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Exhibit 4.1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.08 OF THE INDENTURE.
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US XCHANGE, L.L.C.
15% Senior Note due 2008
CUSIP _________
No. ____ $____________
US XCHANGE, L.L.C., a Michigan limited liability company (the "Company,"
which term includes any successor under the Indenture hereinafter referred to),
for value received, promises to pay to CEDE & CO., or its registered assigns,
the principal sum of ____________________________ DOLLARS ($__________) on July
1, 2008.
Interest Payment Dates: July 1 and January 1, commencing January 1, 1999.
Regular Record Dates: June 15 and December 15.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
Date: ___________, 1998
US XCHANGE, L.L.C.
By: ____________________________
Name:
Title:
By: ____________________________
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 15% Senior Notes due 2008 described in the within-mentioned
Indenture.
Date: ____________, 1998
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______________________________
THE BANK OF NEW YORK,
as Trustee
By: __________________________
Authorized Signatory
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[REVERSE SIDE OF NOTE]
US XCHANGE, L.L.C.
15% Senior Note due 2008
1. Principal and Interest.
The Company will pay the principal of this Note on July 1, 2008.
The Company promises to pay interest on the principal amount of this Note
on each Interest Payment Date, as set forth below, at the rate per annum shown
above.
Interest will be payable semi-annually (to the holders of record of the
Notes at the close of business on the June 15 or December 15 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
January 1, 1999.
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 June 25, 1998;
provided that, if there is no existing default in the payment of interest and
this Note is authenticated between a Regular Record Date referred to on the
face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such Interest Payment Date. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at a
rate per annum that is 2% in excess of the rate otherwise payable.
2. Method of Payment.
The Company will pay interest (except defaulted interest) on the principal
amount of the Notes as provided above on each July 1 and January 1, commencing
January 1, 1999 to the persons who are Holders (as reflected in the Security
Register at the close of business on the June 15 or December 15 immediately
preceding the Interest Payment Date), in each case, even if the Note is
cancelled on registration of transfer or registration of exchange after such
record date; provided that, with respect to the payment of principal, the
Company will make payment to the Holder that surrenders this Note to a Paying
Agent on or after July 1, 2008.
The Company will pay principal, premium, if any, and as provided above,
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal, premium, if any, and interest by its check payable in such money.
It may mail an interest check to a Holder's registered address (as reflected in
the Security Register). If a payment date is a date other than a
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Business Day at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
3. Paying Agent and Registrar.
Initially, the Trustee will act as authenticating agent, Paying Agent and
Registrar. The Company may change any authenticating agent, Paying Agent or
Registrar without notice. The Company, any Subsidiary or any Affiliate of any
of them may act as Paying Agent, Registrar or co-Registrar.
4. Indenture; Limitations.
The Company issued the Notes under an Indenture dated as of June 25, 1998
(the "Indenture"), between the Company and The Bank of New York, trustee (the
"Trustee"). Capitalized terms herein are used as defined in the Indenture
unless otherwise indicated. 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 the TIA for a statement of all such terms. To the extent permitted by
applicable law, in the event of any inconsistency between the terms of this
Note and the terms of the Indenture, the terms of the Indenture shall control.
The Notes are general unsecured obligations of the Company (except as
provided in Section 15 hereof).
Except with respect to the Exchange Notes, the Company may not issue any
additional Notes under the Indenture.
5. Redemption Upon Receipt of Public Equity Offering Proceeds.
At any time and from time to time prior to July 1, 2001, the Company may
redeem up to 35% of the aggregate principal amount of the Notes with the
proceeds of one or more Public Equity Offerings following which there is a
Public Market, at any time or from time to time in part, at a Redemption Price
(expressed as a percentage of principal amount) of 115%, plus accrued and
unpaid interest, if any, to the Redemption Date (subject to the rights of
Holders of record on the relevant Regular Record Date that is on or prior to
the Redemption Date to receive interest due on an Interest Payment Date);
provided that (i) at least 65% of the aggregate principal amount of Notes
originally issued remains outstanding after each such redemption and (ii)
notice of such redemption shall be mailed within 60 days of the related Public
Equity Offering.
Notes in original denominations larger than $1,000 may be redeemed in
part. On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price.
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6. Repurchase upon Change of Control.
Upon the occurrence of any Change of Control, each Holder shall have the
right to require the repurchase of its Notes by the Company in cash pursuant to
the offer described in the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Payment Date").
A notice of such Change of Control will be mailed within 30 days after any
Change of Control occurs to each Holder at its last address as it appears in
the Security Register. Notes in original denominations larger than $1,000 may
be sold to the Company in part. On and after the Payment Date, interest ceases
to accrue on Notes or portions of Notes surrendered for purchase by the
Company, unless the Company defaults in the payment of the purchase price.
7. Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in denominations of
$1,000 of principal amount and multiples of $1,000 in excess thereof. A Holder
may register the transfer or exchange of Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Notes selected for redemption. Also, it need
not register the transfer or exchange of any Notes for a period of 15 days
before the day of mailing of a notice of redemption of Notes selected for
redemption.
8. Persons Deemed Owners.
A Holder shall be treated as the owner of a Note for all purposes.
9. Unclaimed Money.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its written request. After that, Holders entitled
to the money must look to the Company for payment, unless an abandoned property
law designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company deposits with the Trustee cash, Temporary Cash Investments
or U.S. Government Obligations sufficient to pay the then outstanding principal
of, premium, if any, and accrued interest on the Notes (a) to redemption or
maturity, the Company will be discharged from the Indenture and the Notes,
except in certain circumstances for certain provisions thereof, and (b) to the
Stated Maturity, the Company will be discharged from certain covenants set
forth in the Indenture, provided that if, simultaneously with the deposit of
the cash or Temporary Cash Investments and/or U.S. Government Obligations
referred to
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above, the Company has caused an irrevocable, transferable standby letter of
credit to be issued by a bank with capital and surplus exceeding the principal
of, premium, if any, and interest on the Notes then outstanding, expiring not
earlier than 180 days from its issuance, in favor of the Trustee, which permits
the Trustee to draw an amount equal to the principal, premium, if any, and
accrued interest on the Notes through the expiry date of the letter of credit,
then the Company will be deemed to have paid and discharged any and all
obligations under this clause on the date of the deposit and issuance of the
letter of credit.
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Pledge Agreement or the
Notes may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount of the Notes then outstanding, and any
existing default or compliance with any provision may be waived with the
consent of the Holders of at least a majority in principal amount of the Notes
then outstanding. Without notice to or the consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency and make any change that
does not materially and adversely affect the rights of any Holder.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the Company
and its Restricted Subsidiaries, among other things, to Incur additional
Indebtedness, make Restricted Payments, suffer to exist restrictions on the
ability of Restricted Subsidiaries to make certain payments to the Company,
issue Capital Stock of Restricted Subsidiaries, Guarantee Indebtedness of the
Company, engage in transactions with Affiliates, suffer to exist or incur
Liens, enter into sale-leaseback transactions, use the proceeds from Asset
Sales, or merge, consolidate or transfer substantially all of its assets.
Within 45 days after the end of each fiscal quarter (90 days after the end of
the last fiscal quarter of each year), the Company shall deliver to the Trustee
an Officers' Certificate stating whether or not the signers thereof know of any
Default or Event of Default under such restrictive covenants.
13. Successor Persons.
When a successor person or other entity assumes all the obligations of its
predecessor under the Notes and the Indenture, the predecessor person will be
released from those obligations.
14. Defaults and Remedies.
Any of the following events constitutes an "Event of Default" under the
Indenture:
(a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable, upon acceleration,
redemption or otherwise;
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(b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30
days; provided that a failure to make any of the first six scheduled
interest payments on the Notes on the applicable Interest Payment Date
will constitute an Event of Default with no grace or cure period;
(c) default in the performance or breach of the provisions of
Article Five or the failure to make or consummate an Offer to Purchase in
accordance with Sections 4.11 and 4.12 of the Indenture;
(d) the Company defaults in the performance of or breaches any other
covenant or agreement of the Company in the Indenture or under the Notes
(other than a default specified in clause (a), (b) or (c) above) and such
default or breach continues for a period of 30 consecutive days after
written notice by the Trustee or the Holders of 25% or more in aggregate
principal amount of the Notes;
(e) there occurs with respect to any issue or issues of Indebtedness
of the Company or any Significant Subsidiary having an outstanding
principal amount of $5 million or more in the aggregate for all such
issues of all such Persons, whether such Indebtedness now exists or shall
hereafter be created, (A) an event of default that has caused the holder
thereof to declare such Indebtedness to be due and payable prior to its
Stated Maturity and such Indebtedness has not been discharged in full or
such acceleration has not been rescinded or annulled within 30 days of
such acceleration and/or (B) the failure to make a principal payment at
the final (but not any interim) fixed maturity and such defaulted payment
shall not have been made, waived or extended within 30 days of such
payment default;
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $5 million in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Significant Subsidiary and shall not
be paid or discharged, and there shall be any period of 30 consecutive
days following entry of the final judgment or order that causes the
aggregate amount for all such final judgments or orders outstanding and
not paid or discharged against all such Persons to exceed $5 million
during which a stay of enforcement of such final judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (B)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all of the property and assets of
the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary
and, in each case, such decree or order shall remain unstayed
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and in effect for a period of 30 consecutive days; or
(h) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an
order for relief in an involuntary case under any such law, (B) consents
to the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Company or any Significant Subsidiary or for all or substantially all of
the property and assets of the Company or any Significant Subsidiary or
(C) effects any general assignment for the benefit of creditors; or
(i) the Pledge Agreement shall cease to be in full force and effect
or enforceable other than in accordance with its terms.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee may, and at the direction of the Holders of at least
25% in aggregate principal amount of the Notes then outstanding shall, declare
all the Notes to be due and payable. If a bankruptcy or insolvency default
with respect to the Company occurs and is continuing, the Notes automatically
become due and payable. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of at least a majority in principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power.
15. Security.
The Company has entered into the Pledge Agreement and purchased and
pledged to the Trustee for the benefit of the Holders Pledged Securities in an
amount sufficient upon receipt of scheduled interest and principal payments on
such securities to provide for payment in full of the first six scheduled
interest payments due on the Notes. The Pledged Securities have been pledged
by the Company to the Trustee for the benefit of the Holders and will be held
by the Collateral Agent in the Pledge Account pending disbursement pursuant to
the Pledge Agreement.
16. Trustee Dealings with the Company.
The Trustee under the Indenture, 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.
17. No Recourse Against Others.
No founding member or any past, present or future partner, stockholder,
other equity-holder, officer, Director, employee or controlling person, as
such, of the Company or of any successor Person shall have any liability for
any obligations of the Company under the
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Notes or the Indenture or for any claim based on, in respect of or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
18. Authentication.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
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19. Governing Law.
This Note shall be governed by the laws of the State of New York without
regard to the conflicts of laws principles thereof.
20. 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).
The Company will furnish a copy of the Indenture to any Holder upon
written request and without charge. Requests may be made to US XCHANGE,
L.L.C., 20 Monroe Avenue, N.W., Suite 450, Grand Rapids, Michigan 49503,
Attention: Chief Financial Officer.
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[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
___________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
___________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing_________________________________________________________________
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
Date:____________ ______________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
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OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.11 or 4.12 of the Indenture, check the Box: []
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.11 or 4.12 of the Indenture, state the amount:
$___________________.
Date:_____________
Your Signature:_________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: ______________________________