Exhibit 4.1
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OPTEL, INC., as Issuer
and
U.S. TRUST COMPANY OF TEXAS, N.A., as Trustee
--------------------
INDENTURE
Dated as of February 14, 1997
--------------------
$225,000,000
13% Senior Notes Due 2005
13% Senior Notes Due 2005, Series B
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Reconciliation and tie between Trust Indenture Act of 1939, as
amended, and Indenture, dated as of February 14, 1997
Trust Indenture Indenture
Act Section Section
- --------------- ---------
Section 310(a)(1) .................................... 6.09
(a)(2) .................................... 6.09
(a)(3) .................................... Not Applicable
(a)(4) .................................... Not Applicable
(b) .................................... 6.08, 6.10
Section 311(a) .................................... 6.05
(b) .................................... 6.05
(c) .................................... Not Applicable
Section 312(a) .................................... 7.01
(b) .................................... 7.02
(c) .................................... 7.02
Section 313(a) .................................... 7.03
(b) .................................... 7.03
(c) .................................... 7.03
(d) .................................... 7.03
Section 314(a) .................................... 7.04
(a)(4) .................................... 10.11
(b) .................................... Not Applicable
(c)(1) .................................... 1.04, 4.04
(c)(2) .................................... 1.04, 4.04
(c)(3) .................................... Not Applicable
(d) .................................... 12.03(d)
(e) .................................... 1.04
Section 315(a) .................................... 6.01(a)
(b) .................................... 6.02
(c) .................................... 6.01(b)
(d) .................................... 6.01(c)
(e) .................................... 5.14
Section 316(a) (last
sentence) .................................... 1.01
(a)(1)(A) .................................... 5.12, 5.13
(a)(1)(B) .................................... 5.13
(a)(2) .................................... Not Applicable
(b) .................................... 5.08
Section 317(a)(1) .................................... 5.03
(a)(2) .................................... 5.04
(b) .................................... 10.03
Section 318(a) .................................... 1.08
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Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of this Indenture.
TABLE OF CONTENTS
Page
----
PARTIES ............................................................ 1
RECITALS ........................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 1.01. Definitions ..................................... 1
Section 1.02. Other Definitions ............................... 32
Section 1.03. Rules of Construction ........................... 33
Section 1.04. Form of Documents Delivered to
Trustee ....................................... 34
Section 1.05. Acts of Holders ................................. 34
Section 1.06. Notices, etc., to the Trustee and the
Company ....................................... 35
Section 1.07. Notice to Holders; Waiver ....................... 36
Section 1.08. Conflict with Trust Indenture Act ............... 36
Section 1.09. Effect of Headings and Table of
Contents ...................................... 37
Section 1.10. Successors and Assigns .......................... 37
Section 1.11. Separability Clause ............................. 37
Section 1.12. Benefits of Indenture ........................... 37
Section 1.13. GOVERNING LAW ................................... 37
Section 1.14. No Recourse Against Others ...................... 37
Section 1.15. Independence of Covenants ....................... 38
Section 1.16. Exhibits ........................................ 38
Section 1.17. Counterparts .................................... 38
Section 1.18. Duplicate Originals ............................. 38
ARTICLE TWO
SECURITY FORMS
Section 2.01. Form and Dating.................................. 38
ARTICLE THREE
THE SECURITIES
Section 3.01. Title and Terms ................................. 39
Section 3.02. Registrar and Paying Agent ...................... 40
Section 3.03. Execution and Authentication .................... 41
Section 3.04. Temporary Securities ............................ 43
Section 3.05. Transfer and Exchange ........................... 44
Section 3.06. Mutilated, Destroyed, Lost and Stolen
Securities .................................... 45
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Note: This table of contents shall not, for any purpose, be deemed to be a part
of this Indenture.
Section 3.07. Payment of Interest; Interest Rights
Preserved ..................................... 46
Section 3.08. Persons Deemed Owners ........................... 47
Section 3.09. Cancellation .................................... 47
Section 3.10. Computation of Interest ......................... 48
Section 3.11. Legal Holidays .................................. 48
Section 3.12. CUSIP Number .................................... 48
Section 3.13. Paying Agent to Hold Money in Trust ............. 49
Section 3.14. Book Entry Provisions for Global
Securities .................................... 49
Section 3.15. Special Transfer Provisions ..................... 51
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 4.01. Company's Option To Effect Defeasance
or Covenant Defeasance ........................ 54
Section 4.02. Defeasance and Discharge ........................ 54
Section 4.03. Covenant Defeasance ............................. 55
Section 4.04. Conditions to Defeasance or Covenant
Defeasance .................................... 55
Section 4.05. Deposited Money and U.S. Government
Obligations To Be Held in Trust;
Other Miscellaneous Provisions ................ 58
Section 4.06. Reinstatement ................................... 59
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default ............................... 59
Section 5.02. Acceleration of Maturity; Rescission
and Annulment ................................. 62
Section 5.03. Collection of Indebtedness and Suits
for Enforcement by Trustee .................... 64
Section 5.04. Trustee May File Proofs of Claims ............... 65
Section 5.05. Trustee May Enforce Claims Without
Possession of Securities ...................... 66
Section 5.06. Application of Money Collected .................. 66
Section 5.07. Limitation on Suits ............................. 67
Section 5.08. Unconditional Right of Holders to
Receive Principal, Premium and
Interest ...................................... 68
Section 5.09. Restoration of Rights and Remedies .............. 68
Section 5.10. Rights and Remedies Cumulative .................. 68
Section 5.11. Delay or Omission Not Waiver .................... 68
Section 5.12. Control by Majority ............................. 69
Section 5.13. Waiver of Past Defaults ......................... 69
Section 5.14. Undertaking for Costs ........................... 70
Section 5.15. Waiver of Stay, Extension or Usury
Laws .......................................... 70
Section 5.16. Unconditional Right of Holders to
Institute Certain Suits ....................... 70
ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities ............. 71
Section 6.02. Notice of Defaults .............................. 72
Section 6.03. Certain Rights of Trustee ....................... 72
Section 6.04. Trustee Not Responsible for Recitals,
Dispositions of Securities or
Application of Proceeds Thereof ............... 75
Section 6.05. Trustee and Agents May Hold
Securities; Collections; Etc. ................. 75
Section 6.06. Money Held in Trust ............................. 75
Section 6.07. Compensation and Indemnification of
Trustee and its Prior Claim ................... 75
Section 6.08. Conflicting Interests ........................... 77
Section 6.09. Corporate Trustee Required;
Eligibility ................................... 77
Section 6.10. Resignation and Removal; Appointment
of Successor Trustee .......................... 77
Section 6.11. Acceptance of Appointment by
Successor ..................................... 79
Section 6.12. Merger, Conversion, Amalgamation,
Consolidation or Succession to
Business ...................................... 80
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND COMPANY
Section 7.01. Preservation and Information; Company
to Furnish Trustee Names and
Addresses of Holders .......................... 81
Section 7.02. Communications of Holders ....................... 82
Section 7.03. Reports by Trustee .............................. 82
Section 7.04. Reports by Company .............................. 82
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OF
ASSETS, ETC.,
Section 8.01. Company May Consolidate, Etc., Only
on Certain Terms .............................. 83
Section 8.02. Successor Substituted ........................... 85
ARTICLE NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements
and Waivers Without Consent of
Holders ....................................... 86
Section 9.02. Supplemental Indentures, Agreements
and Waivers with Consent of Holders............ 87
Section 9.03. Execution of Supplemental Indentures,
Agreements and Waivers ........................ 89
Section 9.04. Effect of Supplemental Indentures ............... 89
Section 9.05. Conformity with Trust Indenture Act ............. 90
Section 9.06. Reference in Securities to
Supplemental Indentures ....................... 90
Section 9.07. Record Date ..................................... 90
Section 9.08. Revocation and Effect of Consents ............... 90
ARTICLE TEN
COVENANTS
Section 10.01. Payment of Principal, Premium and
Interest ...................................... 91
Section 10.02. Maintenance of Office or Agency ................. 91
Section 10.03. Money for Security Payments To Be
Held in Trust ................................. 92
Section 10.04. Corporate Existence ............................. 93
Section 10.05. Payment of Taxes and Other Claims ............... 94
Section 10.06. Maintenance of Properties ....................... 94
Section 10.07. Insurance ....................................... 94
Section 10.08. Books and Records ............................... 95
Section 10.09. Compliance Certificates and Opinions ............ 95
Section 10.10. Provision of Financial Statements ............... 96
Section 10.11. Change of Control ............................... 96
Section 10.12. Limitation on Indebtedness ...................... 99
Section 10.13. Statement by Officers as to Default ............. 99
Section 10.14. Limitation on Restricted Payments ............... 100
Section 10.15. Limitation on Transactions with
Affiliates .................................... 104
Section 10.16. Disposition of Proceeds of Asset
Sales ......................................... 105
Section 10.17. Limitation on Liens Securing Certain
Indebtedness .................................. 110
Section 10.18. Escrow Account .................................. 110
Section 10.19. Limitation on Certain Guarantees and
Indebtedness by Restricted
Subsidiaries .................................. 110
Section 10.20. Limitation on Issuances and Sales of
Preferred Stock of Restricted
Subsidiaries .................................. 111
Section 10.21. Limitation on Dividends and Other
Payment Restrictions Affecting
Restricted Subsidiaries ....................... 111
Section 10.22. Limitation on Designations of
Unrestricted Subsidiaries ..................... 112
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 11.01. Right of Redemption ............................. 114
Section 11.02. Applicability of Article ........................ 114
Section 11.03. Election to Redeem; Notice to
Trustee ....................................... 114
Section 11.04. Selection by Trustee of Securities to
Be Redeemed ................................... 114
Section 11.05. Notice of Redemption ............................ 115
Section 11.06. Deposit of Redemption Price ..................... 116
Section 11.07. Securities Payable on Redemption
Date .......................................... 116
Section 11.08. Securities Redeemed or Purchased in
Part .......................................... 117
ARTICLE TWELVE
COLLATERAL AND SECURITY
Section 12.01. Escrow Agent..................................... 117
Section 12.02. Recording and Opinions........................... 119
Section 12.03. Release of Collateral............................ 119
Section 12.04. Certificates of the Company...................... 120
Section 12.05. Authorization of Actions to Be Taken
by the Trustee Under the Escrow
Agreement...................................... 121
Section 12.06. Authorization of Receipt of Funds by
the Trustee Under the Escrow
Agreement...................................... 121
Section 12.07. Termination of Security Interest................. 121
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE
Section 13.01. Satisfaction and Discharge of
Indenture...................................... 122
Section 13.02. Application of Trust Money ...................... 123
SIGNATURES ......................................................... 124
Exhibit A-1 - Form of Series A Security
Exhibit A-2 - Form of Series B Security
Exhibit B - Form of Legend for Book-Entry Securities
Exhibit C - Form of Certificate to Be Delivered in Connection
with Transfers to Non-QIB Accredited Investors
Exhibit D - Form of Certificate to Be Delivered in Connection
with Transfers Pursuant to Regulation S
Exhibit E - Form of Escrow Agreement
Exhibit F - Form of Subordination Provisions for Deeply
Subordinated Shareholder Loans
INDENTURE, dated as of February 14, 1997, among OpTel, Inc., a
corporation incorporated under the laws of the State of Delaware (the
"Company"), as issuer and U.S. Trust Company of Texas, N.A., a national banking
association, as trustee (the "Trustee").
RECITALS
The Company has duly authorized the creation of an issue of 13%
Senior Notes Due 2005 (the "Series A Securities"), and an issue of 13% Senior
Notes Due 2005, Series B (the "Series B Securities," and together with the
Series A Securities, the "Securities"), of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.
All things necessary have been done to make the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligation of the Company and to make this
Indenture a valid agreement of each of the Company and the Trustee in accordance
with the terms hereof.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders (as hereinafter defined) of the
Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a person existing at
the time such person becomes a Restricted Subsidiary or assumed in connection
with an Asset Acquisition of such person and not incurred in connection with, or
in anticipation of, such person becoming a Restricted Subsidiary or such Asset
Acquisition.
"Affiliate" of any specified person means any other person which,
directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, such specified person. For the purposes of this
definition, "control" when used with respect to any person means the power
to direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent Member" has the meaning set forth in
Section 3.14.
"Annualized Pro Forma Consolidated Coverage" means, as of any date
of determination, the ratio of (1) Annualized Pro Forma Operating Cash Flow to
(2) Consolidated Interest Expense for the four-quarter period immediately
preceding the date of determination for which financial statements are
available; provided, that (1) if the Company or any of the Restricted
Subsidiaries has incurred any Indebtedness (whether through an Asset
Acquisition, Asset Sale or otherwise) since the beginning of such period and
through the date of determination that remains outstanding or if the transaction
or series of transactions giving rise to the need to calculate such ratio
involves an incurrence of Indebtedness, Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to (A) such
Indebtedness as if such Indebtedness had been incurred on the first day of such
period (provided that if such Indebtedness is incurred under a revolving credit
facility (or similar arrangement or under any predecessor revolving credit or
similar arrangement) only that portion of such Indebtedness that constitutes the
one-year projected average balance of such Indebtedness (as determined in good
faith by senior management of the Company shall be deemed outstanding for
purposes of this calculation), and (B) the discharge of any other Indebtedness
repaid, repurchased, defeased or otherwise discharged with the proceeds of such
new Indebtedness as if such discharge had occurred on the first day of such
period and (2) if since the beginning of such period any Indebtedness of the
Company or any of the Restricted Subsidiaries has been repaid, repurchased,
defeased or otherwise discharged (whether through an Asset Acquisition, Asset
Sale or otherwise) (other than Indebtedness under a revolving credit or similar
arrangement unless such revolving credit Indebtedness has been permanently
repaid and has not been replaced), Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto as if such
Indebtedness had been repaid, repurchased, defeased or otherwise discharged on
the first day of such period.
"Annualized Pro Forma Consolidated Operating Cash Flow" means
Consolidated Operating Cash Flow for the latest two fiscal quarters for which
consolidated financial statements of the Company are available multiplied by
two. For purposes of calculating "Consolidated Operating Cash Flow" for any two
fiscal quarter period for purposes of this definition, (i) any Subsidiary of the
Company that is a Restricted Subsidiary on the date of the transaction (the
"Transaction Date") giving
rise to the need to calculate "Annualized Pro Forma Consolidated Operating Cash
Flow" shall be deemed to have been a Restricted Subsidiary at all times during
such two fiscal quarter period and (ii) any Subsidiary of the Company that is
not a Restricted Subsidiary on the Transaction Date shall be deemed not to have
been a Restricted Subsidiary at all times during such two fiscal quarter period.
In addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated Operating Cash Flow" shall be calculated after giving
effect on a pro forma basis for the applicable two fiscal quarter period to,
without duplication, any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of the Company or one of the Restricted Subsidiaries
(including any person who becomes a Restricted Subsidiary as a result of the
Asset Acquisition) incurring, assuming or otherwise being liable for Acquired
Indebtedness) occurring during the period commencing on the first day of such
two fiscal quarter period to and including the Transaction Date (the "Reference
Period"), as if such Asset Sale or Asset Acquisition occurred on the first day
of the Reference Period.
"Asset Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Company or any
Restricted Subsidiary in any other person, or any acquisition or purchase of
Capital Stock of any other person by the Company or any Restricted Subsidiary,
in either case pursuant to which such person shall become a Restricted
Subsidiary or shall be merged with or into the Company or any Restricted
Subsidiary or (ii) any acquisition by the Company or any Restricted Subsidiary
of the assets of any person which constitute substantially all of an operating
unit or line of business of such person or which is otherwise outside of the
ordinary course of business.
"Asset Sale" means any direct or indirect sale, conveyance, transfer
or lease (that has the effect of a disposition and is not for security purposes)
or other disposition (that is not for security purposes) to any person other
than the Company or a Restricted Subsidiary, in one transaction or a series of
related transactions, of (i) any Capital Stock of any Restricted Subsidiary,
(ii) any material license or other authorization of the Company or any
Restricted Subsidiary pertaining to a Cable/Telecommunications Business (other
than the disposition to License Co. of the licenses and authorizations on terms
identical to or at least as favorable to the Company and the Restricted
Subsidiaries as those set forth in the License Co. Documents (provided such new
documents shall also constitute License Co. Documents for all purposes
hereunder) so long as the Company or a Restricted Subsidiary has the ability
(pursuant to contract or otherwise) to fully
exploit such license or authorization in a Cable/Telecommunications Business),
(iii) any assets of the Company or any Restricted Subsidiary which constitute
substantially all of an operating unit or line of business of the Company and
the Restricted Subsidiaries or (iv) any other property or asset of the Company
or any Restricted Subsidiary outside of the ordinary course of business. For the
purposes of this definition, the term "Asset Sale" shall not include (i) any
disposition of properties and assets of the Company that is governed under
Article Eight hereof, (ii) sales of property or equipment that have become worn
out, obsolete or damaged or otherwise unsuitable for use in connection with the
business of the Company or any Restricted Subsidiary, as the case may be, and
(iii) for purposes of Section 10.16, any sale, conveyance, transfer, lease or
other disposition of any property or asset, whether in one transaction or a
series of related transactions occurring within one year, either (x) involving
assets with a Fair Market Value not in excess of $250,000 or (y) which
constitutes the incurrence of a Capitalized Lease Obligation.
"Average Life to Stated Maturity" means, with respect to any
Indebtedness, as at any date of determination, the quotient obtained by dividing
(i) the sum of the products of (a) the number of years from such date to the
date or dates of each successive scheduled principal payment (including, without
limitation, any sinking fund requirements) of such Indebtedness multiplied by
(b) the amount of each such principal payment by (ii) the sum of all such
principal payments; provided that, in the case of any Capitalized Lease
Obligation, all calculations hereunder shall give effect to any applicable
options to renew in favor of the Company or any Restricted Security.
"Bankruptcy Law" means Title 11, United States Code or any similar
federal or state law relating to bankruptcy, insolvency, receivership,
winding-up, liquidation, reorganization or relief of debtors or the law of any
other jurisdiction relating to bankruptcy, insolvency, receivership, winding-up,
liquidation, reorganization or relief of debtors or any amendment to, succession
to or change in any such law.
"Bankruptcy Order" means any court order made in a proceeding
pursuant to or within the meaning of any Bankruptcy Law, containing an
adjudication of bankruptcy or insolvency, or providing for liquidation,
receivership, winding-up, dissolution, "concordate" or reorganization, or
appointing a Custodian of a debtor or of all or any substantial part of a
debtor's property, or providing for the staying, arrangement, adjustment or
composition of indebtedness or other relief of a debtor.
"Board" or "Board of Directors" means the board of directors of the
Company or any duly authorized committee of such board.
"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 and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York,
State of New York are authorized or obligated by law, regulation or executive
order to close.
"Cable Subscriber" means, as of any determination date, any
individual customer or bulk or commercial account (computed on an equivalent
customer basis) to whom the Company or any Restricted Subsidiary provides
subscription basic video programming services as well as accounts to whom the
Company or any Restricted Subsidiary provides other video services for a fee
(computed on an equivalent customer basis based on the basic programming service
subscriber fee), in each case as of such date.
"Cable/Telecommunications Business" means any business operating a
cable and/or telephone and/or telecommunications system (delivered by any means,
including, without limitation, cable, microwave, satellite or radio frequency)
in the United States or otherwise delivering or expected to deliver services
over the networks or systems of the Company and the Restricted Subsidiaries
(including, without limitation, any business conducted by the Company or any
Restricted Subsidiary on the Issue Date) and, for all purposes of this Indenture
other than clauses (c) and (d) of the definition "Permitted Indebtedness," any
business reasonably related to the foregoing (including, without limitation, any
television programming, production and/or licensing business and any programming
guide or telephone directory business). Any company holding a license or
licenses to conduct any of the foregoing businesses that is not conducting any
material business other than a Cable/Telecommunications Business shall also be
considered a Cable/Telecommunications Business. A good faith determination by a
majority of the Board as to whether a business meets the requirements of this
definition shall be conclusive, absent manifest error.
"Capital Stock" means, with respect to any person, any and all
shares, interests, participations, rights in or other equivalents (however
designated and whether voting and/or non-voting) of, such person's capital
stock, whether outstanding on the Issue Date or issued after the Issue Date, and
any and all rights (other than evidence of Indebtedness), warrants or options
exchangeable for or convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation to pay rent or
other amounts under a lease of (or other agreement conveying the right to use)
any property (whether real, personal or mixed, immovable or movable) that is
required to be classified and accounted for as a capitalized lease obligation
under GAAP, and, for the purpose of this Indenture, the amount of such
obligation at any date shall be the capitalized amount thereof at such date,
determined in accordance with GAAP.
"Cash Equivalents" means (i) any evidence of Indebtedness with a
maturity of 365 days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof or such Indebtedness constitutes a general obligation
of such country); (ii) deposits, certificates of deposit or acceptances with a
maturity of 365 days or less of any financial institution that is a member of
the Federal Reserve System, in each case, having combined capital and surplus
and undivided profits (or any similar capital concept) of not less than
$500,000,000 and whose senior unsecured debt is rated at least "A-1" by S&P or
"P-1" by Moody's; (iii) commercial paper with a maturity of 365 days or less
issued by a corporation (other than an Affiliate of the Company) organized under
the laws of the United States or any State thereof and rated at least "A-1" by
S&P or "P-1" by Moody's; and (iv) repurchase agreements and reverse repurchase
agreements relating to marketable direct obligations issued or unconditionally
guaranteed by the government of the United States of America or issued by any
agency thereof and backed by the full faith and credit of the United States of
America, in each case, maturing within 365 days from the date of acquisition.
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) other than the Permitted Holders is or becomes
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that a person will be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total Voting Stock of the Company; or (b)
the Company consolidates with, or merges with or into, another person or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any person, or any person consolidates with,
or merges with or into, the Company in any such event pursuant to a transaction
in which the outstanding Voting Stock of the Company is converted into or
exchanged for cash, securities or other property, other than any such
transaction where (i) the outstanding Voting Stock of the Company is converted
into or
exchanged for (1) Voting Stock (other than Disqualified Stock) of the surviving
or transferee corporation and/or (2) cash, securities and other property in an
amount which could be paid by the Company as a Restricted Payment under this
Indenture and (ii) immediately after such transaction no "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act), excluding
the Permitted Holders, is the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total Voting Stock of
the surviving or transferee corporation; or (c) during any consecutive two-year
period, individuals who at the beginning of such period constituted the Board
(together with any new directors whose election to the Board or whose nomination
for election by the stockholders of the Company was approved by a Permitted
Holder or by a vote of a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason (other than by
action of the Permitted Holders) to constitute a majority of the Board then in
office; provided that (i) to the extent that either (x) one or more regulatory
approvals are required for the consummation of one or more of the events or
circumstances described in clauses (a) through (c) above to become effective
under applicable law or (y) in the good faith judgment of the Board, one or more
regulatory approvals are desirable prior to making one or more of the events or
circumstances described in clauses (a) through (c) above to become effective
under applicable law (provided, in the case of this clause (y), such approvals
are sought on a reasonably prompt basis), then such events or circumstances
shall be deemed to have occurred at the time such approvals have been obtained
and become effective under applicable law, and (ii) any event or circumstance
which would constitute a Change of Control solely by reason of the acquisition
of "beneficial ownership" of securities of GVL shall not constitute a Change of
Control with respect to the Company, unless it would result in a mandatory
prepayment (by tender offer or otherwise) of Indebtedness, or an event of
default under Indebtedness, of GVL or any of its Subsidiaries (other than the
Company and its Subsidiaries). The good faith determination by the Board, based
upon advice of outside counsel, of the beneficial ownership of securities of the
Company within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act shall
be conclusive, absent contrary controlling judicial precedent or contrary
written interpretation published by the Commission.
"Collateral" shall have the meaning ascribed to such term in the
Escrow Agreement.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, or if at any time after the execution of this
Indenture such Commission is not existing and performing the applicable duties
now assigned to it, then the body or bodies performing such duties at such time.
"Common Stock" means, with respect to any person, any and all
shares, interest or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of such person's common stock
whether outstanding at the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the person named as the "Company" in the first
paragraph of this Indenture, until a successor person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by any one of its Chairman of the Board,
its Vice-Chairman, its Chief Executive Officer, its President or a Vice
President, and by its Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer, and delivered to the Trustee.
"Consolidated Income Tax Expense" means, with respect to any period,
the provision for United States corporation, local, foreign and other income
taxes of the Company and the Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, without
duplication, the sum of (i) the interest expense of the Company and the
Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP, including, without limitation, (a) any amortization of
debt discount attributable to such period, (b) the net cost under Interest Rate
Obligations (including any amortization of discounts), (c) the interest portion
of any deferred payment obligation, (d) all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing and (e) all accrued interest, (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by the Company and the Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP and (iii) the amount
of dividends in respect of Disqualified Stock paid by the Company and the
Restricted Subsidiaries during such period. Notwithstanding the foregoing, in no
event shall Consolidated Interest Expense include interest expense arising under
the Convertible Notes or any Deeply Subordinated
Shareholder Loans to the extent incurred prior to the Termination Date.
"Consolidated Net Income" means, with respect to any period, the
consolidated net income of the Company and the Restricted Subsidiaries for such
period, adjusted, to the extent included in calculating such consolidated net
income, by excluding, without duplication, (i) all extraordinary, unusual or
nonrecurring gains or losses of such person (net of fees and expenses relating
to the transaction giving rise thereto) for such period, (ii) income of the
Company and the Restricted Subsidiaries derived from or in respect of all
Investments in persons other than Subsidiaries of the Company or any Restricted
Subsidiary, (iii) the portion of net income (or loss) of such person allocable
to minority interests in unconsolidated persons for such period, except to the
extent actually received by the Company or any Restricted Subsidiary, (iv) net
income (or loss) of any other person combined with such person on a "pooling of
interests" basis attributable to any period prior to the date of combination,
(v) any gain or loss, net of taxes, realized by such person upon the termination
of any employee pension benefit plan during such period, (vi) gains or losses in
respect of any Asset Sales (net of fees and expenses relating to the transaction
giving rise thereto) during such period and (vii) except in the case of any
restriction or encumbrance permitted under clause (v) of the covenant
"Limitation on Dividends and Other Payment Restrictions Affecting Restricted
Subsidiaries," the net income of any Restricted Subsidiary for such period to
the extent that the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is not at the time permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulations
applicable to that Restricted Subsidiary or its stockholders.
"Consolidated Operating Cash Flow" means, with respect to any
period, the Consolidated Net Income of the Company and the Restricted
Subsidiaries for such period increased, to the extent deducted in arriving at
Consolidated Net Income for such period, by the sum of (i) the Consolidated
Income Tax Expense of the Company and the Restricted Subsidiaries accrued
according to GAAP for such period (other than taxes attributable to
extraordinary gains or losses and gains and losses from Asset Sales); (ii)
Consolidated Interest Expense for such period; (iii) depreciation of the Company
and the Restricted Subsidiaries for such period; (iv) amortization of the
Company and the Restricted Subsidiaries for such period, including, without
limitation, amortization of capitalized debt issuance costs for such period, all
determined on a consolidated basis in accordance with GAAP; and (v) for purposes
of Section 10.12 only, other non-cash charges decreasing Consolidated Net
Income.
"consolidation" means, with respect to the Company, the
consolidation of the accounts of the Restricted Subsidiaries with those of the
Company, all in accordance with GAAP; provided that "consolidation" will not
include consolidation of the accounts of any Unrestricted Subsidiary with the
accounts of the Company. The term "consolidated" has a correlative meaning to
the foregoing.
"Convertible Notes" means all 15% convertible subordinated
promissory notes of the Company due six months after the final maturity of the
Securities that are outstanding on the Issue Date (after giving effect to the
use of proceeds from the issuance of the Securities).
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 2001 Ross Avenue, Suite 2700, Dallas, Texas 75201, Attention: Corporate Trust
Department.
"Cumulative Available Cash Flow" means, as at any date of
determination, the positive cumulative Consolidated Operating Cash Flow realized
during the period commencing on the Issue Date and ending on the last day of the
most recent fiscal quarter immediately preceding the date of determination for
which consolidated financial information of the Company is available or, if such
cumulative Consolidated Operating Cash Flow for such period is negative, the
amount by which cumulative Consolidated Operating Cash Flow is less than zero.
"Cumulative Consolidated Interest Expense" means, at any date on
which a Restricted Payment is proposed to be made, the sum of the Quarterly
Consolidated Interest Expense Amounts for each quarter after the Issue Date
(with the first quarter commencing on the Issue Date and ending on May 31, 1997)
through the most recent quarter immediately preceding such Restricted Payment
for which consolidated financial statements of the Company are available. The
"Quarterly Consolidated Interest Expense Amount" for any quarter (the "Subject
Quarter") will be the product of (a) Consolidated Interest Expense for the
Subject Quarter times (b) the Applicable Percentage for the Subject Quarter,
where the "Applicable Percentage" for the Subject Quarter will be (1) 150% of
the Consolidated Interest Expense of the Company for the Subject Quarter if
Total Consolidated Indebtedness for each day of the Subject Quarter is less than
6.0 times the Annualized Pro Forma Consolidated Operating Cash Flow of the
Company (based upon the two most recent quarters for which consolidated
financial statements of the Company are available immediately preceding the
Subject Quarter) or (2) 200% of the Consolidated Interest Expense of the Company
for the Subject Quarter if Total Consolidated Indebtedness for any day of the
Subject Quarter is equal to or greater than 6.0 times the Annualized Pro Forma
Consolidated Operating Cash Flow of the Company (based upon the two most recent
quarters for which consolidated financial statements of the Company are
available immediately preceding the Subject Quarter).
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company against fluctuations in currency values.
"Custodian" means any receiver, interim receiver, receiver and
manager, receiver-manager, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law or any other law respecting secured
creditors and the enforcement of their security or any other person with like
powers whether appointed judicially or out of court and whether pursuant to an
interim or final appointment.
"Deeply Subordinated Shareholder Loans" means any Indebtedness of
the Company for money borrowed from either (x) a Permitted Holder or (y) another
person whose obligations have been guaranteed by a Permitted Holder, provided
such Indebtedness of the Company (i) has been expressly subordinated in right of
payment and postponed as to all payments of interest (other than payment-in-kind
interest) and principal (other than payment-in-kind interest) to the Securities,
(ii) provides for no payments of interest or principal prior to the earlier of
(a) the end of the sixth month after the final maturity of the Securities and
(b) the indefeasible payment in full in cash of all Securities (or due provision
therefor which results in the discharge of all Obligations under this
Indenture); provided that the terms of the subordination agreement are in the
form annexed to this Indenture as Exhibit F and the Company has received one or
more Opinions of Counsel as to the validity and enforceability of such
subordination agreement.
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its
nominees and successors.
"Designation" shall have the meaning specified in
Section 10.22 hereof.
"Designation Amount" has the meaning specified in
Section 10.22 hereof.
"Disinterested Director" means, with respect to any transaction or
series of related transactions, a member of the Board of Directors of the
Company other than a director who (i) has any material direct or indirect
financial interest in or with respect to such transaction or series of related
transactions or (ii) is an employee or officer of the Company or an Affiliate
that is itself a party to such transaction or series of transactions or an
Affiliate of a party (other than the Company or any Subsidiary) to such
transaction or series of related transactions.
"Disqualified Stock" means, with respect to any person, any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is exchangeable for Indebtedness at the option of
the holder thereof, or is redeemable at the option of the holder thereof, in
whole or in part, on or prior to the final maturity date of the Securities;
provided such Capital Stock shall only constitute Disqualified Stock to the
extent it so matures or is redeemable or exchangeable on or prior to the final
maturity date of the Securities.
"Equity Offering" means an underwritten public offering of Common
Stock of the Company which has been registered under the Securities Act.
"Escrow Account" means an escrow account established under the
Escrow Agreement for the deposit of a portion of the net proceeds from the sale
of the Securities (the "Initial Escrow Amount"), and the proceeds from the
investment thereof.
"Escrow Agent" means U.S. Trust Company of Texas, N.A., as Escrow
Agent pursuant to the Escrow Agreement until a successor escrow agent replaces
it in accordance with the provisions of the Escrow Agreement and thereafter
means such successor.
"Escrow Agreement" means the Escrow Agreement dated as of February
14, 1997, among the Company, the Escrow Agent and the Trustee, in substantially
the form set forth as Exhibit E hereto.
"Event of Default" shall have the meaning specified
in Section 5.01 hereof.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Exchange Securities" means the Series B Securities (the terms of
which are identical to the Series A Securities except that the Exchange
Securities shall be registered under the Securities Act, and shall not contain
the restrictive legend on the face of the form of Series A Securities) issued
pursuant to this Indenture.
"Existing Market Asset Acquisition" means an Asset Acquisition of a
Cable/Telecommunications Business (other than
the Phonoscope Acquisition) to the extent subscribers or customers are located
in the metropolitan areas of Houston, Texas; Dallas-Fort Worth, Texas; San
Diego, California; Phoenix, Arizona; Chicago, Illinois; Denver, Colorado; San
Francisco, California; Los Angeles, California; Miami-Ft. Lauderdale, Florida;
Tampa, Florida; or Austin, Texas (it being understood that where a
Cable/Telecommunications Business subject to an Asset Acquisition is conducted
in more than one market, an allocation of Indebtedness being incurred pursuant
to clause (c) of the definition of Permitted Indebtedness may be made on the
basis of the latest 12 months of revenues of the Cable/Telecommunications
Business immediately preceding the date of incurrence in a particular
metropolitan area).
"Fair Market Value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length free market transaction,
for cash, between a willing seller and a willing buyer, neither of which is
under pressure or compulsion to complete the transaction. Unless otherwise
specified in this Indenture, Fair Market Value will be determined by the Board
of Directors of the Company acting in good faith evidenced by a Board Resolution
thereof delivered to the Trustee.
"Fiscal Year" shall mean the fiscal year of the Company, which ends
on August 31 of each year.
"GAAP" means, at any date of determination, generally accepted
accounting principles in effect in the United States which are applicable as of
the date of determination and which are consistently applied for all applicable
periods.
"Global Security" has the meaning provided in Section 3.03 hereof.
"guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"GVL" means Le Groupe Videotron Ltee.
"Holder" or "Securityholder" means a person in whose name a Security
is registered in the Security Register.
"Incremental Qualifying Cable Subscribers" means, as of any date of
determination, the aggregate number of Qualifying Cable Subscribers of the
Company and the Restricted
Subsidiaries minus (i) the number of Qualifying Cable Subscribers of the Company
and the Restricted Subsidiaries as of the Issue Date and minus (ii) the number
of Qualifying Cable Subscribers acquired pursuant to the Phonoscope Acquisition
to the extent and only to the extent Indebtedness is incurred under clause (d)
of the definition of "Permitted Indebtedness" to finance the Phonoscope
Acquisition.
"Indebtedness" means, with respect to any person, without
duplication, (i) any liability, contingent or otherwise, of such person (A) for
borrowed money (whether or not the recourse of the lender is to the whole of the
assets of such person or only to a portion thereof) or (B) evidenced by a note,
debenture or similar instrument or letter of credit (including a purchase money
obligation) or (C) for the payment of money relating to a Capitalized Lease
Obligation or other obligation relating to the deferred purchase price of
property or (D) in respect of an Interest Rate Obligation or Currency Agreement;
or (ii) any liability of others of the kind described in the preceding clause
(i) which the person has guaranteed or which is otherwise its legal liability;
or (iii) any obligation secured by a Lien (other than (x) Permitted Liens of the
type described in clauses (b), (d), or (e) of the definition of the Permitted
Liens; provided that the obligations secured would not constitute Indebtedness
under clauses (i) or (ii) or (iii) of this definition, and (y) Liens on Capital
Stock or Indebtedness of any Unrestricted Subsidiary) to which the property or
assets of such person are subject, whether or not the obligations secured
thereby shall have been assumed by or shall otherwise be such person's legal
liability (the amount of such obligation being deemed to be the lesser of the
value of such property or asset or the amount of the obligation so secured);
(iv) all Disqualified Stock valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends;
and (v) any and all deferrals, renewals, extensions and refundings of, or
amendments, modifications or supplements to, any liability of the kind described
in any of the preceding clauses (i), (ii), (iii) or (iv). In no event shall
"Indebtedness" include trade payables and accrued liabilities that are current
liabilities incurred in the ordinary course of business, excluding the current
maturity of any obligation which would otherwise constitute Indebtedness. For
purposes of Sections 10.12 and 10.14 and the definition of "Events of Default,"
in determining the principal amount of any Indebtedness to be incurred by the
Company or a Restricted Subsidiary or which is outstanding at any date, (x) the
principal amount of any Indebtedness which provides that an amount less than the
principal amount at maturity thereof shall be due upon any declaration of
acceleration thereof shall be the accreted value thereof at the date of
determination and (y) the principal amount of any Indebtedness shall be reduced
by any amount of cash or Cash Equivalent collateral securing on a perfected
basis, and
dedicated for disbursement exclusively to the payment of principal of and
interest on, such Indebtedness.
"Indenture" means this instrument as originally executed (including
all exhibits and schedules hereto) and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company and any
other obligor under this Indenture or under the Securities to pay principal of,
premium, if any, and interest on the Securities when due and payable, whether at
maturity, by acceleration, call for redemption or repurchase or otherwise, and
all other amounts due or to become due under or in connection with this
Indenture or the Securities and the performance of all other obligations to the
Trustee (including, but not limited to, payment of all amounts due the Trustee
under Section 6.07 hereof), Paying Agent, Registrar, Escrow Agent and the
Holders of the Securities under this Indenture, the Escrow Agreement and the
Securities according to the terms thereof.
"Independent Financial Advisor" means a United States investment
banking firm of national standing in the United States (i) which does not, and
whose directors, officers and employees or Affiliates do not have, a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board, is otherwise independent and qualified to perform the task for which
it is to be engaged.
"Initial Purchasers" means Salomon and Merrill Lynch.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"interest," when used with respect to any Security, means the amount
of all interest accruing on such Security, including all additional interest
payable on the Securities pursuant to the Registration Agreement and all
interest accruing subsequent to the occurrence of any events specified in
Sections 5.01(h), (i), (j) and (k) or which would have accrued but for any such
event, whether or not such claims are allowable under applicable law.
"Interest Payment Date" means, when used with respect to any
Security, the Stated Maturity of an installment of interest on such Security, as
set forth in such Security.
"Interest Rate Obligations" means the obligations of any person
pursuant to any arrangement with any other person whereby, directly or
indirectly, such person is entitled to
receive from time to time periodic payments calculated by applying either a
floating or a fixed rate of interest on a stated notional amount and shall
include without limitation, interest rate swaps, caps, floors, collars, forward
interest rate agreements and similar agreements.
"Investment" means, with respect to any person, any advance, loan,
account receivable (other than an account receivable arising in the ordinary
course of business), or other extension of credit (including, without
limitation, by means of any guarantee) or any capital contribution to (by means
of transfers of property to others, payments for property or services for the
account or use of others, or otherwise), or any purchase or ownership of any
stocks, bonds, notes, debentures or other securities of, any other person.
Notwithstanding the foregoing, in no event shall any issuance of Capital Stock
(other than Disqualified Stock) of the Company in exchange for Capital Stock,
property or assets of another person constitute an Investment by the Company in
such other person.
"Issue Date" means the original date of issuance of the Securities.
"License Co." means Transmission Holdings, Inc., a Delaware
corporation.
"License Co. Documents" means, collectively, (i) the Assignment
Agreement dated as of the Issue Date among TVMAX Telecommunications, Inc.
("TVMAX"), Sunshine Television Entertainment, Inc., Richey Pacific Cablevision,
Inc. and IRPC Arizona, Inc., as assignors, and License Co., as assignee, (ii)
the Equipment License and Services Agreement dated as of the Issue Date between
TVMAX and License Co. and the Promissory Note of License Co. in favor of TVMAX
annexed thereto, (iii) the Option Agreement dated as of the Issue Date between
TVMAX and License Co., (iv) each Shareholder Option Agreement dated as of the
Issue Date between TVMAX and a License Co. Shareholder (as defined below), (v)
the Subscription and Shareholders Agreement dated as of the Issue Date among
Rory O. Cole, Henry Goldberg and Russell B. Berman (collectively, the "License
Co. Shareholders") and License Co. and (vi) any other agreements identical to
the foregoing in all material respects and entered into for the same purposes
that the Company or any Restricted Subsidiary may enter into in the future, as
each of the foregoing documents referred to in clauses (i) through (v) may be
amended, modified or supplemented in compliance with Section 10.15.
"Lien" means any mortgage, charge, pledge, lien (statutory or
other), security interest, hypothecation, assignment for security, claim, or
preference or priority or other encumbrance upon or with respect to any property
of any kind. A person shall be deemed to own subject to a Lien any
property which such person has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement.
"Material Restricted Subsidiary" means any Restricted Subsidiary of
the Company, which, at any date of determination, is a "Significant Subsidiary"
(as that term is defined in Regulation S-X issued under the Securities Act), but
shall, in any event, include (x) any Guarantor, (y) TVMAX or (z) any Restricted
Subsidiary of the Company which, at any date of determination, is an obligor
under any Indebtedness in an aggregate principal amount equal to or exceeding
$10.0 million if another Material Restricted Subsidiary is also obligated in
respect of such Indebtedness.
"Maturity Date" means, with respect to any Security, the date
specified in such Security as the fixed date on which the principal of such
Security is due and payable.
"Merrill Lynch" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
"Moody's" means Moody's Investors Service.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash (including assumed liabilities and other
items deemed to be cash under the proviso to the first sentence of Section
10.16) or Cash Equivalents including payments in respect of deferred payment
obligations when received in the form of cash or Cash Equivalents (except to the
extent that such obligations are financed or sold with recourse to the Company
or any Restricted Subsidiary) net of (i) brokerage commissions and other fees
and expenses (including fees and expenses of legal counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all taxes payable as a
result of such Asset Sale, (iii) amounts required to be paid to any person
(other than the Company or any Restricted Subsidiary) owning a beneficial
interest in or having a Permitted Lien on the assets subject to the Asset Sale
and (iv) 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 environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale all as reflected
in an Officer's Certificate delivered to the Trustee.
"Non-Global Purchasers" shall have the meaning specified in Section
3.03 hereof.
"Offering Memorandum" means the Offering Memorandum dated February
7, 1997 pursuant to which the Series A Securities were offered, and any
supplement thereto.
"Officer" means, with respect to the Company, the Chairman of the
Board, a Vice Chairman, the President, a Vice President, the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, a Vice Chairman, the President or a Vice President, and by the
Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer, of
the Company and delivered to the Trustee.
"Offshore Physical Securities" shall have the meaning specified in
Section 3.03 hereof.
"Opinion of Counsel" means a written opinion of counsel who may be
counsel for the Company or the Trustee, and who shall be reasonably acceptable
to the Trustee.
"Other Senior Debt Pro Rata Share" means the amount of the
applicable Excess Proceeds obtained by multiplying the amount of such Excess
Proceeds by a fraction, (i) the numerator of which is the aggregate accreted
value and/or principal amount, as the case may be, of all Indebtedness (other
than (x) the Securities and (y) Subordinated Indebtedness) of the Company
outstanding at the time of the applicable Asset Sale with respect to which the
Company is required to use Excess Proceeds to repay or make an offer to purchase
or repay and (ii) the denominator of which is the sum of (a) the aggregate
principal amount of all Securities outstanding at the time of the applicable
Asset Sale and (b) the aggregate principal amount or the aggregate accreted
value, as the case may be, of all other Indebtedness (other than Subordinated
Indebtedness) of the Company outstanding at the time of the applicable Asset
Sale Offer with respect to which the Company is required to use the applicable
Excess Proceeds to offer to repay or make an offer to purchase or repay.
"Outstanding" means, as of the date of determination, all Securities
theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company or any Affiliate
thereof) in trust or set aside and segregated in trust by the Company or
any Affiliate thereof (if the Company or Affiliate
shall act as Paying Agent) for the Holders of such Securities; provided,
however, that if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities with respect to which the Company has effected
defeasance or covenant defeasance as provided in Article Four, to the
extent provided in Sections 4.02 and 4.03; and
(iv) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands the Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that a Responsible Officer of the Trustee
knows to be so owned shall be so disregarded. The Company shall notify the
Trustee, in writing, when it repurchases or otherwise acquires Securities, of
the aggregate principal amount of such Securities so repurchased or otherwise
acquired. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor. If the Paying Agent holds, in
its capacity as such, on any Maturity Date or on any optional redemption date
money sufficient to pay all accrued interest and principal with respect to such
Securities payable on that date and is not prohibited from paying such money to
the Holders thereof pursuant to the terms of this Indenture, then on and after
that date such Securities cease to be Outstanding and interest on them ceases to
accrue. Securities may also cease to be outstanding to the extent expressly
provided in Article Eight.
"Pacific" means Pacific Capital Group, Inc.
"Pari Passu Indebtedness" means any Indebtedness of the Company or
any Subsidiary Guarantor ranking pari passu in right of payment with the
Securities.
"Paying Agent" shall have the meaning specified in
Section 3.02 hereof.
"Permitted Holder" means (i) any of GVL, Caisse de depot placement
du Quebec or any of their respective controlled Affiliates, (ii) a Strategic
Equity Investor that, prior to August 31, 1999, invests on a primary basis in
Capital Stock (other than Disqualified Stock) representing not less than 15% of
the fully diluted Common Stock of the Company at the time of issuance by the
Company; provided that only the first such Strategic Equity Investor shall be a
Permitted Holder, or (iii) Andre Chagnon, his spouse or any of his lineal
descendants and their respective spouses (collectively, the "Chagnon Family"),
whether acting in their own name or as one or as a majority of persons having
the power to exercise the voting rights attached to, or having investment power
over, shares of Capital Stock held by others, or (iv) any controlled Affiliate
of any member of the Chagnon Family or (v) any trust principally for the benefit
of one or more members of the Chagnon Family (whether or not any member of the
Chagnon Family is a trustee of such trust ) or (vi) any charitable foundation a
majority of whose members, trustees or directors, as the case may be, are
persons referred to in (iii) above. For purposes of this definition, "lineal
descendant" shall include at any time any person that is treated as being
adopted or is in the process of being adopted by any member of the Chagnon
Family at such time.
"Permitted Indebtedness" means the following Indebtedness (each of
which shall be given independent effect):
(a) Indebtedness under the Securities and this
Indenture;
(b) Indebtedness of the Company and/or any
Restricted Subsidiary outstanding on the Issue Date;
(c) Indebtedness, including under any Senior Bank Facility or Vendor
Credit Facility, of the Company and/or any Restricted Subsidiary to the
extent that the proceeds of such Indebtedness are used to finance or
support working capital (including to fund operating losses) for, or the
construction of, a Cable/Telecommunications Business of the Company or any
of the Restricted Subsidiaries or the acquisition of properties or assets
(tangible or intangible) to be used in a Cable/Telecommunications Business
of the Company or any of its Restricted Subsidiaries (other than for an
Asset Acquisition to the extent that it is not an Existing Market Asset
Acquisition) or for an Existing Market Asset Acquisition; provided that,
after giving effect to the incurrence of any such Indebtedness, the
aggregate outstanding Indebtedness incurred under this clause (c) and
incurred pursuant to any Refinancings (whether the
initial Refinancing or any successive Refinancing) thereof incurred under
clause (h) below does not exceed the sum of (i) $100.0 million, plus (ii)
the product of the number of Incremental Qualifying Cable Subscribers
times $1,200; provided that no Indebtedness may be incurred under this
clause (c) in reliance on the immediately preceding clause (ii) on any
date on or after February 15, 2001;
(d) to the extent not funded with the net proceeds from the sale of
the Securities, Indebtedness incurred by the Company or any Restricted
Subsidiary to finance the Phonoscope Acquisition;
(e) (i) Indebtedness of any Restricted Subsidiary owed to and held
by the Company or a Restricted Subsidiary and (ii) Indebtedness of the
Company owed to and held by any Restricted Subsidiary; provided that an
incurrence of Indebtedness shall be deemed to have occurred upon (x) any
sale or other disposition (excluding assignments as security to financial
institutions) of any Indebtedness of the Company or a Restricted
Subsidiary referred to in this clause (e) to a person (other than the
Company or a Restricted Subsidiary) or (y) any sale or other disposition
of Capital Stock of a Restricted Subsidiary, or Designation of a
Restricted Subsidiary, which holds Indebtedness of the Company or any
Restricted Subsidiary such that such Restricted Subsidiary, in any such
case, ceases to be a Restricted Subsidiary;
(f) Interest Rate Obligations of the Company and/or any Restricted
Subsidiary relating to (i) Indebtedness of the Company and/or such
Restricted Subsidiary, as the case may be (which Indebtedness (x) bears
interest at fluctuating interest rates and (y) is otherwise permitted to
be incurred under the "Limitation on Additional Indebtedness" covenant),
and/or (ii) Indebtedness (which Indebtedness would bear interest at
fluctuating interest rates) for which a lender has provided a commitment
(subject to customary conditions) in an amount reasonably anticipated to
be incurred by the Company and/or a Restricted Subsidiary in the following
12 months after such Interest Rate Obligation has been incurred, but only
to the extent, in the case of either subclause (i) or (ii), that the
notional principal amount of such Interest Rate Obligations does not
exceed the principal amount of the Indebtedness (and/or Indebtedness
subject to commitments) to which such Interest Rate Obligations relate;
(g) Indebtedness of the Company and/or any Restricted Subsidiary in
respect of performance bonds of the Company or any Restricted Subsidiary
or surety bonds provided by the Company or any Restricted Subsidiary
incurred in the ordinary course of business in connection
with the construction, implementation or operation of a
Cable/Telecommunications Business;
(h) Indebtedness of the Company and/or any Restricted Subsidiary to
the extent it represents a replacement, renewal, refinancing or extension
(a "Refinancing") of outstanding Indebtedness of the Company and/or of any
Restricted Subsidiary incurred or outstanding pursuant to clause (a), (b)
(other than the Convertible Notes), (c) or (d) of this definition or the
proviso of Section 10.12; provided that (1) Indebtedness of the Company
may not be Refinanced to such extent under this clause (h) with
Indebtedness of any Restricted Subsidiary and (2) any such Refinancing
shall only be permitted under this clause (h) to the extent that (x) it
does not result in a lower Average Life to Stated Maturity of such
Indebtedness as compared with the Indebtedness being Refinanced and (y) it
does not exceed the sum of the principal amount (or, if such Indebtedness
provides for a lesser amount to be due and payable upon a declaration of
acceleration thereof, an amount no greater than such lesser amount) of the
Indebtedness being Refinanced plus the amount of accrued interest thereon
and the amount of any reasonably determined prepayment premium necessary
to accomplish such Refinancing and such reasonable fees and expenses
incurred in connection therewith;
(i) Indebtedness of the Company under Deeply
Subordinated Shareholder Loans to the extent incurred
prior to the Termination Date; and
(j) in addition to the items referred to in clauses (a) through (i)
above, Indebtedness of the Company and any Acquired Indebtedness of any
Restricted Subsidiary having an aggregate principal amount not to exceed
$50.0 million
at any time outstanding.
"Permitted Investments" means (a) Cash Equivalents; (b) Investments
in prepaid expenses, negotiable instruments held for collection and lease,
utility and workers' compensation, performance and other similar deposits; (c)
loans and advances to employees made in the ordinary course of business; (d)
Interest Rate Obligations; (e) bonds, notes, debentures or other securities
received as a result of Asset Sales pursuant to and in compliance with the
covenant "Disposition of Proceeds of Assets Sales"; (f) Investments made in the
ordinary course of business as partial payment for constructing a network
relating principally to a Cable/Telecommunications Business; (g) Investments in
License Co. contemplated by the License Co. Documents; and (h) Investments in
companies owning or managing multiple dwelling units (or an Affiliate thereof)
with which the Company or any Restricted Subsidiary have Rights of Entry in the
ordinary course of business in lieu of (in whole or in part) other customary
financial inducements to property owners.
"Permitted Liens" means (a) Liens on property of a person existing
at the time such person is merged into or consolidated with the Company or any
Restricted Subsidiary or becomes a Restricted Subsidiary; provided that such
Liens were in existence prior to the contemplation of such merger, consolidation
or acquisition and do not secure any property or assets of the Company or any
Restricted Subsidiary other than the property or assets subject to the Liens
prior to such merger or consolidation; (b) Liens imposed by law, such as
Carriers', warehousemen's and mechanics' Liens and other similar Liens arising
in the ordinary course of business which secure payment of obligations not more
than 60 days past due or are being contested in good faith and by appropriate
proceedings; (c) Liens existing on the Issue Date, including to secure the note
in the amount of $1.0 million in favor of International Richey Pacific
Cablevision Ltd.; (d) 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 conducted; provided
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (e) easements, rights of
way, restrictions and other similar easements, licenses, restrictions on the use
of properties, or minor imperfections of title that, in the aggregate, are not
material in amount and do not in any case materially detract from the properties
subject thereto or interfere with the ordinary conduct of the business of the
Company or the Restricted Subsidiaries; (f) Liens 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; (g)
Liens securing any Senior Bank Facility or Vendor Credit Facility to the extent
it would constitute "Permitted Indebtedness"; (h) Liens to secure any
Refinancing of any Indebtedness secured by Liens referred to in the foregoing
clauses (a), (c) or (j), but only to the extent that such Liens do not extend to
any other property or assets and the principal amount of the Indebtedness
secured by such Liens is not increased; (i) Liens to secure the Securities; (j)
Liens on real property incurred in connection with the financing of the purchase
of such real property (or incurred within 60 days of purchase) by the Company or
any Restricted Subsidiary; and (k) Liens on the Escrow Account and all funds and
securities therein securing only the Securities equally and ratably (other than
as provided in clause (k) of this definition, Permitted Liens may not extend to
the Escrow Account or the Escrow Agreement).
"person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Physical Security" shall have the meaning specified
in Section 3.03 hereof.
"Predecessor Security" means, with respect to any particular
Security, every previous Security evidencing all or a portion of the same debt
as that evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.06 hereof
in exchange for a mutilated Security or in lieu of a lost, destroyed or stolen
Security shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Security.
"Preferred Stock" means, with respect to any person, any and all
shares, interests, participation or other equivalents (however designated) of
such person's preferred or preference stock whether now outstanding, or issued
after the Issue Date, and including, without limitation, all classes and series
of preferred or preference stock of such person.
"Private Exchange Securities" shall have the meaning specified in
Section 3.03 hereof.
"Private Placement Legend" shall mean the first paragraph of the
legend initially set forth in the Securities in the form set forth on Exhibit
A-1.
"Publicly Traded Stock" means any Common Stock of an issuer that is
listed and traded on either the New York Stock Exchange or the American Stock
Exchange or the Nasdaq National Market System.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Qualifying Cable Subscribers" means, as of any date of
determination, the aggregate number of Cable Subscribers for the Company and the
Restricted Subsidiaries as of the last day of the most recent month ending not
more than 45 days prior to the date of determination.
"Redemption Date" means, with respect to any Security to be
redeemed, any date fixed for such redemption by or pursuant to this Indenture
and the terms of the Securities.
"Redemption Price" means, with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture and
the terms of the Securities.
"Refinancing" has the meaning set forth in clause (h)
of the definition of "Permitted Indebtedness."
"Registered Exchange Offer" means the registration by the Company
under the Securities Act of all Series B Securities pursuant to a registration
statement under which the Company offers each Holder of Series A Securities the
opportunity to exchange all Series A Securities held by such Holder for Series B
Securities in an aggregate principal amount equal to the aggregate principal
amount of Series A Securities held by such Holder, all in accordance with the
terms and conditions of the Registration Agreement.
"Registrable Securities" shall have the meaning
specified in the Registration Agreement.
"Registration Agreement" means the Registration Agreement dated as
of February 14, 1997 by and among the Company and the Initial Purchasers, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"Regular Record Date" means the Regular Record Date
specified in the Securities.
"Regulation S" means Regulation S under the
Securities Act.
"Responsible Officer" means, with respect to the Trustee, any
officer with the Corporate Trust Office 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 of the Trustee to whom any corporate trust matter is referred because of
his or her knowledge of and familiarity with the particular subject.
"Restricted Payment" means any of the following: (i) the declaration
or payment of any dividend or any other distribution on Capital Stock of the
Company or any payment made to the direct or indirect holders (in their
capacities as such) of Capital Stock of the Company (other than dividends or
distributions payable solely in Capital Stock (other than Disqualified Stock) of
the Company or in options, warrants or other rights to purchase Capital Stock
(other than Disqualified Stock) of the Company); (ii) the purchase, redemption
or other acquisition or retirement for value of any Capital Stock of the Company
(other than any such Capital Stock owned by the Company or a Restricted
Subsidiary); (iii) the purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Indebtedness (other than any
Subordinated Indebtedness held by a Restricted Subsidiary); (iv) the making of
any payment (whether of principal or interest (other than the payment of
interest in the form of additional Deeply Subordinated Shareholder Loans)) in
respect of the Convertible Notes or the Deeply Subordinated Shareholder Loans;
or (v) the
making of any Investment (other than a Permitted Investment) in any person
(other than an Investment by a Restricted Subsidiary in the Company or an
Investment by the Company or a Restricted Subsidiary in either (x) a Restricted
Subsidiary engaged principally in a Cable/Telecommunications Business or (y) a
person engaged principally in a Cable/Telecommunications Business that becomes a
Restricted Subsidiary as a result of such Investment). Notwithstanding the
foregoing, the payment of compensation to Le Groupe Vide'otron Lte'e, Pacific or
any of their respective Subsidiaries pursuant to the Settlement Agreement dated
as of August 1, 1996 between Vanguard Communications, L.P., Pacific, VPC, the
Company and Le Groupe Vide'otron Lte'e, as in effect on the Issue Date, shall
not constitute a Restricted Payment to the extent, and only to the extent, that
such amounts are deducted in arriving at Cumulative Available Cash Flow of the
Company.
"Restricted Security" shall have the meaning specified in Rule
144(a)(3) under the Securities Act; provided that the Trustee shall be entitled
to request and conclusively rely upon an Opinion of Counsel with respect to
whether a Security is a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company that has
not been designated by the Board of Directors of the Company, by a Board
Resolution delivered to the Trustee, as an Unrestricted Subsidiary pursuant to
and in compliance with Section 10.22 hereof. Any such Designation may be revoked
by a Board Resolution of the Company delivered to the Trustee, subject to the
provisions of Section 10.22 hereof.
"Restricted Subsidiary Indebtedness" means Indebtedness of any
Restricted Subsidiary (i) which is not subordinated to any other Indebtedness of
such Restricted Subsidiary and (ii) in respect of which the Company is not also
obligated (by means of a guarantee or otherwise) other than, in the case of this
clause (ii), Indebtedness under any Senior Bank Facility or Vendor Credit
Facility to the extent constituting "Permitted Indebtedness."
"Revocation" shall have the meaning specified in
Section 10.22 hereof.
"Richey Warrant" means the Warrant dated December 29, 1994 to
purchase B Units of Limited Partnership Interest of Vanguard Communications,
L.P.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Corporation.
"Salomon" means Salomon Brothers Inc.
"Securities" shall have the meaning specified in the
recitals of this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended.
"Securities Register" shall have the respective meanings specified
in Section 3.05 hereof.
"Security Registrar" or "Registrar" shall have the meaning specified
in Section 3.02 hereof.
"Senior Bank Facility" means any senior commercial term loan and/or
revolving credit facility (including any letter of credit subfacility) entered
into principally with commercial banks and/or other financial institutions
typically party to commercial loan agreements.
"Series A Securities" has the meaning specified in
the first recital of this Indenture.
"Series B Securities" has the meaning specified in
the first recital of this Indenture.
"Special Record Date" means, with respect to the payment of any
Defaulted Interest, a date fixed by the Trustee pursuant to Section 3.07 hereof.
"Stated Maturity" means, with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable, and when used with respect to any other
Indebtedness, means the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such Indebtedness, or
any installment of interest thereon, is due and payable.
"Strategic Equity Investor" means (i) any company (other than GVL
and its affiliates) which is engaged principally in a Cable/Telecommunications
Business and which has a rating from Moody's of Baa3 (or the equivalent thereof)
or higher or from S&P of BBB- (or the equivalent thereof) or higher or (ii) any
controlled Affiliate of any company referred to in the preceding clause (i).
"Subordinated Indebtedness" means any Indebtedness of the Company
which is expressly subordinated in right of payment to any other Indebtedness of
the Company.
"Subsidiary" means, with respect to any person, (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors shall at the time be owned,
directly or indirectly, by such person, or (ii) any other person of
which at least a majority of voting interest is at the time, directly or
indirectly, owned by such person.
"Termination Date" means the earlier to occur of (i) July 31, 1999
and (ii) an Equity Offering.
"Total Consolidated Indebtedness" means, at any date of
determination, an amount equal to the aggregate amount of all Indebtedness of
the Company and the Restricted Subsidiaries outstanding as of the date of
determination; provided that Total Consolidated Indebtedness shall exclude the
Convertible Notes and any Deeply Subordinated Shareholder Loans to the extent
incurred prior to the Termination Date.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended.
"Trustee" means the person named as the "Trustee" in the first
paragraph of this Indenture, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to and in compliance with Section 10.22 hereof. Any
such Designation may be revoked by a Board Resolution of the Company delivered
to the Trustee, subject to the provisions of Section 10.22 hereof.
"Vendor Credit Facility" means, collectively, any credit facility
entered into with any vendor or supplier (or any financial institution acting on
behalf of or for the purpose of directly financing purchases from such vendor or
supplier) to the extent the Indebtedness thereunder is incurred for the purpose
of financing the cost (including the cost of design, development, site
acquisition, construction, integration, manufacture or acquisition) of personal
property (tangible or intangible) used, or to be used, in a Cable/
Telecommunications Business.
"VPC" means VPC Corporation.
"Voting Stock" means any class or classes of Capital Stock pursuant
to which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any persons (irrespective of whether or not, at the time, stock
of any other class or classes will have, or might have, voting power by reason
of the happening of any contingency).
Section 1.02. Other Definitions.
Defined in
Term Section
---- ----------
"Act" 1.05
"Asset Sale Offer" 10.16
"Asset Sale Offer Price" 10.16
"Asset Sale Purchase Date" 10.16
"Change of Control Date" 10.11
"Change of Control Offer" 10.11
"Change of Control Purchase Date" 10.11
"covenant defeasance" 4.03
"Defaulted Interest" 3.07
"defeasance" 4.02
"Defeased Securities" 4.01
"Excess Proceeds" 10.16
"incur" 10.12
"insolvent person" 4.04
"Offer Excess Proceeds" 10.16
"Replacement Assets" 10.16
"Surviving Entity" 8.01
Section 1.03. Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance
with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(e) all references to "$" or "dollars" shall refer
to the lawful currency of the United States of America;
and
(f) the words "include," "included" and "including" as used herein
shall be deemed in each case to be followed by the phrase "without
limitation."
Section 1.04. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
person, or that they be so certified or covered by only one document, but one
such person may certify or give an opinion with respect to some matters and one
or more other persons as to other matters, and any such person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated, with
proper identification of each matter covered therein, and form one instrument.
Section 1.05. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution (as provided below in
subsection (b) of this Section 1.05) of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in
favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient, including the execution of such instrument or writing without more.
(c) The ownership of Securities shall be proved by
the Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security or the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof to the same extent
as the original Holder, in respect of anything done, suffered or omitted to be
done by the Trustee, any Paying Agent or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.
Section 1.06. Notices, etc., to the Trustee and the Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed, in writing
and mailed, first-class postage prepaid, to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Trust Department or at any
other address previously furnished in writing to the Holders and the
Company by the Trustee and shall be effective upon actual receipt at such
address; or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose (except as otherwise expressly provided herein)
hereunder if in writing and mailed, first-class postage prepaid, delivered
in person or sent by facsimile transmission to the Company addressed to it
at Optel, Inc., 1111 W. Mockingbird Lane, Dallas, Texas 75247, Attention:
Chief Executive Officer, or at any other address previously furnished in
writing to the Trustee by the Company.
Section 1.07. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise expressly provided
herein) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such
event, at the address of such Holder as it appears in the Security Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Any notice when mailed to a Holder in the
aforesaid manner shall be conclusively deemed to have been received by such
Holder whether or not actually received by such Holder. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 1.08. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such provision or requirement of the Trust Indenture Act shall
control.
If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
Section 1.09. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.10. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its respective successors and assigns, whether so expressed or not.
Section 1.11. Separability Clause.
In case any provision in this Indenture or in the Securities issued
pursuant hereto 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 1.12. Benefits of Indenture.
Nothing in this Indenture or in the Securities issued pursuant
hereto, express or implied, shall give to any person (other than the parties
hereto and their predecessors and successors hereunder, any Paying Agent, any
Registrar and the Holders) any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 1.13. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
Section 1.14. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation.
Section 1.15. Independence of Covenants.
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default if such action is taken or condition exists.
Section 1.16. Exhibits.
All exhibits attached hereto are by this reference made a part
hereof with the same effect as if herein set forth in full.
Section 1.17. Counterparts.
This Indenture may be executed in any number of counterparts, each
of which shall be an original; but such counterparts shall together constitute
but one and the same instrument.
Section 1.18. Duplicate 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.
ARTICLE TWO
SECURITY FORMS
Section 2.01. Form and Dating.
The Securities and the Trustee's certificate of authentication with
respect thereto shall be in substantially the forms set forth, or referenced, in
Exhibit A-1 and Exhibit A-2, respectively, annexed hereto, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with any applicable law or with the rules of the Depository,
any clearing agency or any securities exchange or as may, consistently herewith,
be determined by the officers executing such Securities, as evidenced by their
execution thereof.
The definitive Securities shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Securities may be listed, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
Each Security shall be dated the date of its issuance and shall show
the date of its authentication. The terms and provisions contained in the
Securities shall constitute, and are expressly made, a part of this Indenture.
ARTICLE THREE
THE SECURITIES
Section 3.01. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $225,000,000 in
aggregate principal amount of Series A Securities and Series B Securities,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section
3.03, 3.04, 3.05, 3.06, 9.06, 10.11, 10.16 or 11.08.
The Series A Securities shall be known and designated as the "13%
Senior Notes Due 2005" of the Company. The Series B Securities shall be known
and designated as the "13% Senior Notes Due 2005, Series B" of the Company. The
final Stated Maturity of the Series A Securities and the Series B Securities
shall be February 15, 2005, and the Series A Securities and Series B Securities
shall each bear interest at the rate of 13% per annum from the Issue Date or
from the most recent Interest Payment Date to which interest has been paid, as
the case may be, payable on August 15, 1997 and semi-annually thereafter on
February 15 and August 15, in each year, until the principal thereof is paid or
duly provided for. Interest on any overdue principal, interest (to the extent
lawful) or premium, if any, shall be payable on demand.
Series B Securities may be issued only in exchange for a like
principal amount of Series A Securities pursuant to a Registered Exchange Offer.
The Securities shall be redeemable as provided in Article Eleven and
paragraph 3 of the Series A Securities and paragraph 2 of the Series B
Securities.
At the election of the Company, the entire Indebtedness on the
Securities or certain of the Company's obligations and covenants and certain
Events of Default thereunder may be defeased as provided in Article Four.
The Securities will rank pari passu in right of payment with all
present and future senior unsecured obligations of the Company and will rank
senior in right of payment to all present and future subordinated indebtedness
of the Company. The Securities will be effectively subordinated to all existing
and future indebtedness and liabilities of the Company's subsidiaries.
Section 3.02. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in The City of New York, State of New York)
where Securities may be presented for registration of transfer or for exchange
(the "Security Registrar" or "Registrar"), an office or agency (which shall be
located in the Borough of Manhattan in The City of New York, State of New York)
where Securities may be presented for payment (the "Paying Agent" or "Agent")
and an office or agency where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" or "Agent" includes any additional paying agent.
The Company may act as its own Paying Agent, except for the
purposes of payments on account of principal on the Securities pursuant to
Sections 10.11 and 10.16 hereof.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the Trust Indenture Act. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of the
name and address of any such Agent. If the Company fails to maintain a Registrar
or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 6.07 hereof.
The Company initially appoints the Trustee as the Registrar and
Paying Agent and agent for service of notices and demands in connection with the
Securities.
Section 3.03. Execution and Authentication.
Two Officers shall execute the Securities on behalf of the Company
by either manual or facsimile signature.
Securities bearing the manual or facsimile signature of individuals
who were at any time the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices on the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company many deliver Securities executed by the Company
to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as
provided in this Indenture and not otherwise.
A Security shall not be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose until the Trustee manually signs the
certificate of authentication on the Security. The Trustee's signature on such
certificate shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate Series A Securities for original
issue in an aggregate principal amount at maturity not to exceed $225,000,000,
upon receipt of a Company Order. In addition, on or prior to the date of the
Registered Exchange Offer, the Trustee or an authenticating agent shall
authenticate Exchange Securities (including any Private Exchange Securities
which will be in the form of Exhibit A-2 but which shall have the restrictive
legend contained in
Exhibit A-1) to be issued at the time of the Registered Exchange Offer in the
aggregate principal amount at maturity of up to $225,000,000 upon receipt of a
Company Order of the Company. In each case, the Company Order shall specify the
amount of Securities to be authenticated, the names of the persons in which such
Securities shall be registered and the date on which such Securities are to be
authenticated and direct the Trustee to authenticate such Securities together
with an Officer's Certificate certifying that all conditions precedent to the
issuance of such Securities contained herein have been complied with. The
aggregate principal amount at maturity of Securities Outstanding at any time may
not exceed $225,000,000, except as provided in Section 3.04 hereof.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities on behalf of the Trustee.
Unless limited by the terms of such appointment, an authenticating agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. Such authenticating agent shall have the same authenticating rights and
duties as the Trustee in any dealings hereunder with the Company or with any
Affiliate of the Company.
The certificates representing the Securities will be issued in fully
registered form, without coupons and only in denominations of $1,000 and any
integral multiple thereof. Except as described below, the Series A Securities
will be deposited with, or on behalf of, the Depository, and registered in the
name of Cede & Co. as the Depository's nominee in the form of a global note
certificate substantially in the form of Exhibit A-1 (the "Global Security") or
will remain in the custody of the Trustee pursuant to the FAST Balance
Certificate Agreement between the Depository and the Trustee.
Series A Securities purchased by or transferred to (i) Institutional
Accredited Investors who are not Qualified Institutional Buyers, (ii) except as
described below, persons outside the United States pursuant to sales in
accordance with Regulation S under the Securities Act or (iii) any other persons
who are not Qualified Institutional Buyers (collectively, "Non-Global
Purchasers") will be issued in registered form without coupons substantially in
the form of Exhibit A-1 (the "U.S. Physical Securities"). Upon the transfer to a
Qualified Institutional Buyer of U.S. Physical Securities initially issued to a
Non-Global Purchaser, such U.S. Physical Security will be exchanged for an
interest in the Global Security or in the Securities in the custody of the
Trustee representing the principal amount of Securities being transferred.
Series A Securities purchased by persons outside the United States
pursuant to sales in accordance with Regulation S
under the Securities Act will be represented upon issuance by a temporary global
note certificate substantially in the form of Exhibit A-1 (the "Offshore
Physical Securities" and, together with the U.S. Physical Securities, the
"Physical Securities") which will not be exchangeable for U.S. Physical
Securities until the expiration of the "40-day restricted period" within the
meaning of Rule 903(c)(3) of Regulation S under the Securities Act. The Offshore
Physical Securities will be registered in the name of, and be held by, an
offshore physical security holder (the "Offshore Physical Security Holder")
until the expiration of such 40-day period, at which time the Offshore Physical
Securities will be delivered to the Trustee in exchange for Securities
registered in the names requested by the Offshore Physical Security Holder. In
addition, until the expiration of such 40-day period, transfers of interests in
the Offshore Physical Securities can only be effected through the Offshore
Physical Security Holder in accordance with the requirements of Section 3.15
hereof.
Section 3.04. Temporary Securities.
Until definitive Securities are prepared and ready for delivery, the
Company may execute and upon a Company Order the Trustee shall authenticate and
deliver temporary Securities. Temporary Securities shall be substantially in the
form of definitive Securities, in any authorized denominations, but may have
variations that the Company reasonably considers appropriate for temporary
Securities as conclusively evidenced by the Company's execution of such
temporary Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay but in no event
later than the date that the Registered Exchange Offer is consummated. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 10.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute
and the Trustee shall in accordance with a Company Order authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
like tenor and of authorized denominations. Until so exchanged the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.
Section 3.05. Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.02 being sometimes referred
to herein as the "Securities Register") in which, subject to such reasonable
regulations as the Securities Registrar may prescribe, the Company shall provide
for the registration of Securities and of transfers and exchanges of Securities.
The Trustee is hereby initially appointed Security Registrar for the purpose of
registering Securities and transfers of Securities as herein provided.
When Securities are presented to the Registrar or a co-Registrar
with a request from the Holder of such Securities to register the transfer or
exchange for an equal principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested; provided that every Security presented or surrendered for
registration of transfer or exchange shall be duly endorsed or be accompanied by
a written instrument of transfer or exchange in form satisfactory to the Company
and the Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing. Whenever any Securities are so presented for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive. No
service charge shall be made to the Securityholder for any registration of
transfer or exchange. The Company may require from the Securityholder payment of
a sum sufficient to cover any transfer taxes or other governmental charge that
may be imposed in relation to a transfer or exchange, but this provision shall
not apply to any exchange pursuant to Section 3.09, 10.11, 10.16 or 9.06 hereof
(in which events the Company will be responsible for the payment of all such
taxes which arise solely as a result of the transfer or exchange and do not
depend on the tax status of the Holder). The Trustee shall not be required to
exchange or register the transfer of any Security for a period of 15 days
immediately preceding the first mailing of notice of redemption of Securities to
be redeemed or of any Security selected, called or being called for redemption
except, in the case of any Security where public notice has been given that such
Security is to be redeemed in part, the portion thereof not to be redeemed.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security of any series claims that the Security has been lost,
destroyed or wrongfully taken, the Company shall execute and upon a Company
Order, the Trustee shall authenticate and deliver a replacement Security of like
tenor and principal amount, bearing a number not contemporane ously outstanding,
if the Holder of such Security furnishes to the Company and to the Trustee
evidence acceptable to them of the ownership and the destruction, loss or theft
of such Security and an indemnity bond shall be posted, sufficient in the
judgment of both the Company and the Trustee, to protect the Company, the
Trustee or any Agent from any loss that any of them may suffer if such Security
is replaced. The Company may charge such Holder for the Company's expenses in
replacing such Security (including expenses of the Trustee charged to the
Company) and the Trustee may charge the Company for the Trustee's expenses in
replacing such Security.
Every replacement Security issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.07. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date and interest on such
defaulted interest at the then applicable interest rate borne by the Securities,
to the extent lawful (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the Regular Record Date; and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in subsection (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of
the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as in this
subsection (a) provided. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company in writing of such Special Record Date. In the name and at the
expense of the Company, the Trustee shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder at its address as
it appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the persons in whose names the
Securities (or their respective Predecessor Securities) are registered on
such Special Record Date and shall no longer be payable pursuant to the
following subsection (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after written notice given
by the Company to the Trustee of the proposed payment pursuant to this
subsection (b), such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 3.08. Persons Deemed Owners.
Prior to and at the time of due presentment for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name any Security is registered in the Security
Register as the owner of such Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 3.07) interest on such
Security and for all other
purposes whatsoever, whether or not such Security shall be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 3.09. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall be delivered to the Trustee and, if not already
cancelled, shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. The Registrar and the Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer or exchange,
redemption or payment. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section 3.09, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee shall
be disposed of as directed by the Company in writing to the Trustee or in
accordance with the Trustee's customary practice. The Trustee shall provide the
Company a list of all Securities that have been cancelled from time to time as
requested by the Company.
Section 3.10. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
Section 3.11. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, date
established for the payment of Defaulted Interest or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or of the Securities) payment of principal, premium, if any,
or interest need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date, Redemption Date, date established for the payment of
Defaulted Interest or at the Stated Maturity, as the case may be, and no
interest shall accrue with respect to such payment for the period from and after
such Interest Payment Date, Redemption Date, date established for the payment of
Defaulted Interest or Stated Maturity, as the case may be, to the next
succeeding Business Day.
Section 3.12. CUSIP Number.
The Company in issuing the Securities may use a "CUSIP" number (if
then generally in use), and if so, the Trustee may use the CUSIP numbers in
notices of redemption or exchange as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed in the notice or on the
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the Trustee
in writing of any change in the CUSIP number of either series of Securities.
Section 3.13. Paying Agent to Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of the
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of, premium, if any, or interest on the Securities, and
shall notify the Trustee of any default by the Company in making any such
payment. Money held in trust by the Paying Agent need not be segregated except
as required by law and in no event shall the Paying Agent be liable for any
interest on any money received by it hereunder. The Company at any time may
require the Paying Agent to pay all money held by it to the Trustee and account
for any funds disbursed and the Trustee may at any time during the continuance
of any Event of Default, upon a Company Order to the Paying Agent, require such
Paying Agent to pay forthwith all money so held by it to the Trustee and to
account for any funds disbursed. Upon making such payment, the Paying Agent
shall have no further liability for the money delivered to the Trustee.
Section 3.14. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit B.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the
Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 3.15. In
addition, Physical Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depository is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a written request from
the Depository to issue Physical Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease in the
principal amount at maturity of the Global Security in an amount equal to the
principal amount of the beneficial interest in the Global Security to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Physical Securities of like tenor and principal amount
of authorized denominations.
(d) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b), the Global Securities
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Securities, an equal aggregate principal amount at
maturity of Physical Securities of like tenor of authorized denominations.
(e) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to
subparagraphs (b) or (c) of this Section 3.14 shall, except as otherwise
provided by paragraphs (a)(l)(x) and (c) of Section 3.15, bear the legend
regarding transfer restrictions applicable to the Physical Securities set forth
in Exhibit A-1.
(f) The Holder of any Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
Section 3.15. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Security constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to any
non-U.S. person:
(1) the Registrar shall register the transfer of any Security
constituting a Restricted Security, whether or not such Security bears the
Private Placement Legend, if (x) the requested transfer is not prior to
the date which is three years (or such shorter period as may be prescribed
by Rule 144(k) under the Securities Act or any successor provision
thereunder) after the later of the original Issue Date of such Security
(or of any Predecessor Security) or the last day on which the Company or
any Affiliate of the Company was the owner of such Security or any
Predecessor Security or (y) (1) in the case of a transfer to a person
purporting to be an Institutional Accredited Investor which is not a QIB
(excluding non-U.S. persons), the proposed transferee has delivered to the
Registrar a certificate substantially in the form of Exhibit C hereto or
(2) in the case of a transfer to a person purporting to be a non-U.S.
person, the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit D hereto; and
(2) if the proposed transferor is an Agent Member holding a
beneficial interest in a Global Security, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (1) above and (y)
instructions given in accordance with the Depository's and the Registrar's
procedures;
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of Outstanding Physical Securities)
a decrease in the principal amount at maturity of a Global Security in an amount
equal to the principal amount at maturity of the beneficial interest in a Global
Security to be transferred, and (b) the Company shall execute and the Trustee
shall authenticate and deliver one or more Physical Securities of like tenor and
principal amount of authorized denominations.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to a
person purporting to be a QIB (excluding transfers to non-U.S. persons):
(1) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for
on the form of Security stating, or has otherwise advised the Company and
the Registrar in writing, that the transfer has been made in compliance
with the exemption from registration under the Securities Act provided
under Rule 144A to a transferee who has signed the certification provided
for on the form of Security stating, or has otherwise advised the Company
and the Registrar in writing, that such transferee represents and warrants
that it is purchasing the Security for its own account or an account with
respect to which it exercises sole investment discretion and that it and
any such account is a QIB within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company
as it has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A; and
(2) if the proposed transferee is an Agent Member, and the
Securities to be transferred consist of Physical Securities which after
transfer are to be evidenced by an interest in the Global Security, upon
receipt by the Registrar of instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall reflect
on the Security Register the date and an increase in the principal amount
at maturity of the Global Security in an amount equal to the principal
amount at maturity of the Physical Securities to be transferred, and the
Trustee shall cancel the Physical Securities so transferred.
(c) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Securities not bearing the Private Placement Legend,
the Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the registration of transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar shall deliver only
Securities that bear the Private Placement Legend unless (i)(x) the
circumstances contemplated by paragraph (a)(l)(x) of this Section 3.15 exist or
(y) such Security has been sold pursuant to an effective registration statement
under the Securities Act and (ii) there is delivered to the Registrar an Opinion
of Counsel reasonably satisfactory to the Company and the Trustee to the effect
that neither such legend nor the related restrictions on transfer are required
in
order to maintain compliance with the provisions of the
Securities Act.
(d) Other Transfers. If a Holder proposes to transfer a Security
constituting a Restricted Security pursuant to any exemption from the
registration requirements of the Securities Act other than as provided for by
Section 3.15(a) and (b), the Registrar shall only register such transfer or
exchange if such transferor delivers an Opinion of Counsel satisfactory to the
Company and the Registrar that such transfer is in compliance with the
Securities Act and the terms of this Indenture; provided that the Company may,
based upon the opinion of its counsel, instruct the Registrar by a Company Order
not to register such transfer in any case where the proposed transferee is not a
QIB, non-U.S. person or Institutional Accredited Investor.
(e) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 3.14 or this Section 3.15
for a period of two years at which time such letters, notices and other written
communications shall be delivered to the Company. The Company shall have the
right to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable prior
written notice to the Registrar.
ARTICLE FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. Company's Option to Effect Defeasance or Covenant
Defeasance.
The Company may, at its option by Board Resolution, at any time,
with respect to the Securities, elect to have either Section 4.02 or Section
4.03 be applied to all of the Outstanding Securities (the "Defeased
Securities"), upon compliance with the conditions set forth below in this
Article
Four.
Section 4.02. Defeasance and Discharge.
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.02, the Company shall be deemed to have been
discharged from its obligations with
respect to the Defeased Securities on the date the conditions set forth below
are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Defeased Securities, which shall thereafter be
deemed to be "Outstanding" only for the purposes of Section 4.05 and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of the
Company, and, upon Company Request, shall execute proper instruments
acknowledging the same), except for the following, which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
Defeased Securities to receive, solely from the trust fund described in Section
4.04 and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest on such Securities when such
payments are due, (b) the Company's obligations with respect to such Defeased
Securities under Sections 3.04, 3.05, 3.06, 10.02 and 10.03, (c) the rights,
powers, trusts, duties and immunities of the Trustee, the Paying Agent and the
Registrar hereunder, including, without limitation, the Trustee's rights under
Section 6.07, and (d) this Article Four. Subject to compliance with this Article
Four, the Company may exercise its option under this Section 4.02
notwithstanding the prior exercise of its option under Section 4.03 with respect
to the Securities.
Section 4.03. Covenant Defeasance.
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.03, the Company shall be released from its
obligations under any covenant or provision contained in Sections 10.06 through
10.22 (except Sections 10.09, the last sentence of 10.10, 10.13(b) and 10.18)
and the provisions of Articles Eight and Eleven shall not apply, with respect to
the Defeased Securities on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"), and the Defeased Securities
shall thereafter be deemed not to be "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. For this
purpose, such covenant defeasance means that, with respect to the Defeased
Securities, 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 Section or
Article, whether directly or indirectly, by reason of any reference elsewhere
herein to any such Section or Article or by reason of any reference in any such
Section or Article 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 5.01(c) or (d), but, except as specified above, the
remainder of this Indenture and such Defeased Securities shall
be unaffected thereby.
Section 4.04. Conditions to Defeasance or Covenant
Defeasance.
The following shall be the conditions to application of either
Section 4.02 or Section 4.03 to the Defeased Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.09 who shall agree to comply with the provisions of this
Article Four applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (a)
money in an amount, or (b) U.S. Government Securities which through the
scheduled payment of principal, premium, if any, and interest in respect
thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, money in an amount, or (c) a
combination thereof, in any such case, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and
discharge and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of, premium, if any, and
interest on the Defeased Securities upon redemption or at the Stated
Maturity of such principal or installment of principal, premium, if any,
or interest; provided, however, that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Securities to said payments with respect to the Securities;
(2) No Default shall have occurred and be continuing on the date of
such deposit or, insofar as Sections 5.01(h), (i) or (j) are concerned, at
any time during the period ending on the ninety-first day after the date
of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);
(3) Neither the Company nor any Subsidiary of the Company is an
"insolvent person" within the meaning of any applicable Bankruptcy Law on
the date of such deposit or at any time during the period ending on the
ninety-first day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period);
(4) Such defeasance or covenant defeasance shall not cause the
Trustee for the Securities to have a conflicting interest in violation of
Section 6.08 and for purposes of the Trust Indenture Act with respect to
any securities of the Company;
(5) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company is a party or by
which it is bound;
(6) In the case of an election under Section 4.02, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (y) since the date hereof, there has been a
change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such opinion shall confirm that, the
Holders of the Outstanding Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of such defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance had not occurred;
(7) In the case of an election under Section 4.03, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred;
(8) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, immediately following the ninety-first day
after the deposit, the trust funds established pursuant to this Article
will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally (for the limited purpose of the Opinion of Counsel referred to
in this clause (8), such Opinion of Counsel may contain an assumption that
the conclusions contained in a customary solvency letter by a nationally
recognized appraisal firm, dated as of the date of the deposit and taking
into account such deposit, are accurate as of such date, provided,
however, that such solvency letter is also delivered to the Trustee);
(9) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit made by the Company pursuant to its
election under Section 4.02 or
4.03 was not made by the Company with the intent of preferring the Holders
over the other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (i) all
conditions precedent (other than conditions requiring the passage of time)
provided for relating to either the defeasance under Section 4.02 or the
covenant defeasance under Section 4.03 (as the case may be) have been
complied with as contemplated by this Section 4.04 and (ii) if any other
Indebtedness of the Company shall then be outstanding or committed, such
defeasance or covenant defeasance will not violate the provisions of the
agreements or instruments evidencing such Indebtedness.
Opinions required to be delivered under this Section may have such
qualifications as are customary for opinions of the type required and acceptable
to the Trustee.
Section 4.05. Deposited Money and U.S. Government Obligations To Be
Held in Trust; Other Miscellaneous Provisions.
Subject to the proviso of the last paragraph of Section 10.03, all
money and U.S. Government Securities (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 4.05, the "Trustee") pursuant to Section 4.04 in respect of the Defeased
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (other than the Company) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, 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 and hold it harmless
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Securities deposited pursuant to Section 4.04 or the principal,
premium, if any, 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
Defeased Securities.
Anything in this Article Four to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Securities held by it as provided in
Section
4.04 which, in the opinion of an internationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent defeasance or covenant defeasance.
Section 4.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Securities in accordance with Section 4.02 or 4.03, 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
obligations of the Company under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section
4.02 or 4.03, as the case may be, until such time as the Trustee or Paying Agent
is permitted to apply all such money and U.S. Government Securities in
accordance with Section 4.02 or 4.03, as the case may be; provided, however,
that if the Company makes any payment of principal, premium, if any, or interest
on any Security following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment from the money and U.S. Government Securities held by the Trustee
or Paying Agent.
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) default in the payment of an installment of interest on any of
the Securities, when due and payable, and continuance of such default for
a period of 30 days or more (provided such 30 day grace period shall be
inapplicable to the first six Interest Payment Dates); or
(b) default in the payment of the principal of or premium, if any,
when due and payable, on any of the Securities (at its Stated Maturity,
upon optional redemption, required purchase, scheduled principal payment
or otherwise); or
(c) the Company fails to comply with any of its obligations
described under Article Eight or Sections 10.11 or 10.16 hereof; or
(d) the Company fails to perform or observe any other term, covenant
or agreement contained in the Securities, this Indenture or the Escrow
Agreement (other than a default specified in (a), (b) or (c) above) for a
period of 30 days after written notice of such failure requiring the
Company to remedy the same and stating that such notice is a "Notice of
Default" hereunder shall have been given (x) to the Company by the Trustee
or (y) to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Securities then Outstanding; or
(e) failure to perform any term, covenant, condition or provision of
one or more classes or issues of Indebtedness in an aggregate principal
amount of $5,000,000 or more under which the Company or a Material
Restricted Subsidiary is obligated, and either (a) such Indebtedness is
already due and payable in full or (b) such failure results in the
acceleration of the maturity of such Indebtedness; provided that, in the
case of a termination or expiration of an Interest Rate Obligation
requiring that the monetary liability thereunder be paid, no Event of
Default shall occur if such payment is made within 30 days after such
payment is due; or
(f) any holder of at least $5,000,000 in aggregate principal amount
of Indebtedness of the Company or any Material Restricted Subsidiary shall
commence judicial proceedings or take any other action to foreclose upon
or dispose of assets of the Company or any Material Restricted Subsidiary
having an aggregate Fair Market Value, individually or in the aggregate,
of $5,000,000 or more or shall have exercised any right under applicable
law or applicable security documents to take ownership of any such assets
in lieu of foreclosure; provided that, in any such case, the Company or
any Material Restricted Subsidiary shall not have obtained, prior to any
such foreclosure or disposition of assets, a stay of all such actions that
remains in effect; or
(g) one or more judgments, orders or decrees of any court or
regulatory or administrative agency for the payment of money of $5,000,000
or more, either individually or in the aggregate, shall have been entered
against the Company or any Material Restricted Subsidiary or any of their
respective properties and shall not have been discharged and there shall
have been a period of 60 consecutive days during which a stay of
enforcement of
such judgment, order or decree, by reason of pending appeal or otherwise,
shall not be in effect; or
(h) the Company, any Material Restricted Subsidiary or License Co.
pursuant to or under or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the making of a Bankruptcy Order in an
involuntary case or proceeding or the commencement of any case
against it;
(iii) consents to the appointment of a Custodian of it or for
any substantial part of its property;
(iv) makes a general assignment for the benefit of its
creditors;
(v) files an answer or consent seeking reorganization or
relief;
(vi) shall admit in writing its inability to pay its debts
generally; or
(vii) consents to the filing of a petition in bankruptcy; or
(i) a court of competent jurisdiction in any involuntary case or
proceeding enters a Bankruptcy Order against the Company, any Material
Restricted Subsidiary or License Co., and such Bankruptcy Order remains
unstayed and in effect for 60 consecutive days; or
(j) a Custodian shall be appointed out of court with respect to the
Company, any Material Restricted Subsidiary or License Co. or with respect
to all or any substantial part of the assets or properties of the Company,
any Material Restricted Subsidiary or License Co.; or
(k) the Company or License Co. is subject, voluntarily or
involuntarily, to dissolution proceedings; or
(l) failure by License Co. or its shareholders to perform any
material term, covenant, condition or provision of the License Co.
Documents; or
(m) the Company shall have failed on the Issue Date to enter into
the Escrow Agreement or pursuant thereto fail to place the Initial Escrow
Amount (as defined in the Escrow Agreement) in the Escrow Account held by
the Escrow Agent for the benefit of the Holders of the Securities and
the Trustee, or the Company shall assert or acknowledge in writing that
the Escrow Agreement is invalid or unenforceable.
Section 5.02. Acceleration of Maturity; Rescission
and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.01(h), (i), (j) or (k) with respect to the Company) occurs and is
continuing then and in every such case the Trustee or the Holders of at least
25% in aggregate principal amount of the Securities then Outstanding may, and
the Trustee upon the request of the Holders of not less than 25% in aggregate
principal amount of the Securities then Outstanding shall, declare all principal
of all the Securities to be due and payable immediately in an amount equal to
the principal amount of the Securities, premium, if any, thereon plus accrued
and unpaid interest, if any, to the date the Securities become due and payable
by a notice in writing to the Company (and to the Trustee, if given by the
Holders) and upon any such declaration such principal, premium, if any, and
interest, shall become immediately due and payable. If an Event of Default
specified in Section 5.01(h), (i), (j) or (k) with respect to the Company occurs
and is continuing, then the principal of, premium, if any, and accrued and
unpaid interest, if any, on all the Securities then Outstanding shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder.
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article, the Holders of a majority
in aggregate principal amount of the Securities then Outstanding, by written
notice to the Company and the Trustee, may rescind and annul such declaration of
acceleration and its consequences if:
(a) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(i) all amounts due the Trustee under Section 6.07, including
the reasonable compensation, fees, expenses, disbursements and
advances of the Trustee, its agents and counsel,
(ii) all overdue interest on all Securities,
(iii) the principal of and premium, if any, on any Securities
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate then borne by the
Securities, and
(iv) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate then borne by the
Securities; and
(b) all existing Events of Default, other than the non-payment of
principal of, premium, if any, and any accrued and unpaid interest on, the
Securities which have become due solely as a result of such declaration of
acceleration, have been cured or waived as provided in Section 5.13 and if
the rescission of the acceleration would not conflict with any judgment or
decree.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
Notwithstanding the foregoing, in the event of a declaration of
acceleration in respect of the Securities because an Event of Default specified
in Section 5.01(e) shall have occurred and be continuing, such declaration of
acceleration shall be automatically annulled if the Indebtedness that is the
subject of such Event of Default has been discharged or paid or the requisite
Holders thereof have rescinded their declaration of acceleration in respect of
such Indebtedness and written notice of such discharge or rescission, as the
case may be, shall have been given to the Trustee by the Company and by the
requisite holders of such Indebtedness or a trustee, fiduciary or agent for such
holders, within 60 days after such declaration of acceleration in respect of the
Securities and no other Event of Default has occurred which has not been cured
or waived during such 60-day period.
Section 5.03. Collection of Indebtedness and Suits
for Enforcement by Trustee.
The Company covenants that if:
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for
a period of 30 days or more (provided such 30 day grace period shall be
inapplicable to the first six Interest Payment Dates), or
(b) default is made in the payment of the principal of or premium,
if any, on any Security when due and payable, including, when applicable,
purchases made pursuant to Section 10.11 and 10.16 hereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal, premium, if any, and interest, with interest
upon the overdue principal, premium, if any, and, to the extent that payment of
such interest shall be legally enforceable, upon
overdue installments of interest, at the rate then borne by the Securities; and,
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation, fees,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may, but is not
obligated under this paragraph to, institute a judicial proceeding for the
collection of the sums so due and unpaid and may, but is not obligated under
this paragraph to, prosecute such proceeding to judgment or final decree, and
may, but is not obligated under this paragraph to, enforce the same against the
Company or any other obligor upon the Securities and collect the moneys adjudged
or decreed to be payable in the manner provided by law out of the property of
the Company or any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion, but is not obligated under this paragraph to, (i) proceed to
protect and enforce its rights and the rights of the Holders under this
Indenture by such appropriate private or judicial proceedings as the Trustee
shall deem most effectual to protect and enforce such rights, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted herein, or (ii) proceed to protect
and enforce any other proper remedy. No recovery of any such judgment upon any
property of the Company shall affect or impair any rights, powers or remedies of
the Trustee or the Holders.
Section 5.04. Trustee May File Proofs of Claims.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities, or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, fees, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other
property payable or deliverable on any such claims and to
distribute the same;
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 the
Trustee any amount due it for the reasonable compensation, fees, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 5.05. Trustee May Enforce Claims Without
Possession of Securities.
All rights of action and claims under this Indenture, the Escrow
Agreement or the Securities may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name and as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, fees, expenses, disbursements and advances of the Trustee, its
agents and counsel, be for the ratable benefit of the Holders of the Securities
in respect of which such judgment has been recovered.
Section 5.06. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article,
including such amounts held pursuant to the Escrow Agreement, shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal, premium, if any, or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
First: to the Trustee and any predecessor thereof for amounts due
under Section 6.07;
Second: to Holders for interest accrued on the Securities, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Securities for interest;
Third: to Holders for principal and premium, if any, amounts owing
under the Securities, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal
and premium, if any; and
Fourth: the balance, if any, to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Securityholders pursuant to this
Section 5.06.
Section 5.07. Limitation on Suits.
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice
to the Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee within 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture or any Security to affect, disturb or prejudice the rights of any
other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture or any Security, except in the
manner provided in this Indenture and for the equal and ratable benefit of all
the Holders.
Section 5.08. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive cash payment of the principal of, premium, if any, and (subject to
Section 3.07 hereof) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
respective Redemption Date) and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the consent of such
Holder.
Section 5.09. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Security and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 5.10. Rights and Remedies Cumulative.
Except as provided in Section 3.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
Section 5.12. Control by Majority.
The Holders of a majority in aggregate principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, provided, however, that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or the Escrow Agreement or any Security or expose the
Trustee to personal liability; and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities may on behalf of the Holders of all the
Securities waive any past Default hereunder and its consequences, except a
Default
(a) in the payment of the principal of, premium, if
any, or interest on any Outstanding Security or
(b) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of,
premium, if any, or interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or
after the respective Redemption Dates).
Section 5.15. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury or other law wherever enacted, now or at any time hereafter in force,
which would prohibit or forgive the Company from paying all or any portion of
the principal of, premium, if any, or interest on the Securities contemplated
herein or in the Securities or which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
Section 5.16. Unconditional Right of Holders to Institute Certain
Suits.
Notwithstanding any other provision in this Indenture or the Escrow
Agreement and any other provision of any Security, the right of any Holder of
any Security to receive payment of the principal of, premium, if any, and
interest on such Security on or after the respective Stated Maturities (or the
respective Redemption Dates, in the case of redemption) expressed in such
Security, or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and the Escrow
Agreement, and no implied covenants or obligations shall be read into this
Indenture and the Escrow Agreement against the Trustee; and
(2) 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 or the
Escrow Agreement; but in the case of any such certificates or opinions
which by provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture or the Escrow Agreement.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and the Escrow Agreement, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that (i) no provision of this
Indenture or the Escrow Agreement shall require the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it and (ii) the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it with respect to the Securities in good
faith in accordance with the direction of the Holders of a majority of the
Outstanding Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture or the Escrow Agreement.
(d) Whether or not therein expressly so provided, every provision of
this Indenture and the Escrow Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 6.01.
Section 6.02. Notice of Defaults.
Within 60 days after the occurrence of any Default, the Trustee
shall transmit by mail to all Holders, as their
names and addresses appear in the Security Register, notice of such Default
hereunder known to the Trustee, unless such Default shall have been cured or
waived; provided, however, that, except in the case of a Default in the payment
of the principal of, premium, if any, or interest on any Security, the Trustee
shall be protected in withholding such notice if and so long as a trust
committee of Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interest of the Holders.
Section 6.03. Certain Rights of Trustee.
Subject to Section 6.01 hereof and the provisions of Section 315 of
the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution thereof;
(c) the Trustee may consult with counsel and any written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture or the Escrow Agreement at
the request or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities which might be
incurred by the Trustee in compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture or Escrow
Agreement other than any liabilities arising out of its own negligence;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, other evidence of indebtedness or other paper or
document unless requested in writing so to do by the Holders of not less
than a majority in aggregate principal amount of the Securities then
Outstanding; provided, however, that, if the payment within a reasonable
time to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of
the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition
to proceeding; the reasonable expenses of every such investigation shall
be paid by the Company or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Company upon demand; provided, further,
the Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may deem fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the permissive right of the Trustee to act hereunder shall not
be construed as a duty;
(i) the Trustee shall not be required to take notice or deemed to
have notice of any Event of Default hereunder, except failure by the
Company to make any of the payments to the Trustee pursuant to Section
5.01(a) or Section 5.01(b) hereof, unless the Trustee shall be
specifically notified in writing of such Event of Default by the Company
or by one or more of the Holders;
(j) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate; and
(k) except as specifically provided for in the provisions of this
Indenture or the Escrow Agreement, the Trustee shall not be deemed to have
notice or knowledge of
any matter unless a Responsible Officer has actual knowledge thereof or
unless written notice thereof is received by the Trustee at its Corporate
Trust Office and such notice references the Securities generally, the
Company or this Indenture.
Section 6.04. Trustee Not Responsible for Recitals, Dispositions
of Securities or Application of Proceeds Thereof.
The recitals contained herein, in the Securities and in the Escrow
Agreement, except the Trustee's certificates of authentication, shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture and
the Escrow Agreement, authenticate the Securities and perform its obligations
hereunder and that the statements made by it in a Statement of Eligibility and
Qualification on Form T-1, if any, to be supplied to the Company are true and
accurate subject to the qualifications set forth therein. The Trustee shall not
be accountable for the use or application by the Company of Securities or the
proceeds thereof.
Section 6.05. Trustee and Agents May Hold Securities; Collections;
Etc.
The Trustee, any Paying Agent, Security Registrar or any other agent
of the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent and, subject to
Section 6.08 hereof and Sections 310 and 311 of the Trust Indenture Act, may
otherwise deal with the Company and receive, collect, hold and retain
collections from the Company with the same rights it would have if it were not
the Trustee, Paying Agent, Security Registrar or such other agent.
Section 6.06. Money Held in Trust.
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required herein
or by law. The Trustee shall not be under any liability for interest on or to
invest any moneys received by it hereunder.
Section 6.07. Compensation and Indemnification of Trustee and its
Prior Claim.
The Company covenants and agrees: (a) to pay to the Trustee from
time to time, and the Trustee shall be entitled
to, reasonable compensation for all services rendered by it hereunder (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust); (b) to reimburse the Trustee and each predecessor
Trustee upon its request for all reasonable expenses, fees, disbursements and
advances incurred or made by or on behalf of it in the administration of the
trusts and the performance of its duties and obligations hereunder (including
the reasonable compensation, fees, and the expenses and disbursements of its
counsel and of all agents and other persons not regularly in its employ), except
any such expense, disbursement or advance as may arise from its negligence or
bad faith; and (c) to indemnify the Trustee and each predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this Indenture or in respect of the Escrow
Agreement or the trusts hereunder and its duties hereunder, including
enforcement of this Section 6.07. The Trustee shall promptly notify the Company
of any claim for which it may seek indemnity. 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; provided that the Company will not be required to pay such fees and
expenses if it assumes the Trustee's defense with counsel acceptable to and
approved by the Trustee (such approval not to be unreasonably withheld) and
there is no conflict of interest between the Company and the Trustee in
connection with such defense. The Company need not pay for any settlement made
without its written consent, which consent shall not be unreasonably withheld.
The Company need not reimburse the Trustee for any expense or indemnify against
any liability or loss of the Trustee to the extent such expense, liability or
loss is attributable to the negligence, bad faith or willful misconduct of the
Trustee. The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, fees, disbursements and
advances shall constitute an additional obligation hereunder and shall survive
the satisfaction and discharge of this Indenture. To secure the obligations of
the Company to the Trustee and each predecessor Trustee under this Section 6.07,
the Trustee and each predecessor Trustee shall have a prior Lien upon all
property and funds held or collected by the Trustee as such, except funds and
property paid by the Company and held in trust for the benefit of the Holders of
the Securities.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 5.01(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.
Section 6.08. Conflicting Interests.
The Trustee shall be subject to and comply with the provisions of
Section 310(b) of the Trust Indenture Act.
Section 6.09. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under Trust Indenture Act Sections 310(a)(1) and (2)
and which shall have, or in the case of a corporation included in a bank holding
company system the related bank holding company shall have, a combined capital
and surplus of at least $100,000,000, and have a Corporate Trust Office in the
Borough of Manhattan in The City of New York, State of New York. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of any Federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 6.10. Resignation and Removal; Appointment of Successor
Trustee.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee, or any trustee or trustees hereinafter appointed,
may at any time resign by giving written notice thereof to the Company at least
20 Business Days prior to the date of such proposed resignation. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument executed by authority of the Board of Directors of
the Company, a copy of which shall be delivered to the resigning Trustee and a
copy to the successor Trustee. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 20 Business Days
after the giving of such notice of resignation, the resigning Trustee may, or
any Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee. Such court
may thereupon, after such notice, if any, as it may deem proper, appoint a
successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders
of a majority in principal amount of the Outstanding Securities, delivered to
the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Section
310(b) of the Trust Indenture Act in accordance with Section 6.08 hereof
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 hereof
and shall fail to resign after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Security for at least
six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose or
rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 5.14, the Holder of any Security who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution of its Board of Directors, shall promptly appoint
a successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the Holders of the Securities and accepted appointment in the
manner hereinafter provided, the Holder of any Security who has been a bona fide
Holder for at least six months may, subject to Section 5.14, on behalf of
himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
Section 6.11. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee as if originally named as
Trustee hereunder; but, nevertheless, on the written request of the Company or
the successor Trustee, upon payment of amounts due it pursuant to Section 6.07,
such retiring Trustee shall duly assign, transfer and deliver to the successor
Trustee all moneys and property at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers, duties and obligations of the retiring Trustee. Upon request of
any such successor Trustee, the Company shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor Trustee
all such rights and powers. Any Trustee ceasing to act shall, nevertheless,
retain a prior claim upon all property or funds held or collected by such
Trustee to secure any amounts then due it pursuant to the provisions of Section
6.07.
No successor Trustee with respect to the Securities shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor Trustee shall be eligible to act as Trustee under this
Article.
Upon acceptance of appointment by any successor Trustee as provided
in this Section 6.11, the successor shall give notice thereof to the Holders of
the Securities, by mailing such notice to such Holders at their addresses as
they shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
6.10. If the Company fails to give such notice within 10 days after acceptance
of appointment by the successor
Trustee, the successor Trustee shall cause such notice to be given at the
expense of the Company.
Section 6.12. Merger, Conversion, Amalgamation, Consolidation or
Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or amalgamated, or any corporation resulting
from any merger, conversion, amalgamation or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided such corporation shall be
eligible under this Article to serve as Trustee hereunder.
In case at the time such successor to the Trustee under this Section
6.12 shall succeed to the trusts created by this Indenture any of the Securities
shall have been authenticated but not delivered, any such successor to the
Trustee may adopt the certificate of authentication of any predecessor Trustee
and deliver such Securities so authenticated; and, in case at that time any of
the Securities shall not have been authenticated, any successor to the Trustee
under this Section 6.12 may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor Trustee; and in all
such cases such certificate shall have the full force which it is anywhere in
the Securities or in this Indenture provided that the certificate of the Trustee
shall have been authenticated.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company to Furnish
Trustee Names and Addresses of Holders.
(a) The Trustee shall preserve the names and addresses of the
Securityholders and otherwise comply with TIA Section 312(a). If the Trustee is
not the Registrar, the Company shall furnish or cause the Registrar to furnish
to the Trustee before each Interest Payment Date, and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the
Securityholders. Neither the Company nor the Trustee shall be under any
responsibility with regard to the accuracy of such list.
(b) The Company will furnish or cause to be furnished to the Trustee
(i) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and
(ii) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished pursuant to this Subsection 7.01(b).
Section 7.02. Communications of Holders.
Holders may communicate with other Holders with respect to their
rights under this Indenture or under the Securities pursuant to Section 312(b)
of the Trust Indenture Act. The Company and the Trustee and any and all other
persons benefited by this Indenture shall have the protection afforded by
Section 312(c) of the Trust Indenture Act.
Section 7.03. Reports by Trustee.
Within 60 days after May 15 of each year commencing with the first
May 15 following the date of this Indenture, the Trustee shall mail to all
Holders, as their names and addresses appear in the Security Register, a brief
report dated as of such May 15, in accordance with, and to the extent required
under Section 313 of the Trust Indenture Act. At the time of its mailing to
Holders, a copy of each such report shall be filed by the Trustee with the
Company, the Commission and with each stock exchange on which the Securities are
listed. The Company shall notify the Trustee when the Securities are listed on
any stock exchange.
Section 7.04. Reports by Company.
(a) The Company shall mail to each Holder of the Securities, and
shall file with the Trustee within 15 days after it is required to file the same
with the Commission, copies of the annual reports and quarterly reports and of
the information, documents and other reports which it may be required to file
with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange
Act. The Company shall also comply with the other provisions of TIA Section
314(a).
(b) Whether or not the Company is required to file with the
Commission such reports and other information referred to in Section 7.04(a),
the Company shall furnish without cost to each Holder of the Securities and the
Trustee and (following the effective date of the Registered Exchange Offer or
Shelf
Registration Statement (as defined in the Registration Agreement), as
applicable) file with the Commission (i) within 135 days after the end of each
Fiscal Year of the Company, the information required by Form 10-K (or any
successor form thereto) under the Securities Act with respect to such period,
(ii) within 60 days after the end of each of the first three fiscal quarters of
each Fiscal Year of the Company, the information required by Form 10-Q (or any
successor form thereto) under the Securities Act with respect to such period and
(iii) within 15 days after it would be required to be filed with the Commission,
the information required by Form 8-K (or any successor form thereto).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 8.01. Company May Consolidate, Etc., Only on Certain Terms.
The Company will not, in a single transaction or through a series of
transactions, consolidate or combine with or merge with or into any other person
or, directly or indirectly, sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and assets to any other
person or persons, or permit any of the Restricted Subsidiaries to enter into
any such transaction or series of transactions if such transaction or series of
transactions, in the aggregate, would result in the sale, assignment,
conveyance, lease, transfer or disposition of all or substantially all of the
properties or assets of the Company and the Restricted Subsidiaries, on a
consolidated basis, to any person or persons, unless:
(i) either (A) (1) if the transaction or transactions is a merger or
consolidation involving the Company, the Company shall be the person
surviving such merger or consolidation or (2) if the transaction or
transactions is a merger or consolidation involving a Restricted
Subsidiary, such Restricted Subsidiary shall be the person surviving such
merger or consolidation and such person surviving shall be a Restricted
Subsidiary, or (B) (1) the person formed by such consolidation or into
which the Company or such Restricted Subsidiary is merged or to which the
properties and assets of the Company or such Restricted Subsidiary, as the
case may be, are transferred (any such surviving person or transferee
person being the "Surviving Entity") shall be a corporation organized and
validly existing under the laws of the United States of America, any State
thereof or the District of Columbia, and (2) in the case of a transaction
involving the Company, the Surviving Entity shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, in form and
substance reasonably satisfactory to the Trustee, all the obligations
under this Indenture, the Escrow Agreement and the Securities, and in each
case, this Indenture and the Escrow Agreement shall remain in full force
and effect;
(ii) immediately after giving effect to such transaction or series of
transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or
in respect of such transaction or series of transactions), no Default
shall have occurred and be continuing and the Company or the Surviving
Entity (assuming such Surviving Entity's assumption of the Company's
obligations under the Securities and this Indenture), as the case may be,
after giving effect to such transaction or series of transactions on a pro
forma basis, could incur $1.00 of additional Indebtedness under Section
10.12 hereof; provided that, in addition to the foregoing, (1) if
immediately prior to such transaction or series of transactions the ratio
of Total Consolidated Indebtedness of the Company to Annualized Pro Forma
Consolidated Operating Cash Flow of the Company (based upon the two most
recent quarters for which consolidated financial statements are available
immediately preceding the date of such transaction or series of
transactions) (the "Pre-Transaction Ratio") equals or exceeds 6.0:1.0,
then, after giving pro forma effect to such transaction or series of
transactions, the ratio of Total Consolidated Indebtedness of the Company
or the surviving entity on a pro forma basis to Annualized Pro Forma
Consolidated Operating Cash Flow of the Issuer or the surviving entity
(based upon the two most recent quarters for which consolidated financial
statements are available immediately preceding the date of such
transaction or series of transactions) (the "Post-Transaction Ratio") must
not be any higher than the Pre-Transaction Ratio or (2) if the
Pre-Transaction Ratio is less than 6.0:1.0, then (x) the Post-Transaction
Ratio must be less than 6.0:1.0 and (y) the Annualized Pro Forma
Consolidated Coverage after giving pro forma effect to such transaction or
series of transactions must be greater than or equal to 1.75:1.0;
(iii) immediately after giving effect to such transaction or series of
transactions on a pro forma basis (including without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or
in respect of such transaction or series of transactions), no Default
shall have occurred and be continuing; and
(iv) the Company or the Surviving Entity, as the case may be, shall
have delivered to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate
stating that such transaction or series of transactions and, if a
supplemental indenture is required in connection with such transaction or
series of transactions to effectuate such assumption, such supplemental
indenture complies with this Indenture and that all conditions precedent
provided for in this Indenture relating to such transaction or series of
transactions have been satisfied.
Section 8.02. Successor Substituted.
Upon any consolidation, combination or merger, or any sale,
assignment, conveyance, transfer, lease or other disposition of all or
substantially all of the properties and assets of the Company or a Restricted
Subsidiary in accordance with Section 8.01 hereof in which the Company or such
Restricted Subsidiary, as the case may be, is not the Surviving Entity, such
Surviving Entity shall succeed to, and be substituted for, and may exercise
every right and power of, the Company or such Restricted Subsidiary, as the case
may be, under this Indenture, the Escrow Agreement and the Securities with the
same effect as if such successor had been named as the Company or such
Restricted Subsidiary, as the case may be, herein, in the Escrow Agreement and
in the Securities and, thereafter, except in the case of (a) a lease or (b) any
sale, assignment, conveyance, transfer, lease or other disposition to a
Restricted Subsidiary of the Company, the Company shall be discharged from all
obligations and covenants under this Indenture, the Escrow Agreement and the
Securities.
For all purposes of this Indenture and the Securities (including
this Article Eight and Sections 10.12, 10.14 and 10.17 hereof) Subsidiaries of
any Surviving Entity will, upon such transaction or series of related
transactions described in this Article Eight, become Restricted Subsidiaries or
Unrestricted Subsidiaries as provided pursuant to Section 10.22 and all
Indebtedness, and all Liens on property or assets, of the Company and the
Restricted Subsidiaries in existence immediately prior to such transaction or
series of related transactions will be deemed to have been incurred upon such
transaction or series of related transactions.
ARTICLE NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements and Waivers
Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution of the Board of Directors of the Company, and the Trustee, at
any time and from time to
time, may amend, waive or enter into one or more indentures supplemental hereto,
in form and substance satisfactory to the Trustee, for any of the following
purposes:
(a) to the extent permitted herein, to evidence the succession of
another person to the Company, and the assumption by any such successor of
the covenants of the Company herein and in the Securities;
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company, herein or in the Securities;
(c) to cure any ambiguity or to correct or supplement any provision
herein or in the Securities which may be defective or inconsistent with
any other provision herein or to make any other provisions with respect to
matters or questions arising under this Indenture or the Securities;
provided, however, that, in each case, such provisions shall not
materially adversely affect the interests or legal rights of any Holder
and the Company has delivered to the Trustee an Opinion of Counsel stating
that such change, agreement or waiver does not materially adversely affect
the interests or legal rights of any Holders;
(d) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by Section 9.05 hereof or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section 10.19
hereof;
(f) to evidence and provide the acceptance of the appointment of a
successor Trustee hereunder; or
(g) to mortgage, pledge, hypothecate or grant a security interest in
any property or assets in favor of the Trustee for the benefit of the
Holders as security for the payment and performance of this Indenture
Obligations;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such change, agreement or waiver does not materially
adversely affect the interests or legal rights of any Holders.
Section 9.02. Supplemental Indentures, Agreements and Waivers with
Consent of Holders.
With the written consent of the Holders of not less than a majority
in aggregate principal amount of the Outstanding Securities delivered to the
Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto satisfactory to the
Trustee for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or the Securities or of
modifying in any manner the rights of the Holders under this Indenture or the
Securities. The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities may waive compliance by the Company with
any provision of this Indenture or the Securities. However, no such supplemental
indenture, agreement or instrument, including any waiver pursuant to Section
5.13, shall, without the written consent or waiver of the Holder of each
Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, alter the redemption provisions of the Securities or
this Indenture, or change the coin or currency in which any Security or
any premium or the accrued interest thereon is payable, or impair the
right to institute suit for the enforcement of any payment after the
Stated Maturity thereof (or, in the case of either a redemption or a
purchase pursuant to Sections 10.11 or 10.16 of this Indenture, on or
after the applicable Redemption Date or purchase date, as the case may
be);
(b) reduce the percentage of the aggregate principal amount of the
Outstanding Securities, the consent of whose Holders is required for any
amendment or supplemental indenture, or the consent of whose Holders is
required for any waiver or consent provided for in this Indenture, the
Escrow Agreement or with respect to any Security;
(c) modify any of the provisions of this Section 9.02 or Sections
5.13 and 5.16, except to increase any such percentage, if applicable
thereto, or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Security affected thereby;
(d) consent to the assignment or transfer by the Company of any of
its rights and obligations under this Indenture or the Securities;
(e) release any Liens created by the Escrow Agreement except in
strict accordance with the terms of the Escrow Agreement;
(f) following (i) either (x) the mailing of a notice of a Change of
Control Offer or (y) the failure to mail such notice prior to the date set
forth in the second
paragraph of Section 10.11, in either case, following satisfaction of the
condition precedent to the mailing of such notice set forth in the first
paragraph of Section 10.11, or (ii) the occurrence of an Asset Sale, alter
the Company's obligation to repurchase Securities in accordance with the
provisions of Sections 10.11 or 10.16, as the case may be, or waive any
default in the performance thereof;
(g) adversely affect the ranking of the Securities in a manner
adverse to any Holder;
(h) release any Guarantee except in compliance with the terms of
this Indenture;
(i) waive a default in payment with respect to the Securities or
impair the right to institute suit for the enforcement of any payment on
or with respect to the Securities; or
(j) amend or modify the provisions of Section 10.08.
Upon the written request of the Company accompanied by a copy of a
Board Resolution of the Board of Directors authorizing the execution of any such
supplemental indenture or other agreement, instrument or waiver, and upon the
filing with the Trustee of evidence of the consent of Holders as aforesaid, the
Trustee shall join with the Company in the execution of such supplemental
indenture or other agreement, instrument or waiver.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture or other
agreement, instrument or waiver, but it shall be sufficient if such Act shall
approve the substance thereof.
Section 9.03. Execution of Supplemental Indentures, Agreements and
Waivers.
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement, instrument or waiver permitted by this
Article Nine or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01 hereof) shall be fully protected in relying upon, an Opinion of Counsel and
an Officers' Certificate from each obligor under the Securities entering into
such supplemental indenture, agreement, instrument or waiver, each stating that
the execution of such supplemental indenture, agreement, instrument or waiver
(a) is authorized or permitted by this Indenture and (b) does not violate the
provisions of any agreement or instrument evidencing any other Indebtedness of
the Company or any Subsidiary of the Company. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture, agreement,
instrument or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture, the Securities or otherwise.
Section 9.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article
Nine, this Indenture and the Securities, if applicable, shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture and the Securities, if applicable, for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 9.05. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors of the Company, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee upon a Company Order in exchange for Outstanding Securities.
Section 9.07. Record Date.
The Company may, but shall not be obligated to, fix, a record date
for the purpose of determining the Holders entitled to consent to any
supplemental indenture, agreement or instrument or any waiver, and shall
promptly notify the Trustee of any such record date. If a record date is fixed
those persons who were Holders at such record date (or their duly designated
proxies), and only those persons, shall be entitled to consent to such
supplemental indenture, agreement or instrument or waiver or to revoke any
consent previously given, whether or not such persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
Section 9.08. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if a notation of the consent is not made
on any Security. However, any such Holder, or subsequent Holder, may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
An amendment or waiver shall become effective in accordance with its terms and
thereafter bind every Holder.
ARTICLE TEN
COVENANTS
Section 10.01. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of, premium,
if any, and interest on the Securities in accordance with the terms of the
Securities and this Indenture.
Section 10.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan in The City of
New York, State of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
office of the Trustee at its Corporate Trust Office will be such office or
agency of the Company, unless the Company shall designate and maintain some
other office or agency for one or more of such purposes. The Company will give
prompt written notice to the Trustee of any change in the location of any such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York, State of New York)
where the Securities may be presented or surrendered for any or all such
purposes, and may from time to time rescind such designation; 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 City of New York, State
of New York for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and any change in the location
of any such other office or agency.
Section 10.03. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of, premium, if any, or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Holders entitled thereto a sum sufficient to pay the principal, premium,
if any, or interest so becoming due until such sums shall be paid to such
persons or otherwise disposed of as herein provided, and will promptly notify
the Trustee of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company will, on
or before each due date of the principal of, premium, if any, or interest on,
any Securities, deposit with a Paying Agent a sum in same day funds sufficient
to pay the principal, premium, if any, or interest so becoming due, such sum to
be held in trust for the benefit of the Holders entitled to such principal,
premium or interest, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of such action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause
each Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent will agree with the Trustee, subject to
the provisions of this Section 10.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities in trust for the benefit of the
Holders entitled thereto until such sums shall be paid to such Holders or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal of, premium, if any, or interest on the Securities;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and
liabilities of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent will be released from all further liability with respect to
such money.
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 on any Security and remaining unclaimed for two years after
such principal, premium, if any, or interest has become due and payable shall be
paid to the Company upon receipt of a Company Request therefor, or (if then held
by the Company) will be discharged from such trust; and the Holder of such
Security will thereafter, as an unsecured general 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 Company as
trustee thereof, will 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 10.04. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory), licenses and franchises of the
Company and each of the Restricted Subsidiaries; provided, however, that the
Company will not be required to preserve any such right, license or franchise if
the Board of Directors of the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
the Restricted Subsidiaries as a whole and that the loss thereof is not adverse
in any material respect to the Holders; provided, further, that the foregoing
will not prohibit a sale, transfer or conveyance of a Subsidiary of the Company
or any of its assets in compliance with the terms of this Indenture.
Section 10.05. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed (i) upon the Company or any of its
Subsidiaries or (ii) upon the income, profits or property of the Company or any
of the Restricted Subsidiaries and (b) all material lawful claims for labor,
materials and supplies, which, if unpaid, could reasonably be expected to become
a Lien upon the property of the Company or any of the Restricted Subsidiaries;
provided, however, that the Company will not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings properly instituted and diligently conducted.
Section 10.06. Maintenance of Properties.
The Company will cause all material properties owned by the Company
or any of the Restricted Subsidiaries or used or held for use in the conduct of
their respective businesses to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section 10.06
will prevent the Company from discontinuing the maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any of the Restricted
Subsidiaries and is not disadvantageous in any material respect to the Holders.
Section 10.07. Insurance.
The Company will at all times keep all of its and the Restricted
Subsidiaries' properties which are of an insurable nature insured, either with
insurers believed by the Company in good faith to be financially sound and
responsible or by maintaining reserves in amounts customarily maintained by
corporations similarly situated, against loss or damage to the extent that
property of similar character is usually and customarily so insured by
corporations similarly situated and owning like properties.
Section 10.08. Books and Records.
The Company will, and will cause each of the Restricted Subsidiaries
to, keep proper books of record and account, in which full and correct entries
will be made of all financial transactions and the assets and business of the
Company and each Restricted Subsidiary of the Company in accordance with GAAP.
Section 10.09. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company and any other
obligor on the Securities will furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
(including any covenants compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with, and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents,
certificates and/or opinions is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture will include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) 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;
(iii) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether such covenant or condition
has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 10.10. Provision of Financial Statements.
Whether or not the Company has a class of securities registered
under the Exchange Act, the Company will supply, at its own expense, to each
Holder of the Securities and file with the Trustee and (following the effective
date of the Registered Exchange Offer or Shelf Registration Statement, as
applicable, with the Commission) within fifteen days after the Company is
required to file the same with the Commission, copies of the annual reports and
quarterly reports and of the information,
documents and other reports which the Company may be required to file with the
Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act. The
Company will also comply with the other provisions of Section 314(a) of the
Trust Indenture Act.
Section 10.11. Change of Control.
In the event of a Change of Control (the date of such occurrence,
the "Change of Control Date"), the Company will notify the Holders of Securities
in writing of such occurrence and will make an offer to purchase (the "Change of
Control Offer") on a Business Day (the "Change of Control Purchase Date") not
more than 60 days following the Change of Control Date, all Securities then
Outstanding at a purchase price equal to 101% of the principal amount thereof on
any Change of Control Payment Date, plus accrued and unpaid interest, if any, to
such Change of Control Purchase Date. Failure to mail the notice of a Change of
Control Offer on the date specified below by the date that such notice is
required to be mailed will constitute a covenant Default under Section 5.01(c).
Notice of a Change of Control Offer shall be mailed by the Company
not less than 25 days nor more than 45 days before the Change of Control
Purchase Date to the Holders of Securities at their last registered addresses
with a copy to the Trustee and the Paying Agent. The Change of Control Offer
shall remain open from the time of mailing for at least 20 Business Days and
until 5:00 p.m., New York City time, on the Change of Control Purchase Date. The
notice, which shall govern the terms of the Change of Control Offer, shall
include such disclosures as are required by law and shall state:
(a) that the Change of Control Offer is being made pursuant to this
Section 10.11 and that all Securities tendered into the Change of Control
Offer will be accepted for payment;
(b) the purchase price (including the amount of accrued interest, if
any) for each Security, the Change of Control Purchase Date and the date
on which the Change of Control Offer expires;
(c) that any Security not tendered for payment will continue to
accrue interest in accordance with the terms thereof;
(d) that, unless the Company shall default in the payment of the
purchase price, any Security accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of
Control Purchase Date;
(e) that Holders electing to have Securities purchased pursuant to a
Change of Control Offer will be required to surrender their Securities to
the Paying Agent at the address specified in the notice prior to 5:00
p.m., New York City time, on the Change of Control Purchase Date and must
complete any form letter of transmittal proposed by the Company and
acceptable to the Trustee and the Paying Agent;
(f) that Holders of Securities will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York
City time, on the Change of Control Purchase Date, a facsimile
transmission or letter setting forth the name of the Holders, the
principal amount of Securities the Holders delivered for purchase, the
Security certificate number (if any) and a statement that such Holder is
withdrawing his election to have such Securities purchased;
(g) that Holders whose Securities are purchased only in part will be
issued Securities of like tenor equal in principal amount to the
unpurchased portion of the Securities surrendered;
(h) the instructions that Holders must follow in order to tender
their Securities; and
(i) information concerning the business of the Company, the most
recent annual and quarterly reports of the Company filed with the
Commission pursuant to the Exchange Act (or, if the Company is not
required to file any such reports with the Commission, the comparable
reports prepared pursuant to Section 10.10), a description of material
developments in the Company's business, information with respect to pro
forma historical financial information after giving effect to such Change
of Control and such other information concerning the circumstances and
relevant facts regarding such Change of Control and Change of Control
Offer as would, in the good faith judgment of the Company, be material to
a Holder of Securities in connection with the decision of such Holder as
to whether or not it should tender Securities pursuant to the Change of
Control Offer.
On the Change of Control Purchase Date, the Company will (i) accept
for payment Securities or portions thereof tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent money, in immediately
available funds, sufficient to pay the purchase price of all Securities or
portions thereof so tendered and accepted and (iii) deliver to the Trustee the
Securities so accepted together with an Officers' Certificate setting forth the
Securities or portions thereof tendered to and accepted for payment by the
Company. The Paying Agent will promptly mail or deliver to the Holders
of Securities so accepted payment in an amount equal to the purchase price, and
the Trustee shall promptly authenticate and mail or deliver to such Holders a
new Security of like tenor equal in principal amount to any unpurchased portion
of the Security surrendered. Any Securities not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company will
publicly announce the results of the Change of Control Offer not later than the
first Business Day following the Change of Control Purchase Date.
The Company will comply with all applicable tender offer laws and
regulations, including, to the extent applicable, with the requirements of
Section 14(e) and Rule 14e-1 of the Exchange Act, and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to a
Change of Control Offer. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this Section 10.11, the
Company will comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 10.11 by
virtue thereof.
Any provision of this Section 10.11 to the contrary notwithstanding,
if following any Change of Control, another Person makes the Change of Control
Offer in compliance with the provisions of this Section 10.11 and purchases all
Securities validly tendered and not withdrawn under such Change of Control
Offer, the Company shall not be required to make a Change of Control Offer
following such Change of Control.
Section 10.12. Limitation on Indebtedness.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly create, incur, assume, issue, guarantee or
in any manner become directly or indirectly liable for or with respect to,
contingently or otherwise, the payment of (collectively, to "incur") any
Indebtedness (including any Acquired Indebtedness), except for Permitted
Indebtedness; provided that (i) the Company may incur any Indebtedness and (ii)
a Restricted Subsidiary may incur Acquired Indebtedness if, in either case,
after giving pro forma effect to such incurrence (including the application of
the net proceeds therefrom), the ratio of (x) Total Consolidated Indebtedness
(as of the date of incurrence) to (y) Annualized Pro Forma Consolidated
Operating Cash Flow (based upon the two most recent fiscal quarters for which
consolidated financial statements of the Company are available preceding the
date of such incurrence) would be less than or equal to (A) 8.0 to 1.0 if such
incurrence is prior to August 31, 2000 or (B) 7.0 to 1.0 if such incurrence is
on or after August 31, 2000 and prior to August 31, 2002 or (C) 6.0 to 1.0 if
such incurrence is on or after August 31, 2002.
Section 10.13. Statement by Officers as to Default.
(a) The Company will deliver to the Trustee, within 120 days after
the end of each Fiscal Year of the Company ending after the date hereof, a
written statement signed by the chairman or a chief executive officer, the
principal financial officer or principal accounting officer of the Company,
stating (i) that a review of the activities of the Company 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 the Escrow Agreement, and
(ii) that, to the knowledge of each officer signing such certificate, the
Company has kept, observed, performed and fulfilled each and every covenant and
condition contained in this Indenture and the Escrow Agreement and is not in
default in the performance or observance of any of the terms, provisions,
conditions and covenants hereof or thereof (or, if a Default shall have
occurred, describing all such Defaults of which such officers may have
knowledge, their status and what action the Company is taking or proposes to
take with respect thereto).
(b) When any Default under this Indenture or a default under the
Escrow Agreement has occurred and is continuing, or if the Trustee or any Holder
or the trustee for or the holder of any other evidence of Indebtedness of the
Company or any Restricted Subsidiary gives any notice or takes any other action
with respect to a claimed default (other than with respect to Indebtedness
(other than Indebtedness evidenced by the Securities) in the principal amount of
less than $10,000,000), the Company will promptly notify the Trustee of such
Default, notice or action and will deliver to the Trustee by registered or
certified mail or by telegram, or facsimile transmission followed by hard copy
by registered or certified mail an Officers' Certificate specifying such event,
notice or other action within five Business Days after the Company becomes aware
of such occurrence and what action the Company is taking or proposes to take
with respect thereto.
Section 10.14. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any of the Restricted
Subsidiaries to, make, directly or indirectly, any Restricted Payment unless:
(i) no Default shall have occurred and be continuing
at the time of or upon giving effect to such Restricted
Payment;
(ii) immediately after giving effect to such Restricted Payment, the
Company would be able to incur $1.00 of Indebtedness under the proviso of
Section 10.12; and
(iii) immediately after giving effect to such Restricted Payment, the
aggregate amount of all Restricted Payments declared or made on or after
the Issue Date and all Designation Amounts does not exceed an amount equal
to the sum of (A) the difference between (x) the Cumulative Available Cash
Flow determined at the time of such Restricted Payment and (y) Cumulative
Consolidated Interest Expense determined at the time of such Restricted
Payment, plus (B) the aggregate net cash proceeds received by the Company
either (x) as capital contributions to the Company after the Issue Date or
(y) from the issue and sale (other than to a Restricted Subsidiary of the
Company) of its Capital Stock (other than Disqualified Stock) on or after
the Issue Date, plus (C) the aggregate net proceeds received by the
Company from the issuance (other than to a Restricted Subsidiary of the
Company) on or after the Issue Date of its Capital Stock (other than
Disqualified Stock) upon the conversion of, or in exchange for,
Indebtedness of the Company (other than the Convertible Notes), plus (D)
in the case of the disposition or repayment of any Investment constituting
a Restricted Payment made after the Issue Date (other than an Investment
made pursuant to clause (v), (vi), (vii) or (xii) of the following
paragraph), an amount equal to the lesser of the return of capital with
respect to such Investment and the cost of such Investment, in either
case, less the cost of the disposition of such Investment, plus (E) in the
case of any Revocation with respect to a Subsidiary of the Company that
was made subject to a Designation after the Issue Date, an amount equal to
the lesser of the Designation Amount with respect to such Subsidiary or
the Fair Market Value of the Investment of the Company and the Restricted
Subsidiaries in such Subsidiary at the time of Revocation. For purposes of
the preceding clauses (B)(y) and (C), as applicable, the value of the
aggregate net proceeds received by the Company upon the issuance of
Capital Stock either upon the conversion of convertible Indebtedness or in
exchange for outstanding Indebtedness or upon the exercise of options,
warrants or rights will be the net cash proceeds received upon the
issuance of such Indebtedness, options, warrants or rights plus the
incremental amount received, if any, by the Company upon the conversion,
exchange or exercise thereof.
For purposes of determining the amount expended for Restricted Payments, cash
distributed shall be valued at the face amount thereof and property other than
cash shall be valued at its Fair Market Value.
(b) The provisions of Section 10.14(a) shall not prohibit:
(i) the payment of any dividend or other distribution within 60
days after the date of declaration
thereof if at such date of declaration such payment would be permitted by
the provisions of this Indenture;
(ii) the purchase, redemption, retirement or other acquisition of any
shares of Capital Stock of the Company in exchange for, or out of the net
cash proceeds of the substantially concurrent issue and sale (other than
to a Restricted Subsidiary of the Company) of, shares of Capital Stock of
the Company (other than Disqualified Stock); provided that any such net
cash proceeds are excluded from clause (iii)(b) of Section 10.14(a);
(iii) so long as no Default shall have occurred and be continuing, the
purchase, redemption, retirement, defeasance or other acquisition of
Subordinated Indebtedness (other than the Convertible Notes and Deeply
Subordinated Shareholder Loans) made by exchange for, or out of the net
cash proceeds of, a substantially concurrent issue and sale (other than to
a Restricted Subsidiary of the Company) of (x) Capital Stock (other than
Disqualified Stock) of the Company or (y) other Subordinated Indebtedness
to the extent that its stated maturity for the payment of principal
thereof is not prior to the 180th day after the final stated maturity of
the Securities; provided that any such net cash proceeds are excluded from
clause (iii)(b) of Section 10.14(a);
(iv) the purchase, redemption, retirement or other acquisition of the
Convertible Notes or Deeply Subordinated Shareholder Loans to the extent
made by exchange for (upon conversion in accordance with their terms or
otherwise), or out of the net cash proceeds of, a substantially concurrent
issue and sale (other than to a Restricted Subsidiary of the Company) of
Capital Stock (other than Disqualified Stock) of the Company; provided
that any such net proceeds or net cash proceeds, as applicable, shall be
excluded from clause (iii)(b) of Section 10.14(a);
(v) so long as no Default shall have occurred and be continuing,
Investments by the Company or any Restricted Subsidiary in a person
(including any Unrestricted Subsidiary) in an amount, at any time
outstanding, not to exceed $25.0 million less the amount of Investments
then outstanding under clause (xii) of this Section 10.14(b);
(vi) the extension by the Company and the Restricted Subsidiaries of
trade credit to Unrestricted Subsidiaries, represented by accounts
receivable, extended on usual and customary terms in the ordinary course
of business;
(vii) any renewal or reclassification of any Investment in any
Unrestricted Subsidiary outstanding on
the Issue Date or subsequently made in accordance with the provisions
described herein;
(viii) purchases or redemptions of Capital Stock (including cash
settlements of stock options) held by employees, officers or directors
upon or following termination of their employment with the Company or one
of its Subsidiaries, subject to any put arrangements, provided that
payments not subject to such puts shall not exceed $1.0 million in any
Fiscal Year in the aggregate;
(ix) so long as no Default shall have occurred and be continuing,
Investments in Unrestricted Subsidiaries to the extent promptly made with
the proceeds of a substantially concurrent (1) capital contribution to the
Company or (2) issue or sale of Capital Stock (other than Disqualified
Stock) of the Company (other than to a Restricted Subsidiary of the
Company); provided that any such proceeds are excluded from clause
(iii)(b) of Section 10.14(a);
(x) the redemption or purchase of the Richey Warrant for an amount
not to exceed $1.0 million;
(xi) the payment of management fees to each of VPC and Pacific in an
amount not to exceed $350,000 (plus out-of-pocket travel expenses relating
to the management of the Company) in any Fiscal Year;
(xii) Investments in an amount at any time outstanding not to exceed
$25.0 million less the amount of Investments then outstanding under clause
(v) of this Section 10.14(b) so long as such Investment is in the form of
senior loans having a maturity of not more than one year made in any
person ("target") engaged in a Cable/Telecommunications Business with
respect to which the Company or a Restricted Subsidiary has entered into a
definitive acquisition agreement for the acquisition by the Company or a
Restricted Subsidiary of target such that target will become a Restricted
Subsidiary as a result of such acquisition; provided any such acquisition
is consummated or such Investment is repaid within one year of the making
of any such Investment; and
(xiii) the use of proceeds from the issue and sale of the Securities to
repay up to $10.0 million aggregate principal amount of Convertible Notes.
In determining the amount of Restricted Payments permissible under this Section
10.14(b), amounts expended pursuant to clauses (i), (v), (viii), (xii) and, to
the extent not deducted in arriving at Cumulative Available Cash Flow, (xi)
above shall be included as Restricted Payments.
Section 10.15. Limitation on Transactions with Affiliates.
The Company will not, and will not permit, cause or suffer any
Restricted Subsidiary to, conduct any business or enter into any transaction (or
series of related transactions which are similar or part of a common plan) with
or for the benefit of any of their respective Affiliates or any beneficial
holder of 10% or more of the Common Stock of the Company or any officer or
director of the Company or any Restricted Subsidiary (each an "Affiliate
Transaction"), unless the terms of the Affiliate Transaction are set forth in
writing, and are fair and reasonable to the Company or such Restricted
Subsidiary, as the case may be. Each Affiliate Transaction (and each series of
related Affiliate Transactions which are similar or part of a common plan)
involving aggregate payments or other Fair Market Value in excess of $500,000
shall be approved by a majority of the Board, such approval to be evidenced by a
Board Resolution stating that the Board has determined that such transaction or
transactions comply with the foregoing provisions. In addition to the foregoing,
each Affiliate Transaction involving aggregate consideration of $5,000,000 or
more shall be approved by a majority of the Disinterested Directors; provided
that, in lieu of such approval by the Disinterested Directors, the Company may
obtain a written opinion from an Independent Financial Advisor stating that the
terms of such Affiliate Transaction to the Company or the Restricted Subsidiary,
as the case may be, are fair from a financial point of view. For purposes of
this Section 10.15, any Affiliate Transaction approved by a majority of the
Disinterested Directors or as to which a written opinion has been obtained from
an Independent Financial Advisor, on the basis set forth in the preceding
sentence, shall be deemed to be on terms that are fair and reasonable to the
Company and the Restricted Subsidiaries, as the case may be, and, therefore,
shall be permitted under this Section 10.15.
Notwithstanding the foregoing, the restrictions set forth in this
Section 10.15 shall not apply to (i) transactions with or among, or solely for
the benefit of, the Company and/or any of the Restricted Subsidiaries, (ii)
transactions pursuant to agreements and arrangements existing on the Issue Date,
including payments of management fees to each of VPC and Pacific in an aggregate
amount not to exceed $350,000 (plus travel expenses incurred in providing
management services) in any Fiscal Year of the Company, (iii) the making of
Deeply Subordinated Shareholder Loans pursuant to and in compliance with Section
10.12, (iv) dividends paid by the Company pursuant to and in compliance with
Section 10.14, (v) customary directors' fees, indemnification and similar
arrangements, consulting fees, employee salaries, loans and bonuses or legal
fees and (vi) transactions contemplated by the License Co. Documents.
Notwithstanding any provision of this Indenture to the contrary, the
Company will not, and will not permit any Restricted Subsidiary to, amend,
modify or waive any provision of the License Co., Documents in a manner that is
adverse, from the perspective of creditors of the Company and the Restricted
Subsidiaries, in any material respect.
Section 10.16. Disposition of Proceeds of Asset Sales.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, make any Asset Sale unless (i) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value of the shares or assets sold or
otherwise disposed of and (ii) at least 80% of such consideration for any such
Asset Sale is cash and/or Cash Equivalents; provided that the following shall be
treated as cash for purposes of this provision: (x) the amount of any
liabilities (other than Subordinated Indebtedness or Indebtedness of a
Restricted Subsidiary that would not constitute Restricted Subsidiary
Indebtedness) that are assumed by the transferee or purchaser of any such assets
pursuant to an agreement that unconditionally releases the Company or such
Restricted Subsidiary from further liability ("assumed liabilities"), (y) the
amount of any notes or other obligations that within 30 days of receipt, are
converted into cash (to the extent of the cash received) and (z) the amount
(valued based upon the reported closing sale price or average of the closing bid
and ask prices, as the case may be, on the principal securities or trading
market on the date of the Asset Sale) of any Publicly Traded Stock received as
consideration in such Asset Sale. The Company or the applicable Restricted
Subsidiary, as the case may be, may (i) apply the Net Cash Proceeds from such
Asset Sale within 365 days of the receipt thereof to repay an amount of
Indebtedness (other than Subordinated Indebtedness) of the Issuer or Company in
an amount not exceeding the Other Senior Debt Pro Rata Share and elect to
permanently reduce the amount of the commitments thereunder by the amount of the
Indebtedness so repaid, (ii) apply the Net Cash Proceeds from such Asset Sale to
repay any Restricted Subsidiary Indebtedness and elect to permanently reduce the
commitments by the amount of the Indebtedness so repaid or (iii) apply such Net
Cash Proceeds within 365 days thereof, to an investment in properties and assets
that will be used in a Cable/Telecommunications Business (or in Capital Stock
and other securities of any person that will become a Restricted Subsidiary as a
result of such investment to the extent such person owns properties and assets
that will be used in a Cable/Telecommunications Business) of the Company or any
Restricted Subsidiary ("Replacement Assets"). Any Net Cash Proceeds from any
Asset Sale that are neither used to repay, and permanently reduce the
commitments under, any Restricted Subsidiary Indebtedness as set forth in clause
(ii) of the
preceding sentence or invested in Replacement Assets within the 365-day period
as set forth in clause (iii) shall constitute "Excess Proceeds". Any Excess
Proceeds not used as set forth in clause (i) of the second preceding sentence
shall constitute "Offer Excess Proceeds" subject to disposition as provided
below.
(b) When the aggregate amount of Offer Excess Proceeds equals or
exceeds $10,000,000, the Company will be obligated to make an offer to purchase
(an "Asset Sale Offer") from all holders of the Securities, on a day not more
than 40 Business Days thereafter (the "Asset Sale Purchase Date"), the maximum
principal amount (expressed as a multiple of $1,000) of Securities that may be
purchased with the aggregate Offer Excess Proceeds at a price, payable in cash,
equal to 100% of the principal amount of the Securities plus accrued and unpaid
interest, if any, to the date of purchase (the "Asset Sale Offer Price"). An
Asset Sale Offer will be required to be kept open for a period of at least 20
Business Days or such longer period as may be required by law.
(c) Notwithstanding clauses (a) and (b) of this Section 10.16, the
Company and the Restricted Subsidiaries will be permitted to consummate an Asset
Sale without complying with such clauses to the extent (i) at least 80% of the
consideration for such Asset Sale constitutes Replacement Assets, cash or Cash
Equivalents (including obligations deemed to be cash under this Section 10.16)
and (ii) such Asset Sale is for Fair Market Value; provided that any
consideration constituting (or deemed to constitute) cash or Cash Equivalents
received by the Company or any of the Restricted Subsidiaries in connection with
any Asset Sale permitted to be consummated under this clause (c) shall
constitute Net Cash Proceeds subject to the provisions of the foregoing clauses
(a) and (b).
(d) Whenever Offer Excess Proceeds received by the Company exceed
$10,000,000, such Offer Excess Proceeds will, prior to the purchase of
Securities, be set aside by the Company in a separate account pending (i)
deposit with the depositary of the amount required to purchase the Securities
tendered in an Asset Sale Offer or (ii) delivery by the Company of the Asset
Sale Offer Price to the Holders of the Securities validly tendered and not
withdrawn pursuant to an Asset Sale Offer. Such Excess Proceeds may be invested
in Cash Equivalents, as directed by the Company, having a maturity date which is
not later than the earliest possible date for purchase or redemption of
Securities pursuant to the Asset Sale Offer. The Company will be entitled to any
interest or dividends accrued, earned or paid on such Cash Equivalents.
(e) Notice of an Asset Sale Offer will be mailed by the Company to
all Holders of Securities not less than 20 Business Days nor more than 40
Business Days before the Asset Sale Purchase Date at their last registered
address with a copy
to the Trustee and any Paying Agents. The Asset Sale Offer will remain open from
the time of mailing for at least 20 Business Days or such longer period as
required by law and until at least 5:00 p.m., New York City time, on the Asset
Sale Purchase Date. The notice, which will govern the terms of the Asset Sale
Offer, will include such disclosures as are required by law and will state:
(i) that the Asset Sale Offer is being made pursuant to this
Section 10.16;
(ii) the Asset Sale Offer Price (including the amount of accrued
interest, if any) for each Security, the Asset Sale Purchase Date and the
date on which the Asset Sale Offer expires;
(iii) that any Security not tendered or accepted for payment shall
continue to accrue interest in accordance with the terms thereof;
(iv) that, unless the Company shall default in the payment of the
Asset Sale Offer Price, any Security accepted for payment pursuant to the
Asset Sale Offer shall cease to accrue interest after the Asset Sale
Purchase Date;
(v) that Holders electing to have Securities purchased pursuant to
an Asset Sale Offer shall be required to surrender their Securities to the
Paying Agent at the address specified in the notice prior to 5:00 p.m.,
New York City time, on the Asset Sale Purchase Date with the "Option of
Holder to Elect Purchase" on the reverse thereof completed;
(vi) that Holders shall be entitled to withdraw their election if the
Paying Agent receives, not later than 5:00 p.m., New York City time, on
the Asset Sale Purchase Date, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of Securities the
Holder delivered for purchase, the Security certificate number (if any)
and a statement that such Holder is withdrawing his election to have such
Securities purchased;
(vii) that if Securities in a principal amount in excess of the
Holder's pro rata share of the amount of Excess Proceeds are tendered
pursuant to the Asset Sale Offer, the Company shall purchase Securities on
a pro rata basis among the Securities tendered (with such adjustments as
may be deemed appropriate by the Company so that only Securities in
denominations of $1,000 or integral multiples of $1,000 shall be
acquired);
(viii) that Holders whose Securities are purchased only
in part shall be issued new Securities equal in principal
amount to the unpurchased portion of the Securities surrendered;
(ix) the instructions that Holders must follow in order to tender
their Securities; and
(x) information concerning the business of the Company, the most
recent annual and quarterly reports of the Company filed with the
Commission pursuant to the Exchange Act (or, if the Company is not
required to file any such reports with the Commission, the comparable
reports prepared pursuant to Section 10.10), a description of material
developments in the Company's business, information with respect to pro
forma historical financial information after giving effect to such Asset
Sale and Asset Sale Offer and such other information as would be material
to a Holder of Securities in connection with the decision of such Holder
as to whether or not it should tender Securities pursuant to the Asset
Sale Offer.
(f) On the Asset Sale Purchase Date, the Company will (i) accept for
payment, on a pro rata basis, Securities or portions thereof tendered pursuant
to the Asset Sale Offer, (ii) deposit with the Paying Agent money, in
immediately available funds, in an amount sufficient to pay the Asset Sale Offer
Price of all Securities or portions thereof so tendered and accepted and (iii)
deliver to the Trustee the Securities so accepted together with an Officers'
Certificate setting forth the Securities or portions thereof tendered to and
accepted for payment by the Company. The Paying Agent will promptly mail or
deliver to Holders of Securities so accepted payment in an amount equal to the
Asset Sale Offer Price, and the Trustee will promptly authenticate and mail or
deliver to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities not so accepted
will be promptly mailed or delivered by the Company to the Holder thereof. The
Company will publicly announce the results of the Asset Sale Offer not later
than the first Business Day following the Asset Sale Purchase Date. To the
extent an Asset Sale Offer is not fully subscribed to by such Holders, the
Company or any Restricted Subsidiary may retain such unutilized portion of the
Offer Excess Proceeds for application to general corporate purposes. The Paying
Agent will promptly deliver to the Company the balance of any such Offer Excess
Proceeds held by the Paying Agent after payment to the Holders of Securities as
aforesaid. Upon completion of such Asset Sale Offer, the amount of Offer Excess
Proceeds shall be reset to zero. For purposes of this Section 10.16, the Trustee
will act as Paying Agent.
(g) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) and Rule 14e-1 of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of Securities
pursuant to the Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 10.16,
the Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Section 10.16 by
virtue thereof.
Section 10.17. Limitation on Liens Securing Certain Indebtedness.
The Company will not, and will not permit any Restricted Subsidiary
to, create, incur, assume or suffer to exist any Lien of any kind, against or
upon (i) any property or assets of the Company or any Restricted Subsidiary,
whether now owned or acquired after the Issue Date, or any proceeds therefrom,
which secures either (x) Subordinated Indebtedness unless the Securities are
secured by a Lien on such property, assets or proceeds that is senior in
priority to the Liens securing such Subordinated Indebtedness or (y)
Indebtedness of the Company that is not Subordinated Indebtedness, unless the
Securities are equally and ratably secured with the Liens securing such
Subordinated Indebtedness, except, in the case of this clause (y), Permitted
Liens or (ii) the Escrow Account.
Section 10.18. Escrow Account.
The Company shall, on the date of this Indenture, enter into the
Escrow Agreement and, pursuant thereto, shall place the Initial Escrow Amount in
the Escrow Account held by the Escrow Agent for the benefit of the Holders of
the Securities and the Trustee.
Section 10.19. Limitation on Certain Guarantees and Indebtedness
by Restricted Subsidiaries.
(a) The Company will not permit any Restricted Subsidiary, directly
or indirectly, to assume, guarantee or in any other manner become liable with
respect to (i) any Subordinated Indebtedness or (ii) any Indebtedness of the
Company that is not Subordinated Indebtedness (other than, in the case of this
clause (ii), (x) Indebtedness under any Senior Bank Facility to the extent
constituting Permitted Indebtedness or (y) Indebtedness under any Vendor Credit
Facility to the extent constituting Permitted Indebtedness), unless such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture providing for the guarantee of payment of the Securities by such
Restricted Subsidiary on a basis senior to any such Subordinated Indebtedness or
pari passu with any such other Indebtedness referred to in clause (ii), as the
case may be. Each guarantee created pursuant to such provisions is referred to
as a "Guarantee" and the issuer of each such Guarantee, so long as the Guarantee
remains outstanding, is referred to as a "Guarantor."
(b) In the event of the unconditional release of any Guarantor from
its obligations in respect of the Indebtedness which gave rise to the
requirement that a Guarantee be given, such Guarantor shall be released from all
obligations under its Guarantee. In addition, upon any sale or disposition (by
merger or otherwise) of any Guarantor by the Company or a Restricted Subsidiary
of the Company to any person that is not an Affiliate of the Company or any of
its Restricted Subsidiaries which is otherwise in compliance with the terms of
this Indenture and as a result of which such Guarantor ceases to be a Subsidiary
of the Company, such Guarantor will be deemed to be released from all
obligations under its Guarantee; provided that each such Guarantor is sold or
disposed of in accordance with Section 10.16.
Section 10.20. Limitation on Issuances and Sales of Preferred
Stock of Restricted Subsidiaries.
The Company (i) will not permit any Restricted Subsidiary to issue
any Preferred Stock (other than to the Company or a Restricted Subsidiary) and
(ii) will not permit any person (other than the Company or a Restricted
Subsidiary) to own any Preferred Stock of any Restricted Subsidiary.
Section 10.21. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist, or
enter into any agreement with any person that would cause to become effective,
any consensual encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary to (a) pay dividends, in cash or otherwise, or make any
other distributions on or in respect of its Capital Stock or any other interest
or participation in, or measured by, its profits to the extent owned by the
Company or any Restricted Subsidiary, (b) pay any Indebtedness owed to the
Company or any other Restricted Subsidiary, (c) make any Investment in the
Company or any Restricted Subsidiary or (d) transfer any of its properties or
assets to the Company or to any Restricted Subsidiary, except for (i) any
encumbrance or restriction existing on the Issue Date, (ii) any encumbrance or
restriction applicable to a Restricted Subsidiary at the time that it becomes a
Restricted Subsidiary that is not created in contemplation thereof, (iii) any
encumbrance or restriction existing under any agreement that refinances or
replaces an agreement containing a restriction permitted by clause (i) or (ii)
above; provided that the terms and conditions of any such encumbrance or
restriction are not materially less favorable to the holders of Securities than
those under or pursuant to the agreement being replaced or the agreement
evidencing the Indebtedness refinanced, (iv) any encumbrance or restriction
imposed upon a Restricted Subsidiary pursuant to an agreement which has been
entered into for the sale or disposition of all or substantially of the Capital
Stock or assets of such Restricted Subsidiary and (v) any customary encumbrance
or restriction applicable to a Restricted Subsidiary that is contained in an
agreement or instrument governing or relating to Indebtedness contained in any
Senior Bank Facility or Vendor Credit Facility; provided that the provisions of
such agreement permit the payment of interest and principal and mandatory
repurchases pursuant to the terms of this Indenture and the Securities and other
Indebtedness that is solely an obligation of the Company, but provided further
that such agreement may nevertheless contain customary net worth, leverage,
invested capital and other financial covenants, customary covenants regarding
the merger of or sale of all or any substantial part of the assets of the
Company or any Restricted Subsidiary, customary restrictions on transactions
with affiliates, and customary subordination provisions governing indebtedness
owed to the Company or any Restricted Subsidiary.
Section 10.22. Limitation on Designations of Unrestricted
Subsidiaries.
The Company may designate any Subsidiary of the Company (other than
a newly created Subsidiary in which no Investment has previously been made) as
an "Unrestricted Subsidiary" under this Indenture (a "Designation") unless:
(i) no Default shall have occurred and be continuing
at the time of or after giving effect to such Designation;
(ii) immediately after giving effect to such Designation, the Company
would be permitted under this Indenture to incur $1.00 of additional
Indebtedness pursuant to the proviso of Section 10.12 hereof; and
(iii) the Company would be permitted under this Indenture to make an
Investment at the time of Designation (assuming the effectiveness of such
Designation) in an amount (the "Designation Amount") equal to the Fair
Market Value of the net Investment of the Company or any other Restricted
Subsidiary in such Restricted Subsidiary on such date.
In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to the
covenant described in Section 10.14 hereof for all purposes of this Indenture in
the Designation Amount. The Company shall not, and shall not permit any
Restricted Subsidiary to, at any time, (a) provide credit support for, or a
guarantee of, any Indebtedness of any Unrestricted Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness); provided
that the Company may pledge Capital Stock or Indebtedness of any Unrestricted
Subsidiary on a nonrecourse basis such that the
pledgee has no claim whatsoever against the Company other than to obtain such
pledged property, (b) be directly or indirectly liable for any Indebtedness of
any Unrestricted Subsidiary or (c) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the occurrence
of a default with respect to any Indebtedness of any Unrestricted Subsidiary
(including any right to take enforcement action against such Unrestricted
Subsidiary), except in the case of clause (a) or (b) to the extent permitted
under the covenant described in Section 10.14 and Section 10.15 hereof.
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
(i) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been permitted to be incurred for all purposes of this
Indenture.
All Designations and Revocations must be evidenced by Board
Resolutions of the Company delivered to the Trustee certifying compliance with
the foregoing provisions.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 11.01. Right of Redemption.
The Securities may be redeemed at the option of the Company, in
whole or in part, on the bases and at the Redemption Prices specified in the
forms of Security, together with accrued but unpaid interest to the Redemption
Date.
Section 11.02. Applicability of Article.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of this Indenture, shall be
made in accordance with such provision and this Article.
Section 11.03. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities
pursuant to Section 11.01 shall be evidenced by a Board
Resolution and an Officers' Certificate. In case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice period shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date and of the principal amount of Securities to be redeemed.
Section 11.04. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities not previously called for redemption in compliance with the
requirements of the principal national securities exchange, if any, on which the
Securities being redeemed are listed, or, if the Securities are not listed on a
national exchange, by such method as the Trustee shall deem fair and
appropriate; provided that no Securities of a principal amount of $1,000 or less
will be redeemed in part; provided, further, that any such redemption pursuant
to the provisions relating to an Equity Offering and/or sales to a Strategic
Equity Investor shall be made on a pro rata basis or on as nearly a pro rata
basis as practicable (subject to the procedures of the Depository or any other
depository).
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for partial redemption and the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
Section 11.05. Notice of Redemption.
Notice of redemption will be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at the address of such Holder
appearing in the Security Register.
All notices of redemption will state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) if less than all Outstanding Securities are to be redeemed,
the identification of the particular Securities to be redeemed;
(iv) in the case of a Security to be redeemed in part, the principal
amount of such Security to be redeemed and that after the Redemption Date
upon surrender of such Security, a new Security or Securities in the
aggregate principal amount equal to the unredeemed portion thereof shall
be issued;
(v) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(vi) that on the Redemption Date the Redemption Price shall become
due and payable upon each such Security or portion thereof, and that
(unless the Company shall default in payment of the Redemption Price)
interest thereon shall cease to accrue on and after said date;
(vii) the place or places where such Securities are to be
surrendered for payment of the Redemption Price;
(viii) the CUSIP number, relating to such Securities; and
(ix) the paragraph of the Securities pursuant to which the
Securities are being redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company will be given by the Company or, at the Company's written request,
by the Trustee in the name and at the expense of the Company.
The notice if mailed in the manner herein provided will be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for redemption as a whole or
in part will not affect the validity of the proceedings for the redemption of
any other Security.
Section 11.06. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company will deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.03) an
amount of money in same day funds sufficient to pay the Redemption Price of, and
accrued interest on, all the Securities or portions thereof which are to be
redeemed on that date.
Section 11.07. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed will, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price) such Securities
will cease to bear interest and such Securities will cease to be outstanding.
Upon surrender of any such Security for redemption in accordance with said
notice, such Security will be paid by the Company at the Redemption Price;
provided, however, that installments of interest whose Stated Maturity is on or
prior to the Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such on the relevant
Regular Record Dates according to the terms and the provisions of Section 3.07.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate then borne by
such Security.
Section 11.08. Securities Redeemed or Purchased in Part.
Any Security which is to be redeemed or purchased only in part shall
be surrendered to the Paying Agent at the office or agency maintained for such
purpose pursuant to Section 10.02 (with, if the Company, the Security Registrar
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to, the Company, the Security Registrar or the
Trustee duly executed by the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver (at the Company's expense) to the Holder of such
Security without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed or purchased.
ARTICLE TWELVE
COLLATERAL AND SECURITY
Section 12.01. Escrow Agreement.
(a) The due and punctual payment of the interest on the Securities
when and as the same shall be due and payable on each Interest Payment Date, at
maturity or by acceleration, and interest on the overdue principal of and
interest (to the
extent permitted by law), if any, on the Securities and performance of all other
obligations of the Company to the Holders of Securities or the Trustee under
this Indenture and the Escrow Agreement with respect to the Securities and the
Securities, according to the terms hereunder or thereunder, shall be secured as
provided in the Escrow Agreement which the Company, the Escrow Agent and the
Trustee have entered into simultaneously with the execution of this Indenture.
Upon the acceleration of the maturity of the Securities, the Escrow Agreement
will provide for the foreclosure by the Trustee of the net proceeds of the
Escrow Account. Each Holder of Securities, by its acceptance thereof, consents
and agrees to the terms of the Escrow Agreement (including, without limitation,
the provisions providing for foreclosure and disbursement of Collateral) as the
same may be in effect or may be amended from time to time in accordance with its
terms and authorizes and directs the Escrow Agent and the Trustee to enter into
the Escrow Agreement and to perform its obligations and exercise its rights
thereunder in accordance therewith. The Company shall deliver to the Trustee
copies of the Escrow Agreement, and shall do or cause to be done all such acts
and things as may be necessary or proper, or as may be required by the
provisions of the Escrow Agreement, to assure and confirm to the Trustee the
security interest in the Collateral contemplated by the Escrow Agreement or any
part thereof, as from time to time constituted, so as to render the same
available for the security and benefit of this Indenture with respect to, and
of, the Securities, according to the intent and purposes expressed in the Escrow
Agreement. The Company shall take any and all actions reasonably required to
cause the Escrow Agreement to create and maintain (to the extent possible under
applicable law), as security for the obligations of the Company hereunder, a
valid and enforceable perfected first priority Lien in and on all the
Collateral, in favor of the Trustee for the benefit of the Trustee, predecessor
trustees, and the Holders of Securities, superior to and prior to the rights of
all third Persons and subject to no other Liens. The Trustee shall have no
responsibility for perfecting or maintaining the perfection of the Trustee's
security interest in the Collateral or for filing any instrument, document or
notice in any public office at any time or times.
(b) The Escrow Agreement shall further provide that in the event a
portion of the Securities has been retired by the Company, depending upon the
amount available in the Escrow Account, funds representing the interest payments
which have not previously been made on such retired Securities shall, upon the
written request of the Company to the Escrow Agent and the Trustee, be paid to
the Company upon compliance with the release of collateral provisions of the TIA
and upon receipt of a notice relating thereto from the Trustee.
Section 12.02. Recording and Opinions.
(a) The Company shall furnish to the Trustee promptly after the
execution and delivery of this Indenture an Opinion of Counsel either (i)
stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, financing
statements or other instruments necessary to make effective the Lien intended to
be created by the Escrow Agreement and reciting with respect to the security
interests in the Collateral the details of such action, or (ii) stating that in
the opinion of such counsel no such action is necessary to make such Lien
effective.
(b) The Company shall furnish to the Escrow Agent and the Trustee on
February 14, 1998, and on each February 14 thereafter until the date upon which
the balance of Available Funds (as defined in the Escrow Agreement) shall have
been reduced to zero, an Opinion of Counsel, dated as of such date, either (i)
stating that (A) in the opinion of such counsel, action has been taken with
respect to the recording, registering, filing, re-recording, re-registering and
refiling of all supplemental indentures, financing statements, continuation
statements and other instruments of further assurance as is necessary to
maintain the Lien of the Escrow Agreement and reciting with respect to the
security interests in the Collateral the details of such action or referring to
prior Opinions of Counsel in which such details are given and (B) based on
relevant laws as in effect on the date of such Opinion of Counsel, all financing
statements and continuation statements have been executed and filed that are
necessary as of such date and during the succeeding 12 months fully to preserve
and protect, to the extent such protection and preservation are possible by
filing, the rights of the Holders of Securities and the Trustee hereunder and
under the Escrow Agreement with respect to the security interests in the
Collateral or (ii) stating that, in the opinion of such counsel, no such action
is necessary to maintain such Lien and assignment.
Section 12.03. Release of Collateral.
(a) Subject to subsections (b), (c) and (d) of this Section 12.03,
Collateral may be released from the Lien and security interest created by the
Escrow Agreement only in accordance with the provisions of the Escrow Agreement.
(b) Except to the extent that any Lien on proceeds of Collateral is
automatically released by operation of Section 9-306 of the Uniform Commercial
Code or other similar law, no Collateral shall be released from the Lien and
security interest created by the Escrow Agreement pursuant to the provisions of
the Escrow Agreement, other than to the Holders pursuant to the terms thereof,
unless there shall have been
delivered to the Trustee the certificate required by Section 12.03(d) and
Section 12.04.
(c) At any time when a Default shall have occurred and be continuing
and the maturity of the Securities issued on the Issue Date shall have been
accelerated (whether by declaration or otherwise), no Collateral shall be
released pursuant to the provisions of the Escrow Agreement, and no release of
Collateral in contravention of this Section 12.03(c) shall be effective as
against the Holders of Securities, except for the disbursement of all Available
Funds (as defined in the Escrow Agreement) to the Trustee pursuant to Section
6(b) of the Escrow Agreement.
(d) The release of any Collateral from the Liens and security
interests created by this Indenture and the Escrow Agreement shall not be deemed
to impair the security under this Indenture in contravention of the provisions
hereof if and to the extent the Collateral is released pursuant to the terms
hereof or pursuant to the terms of the Escrow Agreement. To the extent
applicable, the Company shall cause TIA { 314(d) relating to the release of
property or securities from the Lien and security interest of the Escrow
Agreement to be complied with. Any certificate or opinion required by TIA {
314(d) may be made by an Officer of the Company except in cases where TIA {
314(d) requires that such certificate or opinion be made by an independent
Person, which Person shall be an independent engineer, appraiser or other expert
selected or approved by the Trustee in the exercise of reasonable care.
Section 12.04. Certificates of the Company.
The Company shall furnish to the Trustee, prior to any proposed
release of Collateral other than pursuant to the express terms of the Escrow
Agreement, (i) all documents required by TIA { 314(d) and (ii) an Opinion of
Counsel, which may be rendered by internal counsel to the Company, to the effect
that such accompanying documents constitute all documents required by TIA {
314(d). The Trustee may, to the extent permitted by Section 6.01 and Section
6.03, accept as conclusive evidence of compliance with the foregoing provisions
the appropriate statements contained in such documents and such Opinion of
Counsel.
Section 12.05. Authorization of Actions to Be Taken by the Trustee
Under the Escrow Agreement.
Subject to the provisions of Section 6.01 and Section 6.03, the
Trustee may, without the consent of the Holders of Securities, on behalf of the
Holders of Securities, take all actions it deems necessary or appropriate in
order to (a) enforce any of the terms of the Escrow Agreement and (b) collect
and receive any and all amounts payable in respect of the obligations of the
Company hereunder. The Trustee shall
have power to institute and maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any acts that may be
unlawful or in violation of the Escrow Agreement or this Indenture, and such
suits and proceedings as the Trustee may deem expedient to preserve or protect
its interests and the interests of the Holders of Securities in the Collateral
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest hereunder or be prejudicial to the interests of the
Holders of Securities or of the Trustee).
Section 12.06. Authorization of Receipt of Funds by the Trustee
Under the Escrow Agreement.
The Trustee is authorized to receive any funds for the benefit of
the Holders of Securities disbursed under the Escrow Agreement, and to make
further distributions of such funds to the Holders of Securities according to
the provisions of this Indenture.
Section 12.07. Termination of Security Interest.
Upon the earliest to occur of (i) the date upon which the balance of
Available Funds (as defined in the Escrow Agreement) shall have been reduced to
zero, (ii) the payment in full of all obligations of the Company under this
Indenture and the Securities, (iii) legal defeasance pursuant to Article Four
and (iv) covenant defeasance pursuant to Article Four, the Trustee shall, at the
written request of the Company, release the Liens pursuant to this Indenture and
the Escrow Agreement upon the Company's compliance with the provisions of the
TIA pertaining to release of collateral.
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE
Section 13.01. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
surviving rights or registration of transfer or exchange of Securities herein
expressly provided for) and the Trustee, on written demand of and at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when either
(a) all Securities theretofore authenticated and
delivered (other than (A) Securities which have been destroyed,
lost or stolen and which have been replaced or paid as provided in Section 3.06
hereof and (B) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section 10.03) have
been delivered to the Trustee for cancellation; or
(b) (i) all such Securities not theretofore delivered to the Trustee
for cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee in trust an amount of money
in dollars sufficient to pay and discharge the entire Indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for the
principal of, premium, if any, and accrued interest to the date of such deposit;
(ii) the Company has paid or caused to be paid all other sums
payable hereunder; and
(iii) the Company has delivered to the Trustee (1) irrevocable
instructions to apply the deposited money toward payment of the Securities
at the Stated Maturities and the Redemption Dates thereof, and (ii) an
Officers' Certificate and an Opinion of Counsel each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (a)(ii) of this
Section 13.01, the obligations of the Trustee under Section 13.02 and the last
paragraph of Section 10.03 shall survive.
Section 13.02. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.03,
all money deposited with the Trustee pursuant to Section 13.01 shall be held in
trust and applied by it, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the persons entitled thereto, of the principal of, premium, if
any, and interest on the Securities for whose payment such money has been
deposited with the Trustee.
[signatures on following pages]
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
OPTEL, INC.
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
U.S. TRUST COMPANY OF
TEXAS, N.A., as Trustee
By:__________________________________
Name:
Title:
EXHIBIT A-1
[Form of Series A Security].
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR
OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN "OFFSHORE TRANSACTION" PURSUANT TO REGULATION S UNDER
THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE
WHICH IS THREE YEARS (OR SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY RULE
144(K) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR
OF THIS SECURITY) OR THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE
OF THE COMPANY WAS THE OWNER OF THIS SECURITY OR ANY PREDECESSOR OF THIS
SECURITY OR (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE
LAWS (THE "RESALE RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO
RULE 904 OF REGULATION S, (E) TO AN ACCREDITED INVESTOR THAT IS ACQUIRING
THE SECURITIES FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR
FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS
A-1
LEGEND. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS
SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 OF
PRINCIPAL AMOUNT (1) THE "ISSUE PRICE" IS $968.89; (2) THE "STATED
REDEMPTION PRICE AT MATURITY" IS $1,000; (3) THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT (THE EXCESS OF THE "STATED REDEMPTION PRICE AT MATURITY" OVER THE
"ISSUE PRICE") IS $31.11; (4) THE ISSUE DATE IS FEBRUARY 14, 1997; AND (5)
THE YIELD TO MATURITY (COMPOUNDED SEMI-ANNUALLY) 13.651%.
A-2
OPTEL, INC.
-----------
13% SENIOR NOTES DUE 2005
CUSIP No. __________
No. ___________ $
OPTEL, INC., a corporation incorporated under the laws of the State
of Delaware (herein called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to _______________ or registered assigns, the principal
sum of _______________ Dollars on February 15, 2005, at the office or agency of
the Company referred to below, and to pay interest thereon on February 15 and
August 15 (each an "Interest Payment Date"), of each year, commencing on August
15, 1997, accruing from the Issue Date or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, at the rate of 13%
per annum, until the principal hereof is paid or duly provided for. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture referred to on
the reverse hereof, be paid to the person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on February
1 or August 1 (each a "Regular Record Date"), whether or not a Business Day, as
the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid, or duly provided for, and interest on such defaulted
interest at the then applicable interest rate borne by the Securities, to the
extent lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice of which shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan in The City of New York, State of New York,
or at such other office or agency of the Company as may be maintained for such
purpose, in such coin or currency of the United States
A-3
of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the address of the person entitled
thereto as such address shall appear on the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture, or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
Dated: , OPTEL, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
A-4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: __________________
U.S. Trust Company of Texas,
N.A., as Trustee
By:__________________________________
Authorized Signatory
A-5
[REVERSE OF SERIES A SECURITY]
1. Indenture. This Security is one of a duly authorized issue of
Securities of the Company designated as its 13% Senior Notes Due 2005 (herein
called the "Series A Securities"), limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $225,000,000,
which may be issued under an indenture (herein called the "Indenture") dated as
of February 14, 1997, among the Company and U.S. Trust Company of Texas, N.A.,
as trustee (herein called the "Trustee," which term includes any successor
Trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Trustee and the Holders of the Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered.
All capitalized terms used in this Series A Security which are
defined in the Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Indenture.
No reference herein to the Indenture and no provisions of this
Series A Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Security at the times, place, and rate,
and in the coin or currency, herein prescribed.
2. Registration Rights. Pursuant to the Registration Agreement among
the Company and the Holders of the Series A Securities, the Company will be
obligated to consummate an exchange offer pursuant to which the Holder of this
Security shall have the right to exchange this Security for 13% Senior Notes Due
2005, Series B, of the Company (herein called the "Series B Securities"), which
have been registered under the Securities Act, in like principal amount and
having identical terms as the Series A Securities (other than as set forth in
this paragraph). The Holders of Series A Securities shall be entitled to receive
certain additional interest payments in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in accordance
with the terms of the Registration Agreement. The Series A Securities and the
Series B Securities are together referred to herein as the "Securities."
3. Redemption.
(a) Optional Redemption. The Securities are subject to redemption,
at the option of the Company, in whole or in
A-6
part, in principal amounts of $1,000 or any integral multiple of $1,000, at any
time on or after February 15, 2002 upon not less than 30 nor more than 60 days
prior notice, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest to the redemption
date, if redeemed during the 12-month period beginning February 15 of the years
indicated below:
Year Redemption Price
---- ----------------
2002 110%
2003 107%
2004 and thereafter 100%
(b) Optional Redemption Upon Equity Offering or Sales to Strategic
Equity Investors. On or prior to February 15, 2000, in the event that the
Company consummates (i) one or more Equity Offerings and/or (ii) a sale or
series of related sales of its Common Stock to one or more Strategic Equity
Investors for aggregate gross proceeds of $100 million or more, the Company may
redeem, at its option, up to a maximum of 35% of the initially outstanding
aggregate principal amount of the Securities from the net proceeds thereof on a
pro rata basis (or as nearly pro rata as practicable), at a redemption price
equal to 113% of the principal amount of the Securities (determined at the
redemption date), plus accrued and unpaid interest, if any, to the date of
redemption; provided that not less than $145,000,000 in aggregate principal
amount of Securities would remain outstanding immediately after such redemption.
Any such redemption may only be affected once and must be effected upon not less
than 30 nor more than 60 days notice given within 30 days after the last such
Equity Offering or sale to a Strategic Equity Investor, as the case may be,
resulting in gross proceeds of $100 million or more.
(c) Interest Payments. In the case of any redemption of Series A
Securities, interest installments whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Date referred to on the face hereof. Securities (or portions thereof) for
whose redemption and payment provision is made in accordance with the Indenture
shall cease to bear interest from and after the Redemption Date.
(d) Partial Redemption. In the event of redemption of this Series A
Security in part only, a new Series A Security or Securities for the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
4. Offers to Purchase. Sections 10.11 and 10.16 of the Indenture
provide that upon the occurrence of a Change of
A-7
Control and following certain Asset Sales, and subject to certain conditions and
limitations contained therein, the Company shall make an offer to purchase
certain amounts of the Securities in accordance with the procedures set forth in
the Indenture.
5. Defaults and Remedies. If an Event of Default occurs and is
continuing, the principal of all of the Outstanding Securities, plus all accrued
and unpaid interest, if any, to and including the date the Securities are paid,
may be declared due and payable in the manner and with the effect provided in
the Indenture.
6. Defeasance. The Indenture contains provisions (which provisions
apply to this Series A Security) for defeasance at any time of (a) the entire
indebtedness of the Company on this Series A Security and (b) certain
restrictive covenants and related Defaults and Events of Default, in each case
upon compliance by the Company with certain conditions set forth therein.
7. Amendments and Waivers. The Indenture permits, with certain
exceptions as provided therein, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past Defaults under the Indenture and this Series A
Security and their consequences. Any such consent or waiver by or on behalf of
the Holder of this Series A Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Series A Security and of any Series A
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof whether or not notation of such consent or waiver is made upon
this Series A Security.
8. Denominations, Transfer and Exchange. The Series A Securities are
issuable only in registered form without coupons in denominations of $1,000 and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, the Series A Securities are exchangeable
for a like aggregate principal amount of Series A Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Series A Security is registrable on the
Security Register of the
A-8
Company, upon surrender of this Series A Security for registration of transfer
at the office or agency of the Company maintained for such purpose in the
Borough of Manhattan in The City of New York, State of New York, or at such
other office or agency of the Company as may be maintained for such purpose,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Series A Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Series A Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
9. Persons Deemed Owners. Prior to and at the time of due
presentment of this Series A Security for registration of transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Series A Security is registered as the owner hereof for all
purposes, whether or not this Series A Security shall be overdue, and neither
the Company, the Trustee nor any agent shall be affected by notice to the
contrary.
10. GOVERNING LAW. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
A-9
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number) __________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
- -------------------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), covering resales of this
Security (which effectiveness shall not have been suspended or terminated at the
date of the transfer) and (ii) the date three years (or such shorter period of
time as permitted by Rule 144(k) under the Securities Act or any successor
provision thereunder) after the later of the original issuance date appearing on
the face of this Security (or any Predecessor Security) or the last date on
which the Company or any Affiliate of the Company was the owner of this Security
(or any Predecessor Security), the undersigned confirms that it has not utilized
any general solicitation or general advertising in connection with the transfer
and that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act provided by Rule 144A
thereunder.
A-10
or
[ ] (b) this Security is being transferred other than in accordance with (a)
above and documents, including a transferee certificate substantially
in the form attached hereto, are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked and, in the case of (b) above, if the
appropriate document is not attached or otherwise furnished to the Trustee, the
Trustee or Registrar shall not be obligated to register this Security in the
name of any person other than the Holder hereof unless and until the conditions
to any such transfer of registration set forth herein and in Section 3.15 of the
Indenture shall have been satisfied.
- -------------------------------------------------------------------------------
Date:______________ Your signature:_____________________________________
(Sign exactly as your name
appears on the other side of
this Security)
By:__________________________________
NOTICE: To be executed
by an executive officer
Signature Guarantee:____________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A (including the information
specified in Rule 144A(d)(4)) or has determined not to request such information
and that it is aware that the transferor is relying upon the undersigned's
foregoing representations in order to claim the exemption from registration
provided by Rule 144A.
A-11
Dated: __________________ ____________________________
NOTICE: To be executed by
an executive officer
[The Transferee Certificates (Exhibits C and D to the
Indenture) will be attached to the Series A Security]
A-12
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the
Company pursuant to Section 10.11 or 10.16 of the Indenture,
check the box: [ ]
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 10.11 or 10.16 of the Indenture, state the amount:
$____________________
Date: _____________ Your Signature:____________________________________
(Sign exactly as your name
appears on the other side
of this Security)
A-13
EXHIBIT A-2
[FORM OF SERIES B SECURITY]
OPTEL, INC.
----------------
13% SENIOR NOTES DUE 2005,
SERIES B
CUSIP No.________
No. _____________ $
OPTEL, INC., a corporation incorporated under the laws of the State
of Delaware (herein called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to ___________________ or registered assigns, the
principal sum of _________________ Dollars on February 15, 2005, at the office
or agency of the Company referred to below, and to pay interest thereon on
February 15 and August 15 (each an "Interest Payment Date"), of each year,
commencing on August 15, 1997, accruing from the Issue Date or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, at the rate of 13% per annum, until the principal hereof is paid or duly
provided for. Interest shall be computed on the basis of a 360-day year of
twelve 30-day months.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture referred to on
the reverse hereof, be paid to the person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on February
1 and August 1 (each a "Regular Record Date"), whether or not a Business Day, as
the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid, or duly provided for, and interest on such defaulted
interest at the then applicable interest rate borne by the Securities, to the
extent lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice of which shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in such Indenture.
A2-1
Payment of the principal of, premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan in The City of New York, State of New York,
or at such other office or agency of the Company as may be maintained for such
purpose, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the address of the person entitled thereto as such address shall
appear on the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture, or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
Dated: , OPTEL, INC.
By: ________________________
Name:
Title:
By: ________________________
Name:
Title:
A2-2
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: ____________________
U.S. Trust Company of Texas,
N.A., as Trustee
By:_____________________________________
Authorized Signatory
A2-3
[REVERSE OF SERIES B SECURITY]
1. Indenture. This Security is one of a duly authorized issue of
Securities of the Company designated as its 13% Senior Notes Due 2005, Series B
(herein called the "Series B Securities"), limited (except as otherwise provided
in the Indenture referred to below) in aggregate principal amount to
$225,000,000, which may be issued under an indenture (herein called the
"Indenture") dated as of February 14, 1997, among the Company and U.S. Trust
Company of Texas, N.A., as trustee (herein called the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitation of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered.
All capitalized terms used in this Series B Security which are
defined in the Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Indenture.
No reference herein to the Indenture and no provision of this Series
B Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, and interest on this Security at the times, place, and rate, and in the
coin or currency, herein prescribed.
The Series B Securities were issued pursuant to an exchange offer
pursuant to which 13% Senior Notes Due 2005 of the Company (herein called the
"Series A Securities"), in like principal amount and having substantially
identical terms as the Series B Securities, were exchanged for the Series B
Securities. The Series A Securities and the Series B Securities are together
referred to herein as the "Securities."
2. Redemption.
(a) Optional Redemption. The Securities are subject to redemption,
at the option of the Company, in whole or in part, in principal amounts of
$1,000 or any integral multiple of $1,000, at any time on or after February 15,
2002 upon not less than 30 nor more than 60 days prior notice at the redemption
prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest to the redemption date, if redeemed during the 12
month period beginning February 15 of the years indicated below:
A2-4
Year Redemption Price
---- ----------------
2002 110%
2003 107%
2004 and thereafter 100%
(b) Optional Redemption upon Equity Offering or Sales to Strategic
Equity Investors. On or prior to February 15, 2000, in the event that the
Company consummates (i) one or more Equity Offerings and/or (ii) a sale or
series of related sales of its Common Stock to one or more Strategic Equity
Investors for aggregate gross proceeds of $100 million or more, the Company may
redeem, at its option, up to a maximum of 35% of the initially outstanding
aggregate principal amount of the Securities from the net proceeds thereof on a
pro rata basis (or as nearly pro rata as practicable), at a redemption price
equal to 113% of the principal amount of the Securities (determined at the
redemption date), plus accrued and unpaid interest, if any, to the date of
redemption; provided that not less than $145,000,000 in aggregate principal
amount of Securities would remain outstanding immediately after such redemption.
Any such redemption may only be affected once and must be effected upon not less
than 30 nor more than 60 days notice given within 30 days after the last such
Equity Offering or sale to a Strategic Equity Investor, as the case may be,
resulting in gross proceeds of $100 million or more.
(c) Interest Payments. In the case of any redemption of Series B
Securities, interest installments whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Date referred to on the face hereof. Securities (or portions thereof) for
whose redemption and payment provision is made in accordance with the Indenture
shall cease to bear interest from and after the Redemption Date.
(d) Partial Redemption. In the event of redemption of this Series B
Security in part only, a new Series B Security or Securities for the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
3. Offers to Purchase. Sections 10.11 and 10.16 of the Indenture
provide that upon the occurrence of a Change of Control and following any Asset
Sale, and subject to further limitations contained therein, the Company shall
make an offer to purchase certain amounts of the Securities in accordance with
the procedures set forth in the Indenture.
4. Defaults and Remedies. If an Event of Default occurs and is
continuing, the principal of all of the Outstanding Securities, plus all accrued
and unpaid interest, if any, to and including the date the Securities are paid,
may
A2-5
be declared due and in the manner and with the effect provided in the Indenture.
5. Defeasance. The Indenture contains provisions (which provisions
apply to this Series B Security) for defeasance at any time of (a) the entire
indebtedness of the Company on this Series B Security and (b) certain
restrictive covenants and related Defaults and Events of Default, in each case
upon compliance by the Company with certain conditions set forth therein.
6. Amendments and Waivers. The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indentures and certain past Defaults under the Indenture and this Series B
Security shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and their consequences. Any such consent or waiver by
or on behalf of the Holder of this Series B Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of any
Series B Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent or waiver is
made upon this Series B Security.
7. Denominations, Transfer and Exchange. The Series B Securities are
issuable only in registered form without coupons in denominations of $1,000 and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, the Series B Securities are exchangeable
for a like aggregate principal amount of Series B Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Series B Security is registrable on the
Security Register of the Company, upon surrender of this Series B Security for
registration of transfer at the office or agency of the Company maintained for
such purpose in the Borough of Manhattan in The City of New York, State of New
York, or at such other office or agency of the Company as may be maintained for
such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney
A2-6
duly authorized in writing, and thereupon one or more new Series B Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Series B Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
8. Persons Deemed Owners. Prior to and at the time of due
presentment of this Series B Security for registration of transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Series B Security is registered as the owner hereof for all
purposes, whether or not this Series B Security shall be overdue, and neither
the Company, the Trustee nor any agent shall be affected by notice to the
contrary.
9. GOVERNING LAW. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
A2-7
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number) __________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
- -------------------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.
Date:______________ Your signature:_____________________________________
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guarantee:_______________________________
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant
to Section 10.11 or 10.16 of the Indenture, check the box: [ ]
A2-8
If you wish to have a portion of this Security purchased by the
Company, state the amount:
$________________
Date: __________________ Your Signature:_____________________________
(Sign exactly as your
name appears on the
other side of this
Security)
Signature Guarantee: _________________
A2-9
EXHIBIT B
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall bear
a legend (which would be in addition to any other legends required in the case
of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
B-1
EXHIBIT C
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------, ----
U.S. TRUST COMPANY OF TEXAS, N.A.
2001 Ross Avenue
Suite 2700
Dallas, Texas 75201
Attention: Corporate Trust Department
Re: Optel, Inc.
(the "Company") 13% Senior Notes due
2005 (the "Securities") and the
related Indenture (the "Indenture")
Dear Sirs:
In connection with our proposed purchase of the Securities, we
confirm that:
1. We have received such information as we deem necessary to make
our investment decisions.
2. We understand that any subsequent transfer of the Securities 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 Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended
(the "Securities Act").
3. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not
be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except as permitted in the following sentence. We
agree, on our own behalf and on behalf of each account for which we
acquire any Securities, that, prior to (x) the date which is three years
after the later of the date of original issuance of the Securities (or
such shorter period as may be prescribed by Rule 144(k) under the
Securities Act or any successor provision) and (y) such later date, if
any, may be required by applicable laws, the Securities may be
C-1
offered, resold, pledged or otherwise transferred only (a) to the Company
or any of its subsidiaries, (b) inside the United States to a person whom
we reasonably believe to be a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) in compliance with Rule 144A under
the Securities Act, (c) inside the United States to a person we reasonably
believe to be an institutional "accredited investor" (as defined below)
that, prior to such transfer, furnished to the Trustee a signed letter
substantially in the form hereof, (d) outside the United States to persons
other than U.S. persons in offshore transactions meeting the requirements
of Rule 904 under Regulation S under the Securities Act, (e) pursuant to
the exemption from registration provided by Rule 144 under the Securities
Act (if available), (f) pursuant to an effective registration statement
under the Securities Act or (g) pursuant to another available exemption
from the registration requirements of the Securities Act, and, in each
case, in accordance with any applicable securities laws of any state of
the United States or any other applicable jurisdiction, and we further
agree to provide to any person purchasing Securities from us a notice
advising such purchaser that resales of the Securities are restricted as
stated herein.
4. We understand that, on any proposed resale of any Securities, we
will be required to furnish to you and the Company such certification,
legal opinions and other information as you and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us
will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) and have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able
to bear the economic risk of our or its investment, as the case may be.
6. We are acquiring the Securities purchased by us for our 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.
C-2
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:_____________________________
Authorized Signature
EXHIBIT D
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
--------------, ----
U.S. TRUST COMPANY OF TEXAS, N.A.
2001 Ross Avenue
Suite 2700
Dallas, Texas 75201
Attention: Corporate Trust Department
Re: Optel, Inc. (the "Company")
13% Senior Notes due 2005
(the "Securities")
Dear Sirs:
In connection with our proposed sale of $ aggregate principal amount
at maturity of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
D-1
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities; and
(6) if the circumstances set forth in Rule 904(c) under the
Securities Act are applicable, we have complied with the additional
conditions therein, including (if applicable) sending a confirmation or
other notice stating that the Securities may be offered and sold during
the restricted period specified in Rule 903(c)(2) or (3), as applicable;
in accordance with the provisions of Regulation S; pursuant to
registration of the Securities under the Securities Act; or pursuant to an
available exemption from the registration requirements under the
Securities Act.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:_________________________________
Authorized Signature
D-2