash
Equivalents.
For purposes of clause (iii) of this paragraph (a), the following are
considered to be cash: any liabilities, as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet, of the Company or such
Restricted Subsidiary, other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any Note Guarantee, that are
assumed by the transferee of any such assets or Equity Interests pursuant to a
customary novation agreement that released the Company or such Restricted
Subsidiary from further liability; and any securities, notes or other
obligations received by the Company or such Restricted Subsidiary from such
transferee that are contemporaneously, subject to ordinary settlement periods,
converted by the Company or such Restricted Subsidiary into cash, to the extent
of the cash received in that conversion.
(b) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or any Restricted Subsidiary may apply the Net Proceeds, at
its option,
(i) to repay Senior Debt;
78
(ii) to acquire all or substantially all of the assets of, or all of
the Voting Stock of, another Permitted Business which becomes part of, or
which is or becomes, a Restricted Subsidiary of the Company;
(iii) to make one or more capital expenditures in assets that are used
or useful in a Permitted Business; or
(iv) to acquire other long-term assets that are used or useful in a
Permitted Business.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture.
(c) Any Net Proceeds from Asset Sales that are not applied or invested as
provided in paragraph (b) of this Section 4.10 will be deemed to constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds is greater than
$10.0 million, the Company shall be required to make an offer to all holders of
Notes and all holders of Indebtedness that is equal in right of payment with the
Notes containing provisions similar to those set forth in this Indenture with
respect to offers to purchase or redeem the Indebtedness with the proceeds of
sales of assets (an "Asset Sale Offer") to purchase the maximum Accreted Value
or principal amount at maturity of Notes and such other Indebtedness that is
equal in right of payment that may be purchased out of the Excess Proceeds. The
offer price in any Asset Sale Offer will be equal to 100% of the Accreted Value
or 100% of the principal amount at maturity, plus accrued and unpaid interest,
if any, to the date of purchase, as applicable, and will be payable in cash. If
any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such Excess Proceeds for any purpose not otherwise prohibited by
this Indenture. If the aggregate Accreted Value of Notes and such other pari
passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes and such other Indebtedness
that is equal in right of payment to be purchased pursuant to Section 3.09 on a
pro rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate. Upon completion of an Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
(d) The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
79
repurchase of Notes pursuant to an Asset Sale Offer. To the extent the
provisions of any such rule conflict with the provisions of this Indenture
relating to Asset Sales, the Company shall comply with the provisions of such
rule and be deemed not to have breached its obligations relating to such Asset
Sale provisions by virtue of such conflict.
Section 4.11. Transactions with Affiliates.
----------------------------
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(i) such Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Restricted Subsid iary than those that would
have been obtained in a comparable transac tion by the Company or such
Restricted Subsidiary with an unrelated Person; and
(ii) The Company delivers to the Trustee:
(A) with respect to any Affili ate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, a Board Resolution set forth in an Officers'
Certificate certifying that such Affiliate Transaction or series of
related Affiliate Transactions complies with this Section 4.11 and
that such Affiliate Transaction or series of related Affiliate
Transactions has been approved by a majority of the disinterested
members of the Board of Directors; and
(B) with respect to any Affili ate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $25.0 million, an opinion as to the fairness to the Holders
of Notes of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of
national standing.
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(b) The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the paragraph (a) of
this Section 4.11:
(i) any employment agreement entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and consistent
with past practice of the Company or such Restricted Subsidiary;
(ii) transactions between or among the Company and/or a Wholly-Owned
Restricted Subsidiary and/or its Wholly-Owned Restricted Subsidiaries;
(iii) payment of reasonable directors fees, expenses and
indemnification to Persons who are not otherwise Affiliates of the Company;
(iv) Restricted Payments that are not prohibited by the provisions of
Section 4.07;
(v) sales of Equity Interests (other than Disqualified Stock) of the
Company to Affiliates of the Company;
(vi) transactions pursuant to the Service Agreement by and between
Horizon Services, Inc. and Horizon Personal Communications, Inc. and
pursuant to the Service Agreement by and between Horizon Services, Inc. and
Bright Personal Communications Services, LLC, as such agreements exist
immediately prior to the Issue Date;
(vii) transactions pursuant to the Services Agreement by and between
Horizon Personal Communications, Inc. and United Communications, Inc., as
such agreement exists immediately prior to the Issue Date;
81
(viii) payments of amounts due under the lease between the Company and
The Chillicothe Telephone Company, as such lease exists immediately prior
to the Issue Date;
(ix) payments by the Company or Horizon Personal Communications, Inc.
of any amounts due pursuant to the Amended and Restated Tax Allocation
Agreement dated as of May 1, 2000 by and among Horizon Telcom and its
Subsidiaries, as such agreements exists immediately prior to the Issue
Date;
(x) sales of accounts receivable, or participations therein, in
connection with any Receivables Facility; and
(xi) transactions with an investor in the investor group led by Apollo
Management in accordance with the agreements governing the sale by the
Company of the Convertible Preferred Stock including the Securities
Purchase Agreement, the Registration Rights Agreement and the Investors'
Rights and Voting Agreement as such agreements exist on the Issue Date or
in accordance with the certificate of incorporation or bylaws of the
Company, as each exists immediately prior to the Issue Date.
Section 4.12 Liens.
-----
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind securing Indebtedness that is equal in
right of payment with the Notes or the applicable Note Guarantee, as the case
may be, or is subordinated Indebtedness, upon any of their property or assets,
now owned or hereafter acquired, unless the Company provides, and causes its
Restricted Subsidiaries to provide, concurrently therewith, that the Notes and
the applicable Note Guarantees are equally and ratably so secured; provided that
if such Indebtedness is subordinated Indebtedness, the Lien securing such
subordinated Indebtedness shall be subordinate and junior to the Lien securing
the Notes (and any related applicable Note Guarantees) with the same relative
priority as such subordinated Indebtedness shall have with respect to the Notes
(and any related applicable Note Guarantees); and provided further that this
restriction will not apply to Permitted Liens.
Section 4.13 Corporate Existence.
-------------------
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Subject to Article V hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, limited liability company, partnership or other
existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Company or any such Restricted Subsidiary and (ii) the rights
(charter and statutory), licenses and franchises of the Company and its
Restricted Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
limited liability company, partnership or other existence of any of its
Restricted Subsidiaries, 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 its Restricted Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Holders of the Notes.
Section 4.14 Offer to Repurchase Upon Change of Control.
------------------------------------------
(a)If a Change of Control occurs, the Company shall make an offer (a
"Change of Control Offer") to each Holder to repurchase all or any part, equal
to $1,000 or an integral multiple of $1,000, of the Holder's Notes at an offer
price in cash equal to (i) 101% of the Accreted Value of the Notes, plus
Liquidated Damages, if any, thereon to the date of repurchase, if the repurchase
occurs prior to October 1, 2005 or (ii) 101% of the aggregate principal amount
of the Notes, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date fixed for repurchase, if the repurchase occurs on or after
October 1, 2005 (the "Change of Control Payment").
(b) Within 30 days following a Change of Control, the Company shall mail a
notice to each Holder describing the transaction or transactions that constitute
the Change of Control and offering to repurchase the Notes on the date specified
in the notice, which date shall be no earlier than 30 days and no later than 60
days from the date the notice is mailed (the "Change of Control Payment Date")
pursuant to the procedures set forth in Section 3.09 and described in the
notice.
(c) The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent the
provisions of any such rule conflict with the provisions of this Indenture
relating to a Change of Control, the Company shall comply with the provisions of
such rule and be deemed not to have breached its obligations under such Change
of Control provisions by virtue of such conflict.
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(d) On the Change of Control Payment Date, the Company shall, to the extent
lawful, (1) accept for payment all Notes or portions of Notes properly tendered
pursuant to a Change of Control Offer; (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes and
portions of the Notes so tendered; and (3) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers' Certificate stating
the Accreted Value or aggregate principal amount, as applicable, of Notes or
portions of the Notes being purchased by the Company.
(e) The Paying Agent shall mail promptly to each Holder of Notes so
tendered the Change of Control Payment for the Notes, and the Trustee shall
promptly authenticate and mail, or cause to be transferred by book entry, to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note shall be in a
principal amount of $1,000 or an integral multiple of $1,000.
(f) Prior to complying with any of the provisions of this Section 4.14, but
in any event within 90 days following a Change of Control, the Company will, or
will cause the Guarantors to, either repay all outstanding Senior Debt or obtain
the requisite consents, if any, under all agreements governing outstanding
Senior Debt to permit the repurchase of Notes required by this Section 4.14. 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.
(g) The Change of Control provisions described in this Section 4.14 shall
be applicable regardless of whether or not any other provisions of this
Indenture are applicable.
(h) The Company shall not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements
set forth in this Section 4.14 and purchases all Notes validly tendered and not
withdrawn under the Change of Control Offer.
Section 4.15 Payments for Consent.
--------------------
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The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
or is paid to all Holders of Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.16 Sale and Leaseback Transactions.
-------------------------------
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction; provided that
the Company or any Restricted Subsidiary that is a Guarantor may enter into a
Sale and Leaseback transaction if:
(i) the Company or that Guarantor, as applicable, could have (A)
incurred Indebtedness in an amount equal to the Attributable Debt relating
to such Sale and Leaseback Transaction under the tests in clauses (i) and
(ii) of Section 4.09(a), if applicable, and (B) incurred a Lien to secure
such Indebtedness pursuant to Section 4.12;
(ii) the gross cash proceeds of that Sale and Leaseback Transaction
are at least equal to the Fair Market Value, as determined in good faith by
the Board of Directors and set forth in an Officers' Certificate delivered
to the Trustee, of the property that is the subject of such Sale and
Leaseback Transaction; and
(iii) the transfer of assets in that Sale and Leaseback Transaction is
permitted by, and the Company applies the Net Proceeds of such transaction
in compliance with, Section 4.10.
(b) Notwithstanding anything to the contrary in this Section 4.16, the
Company or any of its Restricted Subsidiaries shall not be prohibited from
entering into Permitted Tower Sale and Leaseback Transactions.
Section 4.17 Limitation on Layering Indebtedness.
-----------------------------------
The Company will not, and will not permit any of its Restricted
Subsidiaries to, incur any Indebtedness that is contractually subordinated to
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any Indebtedness of the Company or any Guarantor unless such Indebtedness is
subordi nated to the Notes at least to the same extent as it is to such other
Indebtedness.
Section 4.18 Limitation On Issuances and Sales of Equity Interests in
Wholly-Owned Restricted Subsidiaries.
------------------------------------
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in any Wholly-Owned Restricted Subsidiary of the Company to any
Person, other than the Company or a Wholly-Owned Restricted Subsidiary, unless:
(i) such transfer, conveyance, sale, lease or other disposition is of
all the Equity Interests in such Wholly-Owned Restricted Subsidiary; and
(ii) the Net Proceeds from such transfer, conveyance, sale, lease or
other disposition are applied in accordance with Section 4.10.
(b) In addition, the Company will not permit any Wholly- Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests, other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares, to any Person other than to the Company or a Wholly-Owned Restricted
Subsidiary.
Section 4.19 Business Activities.
-------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses;
provided, however, that, subject to the other provisions of this Indenture, the
Company and its Restricted Subsidiaries shall not be prohibited from owning,
directly or indirectly, not more than 2.0% of the equity of any publicly traded
corporation, partnership, limited liability company, joint venture or other
publicly traded entity that is not engaged in a Permitted Business.
Section 4.20 Designation of Restricted and Unrestricted Subsidiaries.
-------------------------------------------------------
The Board of Directors may designate any Restricted Subsidiary as an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, all
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outstanding Investments owned by the Company and its Restricted Subsidiaries in
the Subsidiary so designated will be deemed to be an Investment made as of the
time of such designation and if required by that covenant will reduce the amount
available for Restricted Payments under Section 4.07(b)(iii) or Permitted
Investments, as applicable. All such outstanding Investments will be valued at
their Fair Market Value at the time of such designation. That designation will
only be permitted if such Restricted Payment would be permitted at that time and
if such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.
ARTICLE V
SUCCESSORS
----------
Section 5.01 Merger, Consolidation, or Sale of Assets.
----------------------------------------
(a) The Company and the Guarantors, considered as a whole, shall not, in
any transaction or series of related transactions, merge or consolidate with or
into, or sell, assign, convey, transfer or otherwise dispose of its properties
and assets substantially as an entirety to, any Person, and shall not permit any
of their Restricted Subsidiaries to enter into any such transaction or series of
transactions, unless, at the time and after giving effect thereto:
(i) either: (A) if the transaction or series of transactions is a
consolidation of the Company with or a merger of the Company with or into
any other Person, the Company shall be the surviving Person of such merger
or consolidation, or (B) the Person formed by any consolidation with or
merger with or into the Company, or to which the properties and assets of
theCompany or the Company and its Restricted Subsidiaries, taken as a
whole, as the case may be, substantially as an entirety are sold, assigned,
conveyed or otherwise transferred (any such surviving Person or transferee
Person referred to in this clause (B) being the "Surviving Entity"), shall
be a corporation, partnership, limited liability company or trust organized
and existing under the laws of the United States of America, any state
thereof or the District of Columbia and shall expressly assume by a
supplemental indenture executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the Company's obligations under the Notes
and this Indenture and, in each case, this Indenture, as so supplemented,
shall remain in full force and effect;
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(ii) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis including any
Indebtedness incurred or anticipated to be incurred in connection with or
in respect of such transaction or series of transac tions, no Default or
Event of Default shall have occurred and be continuing; and
(iii) the Company or the Surviving Entity will, at the time of such
transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable period, (A) be
permitted to incur at least $1.00 of additional Indebted ness pursuant to
Section 4.09(a) or (B) in the case of such transaction with another Sprint
PCS Affiliate (1) in the event that such transaction occurs on or after
December 31, 2005 only, the Consolidated Debt to Annualized Operating Cash
Flow Ratio would decrease as compared to the Consolidated Debt to
Annualized Operating Cash Flow Ratio immediately prior to such transaction
or (2) in the event that such transaction occurs prior to December 31, 2005
only, the ratio of Consolidated Debt to Total Invested Capital would
decrease as com pared to the ratio of Consolidated Debt to Total Invested
Capital immediately prior to such transaction; provided, however, that the
foregoing requirements shall not apply to any transaction or series of
transactions involving the sale, assignment, conveyance, transfer or other
disposition of the properties and assets by any Restricted Subsidiary to
the Company or any other Restricted Subsidiary, or the merger or
consolidation of any Restricted Subsidiary with or into the Company or any
other Restricted Subsidiary.
(b) For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of related transactions) of all
or substantially all of the properties or assets of one or more Subsidiaries,
the Capital Stock of which constitutes all or substantially all of the
properties and assets of the Company, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Company.
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(c) In connection with any consolidation, merger, sale, assignment,
conveyance, transfer or other disposition contemplated by the foregoing
provisions of this Section 5.01, the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate stating that such consolidation, merger, sale,
assignment, conveyance, transfer, or other disposition and the supplemental
indenture in respect thereof, required under clause (a)(i)(B) of this Section
5.01, comply with the requirements of the Indenture and an Opinion of Counsel to
such effect. Each such Officers' Certificate shall set forth the manner of
determination of the Company's compliance with clause (a)(iii) of this Section
5.01.
(d) For all purposes under this Indenture and the Notes, including the
provisions described in this Section 5.01 and Sections 4.09 and 4.20,
Subsidiaries of any Surviving Entity will, upon such transaction or series of
transactions, become Restricted Subsidiaries or Unrestricted Subsidiaries as
provided pursuant to Section 4.20 and all Indebtedness of the Surviving Entity
and its Subsidiaries that was not Indebtedness of the Company and its
Subsidiaries immediately prior to such transaction or series of transactions
shall be deemed to have been incurred upon such transaction or series of
transactions.
Section 5.02 Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.01 hereof, the successor corporation formed
by such consolidation or into or with which the Company is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets that meets the requirements of Section 5.01 hereof.
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ARTICLE VI
DEFAULTS AND REMEDIES
---------------------
Section 6.01 Events of Default.
-----------------
An "Event of Default" occurs if:
(a) the failure by the Company to pay any installment of interest on, or
Liquidated Damages with respect to, the Notes as and when the same becomes due
and payable and the continuance of any such failure for 30 days;
(b) the failure of the Company to pay all or any part of the principal, or
premium, if any, on the Notes when and as the same becomes due and payable at
maturity, redemption, by acceleration or otherwise, including, without
limitation, payment of the Change of Control Payment or the amount set forth in
an Asset Sale Offer, or otherwise on Notes validly tendered and not properly
withdrawn pursuant to a Change of Control or Asset Sale Offer, as applicable, or
default in the payment when due of principal of or premium, if any, on the
Notes, whether or not prohibited by any other provision of this Indenture;
(c) the failure by the Company or any of its Restricted Subsidiaries to
comply with any of the provisions of Section 4.10 or 4.14 or Article V hereof;
(d) the failure by the Company or any of its Restricted Subsidiaries, for
30 days after written notice to the Company by the Trustee or the Holders of at
least 25% in aggregate principal amount of the then outstanding Notes, to comply
with any of its other covenants or agreements in this Indenture or the Notes;
(e) the default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries, or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries, whether such Indebtedness or Guarantee now exists, or
is created after the Issue Date, if that default (i) is caused by a failure to
pay principal of or premium, if any, or interest on such Indebtedness prior to
the expiration of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default") or (ii) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the outstanding
principal amount of any such Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $5.0 million or more;
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(f) failure by the Company or any of its Restricted Subsidiaries to pay
final judgments aggregating in excess of $5.0 million, which judgments are not
paid, discharged or stayed for a period of 60 days;
(g) except as permitted by this Indenture, any Note Guarantee of a
Guarantor is held in any judicial proceeding to be unenforceable or invalid or
ceases for any reason to be in full force and effect or any Guarantor, or any
Person acting on behalf of any Guarantor, denies or disaffirms its obligations
under its Note Guarantee;
(h) the Company or any of its Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due;
(i) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary in an involuntary case; or
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(ii) appoints a custodian of the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiar ies that, taken as a
whole, would constitute a Significant Subsidiary, or for all or
substantially all of the property of the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiar ies that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days;
and
(j) (i) if any Credit Facility is not in existence, any event occurs that
causes, subject to any applicable grace period or waiver, an Event of
Termination under any of the Sprint Agreements or (ii) if any Credit Facility is
in existence, Sprint shall have commenced to exercise any remedy under the
Sprint Agreements (other than Section 11.6.3 of the Management Agreement) by
reason of the occurrence of an Event of Termination.
Section 6.02 Acceleration.
------------
If any Event of Default (other than an Event of Default specified in clause
(h) or (i) of Section 6.01 hereof with respect to the Company), occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare to be immediately due and payable (i) if
prior to October 1, 2005, the Accreted Value or (ii) if on or after October 1,
2005, the principal amount at maturity, in each case, of all Notes then
outstanding, plus accrued and unpaid interest, if any, and Liquidated Damages,
if any, to the date of acceleration. Notwithstanding the foregoing, if an Event
of Default specified in clause (h) or (i) of Section 6.01 hereof occurs with
respect to the Company any of its Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, all outstanding Notes shall be due and payable immediately without
further action or notice. In order to effect such acceleration, the Trustee or
Holders of at least 25% in principal amount of the then outstanding Notes shall
deliver notice in writing to the Company and the Trustee specifying the
respective Event of Default and that such notice is a "notice of acceleration"
(the "Acceleration Notice"), and the same (A) shall become immediately due and
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payable or (B) if there are any amounts outstanding under the Credit Facilities,
shall become immediately due and payable upon the first to occur of an
acceleration under the Credit Facilities or five Business Days after receipt by
the Company and the agent under the Credit Facilities of such Acceleration
Notice, but only if such Event of Default is then continuing.
Section 6.03 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
-----------------------
Holders of not less than a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may, on behalf of the Holders of
all of the Notes, waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase) (provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 6.05 Control by Majority.
-------------------
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
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any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of other Holders of Notes or that may involve the Trustee in
personal liability.
Section 6.06 Limitation on Suits.
-------------------
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then outstanding
Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal amount
of the then outstanding Notes do not give the Trustee a direction inconsistent
with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
---------------------------------------------
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
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Section 6.08 Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
--------------------------------
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
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. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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Section 6.10 Priorities.
----------
If the Trustee collects any money or property pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any and
interest, respectively; and
Third: to the Company or to such party as a court of competent jurisdiction
shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount
of the then outstanding Notes.
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ARTICLE VII
TRUSTEE
-------
Section 7.01 Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be deter mined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, 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. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible 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.
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(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c), (e) and (f) of this Section and Section 7.02.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02 Rights of Trustee.
-----------------
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. 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 from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
98
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
Section 7.03 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to 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 or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
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Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
------------------------------------------
Within 60 days after each October 1 beginning with October 1, 2000, and for
so long as Notes remain outstanding, the Trustee shall mail to the Holders of
the Notes a brief report dated as of such reporting date that complies with TIA
ss. 313(a) (but if no event described in TIA ss. 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA ss. 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIAss.313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIAss.313(d). The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense or a portion thereof may be
attributable to its negligence or bad faith. The Trustee shall notify the
100
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 the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its 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.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to the
extent applicable.
Section 7.08 Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
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(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10,
such Holder of a Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. Subject to the Lien provided for in Section 7.07 hereof,
the retiring Trustee shall promptly transfer all property held by it as Trustee
to the successor Trustee; provided, however, that all sums owing to the Trustee
hereunder shall have been paid. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
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Section 7.09 Successor Trustee by Merger, etc.
---------------------------------
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
-----------------------------
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
----------------------------------------
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
--------------------------------------------------------
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article VIII.
103
Section 8.02 Legal Defeasance and Discharge.
------------------------------
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest and Liquidated Damages, if any,
on such Notes when such payments are due, (b) the Company's obligations with
respect to such Notes under Article II and Section 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article VIII. Subject to
compliance with this Article VIII, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
Section 8.03 Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.03, 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20 hereof, and the
operation of Section 5.01 hereof, with respect to the outstanding Notes on and
after the date the conditions set forth in Section 8.04 are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed
not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
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Defeasance means that, with respect to the outstanding 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 covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03 hereof, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, Sections 6.01(c) through
6.01(g) hereof shall not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
------------------------------------------
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes. In order to exercise either Legal
Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as shall be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest and
Liquidated Damages, if any, on the outstanding Notes on the stated date for
payment thereof or on the applicable redemption date, as the case may be, and
the Company must specify whether the Notes are being defeased to maturity or to
a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the Issue Date, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes
shall not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and shall be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
105
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes shall not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and shall be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing
either: (ii) on the date of such deposit other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit, or
(ii) under Sections 6.01(h) or 6.01(i) hereof at any time in the period ending
on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that, assuming no intervening bankruptcy of the Company between
the date of deposit and the 91st day following the deposit and assuming that no
Holder is an "insider" of the Company under applicable Bankruptcy Law, after the
91st day following the deposit, the trust funds shall not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company or others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
106
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
------------------------------------------------------------------
Other Miscellaneous Provisions.
------------------------------
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, 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 Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest and
Liquidated Damages, if any, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities 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 the 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 the request of the
Company any money or non-callable Government Securities 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 (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
--------------------
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest or Liquidated Damages, if any, on any Note and remaining unclaimed for
two years after such principal, and premium, if any, or interest or Liquidated
Damages, if any, has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as an unsecured creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
107
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in The New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.
Section 8.07 Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any United States dollars
or non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment ofprincipal of, premium, if any, or interest or Liquidated Damages, if
any, on any Note following 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 money held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
-----------------------------------
Notwithstanding Section 9.02 of this Indenture, the Company and the Trustee
may amend or supplement this Indenture or the Notes without the consent of any
Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article II hereof (including
the related definitions) in a manner that does not materially adversely affect
any Holder;
108
(c) to provide for the assumption of the Company's or any Guarantor's
obligations to the Holders of the Notes by a successor to the Company pursuant
to Article V hereof;
(d) to make any change that would provide any additional rights or benefits
to the Holders of the Notes or that does not adversely affect the legal rights
hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA;
(f) to add a Guarantor pursuant to Section 12.02; and
(g) to evidence and provide the acceptance of the appointment of a
successor Trustee pursuant to Section 7.08 and 7.09.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
--------------------------------
Except as provided below in this Section 9.02, the Company and the Trustee
may amend or supplement this Indenture and the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in aggregate
Accreted Value of the Notes then outstanding if prior to October 1, 2005, or the
aggregate principal amount at maturity of the Notes then outstanding if after
October 1, 2005 voting as a single class (including without limitation, consents
obtained in connection with a purchase of, tender offer or exchange offer for,
the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default
or Event of Default (other than a Default or Event of Default in the payment of
the principal of, premium, if any, or interest or Liquidated Damages, if any, on
the Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture or the Notes may
109
be waived with the consent of the Holders of a majority in aggregate Accreted
Value of the then outstanding Notes voting as a single class (including without
limitation, consents obtained in connection with a purchase of, tender offer or
exchange offer for, the Notes).
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of
the documents described in Section 7.02 hereof, the Trustee shall join with the
Company in the execution of such amended or supplemental indenture unless such
amended or supplemental indenture directly affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver. However, without the consent of each Holder adversely
affected, an amendment or waiver under this Section 9.02 may not (with respect
to any Notes held by a non-consenting Holder):
(a) reduce the Accreted Value of the then outstanding Notes if prior to
October 1, 2005 or the aggregate principal amount of Notes if after October 1,
2005 whose Holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or
alter any of the provisions with respect to the redemption of the Notes except
as provided above with respect to Sections 3.09, 4.10 and 4.14 hereof;
(c) reduce the rate of or change the time for payment of interest on any
Note;
110
(d) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest or Liquidated Damages, if any, on the Notes (except
a rescission of acceleration of the Notes by the Holders of at least a majority
in aggregate Accreted Value of the then outstanding Notes and a waiver of the
payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to waivers
of past Defaults or the rights of Holders of Notes to receive payments of
principal of or premium, if any, or interest or Liquidated Damages, if any, on
the Notes;
(g) waive a redemption payment with respect to any Note (other than a
payment required by Sections 3.09, 4.10 and 4.14 hereof); or
(h) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions.
Section 9.03 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental indenture that complies with the TIA as then
in effect.
Section 9.04 Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
111
Section 9.05 Notation on or Exchange of Notes.
--------------------------------
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
--------------------------------
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article IX if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
maynot sign an amendment or supplemental indenture until its Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
10.04 hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE X
MISCELLANEOUS
-------------
Section 10.01 Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA ss. 318(c), the imposed duties shall control.
Section 10.02 Notices.
-------
Any notice or communication by the Company or the Trustee to the others is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next-day delivery, to the others' address:
112
If to the Company:
Horizon PCS, Inc.
68 East Main Street
Chillicothe, Ohio 45601-0480
Attention: William A. McKell
Telecopy No.: (740) 774-3400
With copies to:
Arnall Golden & Gregory, LLP
2800 One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3450
Attention: Donald I. Hackney, Jr.
T. Clark Fitzgerald
Telecopy No.: (404) 873-8501
If to the Trustee:
Wells Fargo Bank Minnesota, National Association
Sixth and Marquette, MAC N9303-120
Minneapolis, Minnesota 55479
Telecopier No.: (612) 667-9825
Attention: Corporate Trust Services
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
113
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
Section 10.03 Communication by Holders of Notes with Other Holders of Notes.
-------------------------------------------------------------
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 10.04 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 10.05
hereof) stating that, in the opinion of the signers, all conditions precedent
and covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 10.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
Section 10.05 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:
114
(a) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
Section 10.06 Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 10.07 No Personal Liability of Directors, Officers, Employees and
------------------------------------------------------------------
Stockholders.
------------
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or any Guarantor under the Notes, the Note
Guarantees, this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes and the Note Guarantees. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.
Section 10.08 Governing Law.
-------------
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
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Section 10.09 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 10.10 Successors.
----------
All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors.
Section 10.11 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 10.12 Counterpart Originals.
---------------------
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 10.13 Table of Contents, Headings, etc.
---------------------------------
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
ARTICLE XI
SUBORDINATION OF NOTE GUARANTEES
--------------------------------
Section 11.01 Agreement To Subordinate.
------------------------
Each Guarantor agrees, and each Holder by accepting a Note agrees, that the
Indebtedness evidenced by each Note Guarantee is subordinated in right of
payment, to the extent and in the manner provided herein, to the prior payment
in full of all Senior Debt of such Guarantor (whether outstanding on the date
hereof or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of, and shall be enforceable directly by, the
holders of such Senior Debt.
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Section 11.02 Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon (a) any distribution to creditors of any Guarantor in a liquidation or
dissolution of such Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Guarantor or its property or
(b) an assignment for the benefit of creditors or any marshaling of such
Guarantor's assets and liabilities:
(i) the holders of Senior Debt of such Guarantor shall be entitled to
receive payment in full of all Obligations due in respect of such Senior
Debt (including interest after the com mencement of any such proceeding,
whether or not allowed, at the rate specified in the applicable Senior
Debt) in cash or Cash Equivalents before Holders shall be entitled to
receive any payment with respect to the Guarantee Obligations of such
Guarantor (except that Holders may receive and retain Permitted Junior
Securities); and
(ii) until all Obligations with respect to Senior Debt of such
Guarantor (as provided in clause (i) above) are paid in full, any
distribution to which Holders would be entitled with respect to the
Guarantee Obligations of such Guarantor but for this Article XI shall be
made to holders of Senior Debt of such Guarantor (except that Holders may
receive and retain Permitted Junior Securities), as their interests may
appear to the extent necessary to make payment in full on all Obligations
with respect to such Senior Debt remaining unpaid, after giving effect to
all concurrent payments or distributions to the holders of such Senior
Debt.
The consolidation of any Guarantor with, or the merger of any Guarantor
into, another Person or the liquidation or dissolution of any Guarantor
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in this Indenture shall not be deemed a dissolution, winding up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of such Guarantor for the purposes of this
Section if the Person formed by such consolidation or into which such Guarantor
is merged or the Person which acquires by conveyance, transfer or lease such
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properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, transfer or lease, comply
with the conditions set forth in this Indenture.
Section 11.03 Default On Designated Senior Debt.
---------------------------------
No Guarantor shall make any payment or distribution to the Trustee or any
Holder upon or in respect of its Guarantee Obligations other than payments in
Permitted Junior Securities if:
(a) a default in the payment of any principal of, or premium, if any, or
interest on any Designated Senior Debt of such Guarantor occurs and is
continuing beyond any applicable grace period in the agreement, indenture or
other document governing such Designated Senior Debt (whether upon maturity, as
a result of acceleration or otherwise); or
(b) any other default occurs and is continuing with respect to any such
Designated Senior Debt that permits holders of such Designated Senior Debt as to
which such default relates to accelerate its maturity, and such Guarantor and
the Trustee receive written notice of such default from a majority of the
holders, or from the trustee, agent or other representative (the
"Representative") of the holders, of any such Designated Senior Debt (such
notice, a "Payment Blockage Notice"). If the Trustee receives any such notice, a
subsequent notice received within 360 days thereafter shall not be effective for
purposes of this Section. No nonpayment default that existed or was continuing
on the date of delivery of any Payment Blockage Notice to the Trustee shall be,
or be made, the basis for a subsequent Payment Blockage Notice unless such
default shall have been cured or waived for a period of not less than 90 days.
Notwithstanding anything herein to the contrary, each Guarantor may and
shall resume payments on and distributions in respect of its Guarantee
Obligations including the payment of any amounts previously blocked by such
Payment Blockage Notice upon the earlier of:
(i) in the case of a default referred to in clause (a) of this
Section 11.03, the date upon which the default is cured or waived or
ceases to exist, or
(ii) in the case of a default referred to in clause (b) of this
Section 11.03, 179 days after the date on which the applicable Payment
118
Blockage Notice is received or such earlier date on which the
applicable Payment Blockage Notice is earlier terminated (a) by
written notice to the Trustee and such Guarantor from such
Representative or the majority of the holders of such Designated
Senior Debt, (b) because such default is no longer continuing or (c)
because such Designated Senior Debt has been discharged or repaid in
full.
Section 11.04 Payment Permitted if No Default.
-------------------------------
Nothing contained in this Article XI or elsewhere in this Indenture, in any
of the Notes or in any Note Guarantee shall prevent any Guarantor at any time
except during the pendency of any case, proceedings, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshaling of
assets and liabilities of any such Guarantor referred to in Section 11.02 or
under the conditions described in Section 11.03, from making payments at any
time of the Guarantee Obligations of such Guarantor.
Section 11.05 Acceleration of Notes.
---------------------
If payment of the Notes is accelerated because of an Event of Default, the
Company shall promptly notify holders of Senior Debt of the acceleration.
Section 11.06 When Distribution Must be Paid Over.
-----------------------------------
In the event that any Holder receives any payments with respect to the
Guarantee Obligations of any Guarantor at a time when such payment is prohibited
by Section 11.03 hereof, such payment shall be held by such Holder in trust for
the benefit of, and, upon written request of the Representative of the holders
of Senior Debt of such Guarantor, shall be paid forthwith over and delivered to,
the holders of Senior Debt of such Guarantor under any indenture or other
agreement (if any) pursuant to which such Senior Debt may have been issued, as
their interest may appear, for application to the payment of all Obligations
with respect to such Senior Debt remaining unpaid to the extent necessary to pay
such Obligations in full in accordance with their terms, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Debt.
If a distribution is made to any Holder that because of this Article XI
should not have been made to it, such Holder who receives the distribution shall
hold it in trust for the benefit of, and upon written request of the
Representative of the holders of the applicable Senior Debt pay it over to, the
holders of such Senior Debt under any indenture or other agreement (if any)
119
pursuant to which such Senior Debt may have been issued, as their interest may
appear, for application to the payment of all Obligations with respect to such
Senior Debt remaining unpaid to the extent necessary to pay such Obligations in
full in accordance with their terms, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article XI, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article XI except if such payment is made as a result
of the willful misconduct or gross negligence of the Trustee.
Section 11.07 Notice By The Company.
---------------------
The Company shall promptly notify the Trustee and the Paying Agent of any
facts known to it that would cause a payment of any Guarantee Obligations to
violate this Article XI, but failure to give such notice shall not affect the
subordination of the Guarantee Obligations to Senior Debt as provided in this
Article XI.
Section 11.08 Subrogation.
-----------
After all Senior Debt of a Guarantor is paid in full and until the Notes
are paid in full, the Holders shall be subrogated to the rights of holders of
such Senior Debt to receive payments or distributions applicable to such Senior
Debt to the extent that payments or distributions otherwise payable to the
Holders have been applied to the payment of such Senior Debt. For the purposes
of such subrogation, no such payments or distributions to the holders of such
Senior Debt by or on behalf of such Guarantor to which the Holders or the
Trustee would otherwise be entitled except for the provisions of this Article
XI, and no payments pursuant to the provisions of this Article XI to the holders
of such Senior Debt by the Holders or the Trustee, or by or on behalf of the
Holders by virtue of this Article XI which otherwise would have been made to the
Holders shall, as between the relevant Guarantor and the Holders of the Notes,
be deemed to be a payment by such Guarantor to or on account of such Senior
Debt, it being understood that the provisions of this Article XI are and are
intended solely for the purpose of defining the relative rights of the Holders
on the one hand, and the holders of the Senior Debt, on the other hand.
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Section 11.09 Relative Rights.
---------------
This Article XI defines the relative rights of the Holders and holders of
Senior Debt of a Guarantor. Nothing in this Indenture shall:
(a) impair, as between any Guarantor and the Holders, the obligations of
such Guarantor, which are absolute and unconditional, to pay its Guarantee
Obligations in accordance with their terms;
(b) affect the relative rights of the Holders and the creditors of any
Guarantor other than their rights in relation to the holders of Senior Debt of
such Guarantor; or
(c) prevent the Trustee or any Holder from exercising its available
remedies upon a default by a Guarantor under its Guarantee Obligations, subject
to the rights of holders and owners of Senior Debt of such Guarantor to receive
distributions and payments otherwise payable to Holders pursuant to this Article
XI.
If any Guarantor fails because of this Article XI to pay any Guarantee
Obligation on the due date, such failure shall still constitute a Default or
Event of Default.
Section 11.10 Subordination May Not Be Impaired By The Guarantors.
---------------------------------------------------
No right of any holder of Senior Debt of any Guarantor to enforce the
subordination of the Indebtedness evidenced by the Guarantee Obligations of such
Subsidiary shall be impaired by any act or failure to act by such Guarantor or
any Holder or by the failure of such Guarantor, the Trustee or any Holder to
comply with this Indenture.
Section 11.11 Distribution Or Notice To Representative.
----------------------------------------
Whenever a distribution is to be made or a notice given to holders of
Senior Debt of any Guarantor, the distribution may be made and the notice given
to their Representative.
121
Upon any payment or distribution of assets of any Guarantor referred to in
this Article XI, the Trustee, subject to TIA Sections 315(a) through 315(d), and
the Holders shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction or upon any certificate of such Representative of the
applicable Senior Debt of such Guarantor or of the liquidating trustee or agent
or other person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of such Senior Debt and other Indebtedness of such
Guarantor, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article XI.
Section 11.12 Rights Of Trustee And Paying Agent.
----------------------------------
Regardless of anything to the contrary contained in this Article XI or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any default or event of default with respect to any Senior Debt
of any Guarantor or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until a Responsible Officer of the
Trustee shall have received notice in writing from the Company, or from the
majority holders of the applicable Senior Debt or Designated Senior Debt, as the
case may be, or a Representative therefor satisfactory to it that payments may
not be made pursuant to this Article XI, together with proof satisfactory to the
Trustee of such holding of Senior Debt or of the authority of such
Representative, and, prior to the receipt of any such written notice, the
Trustee, subject to TIA Sections 315(a) through 315(d), shall be entitled to
assume (in the absence of actual knowledge to the contrary) that no such facts
exist.
In the event that the Trustee determines in good faith that any evidence is
required with respect to the right of any Person as a holder of Senior Debt of
any Guarantor to participate in any payment or distribution pursuant to this
Article XI, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of such Senior Debt
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article XI and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
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Section 11.13 Article XI Not To Prevent Events of Default Under A Note Guarantee
------------------------------------------------------------------
or Limit Right to Demand Payment.
--------------------------------
The failure to make a payment pursuant to a Note Guarantee by reason of any
provision in this Article XI shall not be construed as preventing the occurrence
of a default under such Note Guarantee. Nothing in this Article XI shall have
any effect on the right of the Holders or the Trustee to make a demand for
payment on any Note Guarantee pursuant to this Indenture or the relevant Note
Guarantee.
Section 11.14 Authorization To Effect Subordination.
-------------------------------------
Each Holder of Notes by such Holder's acceptance thereof authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article XI, and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.
Section 11.15 Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee.
Section 11.16 Amendments.
----------
The provisions of this Article XI shall not be amended or modified in a
manner that adversely affects the rights of the holders of any Senior Debt of
any Guarantor without the written consent of the Administrative Agent under the
Senior Financing or a majority of the lenders under the Senior Financing.
Section 11.17 Payment in Full.
---------------
For purposes of this Article XI, payment in full of all Senior Debt shall
be deemed to have occurred upon the payment of such Senior Debt in cash or Cash
Equivalents or such other manner as is satisfactory to holders of such Senior
Debt.
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ARTICLE XII
GUARANTEES
----------
Section 12.01 Guarantees.
----------
Each Guarantor hereby unconditionally guarantees, jointly and severally, to
each Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of, and premium and Liquidated Damages, if any,
and interest on the Notes when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company under
this Indenture and the Notes and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under this
Indenture and the Notes. Each Guarantor further agrees that the Guarantee
Obligations set forth in this Article XII may be extended or renewed, in whole
or in part, without notice or further assent from such Guarantor, and that such
Guarantor will remain bound under this Article XII notwithstanding any extension
or renewal of any Guarantee Obligations.
Each Guarantor waives presentation to, demand of, payment from and protest
to the Company of any of the Guarantee Obligations and also waives notice of
protest for nonpayment. Each Guarantor waives notice of any default under
theNotes or its Note Guarantee. The obligations of each Guarantor hereunder
shall not be affected by (a) the failure of any Holder or the Trustee to assert
any claim or demand or to enforce any right or remedy against the Company or any
other Person under this Indenture, the Notes or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Notes or any other agreement; (d) the release of any security
held by any Holder or the Trustee for the Note Guarantees or any of them; (e)
the failure of any Holder or the Trustee to exercise any right or remedy against
any other guarantor of the Note Guarantee; or (f) any change in the ownership of
such Guarantor.
Each Guarantor further agrees that its Note Guarantee herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and waives any right to require that any resort be had by any
Holder or the Trustee to any security held for payment of the Note Guarantee.
Each Note Guarantee is, to the extent and in the manner set forth in
Article XI, subordinated and subject in right of payment to the prior payment in
124
full of all Senior Debt of the Guarantor giving such Note Guarantee and is made
subject to such provisions of this Indenture.
Except as expressly set forth in Sections 8.01 and 12.03, the obligations
of each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of any Note Guarantee
or otherwise. Without limiting the generality of the foregoing, the obligations
of each Guarantor herein shall not be discharged or impaired or otherwise
affected by the failure of any Holder or the Trustee to assert any claim or
demand or to enforce any remedy under this Indenture, the Notes or any other
agreement, by any waiver or modification of any thereof, by any default, failure
or delay, willful or otherwise, in the performance of the obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of such Guarantor or would
otherwise operate as a discharge of such Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Note Guarantee herein shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, or premium, if any, or interest on any Note Guarantee is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other right
which any Holder or the Trustee has at law or in equity against any Guarantor by
virtue hereof, upon the failure of the Company to pay the Accreted Value of or
premium, if any, or interest on any Guarantee Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Obligation, each Guarantor
hereby promises toand will, upon receipt of written demand by the Trustee,
forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an
amount equal to the sum of (i) the unpaid amount of such Guarantee Obligations,
(ii) accrued and unpaid premium and Liquidated Damages, if any, and interest on
such Guarantee Obligations (but only to the extent not prohibited by law) and
(iii) all other monetary Obligations of the Company to the Holders and the
Trustee.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in respect of any Obligations guaranteed hereby until payment in
125
full in cash of all Guarantee Obligations and all obligations to which the Note
Guarantee are subordinated as provided in Article XI. Each Guarantor further
agrees that, as between it, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article VI for the purposes of each such Guarantor's
Note Guarantee herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of such Obligations as
provided in Article VI, such Guarantee Obligations (whether or not due and
payable) shall forthwith become due and payable by such Guarantor for the
purposes of this Section.
Each Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys' fees) incurred by the Trustee or any Holder in enforcing
any rights under this Section 12.01.
Section 12.02 Additional Guarantees.
---------------------
If (a) the Company or any of its Restricted Subsidiaries acquires or
creates (including, without limitation, by designating an Unrestricted
Subsidiary as a Restricted Subsidiary) another Restricted Subsidiary, other than
a Foreign Subsidiary, after the date hereof, (b) any Unrestricted Subsidiary
ceases to be an Unrestricted Subsidiary, (c) any Restricted Subsidiary of the
Company that is not a Guarantor Guarantees any other Indebtedness of the Company
or any Subsidiary of the Company, (d) any Foreign Restricted Subsidiary ceases
to be a Foreign Subsidiary or (e) the Company or a Restricted Subsidiary of the
Company, individually or collectively, pledges more than 65% of the Voting Stock
of a Restricted Subsidiary that is not a Guarantor to a United States lender,
then, in each case, any such Subsidiary shall execute and deliver to the Trustee
(i) a supplemental indenture, in form and substance substantially in the form of
Exhibit E attached hereto, which subjects such Person to the provisions of this
Indenture as a Guarantor, and (ii) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such Person and
constitutes the legal, valid, binding and enforceable obligation of such Person.
Section 12.03 Limitation on Guarantor Liability.
---------------------------------
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
126
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the Obligations of such
Guarantor under this Article XII shall be limited to the maximum amount as
shall, after giving effect to such maximum amount and all other contingent and
fixed liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
Obligations of such other Guarantor under this Article XII, result in the
Obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.
Section 12.04 Execution and Delivery of Note Guarantee.
----------------------------------------
To evidence its Note Guarantee set forth in Section 12.01 hereof, each
Guarantor hereby agrees that a notation of such Note Guarantee in substantially
the form included in Exhibit D shall be endorsed by an Officer of such Guarantor
on each Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of such Guarantor by an Officer of such Guarantor
thereunto authorized.
Each Guarantor hereby agrees that its Note Guarantee set forth in Section
12.01 hereof shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note Guarantee
no longer holds that office at the time the Trustee authenticates the Note on
which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Note Guarantee set forth in this
Indenture on behalf of the Guarantors.
Section 12.05 Guarantors May Consolidate, etc., on Certain Terms.
--------------------------------------------------
A Guarantor may not sell or otherwise dispose of all or substantially all
of its assets, or consolidate with or merge with or into another Person, other
than the Company or another Guarantor, unless:
(a) immediately after giving effect to the transaction, no Default exists
under this Indenture; and
127
(b) Either
(i) the Person acquiring the assets in any such sale or
disposition or the Person formed by or surviving any such
consolidation or merger (if other than a Guarantor or the Company)
unconditionally assumes all the obligations of such Guarantor,
pursuant to a supplemental indenture in form and substance reasonably
satisfac tory to the Trustee, under the Notes, this Indenture, and the
Note Guarantee on the terms set forth herein or therein; or
(ii) the Net Proceeds of the transactions are applied in
accordance with Section 4.10 (it being understood that in the event
that such Net Proceeds are not so applied, the Company will be
permitted and required to make an Asset Sale Offer with any Excess
Proceeds in satisfaction of this condition).
In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles IV and V hereof, and notwithstanding clause
(a) and (b) of this Section 12.05, nothing contained in this Indenture or in any
of the Notes shall prevent any consolidation or merger of a Guarantor with or
into the Company or another Guarantor, or shall prevent any sale or conveyance
of the property of a Guarantor as an entirety or substantially as an entirety to
the Company or another Guarantor.
128
Section 12.06 Releases of Note Guarantees.
---------------------------
A Note Guarantee will be released (a) in connection with any sale of all of
the Capital Stock of a Guarantor to a Person (including by way of merger or
consolidation) that is not (either before or after giving effect to such
transaction) a Subsidiary of the Company, if the Net Proceeds of that
transaction are applied (or the Company delivers an Officers' Certificate to the
Trustee certifying that such Net Proceeds will be applied within the time period
specified in Section 4.10) in accordance with Section 4.10 hereof, (b) if the
Company properly designates any Restricted Subsidiary that is a Guarantor as an
Unrestricted Subsidiary in accordance with Section 4.20 hereof or (c) in
connection with any sale or other disposition of all or substantially all of the
assets of that Guarantor, including by way of merger or consolidation, provided,
however that in the event of such a transaction, the Company still has the
obligation to apply the Net Proceeds as set forth in Section 4.10.
Any Guarantor not released from its obligations under its Note Guarantee
shall remain liable for the full amount of principal of and interest on the
Notes and for the other Obligations of any Guarantor under this Indenture as
provided in this Article XII.
[Signatures on following page]
129
SIGNATURES
Dated as of September 26, 2000
HORIZON PCS, INC.
By: /s/ William A. McKell
--------------------------------------
Name: William A. McKell
Title: President
HORIZON PERSONAL COMMUNICATIONS, INC.
By: /s/ William A. McKell
--------------------------------------
Name: William A. McKell
Title: President
BRIGHT PERSONAL COMMUNICATIONS SERVICES, LLC
By: /s/ William A. McKell
--------------------------------------
Name: William A. McKell
Title: President
WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By: /s/ Jane Y. Schweiger
--------------------------------------
Name: Jane Y. Schweiger
Title: Corporate Trust Officer
EXHIBIT A
(Face of Note)
14% SENIOR DISCOUNT NOTES DUE 2010
CUSIP _______________
No. ______________ $_______________
HORIZON PCS, INC.
promises to pay to Cede & Co. or registered assigns, the principal sum of
________ Dollars ($______________) on October 1, 2010.
Interest Payment Dates: April 1 and October 1.
Record Dates: March 15 and September 15.
Dated: September 26, 2000
HORIZON PCS, INC.
By:__________________________________
Name:
Title:
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By: _________________________________
Authorized Signatory
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(Back of Note)
14% SENIOR DISCOUNT NOTES DUE 2010
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (i) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (ii) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(iii) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (iv) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COM PANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
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OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (i) IT IS A "QUALIFIED INSTITU TIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE ACT)(A "QIB"), (ii) IT HAS ACQUIRED THIS
SECU RITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE ACT OR (iii) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DE FINED
IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT (AN
"IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (i) TO THE COM PANY OR ANY OF ITS SUBSIDIARIES, (ii) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (iii) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF
RULE 903 OR 904 OF THE ACT, (iv) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144 UNDER THE ACT, (v) TO AN IAI THAT, PRIOR TO SUCH TRANS FER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH
CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANS FER IS IN COMPLIANCE WITH
THE ACT, (vi) IN ACCOR DANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO
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THE COMPANY) OR (vii) PURSUANT TO AN EFFEC TIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULA TION S UNDER THE ACT. THE INDENTURE
AND WARRANT AGREEMENT CONTAIN A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THESE SECURITIES IN VIOLATION OF THE FOREGOING.
UNTIL THE SEPARATION DATE (AS DEFINED), THIS NOTE HAS BEEN ISSUED AS, AND MUST
BE TRANSFERRED AS, A UNIT TOGETHER WITH THE ASSOCIATED WARRANTS TO PURCHASE
CLASS A COMMON STOCK OF HORIZON PCS, INC. EACH UNIT CONSISTS OF $1,000 PRINCIPAL
AMOUNT OF NOTES AND A WARRANT TO PURCHASE 12.90 SHARES OF CLASS A COMMON STOCK
OF HORIZON PCS, INC., SUBJECT TO ADJUST MENT UNDER CERTAIN CIRCUMSTANCES. A COPY
OF THE WARRANT AGREEMENT PURSUANT TO WHICH THE WARRANTS HAVE BEEN ISSUED IS
AVAILABLE FROM THE COMPANY UPON REQUEST.
FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR PURPOSES OF SECTION
1273 OF THE CODE, THE ISSUE PRICE IS $507.39 AND THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT IS $561.24, IN EACH CASE PER $1,000 PRINCIPAL AMOUNT OF THIS SECURITY.
FOR PURPOSES OF SECTION 1275 OF THE CODE, THE YIELD TO MATURITY COMPOUNDED
SEMIANNUALLY IS 16.84%.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
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1. Interest. Horizon PCS, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 14% per annum
until maturity, in the manner specified below, and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. Interest will not accrue prior to April 1, 2006.
Thereafter, the Company shall pay interest and Liquidated Damages, if any,
semi-annually on April 1 and October 1 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Notes shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from October 1, 2005;
provided, however, that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be April 1, 2006. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any, proceeding under
any Bankruptcy Law) on overdue installments of interest and Liquidated Damages,
if any (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest shall be computed on the
basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company shall pay interest on the Notes (except
defaulted interest) and Liquidated Damages, if any, to the Persons who are
registered Holders of Notes at the close of business on the March 15 or
September 15 next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes shall be payable as to principal, premium and Liquidated
Damages, if any, and interest at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages, if any, may
be made by check mailed to the Holders at their addresses set forth in the
register of Holders; provided, however, that payment by wire transfer of
immediately available funds shall be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Company or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
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3. Paying Agent and Registrar. Initially, Wells Fargo Bank Minnesota,
National Association, the Trustee under the Indenture, shall act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as of
September 26, 2000 ("Indenture") by and among the Company, Horizon Personal
Communications, Inc. and Bright Personal Communications Services, LLC, as
Guarantors, and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling.
5. Optional Redemption.
(a) On or after October 1, 2005, the Company may redeem the Notes at
any time, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest and Liquidated Damages, if
any, thereon to the date fixed for redemption, if redeemed during the
twelve-month period beginning on October 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2005 107.000%
2006 104.667%
2007 102.333%
2008 and thereafter 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section 5, on
or prior to October 1, 2003, the Company shall be permitted to redeem up to 35%
of the Accreted Value of the Notes originally issued at a redemption price of
114% of the Accreted Value thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date fixed for redemption, with the
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net cash proceeds of one or more Equity Offerings; provided, however, that (1)
at least 65% of the Accreted Value of the Notes originally issued remains
outstanding immediately after the occurrence of the redemption, excluding Notes
held by the Company or any of its Subsidiaries; and (2) each redemption occurs
within 90 days after the date of the closing of such an offering.
6. Mandatory Redemption. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
7. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Company shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to (i) 101% of the Accreted Value thereof, plus Liquidated Damages,
if any, thereon to the date fixed for repurchase, if the repurchase occurs prior
to October 1, 2005, or (ii) 101% of the aggregate principal amount at maturity
thereof plus accrued and unpaid interest and Liquidated Damages, thereon, if
any, to the date of purchase, if the repurchase occurs on or after October 1,
2005 (the "Change of Control Payment"). Within 30 business days following any
Change of Control, the Company shall mail a notice to the Trustee and to each
Holder setting forth the procedures governing the Change of Control Offer as
required by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, when the aggregate amount of Excess Proceeds exceeds $10.0 million, the
Company shall commence an offer to all Holders of Notes and all holders of other
Indebtedness containing provisions similar to those set forth in the Indenture
with respect to offers to purchase or redeem with the proceeds of sales of
assets (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture and
such other Indebtedness to purchase the maximum principal amount of Notes and
such other Indebtedness that may be purchased out of the Excess Proceeds at an
offer price in cash in an amount equal to 100% of the Accreted Value of the
Notes, if the repurchase occurs before October 1, 2005, or 100% of the principal
amount thereof plus accrued and unpaid interest if the repurchase occurs on or
after October 1, 2005, and in each case, Liquidated Damages thereon, if any, to
the date fixed for the closing of such offer in accordance with the procedures
set forth in Section 3.09 and such other Indebtedness.
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8. Notice of Redemption. Notice of redemption shall be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsement s and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding interest payment date.
10. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate Accreted Value of the Notes then
outstanding if prior to October 1, 2005, or the aggregate principal amount at
maturity of the then outstanding Notes if on or after October 1, 2005, voting as
a single class, including without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for Notes, and any
existing Default or compliance with any provision of the Indenture or the Notes
may be waived with the consent of the Holders of a majority in aggregate
Accreted Value of the then outstanding Notes voting as a single class, including
without limitation, in consents obtained in connection with a purchase of, or
tender offer or exchange offer for Notes. Without the consent of any Holder of a
Note, the Indenture or the Notes may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes or to alter the provisions of
Article 2 hereof (including the related definitions) in a manner that does not
materially adversely affect any Holder, to provide for the assumption of the
Company's or any Guarantor's obligations to the Holders of the Notes by a
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successor to the Company pursuant to Article 5 of the Indenture, to make any
change that would provide any additional rights or benefits to the Holders of
the Notes or that does not adversely affect the legal rights hereunder of any
Holder of the Note, to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA, to add a Guarantor
pursuant to Section 12.02 of the Indenture, and to evidence and provide the
acceptance of the appointment of a successor Trustee pursuant to Section 7.08
and 7.09 of the Indenture.
12. Defaults and Remedies. Events of Default include (a) the failure by the
Company to pay any installment of interest on, or Liquidated Damages with
respect to, the Notes, as and when the same becomes due and payable and the
continuance of any such failure for 30 days, (b) the failure of the Company to
pay all or any part of the principal, or premium, if any, on the Notes when and
as the same becomes due and payable at maturity, redemption, by acceleration or
otherwise, including, without limitation, payment of the Change of Control
Payment or the amount set forth in the Asset Sale Offer, or otherwise on Notes
validly tendered and not properly withdrawn pursuant to a Change of Control or
Asset Sale Offer, as applicable, or default in the payment when due of principal
of or premium, if any, on the Notes, whether or not prohibited by any other
provision of the Indenture, (c) the failure by the Company or any of its
Restricted Subsidiaries to comply with any of the provisions of Section 4.10 or
4.14 or Article V of the Indenture, (d) the failure by the Company or any of its
Restricted Subsidiaries, for 30 days after written notice to the Company by the
Trustee or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes, to comply with any of its other agreements in the Indenture
or the Notes, (e) the default under any mortgage, indenture or instrument under
which there may be secured or evidenced any Indebtedness for money borrowed by
the Company or any of its Restricted Subsidiaries, or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries, whether such
Indebtedness or Guarantee now exists, or is created after the date of the
Indenture, if that default (A) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness on the date of such default (a
"Payment Default") or (B) results in the acceleration of such Indebtedness prior
to its express maturity; and, in each case, the outstanding principal amount of
any such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $5.0 million or more; (f) failure by
the Company or any of its Restricted Subsidiaries to pay final judgments
aggregating in excess of $5.0 million, which judgments are not paid, discharged
or stayed for a period of 60 consecutive days, (g) certain events of bankruptcy
or insolvency with respect to the Company or any of its Significant Subsidiaries
and (h) certain termination events under the Sprint Agreements. If any Event of
A-9
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding
Notes shall become due and payable without further action or notice. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
13. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. No 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 the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the SEC that such a waiver is
against public policy.
15. Authentication. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
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17. Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of September 26, 2000, between the Company and the parties named on the
signature pages thereof (the "Registration Rights Agreement").
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Horizon PCS, Inc.
68 East Main Street
Chillicothe, Ohio 45601-0480
Attention: Chief Executive Officer
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
________________________________________________________________________________
Date: __________________________
Your Signature: __________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee:_______________________
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Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.14 of the Indenture, check the box below:
__ Section 4.10 __ Section 4.14
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you
elect to have purchased: $________
Date:______________________ Your Signature: _________________________
(Sign exactly as your name appears on the
Note)
Signature Guarantee:_____________________
Tax Identification No:___________________
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Amount of increase Principal Amount
Amount of decrease in Principal of this Signature of
in Principal Amount Amount Global Note authorized officer
of this of this following such of Trustee or Note
Date of Exchange Global Note Global Note decrease (or increase) Custodian
- ----------------------------------------------------------------------------------------------------------------------------------
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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Horizon PCS, Inc.
68 East Main Street
Chillicothe, Ohio 45601-0480
Wells Fargo Bank Minnesota, National Association
Sixth and Marquette, MAC N9303-120
Minneapolis, MN 55479
Re: 14% Senior Discount Notes due 2010 of Horizon PCS, Inc.
Reference is hereby made to the Indenture, dated as of September 26, 2000
(the "Indenture"), by and among Horizon PCS, Inc., as issuer (the "Company"),
Horizon Personal Communications, Inc. and Bright Personal Communications
Services, LLC, as guarantors, and Wells Fargo Bank Minnesota, National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. __ Check if Transferee shall take delivery of a beneficial interest in
the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933 (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
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meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note shall be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note or the Definitive Note and in the
Indenture and the Securities Act.
2. __ Check if Transferee shall take delivery of a beneficial interest in
the Regulation S Global Note or a Definitive Note pursuant to Regulation S. The
Transfer is being effected pursuant to and in accordance with Rule 904 under the
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a person in the United States and (x) at
the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note shall be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.
3. __ Check and complete if Transferee will take delivery of a beneficial
interest in the IAI Global Note or a Definitive Note pursuant to any provision
of the Securities Act other than Rule 144A or Regulation S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) __ such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
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or
(b) __ such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) ___ such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) __ such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit F to the Indenture and (2) if
such Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the Transferor
or the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the IAI Global Note and/or the Definitive Notes and
in the Indenture and the Securities Act.
4. __ Check and complete if Transferee shall take delivery of a beneficial
interest in a Definitive Note pursuant to any provision of the Securities Act
other than Rule 144A or Regulation S. The Transfer is being effected in
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Notes and Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further
certifies that (check one):
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(a) such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b) such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), to the effect that such Transfer
is in compliance with the Securities Act. Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note shall be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Definitive
Notes and in the Indenture and the Securities Act.
5. __ Check if Transferee shall take delivery of a beneficial interest in
an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) __ Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
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Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consumma tion of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note shall no longer be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Global Notes, on
Restricted Definitive Notes and in the Indenture.
(b) __ Check if Transfer is Pursuant to Regulation S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note shall no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) __ Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consumma tion of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note shall not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
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This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
_____________________________________
[Insert Name of Transferor]
By: _________________________________
Name:
Title:
Dated: __________________, ____
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ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) __ a beneficial interest in the:
(i) __ 144A Global Note (CUSIP __________), or
(ii) __ Regulation S Global Note (CUSIP _______), or
(iii) __ IAI Global Note (CUSIP ___________), or
(iv) __ a Restricted Definitive Note.
2. After the Transfer the Transferee shall hold:
[CHECK ONE]
(a) __ a beneficial interest in the:
(i) __ 144A Global Note (CUSIP __________), or
(ii) __ Regulation S Global Note (CUSIP ___________), or
(iii) __ IAI Global Note (CUSIP __________), or
(iv) __ Unrestricted Global Note (CUSIP _________); or
(b) __ a Restricted Definitive Note; or
(c) __ an Unrestricted Definitive Note, in accordance with the terms
of the Indenture.
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EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Horizon PCS, Inc.
68 East Main Street
Chillicothe, Ohio 45601-0480
Wells Fargo Bank Minnesota, National Association
Sixth and Marquette, MAC N9303-120
Minneapolis, MN 55479
Re: 14% Senior Discount Notes due 2010 of Horizon PCS, Inc.
(CUSIP______________)
Reference is hereby made to the Indenture, dated as of September 26, 2000
(the "Indenture"), by and among Horizon PCS, Inc., as issuer (the "Company"),
Horizon Personal Communications, Inc. and Bright Personal Communications
Services, LLC, as guarantors, and Wells Fargo Bank Minnesota, National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
____________, (the "Owner") owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note
(a) __ Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
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for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933 (the "Securities Act"), (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) __ Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) __ Check if Exchange is from Restricted Definitive Note to
beneficial interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) __ Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
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transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes.
(a) __ Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued shall continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) __ Check if Exchange is from Restricted Definitive Note to
beneficial interest in a Restricted Global Note. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the 144A
Global Note Regulation S Global Note IAI Global Note, with an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, and in compliance with any applicable blue sky securities laws of any state
of the United States. Upon consummation of the proposed Exchange in accordance
with the terms of the Indenture, the beneficial interest issued shall be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the relevant Restricted Global Note and in the Indenture and the
Securities Act.
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This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
__________________________________________
[Insert Name of Owner]
By: ______________________________________
Name:
Title:
Dated: ________________, ____
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EXHIBIT D
FORM OF NOTATION ON NOTE RELATING TO NOTE GUARANTEE
Each Guarantor, as defined in the Indenture (the "Indenture"), referred to
in the Note upon which this notation is endorsed, (i) has jointly and severally
unconditionally guaranteed (a) the full and punctual payment of the principal
of, premium and interest and Liquidated Damages, if any, on the Notes, whether
at maturity or an interest payment date, by acceleration, call for redemption or
otherwise, (b) the full and punctual payment of interest on the overdue
principal and premium of, and interest and Liquidated Damages, if any, on the
Notes, and (c) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, the same shall be promptly paid in full
when due in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise and (ii) has agreed to pay any and
all costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or any Holder in enforcing any rights under this Note Guarantee.
Notwithstanding the foregoing, in the event that the Guarantor would
constitute or result in a violation of any applicable fraudulent conveyance or
similar law of any relevant jurisdiction, the liability of such Guarantor under
its Note Guarantee shall be reduced to the maximum amount permissible under such
fraudulent conveyance or similar law.
No past, present or future director, officer, employee, agent,
incorporator, stockholder or agent of any Guarantor, as such, shall have any
liability for any obligations of the Company or any Guarantor under the Notes,
any Note Guarantee, Indenture, any supplemental Indenture delivered pursuant to
the Indenture by such Guarantor or any Note Guarantees, or for any claim based
on, in respect of or by reason of such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability.
This Note Guarantee shall be binding upon each Guarantor and its successors
and assigns and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by the Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof.
This Note Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Note upon which this Note Guarantee is
D-1
noted have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers. Capitalized terms used herein have
the meaning assigned to them in the Indenture.
GUARANTOR
By: ____________________________________
Name:
Title:
D-2
EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_____________, among ______________ (the "Guarantor"), a subsidiary of Horizon
PCS, Inc. (or its permitted successor), a Delaware corporation (the "Company")
and Wells Fargo Bank Minnesota, National Association, as trustee under the
indenture referred to below (the "Trustee").
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of September 26, 2000 providing for the
issuance of an aggregate principal amount of $295.0 million of 14% Senior
Discount Notes due 2010 (the "Notes") on the Issue Date;
WHEREAS, the Indenture provides that under certain circumstances the
Guarantor shall execute and deliver to the Trustee a supplemental indenture
pursuant to which the Guarantor shall unconditionally guarantee all of the
Company's Obligations under the Notes and the Indenture on the terms and
conditions set forth herein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized Terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guarantor hereby agrees as follows:
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(a) Along with all Guarantors, to jointly and severally Guarantee to
each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the Obligations of the Company
hereunder or thereunder, that:
(i) the principal of, premium, if any, and interest
and Liquidated Damages, if any, on the Notes shall
be promptly paid in full when due, whether at
maturity, by acceleration, redemption or other
wise, and interest on the overdue principal of to
the extent and interest and Liquidation Damages,
if any, on the Notes to the extent lawful, and all
other Obligations of the Company to the Holders or
the Trustee hereunder or under the Indenture shall
be promptly paid in full or performed, all in
accordance with the terms hereof and under the
Indenture;
(ii) in case of any extension of time of payment or
renewal of any Notes or any of such other Obli
gations, that same shall be promptly paid in full
when due or performed in accordance with the terms
of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or
any performance so guaranteed for whatever reason,
the Guarantors shall be jointly and severally
obligated to pay the same immedi ately.
(b) The obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.
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(c) The following is hereby waived: diligence presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever.
(d) This Note Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors, or any Custodian, Trustee, liquidator
or other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
(f) The Guarantor shall not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 of the Indenture for the
purposes of this Note Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Note Guarantee.
(h) The Guarantors shall have the right to seek contribution from
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Note Guarantee.
(i) Notwithstanding the foregoing, in the event that this Note
Guarantee would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability of the
Guarantor under this Supplemental Indenture and its Note Guarantee shall be
reduced to the maximum amount permissible under such fraudulent conveyance or
similar law.
E-3
(j) Notwithstanding anything herein to the contrary, all obligations
of the Guarantor hereunder shall be subordinated to the prior payment of Senior
Debt to the same extent that the Notes are subordinated pursuant to Article 11
of the Indenture.
3. Execution and Delivery. Each Guarantor agrees that the Note Guarantees
shall remain in full force and effect notwithstanding any failure to endorse on
each Note a notation of such Note Guarantee.
4. Guarantor May Consolidate, Etc. on Certain Terms.
(a) A Guarantor may not sell or otherwise dispose of all or
substantially all of its assets, or consolidate with or merge with or into
another Person, other than the Company or another Guarantor, unless:
(i) immediately after giving effect to the
transaction, no Default exists under the
Indenture; and
(ii) Either
a. the Person acquiring the assets in any
such sale or disposition or the Person
formed by or surviving any such
consolidation or merger (if other than a
Guarantor or the Company)
unconditionally assumes all the
obligations of such Guarantor, pursuant
to a supplemental Indenture in form and
sub stance reasonably satisfactory to
the Trustee, under the Notes, the
Indenture, and the Note Guarantee on the
terms set forth herein or therein; or
b. the Net Proceeds of the transactions are
applied in accordance with Section 4.10
of the Indenture (it being understood
that in the event that such Net Proceeds
are not so applied, the Company will be
permitted and required to make an Asset
Sale Offer with any Excess Proceed in
satisfaction of this condition).
E-4
(b) In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental Indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Note Guarantee endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by the
Guarantor, such successor Person shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the Note
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Note Guarantees so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Note Guarantees theretofore
and thereafter issued in accordance with the terms of this Indenture as though
all of such Note Guarantees had been issued at the date of the execution hereof.
(c) Except as set forth in Articles IV and V of the Indenture, and
notwithstanding clause (a) and (b) of Section 12.05 of the Indenture, nothing
contained in the Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.
5. Releases.
(a) A Note Guarantee will be released (a) in connection with any sale
of all of the Capital Stock of a Guarantor to a Person (including by way of
merger or consolidation) that is not (either before or after giving effect to
such transaction) a Subsidiary of the Company, if the Net Proceeds of that
transaction are applied (or the Company delivers an Officer's Certificate to the
Trustee certifying that such Net Proceeds will be applied within the time period
specified in Section 4.10) in accordance with Section 4.10 of the Indenture, (b)
if the Company properly designates any Restricted Subsidiary that is a Guarantor
as an Unrestricted Subsidiary in accordance with Section 4.20 of the Indenture
or (c) in connection with any sale or other disposition of all or substantially
all of the assets of the Guarantor, including by way of merger or consolidation,
provided, however, that in the event of such a transaction, the Company still
has the obligation to apply the Net Proceeds as set forth in Section 4.10 of the
Indenture.
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(b) Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under the Indenture
as provided in the Indenture.
6. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guarantor, as such,
shall have any liability for any obligations of the Company or any Guarantor
under the Notes, any Note Guarantees, the Indenture or this Supplemental
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
SEC that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
10. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guarantor and the Company.
E-6
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: ____________________________
[Guaranteeing Subsidiary]
By: ____________________________________
Name:
Title:
WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By: ____________________________________
Name:
Title:
E-7
EXHIBIT F
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Horizon PCS, Inc.
68 East Main Street
Chillicothe, Ohio 45601-0480
Wells Fargo Bank Minnesota, National Association
Sixth and Marquette, MAC N9303-120
Minneapolis, MN 55479
Re: 14% Senior Discount Notes due 2010
----------------------------------
Reference is hereby made to the Indenture, dated as of September 26, 2000
(the "Indenture"), by and among Horizon PCS, Inc., as issuer (the "Company"),
Horizon Personal Communications, Inc. and Bright Personal Communications
Services, LLC, as guarantors, and Wells Fargo Bank Minnesota, National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) __ a beneficial interest in a Global Note, or
(b) __ a Definitive Note, we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the United States Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
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may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
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You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
________________________________________
[Insert Name of Accredited Investor]
By: ____________________________________
Name:
Title:
Dated: _________________________
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