Exhibit 2.6
MAXCOM TELECOMUNICACIONES, S.A. DE C.V.,
THE GUARANTORS NAMED HEREIN
AND
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
----------
INDENTURE
Dated as of December 20, 2006
----------
11% SENIOR NOTES DUE 2014
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
- --------------- ------------------
310(a)(1).................................................. 7.10
(a)(2).................................................. 7.10
(a)(3).................................................. N.A.
(a)(4).................................................. N.A.
(a)(5).................................................. 7.10
(b)..................................................... 7.03; 7.10
(c)..................................................... N.A.
311(a)..................................................... 7.11
(b)..................................................... 7.11
(c)..................................................... N.A.
312(a)..................................................... 2.06
(b)..................................................... 13.04
(c)..................................................... 13.04
313(a)..................................................... 7.06
(b)(1).................................................. N.A.
(b)(2).................................................. 7.06 7.07
(c)..................................................... 7.06; 12.02
(d)..................................................... 7.06
314(a)..................................................... 4.03; 12.01; 13.06
(b)..................................................... N.A.
(c)(1).................................................. 13.05
(c)(2).................................................. 13.05
(c)(3).................................................. N.A.
(d)..................................................... N.A.
(e)..................................................... 13.06
(f)..................................................... N.A.
315(a)..................................................... 7.01
(b)..................................................... 7.05; 12.02
(c)..................................................... 7.01
(d)..................................................... 7.01
(e)..................................................... 6.11
316(a) (last sentence)..................................... 2.10
(a)(1)(A)............................................... 6.05
(a)(1)(B)............................................... 6.04
(a)(2).................................................. N.A.
(b)..................................................... 6.07
(c)..................................................... 2.13
317(a)(1).................................................. 6.08
(a)(2).................................................. 6.09
(b)..................................................... 2.05
318(a)..................................................... 13.02
Trust Indenture
Act Section Indenture Section
- --------------- ------------------
(b)..................................................... N.A.
(c)..................................................... 13.02
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions .............................................. 1
Section 1.02. Incorporation by Reference of Trust Indenture Act ........ 29
Section 1.03. Rules of Construction .................................... 29
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating .......................................... 30
Section 2.02. Execution and Authentication ............................. 30
Section 2.03. Registrar and Paying Agent ............................... 31
Section 2.04. Luxembourg Listing Agent, Sub-Paying Agent and Transfer
Agent .................................................... 31
Section 2.05. Paying Agent to Hold Money in Trust ...................... 31
Section 2.06. Holder Lists ............................................. 32
Section 2.07. Transfer and Exchange .................................... 32
Section 2.08. Replacement Notes ........................................ 48
Section 2.09. Outstanding Notes ........................................ 48
Section 2.10. Treasury Notes ........................................... 48
Section 2.11. Temporary Notes .......................................... 49
Section 2.12. Cancellation ............................................. 49
Section 2.13. Defaulted Interest ....................................... 49
Section 2.14. CUSIP Numbers ............................................ 49
Section 2.15. Ranking; Security for and Parity of Notes ................ 50
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee ....................................... 50
Section 3.02. Selection of Notes to Be Redeemed or Purchased ........... 50
Section 3.03. Notice of Redemption ..................................... 51
Section 3.04. Effect of Notice of Redemption ........................... 52
Section 3.05. Deposit of Redemption or Purchase Price .................. 52
Section 3.06. Notes Redeemed or Purchased in Part ...................... 52
Section 3.07. Optional Redemption ...................................... 52
Section 3.08. Mandatory Redemption ..................................... 53
Section 3.09. Offer to Purchase by Application of Excess Proceeds ...... 54
Section 3.10. Redemption for Changes in Withholding Tax ................ 56
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes ......................................... 57
Section 4.02. Maintenance of Office or Agency .......................... 57
Section 4.03. Reports .................................................. 58
Section 4.04. Compliance Certificate ................................... 59
Section 4.05. Taxes .................................................... 60
Section 4.06. Stay, Extension and Usury Laws ........................... 60
Section 4.07. Restricted Payments ...................................... 60
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries ............................................. 63
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock .................................................... 65
Section 4.10. Asset Sales .............................................. 70
Section 4.11. Transactions with Affiliates ............................. 73
Section 4.12. Liens .................................................... 75
Section 4.13. Business Activities ...................................... 75
Section 4.14. Corporate Existence ...................................... 75
Section 4.15. Offer to Repurchase Upon Change of Control ............... 75
Section 4.16. Additional Note Guarantees ............................... 77
Section 4.17. Designation of Restricted and Unrestricted Subsidiaries .. 78
Section 4.18. Listing .................................................. 79
Section 4.19. Withholding Taxes ........................................ 79
Section 4.20. Sale and Leaseback Transactions .......................... 83
Section 4.21. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries .................................. 83
Section 4.22. No impairment of Security Interests ...................... 84
Section 4.23. Additional Interest ...................................... 84
Section 4.24. Interest Rate Adjustment ................................. 84
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets ................. 85
Section 5.02. Successor Corporation Substituted ........................ 86
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default ........................................ 86
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Section 6.02. Acceleration ............................................. 88
Section 6.03. Other Remedies ........................................... 89
Section 6.04. Waiver of Defaults ....................................... 89
Section 6.05. Control by Majority ...................................... 89
Section 6.06. Limitation on Suits ...................................... 89
Section 6.07. Rights of Holders of Notes to Receive Payment ............ 90
Section 6.08. Collection Suit by Trustee ............................... 90
Section 6.09. Trustee May File Proofs of Claim ......................... 90
Section 6.10. Priorities ............................................... 91
Section 6.11. Undertaking for Costs .................................... 91
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee ........................................ 92
Section 7.02. Rights of Trustee ........................................ 93
Section 7.03. Individual Rights of Trustee ............................. 94
Section 7.04. Trustee's Disclaimer ..................................... 94
Section 7.05. Notice of Defaults ....................................... 94
Section 7.06. Reports by Trustee to Holders of the Notes ............... 94
Section 7.07. Compensation and Indemnity ............................... 95
Section 7.08. Replacement of Trustee ................................... 96
Section 7.09. Successor Trustee by Merger, Etc ......................... 97
Section 7.10. Eligibility; Disqualification ............................ 97
Section 7.11. Preferential Collection of Claims Against Company ........ 97
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance ............................................... 97
Section 8.02. Legal Defeasance and Discharge ........................... 97
Section 8.03. Covenant Defeasance ...................................... 98
Section 8.04. Conditions to Legal or Covenant Defeasance ............... 99
Section 8.05. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions .................... 100
Section 8.06. Repayment to Company ..................................... 101
Section 8.07. Reinstatement ............................................ 101
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes ...................... 102
Section 9.02. With Consent of Holders of Notes ......................... 103
Section 9.03. Revocation and Effect of Consents ........................ 105
Section 9.04. Notation on or Exchange of Notes ......................... 105
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Section 9.05. Trustee to Sign Amendments, Etc .......................... 106
Section 9.06. Compliance with Trust Indenture Act ...................... 106
ARTICLE 10
COLLATERAL ARRANGEMENTS
Section 10.01. Security ................................................. 106
Section 10.02. Use of the Collateral .................................... 107
Section 10.03. Determinations Relating to Collateral .................... 108
Section 10.04. Suits to Protect the Collateral .......................... 108
Section 10.05. Enforcement and Disposition of Collateral ................ 108
Section 10.06. Release of the Collateral ................................ 109
ARTICLE 11
NOTE GUARANTEES
Section 11.01. Guarantee ................................................ 109
Section 11.02. Limitation on Guarantor Liability ........................ 111
Section 11.03. Execution and Delivery of Note Guarantee ................. 111
Section 11.04. Guarantors May Consolidate, Etc., on Certain Terms ....... 112
Section 11.05. Releases ................................................. 113
ARTICLE 12
SATISFACTION AND DISCHARGE
Section 12.01. Satisfaction and Discharge ............................... 113
Section 12.02. Application of Trust Money ............................... 114
ARTICLE 13
MISCELLANEOUS
Section 13.01. Currency Indemnity ....................................... 115
Section 13.02. Trust Indenture Act Controls ............................. 116
Section 13.03. Notices .................................................. 116
Section 13.04. Communication by Holders of Notes With Other Holders of
Notes .................................................... 117
Section 13.05. Certificate and Opinion as to Conditions Precedent ....... 117
Section 13.06. Statements Required in Certificate or Opinion ............ 118
Section 13.07. Rules by Trustee and Agents .............................. 118
Section 13.08. No Personal Liability of Directors, Officers, Employees
and Stockholders ......................................... 118
Section 13.09. Governing Law ............................................ 118
Section 13.10. Consent to Jurisdiction and Service ...................... 119
Section 13.11. No Adverse Interpretation of Other Agreements ............ 119
Section 13.12. Successors ............................................... 119
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Section 13.13. Severability ............................................. 119
Section 13.14. Counterpart Originals .................................... 120
Section 13.15. Table of Contents, Headings, Etc ......................... 120
Section 13.16. Luxembourg Law Provision ................................. 120
Section 13.17. USA PATRIOT Act .......................................... 118
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF NOTATION OF GUARANTEE
Exhibit E FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of December 20, 2006 among Maxcom Telecomunicaciones,
S.A. de C.V., a sociedad anonima organized under the laws of Mexico, the
Guarantors (as defined herein) and Deutsche Bank Trust Company Americas, a New
York banking corporation, as Trustee.
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined herein) of the 11% Senior Notes due 2014 (the "NOTES"):
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"144A GLOBAL NOTE" means a Global Note substantially in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person
is merged with or into or becomes a Subsidiary of such specified Person, whether
or not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Restricted Subsidiary of,
such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"ADDITIONAL AMOUNTS" has the meaning set forth in Section 4.19.
"ADDITIONAL INTEREST" means all amounts, if any, payable pursuant to
Section 4.24 hereof or Section 2(d) of the Registration Rights Agreement.
"ADDITIONAL NOTES" means additional Notes (other than the Initial Notes)
issued under this Indenture, including any Exchange Notes issued in exchange for
such Additional Notes, in accordance with Section 2.02 hereof, as part of the
same series as the Initial Notes. The Notes and the Additional Notes, if any,
shall
be treated as a single class for all purposes of this Indenture, including,
without limitation Article 9 hereof.
"AFFILIATE" of any specified Person means (i) any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person or (ii) any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law of such Person and
shall include adoptive relationships. For purposes of this definition,
"control," as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person, or of rights or warrants to purchase such Capital
Stock (whether or not currently exercisable), will be deemed to be control. For
purposes of this definition, the terms "controlling," "controlled by" and "under
common control with" have correlative meanings.
"AFFILIATE TRANSACTION" has the meaning set forth in Section 4.11.
"AGENT" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"APPLICABLE PREMIUM" means, with respect to any Note on any Redemption
Date, the greater of:
(1) 1.0% of the principal amount of the Note; or
(2) the excess of:
(a) the present value at such Redemption Date of (i) the redemption
price of the Note on December 15, 2010, (such redemption price being set
forth in the table appearing above in Section 3.07(c)) plus (ii) all
required interest payments due on the Note through December 15, 2010,
(excluding accrued but unpaid interest to the Redemption Date), computed
using a discount rate equal to the Treasury Rate as of such Redemption Date
plus 50 basis points; over
(b) the principal amount of the Note.
"APPLICABLE PROCEDURES" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
"ASSET SALE" means:
(1) the sale, lease, conveyance or other disposition (including a Sale and
Leaseback Transaction) of any assets or rights; provided that the sale, lease,
2
conveyance or other disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole will be governed by
Sections 4.15 and 5.01 of this Indenture and not by Section 4.10; and
(2) the issuance of Equity Interests in any of the Company's Restricted
Subsidiaries or the sale of Equity Interests in any of its Subsidiaries.
Notwithstanding the preceding, none of the following items will be deemed
to be an Asset Sale:
(1) any single transaction or series of related transactions that involves
assets having a Fair Market Value at the time of such transaction of less than
$1,000,000;
(2) a transfer of assets by a Restricted Subsidiary to the Company or by
the Company or a Restricted Subsidiary to a Wholly-Owned Restricted Subsidiary;
(3) an issuance of Equity Interests by a Restricted Subsidiary of the
Company to the Company or to a Restricted Subsidiary of the Company;
(4) the sale or lease of products, services or accounts receivable in the
ordinary course of business and any sale or other disposition of damaged,
worn-out or obsolete assets in the ordinary course of business;
(5) for purposes of Sections 3.09 and 4.10, the sale or other disposition
of cash or Cash Equivalents;
(6) for purposes of Sections 3.09 and 4.10, a Restricted Payment that does
not violate Section 4.07 of this Indenture or a Permitted Investment;
(7) the sale or discount of accounts receivable, but only in connection
with the compromise or collection thereof, or the disposition of assets in
connection with a foreclosure or transfer in lieu of a foreclosure or other
exercise of remedial action;
(8) any exchange of like property similar to (but not limited to) those
allowable under Section 1031 of the Internal Revenue Code; or
(9) grants of licenses to use the Company's or any Restricted Subsidiary's
trade secrets, know-how and other technology or intellectual property in the
ordinary course of business to the extent that such license does not prohibit
the licensor from using the patent, trade secret, know-how or technology.
"ASSET SALE OFFER" has the meaning set forth in Section 3.09.
"ATTRIBUTABLE DEBT" means, in respect of a Sale and Leaseback Transaction,
the present value of the total obligations of the lessee for rental
3
payments during the remaining term of the lease in the Sale and Leaseback
Transaction. Such present value shall be calculated using a discount rate equal
to the rate of interest implicit in such transaction, determined in accordance
with GAAP; provided, however, that if such sale and leaseback transaction
results in a Capital Lease Obligation, the amount of Indebtedness represented
thereby will be determined in accordance with the definition of "Capital Lease
Obligation".
"AUTHENTICATION ORDER" has the meaning set forth in Section 2.02.
"BANKRUPTCY LAW" means Title 11, U.S. Code, the "Ley de Concursos
Mercantiles" of Mexico or any similar federal or state law for the relief of
debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms "beneficially own" and
"beneficially owned" have a corresponding meaning.
"BOARD OF DIRECTORS" means:
(1) with respect to a corporation, the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of such
board;
(2) with respect to a partnership, the Board of Directors of the general
partner of the partnership;
(3) with respect to a limited liability company, the managing member or
members or any controlling committee of managing members thereof; and
(4) with respect to any other Person, the board or committee of such Person
serving a similar function.
"BROKER-DEALER" means any broker or dealer registered under the Exchange
Act.
"BUSINESS DAY" means any day other than a Saturday or Sunday, or a day on
which commercial banking institutions in The City of New York or Mexico City are
authorized or required by law, regulation or executive order to remain closed.
"CALCULATION DATE" has the meaning set forth in the definition of the term
"Leverage Ratio".
4
"CAPITAL LEASE OBLIGATION" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet prepared in
accordance with Mexican GAAP, and the Stated Maturity thereof shall be the date
of the last payment of rent or any other amount due under such lease prior to
the first date upon which such lease may be prepaid by the lessee without
payment of a penalty.
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock;
(3) in the case of a partnership or limited liability company, partnership
interests (whether general or limited) or membership interests; and
(4) any other interest or participation (however designated) that confers
on a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person, but excluding from all of the
foregoing any debt securities convertible into Capital Stock, whether or not
such debt securities include any right of participation with Capital Stock.
"CASH EQUIVALENTS" means:
(1) United States dollars and Mexican pesos;
(2) securities issued or directly and fully guaranteed or insured by the
United States or Mexican government or any agency or instrumentality of the
United States or Mexican government (provided that the full faith and credit of
the United States or Mexico is pledged in support of those securities) having
maturities of not more than six months from the date of acquisition;
(3) demand deposits, time deposits, certificates of deposit or Eurodollar
deposits with a maturity of 365 days or less from the date of acquisition of any
financial institution which at the date of acquisition has outstanding
indebtedness rated at least "A-" by S&P or at least A3 by Moody's (or the
equivalent of such rating by such rating organization, or, if no rating of S&P
or Moody's then exists because neither of the foregoing then rates obligations
of the type described in this clause, the equivalent of such rating by any other
United States nationally recognized securities rating agency);
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications specified
in clause (3) above;
5
(5) commercial paper having one of the two highest ratings obtainable from
Moody's or S&P and, in each case, maturing within six months after the date of
acquisition;
(6) Mexican Peso deposits, with maturities of not more than 12 months from
the date of acquisition, in any bank or financial institution incorporated under
the laws of Mexico with total assets exceeding the equivalent of U.S.$350
million; provided that the aggregate principal amount of any such deposits in
banks described in this clause shall not exceed the equivalent of U.S.$20.0
million at any time outstanding;
(7) repurchase agreements and reverse repurchase agreements relating to
marketable direct obligations issued or unconditionally guaranteed by Mexico and
backed by the full faith and credit of Mexico maturing within one year from the
date of acquisition, in each case entered into with any of the Mexican banks
specified in the preceding clause (6); provided that such agreement with banks
described in subclause (6)(B) shall be deemed a deposit for purposes of the
U.S.$20.0 million limit in such subclause; and
(8) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (7) of this
definition.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(1) the direct or indirect sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets
of the Company and its Subsidiaries taken as a whole to any Person, if any
"person" (as that term is used in Section 13(d) of the Exchange Act) other than
the Permitted Holders is the Beneficial Owner, directly or indirectly, of more
than 50% of the Voting Stock of such Person, measured by voting power rather
than number of shares;
(2) the adoption of a plan relating to the liquidation or dissolution of
the Company;
(3) the consummation of any transaction (including, without limitation, any
merger or consolidation), the result of which is that any "person" (as defined
above) other than the Permitted Holders becomes the Beneficial Owner, directly
or indirectly, of more than 50% of the Voting Stock of the Company, measured by
voting power rather than number of shares; or
(4) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors.
"CHANGE OF CONTROL OFFER" has the meaning set forth in Section 4.15.
6
"CHANGE OF CONTROL PAYMENT" has the meaning set forth in Section 4.15.
"CHANGE OF CONTROL PAYMENT DATE" has the meaning set forth in Section 4.15.
"CHANGE OF TAX LAW" has the meaning set forth in Section 3.10.
"CLEARSTREAM" means Clearstream Banking, S.A., and its successors.
"COLLATERAL" has the meaning set forth in Section 10.01.
"COLLATERAL AGENT" means Deutsche Bank Trust Company Americas, until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder
"COLLATERAL ASSET SALE" means any Asset Sale (provided however that any
exchange of assets under clause 8 of the definition of Asset Sales shall only be
for new assets that immediately thereof constitute Collateral and have been
pledged and perfected on a first-priority basis on the date of exchange) of any
Collateral, or a series of related Asset Sales by the Company or any of its
Subsidiaries involving the Collateral, other than (i) the sale for Fair Market
Value of machinery, equipment, furniture or implements or other similar property
that may be defective or may have become worn out or obsolete or no longer used
or useful in the operations of the Company or (ii) sales of inventory in the
ordinary course of business. A Collateral Asset Sale will not include an Event
of Loss.
"COLLATERAL DOCUMENTS" means the security agreements, non-possessory pledge
agreements, mortgages or other collateral assignment documents to be entered
into from time to time by the Company and its Restricted Subsidiaries and the
Collateral Agent for the benefit of the Holders from time to time.
"COLLATERAL PERMITTED LIENS" means any of the following:
(1) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent or being
contested in good faith, if such reserve or other appropriate provision, if any,
as shall be required by Mexican GAAP has been made in respect thereof;
(2) Liens for taxes, assessments or governmental charges or levies on the
property of the Company or any Restricted Subsidiary if the same shall not at
the time be delinquent or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings promptly instituted and
diligently concluded; provided that any reserve or other appropriate provision
that shall be required in conformity with Mexican GAAP shall have been made
therefor;
7
(3) Liens Incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, including any Lien securing letters of credit issued in the
ordinary course of business consistent with past practice in connection
therewith, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money);
(4) Liens upon specific items of inventory or other goods and proceeds of
any Person securing such Person's obligations in respect of bankers' acceptances
issued or created for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods;
(5) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of the Company or a
Restricted Subsidiary, including rights of offset and set-off;
(6) Liens existing on the Issue Date;
(7) zoning restrictions, licenses, easements, servitudes, rights of way,
title defects, covenants running with the land and other similar charges or
encumbrances or restrictions not interfering in any material respect with the
ordinary operation of any Collateral or materially and adversely affecting the
value of the Collateral; and
(8) Liens created pursuant to the Collateral Documents, including Liens
thereon securing the Notes.
"COMPANY" means Maxcom Telecomunicaciones, S.A. de C.V., and any and all
successors thereto.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
Notes.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the total interest
expense of the Company and its consolidated Restricted Subsidiaries, plus, to
the extent not included in such total interest expense, and to the extent
incurred by the Company or its Restricted Subsidiaries, without duplication:
(1) interest expense attributable to Capital Lease Obligations or to leases
constituting a part of Sale and Leaseback Transactions;
(2) amortization of debt discount;
8
(3) amortization of debt issuance costs;
(4) capitalized interest;
(5) non-cash interest expense;
(6) commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing;
(7) net payments pursuant to Hedging Obligations but excluding realized and
unrealized foreign exchange gains and losses with respect to Hedging Obligations
and unrealized gains and losses associated with interest rate Hedging
Obligations in each case in accordance with Mexican GAAP; and
(8) the product of (a) dividends paid or accrued in respect to Disqualified
Stock of the Company or in respect of preferred stock of any Restricted
Subsidiary, in either case held by Persons other than the Company or a
Restricted Subsidiary (other than dividends payable solely in Capital Stock
(other than Disqualified Stock) of the Company), times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined tax rate of such Person, expressed as decimal, in each case, on
a consolidated basis and in accordance with Mexican GAAP.
"CONSOLIDATED NET INCOME" means, for any period, the aggregate amount of
net income (or loss) of the Company and its Restricted Subsidiaries for such
period determined on a consolidated basis in accordance with Mexican GAAP.
"CONTINUING DIRECTORS" means, as of any date of determination, any member
of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of this Indenture;
or
(2) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members of such
Board of Directors at the time of such nomination or election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" will be at the address of the
Trustee specified in Section 13.03 hereof or such other address as to which the
Trustee may give notice to the Company.
"COVENANT DEFEASANCE" has the meaning set forth in Section 8.03.
"CUSTODIAN" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"DEBT SERVICE" means, with respect to any period, principal or Consolidated
Interest Expense paid, when due, in cash during such period on any
9
Existing Indebtedness, Indebtedness incurred in compliance with Section 4.09
hereof and the Notes.
"DEFAULT" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.07 hereof, substantially
in the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"DEPOSITARY" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"DESIGNATED NON-CASH CONSIDERATION" means the Fair Market Value of non-cash
consideration received by the Company or a Restricted Subsidiary in connection
with an Asset Sale that is so designated as Designated Non-cash Consideration
pursuant to an Officers' Certificate, setting forth the basis of such valuation,
executed by the principal financial officer of the Company.
"DIRECTIVE" has the meaning set forth in Section 4.19.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, (1) matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, (2) redeemable at the option
of the holder of the Capital Stock, in whole or in part, or (3) is convertible
or exchangeable for Indebtedness or Disqualified Stock; in each case on or prior
to the first anniversary of the Stated Maturity of the Notes. Notwithstanding
the preceding sentence, any Capital Stock that would constitute Disqualified
Stock solely because the holders of the Capital Stock have the right to require
the Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if (A) the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are not more favorable to the holders of such Capital Stock than the terms
applicable to the Notes and described under Sections 3.09, 4.10, 4.15 and 5.01
hereof; (B) any such requirement only becomes operative after compliance with
such terms applicable to the Notes, including the purchase of any notes tendered
pursuant thereto and (C) the terms of such Capital Stock provide that the
Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with Section 4.07
hereof. The amount of Disqualified Stock deemed to be outstanding at any time
for purposes of this
10
Indenture will be the maximum amount that the Company and its Restricted
Subsidiaries may become obligated to pay upon the maturity of, or pursuant to
any mandatory redemption provisions of, such Disqualified Stock, exclusive of
accrued dividends.
"DTC" has the meaning set forth in Section 2.03.
"EBITDA" means, with respect to any specified Person for any period, the
Consolidated Net Income of such Person for such period, plus:
(1) Consolidated Interest Expense, to the extent deducted in calculating
Consolidated Net Income, plus
(2) to the extent deducted in calculating Consolidated Net Income and as
determined on a consolidated basis for the Company and its Restricted
Subsidiaries in conformity with Mexican GAAP:
(A) income taxes, other than income taxes or income tax adjustments
(whether positive or negative) attributable to Asset Sales or extraordinary
and non-recurring gains or losses;
(B) depreciation, amortization (including amortization of intangibles
and amortization of pre-operating expenses capitalized in accordance with
Mexican GAAP but excluding amortization of prepaid cash expenses that were
paid in a prior period) and all other non-cash items reducing Consolidated
Net Income (not including non-cash charges in a period which reflect cash
expenses paid or to be paid in another period), less all non-cash items
increasing Consolidated Net Income; and
(C) all non-cash compensation expense arising out of the issuance of
Equity Interests issued to directors, officers or employees of the Company
or any of its Restricted Subsidiaries;
provided that, with respect to any Restricted Subsidiary, such items will
be added only to the extent and in the same proportion that the relevant
Restricted Subsidiary's net income was included in calculating Consolidated Net
Income.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EUROCLEAR" means Euroclear Bank, S.A./N.V., as operator of the Euroclear
system, and its successors.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EVENT OF LOSS" means (i) the loss of, destruction of, or damage to any
Collateral, (ii) the condemnation, seizure, confiscation, requisition of the use
or
11
taking by exercise of the power of eminent domain or otherwise of any Collateral
or (iii) any consensual settlement in lieu of any event listed in clause (ii),
in each case whether in a single event or a series of related events, that
results in Net Proceeds from all sources in excess of $1.0 million.
"EXCESS ADDITIONAL AMOUNTS" has the meaning set forth in Section 3.10.
"EXCESS PROCEEDS" has the meaning set forth in Section 4.10.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE NOTES" means the Notes of the Company issued pursuant to the
Indenture in exchange for, and in an aggregate principal amount equal to, the
Initial Notes in compliance with the terms of a Registration Rights Agreement
and containing terms substantially identical to the Initial Notes (except that
(i) such Exchange Notes will be registered under the Securities Act and will not
be subject to transfer restrictions or bear the Restricted Legend, and (ii) the
provisions relating to Additional Interest will be eliminated).
"EXCHANGE OFFER" means an offer by the Company to the Holders of the
Initial Notes to exchange outstanding Notes for Exchange Notes, as provided for
in a Registration Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in the
Registration Rights Agreement.
"EXCLUDED SUBSIDIARIES" means Telereunion, S.A. de C.V., Telscape de
Mexico, S.A. de C.V. and Sierra USA Communications, Inc.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Subsidiaries in existence on the date of this Indenture, until such amounts are
repaid.
"FAIR MARKET VALUE" means the value that would be paid by a willing buyer
to an unaffiliated willing seller in a transaction not involving distress or
necessity of either party, determined in good faith by the Board of Directors of
the Company (unless otherwise provided in this Indenture).
"GLOBAL NOTE LEGEND" means the legend set forth in Section 2.07(g)(ii)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.
"GLOBAL NOTES" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes deposited with or on behalf of
and registered in the name of the Depository or its nominee, substantially in
the form of Exhibit A hereto and that bears the Global Note Legend and that has
the "Schedule of Exchanges of Interests in the Global Note" attached thereto,
issued in accordance with Article 2 hereof.
12
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America (including any agency or
instrumentality hereof), and the payment for which the United States pledges its
full faith and credit.
"GUARANTEE" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take or pay or to maintain financial statement
conditions or otherwise).
"GUARANTORS" means each of:
(1) Maxcom Servicios Administrativos, S.A. de C.V.,
(2) Outsourcing Operadora de Personal, S.A. de C.V.,
(3) Tecnicos Especializados en Telecomunicaciones, S.A. de C.V.,
(4) Corporativo en Telecomunicaciones, S.A. de C.V.,
(5) Maxcom SF, S.A. de C.V.,
(6) Maxcom TV, S.A. de C.V.,
(7) Maxcom USA, Inc.,
(8) any other Subsidiary of the Company that executes a Note Guarantee in
accordance with the provisions of this Indenture, and
(9) and their respective successors and assigns, in each case, until the
Note Guarantee of such Person has been released in accordance with the
provisions of this Indenture.
"HEDGING OBLIGATIONS" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or from
floating to fixed), interest rate cap agreements and interest rate
collar agreements;
(2) other agreements or arrangements designed to manage interest rates or
interest rate risk; and
13
(3) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange rates or commodity prices.
"HOLDER" means a Person in whose name a Note is registered.
"INCUR" has the meaning set forth in Section 4.09.
"INDEBTEDNESS" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) Attributable Debt under Sale and Leaseback Transactions under which
such a Person is a lessee;
(6) representing the balance deferred and unpaid of the purchase price of
any property or services due more than six months after such property is
acquired or such services are completed;
(7) representing any Hedging Obligations; or
(8) all Indebtedness of a Receivables Subsidiary and the net unrecovered
purchase price of any receivables in connection with a Permitted Securitization,
if and to the extent any of the preceding items (other than letters of credit,
Hedging Obligations and obligations in connection with a Permitted
Securitization referred to in clause (8)) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with Mexican GAAP.
In addition, the term "Indebtedness" includes all Indebtedness of others secured
by a Lien on any asset of the specified Person (whether or not such Indebtedness
is assumed by the specified Person) and, to the extent not otherwise included,
the Guarantee by the specified Person of any Indebtedness of any other Person.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial interest in a
Global Note through a Participant.
14
"INITIAL NOTES" means the Notes issued on the Issue Date and any Notes
issued in replacement thereof, but not including any Exchange Notes issued in
exchange therefor.
"INITIAL PURCHASERS" means Morgan Stanley & Co. Incorporated and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
"INVESTMENTS" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with Mexican GAAP. If the
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Equity Interests of any direct or indirect Subsidiary of the Company such
that, after giving effect to any such sale or disposition, such Person is no
longer a Restricted Subsidiary of the Company, the Company will be deemed to
have made an Investment on the date of any such sale or disposition equal to the
Fair Market Value of the Company's Investments in such Restricted Subsidiary
that were not sold or disposed of in an amount determined as provided in Section
4.07(b). Except as otherwise provided in this Indenture, the amount of an
Investment will be determined at the time the Investment is made and without
giving effect to subsequent changes in value.
"ISSUE DATE" means December 20, 2006.
"ISSUER" means Maxcom Telecomunicaciones, S.A. de C.V., and any and all
successors thereto.
"LEGAL DEFEASANCE" has the meaning set forth in Section 8.02.
"LEGENDED REGULATION S GLOBAL NOTE" means a Global Note in the form of
Exhibit A bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
at maturity of the Notes initially sold in reliance on Rule 903 of Regulation S.
"LETTER OF TRANSMITTAL" means the letter of transmittal prepared by the
Company and sent to all Holder of the Notes for use by such Holders in
connection with the Exchange Offer.
"LEVERAGE RATIO" means as of a specific date (the "CALCULATION DATE"), the
ratio of (i) the aggregate principal amount of the Company's outstanding
Indebtedness and the Indebtedness of the Restricted Subsidiaries plus the amount
of all obligations in respect of the repayment of Disqualified Stock and the
liquidation preference of preferred stock of Restricted Subsidiaries, in each
case
15
determined as of the Calculation Date and calculated in accordance with Mexican
GAAP, to (ii) the Company's aggregate EBITDA for the period consisting of the
last two full fiscal quarters for which financial statements are publicly
available (the "REFERENCE PERIOD") multiplied by two.
For purposes of calculating the Leverage Ratio:
(1) acquisitions that have been made by the Company or any of its
Restricted Subsidiaries, including through mergers or consolidations, or any
Person or any of its Restricted Subsidiaries acquired by the Company or any of
its Restricted Subsidiaries, and including any related financing transactions
and including increases in ownership of Restricted Subsidiaries, during the
two-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date will be given pro forma effect (in accordance with
Mexican GAAP) as if they had occurred on the first day of the Reference Period;
(2) the EBITDA attributable to discontinued operations, as determined in
accordance with Mexican GAAP, and operations or businesses (and ownership
interests therein) disposed of prior to the Calculation Date, will be excluded;
(3) any Person that is a Restricted Subsidiary on the Calculation Date will
be deemed to have been a Restricted Subsidiary at all times during such
Reference Period;
(4) any Person that is not a Restricted Subsidiary on the Calculation Date
will be deemed not to have been a Restricted Subsidiary at any time during such
Reference Period; and
(5) if any Indebtedness bears a floating rate of interest, the interest
expense on such Indebtedness will be calculated as if the rate in effect on the
Calculation Date had been the applicable rate for the entire period (taking into
account any Hedging Obligation applicable to such Indebtedness if such Hedging
Obligation has a remaining term as at the Calculation Date in excess of 12
months).
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"LUXEMBOURG LISTING AGENT" means Deutsche Bank Luxembourg, S.A. and its
successors.
"LUXEMBOURG SUB-PAYING AGENT" means Deutsche Bank Luxembourg, S.A. and its
successors.
16
"MEXICAN GAAP" means generally accepted accounting principles in Mexico in
effect from time to time.
"MEXICO" means the Estados Unidos Mexicanos (the United Mexican States) and
any branch of power thereof and any ministry, department, authority or statutory
corporation or other entity (including a trust), owned or controlled directly or
indirectly by the Estados Unidos Mexicanos or any of the foregoing.
"MOODY'S" means Moody's Investors Service, Inc. and its successors.
"NET PROCEEDS" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale, taxes paid or payable as a result of the
Asset Sale, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, and amounts required to be applied
to the repayment of Indebtedness secured by a Lien on the asset or assets that
were the subject of such Asset Sale, the amount of distributions required to be
made under applicable law or the by-laws of a Restricted Subsidiary in effect on
the date of this Indenture to minority interest holders on account of such Asset
Sale, the amount of any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with Mexican GAAP and any cash
escrows in connection with purchase price adjustments, reserves or indemnities
(until released).
"NON-RECOURSE DEBT" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is directly or indirectly
liable as a guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that the holders
of the Indebtedness may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of any
other Indebtedness of the Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment of the
Indebtedness to be accelerated or payable prior to its Stated Maturity; and
(3) as to which the lenders have been notified in writing that they will
not have any recourse to the stock or assets of the Company or any of its
Restricted Subsidiaries.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
17
"NOTE GUARANTEE" means the Guarantee by each Guarantor of the Company's
obligations under this Indenture and the Notes, executed pursuant to the
provisions of this Indenture.
"NOTES" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes and the Additional Notes shall be treated as a single class
for all purposes under this Indenture, and unless the context otherwise
requires, all references to the Notes shall include the Initial Notes and any
Additional Notes.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFER AMOUNT" has the meaning set forth in Section 3.09.
"OFFERING MEMORANDUM" means the Company's final Offering Memorandum, dated
December 13, 2006, relating to the Notes.
"OFFER PERIOD" has the meaning set forth in Section 3.09.
"OFFICER" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 13.06
hereof.
"OPINION OF COUNSEL" means an opinion from legal counsel that is in form
and substance reasonably acceptable to the Trustee, that meets the requirements
of Section 13.06 hereof. The counsel may be an employee of or counsel to the
Company, any Subsidiary of the Company or the Trustee.
"PARTICIPANT" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"PAYING AGENT" has the meaning set forth in Section 2.03.
"PAYMENT DEFAULT" has the meaning set forth in Section 6.01.
"PERMITTED BUSINESS" means the development, ownership and/or operation of
one or more telephone, telecommunications, information or data transmission
systems or networks and/or the provision of telephony,
18
telecommunications and/or information services and any related, ancillary or
complementary business, including, without limitation, local and long distance
telephony, telecommunications and other information and transmission services
such as the Internet, broadband or cable television.
"PERMITTED HOLDERS" mean Banc America Equity Partners, Nexus-Maxcom
Holdings I, LLC, BASCF-Maxcom Holding I, LLC, BAS Capital Funding Corporation,
BankAmerica Investment Corporation, Mr. Adrian Aguirre Gomez, Mrs. Maria
Trinidad Aguirre Gomez, Mr. Eduardo Vazquez and Mr. Gabriel Vazquez and any
Affiliates or immediate family thereof.
"PERMITTED DEBT" has the meaning set forth in Section 4.09.
"PERMITTED INVESTMENTS" means:
(1) (a) any Investment in the Company or in a Wholly-Owned Restricted
Subsidiary of the Company that is a Guarantor; (b) any Investment in any other
Restricted Subsidiary of the Company that is a Guarantor, provided that such
Investment is evidenced by an intercompany note; (c) any Investment in the
Equity Interests of a Restricted Subsidiary of the Company that is a Guarantor
(by way of acquisition of Equity Interests or capital contribution), in an
amount not to exceed $5.0 million in the aggregate for all Investments made
pursuant to this clause (1)(c); or (d) any Investment in a Restricted Subsidiary
other than a Wholly-Owned Restricted Subsidiary, consisting solely of the
capitalization of amounts due to the Company in exchange for Equity Interests of
such Restricted Subsidiary by such Restricted Subsidiary in an amount not to
exceed $5.0 million in the aggregate for all Investments made pursuant to this
clause (1)(d);
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary in a Person
in a Related Business if, as a result of such Investment, such Person
immediately becomes a Wholly-Owned Restricted Subsidiary that is a Guarantor of
such Person or is immediately merged consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or is liquidated
into, the Company or a Wholly-Owned Restricted Subsidiary that is a Guarantor;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.10 hereof;
(5) any Investments received in compromise or resolution of (A) obligations
of trade creditors or customers that were incurred in the ordinary course of
business of the Company or any of its Restricted Subsidiaries, including
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer; or (B) litigation,
arbitration or other disputes with Persons who are not Affiliates;
19
(6) Investments represented by Hedging Obligations permitted to be incurred
under Section 4.09 hereof;
(7) loans or advances to employees made in the ordinary course of business
of the Company or any Restricted Subsidiary of the Company in an aggregate
principal amount not to exceed $500,000 at any one time outstanding;
(8) repurchases of the Notes;
(9) Investments in a Receivables Subsidiary or any Investment by a
Receivables Subsidiary in any other Person under a Permitted Securitization;
that are necessary or advisable to effectuate such Permitted Securitization;
provided that any Investment in a Receivables Subsidiary is in the form of a
Purchase Money Note, contribution of additional receivables and related assets
or any Equity Interests;
(10) Investments to the extent made in exchange for the Issuance of Capital
Stock (other than Disqualified Stock) of the Company;
(11) any Investment made within 60 days after the date of the commitment to
make the Investment, that when such commitment was made, would have complied
with the terms of this Indenture; provided that such Investment shall be deemed
to have made under the provision under which it was intended to have been made;
and
(12) other Investments made since the date of this Indenture that do not
exceed, at any one time outstanding, $7.5 million.
"PERMITTED LIENS" means:
(1) Liens in favor of the Company or the Guarantors;
(2) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Subsidiary of the
Company; provided that such Liens were in existence prior to the contemplation
of such merger or consolidation and do not extend to any assets other than those
of the Person merged into or consolidated with the Company or the Subsidiary;
(3) Liens on property (including Capital Stock) existing at the time of
acquisition of the property by the Company or any Subsidiary of the Company;
provided that such Liens were in existence prior to, such acquisition, and not
incurred in contemplation of, such acquisition;
(4) Liens in favor of issuers of surety bonds or letters of credit issued
pursuant to the request of and for the account of such Person in the ordinary
course of its business; provided, however, that such letters of credit do not
constitute Indebtedness;
20
(5) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by Section 4.09(b)(iii) hereof covering only the assets acquired with
or financed by such Indebtedness;
(6) Liens existing on the date of this Indenture;
(7) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded; provided that any
reserve or other appropriate provision as is required in conformity with Mexican
GAAP has been made therefor;
(8) Liens imposed by law, such as carriers', warehousemen's, landlord's and
mechanics' Liens, in each case, incurred in the ordinary course of business;
(9) survey exceptions, easements or reservations of, or rights of others
for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone
lines and other similar purposes, or zoning or other restrictions as to the use
of real property incidental to the conduct of the business of such Person or to
the ownership of its properties that were not incurred in connection with
Indebtedness and that do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person;
(10) Liens on Receivables and related assets granted in connection with a
Permitted Securitization, including Liens on Receivables transferred to a
Receivables Subsidiary under a Permitted Securitization;
(11) Liens to secure any Permitted Refinancing Indebtedness permitted to be
incurred under this Indenture, provided, however, that:
(A) the new Lien shall be limited to all or part of the same property
and assets that secured or, under the written agreements pursuant to which
the original Lien arose, could secure the original Lien (plus improvements
and accessions to, such property or proceeds or distributions thereof); and
(B) the Indebtedness secured by the new Lien is not increased to any
amount greater than the sum of (x) the outstanding principal amount, or, if
greater, committed amount, of the Permitted Refinancing Indebtedness and
(y) an amount necessary to pay any fees and expenses, including premiums,
related to such renewal, refunding, refinancing, replacement, defeasance or
discharge;
(12) Liens in the ordinary course to secure Hedging Obligations with
respect to the Notes permitted by Section 4.09(b)(vii) hereof; and
21
(13) Collateral Permitted Liens.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to renew, refund, refinance, replace, defease or
discharge other Indebtedness of the Company or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness renewed, refunded,
refinanced, replaced, defeased or discharged (plus all accrued interest on the
Indebtedness and the amount of all fees and expenses, including premiums,
incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has, at the time the Permitted
Refinancing Indebtedness is incurred, a final maturity date later than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
renewed, refunded, refinanced, replaced, defeased or discharged;
(3) if the Indebtedness being renewed, refunded, refinanced, replaced,
defeased or discharged is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being renewed, refunded, refinanced,
replaced, defeased or discharged; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being renewed,
refunded, refinanced, replaced, defeased or discharged.
"PERMITTED SECURITIZATION" means any sale, transfer or other disposition by
the Company or any of its Restricted Subsidiaries of Receivables and related
collateral, credit support and similar rights and any other assets that are
customarily transferred in a securitization of receivables, pursuant to one or
more securitization programs, to a Receivables Subsidiary or a Person who is not
an Affiliate of the Company; provided that (i) the consideration to be received
by the Company and its Restricted Subsidiaries other than a Receivables
Subsidiary for any such disposition consists of cash, a promissory note or a
customary contingent right to receive cash in the nature of a "hold-back" or
similar contingent right, (ii) no Default shall have occurred and be continuing
or would result therefrom, and (iii) the aggregate outstanding balance of the
Indebtedness in respect of all such programs at any point in time is not in
excess of $20.0 million (or U.S.$50.0 million so long as a first, priority
security interest for the benefit of the Holders on the Collateral is in full
force and effect).
22
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section 2.07(g)(i)
hereof to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"PURCHASE DATE" has the meaning set forth in Section 3.09.
"PURCHASE MONEY NOTE" means a promissory note evidencing a line of credit,
or evidencing other Indebtedness owed to the Company or any Restricted
Subsidiary in connection with a Permitted Securitization, which note shall be
repaid from cash available to the maker of such note, other than amounts
required to be established as reserves, amounts paid to investors in respect of
interest, principal and other amounts owing to such investors and amounts paid
in connection with the purchase of newly generated accounts receivable.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"RECEIVABLE" shall mean a right to receive payment arising from a sale or
lease of goods or the performance of services by a Person pursuant to an
arrangement with another Person pursuant to which such other Person is obligated
to pay for good or services under terms that permit the purchase of such goods
and services on credit and shall include, in any event, any items of property
that would be classified as an "account," "chattel paper," "payment intangible"
or "instrument" under the Uniform Commercial Code and any supporting
obligations.
"RECEIVABLES SUBSIDIARY" shall mean any Wholly Owned Restricted Subsidiary
of the Company (or another Person in which the Company or any Restricted
Subsidiary makes an Investment and to which the Company or one or more of its
Restricted Subsidiaries transfer Receivables and related assets) which engages
in no activities other than in connection with the financing of Receivables and
which is designated by the Board of Directors of the applicable Restricted
Subsidiary (as provided below) as a Receivables Subsidiary and which meets the
following conditions:
(1) no portion of the Indebtedness or any other obligations (contingent or
otherwise) of which:
(A) is guaranteed by the Company or any Restricted Subsidiary (that is
not a Receivables Subsidiary);
(B) is recourse to or obligates the Company or any Restricted
Subsidiary (that is not a Receivables Subsidiary); or
23
(C) subjects any property or assets of the Company or any Restricted
Subsidiary (that is not a Receivables Subsidiary), directly or indirectly,
contingently or otherwise, to the satisfaction thereof;
(2) with which neither the Company nor any Restricted Subsidiary (that is
not a Receivables Subsidiary) has any material contract, agreement, arrangement
or understanding (other than Standard Securitization Undertakings); and
(3) to which neither the Company nor any Restricted Subsidiary (that is not
a Receivables Subsidiary) has any obligation to maintain or preserve such
entity's financial condition or cause such entity to achieve certain levels of
operating results.
Any such designation by the Board of Directors of the applicable Restricted
Subsidiary shall be evidenced by a certified copy of the resolution of the Board
of Directors of such Restricted Subsidiary giving effect to such designation and
an officers certificate certifying, to the best of such officer's knowledge and
belief, that such designation complies with the foregoing conditions.
"REDEMPTION DATE", when used with respect to any Note to be redeemed, means
the date which is a Business Day fixed for such redemption by the Company
pursuant to this Indenture.
"REFERENCE PERIOD" has the meaning set forth in the definition of the term
"Leverage Ratio".
"REGISTRAR" has the meaning set forth in Section 2.03.
"REGISTRATION RIGHTS AGREEMENT" means the registration rights agreement
entered into by the Company, the Guarantors and the Initial Purchasers with
respect to the Notes on the Issue Date.
"REGULATION S" means Regulation S promulgated under the Securities Act.
"REGULATION S GLOBAL NOTE" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee, issued in a denomination equal to the outstanding principal
amount of the Notes sold in reliance on Rule 903 of Regulation S.
"RELEVANT DATE" means whichever is the later of (i) the date on which such
payment referred to in Section 4.19 hereof first becomes due and (ii) if the
full amount payable has not been received in New York City, New York by the
Trustee on or prior to such due date, the date on which, the full amount having
24
been so received, notice to that effect shall have been given to the Holders of
the Notes in accordance with this Indenture.
"REPLACEMENT COLLATERAL" means, at any relevant date in connection with a
Collateral Asset Sale or Event of Loss, assets to be used in the business of the
Company or its Subsidiaries, which on such date (i) constitute assets under
"Telephone Network Systems and Equipment" on the Company's consolidated balance
sheet, (ii) are to be acquired by the Company at a purchase price that does not
exceed the Fair Market Value of such Replacement Collateral, (iii) will be upon
purchase free and clear of all Liens other than Collateral Permitted Liens
(other than any Lien described under clause (6) of the definition thereof), and
(iv) are subject to Collateral Documents to which the owner of the Replacement
Collateral is a party.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means any
officer within the Corporate Trust Office of the Trustee (or any successor group
of the Trustee) with direct responsibility for the administration of this
Indenture and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the Private
Placement Legend.
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private Placement
Legend.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED PAYMENTS" has the meaning set forth in Section 4.07.
"RESTRICTED PERIOD" means the 40-day distribution compliance period as
defined in Regulation S.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated under the Securities Act.
25
"SALE AND LEASEBACK TRANSACTION" means, with respect to any Person, an
arrangement whereby such Person enters into a lease of property previously
transferred by such Person to the lessor.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"S&P" means Standard & Poor's Ratings Services, and its successors.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations, warranties,
covenants and indemnities entered into by the Company or any Restricted
Subsidiary which are reasonably customary in securitization of accounts
receivable transactions.
"STATED MATURITY" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness as of the date of this Indenture, and will not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency and after giving effect to any
voting agreement or stockholders' agreement that effectively transfers voting
power) to vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are that Person or one or more Subsidiaries of that
Person (or any combination thereof).
"TAXES" has the meaning set forth in Section 4.19.
26
"TAX JURISDICTION" means (1) Mexico or any political subdivision thereof or
any authority therein or thereof having the power to tax, (2) any jurisdiction
in which the Company or any Guarantor (including any successor entity) is then
incorporated, engaged in business or resident for tax purposes or any political
subdivision thereof or therein having the power to tax or (3) any jurisdiction
by or through which payment is made.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. Sections
77aaa-77bbbb).
"TOTAL ASSETS" means the total consolidated assets of the Company and its
Restricted Subsidiaries (excluding the value of any Investments in Persons other
than Restricted Subsidiaries), as shown on the most recent balance sheet of the
Company delivered to the trustee pursuant to Section 4.03.
"TREASURY RATE" means, as of any redemption date, the yield to maturity as
of such redemption date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
Business Days prior to the redemption date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the redemption date to December 15, 2010;
provided, however, that if the period from the redemption date to December 15,
2010, is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year will be
used.
"TRUSTEE" means Deutsche Bank Trust Company Americas, until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"UNRESTRICTED DEFINITIVE NOTE" means a Definitive Note that does not bear
and is not required to bear the Private Placement Legend.
"UNRESTRICTED GLOBAL NOTE" means a Global Note that does not bear and is
not required to bear the Private Placement Legend.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors, provided that
such designation maybe only made if such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) except as permitted by Section 4.11 hereof, is not party to any
agreement, contract, arrangement or understanding with the Company or any
Restricted Subsidiary of the Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Company or
27
such Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe
for additional Equity Interests or (b) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results;
(4) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of its Restricted
Subsidiaries;
(5) does not own any Capital Stock or Indebtedness of, or holds any Lien on
any property of, the Company or any Person other than Unrestricted Subsidiaries
of the Subsidiary to be so designated;
(6) (A) the Subsidiary to be so designated has total assets of $1,000.00 or
less or (B) if such Subsidiary has assets greater than $1,000.00, such
designation would be permitted under the covenant described under Section 4.07;
and
(7) immediately after giving effect to such designation no Default shall
have occurred and be continuing.
"U.S. PERSON" means a U.S. Person as defined in Rule 902(k) promulgated
under the Securities Act.
"VOTING STOCK" of any specified Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect of the
Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
will at the time be owned by such Person or by one or more Wholly-Owned
Restricted Subsidiaries of such Person.
28
Section 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Note Guarantees means the Company and the
Guarantors, respectively, and any successor obligor upon the Notes and the Note
Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.03. Rules of Construction. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with Mexican GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include the
singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions; and
(7) references to sections of or rules under the Securities Act will be
deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time.
29
ARTICLE 2
The Notes
Section 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication will
be substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each Note
will be dated the date of its authentication. The Notes shall be issued
initially in denominations of $100,000 and thereafter in minimum denominations
of $100,000 and integral multiples of $1,000 in excess thereof.
The terms and provisions contained in the Notes will constitute, and are
hereby expressly made, a part of this Indenture and the Company, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. However, to the
extent any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form will be substantially in the
form of Exhibit A hereto (including the Global Note Legend thereon and the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes
issued in definitive form will be substantially in the form of Exhibit A hereto
(but without the Global Note Legend thereon and without the "Schedule of
Exchanges of Interests in the Global Note" attached thereto). Each Global Note
will represent such of the outstanding Notes as will be specified therein and
each shall provide that it represents the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby will be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.07 hereof.
Section 2.02. Execution and Authentication. At least one Officer must sign
the Notes for the Company by manual or facsimile signature. If an Officer whose
signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note will nevertheless be valid. A Note will not be valid
until authenticated by the manual signature of the Trustee. The signature will
be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee will, upon receipt of a written order of the Company signed by
at least one Officer (an "AUTHENTICATION ORDER"), authenticate Notes for
original issue that may be validly issued under this Indenture, including any
Additional Notes. The aggregate principal amount of Notes outstanding at any
30
time may not exceed the aggregate principal amount of Notes authorized for
issuance by the Company pursuant to one or more Authentication Orders, except as
provided in Section 2.08 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
Section 2.03. Registrar and Paying Agent. The Company will maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange ("REGISTRAR") and an office or agency where Notes may be presented
for payment ("PAYING AGENT"). The Registrar will keep a register of the Notes
and of their registration of transfer and exchange. The Company may appoint one
or more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company will notify the Trustee in writing of
the name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes. The Company initially appoints
the Trustee to act as the Registrar and Paying Agent and to act as Custodian
with respect to the Global Notes.
Section 2.04. Luxembourg Listing Agent, Sub-Paying Agent and Transfer
Agent. The Company has appointed Deutsche Bank Luxembourg S.A. as Luxembourg
listing agent, Luxembourg sub-paying agent and Luxembourg transfer agent. The
Company shall maintain such agencies so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of the exchange so require.
Section 2.05. Paying Agent to Hold Money in Trust. The Company will require
each Paying Agent other than the Trustee to agree in writing that the Paying
Agent will hold in trust for the benefit of Holders or the Trustee all money
held by the Paying Agent for the payment of principal, premium, if any, or
interest or Additional Amounts on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary) will have no further liability
31
for the money. If the Company or a Subsidiary acts as Paying Agent, it will
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee will serve as Paying Agent for
the Notes.
Section 2.06. Holder Lists. The Trustee will preserve in as current a form
as is reasonably practicable the most recent list available to it of the names
and addresses of all Holders and shall otherwise comply with TIA Section 312(a).
If the Trustee is not the Registrar, the Company will furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of the
Holders of Notes and the Company shall otherwise comply with TIA Section 312(a).
Section 2.07. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes may be exchanged by
the Company for Definitive Notes if:
(i) the Company delivers to the Trustee notice from the Depositary
that it is unwilling or unable to continue to act as Depositary or that it
is no longer a clearing agency registered under the Exchange Act and, in
either case, a successor Depositary is not appointed by the Company within
120 days after the date of such notice from the Depositary;
(ii) the Company, at its option, notifies the Trustee in writing that
it elects to cause the issuance of the Definitive Notes representing the
Notes; or
(iii) there has occurred and is continuing an Event of Default with
respect to the Notes.
Upon the occurrence of any of the preceding events in subparagraph (i),
(ii) or (iii) above, Definitive Notes shall be issued in such names as the
Depositary shall instruct the Trustee. Global Notes also may be exchanged or
replaced, in whole or in part, as provided in Sections 2.08 and 2.11 hereof.
Every Note authenticated and delivered in exchange for, or in lieu of, a Global
Note or any portion thereof, pursuant to this Section 2.07 or Section 2.08 or
2.11 hereof, shall be authenticated and delivered in the form of, and shall be,
a Global Note. A Global Note may not be exchanged for another Note other than as
provided in this Section 2.07(a), however, beneficial interests in a Global Note
may be transferred and exchanged as provided in Section 2.07(b), (c), or (f)
hereof.
32
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Regulation S Global Note may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Beneficial interests in any Unrestricted Global Note
may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.07(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.07(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either:
(A) both:
(1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause
to be credited a beneficial interest in another Global Note in an
amount equal to the beneficial interest to be transferred or
exchanged; and
(2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant
account to be credited with such increase; or
(B) both:
(1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary
33
to cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged; and
(2) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or
exchange referred to in Section 2.07(b)(i) above.
provided, that in no event shall Definitive Notes be issued upon the transfer or
exchange of beneficial interests in the Legended Regulation S Global Note prior
to the expiration of the Restricted Period and the receipt by the Registrar of
any certificates required pursuant to Rule 903 under the Securities Act.
Upon consummation of an Exchange Offer by the Company in accordance with
Section 2.07(f) hereof, the requirements of this Section 2.07(b)(ii) shall be
deemed to have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the Holder of such
beneficial interests in the Restricted Global Notes. Upon satisfaction of all of
the requirements for transfer or exchange of beneficial interests in Global
Notes contained in this Indenture and the Notes or otherwise applicable under
the Securities Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.07(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.07(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in an Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note
34
if the exchange or transfer complies with the requirements of Section
2.07(b)(ii) above and;
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (i) a
Broker Dealer, (ii) a Person participating in the distribution of the
Exchange Notes or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and in each such case set forth in this subparagraph (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
35
accordance with Section 2.02 hereof, the Trustee shall authenticate one or
more Unrestricted Global Notes in an aggregate principal amount equal to
the aggregate principal amount of beneficial interests transferred pursuant
to subparagraph (B) or (D) above.
(v) Transfer and Exchange of Beneficial Interests in an Unrestricted
Global Note for Beneficial Interests in a Restricted Global Note.
Beneficial interest in an Unrestricted Global Note cannot be exchanged for,
or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
36
(F) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.07(h) hereof,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.07(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are
so registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.07(c)(i)
shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(ii) Beneficial Interests in Legended Regulation S Global Note to
Definitive Notes. Notwithstanding Sections 2.07(c)(i)(A) and (C) hereof, a
beneficial interest in the Legended Regulation S Global Note may not be
exchanged for a Definitive Note or transferred to a Person who takes
delivery thereof in the form of a Definitive Note prior to (A) the
expiration of the Restricted Period and (B) the receipt by the Registrar of
any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the
Securities Act; except in the case of a transfer pursuant to an exemption
from the registration requirements of the Securities Act other than Rule
903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Notes to Unrestrictive
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a Broker
Dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of
the Company.
37
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for an Unrestricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the from
of an Unrestricted Definitive Note, a certificate from such
holder in the form of Exhibit B hereof, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.07(b)(ii) hereof, the Trustee will cause
the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.07(h) hereof, and the Company will
execute and the Trustee will authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.07(c)(iv) will be registered in such
name or names and in such authorized denomination or denominations as the
holder of such beneficial interest requests through instructions to the
Registrar from or through the Depositary and the Participant or Indirect
38
Participant. The Trustee will deliver such Definitive Notes to the Persons
in whose names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.07(c)(iv)
will not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note,
then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(F) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
39
the Trustee will cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause
(B) above, the 144A Global Note, in the case of clause (C) above, the
Regulation S Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
in the form of a beneficial interest in an Unrestricted Global Note only
if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of
Exhibit C hereof, including the certifications in item (1)(c)
thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof
in the form of a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Applicable Procedures so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or transfer is
in
40
compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required
in order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.07(d)(ii), the Trustee will cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount at
maturity of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee will cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount at
maturity of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to clauses (ii)(B), (ii)(D) or (iii) above at a
time when an Unrestricted Global Note has not yet been issued, the Company will
issue and, upon receipt of an Authentication Order in accordance with Section
2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes
in an aggregate principal amount equal to the principal amount of Definitive
Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.07(e), the Registrar will register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.07(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following documentation:
(A) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
41
(B) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (3) thereof;
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a Broker Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such
42
Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests, an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note. Upon receipt of a request to register such a transfer, the Registrar
shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of an Exchange Offer in accordance
with the Registration Rights Agreement, the Company will issue and, upon receipt
of an Authentication Order in accordance with Section 2.02 hereof, the Trustee
will authenticate:
(i) one or more Unrestricted Global Notes in an aggregate principal
amount equal to the principal amount of the beneficial interests in the
Restricted Global Notes accepted for exchange in the Exchange Offer by
Persons that certify in the applicable Letters of Transmittal that (A) they
are not Broker Dealers, (B) they are not participating in the distribution
of the Exchange Notes and (C) they are not affiliates (as defined in Rule
144) of the Company; and
(ii) Unrestricted Definitive Notes in the aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted
for exchange in the Exchange Offer by Persons that certify in the
applicable Letters of Transmittal that (A) they are not Broker Dealers, (B)
they are not participating in a distribution of the Exchange Notes and (C)
they are not affiliates (as defined in Rule 144) of the Company.
Concurrently with the issuance of such Notes, the Trustee will cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate upon receipt of an Authentication Order in accordance with Section
2.02 hereof and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends will appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
43
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS NOTE (AND RELATED GUARANTEES) HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR
OF A BENEFICIAL INTEREST HEREIN,
(1) THE ACQUIRER
(A) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS
A "QUALIFIED INSTITUTIONAL BUYER" (WITHIN THE MEANING OF
RULE l44A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES
SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH
ACCOUNT; OR
(B) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT) AND
(2) AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOT OFFER,
SELL, PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL
INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
AND ONLY
(A) TO THE ISSUER,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME
EFFECTIVE UNDER THE SECURITIES ACT,
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT,
44
(D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, OR
(E) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH
(2)(E) ABOVE, THE ISSUER RESERVES THE RIGHT TO REQUIRE THE
DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE
AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE
PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS
MADE AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (c)(ii), Section 2.07(c)(iii),
Section 2.07(d)(ii), (d)(iii), Section 2.07(e)(ii), or (e)(iii) of
this Section 2.07 (and all Notes issued in exchange therefor or
substitution thereof) will not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note will bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07
OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, (3) THIS
45
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR
BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.12 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be
46
made on such Global Note by the Trustee or by the Depositary at the direction of
the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
will execute and the Trustee will authenticate Global Notes and Definitive
Notes upon receipt of an Authentication Order in accordance with Section
2.02 hereof or at the Registrar's request.
(ii) No service charge will be made to a Holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company or the Trustee may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.11, 3.06, 3.09, 4.10, 4.15 and Section 9.04
hereof).
(iii) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
will be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of transfer or
exchange.
(iv) Neither the Registrar nor the Company will be required:
(A) to issue, to register the transfer of or to exchange any
Notes during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption under Section
3.02 hereof and ending at the close of business on the day of
selection;
(B) to register the transfer of or to exchange any Note selected
for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.
(v) Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for
the purpose of receiving payment of principal of and interest on such Notes
and for all other purposes, and none of the Trustee, any Agent or the
Company shall be affected by notice to the contrary.
47
(vi) The Trustee will authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
(vii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.07 to
effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.08. Replacement Notes. If any mutilated Note is surrendered to
the Trustee or the Company and the Trustee receives evidence to its satisfaction
of the destruction, loss or theft of any Note, the Company will issue and the
Trustee, upon receipt of an Authentication Order, will authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company or the Trustee may
charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and will
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.09. Outstanding Notes. The Notes outstanding at any time are all
the Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation, those reductions in the interest in a Global
Note effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.09 as not outstanding. Except as set forth in
Section 2.10 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note; however, Notes held by the
Company or a Subsidiary of the Company shall be deemed to be not outstanding for
purposes of Section 3.07(a) hereof.
If a Note is replaced pursuant to Section 2.08 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a Redemption Date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes will
be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.10. Treasury Notes. In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, waiver or
consent, Notes owned by the Company or any Guarantor, or by any Person
48
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any Guarantor, will be considered as though
not outstanding, except that for the purposes of determining whether the Trustee
will be protected in relying on any such direction, waiver or consent, only
Notes that a Responsible Officer of the Trustee knows are so owned will be so
disregarded.
Section 2.11. Temporary Notes. Until certificates representing Notes are
ready for delivery, the Company may prepare and the Trustee, upon receipt of an
Authentication Order, will authenticate temporary Notes. Temporary Notes will be
substantially in the form of certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as may be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company will prepare
and the Trustee will authenticate final-form Definitive Notes in exchange for
temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this
Indenture.
Section 2.12. Cancellation. The Company at any time may deliver Notes to
the Trustee for cancellation. The Registrar and Paying Agent will forward to the
Trustee any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else will cancel all Notes surrendered for
registration of transfer, exchange, payment, redemption, repurchase, replacement
or cancellation and will destroy canceled Notes (subject to the record retention
requirement of the Exchange Act). Upon the Company's written request,
certification of the destruction of all canceled Notes will be delivered to the
Company. The Company may not issue new Notes to replace Notes that it has paid
or that have been delivered to the Trustee for cancellation.
Section 2.13. Defaulted Interest. If the Company defaults in a payment of
interest on the Notes, it will pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders on a subsequent special record date, in each case at the
rate provided in the Notes and in Section 4.01 hereof. The Company will notify
the Trustee in writing of the amount of defaulted interest proposed to be paid
on each Note and the date of the proposed payment. The Company will fix or cause
to be fixed each such special record date and payment date; provided that no
such special record date may be less than 10 days prior to the related payment
date for such defaulted interest. At least 15 days before the special record
date, the Company (or, upon the written request of the Company, the Trustee in
the name and at the expense of the Company) will mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
Section 2.14. CUSIP Numbers. The Company in issuing the Notes may use one
or more "CUSIP" numbers (if then generally in use), and, if so, the
49
Trustee shall use "CUSIP" numbers in notices of repurchase as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a repurchase and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such repurchase
shall not be affected by any defect in or omission of such numbers. The Company
shall promptly notify the Trustee in writing of any change in the "CUSIP"
numbers.
Section 2.15. Ranking; Security for and Parity of Notes. All Notes issued
and outstanding hereunder rank on a parity with each other Note, and each Note
shall be secured equally and ratably by this Indenture and the Collateral
Documents with each other Note, without preference, priority or distinction of
any one thereof over any other by reason of difference in time of issuance or
otherwise, and each Note shall be entitled to the same benefits and security in
this Indenture and the Collateral Documents as each other Note. The Company
shall be responsible for the continued maintenance, priority and perfection of
such security interest as set forth in the Collateral Documents.
ARTICLE 3
Redemption and Prepayment
Section 3.01. Notices to Trustee. If the Company elects to redeem Notes
pursuant to the optional redemption provisions of Section 3.07 hereof, it must
furnish to the Trustee, at least 45 days but not more than 60 days before a
Redemption Date, an Officers' Certificate setting forth:
(a) the clause of this Indenture pursuant to which the redemption shall
occur;
(b) the Redemption Date;
(c) the principal amount of Notes to be redeemed; and
(d) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed or Purchased. If less than
all of the Notes are to be redeemed or purchased in an offer to purchase at any
time, the Trustee will select Notes for redemption or purchase in compliance
with the requirements of the principal securities exchange, if any, on which the
Notes are listed, or if the Notes are not listed on a securities exchange, by
lot or by such other method as the Trustee shall deem to be fair and
appropriate.
In the event of partial redemption or purchase by lot, the particular Notes
to be redeemed or purchased will be selected, unless otherwise provided herein,
not less than 30 nor more than 60 days prior to the redemption or purchase date
by
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the Trustee from the outstanding Notes not previously called for redemption or
purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in minimum amounts of
$100,000 and whole multiples of $1,000 in excess thereof; except that if all of
the Notes of a Holder are to be redeemed or purchased, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000, shall be
redeemed or purchased. Except as provided in the preceding sentence, provisions
of this Indenture that apply to Notes called for redemption or purchase also
apply to portions of Notes called for redemption or purchase.
Section 3.03. Notice of Redemption. Subject to the provisions of Section
3.09 hereof, at least 30 days but not more than 60 days before a Redemption
Date, the Company will mail or cause to be mailed, by first class mail, a notice
of redemption to each Holder whose Notes are to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior to
a Redemption Date if the notice is issued in connection with a defeasance of the
Notes or a satisfaction and discharge of this Indenture pursuant to Articles 8
or 12 hereof.
The notice will identify the Notes to be redeemed and will state:
(a) the Redemption Date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the Redemption Date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion will be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant to
which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Notes.
51
At the Company's request, the Trustee will give the notice of redemption in
the Company's name and at its expense; provided, however, that the Company has
delivered to the Trustee, at least 45 days prior to the Redemption Date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.04. Effect of Notice of Redemption. Once notice of redemption is
mailed in accordance with Section 3.03 hereof, Notes called for redemption
become irrevocably due and payable on the Redemption Date at the redemption
price. A notice of redemption may not be conditional.
Section 3.05. Deposit of Redemption or Purchase Price. On or before the
Business Day prior to the redemption or purchase date, the Company will deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
or purchase price of and accrued interest on all Notes to be redeemed or
purchased on that date. The Trustee or the Paying Agent will promptly return to
the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption or purchase
price of, and accrued interest on, all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption or purchase date, interest will cease to accrue on the
Notes or the portions of Notes called for redemption or purchase. If a Note is
redeemed or purchased on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date and no additional interest will be paid to Holders
whose Notes are redeemed. If any Note called for redemption or purchase is not
so paid upon surrender for redemption or purchase because of the failure of the
Company to comply with the preceding paragraph, interest shall be paid on the
unpaid principal, from the redemption or purchase date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.06. Notes Redeemed or Purchased in Part. Upon surrender of a Note
that is redeemed or purchased in part, the Company will issue and, upon receipt
of an Authentication Order, the Trustee will authenticate for the Holder at the
expense of the Company a new Note equal in principal amount to the unredeemed or
unpurchased portion of the Note surrendered.
Section 3.07. Optional Redemption. (a) At any time prior to December 15,
2009, the Company may on any one or more occasions redeem up to 35% of the
aggregate principal amount of Notes issued under this Indenture at a redemption
price of 111% of the principal amount thereof, plus accrued and unpaid interest
to the Redemption Date, using cash in an amount up to the amount of the net cash
proceeds of a sale of common Equity Interests (other than Disqualified Stock) of
the Company; provided that:
52
(i) at least 65% of the aggregate principal amount of Notes originally
issued under this Indenture (excluding Notes held by the Company and its
Subsidiaries) remains outstanding immediately after the occurrence of such
redemption; and
(ii) the redemption occurs within 90 days of the date of the closing
of such sale of Equity Interests.
(b) At any time prior to December 15, 2010, the Company may also redeem all
or a part of the Notes upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to 100% of the principal amount of Notes redeemed plus
the Applicable Premium as of, and accrued and unpaid interest and Additional
Interest, if any, to the Redemption Date, subject to the rights of Holders of
Notes on the relevant record date to receive interest due on the relevant
interest payment date.
(c) On or after December 15, 2010, the Company may redeem all or a part of
the Notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest on the Notes redeemed, to the applicable Redemption
Date, if redeemed during the twelve-month period beginning on of the years
indicated below, subject to the rights of Holders of Notes on the relevant
record date to receive interest on the relevant interest payment date:
YEAR PERCENTAGE
---- ----------
2010 ................ 105.500%
2011 ................ 102.750%
2012 and thereafter.. 100.000%
(d) Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable Redemption Date.
(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof; provided that, in the case
of a redemption pursuant to Section 3.07 for the purposes of any notice required
by Section 3.01 or 3.02, the redemption price may be stated to be "the
redemption price determined in accordance with Section 3.07(b)" or "the
redemption price determined in accordance with Section 3.07(c)", as the case
maybe.
Section 3.08. Mandatory Redemption. The Company is not required to make
mandatory redemption or sinking fund payments with respect to the Notes. The
Company may at any time and from time to time purchase Notes in the open market
or otherwise.
53
Section 3.09. Offer to Purchase by Application of Excess Proceeds. In the
event that, pursuant to Section 4.10 hereof, the Company is required to commence
an offer to all Holders to purchase Notes (an "ASSET SALE OFFER"), it will
follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets. The Asset Sale Offer will remain open for
a period of at least 20 Business Days following its commencement and not more
than 30 Business Days, except to the extent that a longer period is required by
applicable law (the "OFFER PERIOD"). No later than three Business Days after the
termination of the Offer Period (the "PURCHASE DATE"), the Company will apply
all Excess Proceeds (the "OFFER AMOUNT") to the purchase of Notes and such other
pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than
the Offer Amount has been tendered, all Notes and such other pari passu
Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes
so purchased will be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest will
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest will be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to each of the Holders, with a copy to the Trustee.
The notice will contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Asset Sale Offer. The notice, which will
govern the terms of the Asset Sale Offer, will state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.09
and Section 4.10 hereof and the length of time the Asset Sale Offer will remain
open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment will continue to
accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer will cease to accrue
interest on after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may elect to have Notes purchased in integral multiples of $1,000
only; provided that any unpurchased balance is in a minimum denomination of
$100,000 or an integral multiple of $1,000 in excess of $100,000;
54
(f) that Holders electing to have Notes purchased pursuant to any Asset
Sale Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" attached to the Notes completed, or
transfer by book-entry transfer, to the Company, a Depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three Business Days before the Purchase Date;
(g) that Holders will be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives, not
later than the close of business on the second Business Day preceding the
expiration of the Offer Period, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the Note
the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes and other pari passu
Indebtedness surrendered by holders thereof exceeds the Offer Amount, the
Company will select the Notes and other pari passu Indebtedness to be purchased
on a pro rata basis based on the principal amount of Notes and such other pari
passu Indebtedness surrendered (with such adjustments as may be deemed
appropriate by the Company so that only Notes in minimum denominations of
$100,000, and integral multiples of $1,000 in excess thereof, will be
purchased); and
(i) that Holders whose Notes were purchased only in part will be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officers' Certificate stating that such Notes or portions
thereof were accepted for payment by the Company in accordance with the terms of
this Section 3.09. The Company, the Depositary or the Paying Agent, as the case
may be, will promptly (but in any case not later than five days after the
Purchase Date) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Company
for purchase, and the Company will promptly issue a new Note, and the Trustee,
upon written request from the Company, will authenticate and mail or deliver (or
cause to be transferred by book entry) such new Note to such Holder, in a
principal amount equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company will publicly announce the results of the Asset Sale
Offer on the Purchase Date.
55
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
Section 3.10. Redemption for Changes in Withholding Tax. The Company may at
its option at any time, upon giving not less than 30 nor more than 60 days'
notice to Holders, redeem all (but not less than all) of the Notes then
outstanding, at 100% of the aggregate principal amount thereof, plus accrued and
unpaid interest and Additional Amounts, if any, to such Redemption Date (subject
to the right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date), in the event the Company
has become, or would become, obligated to pay, on the next date on which any
amount would be payable with respect to such Notes, any Additional Amounts in
excess of the Additional Amounts the Company would be obligated to pay if
payments made on the Notes were subject to withholding or deduction of Mexican
taxes at a rate of 4.9 percent ("EXCESS ADDITIONAL AMOUNTS") as a result of:
(a) any change in, or amendment to, the laws (including any regulations or
rulings promulgated thereunder) of a Taxing Jurisdiction; or
(b) any change in, or amendment to, any official position regarding the
application, administration or interpretation of such laws, regulations or
rulings (each of (a) and (b) a "CHANGE OF TAX LAW"),
if (1) the above-mentioned change or amendment is announced on or after the
date hereof (or, if the relevant Tax Jurisdiction has changed since the date of
this Indenture, the date on which the then current Tax Jurisdiction became the
applicable Tax Jurisdiction under this Indenture), (2) such obligation to pay
Excess Additional Amounts would have arisen absent a further issuance of the
Notes pursuant to this Indenture, and (3) such obligation to pay Excess
Additional Amounts cannot be avoided by the Company taking reasonable measures
available to it (including, without limitation, changing the jurisdiction from
or through which payments are made).
Notwithstanding the foregoing, no such notice of redemption may be given
earlier than 60 days prior to the earliest date on which the Company would be
obligated to pay such Excess Additional Amounts.
Prior to the giving of any notice of redemption of the Notes pursuant to
the foregoing, the Company will deliver to the Trustee (1) an Officers'
Certificate stating that the conditions precedent to the right of the Company to
so redeem have occurred and that the obligation to pay Excess Additional Amounts
cannot be avoided by the Company by taking commercially reasonable measures
available to it, and (2) a written opinion of independent legal counsel of
recognized standing in the relevant Tax Jurisdiction addressed to the Trustee to
the effect that the Company has become obligated to pay Excess Additional
Amounts as a result of a change or amendment described above.
56
The foregoing provisions will apply mutatis mutandis to any successor
Person to the Company after such successor Person becomes a party to this
Indenture.
For so long as the Notes are listed and admitted for trading on the Euro
MTF of the Luxembourg Stock Exchange, and to the extent the rules of the
Luxembourg Stock Exchange so require, the Company will provide a copy of any
such notice to the Luxembourg Stock Exchange. Notices of redemption will be
given in accordance with the provisions set forth under Section 3.03.
ARTICLE 4
Covenants
Section 4.01. Payment of Notes. The Company will pay or cause to be paid
the principal of, premium, if any, and interest on, the Notes on the dates and
in the manner provided in the Notes. Principal, premium, if any, and interest
will be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary thereof, holds as of 10:00 a.m. New York City Time on
the due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and interest at the
rate equal to 2% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful.
Section 4.02. Maintenance of Office or Agency. The Company will maintain in
the Borough of Manhattan, the City of New York, an office or agency (which may
be an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or for
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company fails to maintain any such required
office or agency or fails 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.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission will in any manner relieve the Company of
its obligation to maintain an office or agency in the Borough of Manhattan, the
City of New York for such purposes. The Company will give
57
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
the initial office or agency of the Company in accordance with Section 2.03
hereof.
Section 4.03. Reports. (a) Whether or not required by the rules and
regulations of the SEC, so long as any Notes are outstanding, the Company will
furnish to the Holders of Notes, or cause the Trustee to furnish to the Holders
of Notes within 180 days following the end of each fiscal year and 60 days
following the end of each successive fiscal quarter, as the case may be (or, if
shorter, within the time periods (included extensions thereof) specified in the
SEC's rules and regulations), all quarterly and annual financial information
that would be required to be contained in a filing with the SEC on (1) Form 6-K
(provided that the Company shall be deemed to be required to file (a) such Forms
for each of the first three fiscal quarters for each fiscal year (including
quarterly financial statements) and (b) the information required to be filed
with the SEC on Form 8-K, if applicable, for changes in control, acquisition or
disposition of assets, bankruptcy or receivership and changes in the Company's
certifying accountants) and (2) Form 20-F as if the Company were required to
file such Forms, including an "Operating Results and Condition" disclosure
section and, with respect to the annual information only, a report on the annual
financial statements by the Company's certified independent accountants and,
with respect to quarterly information, a review of the quarterly financial
statements by the Company's certified independent accountants.
Whether or not required by the SEC, the Company will file a copy of all of
the information and reports referred to in clauses (1) and (2) above with the
SEC for public availability within the time periods specified in the SEC's rules
and regulations (unless the SEC will not accept such a filing) and make such
information available to the Holders, securities analysts and prospective
investors upon request.
The Company will make the information and reports referred to in this
Section 4.03 available to securities analysts and prospective investors upon
request.
For so long as the Notes are listed on the Euro MTF, the alternative market
of the Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange
so require, the above information will also be made available in Luxembourg
through the offices of Deutsche Bank Luxembourg S.A., the Luxembourg Listing
Agent.
In addition, for so long as any Notes remain outstanding and are not freely
transferable under the Securities Act, the Company will make available to any
Holder or Beneficial Owner of an interest in the Notes, or to any prospective
58
purchasers designated by such Holder or Beneficial Owner, upon request of such
Holder or Beneficial Owner, and in addition to the other information referred to
under this Section 4.03, the information required to be delivered under
paragraph (d)(4) of Rule 144A unless, at the time of such request, the Company
is subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act.
(b) If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
paragraph (a) of this Section 4.03 will include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in the section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations," of the financial condition and
results of operations of the Company and its Restricted Subsidiaries separate
from the financial condition and results of operations of the Unrestricted
Subsidiaries of the Company.
(c) Delivery of such reports, information and documents hereunder to the
Trustee is for informational purposes only, and the Trustee's receipt of such
reports, information and documents shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to conclusively rely exclusively on an
Officers' Certificate).
Section 4.04. Compliance Certificate. (a) The Company shall deliver to the
Trustee: (1) within 120 days after the end of each fiscal year an Officers'
Certificate stating that the Company has fulfilled its obligations under this
Indenture or, if there has been a Default or Event of Default, specifying the
Default or Event of Default and its nature and status; and (2) as soon as
possible and in any event within 30 days after the Company becomes aware or
should reasonably become aware of the occurrence of a Default or an Event of
Default, an Officers' Certificate setting forth the details of the Default or
Event of Default, and the action which the Company proposes to take with respect
thereto.
(b) The year-end financial statements delivered pursuant to Section 4.03
above shall be accompanied by a written statement of the Company's independent
public accountants (who shall be a firm of established international reputation)
that in making the examination necessary for certification of such financial
statements, nothing has come to their attention that would lead them to believe
that the Company has violated any provisions of Article 4 or Article 5 hereof
or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation.
(c) So long as any of the Notes are outstanding, the Company will deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
59
Default and what action the Company is taking or proposes to take with respect
thereto.
Section 4.05. Taxes. The Company will pay, and will cause each of its
Restricted Subsidiaries to pay, prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested in good faith
and by appropriate proceedings or where the failure to effect such payment is
not adverse in any material respect to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws. The Company and each of the
Guarantors covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted, now
or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Company and each of the Guarantors (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, by resort to any such
law, 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 has been enacted.
Section 4.07. Restricted Payments. (a) The Company will not, and will not
cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Company or any
of its Restricted Subsidiaries) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company and other than
dividends or distributions payable to the Company or a Restricted
Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests (a) of the
Company or any direct or indirect parent of the Company or (b) of any
Restricted Subsidiary held by an Affiliate of the Company (other than a
Restricted Subsidiary), including the exercise of any option to exchange
any Equity Interests (other than into Equity Interests of the Company that
are not Disqualified Stock);
(iii) make any payment on or with respect to, or purchase, redeem,
defease, prepay, decrease or otherwise acquire or retire for value any
Indebtedness of the Company or any Restricted Subsidiary that is
60
subordinated in right of payment to the Notes or the applicable Guarantee,
except a payment of interest or principal at the Stated Maturity thereof;
or
(iv) make any Restricted Investment,
(all such payments and other actions set forth in these clauses (i) through
(iv) above being collectively referred to as "RESTRICTED PAYMENTS"),
unless, at the time of and after giving effect to such Restricted Payment:
(A) no Default or Event of Default has occurred and is continuing
or would occur as a consequence of such Restricted Payment;
(B) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable two-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Leverage Ratio test set forth in Section 4.09(a)
hereof;
(C) such Restricted Payment, together with the aggregate amount
of all other Restricted Payments made by the Company and its
Restricted Subsidiaries since the date of this Indenture (excluding
Restricted Payments permitted by clauses (ii), (iii) and (vi) of
paragraph (b) of this Section 4.07), is less than the sum, without
duplication of:
(1) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) from the beginning of
the first fiscal quarter commencing after the date of this
Indenture to the end of the Company's most recently ended fiscal
quarter for which financial statements are publicly available at
the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, minus 100% of the amount of
such deficit); plus
(2) 100% of the aggregate net cash proceeds received by the
Company since the date of this Indenture as a contribution to its
common equity capital or from the issue or sale of Equity
Interests of the Company (other than Disqualified Stock) or from
the issue or sale of convertible or exchangeable Disqualified
Stock or convertible or exchangeable debt securities of the
Company that have been converted into or exchanged for such
Equity Interests (other than Equity Interests (or Disqualified
Stock or debt securities) sold or issued to a
61
Subsidiary of the Company or Equity Interests of the Company sold
or issued pursuant to irrevocable commitments made prior to the
date of this Indenture); plus
(3) to the extent that one or more Restricted Investments
that were made after the date of this Indenture is pursuant to
this first paragraph are sold for cash or otherwise liquidated or
repaid for cash or otherwise results in a return on such
Investments in cash, through dividends, interest, distributions
or otherwise, the lesser of (i) the cash return of capital with
respect to all such Restricted Investments (less the cost of
disposition, if any) and (ii) the initial amount of all such
Restricted Investments, in each case taken as a whole; plus
(4) to the extent that any Unrestricted Subsidiary of the
Company designated as such after the date of this Indenture is
redesignated as a Restricted Subsidiary after the date of this
Indenture, the lesser of (i) the Fair Market Value of the
Company's Investment in such Subsidiary as of the date of such
redesignation or (ii) such Fair Market Value as of the date on
which such Subsidiary was originally designated as an
Unrestricted Subsidiary after the date of this Indenture,
provided, however, that the foregoing sum shall not exceed, in
the case of any such Unrestricted Subsidiary, the amount of
Restricted Investments previously made (and treated as a
Restricted Payment under this clause (3)) by the Company or any
Restricted Subsidiary in such Person.
(b) The provisions of Section 4.07(a) hereof will not prohibit:
(i) the payment of any dividend or the consummation of any irrevocable
redemption within 60 days after the date of declaration of the dividend or
giving of the redemption notice, as the case may be, if at the date of
declaration or notice, the dividend or redemption payment would have
complied with the provisions of this Indenture;
(ii) so long as no Default has occurred and is continuing or would be
caused thereby, the making of any Restricted Payment in exchange for, or
out of the net cash proceeds of the substantially concurrent sale (other
than to a Subsidiary of the Company) of, Equity Interests of the Company
(other than Disqualified Stock) or from the substantially concurrent
contribution of common equity capital to the Company; provided that the
amount of any such net cash proceeds that are
62
utilized for any such Restricted Payment will be excluded from clause
(a)(iv)(C)(2) hereof;
(iii) so long as no Default has occurred and is continuing or would be
caused thereby, the repurchase, redemption, defeasance or other acquisition
or retirement for value of Indebtedness of the Company or any Guarantor
with the net cash proceeds from a substantially concurrent incurrence of
Permitted Refinancing Indebtedness;
(iv) (A) to the extent required by law, or by the by laws of any
Restricted Subsidiary in effect on the date of this Indenture, or (B) so
long as no Default has occurred and is continuing or would be caused
thereby and, in the case of this clause (B), provided that no intercompany
notes are outstanding pursuant to clause (1) of the definition of
"Permitted Investments," the payment of any dividend (or, in the case of
any partnership or limited liability company, any similar distribution) by
a Restricted Subsidiary of the Company to the holders of its Equity
Interests on a pro rata basis;
(v) so long as no Default has occurred and is continuing or would be
caused thereby, the declaration and payment of regularly scheduled or
accrued dividends to holders of any class or series of Disqualified Stock
of the Company or any Restricted Subsidiary of the Company issued on or
after the date of this Indenture in accordance with the Leverage Ratio test
described in Section 4.09 hereof;
(vi) the repurchase of Capital Stock deemed to occur upon the exercise
of options or warrants if such Capital Stock represents all or a portion of
the exercise price thereof or payments in lieu of the issuance of
fractional shares of Capital Stock; and
(vii) other Restricted Payments in an amount not to exceed $12.5
million since the date of this Indenture.
The amount of all Restricted Payments (other than cash and Indebtedness)
will be the Fair Market Value on the date of the Restricted Payment of the
asset(s) or securities proposed to be transferred or issued by the Company or
such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. The Fair Market Value of any assets or securities that are required to
be valued by this Section 4.07 will be determined by the Board of Directors of
the Company whose resolution with respect thereto shall be delivered to the
Trustee. The Board of Directors' determination must be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
international standing if the Fair Market Value exceeds $6.0 million.
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries. (a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective
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any consensual encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its Capital Stock
to the Company or any of its Restricted Subsidiaries or with respect to any
other interest or participation in, or measured by, its profits, or pay any
indebtedness owed to the Company or any of its Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its Restricted
Subsidiaries;
(iii) pay any Indebtedness owed to the Company or any Restricted
Subsidiary; or
(iv) sell, lease or transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) hereof will not apply to
encumbrances or restrictions existing under or by reason of:
(i) agreements governing Existing Indebtedness as in effect on the
date of this Indenture and any amendments, restatements, modifications,
renewals, supplements, refundings, replacements or refinancings of those
agreements; provided that the amendments, restatements, modifications,
renewals, supplements, refundings, replacements or refinancings are not
materially more restrictive, taken as a whole, with respect to such
dividend and other payment restrictions than those contained in those
agreements on the date of this Indenture;
(ii) this Indenture, the Notes and the Note Guarantees;
(iii) applicable law, rule, regulation or order or the applicable
by-laws of the Company or any of its Restricted Subsidiaries as in effect
on the date of this Indenture;
(iv) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness or Capital Stock was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so acquired;
provided that, in the case of Indebtedness, such Indebtedness was permitted
by the terms of this Indenture to be incurred;
(v) customary non-assignment provisions in contracts and licenses
entered into in the ordinary course of business;
64
(vi) purchase money obligations for property acquired in the ordinary
course of business and Capital Lease Obligations that impose restrictions
on the property purchased or leased of the nature described in clause (iv)
of Section 4.08(a) hereof;
(vii) any agreement for the sale or other disposition of all or
substantially all the stock or assets of a Restricted Subsidiary that
restricts distributions by that Restricted Subsidiary pending the sale or
other disposition;
(viii) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness
being refinanced;
(ix) Liens permitted to be incurred under the provisions of Section
4.12 hereof that limit the right of the debtor to dispose of the assets
subject to such Liens;
(x) customary provisions relating to assets or properties in which the
Company has Investments in joint ventures, provided that the Company was
allowed to make such Investment pursuant to the other terms of this
Indenture; and
(xi) customary provisions existing in the documentation governing any
Permitted Securitization.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "INCUR") any Indebtedness (including Acquired Debt), and the
Company will not issue any Disqualified Stock and will not permit any of its
Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that the Company may incur Indebtedness (including Acquired Debt) or
issue Disqualified Stock, and the Guarantors may incur Indebtedness (including
Acquired Debt) or issue preferred stock, if the Leverage Ratio, as of the
Calculation Date, would have been no greater than (i) 4.25 to 1 in the case of
any incurrence or issuance on or before December 31, 2007, (ii) 4.00 to 1 in the
case of any incurrence or issuance on or after January 1, 2008 and on or before
December 31, 2009 and (iii) 3.50 to 1 in the case of any incurrence or issuance
on or after January 1, 2010, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the Disqualified Stock or the preferred stock
had been issued, as the case may be, as of the Calculation Date.
65
(b) The provisions of Section 4.09(a) hereof will not prohibit, so long as
no Default or Event of Default has occurred and is continuing, the incurrence of
any of the following items of Indebtedness (collectively, "PERMITTED DEBT"):
(i) the incurrence by the Company and its Restricted Subsidiaries of
the Existing Indebtedness;
(ii) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes (other than Additional Notes) and the related Note
Guarantees to be issued on the date of this Indenture (including the
Additional Notes);
(iii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
financings or purchase money obligations, in each case, incurred for the
purpose of financing all or any part of the purchase price (whether in an
asset acquisition or acquisition of Equity Interests) or cost of design,
construction, installation or improvement of property, plant or equipment
used in the Permitted Business of the Company or any of its Restricted
Subsidiaries, in an aggregate principal amount, including all Permitted
Refinancing Indebtedness incurred to renew, refund, refinance, replace,
defease or discharge any Indebtedness incurred pursuant to this clause
(iii), not to exceed $10.0 million at any time outstanding;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to renew, refund, refinance, replace,
defease or discharge any Indebtedness (other than intercompany
Indebtedness) that was permitted by this Indenture to be incurred under the
first paragraph of this covenant or clauses (i), (ii) or (iii) of this
Section 4.09(b);
(v) the incurrence by the Company or any of its Wholly-Owned
Restricted Subsidiaries of intercompany Indebtedness between or among the
Company and any of its Wholly-Owned Restricted Subsidiaries; provided,
however, that:
(A) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all obligations with respect to the
Notes, in the case of the Company, or the Note Guarantee, in the case
of a Guarantor; and
(B) (1) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other
than the Company or a Wholly-Owned Restricted Subsidiary of the
Company and (2) any sale or other transfer of any such Indebtedness to
a Person that is not either the Company
66
or a Wholly-Owned Restricted Subsidiary of the Company, will be
deemed, in each case, to constitute an incurrence of such Indebtedness
by the Company or such Restricted Subsidiary, as the case may be, not
permitted by this clause (v);
(vi) the issuance by any of the Company's Wholly-Owned Restricted
Subsidiaries to the Company or to any of its Wholly-Owned Restricted
Subsidiaries that is a Guarantor of shares of preferred stock; provided,
however, that:
(A) any subsequent issuance or transfer of Equity Interests that
results in any such preferred stock being held by a Person other than
the Company or a Wholly-Owned Restricted Subsidiary of the Company
that is a Guarantor;
(B) any sale or other transfer of any such preferred stock to a
Person that is not either the Company or a Wholly-Owned Restricted
Subsidiary of the Company that is a Guarantor, and
(C) will be deemed, in each case, to constitute an issuance of
such preferred stock by such Restricted Subsidiary not permitted by
this clause (vi);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations for the purpose of managing the
Company's (or any Restricted Subsidiary's) exposure to fluctuations in
interest rates with respect to Indebtedness permitted to be Incurred by the
Company pursuant to this Indenture or protecting the Company (or its
Restricted Subsidiaries) against currency fluctuations in the ordinary
course of business and not for speculative purposes;
(viii) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company that
was permitted to be incurred by another provision of this Section 4.09;
provided that if the Indebtedness being guaranteed is subordinated to or
pari passu with the Notes, then the Guarantee shall be subordinated or pari
passu, as applicable, to the same extent as the Indebtedness guaranteed;
(ix) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of business in
respect of workers' compensation claims or self-insurance, or other
Indebtedness with respect to reimbursement type obligations regarding
workers' compensation claims;
67
(x) the incurrence by the Company or any Restricted Subsidiary of
Indebtedness consisting of performance and other similar bonds and
reimbursement obligations Incurred by the Company or any Restricted
Subsidiary securing the performance of contractual, franchise, concession
or license obligations of the Company or a Restricted Subsidiary;
(xi) Attributable Debt with Respect to a Sale and Leaseback
Transaction to the extent such Sale and Leaseback Transaction complies with
the provisions under Section 4.20;
(xii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business provided, however, that such
Indebtedness is extinguished within five Business Days of incurrence;
(xiii) Indebtedness of the Company, to the extent the net proceeds
thereof in their entirety are (i) used solely to purchase Notes tendered in
a Change of Control Offer or (ii) concurrently deposited to defease the
Notes as described under Article 12;
(xiv) Indebtedness consisting of (i) the financing of insurance
premiums or (ii) take or pay obligations in supply agreements, in each case
in the ordinary course of business; and
(xv) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount at
any time outstanding, including all Permitted Refinancing Indebtedness
incurred to renew, refund, refinance, replace, defease or discharge any
Indebtedness incurred pursuant to this clause (xv), but excluding the
indebtedness permitted by clauses (i) through (xiv), not to exceed $10.0
million.
The Company will not incur, and will not permit any Guarantor to incur, any
Indebtedness (including Permitted Debt) that is contractually subordinated in
right of payment to any other Indebtedness of the Company or such Guarantor
unless such Indebtedness is also contractually subordinated in right of payment
to the Notes and the applicable Note Guarantee on substantially identical terms.
For purposes of determining compliance with this Section 4.09, in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xv) above or is
entitled to be incurred pursuant to Section 4.09 hereof, the Company will be
permitted to classify such item of Indebtedness on the date of its incurrence,
or later reclassify all or a portion of such item of Indebtedness, in any manner
that complies with this Section 4.09. The accrual of interest, the accretion or
amortization of original issue discount, the payment of interest on any
68
Indebtedness in the form of additional Indebtedness with the same terms, the
reclassification of preferred stock as Indebtedness due to a change in
accounting principles, the reclassification of accounts payable as Indebtedness
and the payment of dividends on Disqualified Stock or preferred stock of
Restricted Subsidiaries in the form of additional shares of the same class of
Disqualified Stock or preferred stock of Restricted Subsidiaries will not be
deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock
or preferred stock of Restricted Subsidiaries for purposes of this Section 4.09;
provided, in each such case, that the amount of any such accrual, accretion or
payment is included in Consolidated Interest Expense of the Company as accrued.
Notwithstanding any other provision of this Section 4.09, the maximum amount of
Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to
this Section 4.09 shall not be deemed to be exceeded solely as a result of
fluctuations in exchange rates or currency values.
The amount of any Indebtedness outstanding as of any date will be:
(A) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(B) the principal amount of the Indebtedness, in the case of any
other Indebtedness; and
(C) in respect of Indebtedness of another Person secured by a
Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of
determination; and
(2) the amount of the Indebtedness of the other Person.
For purposes of determining compliance with any U.S. dollar denominated
restriction on the incurrence of Indebtedness, the U.S. dollar equivalent
principal amount of Indebtedness denominated in a foreign currency shall be
calculated based on the relevant currency exchange rate determined as the
average daily observed currency exchange rates reported by the Federal Reserve
Bank of New York for the trailing 30 calendar day period, including the date of
incurrence, in the case of term Indebtedness, or first commitment, in the case
of revolving credit Indebtedness. The principal amount of any Indebtedness
incurred to refinance other Indebtedness, if incurred in a different currency
from the Indebtedness being refinanced, shall be calculated based on the
currency exchange rate applicable to the currencies in which such Refinancing
Indebtedness is denominated calculated based on the relevant currency exchange
rates as calculated in the first sentence of this paragraph.
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Section 4.10. Asset Sales.
Non-Collateral Asset Sales. The Company will not, and will not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale unless:
(a) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Asset Sale at least equal to the Fair Market
Value of the assets or Equity Interests issued or sold or otherwise disposed of
as determined in good faith by the Company's Board of Directors (including as to
the value of all non-cash consideration); and
(b) at least 75% of the consideration received in the Asset Sale by the
Company or such Restricted Subsidiary is in the form of cash and is received at
the time of such dispositions. For purposes of this provision, each of the
following shall be deemed to be cash:
(i) Cash Equivalents;
(ii) any liabilities, as shown on the Company's most recent
consolidated balance sheet, of the Company or any Restricted Subsidiary
(other than contingent liabilities and liabilities that are by their terms
subordinated to the Notes or any Note Guarantee) that are assumed by the
transferee of any such assets pursuant to a customary assumption agreement
in which the transferee releases the Company or such Restricted Subsidiary
from further liability;
(iii) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary into cash within 30
days following the closing of such Asset Sale, to the extent of the cash
received in that conversion; and
(iv) any Designated Non-cash Consideration received by the Company or
such Restricted Subsidiary in such Asset Sale having an aggregate fair
market value, taken together with all other Designated Non-cash
Consideration previously received pursuant to this clause (d), not to
exceed 1.0% of Total Assets at the time of the receipt of such Designated
Non-cash Consideration, with the fair market value of each item of
Designated Non-cash Consideration being measured at the time received and
without giving effect to subsequent changes in value.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Company (or the applicable Restricted Subsidiary, as the case may be) may
apply such Net Proceeds:
(a) to permanently repay any Indebtedness, other than subordinated
Indebtedness or any Indebtedness of a Subsidiary that is not a Guarantor and, if
70
the Indebtedness repaid is revolving credit Indebtedness, to correspondingly
reduce commitments with respect thereto;
(b) to acquire all or substantially all of the assets of, or any Capital
Stock of, another Permitted Business, if, after giving effect to any such
acquisition of Capital Stock, the Permitted Business is or becomes a Restricted
Subsidiary of the Company; or
(c) to purchase long-term property or assets or make a capital expenditure
used or useful in a Permitted Business.
Pending the final application of any Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.
Collateral Asset Sales. The Company will not, and will not permit any of
its Restricted Subsidiaries to, consummate a Collateral Asset Sale unless:
(a) the Company or the applicable Restricted Subsidiary, as the case may
be, receives consideration at the time of the Collateral Asset Sale at least
equal to the Fair Market Value of such Collateral;
(b) with respect to each such Collateral Asset Sale, the Company delivers
an Officers' Certificate to the Trustee dated no more than 15 days prior to the
date of consummation of the relevant Collateral Asset Sale, certifying that such
sale complies with clause (a) above;
(c) at least 75% of the consideration received for the Collateral sold by
the Company or its Restricted Subsidiaries, as the case may be, shall be in the
form of cash or Cash Equivalents received at the time of such Collateral Asset
Sale; provided that any other consideration received for such Collateral shall
constitute Collateral pursuant to appropriate Collateral Documents to which the
owner thereof is a party; and
(d) the Net Proceeds therefrom shall be paid directly by the purchaser
thereof to the Collateral Agent, as additional Collateral.
In the case of any Collateral Asset Sale, the Company, within 360 days from
the date of consummation of a Collateral Asset Sale, may apply all of the Net
Proceeds therefrom to purchase or otherwise invest in Replacement Collateral.
Any such Net Proceeds not so applied will be applied to make an Asset Sale Offer
in accordance with the terms described below under Section 3.09. In the case of
a Collateral Asset Sale that represents all or substantially all of the
Collateral, all of the Net Proceeds therefrom will be immediately applied to
make an Asset Sale Offer in accordance with Section 3.09.
Event of Loss. If the Company or a Restricted Subsidiary suffers an Event
of Loss, the Net Proceeds therefrom will be paid directly by the party providing
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such Net Proceeds to the Collateral Agent, pursuant to the applicable Collateral
Document, as additional Collateral. As any portion or all of the Net Proceeds
from any such Event of Loss are received by the Collateral Agent, the Company
may apply all of such amount or amounts, as received, together with all interest
earned thereon, individually or in combination, (1) to purchase or otherwise
invest in Replacement Collateral and (2) to restore the relevant Collateral. In
the event that the Company elects to restore the relevant Collateral pursuant to
the foregoing clause (2), within 180 days of receipt of such Net Proceeds from
an Event of Loss, the Company will:
(a) give the Trustee irrevocable written notice of such election, and
(b) enter into a binding commitment to restore such Collateral, a copy of
which will be supplied to the Trustee, and will have 360 days from the date of
such binding commitment to complete such restoration, which will be carried out
with due diligence. The Company will take such action, at its sole expense, as
may be required to ensure that the Collateral Agent has, from the date of such
purchase or investment, a first ranking Lien on such Replacement Collateral.
Any such Net Proceeds that the Company does not elect to apply within such
180 period or does not actually apply within such 360 day period will be applied
to make an Asset Sale Offer in accordance with Section 3.09.
Replacement Collateral. In the event that the Company decides pursuant to
the foregoing provisions to apply any portion of the Net Proceeds from a
Collateral Asset Sale or an Event of Loss to purchase or otherwise invest in
Replacement Collateral:
(a) the Company will deliver an Officers' Certificate to the Trustee dated
no more than 30 days prior to the date of consummation of the relevant
investment in Replacement Collateral, certifying that the purchase price for the
amount of the investment in Replacement Collateral does not exceed the Fair
Market Value of such Replacement Collateral;
(b) the Company will deliver an Officers' Certificate to the Collateral
Agent and the Trustee certifying compliance with the provisions of the indenture
and the Permitted Secured Obligations and requesting the release of such
certified purchase price to the Company (or the applicable Restricted
Subsidiary), free of the Lien of the Collateral Documents; and
(c) the Company will take such actions, at its sole expense, as may be
required to permit the Collateral Agent, pursuant to the applicable Collateral
Document, to release such Net Proceeds, together with any interest thereon, from
the Lien of the applicable Collateral Document and to ensure that the Collateral
Agent has, from the date of such purchase or investment, a first-priority Lien
on such Replacement Collateral pursuant to appropriate Collateral Documents.
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Notwithstanding anything to the contrary in the foregoing, pending
application of such consideration to acquire Replacement Collateral or restore
the relevant Collateral in an Event of Loss, any consideration received in
connection with a Collateral Asset Sale, an Event of Loss or an investment in
Replacement Collateral shall be paid directly by the purchaser thereof to the
Collateral Agent or otherwise constitute Collateral subject to a first-priority
lien in form and substance satisfactory to the Collateral Agent.
Asset Sales Offer. Any Net Proceeds from Asset Sales that are not applied
or invested as provided in the second paragraph of this Section 4.10 will
constitute "EXCESS PROCEEDS." When the aggregate amount of Excess Proceeds
exceeds $5.0 million, within five days thereof, the Company will make an Asset
Sale Offer to all Holders of Notes and all holders of other Indebtedness that is
pari passu with the Notes containing provisions similar to those set forth in
this Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets in accordance with Section 3.09 hereof to purchase the maximum
principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds at the offer price specified in the next
sentence. The offer price in any Asset Sale Offer will be equal to 100% of the
principal amount plus accrued and unpaid interest to the date of purchase, and
will be payable in cash. If any Excess Proceeds remain after consummation of an
Asset Sale Offer, the Company may use those Excess Proceeds for any purpose not
otherwise prohibited by this Indenture. If the aggregate principal amount of
Notes and other pari passu Indebtedness tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and
such other pari passu Indebtedness to be purchased on a pro rata basis. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset
at zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
Section 3.09 hereof or this Section 4.10, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under Section 3.09 hereof or this Section 4.10 by
virtue of such compliance.
Section 4.11. Transactions with Affiliates. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend or permit to exist any transaction, contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate of the Company (each an "AFFILIATE TRANSACTION"), unless:
73
(i) the Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and
(ii)
(A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $1.0 million, (i) the terms of the Affiliate Transaction are
set forth in writing; (ii) a majority of the disinterested members of
the Board of Directors of the Company have determined in good faith
that such Affiliate Transaction complies with this covenant and have
approved such Affiliate Transaction; and (iii) the Company delivers to
the trustee a resolution of the Board of Directors of the Company set
forth in an officers' evidencing the fulfillment of the condition set
out in clause (ii)(A) (ii); and
(B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $6.0 million, in addition to the conditions set out in
clause (2)(a), the Company delivers to the trustee a written opinion
to the effect that such Affiliate Transaction is fair, from a
financial standpoint, to the Company and its Restricted Subsidiaries
issued by an investment banking firm of national standing.
(b) The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.11 hereof:
(i) any reasonable and customary employment agreement, employee
benefit plan, officer or director indemnification agreement or any similar
arrangement entered into by the Company or any of its Restricted
Subsidiaries and approved by the Board of Directors;
(ii) transactions exclusively between or among the Company and/or any
of its Restricted Subsidiaries or exclusively between or among such
Restricted Subsidiaries;
(iii) payment of reasonable directors' fees to directors of the
Company and its Restricted Subsidiaries who are not otherwise Affiliates of
the Company as determined in good faith by the Company's Board of
Directors;
(iv) any issuance of Equity Interests (other than Disqualified Stock)
of the Company to Affiliates of the Company;
74
(v) Restricted Payments that do not violate Section 4.07 hereof;
(vi) loans or advances to employees in the ordinary course of business
and in accordance with the past practices of the Company or its Restricted
Subsidiaries, but in any event not to exceed U.S.$500,000 in the aggregate
at any time outstanding;
(vii) transactions with a Person that is an Affiliate of the Company
solely because the Company owns, directly or through a Restricted
Subsidiary, an Equity Interest in, or controls, such Person and no
Affiliate of the Company (other than a Restricted Subsidiary thereof) owns
any Equity Interests in, or controls, such Person except through their
ownership of the Company; and
(viii) customary and reasonable transactions in connection with a
Permitted Securitization, including Standard Securitization Undertakings.
Section 4.12. Liens. The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly create, incur, assume or
suffer to exist any Lien of any kind on any asset now owned or hereafter
acquired by the Company or any of its Restricted Subsidiaries or any proceeds,
income or profits therefrom, or assign or convey any right to receive income
therefrom, except Permitted Liens.
Section 4.13. Business Activities. The Company will not, and will not
permit any of its Restricted Subsidiaries to, engage, directly or indirectly, in
any business other than Permitted Businesses.
Section 4.14. Corporate Existence. Subject to Article 5 hereof, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect:
(a) its corporate existence, and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Subsidiary; and
(b) the rights (charter and statutory), licenses and franchises of the
Company and its Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
Section 4.15. Offer to Repurchase Upon Change of Control. (a) Upon the
occurrence of a Change of Control, the Company will make an offer (a "CHANGE
75
OF CONTROL OFFER") to each Holder to repurchase all or any part (equal to
$100,000 or integral multiples of $1,000 above $100,000) of that Holder's Notes
at a purchase price in cash equal to 101% of the aggregate principal amount of
Notes repurchased plus accrued and unpaid interest, if any, on the Notes
repurchased to the date of purchase, subject to the rights of Holders of Notes
on the relevant record date to receive interest due on the relevant interest
payment date (the "CHANGE OF CONTROL PAYMENT"). Within 10 days following the
date on which a Change of Control occurs, the Company will mail, by first-class
mail, a notice to each Holder, with a copy to the Trustee, describing the
transaction or transactions that constitute the Change of Control and stating:
(i) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes tendered will be accepted for payment;
(ii) the purchase price and the purchase date, which shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "CHANGE OF CONTROL PAYMENT DATE");
(iii) that any Note not tendered will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control
Payment Date;
(v) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" attached to the Notes
completed, or transfer by book-entry transfer, to the Paying Agent at the
address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and
(vii) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to a minimum
of $100,000 in principal amount or an integral multiple of $1,000 above
$100,000.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
76
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Section 4.15 hereof, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under this Section 4.15 by virtue of such compliance.
(b) On the Change of Control Payment Date, the Company will, to the extent
lawful:
(i) accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes properly
tendered; and
(iii) deliver or cause to be delivered to the Trustee the Notes
properly accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions of Notes being purchased by
the Company.
The Paying Agent will promptly mail (but in any case not later than five
Business Days after the Change of Control Payment Date) to each Holder of Notes
properly tendered the Change of Control Payment for such Notes, and the Trustee
will promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Note equal in principal amount to any unpurchased portion
of the Notes surrendered, if any. The Company will publicly announce the results
of the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company will not be required to make a Change of Control Offer upon a Change of
Control (i) if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 hereof and purchases all Notes properly tendered and not withdrawn
under the Change of Control Offer, or (ii) if a notice of redemption is given
pursuant to Section 3.07 hereof and the redemption described therein is effected
in accordance therewith.
Section 4.16. Additional Note Guarantees. If the Company or any of its
Restricted Subsidiaries acquires or creates another Subsidiary after the date of
this Indenture, then that newly acquired or created Subsidiary will become a
Guarantor and deliver to the Trustee execute a supplemental indenture and
deliver an Opinion of Counsel pursuant to which such Subsidiary will
unconditionally and irrevocably guarantee the Company's obligations under the
Notes within 10 Business Days of the date on which such Subsidiary was acquired
or created, provided that any Subsidiary that is designated as an Unrestricted
Subsidiary need
77
not become a Guarantor until five Business Days after as it ceases to be an
Unrestricted Subsidiary.
On or prior to January 1, 2009, the Company will cause each Excluded
Subsidiary (to the extent such Excluded Subsidiary is a Subsidiary on the date
thereof) to become a Guarantor and to execute and deliver to the Trustee a
supplemental indenture and deliver an Opinion of Counsel pursuant to which such
Subsidiary will unconditionally and irrevocably guarantee the Company's
obligations under the Notes. So long as any Excluded Subsidiary is not a
Guarantor, the Company will not permit such Excluded Subsidiary to incur any
Indebtedness (other than as otherwise constitutes Permitted Debt under Section
4.09).
The Company agrees to register such additional guarantees pursuant to the
Securities Act.
Section 4.17. Designation of Restricted and Unrestricted Subsidiaries. The
Board of Directors of the Company may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
Fair Market Value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be
deemed to be an Investment made as of the time of the designation and will
reduce the amount available for Restricted Payments under Section 4.07 hereof or
under one or more clauses of the definition of Permitted Investments, as
determined by the Company. That designation will only be permitted if the
Investment would be permitted at that time and if the Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. The Board of
Directors of the Company may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary if that redesignation would not cause a Default.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of a resolution of the Board of Directors giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions and was permitted by Section 4.07 hereof.
If, at any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it will thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of
such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company will be in
default of such covenant. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the
Company; provided that such designation will be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if (1) such Indebtedness is
78
permitted under Section 4.09 hereof, and if such Indebtedness is being permitted
pursuant to the Leverage Ratio set forth in Section 4.09(a), being calculated on
a pro forma basis as if such designation had occurred at the beginning of the
two-quarter Reference Period; and (2) no Default or Event of Default would be in
existence following such designation.
Section 4.18. Listing. The Company will use its best efforts to obtain and
maintain listing of the Notes on the official list of the Luxembourg Stock
Exchange and to maintain the Notes admitted to trading on the Euro MTF, the
alternative market of the Luxembourg Stock Exchange; provided, however, that if
the Company is unable to list the Notes on the Euro MTF, or if the Company is
unable maintain its listing on the Euro MTF, it will prior to the delisting of
the Notes, list and maintain a listing of the Notes on another internationally
recognized stock exchange. In the event that a Restricted Subsidiary provides a
Guarantee or is released from its obligations under a Guarantee at a time when
the Notes are listed on the Euro MTF, the Company will, to the extent required
by the rules of the Luxembourg Stock Exchange, publish notice of the granting or
release of such Restricted Subsidiary Guarantee in the d'Wort, send a copy of
such notice to the Luxembourg Stock Exchange and, in the case of the granting of
a new Restricted Subsidiary Guarantee, deposit a copy of the Restricted
Subsidiary Guarantee with the Luxembourg Stock Exchange and the Luxembourg
Sub-Paying Agent.
Section 4.19. Withholding Taxes. All payments under or in respect of the
Notes or any Note Guarantee shall be made free and clear of, and without
withholding or deduction for or on account of, any present or future taxes,
duties, levies, imposts, assessments or governmental charges (including
penalties, interest and additions related thereto) (collectively, "TAXES") of
whatever nature imposed, levied, collected, withheld or assessed unless such
withholding or deduction is required by law. In the event of any such
withholding or deduction imposed or levied by a Tax Jurisdiction is required to
be made from any payments under or with respect to the Notes or any Note
Guarantee, the Company or the relevant Guarantor, as applicable, shall pay to
Holders of the Notes such additional amounts ("ADDITIONAL AMOUNTS") as will
result in the net payment to such Holder (including Additional Amounts) of the
amount that would otherwise have been receivable by such Holder in the absence
of such withholding or deduction, except that no such Additional Amounts shall
be payable with respect to:
(a) any Taxes that would not have been so withheld or deducted but for the
Holder or beneficial owner of the Notes having a present or former connection to
the relevant Tax Jurisdiction (including having a permanent establishment in
such Tax Jurisdiction, being a citizen or resident or national of, incorporated
in or carrying on a business, in the relevant Tax Jurisdiction in which such
Taxes are imposed) other than the mere receipt of payments in respect of the
Notes or any Note Guarantee, the mere holding or ownership of such Note or
beneficial interest
79
in the Note or the exercise of any rights under the Notes, this Indenture or the
Registration Rights Agreement;
(b) where presentation is required for payment on a Note, any Taxes that
would not have been so withheld or deducted if the Note had been presented for
payment within 30 days after the Relevant Date, except to the extent that the
Holder would have been entitled to Additional Amounts had the Note been
presented on any day during such 30 day period and there were no additional
withholdings or deductions as a result of such late presentment;
(c) any Taxes that would not have been so withheld or deducted but for the
failure by the Holder or the beneficial owner of the Note or any payment in
respect of such Note, after written request made to that Holder or beneficial
owner at least 60 days before any such withholding or deduction would be
payable, by the Company or the relevant Guarantor, the Trustee or the Paying
Agent, as applicable, to comply with any certification, identification,
information, documentation or other similar reporting requirement concerning its
nationality, residence, identity or connection with the relevant Tax
Jurisdiction, which is required or imposed by a statute, regulation or
administrative practice of the relevant Taxing Jurisdiction as a precondition to
exemption from all or part of such Taxes;
(d) any estate, inheritance, gift, sales, transfer, personal property or
similar Taxes imposed with respect to any Note;
(e) any Taxes payable other than by withholding or deduction;
(f) any withholding or deduction imposed on a payment to an individual that
is required to be made pursuant to the European Union Directive on the taxation
of savings income (the "DIRECTIVE") implementing the conclusions of the European
Counsel of Economic and Finance Ministers (ECOFIN) meeting on June 3, 2003, or
any law implementing or complying with, or introduced in order to conform to,
such Directive;
(g) any Taxes imposed in connection with a Note presented for payment by or
on behalf of a Holder or beneficial owner thereof who would have been able to
avoid such tax by presenting the relevant Note to another paying agent; or
(h) any combination of (a) through (g) above.
Notwithstanding the foregoing, the limitations on the Company's obligation
to pay Additional Amounts set forth in clauses (c) and (h) above shall not apply
if (i) the provision of information, documentation or other evidence described
in such clauses (c) and (h) would be materially more onerous, in form, in
procedure or in the substance of information disclosed, to a Holder or
Beneficial Owner of a Note (taking into account any relevant differences between
U.S. and Mexican law rules, regulations or administrative practice) than
comparable information or other reporting requirements imposed under U.S. tax
80
law, regulation and administrative practice (such as IRS Forms W-8, W-8BEN and
W-9) or (ii) Rule 3.23.8 issued by the Ministry of Finance and Public Credit on
April 28, 2006 or a substantially similar successor of such rule is in effect,
unless the provision of the information, documentation or other evidence
described in clauses (c) and (h) is expressly required by statute, regulation,
rule, ruling or administrative practice in order to apply Rule 3.23.8 (or a
substantially similar successor of such rule), the Company cannot obtain such
information, documentation or other evidence on its own through reasonable
diligence and the Company otherwise would meet the requirements for application
of Rule 3.23.8 (or such successor of such rule). In addition, such clauses (c)
and (d) shall not be construed to require that a non-Mexican pension or
retirement fund or a non-Mexican financial institution or another holder
register with the Ministry of Finance and Public Credit for the purpose of
establishing eligibility for an exemption from or reduction of Mexican
withholding tax or to require that a holder or beneficial owner certify or
provide information concerning whether it is or is not a tax-exempt pension or
retirement fund.
If the Directive imposes taxes upon Notes presented for payment, the
Company will use commercially reasonable efforts to maintain a paying agent with
a specified office in a Member State of the European Union that will not be
obligated to withhold or deduct tax pursuant to the Directive or any law
implementing or complying with, or introduced in order to conform to, the
Directive.
References to principal, interest or any other amount payable on or in
respect of any Note shall be deemed also to refer to any Additional Amounts
which may be payable as set forth in this Indenture or in the Notes to the
extent that Additional Amounts are, were or would be payable in respect thereof.
At least 10 Business Days prior to the first interest payment date (and at
least 10 Business Days prior to each succeeding interest payment date if there
has been any change with respect to the matters set forth in the below mentioned
Officers' Certificate), the Company or the relevant Guarantor, as applicable,
will furnish to the Trustee and the Paying Agent an Officers' Certificate
instructing the Trustee and the Paying Agent whether payments of principal of or
interest on the Notes due on such interest payment date shall be without
deduction or withholding for or on account of any Taxes by the Tax Jurisdictions
(other than the jurisdiction where the Trustee is located or organized). If any
such deduction or withholding shall be required, at least 20 days prior to such
interest payment date (unless the obligation to pay Additional Amounts arises
after the 20th day prior to the payment date, in which case the Company or the
relevant Guarantor shall notify the Trustee and the Paying Agent promptly
thereafter), the Company, or the relevant Guarantor, as applicable, will furnish
the Trustee and the Paying Agent with an Officers' Certificate that specifies
the amount, if any, required to be withheld on such payment to Holders of the
Notes. If the Company or any Guarantor is obligated to pay Additional Amounts
with respect to such payment, the Officers' Certificate must also set forth any
other information reasonably
81
necessary to enable the Paying Agent to pay Additional Amounts to the Holders on
the relevant payment date. For these purposes, any Officers' Certificate
required by this Indenture to be provided to the Trustee and the Paying Agent
shall be deemed to be duly provided if telecopied to the Trustee and the Paying
Agent.
The Company or the relevant Guarantor, as applicable, will make all
withholdings and deductions required by law and will remit the full amount
deducted or withheld to the relevant tax authority in accordance with applicable
law. The Company or the relevant Guarantor, as applicable, will obtain official
receipts from each tax authority evidencing the payment of any Taxes so deducted
or withheld, or, if such receipts are not obtainable, such other documentation
reasonably acceptable to the Trustee. The Company, or the relevant Guarantor, as
applicable, shall furnish to the Trustee the official receipts (or a certified
copy of the official receipts or other such documentation, as applicable)
evidencing payment of Taxes. The Company or the relevant Guarantor, as
applicable, will attach to each certified copy or other such documentation, as
applicable, a certificate stating (x) that the amount of such Tax evidenced by
the certified copy was paid in connection with payments under or with respect to
the Notes then outstanding upon which such Taxes were due and (y) the amount of
such withholding tax paid per $1,000 of principal amount of the Notes. Copies of
such receipts or other such documentation, as applicable, shall be made
available to Holders of the Notes upon request.
The Company and the relevant Guarantor, as applicable, shall promptly pay
when due, and indemnify the Holder for, any present or future stamp, issue,
registration, court and/or documentary taxes, and/or any other excise taxes,
similar charges or similar levies imposed by the Tax Jurisdictions on the
execution, delivery, registration or enforcement of any of the Notes, this
Indenture, any Guarantee or any other document or instrument referred to herein
or therein.
The Company will indemnify and hold harmless each Holder of Notes and, upon
written request of any Holder of Notes, reimburse each such Holder, for the
amount of:
(1) any Taxes (other than Taxes excluded under clauses (a) through (h))
levied or imposed and paid by such Holder as a result of payments made on or
with respect to the Notes; provided that reasonable supporting documentation is
provided; and
(2) any Taxes (other than Taxes excluded under clauses (a) through (h))
levied or imposed with respect to any reimbursement under the foregoing clause
(1), so that the net amount received by such Holder after such reimbursement
will not be less than the net amount the Holder would have received if Taxes
(other than Taxes excluded under clauses (a) through (h)) on such reimbursement
had not been imposed.
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Any payments made pursuant to the preceding sentence will be treated as
Additional Amounts for all relevant purposes.
Section 4.20. Sale and Leaseback Transactions. The Company will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
enter into any Sale and Leaseback Transaction with respect to any property or
assets unless:
(a) the Company or the Restricted Subsidiary, as applicable, would be
entitled to:
(i) incur Indebtedness in an amount equal to the Attributable Debt
with respect to such Sale and Leaseback Transaction pursuant to Section
4.09; and
(ii) create a Lien on such property or assets securing such
Attributable Debt pursuant to Section 4.12.
in which case, the corresponding Indebtedness and Lien will be deemed incurred
pursuant to those provisions, and
(b) the Company complies with Section 4.10 in respect of such transaction.
Section 4.21. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries. The Company:
(a) will not, and will not permit any Restricted Subsidiary to, sell,
lease, transfer or otherwise dispose of any Capital Stock of any Restricted
Subsidiary to any Person (other than the Company or a Wholly-Owned Restricted
Subsidiary); and
(b) will not permit any Restricted Subsidiary to issue any of its Capital
Stock (other than, if necessary, shares of its Capital Stock constituting
directors' or other legally required qualifying shares) to any Person (other
than to the Company or a Wholly-Owned Restricted Subsidiary), unless:
(i) immediately after giving effect to such issuance, sale or other
disposition, neither the Company nor any of its Subsidiaries own any
Capital Stock of such Restricted Subsidiary;
(ii) immediately after giving effect to such issuance, sale or other
disposition, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary and any Investment in such Person remaining after
giving effect thereto would have been permitted to be made under Section
4.07; or
83
(iii) immediately after giving effect to such issuance, sale or other
disposition, such Restricted Subsidiary would continue to constitute a
Restricted Subsidiary and the Company or such Restricted Subsidiary applies
the Net Proceeds of any such sale in accordance with Section 4.10.
Section 4.22. No impairment of Security Interests. Neither the Company nor
any of its Restricted Subsidiaries will be permitted to take any action, or
knowingly or negligently omit to take any action, which action or omission might
or would have the result of materially impairing the security interest with
respect to the Collateral for the benefit of the Trustee and the holders of the
Notes, including the failure to obtain any required approval or any material
defect in the creation, perfection or first-priority status of any Lien granted
pursuant to the Collateral Documents. The Company will cause the Restricted
Subsidiaries to comply with its obligations under the Collateral Documents. The
Company shall not amend, modify or supplement, or permit or consent to any
amendment, modification or supplement of, the Collateral Documents in any way
that would be adverse to the Holders of the notes in any material respect,
except as described above under Article 10 or as permitted under Article 9.
Section 4.23. Additional Interest. If Additional Interest is payable by the
Company pursuant to the Registration Rights Agreement, the Company shall deliver
to the Trustee an Officers' Certificate to that effect stating (i) the amount of
such Additional Interest that is payable and (ii) the date on which such
Additional Interest is payable. Unless and until a Responsible Officer of the
Trustee receives such a certificate, the Trustee may assume without inquiry that
no Additional Interest is payable. If the Company has paid Additional Interest
directly to the persons entitled to it, the Company shall deliver to the Trustee
an Officers' Certificate setting forth the particulars of such payment.
Section 4.24. Interest Rate Adjustment. (a) The interest rate on the Notes
specified in the Notes (increased as the case may be with Additional Interest)
will increase by 0.75% per annum commencing on April 1, 2007, if a
first-priority Lien has not been created and perfected in respect of all of the
Collateral for any reason by March 31, 2007 or there is any material defect in
the creation, perfection or first-priority status of any Lien (subject to
Collateral Permitted Liens) in respect of Collateral as of March 31, 2007. If
such defect still remains as of June 30, 2007, the interest rate on the Notes
specified in the Notes (increased as the case may be with Additional Interest)
will increase by 0.75% (for a total increase of 1.50%), commencing on July 1,
2007. If such defect still remains as of September 30, 2007, the interest rate
on the Notes specified in the Notes (increased as the case may be with
Additional Interest) will increase by 0.50% (for a total increase of 2.00%),
commencing on October 1, 2007.
(b) To avoid any such interest rate adjustment, the Company shall deliver
to the Trustee and the Collateral Agent (x) an Officers' Certificate to the
effect that none of the conditions requiring an interest rate adjustment are
continuing, (y) copies of each of the relevant Collateral Documents, including
84
evidence of registration with the applicable public registry in Mexico and any
other related documentation, and (z) an Opinion of Counsel to the Company that a
first-priority Lien (subject to Collateral Permitted Liens) has been perfected
in the subject Collateral in accordance with Mexican law. Upon delivery of the
above, the interest rate adjustment will no longer remain in effect.
ARTICLE 5
Successors
Section 5.01. Merger, Consolidation, or Sale of Assets. The Company shall
not, directly or indirectly: (1) consolidate, merge or reorganize with or into
another Person (whether or not the Company is the surviving corporation); or (2)
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to another
Person, unless:
(a) either:
(i) the Company is the surviving corporation; or
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment,
transfer, conveyance or other disposition has been made is a corporation
organized or existing under the laws of Mexico, a member of the European
Union or any state of the United States or the District of Columbia;
(b) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or the Person to which such sale, assignment, transfer,
lease, conveyance or other disposition has been made expressly assumes all the
obligations of the Company under the Notes and this Indenture pursuant to
agreements reasonably satisfactory to the Trustee;
(c) immediately after such transaction, no Default or Event of Default
exists;
(d) the Company or the Person formed by or surviving any such consolidation
or merger (if other than the Company), or to which such sale, assignment,
transfer, conveyance or other disposition has been made would, on the date of
such transaction after giving pro forma effect thereto and any related financing
transactions as if the same had occurred at the beginning of the applicable
two-quarter period, (x) be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Leverage Ratio test set forth in Section 4.09
hereof or (y) have a Leverage Ratio equal to or higher than immediately prior to
such transaction;
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(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the relevant jurisdictions, each
stating, in the form and substance reasonably satisfactory to the Trustee, that
such consolidation, merger, transfer or lease and the agreements referred to in
clause (b) of this Section 5.01 comply with this Indenture (provided that such
Opinions of Counsel may assume, among other things, the satisfaction of all
financial ratios in connection with such transaction).
In addition, the Company will not, directly or indirectly, lease all or
substantially all of the properties and assets of it and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to any other
Person.
Section 5.02. Successor Corporation Substituted. Upon any consolidation or
merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the properties or assets of the
Company in a transaction that is subject to, and that complies with the
provisions of, Section 5.01 hereof, the successor Person formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, assignment, transfer, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" or the
"Issuer" shall refer instead to the successor Person and not to the Company),
and may exercise every right and power of the Company under this Indenture with
the same effect as if such successor Person had been named as the Company and
Issuer herein; provided, however, that the predecessor Company shall not be
relieved from the obligation to pay the principal of and interest on the Notes
except in the case of a sale of all of the Company's assets in a transaction
that is subject to, and that complies with the provisions of, Section 5.01
hereof, in which case the predecessor Company will be discharged from all of its
obligations under this Indenture and the Notes.
ARTICLE 6
Defaults and Remedies
Section 6.01. Events of Default. Each of the following is an "EVENT OF
DEFAULT":
(a) default for 30 days in the payment when due of interest (including any
Additional Interest) or any Additional Amounts on the Notes;
(b) default in the payment when due (at maturity, upon redemption or
otherwise) of the principal of, or premium, if any, on, the Notes;
(c) failure by the Company or any of its Restricted Subsidiaries to comply
with the provisions of Section 4.15 or Section 5.01 hereof;
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(d) failure by the Company or any of its Restricted Subsidiaries for 60
days after notice to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding voting as a single class to comply with any of the other
covenants or agreements in this Indenture;
(e) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created
after the date of this Indenture, if that default:
(i) is caused by a failure to pay principal of, or interest or
premium, if any, on, such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a
"PAYMENT DEFAULT"); or
(ii) results in the acceleration of such Indebtedness prior to its
express maturity, and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $5.0 million or more;
(f) failure by the Company or any of its Restricted Subsidiaries to pay
final judgments entered by a court or courts of competent jurisdiction
aggregating in excess of $5.0 million, which judgments are not paid, discharged
or stayed for a period of 60 days;
(g) except as permitted by this Indenture, any Note Guarantee is held in
any judicial proceeding to be unenforceable or invalid or ceases for any reason
to be in full force and effect, or any Guarantor, or any authorized Person
acting on behalf of any Guarantor, denies or disaffirms its obligations under
its Note Guarantee, or any Collateral Document is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full
force and effect;
(h) the Company or any of its Restricted Subsidiaries that is a Significant
Subsidiary or any group of Restricted Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary pursuant to or within the
meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
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(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due; and
(i) (x) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary or for all or substantially all of the property of
the Company or any of its Restricted Subsidiaries that is a Significant
Subsidiary or any group of Restricted Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary; and
(y) such order or decree remains unstayed and in effect for 60 consecutive
days.
Section 6.02. Acceleration. In the case of an Event of Default specified in
clause (h) or (i) of Section 6.01 hereof, with respect to the Company, any
Restricted Subsidiary of the Company that is a Significant Subsidiary or any
group of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary, all outstanding Notes will become due and
payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Upon any such declaration, the Notes
shall become due and payable immediately.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may, on behalf of all of the
Holders, rescind an acceleration and its consequences, if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
(except
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nonpayment of principal, interest or premium that has become due solely because
of the acceleration) have been cured or waived and the Company has paid or
deposited, or caused to be paid or deposited, with the Trustee a sum sufficient
to pay all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Defaults. Subject to Section 6.02, Holders of not
less than a majority in aggregate principal amount of the then outstanding Notes
by notice to the Trustee may on behalf of the Holders of all of the Notes waive
an existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of,
premium, if any, or interest on, the Notes (including in connection with an
offer to purchase); provided, however, that the Holders of a majority in
aggregate principal amount of the then outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
Section 6.05. Control by Majority. Holders of a majority in aggregate
principal amount of the then outstanding Notes may direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
that the Trustee determines may be unduly prejudicial to the rights of other
Holders of Notes or that may involve the Trustee in personal liability.
Section 6.06. Limitation on Suits. A Holder may pursue a remedy with
respect to this Indenture or the Notes only if:
(a) such Holder gives to the Trustee written notice that an Event of
Default is continuing;
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(b) Holders of at least 25% in aggregate principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee security or indemnity reasonably satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with such request within 60 days after
receipt of the request and the offer of security or indemnity; and
(e) during such 60-day period, Holders of a majority in aggregate
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with such request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Note to receive payment of principal, premium, if any, and interest on the
Note, on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase), or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
Section 6.08. Collection Suit by Trustee. If an Event of Default specified
in Section 6.01(a) or (b) hereof occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal of, premium, if any,
and interest remaining unpaid on, the Notes and interest on overdue principal
and, to the extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim. The Trustee is authorized
to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due to the Trustee
pursuant to Section 7.07 hereof) and the Holders of the Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Notes), its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to
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pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof. To the extent that
the payment of any such compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding, in each case absent express
authorization from such Holder.
Section 6.10. Priorities. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expenses and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Notes for principal, premium, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit
by Holders of more than 10% in aggregate principal amount of the then
outstanding Notes.
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ARTICLE 7
Trustee
Section 7.01. Duties of Trustee. (a) If an Event of Default has occurred
and is continuing, the Trustee will exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee will be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties
that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee will examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(ii) the Trustee will not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee will not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b) and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend or
risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture or any
related agreement at the request of any Holders, unless such Holder has offered
to the
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Trustee security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee will not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Company. Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.
Section 7.02. Rights of Trustee. (a) The Trustee may conclusively rely upon
any document believed by it to be genuine and to have been signed or presented
by the proper Person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and will not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee will not be liable for any action it takes or omits to take
in good faith that it believes to be authorized or within the rights or powers
conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company will be sufficient if signed by an
Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders have offered to the Trustee reasonable indemnity
or security against the losses, liabilities and expenses that might be incurred
by it in compliance with such request or direction.
(g) The Trustee shall not be deemed to have notice of a Default or an Event
of Default unless (i) a Responsible Officer of the Trustee has actual knowledge
thereof or (ii) the Trustee has received written notice thereof from the Company
or any Holder.
(h) The permissive rights of the Trustee enumerated herein shall not be
construed as duties.
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(i) Before the Trustee takes any action under Section 6.01(d) or 6.02, it
may request direction from Holders of at least 25% in aggregate principal amount
of outstanding Notes.
Section 7.03. Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Company or any Affiliate of the Company with the same rights it
would have if it were not Trustee. However, in the event that the Trustee
acquires any conflicting interest it must eliminate such conflict within 90
days, if required, apply to the SEC for permission to continue as trustee (if
this Indenture has been qualified under the TIA) or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.
Section 7.04. Trustee's Disclaimer. The Trustee will not be responsible for
and makes no representation as to the validity or adequacy of this Indenture,
the Notes or the Note Guarantees, it shall not be accountable for the Company's
use of the proceeds from the Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, it will not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it will not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.
Section 7.05. Notice of Defaults. If a Default or Event of Default occurs
and is continuing and if it is known to the Trustee, the Trustee will mail to
Holders of Notes a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default in payment
of principal of, premium, if any, or interest on, any Note, or a default
pursuant to clause (e) or (f) of Section 6.01, the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
Section 7.06. Reports by Trustee to Holders of the Notes. (a) Within 60
days after each May 15 beginning with the May 15 following the date of this
Indenture, and for so long as Notes remain outstanding, the Trustee will mail to
the Holders of the Notes a brief report dated as of such reporting date that
complies with TIA Section 313(a) (but if no event described in TIA Section
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also will comply with TIA Section
313(b)(2). The Trustee will also transmit by mail all reports as required by TIA
Section 313(c).
(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA Section 313(d). The Company will promptly notify the Trustee when the Notes
are listed on any stock exchange.
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Section 7.07. Compensation and Indemnity. (a) The Company and the
Guarantors will jointly and severally pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder. The Trustee's compensation will not be limited by any law on
compensation of a trustee of an express trust. The Company will reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses will include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
(b) The Company and the Guarantors will jointly and severally indemnify the
Trustee against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company and the Guarantors (including this Section 7.07)
and defending itself against any claim (whether asserted by the Company, the
Guarantors, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, liability or expense may be attributable to its
negligence, willful misconduct or bad faith. The Trustee will notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company will not relieve the Company or any of the Guarantors of
their obligations hereunder. The Company or such Guarantor will defend the claim
and the Trustee will cooperate in the defense. The Trustee may have separate
counsel and the Company will pay the reasonable fees and expenses of such
counsel. Neither the Company nor any Guarantor need pay for any settlement made
without its consent, which consent will not be unreasonably withheld. In the
event that the Company does not accept the defense of a claim as provided above,
the Trustee shall have the full right to defend against such claim in its sole
discretion, and pursue its rights hereunder.
(c) The obligations of the Company and the Guarantors under this Section
7.07 will survive the resignation or removal of the Trustee and the satisfaction
and discharge of this Indenture.
(d) To secure the Company's and the Guarantors' payment obligations in this
Section 7.07, the Trustee will have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien will survive the
resignation or removal of the Trustee and the satisfaction and discharge of this
Indenture.
(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
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(f) The Trustee will comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
Section 7.08. Replacement of Trustee. (a) A resignation or removal of the
Trustee and appointment of a successor Trustee will become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.
(b) The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in aggregate principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10 hereof;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(iii) a custodian or public officer takes charge of the Trustee or its
property; or
(iv) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly, but in no event
later than 60 days after such resignation or removal, appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
(d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in aggregate principal amount of the then
outstanding Notes may, at the expense of the Company, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10 hereof, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to
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Holders. The retiring Trustee will promptly transfer all property held by it as
Trustee to the successor Trustee; provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act will be the successor Trustee.
Section 7.10. Eligibility; Disqualification. There will at all times be a
Trustee hereunder that is a corporation organized and doing business under the
laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to
supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $100.0 million as set forth in its most
recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the requirements of
TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
Section 7.11. Preferential Collection of Claims Against Company. The
Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed shall
be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
Legal Defeasance and Covenant Defeasance
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance. The
Company may at any time, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, elect to have either Section
8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article 8.
Section 8.02. Legal Defeasance and Discharge. Upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.02, the
Company and each of the Guarantors will, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be deemed to have been discharged
from their obligations with respect to all outstanding Notes and all obligations
of the Guarantors discharged with respect to their Note Guarantees on the date
the conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE").
For this purpose, Legal Defeasance means that the Company and the Guarantors
will be deemed to have paid and discharged the entire Indebtedness represented
by the
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outstanding Notes (including the Note Guarantees), which will thereafter be
deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the
other Sections of this Indenture referred to in clauses (a) and (b) below, and
to have satisfied all their other obligations under such Notes, the Note
Guarantees and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following provisions which will survive until otherwise terminated or
discharged hereunder:
(a) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest or premium, if any, and any Additional
Amounts that may be due and payable, if any, on, such Notes when such payments
are due from the trust referred to in Section 8.04 hereof;
(b) the Company's obligations with respect to such Notes under Article 2
and Section 4.02 hereof;
(c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's and the Guarantors' obligations in connection
therewith; and
(d) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03. Covenant Defeasance. Upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, the Company
and each of the Guarantors will, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from each of their obligations
under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.13, 4.15, 4.16, 4.17, 4.20, and 4.21 hereof and clause (d) of Section 5.01
hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 hereof are satisfied (hereinafter,
"COVENANT DEFEASANCE"), and the Notes will thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but will continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes will not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes and Note Guarantees, the Company and the
Guarantors may omit to comply with and will have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply will not constitute a
Default or an Event of Default under
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Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Note Guarantees will be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, Sections 6.01(c) and 6.01(d) hereof will not
constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance. In order to
exercise either Legal Defeasance or Covenant Defeasance under either Section
8.02 or Section 8.03 hereof:
(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest, and any Additional
Amounts that may be due and payable, if any, on the outstanding Notes on the
stated date for payment thereof or on the applicable Redemption Date, as the
case may be, and the Company must specify whether the Notes are being defeased
to such stated date for payment or to a particular Redemption Date;
(b) in the case of an election under Section 8.02 hereof, the Company must
deliver to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that:
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling; or
(ii) since the date of this Indenture, there has been a change in the
applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such Legal
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 Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company must
deliver to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders of the outstanding Notes
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;
(d) the Company must deliver to the Trustee an Opinion of Counsel in Mexico
to the effect that (A) the Holders of the outstanding Notes will not
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recognize income, gain or loss for Mexican Tax purposes as a result of such
deposit and defeasance and will be subject to Mexican Taxes, in the same manner
and at the same times as would have been the case if such deposit and defeasance
had not occurred, and (B) payments from the defeasance trust will be made free
and clear of, and without withholding or deduction for or on account of any
present or future Taxes imposed, levied, collected, withheld or assessed by
Mexico or any political subdivision or governmental authority thereof or therein
having power to Tax;
(d) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit (other than a Default or Event of Default resulting
from the borrowing of funds to be applied to such deposit) and the deposit will
not result in a breach or violation of, or constitute a default under, any other
instrument to which the Company or any Guarantor is a party or by which the
Company or any Guarantor is bound;
(e) 123 days pass after the deposit is made and during the 123-day period
no Event of Default under clauses (h) or (i) in Section 6.01 occurs;
(f) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound;
(g) the Company must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders of Notes over the other creditors of the Company or with
the intent of defeating, hindering, delaying or defrauding any creditors of the
Company or others;
(h) the Company must deliver to the Trustee and Opinion of Counsel in the
United States and Mexico to the effect that on the 123rd day following the
deposit, the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally; and
(i) the Company must deliver to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to the
Legal Defeasance or the Covenant Defeasance, as applicable, have been complied
with.
Section 8.05. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money
and non-callable Government Securities (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the "TRUSTEE") pursuant to Section 8.04 hereof in
respect of the outstanding Notes will be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment,
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either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. Repayment to Company. Any money deposited with the Trustee or
any Paying Agent, or then held by the Company, in trust for the payment of the
principal of, premium, if any, or interest on, any Note 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 on its request or (if then held by the
Company) will be discharged from such trust; and the Holder of such Note will
thereafter be permitted to 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 will not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 8.07. Reinstatement. If the Trustee or Paying Agent is unable to
apply any U.S. dollars or non-callable Government Securities in accordance with
Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's and the Guarantors'
obligations under this Indenture and the Notes and the Note Guarantees will be
revived and reinstated as though no deposit had occurred pursuant to Section
8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the
case may
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be; provided, however, that, if the Company makes any payment of principal of,
premium, if any, or interest on, any Note following the reinstatement of its
obligations, the Company will be subrogated to the rights of the Holders of such
Notes to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE 9
Amendment, Supplement and Waiver
Section 9.01. Without Consent of Holders of Notes. Notwithstanding Section
9.02 of this Indenture, the Company, the Guarantors and the Trustee may amend or
supplement this Indenture or the Notes or the Note Guarantees without the
consent of any Holder of Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's or a Guarantor's
obligations to the Holders of the Notes and Note Guarantees by a successor to
the Company or such Guarantor pursuant to Article 5 hereof;
(d) to make any change that would provide any additional rights or benefits
to the Holders of the Notes or that does not adversely affect the legal rights
hereunder of any such Holder;
(e) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA;
(f) to allow any Guarantor to execute a supplemental indenture and /or a
Note Guarantee with respect to the Notes;
(g) to conform the text of this Indenture to any provision of the
"Description of Notes" section of the Offering Memorandum, to the extent that
such provision in that "Description of Notes" was intended to be a verbatim
recitation of a provision of this Indenture or the Notes;
(h) to provide for the issuance of Additional Notes in accordance with the
limitations set forth in this Indenture as of the date hereof;
(i) provide for the issuance of Additional Notes under this Indenture to
the extent otherwise so permitted under the terms of this Indenture; or
(j) evidence and provide for the acceptance of appointment by a successor
Trustee.
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Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes. Except as provided below in
this Section 9.02, the Company and the Trustee may amend or supplement this
Indenture (including, without limitation, Section 3.09, 4.10 and 4.15 hereof)
and the Notes and the Note Guarantees with the consent of the Holders of at
least a majority in aggregate principal amount of the then outstanding Notes
(including, without limitation, Additional Notes, if any) voting as a single
class (including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, the Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other
than a Default or Event of Default in the payment of the principal of, premium,
if any, or interest on, the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture or the Notes or the Note Guarantees may be waived with the consent of
the Holders of a majority in aggregate principal amount of the then outstanding
Notes (including, without limitation, Additional Notes, if any) voting as a
single class (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, the Notes.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Company and the Guarantors in the execution of such amended or
supplemental indenture unless such amended or supplemental indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but will not be
obligated to, enter into such amended or supplemental indenture.
It is not be necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it is sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any
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failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes or the
Note Guarantees. However, without the consent of each Holder affected, an
amendment, supplement or waiver under this Section 9.02 may not (with respect to
any Notes held by a non-consenting Holder):
(i) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of
the Notes (except as provided above with respect to Sections 3.09, 4.10,
and 4.15 hereof);
(iii) reduce the rate of or change the time for payment of interest,
including default interest or Additional Interest, on any Note;
(iv) waive a Default or Event of Default in the payment of principal
of, or interest or premium, if any, on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes and a waiver of
the payment default that resulted from such acceleration);
(v) make any Note payable in money other than that stated in the
Notes;
(vi) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of, or interest or premium, if any, on the Notes;
(vii) waive a redemption payment with respect to any Note (other than
a payment required by Sections 3.09, 4.10 and 4.15 hereof);
(viii) release any Guarantor from any of its obligations under its
Note Guarantee or this Indenture, except in accordance with the terms of
this Indenture;
(ix) make any change in the ranking or priority of any Note that would
adversely affect the Holders of the Notes;
(x) impair the right of any Holder of the Notes to receive payment of
principal of and interest on such Holder's Notes on or after the
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due dates therefor or to institute suit for the enforcement of any payment
on or with respect to such Holder's Notes;
(xi) make any change in the provisions of this Indenture described
under Section 3.10 or Section 4.19 hereof that adversely affects the rights
of any Holder, or amend the terms of the Notes or this Indenture in a way
that would result in the loss of an exemption from any of the Taxes
described hereunder;
(xii) make any change in the provisions of the Collateral Documents
that would adversely affect the Holders of the Notes; or
(xiii) make any change in the preceding amendment and waiver
provisions.
Section 9.03. Revocation and Effect of Consents. (a) A consent to an
amendment, supplement or waiver by a Holder a Note shall bind the Holder and
every subsequent Holder of the Note or portion of the Notes that evidences the
same debt as the consenting Holder's Note, even if notion of the consent or
waiver is not made on the Note. Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder of a Note and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder's Note, even if notation of the
consent is not made on any Note. However, any such Holder of a Note or
subsequent Holder of a Note may revoke the consent as to its Note if the Trustee
receives written notice of revocation before the date the amendment, supplement
or waiver becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
(b) The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid for more than 120 days after
such record date.
Section 9.04. Notation on or Exchange of Notes. The Trustee may place an
appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Company in exchange for all Notes may issue and
the Trustee shall, upon receipt of an Authentication Order, authenticate new
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
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Section 9.05. Trustee to Sign Amendments, Etc. The Trustee will sign any
amended or supplemental indenture authorized pursuant to this Article 9 if the
amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company may not sign an amended or
supplemental indenture until the Board of Directors of the Company approves it.
In executing any amended or supplemental indenture, the Trustee will be entitled
to receive and (subject to Section 7.01 hereof) will be fully protected in
relying upon, in addition to the documents required by Section 13.05 hereof, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such amended or supplemental indenture is authorized or permitted by this
Indenture.
Section 9.06. Compliance with Trust Indenture Act. Every amendment or
supplement to the Indenture or the Notes will be set forth in an amended or
supplemental indenture that complies with the TIA as then in effect.
ARTICLE 10
Collateral Arrangements
Section 10.01. Security. (a) The Company shall:
(i) use reasonable best efforts to cause to be created and perfected
on or prior to March 31, 2007, first-priority Liens on all its existing and
future fixed assets which constitute telecommunication network comprised of
switches, fiber optic and copper networks, radio and electronic equipment,
computers and engineering equipment, transportation equipment and office
furniture as set forth on its consolidated balance sheet under "Telephone
Network Systems and Equipment", in each case owned by the Company or any
Restricted Subsidiary on the Issue Date or acquired by the Company or any
Restricted Subsidiary after the Issue Date and all proceeds in respect of
any of the foregoing, but excluding any and all the telecommunication
network systems and equipment of the Excluded Subsidiaries (collectively,
and together with any assets that may be pledged from time to time,
including those under clause (ii) below, the "COLLATERAL"), and
(ii) cause each Excluded Subsidiary (to the extent such Excluded
Subsidiary is a Subsidiary on the date thereof) on or prior to January 1,
2009, to create and perfect first-priority Liens and to execute and deliver
Collateral Documents in form and substance satisfactory to the Collateral
Agent on all its existing and future fixed assets which constitute
telecommunication network comprised of switches, fiber optic and copper
networks, radio and electronic equipment, computers and engineering
equipment, transportation equipment and office furniture as set forth on
its consolidated balance sheet under "Telephone Network Systems and
Equipment", in each case owned by the any Excluded Subsidiary on
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January 1, 2009 or acquired by any Excluded Subsidiary after January 1,
2009 and all proceeds in respect of any of the foregoing,
in each case, to secure the performance of the obligations of the Company
and the Guarantors to the Holders or the Trustee under the Notes, the Note
Guarantees, the Collateral Documents and hereunder, according to the terms
hereunder or thereunder, (including the obligations of the Company referred to
in clauses (a)(i) and (a)(ii) of Section 11.01 hereof and the obligations of the
Guarantors under Article 11).
(b) Each Holder, by its acceptance of a Security, consents and agrees to
all of the terms of the Collateral Documents (including the provisions providing
for the exercise of remedies and release of the Collateral Documents) as the
same may be in effect or may be amended from time to time in accordance with
their terms, and authorizes and directs the Trustee and the Collateral Agent to
enter into the Collateral Documents and to perform or cause to be performed
obligations and exercise rights thereunder in accordance therewith.
(c) Each of the Company and the Guarantors shall use its reasonable best
efforts to do or cause to be done all such acts and things as may be required by
the next sentence of this Section 10.01, to assure and confirm to the Collateral
Agent and the Trustee the first-priority Liens upon the Collateral contemplated
hereby and any Collateral Documents 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 and of the Obligations secured hereby, according to the intent
and purposes herein expressed. Each of the Company and the Guarantors shall (i)
enter into Collateral Documents in form and substance satisfactory to the
Collateral Agent and (ii) use its reasonable best efforts to cause the
Collateral Documents to create and maintain, as security for the Obligations of
the Issuer and the Guarantors under the Notes, the Note Guarantees, the
Collateral Documents and hereunder, a valid and enforceable perfected Lien on
the Collateral, in favor of the Trustee for the ratable benefit of the Holders,
first in priority to any and all Liens at any time granted upon the Collateral,
in each case, as soon as practicable after the Issue Date. The Trustee, the
Company and the Guarantors hereby acknowledge and agree that the Trustee shall
hold the Collateral for the ratable benefit of the Holders and the Trustee
pursuant and subject to the terms of the Collateral Documents.
Section 10.02. Use of the Collateral. Subject to the terms and conditions
of the Collateral Documents and hereof, the Company and the applicable
Restricted Subsidiary will be entitled, unless an Event of Default has occurred
and is continuing and the Collateral Agent has given contrary instructions in
accordance with the terms of the Collateral Documents, to generally to remain in
possession of and to retain exclusive control over the Collateral (other than
any amounts that are the proceeds of a Collateral Asset Sale or an Event of Loss
relating to the Collateral), to freely operate the Collateral, to replace the
Collateral and to sell or otherwise dispose of Collateral (including, with
respect to cash
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constituting Collateral by virtue of being proceeds under a non-possessory
pledge agreement), and to collect, invest and dispose of any income in respect
of any Collateral, in each case in the ordinary course of the Company's
business.
Section 10.03. Determinations Relating to Collateral. In the event (a) the
Collateral Agent shall receive any written request from the Company for consent
or approval with respect to any matter or thing relating to the Collateral or
the Company's obligations with respect thereto or (b) there shall be due to or
from the Collateral Agent under the provisions of the Collateral Documents any
material performance or the delivery of any material instrument or (c) the
Collateral Agent shall become aware of any material nonperformance by the
Company or any Guarantor of any covenant or any material breach of any
representation or warranty of the Company or a Guarantor set forth in the
Collateral Documents, then, in each such event, the Collateral Agent shall be
entitled to hire, at the sole reasonable cost and expense of the Company,
experts, consultants, agents and attorneys to advise the Collateral Agent on the
manner in which the Collateral Agent should respond to such request or render
any requested performance or response to such nonperformance or breach.
Section 10.04. Suits to Protect the Collateral. Subject in all respects to
the terms and conditions of the Collateral Documents, the Collateral Agent shall
have power to institute and to maintain such suits and proceedings as it may
deem expedient to prevent any impairment of the Collateral by any acts which may
be unlawful or in violation of this Indenture, the Collateral Documents, and
such suits and proceedings as the Collateral Agent may deem expedient to
preserve or protect its interests and the interests of the Holders in the
Collateral Documents and in the principal, interest, issues, profits, rents,
revenues and other income arising therefrom, 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 hereunder or under
the Collateral Document, or be prejudicial to the interests of the Holders, the
Trustee or the Collateral Agent.
Section 10.05. Enforcement and Disposition of Collateral. (a) The indenture
and the other Collateral Documents provide that, upon the occurrence and during
the continuation of a Collateral Event of Default:
(i) the Collateral Agent shall be entitled to cancel any lease
agreement entered into by each Restricted Subsidiary owning real property
subject to a mortgage; and
(ii) the Collateral Agent may enter upon all or any portion of the
Company's and its Restricted Subsidiaries' premises that comprises the
Collateral to inspect the Collateral and may exercise other rights with
respect to the Collateral under applicable law.
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(b) The cash proceeds of sales of, or collections on, any Collateral
received upon the exercise of remedies, including pursuant to a bankruptcy
proceeding, will be applied pursuant to the Collateral Documents in the
following order of priority:
(i) first, to the payment of all unpaid fees, expenses,
reimbursements, indemnifications and advancements of the Collateral Agent
(including to the extent advanced by any Holder);
(ii) second, to the payment of all unpaid fees, expenses,
reimbursements, indemnifications and advancements of the Trustee, to the
extent relating to their activities in connection with the Collateral
Documents;
(iii) third, to the payment of principal under the Notes, excluding
any premium, interest, penalty or other amounts in respect thereof, on a
pro rata basis and subject to the limitations provided below;
(iv) fourth, to the payment of accrued and unpaid interest under the
Notes;
(v) fifth, to the payment of any other Obligations under the Notes;
and
(vi) sixth, to the Company and its Restricted Subsidiaries or to
whomever else may lawfully be entitled to receive such proceeds or as a
court of competent jurisdiction may direct.
Section 10.06. Release of the Collateral. Upon the full and final payment
and performance by the Company and the Guarantors of the Obligations under the
Notes, this Indenture and the Collateral Documents, the Collateral Documents
will terminate and the Liens on all of the Collateral will be released. The
Collateral Agent will release the Liens in favor of the Collateral Agent in any
Collateral to be sold pursuant to a Collateral Asset Sale or, in the case of
certain obsolete or other assets, to be disposed of in a transaction not
considered a Collateral Asset Sale pursuant to clause (i) of the exclusion to
the definition thereof; provided that such transaction shall be subject to the
provisions under Section 4.10.
ARTICLE 11
Note Guarantees
Section 11.01. Guarantee. (a) Subject to this Article 11, each of the
Guarantors hereby, jointly and severally, unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of
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this Indenture, the Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of, premium and Additional Amounts, if any, and
interest (including Additional Interest) on, the Notes will be promptly
paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest and
premium and Additional Amounts on the Notes, if any, if lawful, and all
other obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance
with the terms hereof and thereof; and
(ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, will be reinstated in full
force and effect.
(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (i) the maturity of the
obligations guaranteed
110
hereby may be accelerated as provided in Article 6 hereof for the purposes of
this Note Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (ii) in the event of any declaration of acceleration of such obligations as
provided in Article 6 hereof, such obligations (whether or not due and payable)
will forthwith become due and payable by the Guarantors for the purpose of this
Note Guarantee. The Guarantors will have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Note Guarantee.
Section 11.02. Limitation on Guarantor Liability. Each Guarantor, and by
its acceptance of Notes, each Holder, hereby confirms that it is the intention
of all such parties that the Note Guarantee of such Guarantor not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to any Note Guarantee. To
effectuate the foregoing intention, the Trustee, the Holders and the Guarantors
hereby irrevocably agree that the obligations of such Guarantor will be limited
to the maximum amount that will, after giving effect to such maximum amount and
all other contingent and fixed liabilities of such Guarantor that are relevant
under such laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under this
Article 11, result in the obligations of such Guarantor under its Note Guarantee
not constituting a fraudulent transfer or conveyance.
Section 11.03. Execution and Delivery of Note Guarantee. To evidence its
Note Guarantee set forth in Section 11.01 hereof, each Guarantor hereby agrees
that a notation of such Note Guarantee substantially in the form attached as
Exhibit D hereto will be endorsed by an Officer of such Guarantor by manual or
facsimile signature on each Note authenticated and delivered by the Trustee and
that this Indenture will be executed on behalf of such Guarantor by one of its
Officers.
Each Guarantor hereby agrees that its Note Guarantee set forth in Section
11.01 hereof will remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note Guarantee
no longer holds that office at the time the Trustee authenticates the Note on
which a Note Guarantee is endorsed, the Note Guarantee will be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Note Guarantee set forth in this
Indenture on behalf of the Guarantors.
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In the event that the Company or any of its Restricted Subsidiaries creates
or acquires any Subsidiary after the date of this Indenture, if required by
Section 4.16 hereof, the Company will cause such Restricted Subsidiary to comply
with the provisions of Section 4.16 hereof and this Article 11, to the extent
applicable.
Section 11.04. Guarantors May Consolidate, Etc., on Certain Terms. Except
as otherwise provided in Section 11.05 hereof, no Guarantor may sell or
otherwise dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person) another Person, other than the Company or another Guarantor, unless:
(a) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(b) either:
(i) subject to Section 11.05 hereof, the Person acquiring the property
in any such sale or disposition or the Person formed by or surviving any
such consolidation or merger unconditionally assumes all the obligations of
that Guarantor under this Indenture and its Note Guarantee on the terms set
forth herein or therein pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee; or
(ii) the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of this Indenture, including
without limitation, Section 4.10 hereof.
In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person as provided in clause (b)(i) above, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the
due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor Person will succeed
to and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor. Such successor Person thereupon may cause to be
signed any or all of the Note Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Note Guarantees so issued will in all
respects have the same legal rank and benefit under this Indenture as the Note
Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of such Note Guarantees had been issued at the date
of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses
(b)(i) and (ii) above, nothing contained in this Indenture or in any of the
Notes will prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or will prevent any sale or conveyance of the
property of a
112
Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.
Section 11.05. Releases. The Note Guarantee of a Guarantor will be
released:
(a) In the event of any sale or other disposition of all or substantially
all of the assets of that Guarantor (including by way of merger or
consolidation) to a Person that is not (either before or after giving effect to
such transaction) the Company or a Restricted Subsidiary of the Company
otherwise permitted by this Indenture;
(b) In the event of any sale or other disposition of all of the Capital
Stock of that Guarantor owned by the Company and its subsidiaries to a Person
that is not (either before or after giving effect to such transaction) the
Company or a Restricted Subsidiary of the Company otherwise permitted by this
Indenture;
(c) If the Company designates any Restricted Subsidiary that is a Guarantor
to be an Unrestricted Subsidiary in accordance with the provisions of this
Indenture; or
(d) Upon Legal Defeasance or satisfaction and discharge of this Indenture
in accordance with Article 8 and Article 12 hereof, respectively.
Upon delivery by the Company to the Trustee of an Officers' Certificate and
an Opinion of Counsel to the foregoing effect, the Trustee will execute any
documents reasonably requested by the Company in writing in order to evidence
the release of the Guarantor from its obligations under its Note Guarantee.
Any Guarantor not released from its obligations under its Note Guarantee as
provided in this Section 11.05 will remain liable for the full amount of
principal of and interest and premium, if any, on the Notes and for the other
obligations of any Guarantor under this Indenture as provided in this Article
11.
ARTICLE 12
Satisfaction and Discharge
Section 12.01. Satisfaction and Discharge. This Indenture will be
discharged and will cease to be of further effect as to all Notes issued
hereunder, when:
(a) either:
(i) all Notes that have been authenticated, except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for whose payment
money has heretofore been deposited in trust and thereafter
113
repaid to the Company, have been delivered to the Trustee for cancellation;
or
(ii) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the mailing of a
notice of redemption or otherwise or will become due and payable within one
year and the Company or any Guarantor has irrevocably deposited or caused
to be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination of cash in U.S. dollars and non-callable
Government Securities, in amounts as will be sufficient, without
consideration of any reinvestment of interest, to pay and discharge the
entire Indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium, if any, and accrued interest and any
Additional Amounts that may be due and payable, if any, to the date of
maturity or redemption;
(b) no Default or Event of Default has occurred and is continuing on the
date of the deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit) and the deposit will not
result in a breach or violation of, or constitute a default under, any other
instrument to which the Company or any Guarantor is a party or by which the
Company or any Guarantor is bound;
(c) the Company or any Guarantor has paid or caused to be paid all sums
payable by it under this Indenture; and
(d) the Company has delivered irrevocable instructions to the Trustee under
this Indenture to apply the deposited money toward the payment of the Notes at
maturity or on the Redemption Date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money
has been deposited with the Trustee pursuant to subclause (ii) of clause (a) of
this Section 12.01, the provisions of Sections 12.02 and 8.06 hereof will
survive. In addition, nothing in this Section 12.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 12.02. Application of Trust Money. Subject to the provisions of
Section 8.06 hereof, all money deposited with the Trustee pursuant to Section
12.01 hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the
114
principal (and premium, if any) and interest for whose payment such money has
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 12.01 hereof by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 12.01 hereof; provided that if the Company has made any payment of
principal of, premium, if any, or interest on, any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
ARTICLE 13
Miscellaneous
Section 13.01. Currency Indemnity. U.S. dollars are the sole currency of
account and payment for all sums payable by the Company or the Guarantors under
or in connection with the Notes, including damages. Any amount received or
recovered in a currency other than dollars (whether as a result of, or of the
enforcement of, a judgment or order of a court of any jurisdiction, in the
winding up or dissolution of the Company or the Guarantors or otherwise) by any
Holder of a Note in respect of any sum expressed to be due to it from the
Company or the Guarantors shall constitute a discharge to the Company or the
Guarantors only to the extent of the dollar amount which the recipient is able
to purchase with the amount so received or recovered in that other currency on
the date of that receipt or recovery (or, if it is not practicable to make that
purchase on that date, on the first date on which it is practicable to do so).
If that dollar amount is less than the dollar amount expressed to be due to the
recipient under any Note, the Company or the Guarantors shall indemnify the
recipient against any loss sustained by it as a result. In any event, the
Company or the Guarantors shall indemnify the recipient against the cost of
making any such purchase. For the purposes of this Section 13.01, it will be
sufficient for the Holder of a Note to certify in a satisfactory manner
(indicating the sources of information used) that it would have suffered a loss
had an actual purchase of dollars been made with the amount so received or
recovered in that other currency on the date of receipt or recovery (or, if a
purchase of dollars on such date had not been practicable, on the first date on
which it would have been practicable, it being required that the need for a
change of date be certified in the manner mentioned above). These indemnities
constitute a separate and independent obligation from the other obligations of
the Company or the Guarantors, shall give rise to a separate and independent
cause of action, shall apply irrespective of any indulgence granted by any
Holder of a Note
115
and shall constitute in full force and effect despite any other judgment, order,
claim or proof for a liquidated amount in respect of any sum due under any Note.
Section 13.02. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA Section
318(c), the duties imposed by the TIA will control.
Section 13.03. Notices. Any notice or communication by the Company, any
Guarantor or the Trustee to the others is duly given if in writing and delivered
in Person or by first class mail (registered or certified, return receipt
requested), facsimile transmission or overnight air courier guaranteeing next
day delivery, to the others' address:
If to the Company and/or any Guarantor:
Maxcom Telecomunicaciones, S.A. de C.V.
Guillermo Gonzalez Camarena No. 2000
Colonia Centro de Ciudad Santa Fe
Mexico, D.F. 01210
Mexico
Fax: 011 52 55 5147 1310
Attention of: Jose Antonio Solbes
With a copy to:
Kirkland & Ellis LLP
200 East Randolph Drive
Chicago, IL 60601-6636
United States of America
Fax: +1-312-861-2200
Attention of: Mr. Gerald Nowak
If to the Trustee:
Deutsche Bank Trust Company Americas
60 Wall Street
27th Floor
New York, New York 10005
United States of America
Fax: +1-212-797-8622
Attention of: Trust and Securities Services
116
With a copy to:
Deutsche Bank National Trust Company for Deutsche Bank Trust Company
Americas
25 DeForest Avenue
2nd Floor
Summit, New Jersey 07901
United States of America
Fax: +1-732-578-4635
Attention of: Trust and Securities Services
The Company, any Guarantor or the Trustee, by notice to the others, may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and
the next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar. Any notice or communication will also be so mailed to any Person
described in TIA Section 313(c), to the extent required by the TIA. Failure to
mail a notice or communication to a Holder or any defect in it will not affect
its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it will mail a
copy to the Trustee and each Agent at the same time.
Section 13.04. Communication by Holders of Notes With Other Holders of
Notes. Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
Section 13.05. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which must include the statements set forth in Section
117
13.06 hereof) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which must include the statements set forth in Section 13.06
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
Section 13.06. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA Section 314(a)(4)) must comply with the provisions of TIA Section 314(e) and
must include:
(a) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
Section 13.07. Rules by Trustee and Agents. The Trustee may make reasonable
rules for action by or at a meeting of Holders. The Registrar or Paying Agent
may make reasonable rules and set reasonable requirements for its functions.
Section 13.08. No Personal Liability of Directors, Officers, Employees and
Stockholders. No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, will have any liability for any obligations
of the Company or the Guarantors under the Notes, this Indenture, the Note
Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
Section 13.09. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK
WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
118
TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
Section 13.10. Consent to Jurisdiction and Service. The Company, and each
Guarantor has appointed CT Corporation System, 111 Eighth Avenue, 13th Floor,
New York, New York, 10011, USA as its agent (the "AUTHORIZED AGENT") upon whom
process may be served in any actions arising out of, based on, or relating to
the Notes, this Indenture or the transactions contemplated hereby or brought
under U.S. Federal or state securities laws brought in any U.S. Federal or state
court located in the Borough of Manhattan in The City of New York, expressly
consent to the jurisdiction of any such court in respect of any such action, and
waive any other requirements of or objections to personal jurisdiction with
respect thereto. Such appointment shall be irrevocable. The Company and each
Guarantor represents and warrants that the Authorized Agent has agreed to act as
such agent for service of process and agrees to take any and all action,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Company and each of the Guarantors shall be deemed, in every respect,
effective service of process upon the Company and each of the Guarantors.
The Company and each Guarantor irrevocably (i) agree that any legal suit,
action or proceeding against the Company or any Guarantor arising out of, based
on, or relating to the Notes, this Indenture or the transactions contemplated
hereby may be instituted in any U.S. Federal or state court in the Borough of
Manhattan in The City of New York and (ii) waive, to the fullest extent they may
effectively do so, any objection which they may have now or hereafter have to
the laying of venue of any such proceeding.
Section 13.11. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 13.12. Successors. All agreements of the Company in this Indenture
and the Notes will bind its successors. All agreements of the Trustee in this
Indenture will bind its successors. All agreements of each Guarantor in this
Indenture will bind its successors, except as otherwise provided in Section
11.05 hereof.
Section 13.13. Severability. In case any provision in this Indenture or in
the Notes is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
119
Section 13.14. Counterpart Originals. The parties may sign any number of
copies of this Indenture. Each signed copy will be an original, but all of them
together represent the same agreement.
Section 13.15. Table of Contents, Headings, Etc. The Table of Contents,
Cross-Reference Table and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and will in no way modify or restrict any of
the terms or provisions hereof.
Section 13.16. Luxembourg Law Provision. The Company and the Guarantors
expressly accept and confirm for the purposes of articles 1278 and 1281 of the
Luxembourg civil code that, notwithstanding any assignment, transfer and/or
novation made pursuant to this Indenture, the security created or guarantee
given shall be preserved for the benefit of the Trustee and secures and
guarantees all obligations of the Company and the Guarantors (including without
limitation, all obligations with respect to all rights and/or obligations so
assigned, transferred or novated) and shall be preserved for the benefit of any
successor and assign of the Trustee (if any).
Section 13.17. USA PATRIOT Act. The parties hereto acknowledge that in
accordance with Section 326 of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (as amended, modified or supplemented from
time to time, the "USA PATRIOT Act"), the Trustee, like all financial
institutions and in order to help fight the funding of terrorism and money
laundering, is required to obtain, verify, and record information that
identifies each person or legal entity that establishes a relationship or opens
an account with Deutsche Bank Trust Company Americas. The parties to this
Agreement agree that they will provide the Trustee with such information as it
may request in order for the Trustee to satisfy the requirements of the USA
PATRIOT Act.
[signatures on following page]
120
MAXCOM TELECOMUNICACIONES, S.A. de C.V.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MAXCOM SERVICIOS ADMINISTRATIVOS, S.A.
de C.V.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
OUTSOURCING OPERADORA de PERSONAL, S.A.
de C.V
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TECNICOS ESPECIALIZADOS en
TELECOMUNICACIONES, S.A. de C.V.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CORPORATIVO en TELECOMUNICACIONES, S.A.
de C.V.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Signature Page to Indenture
MAXCOM SF, S.A. de C.V.,
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MAXCOM TV, S.A. de C.V.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MAXCOM USA, Inc.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT A
FORM OF NOTE
THIS NOTE (AND RELATED GUARANTEES) HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT (A) IT AND ANY ACCOUNT
FOR WHICH IT IS ACTING IS A "QUALIFIED INSTITUTIONAL BUYER" (WITHIN THE
MEANING OF RULE l44A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE
INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT; OR (B) IT IS NOT A
U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT)
AND (2) AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOT OFFER, SELL,
PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN,
EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE ISSUER, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE
SECURITIES ACT,(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (E)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(E) ABOVE,
THE ISSUER RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO
DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE
AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE ACQUIRER AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
A-1
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON
UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE REGISTRAR MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (2) THIS
GLOBAL NOTE MAY BE TRANSFERRED OR EXCHANGE IN WHOLE BUT NOT IN PART PURSUANT TO
SECTION 2.07 OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (4) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME THE DEPOSITARY OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, THE DEPOSITARY, HAS AN INTEREST HEREIN.
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE
AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON. [THIS LEGEND WILL BE INCLUDED IN THE
REGULATION S GLOBAL NOTE ONLY]
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CUSIP: ____________
11% Senior Notes due 2014
No. ___ $_________________
MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
promises to pay to _______________________ or registered assigns,
the principal sum of ___________________________ DOLLARS on _____________, 2014.
Interest Payment Dates: June 15 and December 15, commencing on June 15, 2007
Record Dates: June 1 and December 1
Dated: _______________, 2006
SIGNATURE PAGE FOLLOWS
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MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Trustee's Certificate of
Authentication: This is one of the
Notes referred to in the
within-mentioned Indenture:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By:
---------------------------------
Authorized Officer
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REVERSE OF SECURITY
11% Senior Notes due 2014
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. Maxcom Telecomunicaciones, S.A. de C.V., a sociedad anonima
de capital variable organized under the laws of Mexico (the "COMPANY" or the
"ISSUER"), promises to pay interest on the principal amount of this Note at 11%
per annum from December 20, 2006 until maturity; provided that the rate of
interest on the principal amount of this Note may increase in accordance with
Sections 4.23 and 4.24 of the Indenture. The Company will pay interest
semi-annually in arrears on June 15 and December 15 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each, an
"INTEREST PAYMENT DATE"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided further that
the first Interest Payment Date shall be June 15, 2007. The Company will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal, interest and premium, if any, from time to
time on demand at a rate that is 2% per annum in excess of the then applicable
interest rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
(2) METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the June 1 or December 1 (each, a "RECORD DATE") preceding
the Interest Payment Date, even if such Notes are canceled after such record
date and on or before such Interest Payment Date, except as provided in Section
2.13 of the Indenture with respect to defaulted interest. The Notes will be
payable as to principal, interest, Additional Amounts, if any, and premium, if
any, at the office or agency of the Paying Agent and Registrar maintained for
such purpose within the City and State of New York, or, at the option of the
Company, payment of interest may be made by check mailed to the Holders at their
addresses set forth in the register of Holders; provided that payment by wire
transfer of immediately available funds will be required with respect to
principal of and interest, premium on, all Global Notes and all other Notes the
Holders of which will have provided wire transfer instructions to the Company.
Such
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payment will be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, Deutsche Bank Trust Company
Americas, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
(4) INDENTURE. The Company issued the Notes under an Indenture dated as of
December 20, 2006 (the "INDENTURE") among the Company, the Guarantors and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the TIA. The Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note conflicts with
the express provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Indenture does not limit the aggregate principal
amount of Notes that may be issued thereunder.
(5) OPTIONAL REDEMPTION. (a) At any time prior to December 15, 2009, the
Company may on any one or more occasions redeem up to 35% of the aggregate
principal amount of Notes issued under the Indenture at a redemption price of
111% of the principal amount thereof, plus accrued and unpaid interest to the
Redemption Date, using cash in an amount up to the amount of the net cash
proceeds of a sale of common Equity Interests (other than Disqualified Stock) of
the Company; provided that (i) at least 65% of the aggregate principal amount of
Notes originally issued under the Indenture (excluding Notes held by the Company
and its Subsidiaries) remains outstanding immediately after the occurrence of
such redemption; and (ii) the redemption occurs within 90 days of the date of
the closing of such sale of Equity Interests.
(b) At any time prior to December 15, 2010, the Company may also redeem all
or a part of the Notes upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to 100% of the principal amount of Notes redeemed plus
the Applicable Premium as of, and accrued and unpaid interest and Additional
Interest, if any, to the Redemption Date, subject to the rights of Holders of
Notes on the relevant record date to receive interest due on the relevant
interest payment date.
(c) On or after December 15, 2010, the Company may redeem all or a part of
the Notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest on the Notes redeemed, to the applicable Redemption
Date, if redeemed during the twelve-month period beginning on of the years
indicated below, subject to the rights of Holders of Notes on the relevant
record date to receive interest on the relevant interest payment date:
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YEAR PERCENTAGE
---- ----------
2010.................. 105.500%
2011.................. 102.750%
2012 and thereafter... 100.000%
(d) The Company may at its option at any time, upon giving not less than 30
nor more than 60 days' notice to Holders, redeem all (but not less than all) of
the Notes then outstanding, at 100% of the aggregate principal amount thereof,
plus accrued and unpaid interest and Additional Amounts, if any, to such
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), in
the event the Company has become, or would become, obligated to pay, on the next
date on which any amount would be payable with respect to such Notes, any
Additional Amounts in excess of the Additional Amounts the Company would be
obligated to pay if payments made on the Notes were subject to withholding or
deduction of Mexican taxes at a rate of 4.9 percent ("Excess Additional
Amounts") as a result of: (a) any change in, or amendment to, the laws
(including any regulations or rulings promulgated thereunder) of a Taxing
Jurisdiction; or (b) any change in, or amendment to, any official position
regarding the application, administration or interpretation of such laws,
regulations or rulings (each of (a) and (b) a "Change of Tax Law"), if (1) the
above-mentioned change or amendment is announced on or after the date hereof
(or, if the relevant Tax Jurisdiction has changed since the date of this
Indenture, the date on which the then current Tax Jurisdiction became the
applicable Tax Jurisdiction under this Indenture), (2) such obligation to pay
Excess Additional Amounts would have arisen absent a further issuance of the
Notes pursuant to this Indenture, and (3) such obligation to pay Excess
Additional Amounts cannot be avoided by the Company taking reasonable measures
available to it (including, without limitation, changing the jurisdiction from
or through which payments are made).
(6) MANDATORY REDEMPTION. The Company is not be required to make
mandatory redemption or sinking fund payments with respect to the Notes. The
Company may at any time and from time to time purchase Notes in the open market
or otherwise.
(7) REPURCHASE AT THE OPTION OF HOLDER. (a) If there is a Change of
Control, the Company will be required to make an offer (a "CHANGE OF CONTROL
OFFER") to each Holder to repurchase all or any part (equal to $100,000 or
integral multiples of $1,000 above $100,000) of each Holder's Notes at a
purchase price in cash equal to 101% of the aggregate principal amount of Notes
repurchased plus accrued and unpaid interest, if any, on the Notes repurchased
to the date of purchase, subject to the rights of Holders on the relevant record
date to receive interest due on the relevant Interest Payment Date (the "CHANGE
OF CONTROL PAYMENT"). Within 10 days following the date on which a Change of
Control occurs, the Company will mail, by first-class mail, a notice to each
Holder, with a copy to the Trustee, setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
A-7
(b) If the Company or a Restricted Subsidiary of the Company
consummates any Asset Sales, within five days of each date on which the
aggregate amount of Excess Proceeds exceeds $5.0 million, within five days
thereof, the Company will make an offer to all Holders of Notes and all holders
of other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in the Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets (an "ASSET SALE OFFER") pursuant
to Section 3.09 of the Indenture to purchase the maximum principal amount of
Notes (including any Additional Notes) and such other pari passu Indebtedness
that may be purchased out of the Excess Proceeds at an offer price in cash in an
amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon to the date of purchase, in accordance with the procedures set
forth in the Indenture. To the extent that the aggregate amount of Notes
(including any Additional Notes) and other pari passu Indebtedness tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
(or such Restricted Subsidiary) may use such deficiency for any purpose not
otherwise prohibited by the Indenture. If the aggregate principal amount of
Notes and other pari passu Indebtedness tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and
such other pari passu Indebtedness to be purchased on a pro rata basis. Holders
of Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" attached to the Notes.
(8) NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a Redemption Date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction or
discharge of the Indenture. Notes and portions of Notes to be selected for
redemption or purchase will be in minimum amounts of $100,000 or whole multiples
of $1,000 in excess thereof ; except that if all of the Notes of a Holder are to
be redeemed or purchased, the entire outstanding amount of such Notes, even if
not a multiple of $1,000, will be redeemed or purchased.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons, initially issuable in minimum denominations of $100,000 and
integral multiples of $1,000 in excess of thereof. The transfer of Notes may be
registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents in connection with a transfer of
Notes. Holders will be required to pay all taxes due on transfer. The Company
will not be required to transfer or exchange need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the
A-8
Company need not exchange or register the transfer of any Notes for a period of
15 days before a selection of Notes to be redeemed.
(10) PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes or the Note Guarantees may be amended or supplemented
with the consent of the Holders of at least a majority in aggregate principal
amount of the then outstanding Notes including Additional Notes, if any, voting
as a single class, and any existing Default or Event or Default or compliance
with any provision of the Indenture or the Notes or the Note Guarantees may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the then outstanding Notes, including Additional Notes, if any, voting
as a single class (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the
Notes). Without the consent of any Holder of a Note, the Indenture or the Notes
or the Note Guarantees may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for the assumption of the Company's
or a Guarantor's obligations to Holders of the Notes and Note Guarantees in case
of a merger or consolidation or sale of all or substantially all of the
Company's or such Guarantor's assets, as applicable, to make any change that
would provide any additional rights or benefits to the Holders of the Notes or
that does not adversely affect the legal rights under the Indenture of any such
Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the TIA, to allow any
Guarantor to execute a supplemental indenture and/or a Note Guarantee with
respect to the Notes, to conform the text of the Indenture to any provisions of
the "Description of Notes" section of the Offering Memorandum, to the extent
that such provision in that "Description of Notes" was intended to be a verbatim
recitation of a provision of the Indenture or the Notes, to provide for the
issuance of additional Notes under the Indenture to the extent otherwise so
permitted under the terms of the Indenture, or to evidence and provide for the
acceptance of appointment by a successor trustee.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest (including Additional Interest) or any
Additional Amounts on the Notes; (ii) default in the payment when due (at
maturity, upon redemption or otherwise) of the principal of, or premium, if any,
on, the Notes; (iii) failure by the Company or any of its Restricted
Subsidiaries to comply with Section 4.15 or 5.01 of the Indenture; (iv) failure
by the Company or any of its Restricted Subsidiaries for 60 days after notice to
the Company by the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes, including Additional Notes, if any, then outstanding voting
as a single class to comply with any of the other agreements or covenants in the
Indenture; (v) default under any mortgage, indenture or
A-9
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now
exists, or is created after the date of the Indenture, if that default: (a) is
caused by a failure to pay principal of, or interest or premium, if any on, such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default; or (b) results in the acceleration of
such Indebtedness prior to its express maturity, and, in each case, the
principal amount of any such Indebtedness, together with the principal amount of
any other such Indebtedness or the maturity of which has been so accelerate
aggregates $5.0 million or more; (vi) failure by the Company or any of its
Restricted Subsidiaries to pay final judgments entered by a court or courts of
competent jurisdiction aggregating in excess of $5.0 million, which judgments
are not paid, discharged or stayed for a period of 60 days; (vii) except as
permitted by the Indenture, any Note Guarantee is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full
force and effect, or any Guarantor, or any authorized Person acting on behalf of
any Guarantor, denies or disaffirms its obligations under its Note Guarantee, or
any Collateral Document is held in any judicial proceeding to be unenforceable
or invalid or ceases for any reason to be in full force and effect; and (viii)
certain events of bankruptcy, reorganization, concurso mercantil, insolvency or
similar laws of Mexico, the United States or any other jurisdiction described in
the Indenture with respect to the Company or any of its Restricted Subsidiaries
that is a Significant Subsidiary or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable immediately
without further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest or premium, if any, or a Default pursuant to clauses (e)
or (f) of Section 6.01 of the Indenture) if it determines that withholding
notice is in their interest. The Holders of a majority in aggregate principal
amount of the then outstanding Notes by notice to the Trustee may, on behalf of
the Holders of all of the Notes, rescind an acceleration or waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of the principal, interest
or premium, if any, on the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required, upon becoming aware of any Default or Event of Default
A-10
under the Indenture governing the Notes, to deliver to the Trustee a statement
specifying such Default or Event of Default.
(13) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee. However, if the Trustee acquires
any conflicting interest, it must eliminate such conflict within 90 days, if
required, apply to the SEC for permission to continue as Trustee (if the
Indenture has been qualified under the TIA) or resign.
(14) NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or stockholder of the Company or any of
Guarantor, as such, will have any liability for any obligations of the Company
or the Guarantors under the Notes, the Note Guarantees or the Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes. The waiver may not be effective to waive liabilities under the
federal securities laws.
(15) AUTHENTICATION. This Note will not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
(16) ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
(17) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption, and reliance may be placed only on the
other identification numbers placed thereon.
(18) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN
AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
A-11
Maxcom Telecomunicaciones, S.A. de C.V.
Guillermo Gonzalez Camarena No. 2000
Colonia Centro de Ciudad Santa Fe
Mexico, D.F. 01210
Mexico
Attention: Jose Antonio Solbes
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
-----------
Your Signature:
--------------------------------------------
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee*:
-------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or Section 4.15 of the Indenture, check the appropriate box below:
[ ] --> Section 4.10 [ ] --> Section 4.15
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$______________
Date:
-----------
Your Signature:
--------------------------------------------
(Sign exactly as your name appears on the
face of this Note)
Tax Identification No.:
------------------------------------
Signature Guarantee*:
-------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-14
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount Signature of
Amount of decrease in Amount of increase in at maturity] of this Global authorized officer
Principal Amount [at Principal Amount [at Note following such decrease of Trustee or
Date of Exchange maturity] of this Global Note maturity] of this Global Note (or increase) Custodian
- ---------------- ----------------------------- ----------------------------- ---------------------------- ------------------
* This schedule should be included only if the Note is issued in global form.
A-15
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Maxcom Telecomunicaciones, S.A. de C.V.
Guillermo Gonzalez Camarena No. 2000
Colonia Centro de Ciudad Santa Fe
Mexico, D.F. 01210
Mexico
Fax: 011 52 55 5147 1310
Attention of: Jose Antonio Solbes
Deutsche Bank Trust Company Americas
60 Wall Street
27th Floor
New York, New York 10005
United States
Fax: +1-212-797-8622
Attention of: Trust and Securities Services
Re: 11% Senior Notes due 2014
Reference is hereby made to the Indenture, dated as of December 20, 2006
(the "INDENTURE"), among Maxcom Telecomunicaciones, S.A. de C.V., as issuer (the
"COMPANY"), the Guarantors party thereto and Deutsche Bank Trust Company
Americas as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.
___________________, (the "TRANSFEROR") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "TRANSFER"),
to ___________________________ (the "TRANSFEREE"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor
B-1
reasonably believes is purchasing the beneficial interest or Definitive Note for
its own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A, and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
REGULATION S GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO REGULATION
S. The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a Person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act and (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Restricted
Definitive Note and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN A RESTRICTED DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE
SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a subsidiary
thereof;
or
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(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
B-3
----------------------------------------
[Insert Name of Transferor]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated:
-------------
B-4
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-5
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Maxcom Telecomunicaciones, S.A. de C.V.
Guillermo Gonzalez Camarena No. 2000
Colonia Centro de Ciudad Santa Fe
Mexico, D.F. 01210
Mexico
Fax: 011 52 55 5147 1310
Attention of: Jose Antonio Solbes
Deutsche Bank Trust Company Americas
60 Wall Street
27th Floor
New York, New York 10005
United States
Fax: +1-212-797-8622
Attention of: Trust and Securities Services
Re: 11% Senior Notes due 2014
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of December 20, 2006
(the "INDENTURE"), among Maxcom Telecomunicaciones, S.A. de C.V., as issuer (the
"COMPANY"), the Guarantors party thereto and Deutsche Bank Trust Company
Americas as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.
_________________________, (the "OWNER") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "EXCHANGE"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
C-1
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "SECURITIES ACT"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
C-2
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
[ ] 144A Global Note, [ ] Regulation S Global Note, with an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, and in compliance with any applicable blue sky securities laws of any state
of the United States. Upon consummation of the proposed Exchange in accordance
with the terms of the Indenture, the beneficial interest issued will be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the relevant Restricted Global Note and in the Indenture and the
Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
----------------------------------------
[Insert Name of Transferor]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated:
------------------------------
C-3
EXHIBIT D
[FORM OF NOTATION OF GUARANTEE]
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of December 20, 2006 (the "INDENTURE")
among Maxcom Telecomunicaciones, S.A. de C.V., (the "COMPANY"), the Guarantors
party thereto and Deutsche Bank Trust Company Americas, as trustee (the
"TRUSTEE"), (a) the due and punctual payment of the principal of, premium, if
any, and interest on, the Notes, whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue
principal of and interest on the Notes, if any, if lawful, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee all in accordance with the terms of the Indenture and (b) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Note Guarantee and the
Indenture are expressly set forth in Article 11 of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Note Guarantee.
Capitalized terms used but not defined herein have the meanings given to
them in the Indenture.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
D-1
EXHIBIT E
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of
________________, 20__, among ________________ (the "GUARANTEEING SUBSIDIARY"),
a subsidiary of ___________________ (or its permitted successor), a [__________]
corporation (the "COMPANY"), the Company, the other Guarantors (as defined in
the Indenture referred to herein) and ____________________, as trustee under the
Indenture referred to below (the "TRUSTEE").
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "INDENTURE"), dated as of December 20, 2006 providing for the
issuance of 11% Senior Notes due 2014 (the "NOTES");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "NOTE GUARANTEE"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby provides an
unconditional Guarantee on the terms and subject to the conditions set forth in
the Note Guarantee and in the Indenture including but not limited to Article 11
thereof.
4. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of
E-1
the Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that such a waiver is against public policy.
5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
6. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
7. EFFECT OF HEADINGS. The Section headings herein are for convenience only
and shall not affect the construction hereof.
8. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
E-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20__
[GUARANTEEING SUBSIDIARY]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[COMPANY]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[EXISTING GUARANTORS]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[TRUSTEE],
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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