EXHIBIT 4.1
EXECUTION COPY
________________________________________________________________________________
AVALON CABLE OF MICHIGAN HOLDINGS, INC.,
AVALON CABLE LLC
AND
AVALON CABLE HOLDINGS FINANCE, INC.,
AS ISSUERS
11 7/8% SENIOR DISCOUNT NOTES DUE 2008
INDENTURE
Dated as of December 10, 1998
THE BANK OF NEW YORK,
as Trustee
________________________________________________________________________________
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
(i)(b)................................................................. 7.10
(ii)(c)................................................................ N.A.
311(a)................................................................. 7.11
(b).................................................................... 7.11
(iii)(c)............................................................... N.A.
312(a)................................................................... 2.5
(b)(5)................................................................. 11.3
(iv)(c)................................................................ 11.3
313(a)................................................................... 7.6
(b)(1)................................................................. 10.3
(b)(2)................................................................. 7.7
(v)(c)................................................................. 7.6
11.2
(v)(d)................................................................. 7.6
314(a)................................................................... 4.3;
11.2
(A)(b)................................................................. 10.2
(c)(1)................................................................. 11.4
(c)(2)................................................................. 11.4
(c)(3)................................................................. N.A.
(vi)(e)................................................................ 11.5
(f).................................................................... N.A.
315(a)................................................................... 7.1
(b).................................................................... 7.5
11.2
(B)(c)................................................................. 7.1
(d).................................................................... 7.1
(e).................................................................... 6.11
316(a)(last sentence).................................................... 2.9
(a)(1)(A).............................................................. 6.5
(a)(1)(B).............................................................. 6.4
(a)(2)................................................................. N.A.
(b).................................................................... 6.7
(C)(c)................................................................. 2.12
317(a)(1)................................................................ 6.8
(a)(2)................................................................. 6.9
(b).................................................................... 2.2
318(a)................................................................... 11.1
(b).................................................................... N.A.
(c).................................................................... 11.1
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE............................. 1
SECTION 1.1 DEFINITIONS.................................................... 1
SECTION 1.2 OTHER DEFINITIONS.............................................. 22
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.............. 23
SECTION 1.4 RULES OF CONSTRUCTION.......................................... 24
SECTION 1.5 ONE CLASS OF SECURITIES........................................ 24
ARTICLE 2.
THE SENIOR DISCOUNT NOTES.............................................. 24
SECTION 2.1 FORM AND DATING................................................ 24
SECTION 2.2 EXECUTION AND AUTHENTICATION................................... 26
SECTION 2.3 REGISTRAR AND PAYING AGENT..................................... 26
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST............................ 27
SECTION 2.5 HOLDER LISTS................................................... 27
SECTION 2.6 TRANSFER AND EXCHANGE.......................................... 28
SECTION 2.7 REPLACEMENT SENIOR DISCOUNT NOTES.............................. 41
SECTION 2.8 OUTSTANDING SENIOR DISCOUNT NOTES.............................. 42
SECTION 2.9 TREASURY SENIOR DISCOUNT NOTES................................. 42
SECTION 2.10 TEMPORARY SENIOR DISCOUNT NOTES................................ 42
SECTION 2.11 CANCELLATION................................................... 43
SECTION 2.12 DEFAULTED INTEREST............................................. 43
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SECTION 2.13 CUSIP NUMBERS.................................................. 43
SECTION 2.14 LIMITATION OF ISSUER'S AND ADDITIONAL OBLIGOR'S
LIABILITY...................................................... 44
ARTICLE 3.
REDEMPTION AND PREPAYMENT.............................................. 44
SECTION 3.1 NOTICES TO TRUSTEE............................................. 44
SECTION 3.2 SELECTION OF SENIOR DISCOUNT NOTES TO BE REDEEMED.............. 44
SECTION 3.3 NOTICE OF REDEMPTION........................................... 45
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION................................. 46
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.................................... 46
SECTION 3.6 SENIOR DISCOUNT NOTES REDEEMED IN PART......................... 47
SECTION 3.7 OPTIONAL REDEMPTION............................................ 47
SECTION 3.8 MANDATORY REDEMPTION........................................... 48
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS............ 48
SECTION 3.10 MANDATORY PAYMENT OF ACCRUED INTEREST.......................... 50
ARTICLE 4.
COVENANTS.............................................................. 50
SECTION 4.1 PAYMENT OF SENIOR DISCOUNT NOTES............................... 50
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY................................ 50
SECTION 4.3 REPORTS........................................................ 51
SECTION 4.4 COMPLIANCE CERTIFICATE......................................... 52
SECTION 4.5 TAXES.......................................................... 52
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SECTION 4.6 STAY, EXTENSION AND USURY LAWS................................. 53
SECTION 4.7 RESTRICTED PAYMENTS............................................ 53
SECTION 4.8 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES........................................ 56
SECTION 4.9 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK................................................ 57
SECTION 4.10 ASSET SALES.................................................... 59
SECTION 4.11 TRANSACTIONS WITH AFFILIATES................................... 61
SECTION 4.12 LIENS.......................................................... 61
SECTION 4.13 BUSINESS ACTIVITIES............................................ 62
SECTION 4.14 CORPORATE EXISTENCE............................................ 62
SECTION 4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL..................... 62
SECTION 4.16 [INTENTIONALLY OMITTED]........................................ 63
SECTION 4.17 GUARANTEES BY RESTRICTED SUBSIDIARIES.......................... 63
SECTION 4.18 PAYMENTS FOR CONSENT........................................... 64
SECTION 4.19 SALE AND LEASEBACK TRANSACTIONS................................ 64
SECTION 4.20 SALE OR ISSUANCE OF CAPITAL STOCK OF RESTRICTEDSUBSIDIARIES.... 64
ARTICLE 5.
SUCCESSORS............................................................. 65
SECTION 5.1 MERGER, CONSOLIDATION, OR SALE OF ASSETS....................... 65
SECTION 5.2 SUCCESSOR CORPORATION OR GUARANTORS SUBSTITUTED................ 65
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ARTICLE 6.
EVENTS OF DEFAULT..................................................... 66
SECTION 6.1 EVENTS OF DEFAULT............................................. 66
SECTION 6.2 ACCELERATION.................................................. 68
SECTION 6.3 OTHER REMEDIES................................................ 69
SECTION 6.4 WAIVER OF PAST DEFAULTS....................................... 69
SECTION 6.5 CONTROL BY MAJORITY........................................... 69
SECTION 6.6 LIMITATION ON SUITS........................................... 69
SECTION 6.7 RIGHTS OF HOLDERS OF SENIOR DISCOUNT NOTES TO
RECEIVE PAYMENT............................................... 70
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.................................... 70
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.............................. 70
SECTION 6.10 PRIORITIES.................................................... 71
SECTION 6.11 FOR COSTS..................................................... 71
ARTICLE 7.
TRUSTEE............................................................... 72
SECTION 7.1 DUTIES OF TRUSTEE............................................. 72
SECTION 7.2 RIGHTS OF TRUSTEE............................................. 73
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.................................. 74
SECTION 7.4 TRUSTEES DISCLAIMER........................................... 74
SECTION 7.5 NOTICE OF DEFAULTS............................................ 75
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SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS OF THE SENIOR
SUBORDINATED NOTES............................................ 75
SECTION 7.7 COMPENSATION AND INDEMNITY.................................... 75
SECTION 7.8 REPLACEMENT OF TRUSTEE........................................ 76
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.............................. 77
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION................................. 77
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY............. 78
SECTION 7.12 OTHER CAPACITIES.............................................. 78
SECTION 7.13 TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM
THE ISSUER.................................................... 78
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE.............................. 79
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE................................................... 79
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE............................... 79
SECTION 8.3 COVENANT DEFEASANCE.......................................... 79
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE................... 80
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS................ 81
SECTION 8.6 REPAYMENT TO ISSUERS......................................... 82
SECTION 8.7 REINSTATEMENT................................................ 82
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER...................................... 83
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SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF SENIOR DISCOUNT
NOTES........................................................ 83
SECTION 9.2 WITH CONSENT OF HOLDERS OF SENIOR DISCOUNT NOTES............. 84
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT.......................... 85
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS............................ 85
SECTION 9.5 NOTATION ON OR EXCHANGE OF SENIOR DISCOUNT NOTES............. 86
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC.............................. 86
ARTICLE 10.
GUARANTEE............................................................. 86
SECTION 10.1 UNCONDITIONAL GUARANTEE...................................... 86
SECTION 10.2 SEVERABILITY................................................. 87
SECTION 10.3 LIMITATION OF GUARANTOR'S LIABILITY.......................... 87
SECTION 10.4 CONTRIBUTION................................................. 87
SECTION 10.5 SUBORDINATION OF SUBROGATION AND OTHER RIGHTS................ 88
ARTICLE 11.
MISCELLANEOUS......................................................... 88
SECTION 11.1 TRUST INDENTURE ACT CONTROLS................................. 88
SECTION 11.2 NOTICES...................................................... 88
SECTION 11.3 COMMUNICATION BY HOLDERS OF SENIOR SUBORDINATED
NOTES WITH OTHER HOLDERS OF SENIOR DISCOUNT NOTES............ 89
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT........... 89
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION................ 90
SECTION 11.6 RULES BY TRUSTEE AND AGENTS.................................. 90
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SECTION 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND SHAREHOLDERS.....................................90
SECTION 11.8 GOVERNING LAW..................................................91
SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..................91
SECTION 11.10 SUCCESSORS.....................................................91
SECTION 11.11 SEVERABILITY...................................................91
SECTION 11.12 COUNTERPART ORIGINALS..........................................91
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC...............................91
EXHIBITS:
A Form of Senior Discount Notes
B Form of Certificate of Transfer
C Form of Certificate of Exchange
D Form of Supplemental Indenture
INDENTURE dated as of December 10, 1998 among Avalon Cable of Michigan
Holdings, Inc., a Delaware corporation ("Michigan Holdings"), Avalon Cable LLC,
a Delaware limited liability company ("Avalon Holdings") and Avalon Cable
Holdings Finance, Inc., a Delaware corporation ("Finance Holdings") and The Bank
of New York, a New York banking corporation, as trustee (the "Trustee").
The Issuers, any Guarantors (as defined herein) and the Trustee agree as
follows for the benefit of the other parties and for the equal and ratable
benefit of the Holders of the 11% Senior Discount Notes due 2008 (the "Initial
Senior Discount Notes") and the 11% Senior Discount Notes due 2008 if and when
issued in the Exchange Offer (the "New Senior Discount Notes" and, together with
the Initial Senior Discount Notes and the Additional Senior Discount Notes, if
any, the "Senior Discount Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"ABRY" means ABRY Partners, Inc.
"ABRY III" means ABRY Broadcast Partners III, L.P.
"ABRY Management Agreement" means the Management and Consulting Services
Agreement entered into as of May 29, 1998 and amended and restated as of
November 6, 1998 by and among ABRY Partners, Inc., Avalon Michigan and Avalon
New England and any successor agreement; provided that any such successor
agreement shall not modify the ABRY Management Agreement as in effect as of
November 6, 1998 in any material respect, taken as a whole, adverse to the
Issuers and their Subsidiaries or the Trustee.
"ABRY Subordinated Debt" means Indebtedness of the Issuers in principal
amount not to exceed $30.0 million in the aggregate at any time outstanding (a)
that is owed to Avalon, directly or indirectly, or to ABRY III, ABRY or any
other investment fund controlled by ABRY, (b) as to which the payment of
principal of (and premium, if any) and interest and other payment obligations in
respect of such Indebtedness shall be subordinate to the prior payment in full
of the Senior Discount Notes and the Senior Subordinated Notes to at least the
following extent: (i) no payments of principal (or premium, if any) or interest
on or otherwise due in respect of such Indebtedness may be permitted for so long
as any default in the payment of principal (or premium, if any) or interest on
the Senior Discount Notes and/or the Senior Subordinated Notes exists and (ii)
in the event that any other default that with the passing of time or the giving
of notice, or both, would constitute an event of default exists with respect to
the Senior Discount Notes and/or the Senior Subordinated Notes, upon notice by
25% or more in principal amount at maturity of the Senior Discount Notes and/or
the Senior Subordinated Notes, as appropriate, to the trustee under the Senior
Discount Notes and/or the Senior Subordinated Notes, such trustee or trustees
shall have the right to give notice to the Issuers and the holder of
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such Indebtedness (or trustees or agents therefor) of a payment blockage, and
thereafter no payments of principal of (or premium, if any) or interest on or
otherwise due in respect of such Indebtedness may be made for a period of 179
days from the date of such notice and (c) that shall automatically convert into
common equity of the Issuers within 18 months of the date of issuance thereof,
unless refinanced.
"Accreted Value" means as of any date prior to December 1, 2003, an
amount per $1,000 principal amount at maturity of the Senior Discount Notes that
is equal to the sum of (a) the initial offering price of each Senior Discount
Note and (b) the portion of the excess of the principal amount at maturity of
each Senior Discount Note over such initial offering price which shall have been
amortized through such date, such amount to be so amortized on a daily basis and
compounded semi-annually on each June 1, and December 1, at the rate of 11% per
annum from the Issue Date through the date of determination computed on the
basis of a 360-day year of twelve 30-day months.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness 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 (ii) Indebtedness secured by
a Lien encumbering any asset acquired by such specified Person.
"Acquisition Transactions" means the acquisition (i) by the Issuers
and their Subsidiaries of 1,822,810 outstanding shares of the common stock of
Mercom, (ii) by Avalon Michigan or Avalon Michigan LLC of a cable television
system from Cross Country Cable TV, Inc., (iii) by Avalon Michigan or Avalon
Michigan LLC of a cable television system from Nova Cablevision, Inc., Nova
Cablevision VI, L.P. and Nova Cablevision VII, L.P., (iv) by Avalon Michigan or
Avalon Michigan LLC of the assets of Traverse Internet, Inc. and (v) by Avalon
New England of all of the cable system assets of Taconic Technology Corp.
"Additional Senior Discount Notes" means an additional $50.0 million
in aggregate principal amount at issuance of Senior Discount Notes issued under
this Indenture after the Issue Date in accordance with Sections 2.2 and 4.9
hereof.
"Affiliate"' means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise; provided that beneficial ownership of 10% or more of
the voting securities of a Person shall be deemed to be control.
3
"Agent" means any Registrar, Paying Agent, co-registrar,
authenticating agent or securities custodian.
"Amrac" means Amrac Clear View, a Limited Partnership.
"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 Cedel that apply to such transfer or
exchange.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback) other than in the ordinary course of business (provided that
the sale, lease, conveyance or other disposition of all or substantially all of
the assets of the Issuers and their Restricted Subsidiaries taken as a whole
will be governed by Sections 4.15 and 5.1 and not by the provisions of Section
4.10, and (ii) the issue or sale by the Issuers or any of their Restricted
Subsidiaries of Equity Interests in any of their Restricted Subsidiaries, in the
case of either clause (i) or (ii), whether in a single transaction or a series
of related transactions (a) that have a fair market value in excess of $2.5
million or (b) for Net Cash Proceeds in excess of $2.5 million. Notwithstanding
the foregoing: (i) a transfer of assets by any of the Issuers to a Restricted
Subsidiary of any Issuer or by a Restricted Subsidiary of any Issuer to such
Issuer or to another Issuer or Restricted Subsidiary of an Issuer, (ii) an
issuance or sale of Equity Interests by a Restricted Subsidiary of an Issuer to
any Issuer or to another Issuer or Restricted Subsidiary of any Issuer, (iii) a
Restricted Payment that is permitted by the covenant described under Section 4.7
and (iv) transactions that are part of the Reorganization will not be deemed to
be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Avalon" means Avalon Cable Holdings LLC, a Delaware limited
liability company.
"Avalon Michigan" means Avalon Cable of Michigan, Inc., a
Pennsylvania corporation.
"Avalon Michigan LLC" means Avalon Cable of Michigan LLC, a Delaware
limited liability company.
"Avalon New England" means Avalon Cable of New England LLC, a
Delaware limited liability company.
4
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors
of such Person (or, if such Person is a limited liability company, the board of
managers of such Person) or similar governing body or any duly authorized
committee thereof.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close.
"Cable Michigan" means Cable Michigan, Inc., a Pennsylvania
corporation.
"Capital Lease Obligation" means, as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and, for the purposes of the Indenture, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock and (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited).
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (iii) certificates of deposit
and Eurodollar time deposits with maturities of not more than one year from the
date of acquisition, bankers' acceptances with maturities of not more than one
year from the date of acquisition and overnight bank deposits, in each case with
(A) Brown Brothers Harriman or (B) any other domestic commercial bank having
capital and surplus in excess of $500 million and a Thompson Bank Watch Rating
of "B" or better, (iv) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clauses (ii) and (iii)
above entered into with any financial institution meeting the qualifications
specified in clause (iii) above, (v) commercial paper having the highest rating
obtainable from Moody's Investors Service, Inc. or one of the two highest
ratings from Standard & Poor's with maturities of not more than one year from
the date of acquisition and (vi) money market funds at least 95% of the assets
of which constitute Cash Equivalents of the kinds described in clauses (i)-(v)
of this definition.
"Cedel" means Cedel Bank, S.A.
5
"Change of Control" means the occurrence of any of the following: (i)
the 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 combined assets of the Issuers and their Restricted
Subsidiaries, taken as a whole, or of all or substantially all of the, direct or
indirect, assets of Avalon, in either case, to any "person" (as such term is
used in Section 13(d)(3) of the Exchange Act) other than another Issuer, a
Restricted Subsidiary or an Additional Obligor; (ii) the adoption of a plan
relating to the liquidation or dissolution of an Issuer or Issuers which
individually or in the aggregate holds all or substantially all of the combined
assets of the Issuers; (iii) (A) 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 Principals, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 35% of the Capital Stock of
Avalon (measured by voting power rather than number of shares) and (B) the
Principals "beneficially own" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is currently exercisable or is exercisable only upon
the occurrence of a subsequent condition), directly or indirectly, in the
aggregate a lesser percentage of the Capital Stock of Avalon (measured by voting
power rather than number of shares) than such other person; (iv) the first day
on which a majority of the members of the Board of Directors of Avalon are not
Continuing Managers; or (v) (A) Avalon or an Issuer or Issuers which
individually or in the aggregate holds all or substantially all of the combined
assets of the Issuers, consolidates with, or merges with or into, any Person or
(B) any Person consolidates with, or merges with or into, Avalon or an Issuer or
Issuers which individually or in the aggregate holds all or substantially all of
the combined assets of the Issuers, in any such event pursuant to a transaction
in which any of the outstanding Voting Stock of such Issuer or Issuers or Avalon
is converted into or exchanged for cash, securities or other property, other
than any such transaction where the Voting Stock of such Issuer or Issuers or
Avalon outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the surviving or
transferee Person constituting a majority of the outstanding shares of such
Voting Stock of such surviving or transferee Person (immediately after giving
effect to such issuance); provided, however, that notwithstanding the foregoing,
the Reorganization shall not be deemed to be a Change of Control.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Company Issuers" means initially Avalon Michigan, Avalon New England
and Avalon Cable Finance, Inc. or any successor thereto; provided that
subsequent to the Reorganization, the Company Issuers shall be Avalon New
England, Avalon Michigan LLC, as successor to Avalon Michigan, and Avalon Cable
Finance, Inc. or any successor thereto.
6
"Completed Acquisitions" means the acquisitions of Cable Michigan,
Amrac and Pegasus by Avalon or an Affiliate of Avalon.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Restricted Subsidiaries for such period, to the
extent that such provision for taxes was included in computing such Consolidated
Net Income, plus (iii) Consolidated Interest Expense of such Person for such
period, to the extent that any such expense was deducted in computing such
Consolidated Net Income, plus (iv) depreciation and amortization (including
amortization of goodwill and other intangibles but excluding amortization of
prepaid cash expenses that were paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation and
amortization were deducted in computing such Consolidated Net Income, plus (v)
other non-cash items decreasing such Consolidated Net Income, minus (vi) non-
cash items increasing such Consolidated Net Income for such period (other than
items that were accrued in the ordinary course of business), in each case, on a
consolidated basis and determined in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum, without duplication of (i) the consolidated interest
expense of such Person and its Restricted Subsidiaries for such period, whether
paid or accrued (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), (ii) the consolidated interest expense of such Person
and its Restricted Subsidiaries that was capitalized during such period, (iii)
any interest expense on Indebtedness of another Person that is guaranteed by
such Person or any of its Restricted Subsidiaries or secured by a Lien on assets
of such Person or any of its Restricted Subsidiaries (whether or not such
guarantee or Lien is called upon) and (iv) the product of (a) all cash dividend
payments (and non-cash dividend payments in the case of a Person that is a
Restricted Subsidiary) on any series of preferred stock of such Person or any of
its Restricted Subsidiaries, times (b) a fraction, the numerator of which is one
and the denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries (for such period, on a consolidated basis, determined in accordance
with GAAP); provided that (i) the Net Income (but not loss) of any Person that
is not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary,
(ii) the Net Income of
7
any Person acquired in a pooling of interests transaction for any period prior
to the date of such acquisition shall be excluded, (iii) the cumulative effect
of a change in accounting principles shall be excluded and (iv) the Net Income
of any Unrestricted Subsidiary shall be excluded whether or not distributed to
an Issuer or one of its Restricted Subsidiaries.
"Continuing Managers" means the managers of Avalon on the Issue Date
and each other manager, if, in each case, such other manager's nomination for
election to the board of managers of Avalon is recommended by at least
66 2/3% of the then Continuing Managers or such other manager receives the
vote of the Permitted Investors in his or her election by the equityholders of
Avalon.
"Control Investment Affiliate" means as to any Person, any other
Person which (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.2 hereof or such other address as to which the
Trustee may give notice to the Issuers.
"Credit Facility" means that certain Senior Credit Agreement, dated as
of November 5, 1998, by and among the Company Issuers, the lenders party
thereto, Lehman Commercial Paper Inc., as administrative agent, and other
parties thereto, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, modified, renewed, refunded, replaced or refinanced from time to time.
"Custodian" means the Trustee, as custodian with respect to the Senior
Discount Notes in global form, or any successor entity thereto.
"Default" means any event that is or with the passage of time or the
giving of notice (or both) would be an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.6 hereof, 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 Senior Discount Notes issuable
or issued in whole or in part in global form, the Person specified in Section
2.3 hereof as the Depositary with respect to the Senior Discount Notes, and any
and all successors thereto
8
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"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 at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Senior Discount Notes mature, except to the extent that such Capital
Stock is solely redeemable with, or solely exchangeable for, any Capital Stock
of such Person that is not Disqualified Stock; provided, however, that any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Issuers or their Affiliates to
repurchase such Capital Stock upon the occurrence of a Change of Control or an
Asset Sale shall not constitute Disqualified Stock if the terms of such Capital
Stock provide that the Issuers or their Affiliates may not repurchase or redeem
any such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.7.
"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).
"Equity Offering" means any public or private sale of Capital Stock of
any of the Issuers or Avalon or any Subsidiary of Avalon pursuant to which the
Issuers together receive net proceeds of at least $25.0 million, other than
issuances of Capital Stock pursuant to employee benefit plans or as compensation
to employees; provided that to the extent such Capital Stock is issued by Avalon
or any Subsidiary of Avalon, the Net Cash Proceeds thereof shall have been
contributed to one or more of the Issuers in the form of an equity contribution.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Excess Proceeds" means any Net Cash Proceeds from Asset Sales that
are not applied or invested as provided in the first sentence of the third
paragraph under Section 4.10 within the applicable period.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
9
"Existing Indebtedness" means up to $5.0 million in aggregate
principal amount of Indebtedness of the Issuers and their Restricted
Subsidiaries (other than Indebtedness under the Credit Facility and the Senior
Discount Notes) in existence on the Issue Date, until such amounts are repaid.
"Existing Michigan Indebtedness" means Indebtedness incurred by Avalon
Michigan or Mercom between the Issue Date and the completion of the
Reorganization that would be permitted to be incurred under the terms of this
Indenture, including any related notes, guarantees, collateral documents,
instruments and agreement executed in connection therewith, and in each case, as
amended, modified renewed, refunded, replaced or refinanced.
"Full Accretion Date" means December 1, 2003.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, except for the provisions
described above under Sections 4.7 and 4.9, GAAP shall be determined on the
basis of such principles in effect on the Issue Date.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto issued in accordance with Section 2.1, 2.6(b), 2.6(d) or 2.6(f)
hereof.
"Global Note Legend" means the legend set forth in Section 2.6(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, 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, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means (i) Avalon Michigan and Michigan Holdings upon the
effective completion of the Reorganization and their execution of Guarantees of
the Senior Discount Notes in accordance with the provisions of this Indenture
and (ii) any Subsidiary that executes a Guarantee of the Senior Discount Notes
in accordance with the provisions of this Indenture, and their respective
successors and assigns.
10
"Hedging Obligations" means, with respect to any Person, the net
payment Obligations of such Person under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements in the ordinary course of business designed to
protect such Person against fluctuations in commodity prices, interest rates or
currency exchange rates.
"Holder" means a Person in whose name a Senior Discount Note is
registered.
"IAI Global Note" means a global note 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 an initial denomination equal to $0 for resales
after the Issue Date to institutional "accredited investors" (as defined in Rule
501 under the Securities Act).
"Indebtedness" means, with respect to any Person, without duplication,
any indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof) or
banker's acceptances or representing Capital Lease Obligations or the balance
deferred and unpaid of the purchase price of any Property acquired by such
Person or representing any Hedging Obligations, except any such balance that
constitutes an accrued expense or trade or accounts payable, if and to the
extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all Indebtedness of others
secured by a Lien on any asset of such Person (whether or not such Indebtedness
is assumed by such Person) and, to the extent not otherwise included, the
Guarantee by such Person of any Indebtedness of any other Person. The amount of
any Indebtedness outstanding as of any date shall be (i) the face amount
thereof, in the case of any Indebtedness with respect to acceptances, letters of
credit and similar facilities, (ii) the accreted value thereof in the case of
any Indebtedness that does not require current payments of interest and (ii) the
principal amount thereof, together with any interest thereon that is more than
30 days past due, in the case of any other Indebtedness; provided, however,
that, in each case, with respect to any Indebtedness of any Person secured by a
Lien on any asset of such Person and non-recourse to such Person, the amount of
such Indebtedness shall be the lesser of (A) the principal amount thereof and
(B) the fair market value of the Property subject to such Lien. Notwithstanding
the foregoing, the term "Indebtedness" shall not include Indebtedness of the
Issuers to Affiliates for which principal and interest payments are not required
to be made prior to the maturity of the Senior Discount Notes and which is
otherwise subordinated to the prior payment in full of the Senior Discount
Notes.
"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.
11
"Initial Purchasers" means Lehman Brothers Inc. and Barclays Capital
Inc.
"Initial Senior Discount Notes" means $196.0 million in aggregate
principal amount at maturity of Senior Discount Notes issued under this
Indenture on the date hereof.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other Obligations),
advances of assets or capital contributions (excluding commission, travel and
entertainment, moving, and similar advances to officers and employees made in
the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If any of the Issuers or any of their
Restricted Subsidiaries sells or otherwise disposes of any Equity Interests of
any direct or indirect Restricted Subsidiary of any Issuer such that, after
giving effect to any such sale or disposition, such Person is no longer a direct
or indirect Restricted Subsidiary of any Issuer, such Issuer or such Restricted
Subsidiary, as the case may be, shall be deemed to have made an Investment on
the date of any such sale or disposition equal to the fair market value of the
Equity Interests of such Restricted Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of Section 4.7.
"Issue Date" means the date on which $196.0 million aggregate
principal amount at maturity of the Senior Discount Notes are originally issued.
"Issuers" means, initially, Michigan Holdings, Avalon Holdings and
Finance Holdings or any successor thereto; provided that subsequent to the
Reorganization, the Issuers shall be Avalon Holdings and Finance Holdings or any
successor thereto.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Issuers and sent to all Holders of the Senior Discount Notes for use by
such Holders in connection with the Exchange Offer.
"Leverage Ratio" means the ratio of (i) the aggregate outstanding
amount of Indebtedness of each of the Issuers and their Restricted Subsidiaries
as of the date of calculation on a combined consolidated basis in accordance
with GAAP (subject to the terms described in the next paragraph) plus the
aggregate liquidation preference of all outstanding Disqualified Stock of the
Issuers and preferred stock of the Issuers' Restricted Subsidiaries (except
preferred stock issued to the Issuers or a Wholly Owned Subsidiary of the
Issuers) on such date to (ii) the
12
aggregate Consolidated Cash Flow of the Issuers for the full fiscal quarter
ending on or prior to the date of determination multiplied by four.
For purposes of this definition, (i) the amount of Indebtedness which
is issued at a discount shall be deemed to be the accreted value of such
Indebtedness at the end of the quarter, whether or not such amount is the amount
then reflected on a balance sheet prepared in accordance with GAAP, and (ii) the
aggregate outstanding principal amount of Indebtedness of the Issuers and their
Subsidiaries and the aggregate liquidation preference of all outstanding
preferred stock of the Issuers' Subsidiaries for which such calculation is made
shall be determined on a pro forma basis as if the Indebtedness and preferred
stock giving rise to the need to perform such calculation had been incurred and
issued and the proceeds therefrom had been applied, and all other transactions
in respect of which such Indebtedness is being incurred or preferred stock is
being issued had occurred, on the first day of the quarter. In addition to the
foregoing, for purposes of this definition, Consolidated Cash Flow shall be
calculated on a pro forma basis after giving effect to (i) the incurrence of the
Indebtedness of such Person and its Subsidiaries and the issuance of the
preferred stock of such Subsidiaries (and the application of the proceeds
therefrom) giving rise to the need to make such calculation and any incurrence
(and the application of the proceeds therefrom) or repayment of other
Indebtedness, at any time subsequent to the beginning of the quarter and on or
prior to the date of determination, as if such incurrence or issuance (and the
application of the proceeds thereof), or the repayment, as the case may be,
occurred on the first day of the quarter (except that, in making such
computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average balance of such Indebtedness at the end
of each month during such period) and (ii) any acquisition (including, without
limitation, the acquisitions of Cable Michigan, Amrac and Pegasus and any other
acquisition giving rise to the need to make such calculation as a result of such
Person or one of its Subsidiaries (including any Person that becomes a
Subsidiary as a result of such acquisition) incurring, assuming or otherwise
becoming liable for Indebtedness or such Person's Subsidiaries issuing preferred
stock) at any time on or subsequent to the first day of the quarter and on or
prior to the date of determination, as if such acquisition (including the
incurrence, assumption or liability for any such Indebtedness and the issuance
of such preferred stock and also including any Consolidated Cash Flow associated
with such acquisition) occurred on the first day of the quarter, giving pro
forma effect to any non-recurring expenses, non-recurring costs and cost
reductions within the first year after such acquisition the Issuers anticipate
if the Issuers deliver to the Trustee an officer's certificate executed by the
chief financial or accounting officer of any of the Issuers certifying to and
describing and quantifying with reasonable specificity such non-recurring
expenses, non-recurring costs and cost reductions. Furthermore, in calculating
Consolidated Interest Expense for purposes of the calculation of Consolidated
Cash Flow, (a) interest on Indebtedness determined on a fluctuating basis as of
the date of determination (including Indebtedness actually incurred on the date
of the transaction giving rise to the need to calculate the Leverage Ratio) and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness as in effect on the date of determination and (b) notwithstanding
(a) above, interest determined on a fluctuating basis, to the extent such
interest is covered by
13
Hedging Obligations, shall be deemed to accrue at the rate per annum resulting
after giving effect to the operation of such agreements.
"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 any asset and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Mercom" means Mercom, Inc., a Delaware corporation.
"Mercom Intercompany Loan" means the Term Credit Agreement between
Mercom and Cable Michigan, Inc. originally dated as of November 26, 1989,
amended and restated as of August 16, 1995, further amended and restated as of
September 29, 1997 and as may be further amended from time to time; provided
that any such further amendment shall not modify the Mercom Intercompany Loan as
in effect as of September 29, 1997 in any material respect, taken as a whole,
adverse to the Issuers and their Subsidiaries or the Trustee or the Holders.
"Mercom Management Agreement" means the Management Agreement between
Mercom and Cable Michigan, Inc. dated as of January 1, 1997, as may be amended
from time to time; provided that any such amendment shall not modify the Mercom
Management Agreement as in effect as of January 1, 1997 in any material respect.
"Merger" means the merger of Avalon Cable Michigan, Inc. with and
into Cable Michigan, Inc.
"Net Cash Proceeds" means (a) with respect to any Asset Sale, the
aggregate cash proceeds or Cash Equivalents received by the Issuers or any of
their Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of (i) all costs relating to such
Asset Sale (including, without limitation, legal, accounting, investment banking
and brokers fees, and sales and underwriting commissions) and any relocation
expenses incurred as a result thereof, taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements), (ii) any reserve established in accordance with GAAP or
amounts deposited in escrow for adjustment in respect of the sale price of such
asset or assets or for indemnities with respect to any Asset Sale (provided that
such amounts shall be Net Cash Proceeds to the extent and at the time released
or not required to be reserved) and (iii) amounts required to be applied to the
repayment of Indebtedness secured by a Lien which is expressly permitted
hereunder on any asset that is the subject of such Asset Sale
14
and (b) with respect to transactions or events other than Asset Sales, the
aggregate cash proceeds or Cash Equivalents received by the Issuers or any of
their Restricted Subsidiaries in connection therewith less the reasonable fees,
commissions and other out-of-pocket expenses incurred by the Issuers or any of
their Restricted Subsidiaries in connection with such transaction or event and
less any taxes paid or payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing arrangements).
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss).
"New Senior Discount Notes" has the meaning assigned to it in the
preamble to this Indenture.
"Non-Recourse Debt" means Indebtedness (i) as to which none of the
Issuers nor any of their 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; and (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any Indebtedness (other than the
Senior Discount Notes being offered hereby) of any of the Issuers or their
Restricted Subsidiaries to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its stated maturity;
and (iii) as to which the lender have been notified in writing that they will
not have any recourse to the stock or assets of any of the Issuers or their
Restricted Subsidiaries.
"Non-US. Person" means a Person who is not a U.S. Person.
"Obligations" means any principal, premium, if any, interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to any Issuer or any of their
Restricted Subsidiaries whether or not a claim for post-filing interest is
allowed in such proceeding), penalties, fees, charges, expenses,
indemnifications, reimbursement obligations, damages (including Liquidated
Damages), guarantees and other liabilities or amounts payable under the
documentation governing any Indebtedness or in respect thereof.
"Offering" means the offering of the Initial Senior Discount Notes by
the Issuers.
15
"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 that meets the
requirements of Section 11.5 hereof and is signed on behalf of any Person by any
two of the following Officers: the Chief Executive Officer, the President, the
Chief Operating Officer, the Chief Financial Officer, the Treasurer or any Vice
President.
"144A Global Note" means a global note 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 Senior Discount Notes sold in reliance on Rule 144A.
"Opinion of Counsel" means a written opinion from legal counsel that
meets the requirements of Section 11.5 hereof. The counsel may be an employee
of or counsel to the Issuers, any Subsidiary of the Issuers or the Trustee.
"Parent Guarantors" means Avalon Michigan and Michigan Holdings upon
the effective completion of the Reorganization and their execution of Guarantees
of the Senior Discount Notes in accordance with the provisions of this
Indenture.
"Participant" means, with respect to the Depositary, Euroclear or
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depository Trust Company, shall include
Euroclear and Cedel).
"Pegasus" means, collectively, Pegasus Cable Television, Inc. and
Pegasus Cable Television of Connecticut, Inc.
"Permitted Business" means any business engaged in by the Issuers or
their Restricted Subsidiaries as of the Issue Date or any business reasonably
related, ancillary or complementary thereto.
"Permitted Investments" means (a) any Investment in any Issuer or in
any Restricted Subsidiary of the Issuers; (b) any Investment in Cash Equivalents
constituting Cash Equivalents at the time made; (c) any Investment by the
Issuers or any of their Restricted Subsidiaries in a Person engaged in a
Permitted Business, if as a result of such Investment (i) such Person becomes a
Wholly-Owned Subsidiary of any Issuer or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, any of the Issuers or any of their
Restricted Subsidiaries; (d) any Restricted Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made in compliance
with Section 4.10; (e) any acquisition of assets solely in exchange for the
16
issuance of Equity Interests (other than Disqualified Stock) of any of the
Issuers; (f) other Investments by the Issuers or any of their Restricted
Subsidiaries in any Person having an aggregate fair market value (measured as of
the date made and without giving effect to subsequent changes in value), when
taken together with all other Investments made pursuant to this clause (f) that
are at the time outstanding, not to exceed $10.0 million; (g) Investments
arising in connection with Hedging Obligations that are incurred in the ordinary
course of business, for the purpose of fixing or hedging currency, commodity or
interest rate risk (including with respect to any floating rate Indebtedness
that is permitted by the terms of the Indenture to be outstanding) in connection
with the conduct of the business of the Issuers and their Restricted
Subsidiaries; (h) prior to the completion of the Mercom Acquisition, the Mercom
Intercompany Loan; and (i) any Investment existing on the Issue Date and any
amendment, modification, restatement, supplement, extension, renewal, refunding,
replacement, refinancing, in whole or in part, thereof.
"Permitted Investors" means the collective reference to ABRY and its
Control Investment Affiliates, including ABRY III.
"Permitted Liens" means (i) Liens securing Indebtedness under the
Credit Facility or other senior Indebtedness if such Indebtedness was permitted
by the terms of the Indenture to be incurred, (ii) Liens securing Indebtedness
of any Restricted Subsidiary of any of the Issuers if such Indebtedness was
permitted by the terms of the Indenture to be incurred; (iii) Liens securing
Hedging Obligations with respect to Indebtedness permitted by the Indenture to
be incurred; (iv) Liens on property of a Person existing at the time such Person
is merged into or consolidated with any of the Issuers or any of their
Restricted Subsidiaries; provided that such Liens were not created in
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with such Issuer; (v)
Liens on property existing at the time of acquisition thereof by any of the
Issuers or any of their Restricted Subsidiaries, provided that such Liens were
not created in contemplation of such acquisition and only extend to the property
so acquired; (vi) Liens existing on the Issue Date; (vii) Liens to secure any
Permitted Refinancing Indebtedness incurred to refinance any Indebtedness
secured by any Lien referred to in the foregoing clauses (ii) through (vi), as
the case may be, at the time the original Lien became a Permitted Lien; (viii)
Liens in favor of any of the Issuers or any of their Restricted Subsidiaries;
(ix) Liens incurred in the ordinary course of business of the Issuers or any of
their Restricted Subsidiaries with respect to obligations that do not exceed the
greater of $15.0 million or 5% of Total Assets in the aggregate at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by such Issuer or such Restricted Subsidiary; (x) Liens to
secure the performance of statutory obligations, surety or appeal bonds,
performance bonds, deposits to secure the performance of bids, trade contracts,
government contracts, leases or licenses or other obligations of a like nature
incurred in the ordinary course of business (including, without limitation,
landlord Liens on leased properties); (xi) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
17
contested in good faith by appropriate proceedings promptly instituted and
diligently prosecuted, provided that any reserve or other appropriate provision
as shall be required to conform with GAAP shall have been made therefor; (xii)
Liens to secure Indebtedness (including Capital Lease Obligations) permitted by
clause (vi) of the second paragraph of Section 4.9 covering only the assets
acquired with such Indebtedness; (xiii) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business in respect of obligations not overdue for a period
in excess of 60 days or which are being contested in good faith by appropriate
proceedings promptly instituted and diligently prosecuted; provided that any
reserve or other appropriate provision as shall be required to conform with GAAP
shall have been made therefor; (xiv) easements, rights-of-way, zoning and
similar restrictions and other similar encumbrances or title defects incurred,
or leases or subleases granted to others, in the ordinary course of business,
which do not in any case materially detract from the value of the Property
subject thereto or do not interfere with or adversely affect in any material
respect the ordinary conduct of the business of the Issuers and their Restricted
Subsidiaries taken as a whole; (xv) Liens in favor of customs and revenue
authorities to secure payment of customs duties in connection with the
importation of goods in the ordinary course of business and other similar Liens
arising in the ordinary course of business; (xvi) leases or subleases granted to
third Persons not materially interfering with the ordinary course of business of
the Issuers or any of their Restricted Subsidiaries; (xvii) Liens (other than
any Lien imposed by ERISA or any rule or regulation promulgated thereunder)
incurred or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance, and other types of social
security; (xviii) deposits made in the ordinary course of business to secure
liability to insurance carriers; (xix) Liens to secure Indebtedness permitted
under Section 4.9; provided, that any such Lien encumbers only the assets so
purchased with the proceeds thereof; (xx) any attachment or judgment Lien not
constituting an Event of Default under clause (vii) of the first paragraph of
Section 6.1; (xxi) any interest or title of a lessor or sublessor under any
operating lease; (xxii) Liens under licensing agreements for use of Intellectual
Property entered into in the ordinary course of business; (xxiii) Liens
encumbering deposits made to secure obligations arising from statutory,
regulatory, contractual, or warranty requirements of any of the Issuers or any
of their Restricted Subsidiaries, including rights of offset and set-off; (xxiv)
bankers' Liens in respect of deposit accounts; (xxv) Liens created under this
Indenture; (xxvi) Liens imposed by law incurred by the Issuers or their
Restricted Subsidiaries in the ordinary course of business; and (xxvii) any
renewal of or substitution for any Lien permitted by clauses (i) through (xxvi),
provided, however, that with respect to Liens incurred pursuant to this clause
(xxvii), the principal amount secured has not increased nor the Liens extended
to any additional property (other than proceeds of the property in question).
"Permitted Refinancing Indebtedness" means any Indebtedness of any of
the Issuers or any of their Restricted Subsidiaries issued in exchange for, or
the net proceeds of which are used to extend, refinance, renew, replace, defease
or refund other Indebtedness of such Issuer or such Restricted Subsidiary (other
than intercompany Indebtedness); provided that either: (A) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
accrued and unpaid interest on, any Indebtedness so extended, refinanced,
renewed, replaced,
18
defeased or refunded (plus the amount of reasonable fees and expenses incurred
in connection therewith); (B) for Indebtedness other than Indebtedness incurred
pursuant to the Credit Facility, such Permitted Refinancing Indebtedness has a
final maturity date the same as or later than the final maturity date of, and
has a Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; (C) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Senior Discount 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 Senior Discount Notes on terms at least
as favorable to the Holders of Senior Discount Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (D) such Indebtedness is incurred either by
the Issuer or the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded or by the
parent company of such obligor.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or any other entity.
"Principal" means (i) Permitted Investors and (ii) the members of
management of the Issuers or any of the Subsidiaries of the Issuers as of the
Issue Date, in each case, together with any spouse or immediate family member
(including adoptive children), estate, heirs, executors, personal
representatives and administrators of such Person.
"Private Placement Legend" means the legend set forth in Section
2.6(g)(i) to be placed on all Senior Discount Notes issued under this Indenture
except where otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of December 10, 1998, by and among the Issuers and the
Initial Purchasers, as such agreement may be amended, modified or supplemented
from time to time.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Note 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 Regulation S Temporary Global Note upon
expiration of the Restricted Period.
19
"Regulation S Temporary Global Note" means a temporary global Note in
the form of Exhibit A hereto bearing 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 Senior Discount Notes initially sold in reliance on Rule 903 of Regulation
S.
"Representative" means the indenture trustee or other trustee, agent
or representative for any Senior Indebtedness.
"Reorganization" means the related series of substantially
simultaneous transactions pursuant to which (i) substantially all the assets of
Avalon Michigan (other than, at the option of Avalon Michigan, the Capital Stock
of Mercom and any Subsidiary of Avalon Michigan organized for purposes of
consummating the Mercom Acquisition) and Mercom (other than, at the option
Avalon Michigan, the Capital Stock of Wholly-Owned Subsidiaries of Mercom) are
transferred to Avalon Michigan LLC; (ii) substantially all of the liabilities of
Avalon Michigan and Mercom (other than liabilities hereunder and, at the option
of Avalon Michigan, intercompany debt) are transferred to Avalon Michigan LLC;
(iii) Michigan Holdings ceases to be an Issuer and together with Avalon Michigan
becomes a guarantor under the Indenture and (iv) certain Indebtedness of Avalon
New England shall be assumed by Avalon Michigan.
"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) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"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; provided that, on the
Issue Date, all Subsidiaries of each of the Issuers shall be Restricted
Subsidiaries of each such Issuer.
20
"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.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Discount Note Guarantee" means the supplemental indenture, in
the form of Exhibit D hereto, executed and delivered to the Trustee pursuant to
which each Guarantor will guarantee payment of the Senior Discount Notes.
"Senior Discount Notes" has the meaning assigned to it in the preamble
to this Indenture.
"Senior Subordinated Notes" means the Senior Subordinated Notes issued
by the Company Issuers, as co-obligors, under an indenture dated as of December
10, 1998 among the Company Issuers and the Bank of New York, as trustee.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"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 Act, as such Regulation is in effect on the Issue
Date.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the credit agreement or other
original documentation governing such Indebtedness, and shall not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"Strategic Equity Investment" means a cash contribution to the equity
capital of any of the Issuers or a purchase from any such Issuer of common
Equity Interests (other than Disqualified Stock), in either case by or from a
Strategic Equity Investor and for aggregate cash consideration of at least $25.0
million.
"Strategic Equity Investor" means, as of any date, any Person (other
than an Affiliate of any of the Issuers) engaged in a Permitted Business.
21
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or an entity described in clause (i) and
related to such Person or (b) the only general partners of which are such Person
or of one or more entities described in clause (i) and related to such Person
(or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA.
"Total Assets" means the total combined consolidated assets of the
Issuers and their Restricted Subsidiaries, as shown on the most recent balance
sheets (excluding the footnotes thereto) of the Issuers.
"Total Revenues" means the total combined consolidated revenues of the
Issuers and their Restricted Subsidiaries, as shown on the most recent balance
sheets (excluding the footnotes thereto) of the Issuers.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note in the form
of Exhibit A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Senior Discount Notes that does not bear
the Private Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated
by the Board of Directors of the applicable Issuer as an Unrestricted Subsidiary
pursuant to a Board Resolution; but only to the extent that such Subsidiary: (a)
has no Indebtedness other than Non-Recourse Debt; (b) is not party to any
agreement, contract, arrangement or understanding with such Issuer or any
Restricted Subsidiary of such Issuer unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to such Issuer or
such Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of such Issuer; (c) is a Person with respect to
which none of the Issuers nor any of their Restricted Subsidiaries has any
direct or indirect obligation (x) to subscribe for additional Equity Interests
or (y) to maintain or preserve such Person's financial condition or to cause
such Person to achieve any specified levels of operating results; and (d) has
not guaranteed or otherwise directly
22
or indirectly provided credit support for any Indebtedness of the Issuers or any
of their Restricted Subsidiaries. The Board of Directors of the Issuers may at
any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Issuers of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted pursuant to Section 4.9,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the reference period, and (ii) no Default or Event of Default would
be in existence following such designation.
For purposes of the applicable Board of Directors making a
determination that a Restricted Subsidiary is an Unrestricted Subsidiary, all
outstanding Investments by each Issuer and its Restricted Subsidiaries (except
to the extent repaid in cash) in the Subsidiary so designated will be deemed to
be Restricted Payments at the time of such designation and will reduce the
amount available for Restricted Payments under the first paragraph of Section
4.7. All such outstanding Investments will be deemed to constitute Investments
in an amount equal to the fair market value of such Investments at the time of
such designation. Such designation will only be permitted if such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the requirements contained in the definition of an Unrestricted
Subsidiary.
Any designation of an Unrestricted Subsidiary by the applicable Board
of Directors shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolutions of the Board of Directors of the applicable
Issuer giving effect to such designation and an Officers' Certificate of the
applicable Issuer certifying that such designation complied with the terms of
the Indenture governing the designation of Unrestricted Subsidiaries and was
permitted by Section 4.7. If, at any time, any Unrestricted Subsidiary fails to
meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture
and any Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of the applicable Issuer as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under the covenant
described under Section 4.9 hereof, such Issuer shall be in default of such
covenant).
"U.S. Person" means a U.S. person as defined in Rule 902(k) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date
23
and the making of such payment, by (ii) the then outstanding principal amount of
such Indebtedness.
"Wholly Owned Subsidiary of any Person" means a Restricted Subsidiary
of such Person all of the outstanding Capital Stock and other Equity Interests
of which shall at the time be owned by such Person or by one or more Wholly
Owned Subsidiaries of such Person.
SECTION 1.2 OTHER DEFINITIONS.
Defined in
Term Section
"Accreted Interest Redemption Amount"..................... 3.10
"Affiliate Transaction"................................... 4.11
"Asset Sale Offer"........................................ 4.10
"Authentication Order".................................... 2.2
"Change of Control Offer"................................. 4.15
"Change of Control Payment"............................... 4.15
"Change of Control Payment Date".......................... 4.15
"Covenant Defeasance"..................................... 8.3
"DTC"..................................................... 2.3
"Event of Default"........................................ 6.1
"Excess Proceeds"......................................... 4.10
"Funding Guarantor"....................................... 10.4
"incur"................................................... 4.9
"Legal Defeasance"........................................ 8.2
"Offer Amount"............................................ 3.9
"Offer Period"............................................ 3.9
"Paying Agent"............................................ 2.3
"Payment Default"......................................... 6.1
"Permitted Debt".......................................... 4.9
"Purchase Date"........................................... 3.9
"Redemption Date"......................................... 3.7
"Registrar"............................................... 2.3
"Restricted Payments"..................................... 4.7
"Successor Guarantor"..................................... 5.2
SECTION 1.3 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:
24
"indenture securities" means the Senior Discount Notes and the
Senior Discount Note Guarantees;
"indenture security Holder" means a Holder of a Security;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"Obligor" on the indenture securities means the Issuers, the
Guarantors and any successor obligor upon the indenture securities.
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 1.4 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 GAAP;
(3) or is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement or successor sections or
rules adopted by the SEC from time to time.
SECTION 1.5 ONE CLASS OF SECURITIES.
The Initial Senior Discount Notes, the New Senior Discount Notes and
the Additional Senior Discount Notes, if any, shall vote and consent together on
all matters as one class and none of the Initial Senior Discount Notes, the New
Senior Discount Notes or the
25
Additional Senior Discount Notes shall have the right to vote or consent as a
separate class on any matter.
ARTICLE 2.
THE SENIOR DISCOUNT NOTES
SECTION 2.1 FORM AND DATING.
(a) General.
The Senior Discount Notes and the Trustee's certificate of
authentication shall be substantially in the forms as in Exhibit A hereto. The
Senior Discount Notes may have notations, legends or endorsements required by
law, stock exchange rule or usage. Each Senior Discount Note shall be dated the
date of its authentication. The Senior Discount Notes shall be in denominations
of $1,000 and integral multiples thereof.
The terms and provisions contained in the Senior Discount Notes
shall constitute, and are hereby expressly made, a part of this Indenture and
the Issuers, any Guarantor 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 Senior Discount Note
conflicts with the express provisions of this Indenture, the provisions of this
Indenture shall govern and be controlling.
(b) Global Notes.
Senior Discount Notes issued in global form shall be substantially
in the form of Exhibit A attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Senior Discount Notes issued in definitive form shall be substantially
in the form of Exhibit A attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the outstanding
Senior Discount Notes as shall be specified therein and each shall provide that
it shall represent the aggregate principal amount at maturity of outstanding
Senior Discount Notes from time to time endorsed thereon and that the aggregate
principal amount at maturity of outstanding Senior Discount 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 at
maturity of outstanding Senior Discount Notes represented thereby shall be made
by the Trustee or the Custodian, at the direction of the Issuers, in accordance
with written instructions given by the Holder thereof as required by Section 2.6
hereof.
(c) Temporary Global Notes
26
Senior Discount Notes offered and sold in reliance on Regulation S
shall be issued initially in the form of the Regulation S Temporary Global Note,
which shall be deposited on behalf of the purchasers of the Senior Discount
Notes represented thereby with the Trustee, at its New York office, as custodian
for the Depositary, and registered in the name of the Depositary or the nominee
of the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Cedel Bank, duly executed by the Issuers and authenticated by the
Trustee as hereinafter provided. The Restricted Period shall be terminated upon
the receipt by the Trustee of (i) a written certificate from the Depositary,
together with copies of certificates from Euroclear and Cedel Bank certifying
that they have received certification of non-United States beneficial ownership
of 100% of the aggregate principal amount at maturity of the Regulation S
Temporary Global Note (except to the extent of any beneficial owners thereof who
acquired an interest therein during the Restricted Period pursuant to another
exemption from registration under the Securities Act and who will take delivery
of a beneficial ownership interest in a 144A Global Note or an IAI Global Note
bearing a Private Placement Legend, all as contemplated by Section 2.6(b)(ii)
hereof), and (ii) an Officers' Certificate from the Issuers. Following the
termination of the Restricted Period, beneficial interests in the Regulation S
Temporary Global Note shall be exchanged for beneficial interests in Regulation
S Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously
with the authentication of Regulation S Permanent Global Notes, the Trustee
shall cancel the Regulation S Temporary Global Note. The aggregate principal
amount at maturity of the Regulation S Temporary Global Note and the Regulation
S Permanent Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its
nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
(d) Euroclear Cedel Procedures Applicable.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Temporary
Global Note and the Regulation S Global Notes that are held by Participants
through Euroclear or Cedel Bank.
SECTION 2.2 EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Senior Discount Notes for each of the
Issuers by manual or facsimile signature. The Issuers' seals, if any, may be
reproduced on the Senior Discount Notes and may be in facsimile form.
If an Officer whose signature is on a Senior Discount Note no longer
holds that office at the time a Senior Discount Note is authenticated, the
Senior Discount Note shall nevertheless be valid.
27
A Senior Discount Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence
that the Senior Discount Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of each of the Issuers
signed by two Officers of each Issuer (an "Authentication Order"), (i)
authenticate Senior Discount Notes for original issue up to the aggregate
principal amount at issuance of $110,410,720 (such Senior Discount Notes
authenticated in the aggregate principal amount at maturity of $196,000,000) and
(ii) authenticate Additional Senior Discount Notes for issue up to the aggregate
principal amount at issuance of $50,000,000 (such Senior Discount Notes
authenticated in the aggregate principal amount of maturity as determined at
such time). The aggregate principal amount at issuance of Senior Discount Notes
outstanding at any time may not exceed $160,410,720 except as provided in
Section 2.7 hereof. The Trustee shall also authenticate the Senior Discount
Notes as required by Section 2.6 hereof.
The Trustee may (at the expense of the Issuers) appoint an
authenticating agent acceptable to the Issuers to authenticate Senior Discount
Notes. An authenticating agent may authenticate Senior Discount 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 Issuers
and has the same protections under Article 7 herein.
SECTION 2.3 REGISTRAR AND PAYING AGENT.
The Issuers shall maintain an office or agency where Senior Discount
Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Senior Discount Notes may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Senior Discount Notes and of their transfer and exchange. The Issuers 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 Issuers may change any Paying Agent or
Registrar without notice to any Holder. The Issuers shall promptly notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Issuers, any of
their Subsidiaries or any Guarantor may act as Paying Agent or Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar
and Paying Agent and to act as Custodian with respect to the Global Notes.
28
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
The Issuers shall require each Paying Agent other than the Trustee
or the Issuers, any of their Subsidiaries or any Guarantor 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
or Liquidated Damages, if any, or interest on the Senior Discount Notes, and
will notify the Trustee in writing of any default by the Issuers 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 Issuers 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 shall have no further liability for the
money so paid over. If an Issuer, a Subsidiary or a Guarantor acts as Paying
Agent, it shall segregate and hold in a separate trust funds for the benefit of
the Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Issuers, the Trustee shall serve as
Paying Agent for the Senior Discount Notes.
SECTION 2.5 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Issuers shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Senior Discount Notes and the Issuers shall otherwise comply with TIA (S)
312(a).
SECTION 2.6 TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes.
A Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Notes will be exchanged by the Issuers for Definitive
Notes if (i) the Issuers deliver to the Trustee written 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 Issuers within 120
days after the date of such notice from the Depositary; (ii) the Issuers in
their sole discretion determine that the Global Notes (in whole but not in part)
should be exchanged for Definitive Notes and deliver a written notice to such
effect to the Trustee or (iii) there shall have occurred and be continuing a
Default or Event of Default with respect to the Senior Discount Notes; provided
that in no event shall the Regulation S Temporary Global Note be exchanged by
the Issuers for Definitive Notes prior to (x) the expiration of the Restricted
Period and (y) the receipt by the Registrar of any certificates required
pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act. Upon the occurrence
of either of the preceding events
29
in (i) or (ii) above, Definitive Notes shall be issued in such names as the
Depositary shall instruct the Trustee in writing. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.7 and 2.10
hereof. Every Senior Discount Note authenticated and delivered in exchange for,
or in lieu of, a Global Note or any portion thereof, pursuant to this Section
2.6 or Section 2.7 or 2.10 hereof, shall be authenticated and delivered in the
form of, and shall be, a Global Note. A Global Note may not be exchanged for
another Senior Discount Note other than as provided in this Section 2.6(a),
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.6(b),(c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Temporary 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 2.6(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 2.6(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) written instructions given in accordance
with the Applicable Procedures containing information regarding the
Participant account to be credited with such increase or (B) (1) a written
order from a Participant or an Indirect Participant given to the Depositary
in accordance with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the
30
Person in whose name such Definitive Note shall be registered to effect the
transfer or exchange referred to in (1) above; provided that in no event
shall Definitive Notes be issued upon the transfer or exchange of
beneficial interests in the Regulation S Temporary Global Note prior to (x)
the expiration of the Restricted Period and (y) 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 Issuers and
any Guarantors in accordance with Section 2.6(f) hereof, the requirements
of this Section 2.6(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 Senior Discount Notes or otherwise applicable under
the Securities Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.6(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 2.6(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;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or 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; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications and certificates and Opinion of Counsel required by
item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.6(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
31
beneficial interest to be transferred, in the case of an exchange, or
the transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the New Senior Discount Notes or
(3) a Person who is an affiliate (as defined in Rule 144) of the
Issuers;
(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 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
Issuers shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.2 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount at maturity equal to the aggregate
principal amount of beneficial interests transferred pursuant to subparagraph
(B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c)Transfer or Exchange of Beneficial Interests for Definitive Notes.
32
(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 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-
U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to the
Issuers or any of their Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
(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 at maturity of the
applicable Global Note to be reduced accordingly pursuant to Section 2.6(h)
hereof, and the Issuers shall execute and the Trustee shall upon receipt by
a Responsible Officer of an Authentication Order 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
2.6(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 in writing through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
(at the expense of the Issuers) deliver such Definitive Notes to the
Persons in whose names such Senior Discount Notes are so registered. Any
33
Definitive Notes issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.6(c)(i) shall bear the
Private Placement Legend and shall be subject to all restrictions on
transfer contained therein.
(ii) Notwithstanding Sections 2.6(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary 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 (x) the
expiration of the Restricted Period and (y) 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 Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
(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 New
Senior Discount Notes or (3) a Person who is an affiliate (as defined
in Rule 144) of the Issuers;
(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 Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the
34
Private Placement Legend, 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.
(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 2.6(b)(ii) hereof, the Trustee shall cause
the aggregate principal amount at maturity of the applicable Global Note to
be reduced accordingly pursuant to Section 2.6(h) hereof, and the Issuers
shall execute and the Trustee shall upon receipt of an Authentication Order
authenticate and (at the expense of the Issuers) 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 2.6(c)(iv) 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 (at the expense of the Issuers) deliver such
Definitive Notes to the Persons in whose names such Senior Discount Notes
are so registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.6(c)(iv) shall 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 Senior Discount Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Note 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 Senior Discount 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;
35
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to
an institutional accredited investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)(d) thereof,
if applicable;
(F) if such Restricted Definitive Note is being transferred to
the Issuers or any of their Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount at maturity of, in the case
of clause (A) above, the appropriate Restricted Global Notes, in the case
of clause (B) above, the 144A Global Notes, and in the case of clause (C)
above, the Regulation S Global Note, and in all other cases if applicable,
the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Senior Discount Note for a beneficial interest in an
Unrestricted Global Note or transfer such Restricted Definitive Note to a
Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the
36
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
New Senior Discount Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Issuers;
(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 Note proposes to
exchange such Senior Discount Note for a beneficial interest in
the Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in
item (1)(c) thereof; or
(2) if the Holder of such Definitive Note proposes to
transfer such Senior Discount Note to a Person who shall take
delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel 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.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.6(d)(ii), the Trustee shall 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 Note 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 written request for such an exchange or transfer,
the Trustee shall cancel the applicable Unrestricted Definitive Note and
increase
37
or cause to be increased the aggregate principal amount at maturity of one
of the Unrestricted Global Note.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Issuers shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.2 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount at maturity 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 2.6(e), the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer duly executed by such Holder or by his
attorney, duly authorized in writing. In addition, the requesting Holder shall
provide any additional certifications, documents and information, as applicable,
required pursuant to the following provisions of this Section 2.6(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Notes may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Definitive Notes if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the 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, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
38
(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 New Senior Discount Notes or (3) a Person who is
an affiliate (as defined in Rule 144) of the Issuers;
(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 Note
proposes to exchange such Senior Discount Note 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 Note
proposes to transfer such Senior Discount Note to a Person who
shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), an Opinion
of Counsel 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 Note may transfer such Senior Discount
Note 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 Note pursuant to
the instructions from the Holder thereof.
(f) Exchange Offer.
Upon the occurrence of the Exchange Offer in accordance with the
Registration Rights Agreement, the Issuers shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.2, the Trustee shall
authenticate (i) one or more Unrestricted Global
39
Notes in an aggregate principal amount at maturity equal to the principal amount
of the beneficial interests in the Restricted Global Notes tendered for
acceptance by Persons that certify in the applicable Letters of Transmittal that
(x) they are not Broker-Dealers, (y) they are not participating in a
distribution of the New Senior Discount Notes and (z) they are not affiliates
(as defined in Rule 144) of the Issuers, and accepted for exchange in the
Exchange Offer and (ii) Definitive Notes in an aggregate principal amount at
maturity equal to the principal amount of the Restricted Definitive Notes
accepted for exchange in the Exchange Offer. Concurrently with the issuance of
such Senior Discount Notes, the Trustee shall cause the aggregate principal
amount at maturity of the applicable Restricted Global Notes to be reduced
accordingly, and the Issuers shall execute and the Trustee shall authenticate
and (at the expense of the Issuers) deliver to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the appropriate
principal amount.
(g) Legends.
The following legends shall appear on the face of all Global Notes and
Definitive Notes issued under this Indenture unless specifically stated
otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global Note
and each Definitive Note (and all Senior Discount Notes issued in exchange
therefor or substitution thereof) shall bear the legend in substantially the
following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISION OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) (a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A OF THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 903 OR 904 UNDER THE SECURITIES ACT OR
40
(d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS
SO REQUEST), (2) TO EITHER ISSUER OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(iii), (c)(iv), (d)(ii),
(d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.6 (and all Senior Discount
Notes issued in exchange therefor or substitution thereof) shall not bear the
Private Placement Legend .
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.7 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a)
OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE ISSUERS."
(iii) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following form:
"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."
41
(iv) Original Issue Discount Legend. Each Global Note and each
Definitive Note (and all Senior Discount Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the following form:
"THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR PURPOSES OF
SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF
1986, AS AMENDED, THE ISSUE PRICE OF THIS NOTE IS 56.332% OF ITS PRINCIPAL
AMOUNT AT MATURITY, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $436.68 PER
$1,000 OF PRINCIPAL AMOUNT AT MATURITY, THE ISSUE DATE IS DECEMBER 10, 1998
AND THE YIELD TO MATURITY IS 11 7/8%."
(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 shall be returned to or retained and canceled by the Trustee in accordance
with Section 2.11 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note or for Definitive Notes, the principal amount of Senior Discount
Notes represented by such Global Note shall be reduced accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such 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 shall be increased accordingly and an endorsement
shall be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Issuers
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order in accordance with
Section 2.2 hereof or upon receipt of a written request of the Registrar.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Issuers may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.6, 3.9, 4.10, 4.15 and 9.5 hereof).
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(iii) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the legal, valid and binding obligations of the Issuers,
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 Issuers nor the Registrar, as applicable, shall be
required (A) to issue, to register the transfer of or to exchange any
Senior Discount Notes during a period beginning at the opening of business
15 days before the day of any selection of Senior Discount Notes for
redemption under Section 3.2 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any
Senior Discount Note so selected for redemption in whole or in part, except
the unredeemed portion of any Senior Discount Note being redeemed in part
or (C) to register the transfer of or to exchange a Senior Discount 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 Senior Discount Note, the Trustee, any Agent and the Issuers may deem
and treat the Person in whose name any Senior Discount Note is registered
as the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Senior Discount Notes and for all other
purposes, and none of the Trustee, any Agent or the Issuers shall be
affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.2 hereof.
(vii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.6 to
effect a registration of transfer or exchange may be submitted by
facsimile.
SECTION 2.7 REPLACEMENT SENIOR DISCOUNT NOTES.
If any mutilated Senior Discount Note is surrendered to the Trustee
or the Issuers and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Senior Discount Note, the Issuers shall issue
and the Trustee, upon receipt of an Authentication Order, shall authenticate a
replacement Senior Discount Note if the Trustee's requirements are met. If
required by the Trustee or the Issuers, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Issuers to
protect the Issuers, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Senior Discount Note is replaced. The
Issuers and the Trustee may charge for their expenses (including reasonable fees
and expenses of its agents and counsel) in replacing a Senior Discount Note.
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Every replacement Senior Discount Note is an additional obligation
of the Issuers and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Senior Discount Notes duly issued
hereunder.
SECTION 2.8 OUTSTANDING SENIOR DISCOUNT NOTES.
The Senior Discount Notes outstanding at any time are all the Senior
Discount 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 as not outstanding. Except as set forth in
Section 2.9 hereof, a Senior Discount Note does not cease to be outstanding
because the Issuers or an Affiliate of the Issuers holds the Senior Discount
Note.
If a Senior Discount Note is replaced pursuant to Section 2.7
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Senior Discount Note is held by a bona fide
purchaser.
If the principal amount of any Senior Discount Note is considered
paid under Section 4.1 hereof, it ceases to be outstanding and interest on it
ceases to accrue.
If the Paying Agent (other than an Issuer, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Senior Discount Notes payable on that date, then on and after
that date such Senior Discount Notes shall be deemed to be no longer outstanding
and shall cease to accrue interest.
SECTION 2.9 TREASURY SENIOR DISCOUNT NOTES.
In determining whether the Holders of the required principal amount
of Senior Discount Notes have concurred in any direction, waiver or consent,
Senior Discount Notes owned by the Issuers or any Guarantor, or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuers or any Guarantor shall be considered as though
not outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Senior Discount Notes that a Responsible Officer of the Trustee actually knows
are so owned shall be so disregarded.
SECTION 2.1 TEMPORARY SENIOR DISCOUNT NOTES.
Until certificates representing Senior Discount Notes are ready for
delivery, the Issuers may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Senior Discount Notes.
Temporary Senior Discount Notes shall be substantially in the form of
certificated Senior Discount Notes but may have variations that the Issuers
consider appropriate for temporary Senior Discount Notes.
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Without unreasonable delay, the Issuers shall prepare and the
Trustee shall authenticate Definitive Notes in exchange for temporary Senior
Discount Notes.
Holders of temporary Senior Discount Notes shall be entitled to all
of the benefits of this Indenture.
SECTION 2.11 CANCELLATION.
The Issuers at any time may deliver Senior Discount Notes to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Senior Discount Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Senior Discount Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall return such canceled Senior
Discount Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Senior Discount Notes
shall be delivered (at the expense of the Issuers) to the Issuers. The Issuers
may not issue new Senior Discount Notes to replace Senior Discount Notes that it
has paid or that have been delivered to the Trustee for cancellation (except as
otherwise provided herein).
SECTION 2.12 DEFAULTED INTEREST.
If the Issuers default in a payment of interest on the Senior
Discount Notes, they shall pay the defaulted interest in any lawful manner plus,
to the extent lawful, interest payable on the defaulted interest, to the Persons
who are Holders on a subsequent special record date, in each case at the rate
provided in the Senior Discount Notes and in Section 4.1 hereof. The Issuers
shall notify the Trustee in writing of the amount of defaulted interest proposed
to be paid on each Senior Discount Note and the date of the proposed payment.
The Issuers shall fix or cause to be fixed each such special record date and
payment date, provided that no such special record date shall 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 Issuers (or, upon the written request
of the Issuers, the Trustee in the name and at the expense of the Issuers) shall
mail or cause to be mailed to Holders a notice that states the special record
date, the related payment date and the amount of such interest to be paid.
SECTION 2.13 CUSIP NUMBERS.
The Issuers in issuing the Senior Discount Notes may use "CUSIP"
numbers (if then generally in use) and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders, provided, however,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Senior Discount Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Senior Discount Notes, and any
such redemption shall not be affected by any defect in or omission of such
numbers. The Issuers shall promptly notify the Trustee of any change in the
CUSIP numbers.
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In the event that the Issuers shall issue and the Trustee shall
authenticate any Additional Senior Discount Notes pursuant to this Indenture,
the Issuers shall use their best efforts to obtain the same CUSIP number for
such Additional Senior Discount Notes as is printed on the Senior Discount Notes
outstanding at such time; provided, however, that if any Additional Senior
Discount Notes is determined, pursuant to an Opinion of Counsel, to be a
different class of security than the Senior Discount Notes outstanding at such
time for federal income tax purposes, the Issuers may obtain a CUSIP number for
such Additional Senior Discount Notes that is different from the CUSIP number
printed on the Senior Discount Notes then outstanding.
SECTION 2.14 LIMITATION OF ISSUER'S AND ADDITIONAL OBLIGOR'S LIABILITY.
Each Issuer and Additional Obligor, if any, and by its acceptance
hereof each Holder and the Trustee, hereby confirms that it is the intention of
all such parties that the obligations under this Indenture and the Senior
Discount Notes not constitute a fraudulent transfer or conveyance for purposes
of Title 11 of the United States Code, as amended, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar U.S. Federal
or state or other applicable law. To effectuate the foregoing intention, the
Holders and each Issuer or Additional Obligor hereby irrevocably agree that the
obligations of each Issuer and Additional Obligor under the Indenture and the
Senior Discount Notes shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Issuer or
Additional Obligor and after giving effect to any collections from or payments
made by or on behalf of any other Issuer or Additional Obligor in respect of the
obligations of such other Issuer or Additional Obligor pursuant to this
Indenture or the Senior Discount Notes, result in the obligations of such Issuer
or Additional Obligor not constituting such a fraudulent transfer or conveyance.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.1 NOTICES TO TRUSTEE.
If the Issuers elect to redeem Senior Discount Notes pursuant to
the optional redemption provisions of Section 3.7 hereof, they shall furnish to
the Trustee, at least 30 days but not more than 60 days before a redemption
date, an Officers' Certificate setting forth (i) the clause of this Indenture
pursuant to which the redemption shall occur, (ii) the redemption date, (iii)
the principal amount of Senior Discount Notes to be redeemed and (iv) the
redemption price.
SECTION 3.2 SELECTION OF SENIOR DISCOUNT NOTES TO BE REDEEMED.
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If less than all of the Senior Discount Notes are to be redeemed or
purchased in an offer to purchase at any time, the Trustee shall select the
Senior Discount Notes to be redeemed or purchased among the Holders of the
Senior Discount Notes in compliance with the requirements of the principal
national securities exchange, if any, on which the Senior Discount Notes are
listed or, if the Senior Discount Notes are not so listed, on a pro rata basis,
by lot or in accordance with any other customary method. In the event of
partial redemption by lot, the particular Senior Discount Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Senior Discount Notes not previously called for redemption.
The Trustee shall promptly notify the Issuers of the Senior
Discount Notes selected for redemption and, in the case of any Senior Discount
Note selected for partial redemption, the principal amount thereof to be
redeemed. Senior Discount Notes and portions of Senior Discount Notes selected
shall be in amounts of $1,000 or whole multiples of $1,000; except that if all
of the Senior Discount Notes of a Holder are to be redeemed, the entire
outstanding amount of Senior Discount Notes held by such Holder, even if not a
multiple of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Senior Discount Notes
called for redemption also apply to portions of Senior Discount Notes called for
redemption.
SECTION 3.3 NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.9 hereof, at least 30 days
but not more than 60 days before a redemption date, the Issuers shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Senior Discount Notes are to be redeemed at its registered address.
The notice shall identify the Senior Discount Notes to be redeemed
and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Discount Note is being redeemed in part, the
portion of the principal amount of such Senior Discount Note to be redeemed and
that, after the redemption date upon surrender of such Senior Discount Note, a
new Senior Discount Note or Senior Discount Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Senior
Discount Note;
(d) the name and address of the Paying Agent;
(e) that Senior Discount Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
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(f) that, unless the Issuers default in making such redemption
payment, interest on Senior Discount Notes called for redemption ceases to
accrue on and after the redemption date;
(g) the paragraph of the Senior Discount Notes and/or Section of
this Indenture pursuant to which the Senior Discount 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
Senior Discount Notes.
At the Issuers' request, the Trustee shall give the notice of
redemption in the Issuers' name and at their expense; provided, however, that
the Issuers shall have 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 3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3
hereof, Senior Discount 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 3.5 DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Issuers shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Senior Discount Notes to be
redeemed on that date. The Trustee or the Paying Agent shall promptly return to
the Issuers any money deposited with the Trustee or the Paying Agent by the
Issuers in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Senior Discount Notes to be redeemed.
If the Issuers comply with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Senior Discount Notes or the portions of Senior Discount Notes called for
redemption. If a Senior Discount Note is redeemed on or after an interest record
date but on or prior to the related interest payment date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Senior Discount
Note was registered at the close of business on such record date. If any Senior
Discount Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Issuers to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Senior
Discount Notes and in Section 4.1 hereof.
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SECTION 3.6 SENIOR DISCOUNT NOTES REDEEMED IN PART.
Upon surrender of a Senior Discount Note that is redeemed in part,
the Issuers shall issue and, upon receipt of an Authentication Order, the
Trustee shall authenticate for the Holder at the expense of the Issuers a new
Senior Discount Note equal in principal amount to the unredeemed portion of the
Senior Discount Note surrendered.
SECTION 3.7 OPTIONAL REDEMPTION.
(a) Except as described in clause (b) of this Section 3.7, the
Senior Discount Notes will not be redeemable at the Issuers' option prior to
December 1, 2003. Thereafter, the Senior Discount Notes will be subject to
redemption at any time at the option of the Issuers, in whole or in part, upon
not less than 30 nor more than 60 days notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest, if any, and Liquidated Damages, if any, thereon to the
applicable redemption date, if redeemed during the twelve-month period beginning
on December 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2003............................. 105.938%
2004............................. 103.958%
2005............................. 101.979%
2006 and thereafter.............. 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section
3.7, at any time prior to December 1, 2001, the Issuers may on any one or more
occasions redeem up to 35% of the aggregate principal amount at maturity of
Senior Discount Notes originally issued under the Indenture at a redemption
price equal to 111.875% of the Accreted Value at the date of redemption, plus
Liquidated Damages, if any, to the redemption date, with the Net Cash Proceeds
of any Equity Offering and/or the Net Cash Proceeds of a Strategic Equity
Investment; provided that at least 65% of the aggregate principal amount at
maturity of Senior Discount Notes originally issued remain outstanding
immediately after each occurrence of such redemption; and provided, further,
that each such redemption shall occur within 45 days of the date of the closing
of such Equity Offering and/or Strategic Equity Investment.
(c) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Section 3.1 through 3.6 hereof.
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SECTION 3.8 MANDATORY REDEMPTION.
Except pursuant to Sections 3.10, 4.10 or 4.15, the Issuers shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Senior Discount Notes.
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Issuers
shall be required to commence an Asset Sale Offer, they shall follow the
procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Issuers shall purchase the principal amount of Senior Discount Notes
required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount")
or, if less than the Offer Amount has been tendered, all Senior Discount Notes
tendered in response to the Asset Sale Offer. Payment for any Senior Discount
Notes so purchased shall 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
shall be paid to the Person in whose name a Senior Discount Note is registered
at the close of business on such record date, and no additional interest shall
be payable to Holders who tender Senior Discount Notes pursuant to the Asset
Sale Offer.
Upon the commencement of an Asset Sale Offer, the Issuers shall
send, by first class mail, a written notice to the Trustee and to each of the
Holders. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Senior Discount Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.9 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Senior Discount Note not tendered or accepted for
payment shall continue to accrete or accrue interest;
(d) that, unless the Issuers default in making such payment, any
Senior Discount Note accepted for payment pursuant to the Asset Sale Offer
shall cease to accrete or accrue interest after the Purchase Date;
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(e) that Holders electing to have a Senior Discount Note purchased
pursuant to an Asset Sale Offer may only elect to have all of such Senior
Discount Note purchased and may not elect to have only a portion of such
Senior Discount Note purchased;
(f) that Holders electing to have a Senior Discount Note purchased
pursuant to any Asset Sale Offer shall be required to surrender the Senior
Discount Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Senior Discount Note completed, or transfer by book-
entry transfer, to the Issuers, a depositary, if appointed by the Issuers,
or a Paying Agent at the address specified in the notice at least three
days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Issuers, the depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Senior Discount Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Senior Discount Note purchased;
(h) that, if the aggregate principal amount at maturity of Senior
Discount Notes surrendered by Holders exceeds the Offer Amount, the Issuers
shall select the Senior Discount Notes to be purchased on a pro rata basis,
by lot or by any other customary method (with such adjustments as may be
deemed appropriate by the Issuers so that only Senior Discount Notes in
denominations of $1,000, or integral multiples thereof, shall be
purchased); and
(i) that Holders whose Senior Discount Notes were purchased only in
part shall be issued new Senior Discount Notes equal in principal amount to
the unpurchased portion of the Senior Discount Notes surrendered (or
transferred by book-entry transfer).
On or before the Purchase Date, the Issuers shall, to the extent
lawful, accept for payment, as described in (h) above, to the extent necessary,
the Offer Amount of Senior Discount Notes or portions thereof tendered pursuant
to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all
Senior Discount Notes tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Senior Discount Notes or portions thereof were
accepted for payment by the Issuers in accordance with the terms of this Section
3.9. The Issuers, the Depositary or the Paying Agent, as the case may be, shall
promptly (but in any case not later than five days after the Purchase Date) mail
or deliver to each tendering Holder an amount equal to the purchase price of the
Senior Discount Notes tendered by such Holder and accepted by the Issuers for
purchase, and the Issuers shall promptly issue a new Senior Discount Note, and
the Trustee, upon receipt of an Authentication Order from the Issuers shall
authenticate and mail or deliver such new Senior Discount Note to such Holder,
in a principal amount equal to any unpurchased portion of the Senior Discount
Note surrendered. Any Senior Discount Note not so accepted shall be promptly
mailed or delivered by the Issuers to the Holder thereof. The Issuers shall
publicly announce the results of the Asset Sale Offer on the Purchase Date.
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Other than as specifically provided in this Section 3.9, any
purchase pursuant to this Section 3.9 shall be made pursuant to the provisions
of Sections 3.1 through 3.6 hereof.
SECTION 3.1 MANDATORY PAYMENT OF ACCRUED INTEREST.
On December 1, 2003, the Issuers shall be required to redeem an
amount equal to $369.79 per $1,000 principal amount at maturity of each Senior
Discount Note then outstanding (the "Accreted Interest Redemption Amount") on a
pro rata basis at a redemption price of 100% of the principal amount at maturity
of the Senior Discount Notes so redeemed.
ARTICLE 4.
COVENANTS
SECTION 4.1 PAYMENT OF SENIOR DISCOUNT NOTES.
The Issuers shall pay or cause to be paid the principal of, premium,
if any, and interest and Liquidated Damages, if any, on the Senior Discount
Notes on the dates and in the manner provided in the Senior Discount Notes.
Principal, premium, if any, and interest and Liquidated Damages, if any, shall
be considered paid on the date due if the Paying Agent, if other than the
Issuers or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due
date money deposited by the Issuers in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest and Liquidated Damages, if any, then due. The Issuers shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Issuers shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Senior
Discount Notes to the extent lawful; they shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Issuers shall maintain in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Senior Discount Notes
may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Issuers in respect of the Senior Discount
Notes and this Indenture may be served. The Issuers shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Issuers shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
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The Issuers may also from time to time designate one or more other
offices or agencies where the Senior Discount Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Issuers of their obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York for such purposes. The
Issuers shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Issuers hereby designate the Corporate Trust Office of the
Trustee as one such office or agency of the Issuers in accordance with Section
2.3.
SECTION 4.3 REPORTS.
(a) Whether or not the Issuers are required by the rules and
regulations of the Commission, so long as any Senior Discount Notes are
outstanding, the Issuers, on a combined consolidated basis, will furnish to each
of the Holders of Senior Discount Notes (i) quarterly and annual financial
statements substantially equivalent to financial statements that would have been
included in a filing with the Commission on Forms 10-Q and 10-K if the Issuers
were required to file such financial information, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" that
describes the financial condition and results of operations of the Issuers and,
with respect to the annual information only, reports thereon by the Issuers'
independent public accountants (which shall be firm(s) of established national
reputation) and (ii) all information that would be required to be filed with the
Commission on Form 8-K if the Issuers were required to file such reports. All
such information and reports shall be provided on or prior to the dates on which
such filings would have been required to be made had such Issuer been subject to
the rules and regulations of the Commission. In addition, the Issuers shall make
such information available to securities analysts and prospective investors upon
request. In addition, following the consummation of the exchange offer
contemplated by the Registration Rights Agreement, whether or not required by
the rules and regulations of the SEC, the Issuers shall file a copy of all such
information and reports 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 securities analysts
and prospective investors upon request.
(b) For so long as any Senior Discount Notes remain outstanding, the
Issuers shall furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuers'
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
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SECTION 4.4 COMPLIANCE CERTIFICATE.
(a) The Issuers and any Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal quarter, an Officers' Certificate stating that
a review of the activities of the Issuers and their Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Issuers have kept, observed,
performed and fulfilled their obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Issuers have kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and are not in default in
the performance or observance of any of the terms, provisions and conditions of
this Indenture (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Issuers are taking or propose to take with respect
thereto) and that to the best of his or her knowledge no event has occurred and
remains in existence by reason of which payments on account of the principal of
or interest, if any, on the Senior Discount Notes is prohibited or if such event
has occurred, a description of the event and what action the Issuers are taking
or propose to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.3(a) above shall be accompanied by a
written statement of the Issuers' independent public accountants (who shall be a
firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Issuers have violated
any provisions of Article 4 or Article 5 hereof, as they relate to accounting
and financial matters, or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Issuers shall, so long as any of the Senior Discount Notes
are outstanding, 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 Default and what action the Issuers are taking or
propose to take with respect thereto.
SECTION 4.5 TAXES.
The Issuers shall pay, and shall cause each of their 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 Senior Discount Notes.
SECTION 4.6 STAY, EXTENSION AND USURY LAWS.
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Each of the Issuers and any Guarantor covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Issuers and any Guarantor (to the extent that they may lawfully do so) hereby
expressly waive all benefit or advantage of any such law, and covenant that they
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 4.7 RESTRICTED PAYMENTS.
The Issuers will not, and will not permit any of their Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Issuers' or any of their
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving any Issuer) or
to the direct or indirect holders of the Issuers' or any of their Restricted
Subsidiaries' Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
any Issuer and other than dividends or distributions payable to any Issuer or
another Restricted Subsidiary and if such Restricted Subsidiary has equity
holders other than any of the Issuers or other Restricted Subsidiaries, to its
other equity holders on a pro rata basis); (ii) purchase, redeem or otherwise
acquire or retire for value (including without limitation, in connection with
any merger or consolidation involving any Issuer) any Equity Interests of any
Issuer or any direct or indirect parent of any Issuer or other Affiliate of any
Issuer; (iii) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness of any Issuer
that is subordinated to the Senior Discount Notes, except a payment of interest
or principal at Stated Maturity, or a payment of interest made through the
issuance of additional Indebtedness of the same kind as the Indebtedness on
which such interest shall have accrued or payment on Indebtedness owed to
another Issuer and except any payment in respect of the ABRY Subordinated Debt;
or (iv) make any Restricted Investment (all such payments and other actions set
forth in 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 shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Issuers 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 quarter, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the test set forth in the
Section 4.9; and
(c) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Issuers and their Restricted
Subsidiaries after the Issue Date
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(excluding Restricted Payments permitted by clauses (ii), (iii), (iv), (vii),
(viii), (ix), (x), (xi), (xii) and (xiii) of the next succeeding paragraph), is
less than the sum of (i)(A) 100% of the aggregate Consolidated Cash Flow of the
Issuers (or, in the event such Consolidated Cash Flow shall be a deficit, minus
100% of such deficit) accrued for the period beginning on the first day of the
Issuers' first fiscal quarter commencing after the Issue Date and ending on the
last day of the Issuers' most recent calendar month for which financial
information is available to the Issuers ending prior to the date of such
proposed Restricted Payment, taken as one accounting period, less (B) 1.4 times
Consolidated Interest Expense for the same period, plus (ii) 100% of the
aggregate Net Cash Proceeds received by the Issuers as a contribution to the
equity capital of the Issuers or from the issue or sale since the Issue Date of
Equity Interests of the Issuers (other than Disqualified Stock), or of
Disqualified Stock or debt securities (including the ABRY Subordinated Debt) of
the Issuers that have been converted into such Equity Interests (other than
Equity Interests (or Disqualified Stock or convertible debt securities) sold to
a Restricted Subsidiary of the Issuers and other than Disqualified Stock or
convertible debt securities that have been converted into Disqualified Stock),
plus (iii) to the extent that any Restricted Investment that was made after the
Issue Date is sold for cash or otherwise liquidated or repaid for cash, the
amount of such Net Cash Proceeds plus (iv) to the extent that any Unrestricted
Subsidiary is redesignated as a Restricted Subsidiary after the Issue Date, the
fair market value of the Investment of the applicable Issuer or Restricted
Subsidiary of such Issuer in such Subsidiary as of the date of such
redesignation.
The foregoing provisions shall not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any Indebtedness of any of the Issuers which is subordinated to
the Senior Discount Notes or Equity Interests of any of the Issuers in exchange
for, or out of the Net Cash Proceeds of the substantially concurrent sale (other
than to a Restricted Subsidiary of any of the Issuers) of, other Equity
Interests of any of the Issuers (other than any Disqualified Stock) or capital
contributions to any of the Issuers; provided that the amount of any such Net
Cash Proceeds that are utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition shall be excluded from clause (c) (ii) of the
preceding paragraph; (iii) the defeasance, redemption, repurchase or other
acquisition of Indebtedness of any of the Issuers which is subordinated to the
Senior Discount Notes with the Net Cash Proceeds from an incurrence of Permitted
Refinancing Indebtedness; (iv) the payment of any dividend or distribution by a
Restricted Subsidiary of any of the Issuers to the holders of its common Equity
Interests so long as the applicable Issuer or such Restricted Subsidiary
receives at least its pro rata share of such dividend or distribution in
accordance with its Equity Interests; (v) the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of any of the
Issuers or the payment of a dividend to any Affiliates of the Issuers to effect
the repurchase, redemption, acquisition or retirement of an Affiliate's equity
interest, that are held by any member of any of the Issuers' (or any of their
respective Restricted Subsidiaries) management pursuant to any management equity
subscription or purchase agreement or stock option agreement or similar
agreement; provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests shall not exceed $2 million in
any
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fiscal year; (vi) from and after the time that the aggregate Consolidated Cash
Flow of the Issuers (calculated on a pro forma basis as described in the
definition of "Leverage Ratio") for any full fiscal quarter mutliplied by four
exceeds $60 million, payments or distributions to any Affiliate of the Issuers
to permit such Affiliate to pay for the performance of management functions by
any Affiliate of the Issuers in an aggregate amount not to exceed the greater of
(A) $250,000 in any fiscal year and (B) 0.25% of Total Revenues for such year;
(vii) any payments or distributions or other transactions to be made in
connection with the Merger, the Mercom Acquisition or the Reorganization
(including fees and expenses incurred in connection therewith); (viii) payments
to Affiliates of the Issuers and holders of Equity Interests in the Issuers in
amounts equal to the amounts required to pay any Federal, state or local income
taxes to the extent that (A) such income taxes are attributable to the income of
the Issuers and their Restricted Subsidiaries (but limited, in the case of taxes
based upon taxable income, to the extent that cumulative taxable net income
subsequent to the Issue Date is positive) and (B) such taxes are related to
Indebtedness between or among any of the Issuers and any of their Restricted
Subsidiaries or Avalon or any of its Restricted Subsidiaries; (ix) Restricted
Investments received in connection with an Asset Sale that complies with Section
4.10; (x) payments on the ABRY Subordinated Debt (including all accrued interest
thereon) in accordance with the terms thereof; (xi) payments or distributions to
dissenting stockholders pursuant to transactions permitted under the terms of
the Indenture; (xii) the distribution by Avalon Holdings to the holders of its
Capital Stock of all the Equity Interests held by Avalon Holdings in any of its
Subsidiaries; provided that, substantially simultaneously with such
distribution, such Equity Interests, and/or option to purchase all such Equity
Interests, are sold to a third party for consideration in an amount at least
equal to the fair market value of such Equity Interests and Avalon Holdings
receives an amount equal to the Net Cash Proceeds of such sale and any other
consideration received in connection therewith; and (xiii) other Restricted
Payments in an aggregate amount not to exceed $5.0 million; provided, however,
that at the time of, and after giving effect to, any Restricted Payment
permitted under clauses (v), (vi), (x) and (xiii) above, no Default or Event of
Default shall have occurred and be continuing or would occur as a consequence
thereof.
The amount of all Restricted Payments (other than cash) shall 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 applicable Issuer or the
Restricted Subsidiary of such Issuer, pursuant to the Restricted Payment. The
fair market value of any non-cash Restricted Payment shall be determined by the
Board of Directors of such Issuer or Restricted Subsidiary, as the case may be,
whose resolution with respect thereto shall be delivered to the Trustee, such
determination shall be conclusive and shall be based upon an opinion or
appraisal issued by an appraisal, accounting or investment banking firm of
national standing if such fair market value exceeds $10.0 million. Not later
than the date of making any Restricted Payment, such Issuer or Restricted
Subsidiary, as the case may be, shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.7 were
computed, together with a copy of any opinion or appraisal required by the
Indenture.
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SECTION 4.8 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Issuers will not, and will not permit any of their Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(x) pay dividends or make any other distributions to
the Issuers or any of their Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (y) pay any Indebtedness owed to the Issuers or any of their
Restricted Subsidiaries, (ii) make loans or advances to the Issuers or any of
their Restricted Subsidiaries or (iii) transfer any of its properties or assets
to the Issuers or any of their Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the Issue Date, (b) the Credit Facility as in
effect on the date of the Indenture, and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings thereof; provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings are no more restrictive with respect to such dividends and other
payments restrictions than those contained in the Credit Facility as in effect
on the date of the Indenture, (c) the terms of any Indebtedness permitted by the
Indenture to be incurred by any Restricted Subsidiary of any of the Issuers, (d)
the Indenture and the Senior Discount Notes, (e) the Indenture under which the
Senior Subordinated Notes will be issued and the Senior Subordinated Notes, (f)
any instrument governing Indebtedness or Capital Stock of a Person acquired by
the Issuers or any of their Restricted Subsidiaries as in effect at the time of
such acquisition (except to the extent such Indebtedness 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 the Indenture to be incurred, (g) by reason of
customary non-assignment provisions in leases entered into in the ordinary
course of business, (h) purchase money obligations (including Capital Lease
Obligations) for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so acquired, (i) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those contained in
the agreements governing the Indebtedness being refinanced, (j) contracts for
the sale of assets, including, without limitation, customary restrictions with
respect to a Subsidiary pursuant to an agreement that has been entered into for
the sale or disposition of all or substantially all of the Capital Stock or
assets of such Subsidiary or (k) applicable law or any applicable rule,
regulation or order.
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SECTION 4.9 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Issuers will not, and will not permit any of their 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) other than Permitted Debt and the Issuers will not issue any Disqualified
Stock and will not permit any of their Restricted Subsidiaries to issue any
shares of preferred stock (other than to an Issuer or another Restricted
Subsidiary); provided, however, that the Issuers may incur Indebtedness
(including Acquired Debt) or issue shares of Disqualified Stock and any of the
Issuers' Restricted Subsidiaries may incur Indebtedness or issue shares of
preferred stock if the Issuers' Leverage Ratio at the time of incurrence of such
Indebtedness or the issuance of such Disqualified Stock or such preferred stock,
as the case may be, after giving pro forma effect to such incurrence or issuance
and to the use of the proceeds therefrom would have been no greater than (a) 7.0
to 1, if such incurrence or issuance is on or prior to December 31, 2000, and
(b) 6.5 to 1, if such incurrence or issuance is after December 31, 2000.
The Issuers will not incur any Indebtedness that is contractually
subordinated in right of payment to any other Indebtedness of the Issuers unless
such Indebtedness is also contractually subordinated in right of payment to the
Senior Discount Notes on substantially identical terms; provided, however, that
no Indebtedness of the Issuers shall be deemed to be contractually subordinated
in right of payment to any other Indebtedness of the Issuers solely by virtue of
being unsecured.
The provisions of the first paragraph of this covenant shall not
apply to the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the incurrence by the Issuers or their Restricted Subsidiaries
of Indebtedness under the Credit Facility, letters of credit (with letters
of credit being deemed to have a principal amount equal to the maximum
potential liability of the Issuers and their Restricted Subsidiaries
thereunder) and related Guarantees under the Credit Facility; provided that
the aggregate principal amount of all Indebtedness of the Issuers and their
Restricted Subsidiaries outstanding under the Credit Facility after giving
effect to such incurrence, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any other Indebtedness incurred
pursuant to this clause (i) does not exceed an amount equal to $345,888,000
less the aggregate amount applied by the Issuers and their Restricted
Subsidiaries to permanently reduce the availability of Indebtedness under
the Senior Credit Facility pursuant to the provisions described under
Section 4.10;
(ii) the incurrence by the Issuers of the ABRY Subordinated Debt;
(iii) the incurrence by the Issuers and their Restricted
Subsidiaries of Existing Indebtedness;
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(iv) the incurrence by the Issuers of the Existing Michigan
Indebtedness and the Mercom Intercompany Loan;
(v) the incurrence by the Issuers of Indebtedness represented by
the Senior Discount Notes and the incurrence by the Company Issuers of
Indebtedness represented by the Senior Subordinated Notes in an aggregate
principal amount of $150 million outstanding on the date of the Indenture;
(vi) the incurrence by the Issuers or any of their Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Issuers or such Restricted Subsidiary, in an aggregate
principal amount, including all Indebtedness incurred to refund, refinance
or replace Indebtedness incurred pursuant to this clause (vi), not to
exceed $10.0 million at any time outstanding;
(vii) the incurrence by the Issuers or any of their Restricted
Subsidiaries of Permitted Refinancing Indebtedness;
(viii) the incurrence by the Issuers or any of their Restricted
Subsidiaries of intercompany Indebtedness between or among any of the
Issuers and any of their Restricted Subsidiaries; provided, however, that
(i) if one of the Issuers is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in cash
of all Obligations with respect to the Senior Discount Notes and the
Indenture, and (ii)(A) any subsequent event or issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a
Person other than one of the Issuers or a Restricted Subsidiary thereof and
(B) any sale or other transfer of any such Indebtedness to a Person that is
not any one of the Issuers or a Restricted Subsidiary thereof shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by
such Issuer or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (viii);
(ix) the incurrence by the Issuers or any of their Restricted
Subsidiaries of Hedging Obligations that are incurred in the ordinary
course of business for the purpose of fixing or hedging currency, commodity
or interest rate risk (including with respect to any floating rate
Indebtedness that is permitted by the terms of the Indenture to be
outstanding) in connection with the conduct of their respective businesses
and not for speculative purposes;
(x) the guarantee by the Issuers of Indebtedness of any of their
Restricted Subsidiaries so long as the incurrence of such Indebtedness by
such Restricted Subsidiary is permitted to be incurred by another provision
of this Section 4.9;
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(xi) the guarantee by any Restricted Subsidiary of Indebtedness
of any of the Issuers so long as such guarantee by such Restricted
Subsidiary complies with the provisions under Section 4.17;
(xii) Indebtedness consisting of customary indemnification,
adjustments of purchase price or similar obligations, in each case,
incurred or assumed in connection with the acquisition of any business or
assets; and
(xiii) the incurrence by the Issuers or any of their Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any other Indebtedness incurred pursuant to this clause (xiii), not to
exceed $15.0 million.
For purposes of determining compliance with this covenant, 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 (xiii)
above as of the date of incurrence thereof or is entitled to be incurred
pursuant to the first paragraph of this covenant as of the date of incurrence
thereof, the Issuers shall, in their sole discretion, classify or reclassify
such item of Indebtedness in any manner that complies with this covenant.
Accrual of interest, the accretion of accreted value and the payment of interest
in the form of additional Indebtedness will not be deemed to be an incurrence of
Indebtedness for purposes of this covenant and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed an issuance of Disqualified Stock.
SECTION 4.10 ASSET SALES.
The Issuers will not, and will not permit any of their Restricted
Subsidiaries to, consummate an Asset Sale unless (i) such Issuer or such
Restricted Subsidiary receives consideration at the time of such Asset Sale at
least equal to the fair market value (evidenced by a resolution of its Board of
Directors, whose determination shall be conclusive, set forth in an Officers'
Certificate delivered to the Trustee) of the assets or Equity Interests issued
or sold or otherwise disposed of and (ii) at least 75% of the consideration
therefor received by such Issuer or such Restricted Subsidiary is in the form of
cash or Cash Equivalents; provided that the amount of (x) any liabilities (as
shown on such Issuer's or such Restricted Subsidiary's most recent balance
sheet), of such Issuer or any of its Restricted Subsidiaries (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Senior Discount Notes) that are assumed by the transferee of any such assets
and (y) any securities, notes or other obligations received by such Issuer or
any such Restricted Subsidiary from such transferee that are promptly converted
by such Issuer or such Restricted Subsidiary into cash (to the extent of the
cash received), shall be deemed to be cash for purposes of the foregoing and the
next paragraph.
Notwithstanding the immediately preceding paragraph, the Issuers and
their Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with
61
the prior paragraph if (i) such Issuer or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or other property sold, issued or otherwise disposed of (as
evidenced by a resolution of its Board of Directors, which shall be conclusive,
set forth in an Officers' Certificate delivered to the Trustee) and (ii) at
least 75% of the consideration for such Asset Sale constitutes a controlling
interest in a Permitted Business, assets used or useful in a Permitted Business
and/or cash or Cash Equivalents; provided that any cash (other than any amount
deemed cash under clause (ii)(x) of the preceding paragraph) or Cash Equivalents
received by such Issuer or such Restricted Subsidiary in connection with any
Asset Sale permitted to be consummated under this paragraph shall constitute Net
Cash Proceeds subject to the provisions of the next paragraph.
Within 360 days after the receipt of any Net Cash Proceeds from an
Asset Sale, the Issuer or such Restricted Subsidiary, as the case may be, may
apply such Net Cash Proceeds, at its option, (a) to repay Indebtedness of the
Company Issuers (and to correspondingly permanently reduce the commitments with
respect thereto under the Credit Facility) or (b) to the acquisition of a
controlling interest in a Permitted Business, the making of a capital
expenditure or the acquisition of assets used or useful in a Permitted Business.
Pending the final application of any such Net Cash Proceeds, the Issuers or such
Restricted Subsidiary, as the case may be, may temporarily reduce revolving
credit borrowings or otherwise invest such Net Cash Proceeds in any manner that
is not prohibited by the Indenture. Any Net Cash Proceeds from Asset Sales that
are not applied or invested as provided in the first sentence of this paragraph
within the applicable period shall be deemed to constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $10.0 million, the Issuers
shall be required, to the extent permitted by the Senior Subordinated Note
Indenture, to make an offer to all Holders of Senior Discount Notes and all
holders of other pari passu Indebtedness of the Issuers containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds or sales of assets (an "Asset Sale Offer") to
purchase the maximum principal amount of Senior Discount Notes and such other
pari passu Indebtedness of the Issuers 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 and Liquidated Damages thereon,
if any, to the date of repurchase (or, in the case of repurchases of Senior
Discount Notes prior to the Full Accretion Date, at a purchase price equal to
100% of the Accreted Value thereof as of the date of repurchase), in accordance
with Section 3.9 and such other Indebtedness. To the extent that any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Issuers may use
such Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount at maturity or Accreted Value (as applicable)
of the Senior Discount Notes and such other Indebtedness tendered into such
Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select
the Senior Discount Notes and such other Indebtedness to be purchased on a pro
rata basis, by lot or by any other customary method; provided that no Senior
Discount Notes of $1,000 or less shall be redeemed in part. Upon completion of
such offer to purchase, the amount of Excess Proceeds shall be reset at zero.
The Issuers will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws
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and regulations are applicable in connection with the repurchase of Senior
Discount Notes pursuant to an Asset Sale Offer.
SECTION 4.11 TRANSACTIONS WITH AFFILIATES.
The Issuers will not, and will not permit any of their Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any properties or assets to, or purchase any property or assets from,
or enter into or make or amend any transaction, contract, agreement,
understanding, loan, advance or Guarantee with, or for the benefit of, any
Affiliate of any such Person (each of the foregoing, an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms that are no
less favorable to such Issuer or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by such Issuer or such
Restricted Subsidiary with an unrelated Person and (ii) such Issuer delivers to
the Trustee (a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $2.5
million, a resolution of its Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with clause (i)
above and that such Affiliate Transaction has been approved by a majority of the
members of its Board of Directors and (b) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $10.0 million, an opinion as to the fairness to the
Holders of such Affiliate Transaction from a financial point of view issued by
an investment banking, appraisal or accounting firm of national standing;
provided that none of the following shall be deemed to be Affiliate
Transactions: (1) any employment agreement entered into by any of the Issuers or
any of their Restricted Subsidiaries or Avalon in the ordinary course of
business, (2) transactions between or among any of the Issuers and/or their
Restricted Subsidiaries, (3) any sale or other issuance of Equity Interests
(other than Disqualified Stock) of any of the Issuers, (4) Restricted Payments
that are permitted by Section 4.7 (5) fees and compensation paid to members of
the Boards of Directors of the Issuers and their Restricted Subsidiaries or
Avalon in their capacity as such, to the extent such fees and compensation are
reasonable and customary, (6) advances to employees for moving, entertainment
and travel expenses, drawing accounts and similar expenditures in the ordinary
course of business, (7) fees and compensation paid to, and indemnity provided on
behalf of, officers, directors or employees of the Issuers or any of their
Restricted Subsidiaries or Avalon, as determined by the Board of Directors of
such Person, to the extent such fees and compensation are reasonable and
customary, (8) all transactions associated with the Reorganization and the
Mercom Acquisition, (9) the Mercom Intercompany Loan, the ABRY Management
Agreement and the Mercom Management Agreement and (10) Indebtedness permitted
under this Indenture.
SECTION 4.12 LIENS.
The Issuers will not, and will not permit any of their Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien (other than Permitted Liens) of any kind securing
Indebtedness, Attributable Debt, or trade payables upon any of their property or
assets, now owned or hereafter acquired, unless all payments due under the
Indenture and the Senior Discount Notes are secured on an equal and ratable
basis with
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the obligations so secured until such time as such obligations are no longer
secured by a Lien; provided that, with respect to any Indebtedness which by its
terms is subordinate to the Senior Discount Notes, any Lien securing such
Indebtedness shall be subordinate to the Liens securing the Senior Discount
Notes and all payments due under the Indenture and the Senior Discount Notes.
SECTION 4.13 BUSINESS ACTIVITIES.
The Issuers shall not, and shall not permit any Restricted
Subsidiary to, engage in any line of business other than Permitted Businesses,
except to such extent as would not be material to the Issuers and their
Restricted Subsidiaries taken as a whole, and Finance Holdings shall not own any
operating assets or other properties or conduct any business other than to serve
as an Issuer and obligor on the Senior Discount Notes.
SECTION 4.14 CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Issuers shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i)
their limited liability company or corporate existence, and the corporate,
partnership, limited liability company or other existence of each of their
Subsidiaries, in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Issuers or any such Subsidiary and
(ii) the rights (charter and statutory), licenses and franchises of the Issuers
and their Subsidiaries; provided, however, that the Issuers shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership, limited liability company or other existence of any of their
Subsidiaries or of the Issuers holding less than substantially all of the assets
of the Issuers on a combined basis, if the Board of Directors shall determine
that the loss thereof is not adverse in any material respect to the conduct of
the business of the Issuers and their Subsidiaries taken as a whole or to the
Holders.
SECTION 4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of
Senior Discount Notes will have the right to require the Issuers to repurchase
all or any part (equal to $1,000 or an integral multiple thereof) of such
Holder's Senior Discount Notes pursuant to a Change of Control Offer (as defined
below) at an offer price in cash equal to 101% of the aggregate principal amount
at maturity thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase (or, in the case of repurchases of
Senior Discount Notes prior to the Full Accretion Date, at a purchase price
equal to 101% of the Accreted Value thereof as of the date of purchase)
(collectively, the "Change of Control Payment"). Within 20 days following any
Change of Control, the Issuers will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offer (a
"Change of Control Offer") to repurchase Senior Discount Notes on the date
specified in such notice, which date 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"), pursuant to the procedures
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required by this Indenture and described in such notice. The Issuers will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Senior
Discount Notes as a result of a Change of Control.
(b) On the Change of Control Payment Date, the Issuers will, to the
extent lawful, (1) accept for payment all Senior Discount Notes or portions
thereof properly tendered pursuant to the Change of Control Offer, (2) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Senior Discount Notes or portions thereof so tendered and (3)
deliver or cause to be delivered to the Trustee the Senior Discount Notes so
accepted together with an Officers' Certificate stating the aggregate principal
amount at maturity of Senior Discount Notes or portions thereof being purchased
by the Issuers. The Paying Agent will promptly mail to each Holder of Senior
Discount Notes so tendered the Change of Control Payment for such Senior
Discount Notes, and the Trustee will promptly authenticate and mail (or cause to
be transferred by book entry) to each Holder a new Senior Discount Note equal in
principal amount to any unpurchased portion of the Senior Discount Notes
surrendered, if any; provided that each such new Senior Discount Note will be in
a principal amount of $1,000 or an integral multiple thereof. Prior to
complying with the provisions of this covenant, but in any event within 90 days
following a Change of Control, the Issuers will either repay all outstanding
Senior Indebtedness or obtain the requisite consents, if any, under all
agreements governing outstanding Senior Indebtedness to permit the repurchase of
Senior Discount Notes required by this covenant. The Issuers 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) The Issuers will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Issuers and purchases all Senior Discount Notes validly tendered and
not withdrawn under such Change of Control Offer.
(d) The Change of Control provisions described above will be
applicable whether or not any other provisions of this Indenture are applicable.
SECTION 4.16 [INTENTIONALLY OMITTED].
SECTION 4.17 GUARANTEES BY RESTRICTED SUBSIDIARIES.
The Issuers will not permit any of their Restricted Subsidiaries,
directly or indirectly, to Guarantee, assume or in any other manner become
liable for the payment of any Indebtedness of the Issuers (other than as part of
the Reorganization) unless: (i) such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture providing for a Senior Discount
Note Guarantee of payment of the Senior Discount Notes by such Restricted
Subsidiary, and (ii) such Restricted Subsidiary waives, and will not in any
manner whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation
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or any other rights against the Issuers or any other Restricted Subsidiary as a
result of any payment by such Restricted Subsidiary under its Senior Discount
Note Guarantee until the Senior Discount Notes have been paid in full.
SECTION 4.18 PAYMENTS FOR CONSENT.
Neither the Issuers nor any of their Subsidiaries shall, directly
or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Senior Discount Notes for or as
an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Senior Discount Notes unless such
consideration is offered to be paid or is paid to all Holders of the Senior
Discount Notes that consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to such consent, waiver or agreement.
SECTION 4.19 SALE AND LEASEBACK TRANSACTIONS.
The Issuers will not, and will not permit any of their Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Issuers or any of their Restricted Subsidiaries may enter into a sale and
leaseback transaction if (i) such Issuer or Restricted Subsidiary could have
incurred Indebtedness in an amount equal to the Attributable Debt relating to
such sale and leaseback transaction pursuant to the test set forth in the first
paragraph of Section 4.9, (ii) the gross cash proceeds of such sale and
leaseback transaction are at least equal to the fair market value (as determined
in good faith by the Board of Directors of such Issuer or Restricted Subsidiary,
whose determination shall be conclusive, and set forth in an Officers'
Certificate delivered to the Trustee) of the property that is the subject of
such sale and leaseback transaction and (iii) the transfer of assets in such
sale and leaseback transaction is permitted by, and such Issuer or Restricted
Subsidiary applies the proceeds of such transaction in compliance with, Section
4.10.
SECTION 4.20 SALE OR ISSUANCE OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES.
Other than pursuant to the Reorganization, the Issuers (i) will
not, and will not permit any of their Restricted Subsidiaries to, transfer,
convey, sell, lease or otherwise dispose of any Equity Interests in any such
Restricted Subsidiary to any Person (other than an Issuer or a Restricted
Subsidiary of an Issuer), unless (a)(1) such transfer, conveyance, sale, lease
or other disposition is of all the Equity Interests in such Restricted
Subsidiary or (2) after giving effect thereto, such Restricted Subsidiary will
still constitute a Restricted Subsidiary and (b) the Net Cash Proceeds from such
transfer, conveyance, sale, lease or other disposition are applied in accordance
with Section 4.10, and (ii) will not permit any of their Restricted Subsidiaries
to issue any of its Equity Interests (other than, if necessary, shares of its
Capital Stock constituting directors' qualifying shares) to any Person other
than to such Issuer or a Wholly Owned Restricted Subsidiary of such Issuer if,
after giving effect thereto, such Restricted Subsidiary will not be a direct or
indirect Subsidiary of an Issuer.
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ARTICLE 5.
SUCCESSORS
SECTION 5.1 MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Issuer or Issuers holding all or substantially all of the assets
of the Issuers on a combined basis will not, directly or indirectly, consolidate
or merge with or into (whether or not such Issuer is the surviving corporation),
or sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of the Issuers on a combined basis in one or
more related transactions, to another Person unless (i) such Issuer is the
surviving corporation or the Person formed by or surviving any such
consolidation or merger (if other than such Issuer) or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made is a
Person organized or existing under the laws of the United States, any state
thereof or the District of Columbia; provided that the Issuers agree that so
long as the Senior Discount Notes are outstanding at least one of the Issuers
shall be a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia; (ii) the Person formed by
or surviving any such consolidation or merger (if other than such Issuer) or the
Person to which such sale, assignment, transfer, conveyance or other disposition
shall have been made assumes all the obligations of such Issuer under the Senior
Discount Notes and the Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee; (iii) immediately before and after such
transaction no Default or Event of Default shall have occurred; and (iv) except
in the case of a merger of such Issuer with or into a Restricted Subsidiary of
such Issuer, the Issuer or the Person formed by or surviving any such
consolidation or merger (if other than such Issuer), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made,
together with the surviving Issuers, will, immediately before and after 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
quarter, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the test set forth in the first paragraph of Section 4.9. None of
the Issuers may, directly or indirectly, lease all or substantially all of its
properties or assets, in one or more related transactions, to any other Person.
Notwithstanding the foregoing, (a) any or all of the Issuers may
merge or consolidate with or transfer substantially all of its assets to an
Affiliate that has no significant assets or liabilities and was formed solely
for the purpose of changing the jurisdiction of organization of such Issuer or
the form of organization of such Issuer, provided that the amount of
Indebtedness of such Issuer and its Restricted Subsidiaries is not increased
thereby and provided, further, that the successor assumes all obligations of
such Issuer under the Indenture and the Registration Rights Agreement and (b)
nothing in this Section 5.1 shall be deemed to prevent the consummation of the
Reorganization.
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SECTION 5.2 SUCCESSOR CORPORATION OR GUARANTORS SUBSTITUTED.
(a) 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 Issuers in accordance with this covenant, the
successor corporation formed by such consolidation or into or with which an
Issuer or Issuers are merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted for
and may exercise every right and power of such Issuer or Issuers under this
Indenture with the same effect as if such successor Person had been named as
such Issuer or Issuers therein (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of the Indenture referring to the "Issuers" shall refer instead to
the successor corporation and not to such Issuer or Issuers), and may exercise
every right and power of such Issuer or Issuers under this Indenture with the
same effect as if such successor Person had been named as such Issuer or Issuers
therein; provided, however, that the predecessor Issuer shall not be relieved
from the obligation to pay the principal of and interest on the Senior Discount
Notes except in the case of a sale, assignment, transfer, conveyance or other
disposition of all or substantially all of the properties or assets of the
Issuers on a combined basis that meets the requirements of this Article 5.
(b) Each Guarantor which is a Restricted Subsidiary, if any, shall
not, and the Issuers will not permit a Guarantor which is a Restricted
Subsidiary to, consolidate or merge with or into or wind up into (whether or not
such Guarantor is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, any Person unless (i) such
Guarantor is the surviving corporation or the Person formed by or surviving any
such consultation or merger (if other than such Guarantor) or to which such
sale, assignment, transfer, lease, conveyance or other disposition will have
been made is a corporation, partnership or limited liability company organized
or existing under the laws of the United States, any state thereof, the District
of Columbia, or any territory thereof (such Guarantor or such Person, as the
case may be, being herein called the "Successor Guarantor"); (ii) the Successor
Guarantor (if other than such Guarantor) expressly assumes all the obligations
of such Guarantor under this Indenture and such Guarantor's Senior Discount Note
Guarantee pursuant to a supplemental indenture or other documents or instruments
in form reasonably satisfactory to the Trustee; and (iii) if such merger or
consolidation is with a Person other than the Issuers or a Restricted
Subsidiary, (x) immediately after such transaction no Default or Event of
Default shall have occurred and be continuing any (y) the Issuers will, at the
time of such transaction after giving pro forma effect thereto, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the first paragraph
of Section 4.9 hereof. The Successor Guarantor will succeed to, and be
substituted for, such Guarantor under this Indenture and such Guarantor's Senior
Discount Note Guarantee.
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ARTICLE 6.
EVENTS OF DEFAULT
SECTION 6.1 EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Issuers default in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Senior Discount Notes and
such default continues for a period of 30 days;
(b) the Issuers default in the payment when due of the Accreted
Value of or the principal of or premium, if any, on the Senior Discount
Notes;
(c) the Issuers or any of their Restricted Subsidiaries fail to
comply with any of the provisions of Sections 4.7, 4.9 or 5.1 hereof;
(d) the Issuers or any of their Restricted Subsidiaries fail for 30
days after written notice by the Trustee or the Holders of at least 25% in
principal amount at maturity of the then outstanding Senior Discount Notes
to comply with the provisions of Sections 4.10 or 4.15;
(e) the Issuers, any of their Restricted Subsidiaries or any
Guarantor which is a Restricted Subsidiary, fails to observe or perform any
other covenant, representation, warranty or other agreement in this
Indenture or the Senior Discount Notes for 60 days after written notice to
the Issuers by the Trustee or the Holders of at least 25% in aggregate
principal amount at maturity of the Senior Discount Notes then outstanding;
(f) the Issuers or any of their Restricted Subsidiaries 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 any of the Issuers or any of their Restricted Subsidiaries (or
the payment of which is guaranteed by any of the Issuers or any of their
Restricted Subsidiaries) whether such Indebtedness or guarantee now exists,
or is created after the Issue Date, which default (a) is caused by a
failure to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (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 under
which there has been a Payment Default or the maturity of which has been so
accelerated, aggregates without duplication $5.0 million or more;
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(g) the Issuers or any of its Subsidiaries fail to pay a final
judgment or final judgments for the payment of money which are entered by a
court or courts of competent jurisdiction against the Issuers or any of
their Subsidiaries and such judgment or judgments remain undischarged for a
period (during which execution shall not be effectively stayed) of 60 days,
provided that the aggregate of all such undischarged judgments (without
duplication) exceeds $5.0 million (excluding amounts covered by insurance);
and
(h) the Issuers or any of their Restricted Subsidiaries that
constitute a Significant Subsidiary, or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(i) commence a voluntary case,
(ii) consent to the entry of an order for relief against them in
an involuntary case,
(iii) consent to the appointment of a custodian of them or for
all or substantially all of their property,
(iv) make a general assignment for the benefit of their
creditors, or
(v) generally are not paying their debts as they become due; or
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Issuers or any of their
Restricted Subsidiaries that constitute a Significant Subsidiary, or
any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Issuers or any of their
Restricted Subsidiaries that constitute a Significant Subsidiary, or
any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary or for all or substantially all of
the property of the Issuers or any of their Restricted Subsidiaries
that constitute a Significant Subsidiary, or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary; or
(iii) orders the liquidation of the Issuers or any of their
Restricted Subsidiaries that constitute a Significant Subsidiary, or
any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
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SECTION 6.2 ACCELERATION.
If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount at maturity of the then
outstanding Senior Discount Notes may declare all the Senior Discount Notes to
be due and payable immediately; provided that so long as any Indebtedness
permitted to be incurred pursuant to the Senior Credit Facility shall be
outstanding, such acceleration shall not be effective until the earlier of (i)
an acceleration of such Indebtedness under the Senior Credit Facility and (ii)
five business days after receipt by the Issuers of written notice of such
acceleration of the Senior Discount Notes. Notwithstanding the foregoing, in the
case of an Event of Default arising from Section 6.1(h) or 6.1(i), with respect
to any of the Issuers or any of their Restricted Subsidiaries, all outstanding
Senior Discount Notes will become due and payable without further action or
notice. Holders of the Senior Discount Notes may not enforce the Indenture or
the Senior Discount Notes except as provided in the Indenture. Subject to
certain limitations within this Indenture or the TIA, Holders of a majority in
principal amount at maturity of the then outstanding Senior Discount Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Senior Discount Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest) if it determines that withholding notice
is in their interest.
SECTION 6.3 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, interest and Liquidated Damages, if any, on the Senior Discount Notes or to
enforce the performance of any provision of the Senior Discount Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Senior Discount Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of a Senior
Discount 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 6.4 WAIVER OF PAST DEFAULTS.
The Holders of a majority in aggregate principal amount at maturity
of the Senior Discount Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Senior Discount Notes waive any existing
Default or Event of Default and its consequences under this Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
Accreted Value or principal of, the Senior Discount Notes.
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SECTION 6.5 CONTROL BY MAJORITY.
Holders of a majority in principal amount at maturity of the then
outstanding Senior Discount 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 or that may be
unduly prejudicial to the rights of other Holders of Senior Discount Notes or
that may involve the Trustee in personal liability. The Trustee may take any
other action consistent with this Indenture relating to any such direction.
SECTION 6.6 LIMITATION ON SUITS.
A Holder of a Senior Discount Note may pursue a remedy with respect
to this Indenture or the Senior Discount Notes only if:
(a) the Holder of a Senior Discount Note gives to the Trustee
written notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount at maturity of
the then outstanding Senior Discount Notes make a written request to the Trustee
to pursue the remedy;
(c) such Holder of a Senior Discount Note or Holders of Senior
Discount Notes offer and, if requested, provide to the Trustee security and
indemnity satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
security and indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount at maturity of the then outstanding Senior Discount Notes do
not give the Trustee a direction inconsistent with the request.
A Holder of a Senior Discount Note may not use this Indenture to
prejudice the rights of another Holder of a Senior Discount Notes or to obtain a
preference or priority over another Holder of a Senior Discount Notes.
SECTION 6.7 RIGHTS OF HOLDERS OF SENIOR DISCOUNT NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Senior Discount Note to receive payment of principal, premium
and Liquidated Damages, if any, and interest on the Senior Discount Note, on or
after the respective due dates expressed in the Senior Discount Notes (including
in connection with an offer to purchase), or to bring suit for the
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enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Issuers for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Senior Discount 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 compensation, fees,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.9 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 compensation, fees, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Senior Discount Notes allowed in any judicial proceedings
relative to the Issuers (or any other obligor upon the Senior Discount Notes),
its creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on any
such claims and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the compensation, fees,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under or in connection with this Indenture.
To the extent that the payment of any such compensation, fees, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under or in connection with this Indenture out of the
estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a perfected, first priority 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, and such Lien in favor of a predecessor Trustee shall be senior to
the Lien in favor of the current Trustee. 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 Senior Discount 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.
SECTION 6.1 PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
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First: to the Trustee (including any predecessor Trustee), its
agents and attorneys for amounts due under Section 7.7 hereof, including payment
of all compensation, fees, expenses and liabilities incurred, and all advances
made, by the Trustee and the costs and expenses of collection;
Second: to Holders of Senior Discount Notes for amounts due and
unpaid on the Senior Discount Notes for principal, premium and Liquidated
Damages, if any, and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Senior Discount Notes for
principal, premium and Liquidated Damages, if any and interest, respectively;
and
Third: to the Issuers.
The Trustee may fix a record date and payment date for any payment
to Holders of Senior Discount Notes pursuant to this Section 6.10.
SECTION 6.11 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 and expenses, 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 Senior Discount Notes pursuant to Section 6.7 hereof, or a suit by
Holders of more than 10% in principal amount at maturity of the then outstanding
Senior Discount Notes.
ARTICLE 7.
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be 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
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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.
(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 or bad faith, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts;
and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 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), (c), (e) and (f) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request or direction of any Holders, unless such Holder shall have provided
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuers.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.2 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, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Issuers, personally or by agent or attorney
at the sole expense
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of the Issuers and shall incur no liability or additional liability of any kind
by reason of such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting, it shall be
entitled to receive an Officers' Certificate or an Opinion of Counsel or both.
The Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel of its own selection and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence or bad faith of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Issuers shall be sufficient if
signed by an Officer of each of the Issuers.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have provided to the Trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(g) No permissive right of the Trustee to act hereunder shall be
construed as a duty.
(h) Whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of willful misconduct or
bad faith on its part, conclusively rely upon an Officers' Certificate, an
Opinion of Counsel, or both.
(i) Except with respect to Section 4.1 hereof, the Trustee shall have
no duty to inquire as to the performance of the Issuers' covenants in Article 4
hereof. In addition, the Trustee shall not be deemed to have knowledge
(including actual knowledge) of any Default or Event of Default except (i) any
Event of Default occurring pursuant to Sections 6.1(a) and 6.1(b) hereof or (ii)
any Default or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
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(j) The Trustee shall not be deemed to have notice or knowledge
(including actual knowledge) of any matter unless a Responsible Officer has
actual knowledge thereof or unless written notice thereof is actually received
by a Responsible Officer of the Trustee at the Corporate Trust Office of the
Trustee and such notice references the Senior Discount Notes generally, the
Issuers or this Indenture.
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Senior Discount Notes and may otherwise deal with the
Issuers or any Affiliate of the Issuers with the same rights it would have if it
were not Trustee. However, in the event that the Trustee acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the SEC for permission to continue as trustee or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.
SECTION 7.4 TRUSTEES DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, the Senior
Discount Notes, the Registration Rights Agreement or the Offering Memorandum; it
shall not be accountable for the Issuers' use of the proceeds from the Senior
Discount Notes or any money paid to the Issuers or upon the Issuers' direction
under any provision of this Indenture; it shall not be responsible for the use
or application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Senior Discount Notes or any other document in connection with
the sale of the Senior Discount Notes or pursuant to this Indenture other than
its certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if the
Trustee receives written notice thereof, the Trustee shall (at the expense of
the Issuers) mail to Holders of Senior Discount 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, Liquidated
Damages, if any, or interest on any Senior Discount Notes, 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 Senior Discount Notes.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS OF THE SENIOR SUBORDINATED NOTES.
Within 60 days after each November 15 beginning with the November 15
following the date of this Indenture, and for so long as Senior Discount Notes
remain outstanding, the Trustee shall (at the expense of the Issuers) mail to
the Holders of the Senior Discount Notes a brief report dated as of such
reporting date that complies with TIA (S) 313(a)
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(but if no event described in TIA (S) 313(a) has occurred within the twelve
months preceding the reporting date, no report need be transmitted). The Trustee
also shall comply with TIA (S) 313(b)(2). The Trustee shall also transmit by
mail all reports as required by TIA (S) 313(c).
A copy of each report at the time of its mailing to the Holders of
Senior Discount Notes shall be mailed to the Issuers and filed with the SEC and
each stock exchange on which the Senior Discount Notes are listed in accordance
with TIA (S) 313(d). The Issuers shall promptly notify the Trustee when the
Senior Discount Notes are listed on any stock exchange or delisted therefrom.
SECTION 7.7 COMPENSATION AND INDEMNITY.
The Issuers jointly and severally agree to pay to the Trustee from
time to time such compensation as agreed upon in writing by the Trustee and the
Issuers, and, in the absence of any such agreement, reasonable compensation for
its acceptance of this Indenture and services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuers shall reimburse the Trustee promptly upon request
for all disbursements, advances and expenses incurred or made by it in addition
to the compensation for its services. Such expenses shall include the
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Issuers shall fully indemnify the Trustee against any and all
losses, liabilities, claims, damages or expenses (including taxes other than
taxes based on the income of the Trustee) 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 Issuers and the Guarantors (including this Section 7.7) and defending itself
against any claim (whether asserted by the Issuers, the Guarantors or any Holder
or any other person) or liability in connection with, relating to, or arising
out of (i) the exercise or performance of any of its powers or duties hereunder,
or in connection herewith, and (ii) the validity, invalidity, adequacy or
inadequacy of this Indenture, the Senior Discount Note Guarantees, the Senior
Discount Notes, the Registration Rights Agreement and the Offering Memorandum,
except to the extent any such loss, liability, claim, damage or expense may be
attributable to its negligence, willful misconduct or bad faith. The Trustee
shall notify the Issuers promptly of any claim for which it intends to seek
indemnity. Failure by the Trustee to so notify the Issuers shall not relieve
the Issuers and the Guarantors of their obligations hereunder. The Issuers
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Issuers shall pay the fees and
expenses of such counsel. The Issuers need not pay for any settlement made
without their consent, which consent shall not be unreasonably withheld.
The obligations of the Issuers to the Trustee under this Indenture
shall survive the satisfaction and discharge of this Indenture and shall be
secured by a Lien as provided in Section 6.9 hereof.
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To secure the Issuers' payment obligations in this Section, the
Trustee shall have a Lien prior to the Senior Discount Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Senior Discount Notes. Such Lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.1(g) or (h) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to
the extent applicable.
SECTION 7.8 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Issuers. The Holders of Senior
Discount Notes of a majority in principal amount at maturity of the then
outstanding Senior Discount Notes may remove the Trustee by so notifying the
Trustee and the Issuers in writing. The Issuers may by a board resolution
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount at maturity of the then outstanding Senior
Discount Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Issuers.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or
the Holders of Senior Discount Notes of at least 10% in principal amount at
maturity of the then outstanding Senior Discount
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Notes may petition, at the expense of the Issuers, any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after receiving a written request by any Holder of
a Senior Discount Notes who has been a bona fide Holder of a Senior Discount
Notes for at least six months, fails to comply with Section 7.10, such Holder of
a Senior Discount Notes may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Senior Discount Notes. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
provided all sums owing to the Trustee (and its agents and counsel) hereunder
have been paid and subject to the Lien provided for in Section 7.7 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Issuers' obligations under Section 7.7 hereof shall continue for the benefit of
the retiring Trustee.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee or any Agent consolidates, merges or converts into,
or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Trustee or Agent, as the case may be.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that together with its direct parent, if any,
or in the case of a corporation included in a bank holding company system, its
related bank holding company, has a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA
(S) 310(b).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
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SECTION 7.12 OTHER CAPACITIES.
All references in this Indenture to the Trustee shall be deemed to
refer to the Trustee in its capacity as Trustee and in its capacities as any
Agent, to the extent acting in such capacities, and every provision of this
Indenture relating to the conduct or affecting the liability or offering
protection, immunity or indemnity to the Trustee shall be deemed to apply with
the same force and effect to the Trustee acting in its capacities as any Agent.
SECTION 7.13 TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE ISSUER.
Any application by the Trustee for written instructions from the
Issuers may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three Business Days after the date any officer of the Issuers actually receives
such application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Issuers may, at their option and at any time, elect to have
either Section 8.2 or 8.3 hereof be applied to all outstanding Senior Discount
Notes and the Senior Discount Note Guarantees, if any, upon compliance with the
conditions set forth below in this Article 8.
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Issuers' exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Issuers shall, subject to the satisfaction
of the conditions set forth in Section 8.4 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Senior
Discount Notes and to have each Guarantor's obligations discharged with respect
to its Senior Discount Note Guarantee on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Issuers shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Senior Discount Notes,
which shall thereafter be deemed to be "outstanding" only for the purposes of
Section 8.5 hereof and the other sections of this Indenture referred to in (a)
and (b) below, and to have satisfied all its other obligations under such Senior
Discount Notes and this Indenture (and the Trustee, on demand of and at the
expense of the Issuers, shall execute
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proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder: (a) the
rights of Holders of outstanding Senior Discount Notes to receive solely from
the trust fund described in Section 8.4 hereof, and as more fully set forth in
such Section, payments in respect of the principal of, premium, if any, and
interest and Liquidated Damages, if any, on such Senior Discount Notes when such
payments are due, (b) the Issuers' obligations with respect to such Senior
Discount Notes under Article 2 and Section 4.2 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee and any Agent hereunder and the
Issuers' and any Guarantors' obligations in connection therewith, including,
without limitation, Article 7 and Section 8.5 and 8.7 hereunder, and (d) this
Article 8. Subject to compliance with this Article 8, the Issuers may exercise
their option under this Section 8.2 notwithstanding the prior exercise of its
option under Section 8.3 hereof.
SECTION 8.3 COVENANT DEFEASANCE.
Upon the Issuers' exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Issuers and each Guarantor shall, subject to
the satisfaction of the conditions set forth in Section 8.4 hereof, be released
from its obligations under the covenants contained in Sections 4.7, 4.8, 4.9,
4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17, 4.18, 4.19, 4.20, and 5.1 hereof with
respect to the outstanding Senior Discount Notes on and after the date the
conditions set forth in Section 8.4 are satisfied (hereinafter, "Covenant
Defeasance"), and the Senior Discount Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Senior Discount Notes shall not be
deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Senior Discount Notes,
the Issuers may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.1 hereof, but,
except as specified above, the remainder of this Indenture and such Senior
Discount Notes shall be unaffected thereby. In addition, upon the Company's
exercise under Section 8.1 hereof of the option applicable to this Section 8.3
hereof, subject to the satisfaction of the conditions set forth in Section 8.4
hereof, Sections 6.1(c) through 6.1(f) hereof shall not constitute Events of
Default.
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Senior Discount Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
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(a) the Issuers must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as 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
Liquidated Damages, if any, on the outstanding Senior Discount Notes on the
stated maturity or on the applicable redemption date, as the case may be, and
the Issuers must specify whether the Senior Discount Notes are being defeased to
maturity or to a particular redemption date;
(b) in the case of an election under Section 8.2 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
confirming that (A) the Issuers have received from, or there has been published
by, the Internal Revenue Service a ruling or (B) 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 Senior Discount 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 8.3 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
confirming that the Holders of the outstanding Senior Discount 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) 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) or insofar
as Sections 6.1(h) or 6.1(i) hereof are concerned, at any time in the period
ending on the 91st day after the date of deposit;
(e) 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 (other than this Indenture) to which any of the Issuers or any of
their Subsidiaries is a party or by which any of the Issuers or any of their
Restricted Subsidiaries is bound;
(f) the Issuers must have delivered to the Trustee an Opinion of
Counsel (subject to customary qualifications and assumptions) to the effect that
on the 91st 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;
(g) the Issuers must have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the intent
of preferring the Holders of Senior
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Discount Notes over the other creditors of the Issuers or with the intent of
defeating, hindering, delaying or defrauding creditors of the Issuers or others;
(h) the Issuers must have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
(i) the Trustee shall have received such other documents,
assurances and Opinion of Counsel as are necessary.
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 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 8.5, the
"Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Senior
Discount Notes shall be held in trust and applied by the Trustee, in accordance
with the provisions of such Senior Discount Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including an Issuer acting
as Paying Agent), to the Holders of such Senior Discount Notes of all sums due
and to become due thereon in respect of principal, premium, if any, Liquidated
Damages, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Issuers jointly and severally agree to 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 8.4
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 Senior Discount Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuers from time to time upon the request
of the Issuers any money or non-callable Government Securities held by it as
provided in Section 8.4 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 8.4(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 8.6 REPAYMENT TO ISSUERS.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Issuers, in trust for the payment of the principal of, premium, if
any, Liquidated Damages, if any, or interest on any Senior Discount Notes and
remaining unclaimed for two years after such principal, and premium, if any,
Liquidated Damages, if any, or interest has become due and
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payable shall be paid to the Issuers on their request or (if then held by the
Issuers) shall be discharged from such trust; and the Holder of such Senior
Discount Notes shall thereafter, as a secured creditor, look only to the Issuers
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuers as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Issuers cause to be published once, in The New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Issuers.
SECTION 8.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or noncallable Government Securities in accordance with Section 8.2 or
8.3 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 Issuers' obligations under this Indenture and the Senior
Discount Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.2 or 8.3 hereof until such time as the Trustee or Paying
Agent is permitted by such court or governmental authority to apply all such
money in accordance with Section 8.2 or 8.3 hereof, as the case may be;
provided, however, that, if the Issuers make any payment of principal of,
premium, if any, Liquidated Damages, if any, or interest on any Senior Discount
Notes following the reinstatement of their obligations, the Issuers shall be
subrogated to the rights of the Holders of such Senior Discount Notes to receive
such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF SENIOR DISCOUNT NOTES.
Notwithstanding Section 9.2 of this Indenture, the Issuers, any
Guarantors and the Trustee may amend or supplement this Indenture, any Senior
Discount Note Guarantees or the Senior Discount Notes without the consent of any
Holder of a Note:
(a) to cure any ambiguity, omission, defect or inconsistency;
(b) to provide for uncertificated Senior Discount Notes in addition
to or in place of certificated Senior Discount Notes or to alter the provisions
of Article 2 hereof (including the related definitions) in a manner that does
not materially adversely affect any Holder;
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(c) to provide for the assumption of the Issuers' obligations to
the Holders of the Senior Discount Notes by a successor to the Issuers pursuant
to Article 5 hereof or in the Reorganization;
(d) to add additional guarantees with respect to the Senior
Discount Notes, including any Senior Discount Note Guarantees;
(e) to make any change that would provide any additional rights or
benefits to the Holders of the Senior Discount Notes or that does not adversely
affect the legal rights hereunder of any Holder of the Senior Discount Notes; or
(f) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Issuers accompanied by a resolution of their
respective 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 7.2 hereof, the Trustee shall join with the Issuers in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.2 WITH CONSENT OF HOLDERS OF SENIOR DISCOUNT NOTES.
Except as provided below in this Section 9.2, the Issuers and the
Trustee may amend or supplement this Indenture (including Sections 3.9, 4.10 and
4.15 hereof) and the Senior Discount Notes and any Senior Discount Note
Guarantees may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount at maturity of the Senior Discount Notes
then outstanding voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the Senior
Discount Notes), and, subject to Sections 6.4 and 6.7 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, Liquidated Damages, if any, or
interest on the Senior Discount Notes, except a payment default resulting from
an acceleration that has been rescinded) or compliance with any provision of
this Indenture, the Senior Discount Notes or any Senior Discount Note Guarantees
may be waived with the consent of the Holders of a majority in principal amount
at maturity of the then outstanding Senior Discount Notes voting as a single
class (including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Senior Discount Notes). Section 2.8 hereof shall
determine which Senior Discount Notes are considered to be "outstanding" for
purposes of this Section 9.2.
86
Upon the request of the Issuers accompanied by a resolution of their
respective Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of evidence satisfactory
to the Trustee of the consent of the Holders of Senior Discount Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
7.2 hereof, the Trustee shall join with the Issuers in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
directly affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Senior
Discount Notes under this Section 9.2 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Issuers shall mail to the Holders of Senior Discount Notes
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Issuers to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such amended
or supplemental Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof,
the Holders of a majority in aggregate principal amount at maturity of the
Senior Discount Notes then outstanding voting as a single class may waive
compliance in a particular instance by the Issuers with any provision of this
Indenture or the Senior Discount Notes. However, without the consent of each
Holder affected, an amendment or waiver under this Section 9.2 may not (with
respect to any Senior Discount Notes held by a non-consenting Holder):
(a) reduce the principal amount of Senior Discount Notes whose
Holders must consent to an amendment, supplement or waiver;
(b) reduce the Accreted Value or principal of or change the fixed
maturity of any Senior Discount Note or alter the provisions with respect to the
redemption of the Senior Discount Notes except as provided above with respect to
Sections 3.9, 4.10 and 4.15 hereof;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Senior Discount Notes;
(d) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest or Liquidated Damages, if any, on the Senior
Discount Notes (except a rescission of acceleration of the Senior Discount Notes
by the Holders of at least a majority in aggregate principal amount at maturity
of the then outstanding Senior Discount Notes and a waiver of the payment
default that resulted from such acceleration);
(e) make any Senior Discount Notes payable in money other than that
stated in the Senior Discount Notes;
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(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Senior Discount Notes to
receive payments of principal of or premium, if any, or interest or Liquidated
Damages, if any, on the Senior Discount Notes;
(g) waive a redemption payment with respect to any Senior Discount
Notes (other than a payment required by one of the covenants described in
Sections 4.10 and 4.15); or
(h) make any change in the foregoing amendment and waiver
provisions.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Senior
Discount Notes shall be set forth in an amended or supplemental Indenture that
complies with the TIA as then in effect.
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Senior Discount Notes is a continuing consent by
the Holder of a Senior Discount Notes and every subsequent Holder of a Senior
Discount Notes or portion of a Senior Discount Notes that evidences the same
debt as the consenting Holder's Senior Discount Notes, even if notation of the
consent is not made on any Senior Discount Notes. However, any such Holder of a
Senior Discount Notes or subsequent Holder of a Senior Discount Notes may revoke
the consent as to its Senior Discount Notes if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.5 NOTATION ON OR EXCHANGE OF SENIOR DISCOUNT NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Senior Discount Notes thereafter authenticated. The
Issuers in exchange for all Senior Discount Notes may issue and the Trustee
shall, upon receipt of an Authentication Order, authenticate new Senior Discount
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior
Discount Notes shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Issuers may not sign an amendment or
88
supplemental Indenture until the Board of Directors approves it. In executing
any amended or supplemental indenture, the Trustee shall be entitled to receive
and (subject to Section 7.1 hereof) shall be fully protected in relying upon, in
addition to the documents required by Section 11.4 hereof, an Officer's
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental indenture is authorized or permitted by this Indenture.
ARTICLE 10.
GUARANTEE
SECTION 10.1 UNCONDITIONAL GUARANTEE.
Any Guarantor will unconditionally, jointly and severally,
guarantee to each Holder of a Senior Discount Notes authenticated by the Trustee
and to the Trustee and its successors and assigns that: the principal of,
interest and Liquidated Damages, if any, on the Senior Discount Notes will be
promptly paid in full when due, subject to any applicable grace period, whether
at maturity, by acceleration or otherwise, and interest on the overdue principal
and interest on any overdue interest on the Senior Discount Notes and all other
obligations of the Issuers to the Holders or the Trustee hereunder or under the
Senior Discount Notes will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; subject, however, to the
limitations set forth in Section 10.3. Any Guarantor will agree that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Senior Discount Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Senior Discount Notes with respect to any provisions hereof or thereof,
the recovery of any judgment against the Issuers, any action to enforce the same
or any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Any Guarantor will waive diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of an Issuer, any right to require a proceeding first
against an Issuer, protest, notice and all demands whatsoever and covenants that
each Senior Discount Note Guarantee, as the case may be, will not be discharged
except by complete performance of the obligations contained in the Senior
Discount Notes and this Indenture. If any Holder or the Trustee is required by
any court or otherwise to return to an Issuer or any Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation to
an Issuer or any Guarantor, any amount paid by an Issuer or any Guarantor to the
Trustee or such Holder, each Senior Discount Note Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Any
Guarantor will agree that, as between any Guarantor, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 for the purpose of
each Senior Discount Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article 6, such obligations (whether or not due and payable)
shall become due and payable by any Guarantor for the purpose of each Senior
Discount Note Guarantee.
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SECTION 10.2 SEVERABILITY.
In case any provision of this Article 10 shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 10.3 LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor, and by its acceptance hereof each Holder and the
Trustee, hereby confirms that it is the intention of all such parties that each
Senior Discount Note Guarantee not constitute a fraudulent transfer or
conveyance for purposes of Title 11 of the United States Code, as amended, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar U.S. Federal or state or other applicable law. To effectuate the
foregoing intention, the Holders and each Guarantor hereby irrevocably agree
that the obligations of each Guarantor under each Senior Discount Note Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor pursuant to Section 10.4,
result in the obligations of such Guarantor not constituting such a fraudulent
transfer or conveyance.
SECTION 10.4 CONTRIBUTION.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under a Senior
Discount Note Guarantee, as the case may be, such Funding Guarantor shall be
entitled to a contribution from all other Guarantors (if any) in a pro rata
amount, based on the net assets of each Guarantor (including the Funding
Guarantor), determined in accordance with GAAP, subject to Section 10.3, for all
payments, damages and expenses incurred by such Funding Guarantor in discharging
the Issuers' obligations with respect to the Senior Discount Notes or any other
Guarantor's obligations under a Senior Discount Note Guarantee, as the case may
be.
SECTION 10.5 SUBORDINATION OF SUBROGATION AND OTHER RIGHTS.
Each Guarantor hereby agrees that any claim against an Issuer that
arises from the payment, performance or enforcement of such Guarantor's
obligations under a Senior Discount Note Guarantee or this Indenture, including,
without limitation, any right of subrogation, shall be subject and subordinate
to, and no payment with respect to any such claim of such Guarantor shall be
made before, the payment in full in cash of all outstanding Senior Discount
Notes in accordance with the provisions provided therefor in this Indenture.
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ARTICLE 11.
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA (S) 318(c), the imposed duties shall control.
SECTION 11.2 NOTICES.
Any notice or communication by the Issuers, the Guarantors or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address.
If to the Issuers and/or any Guarantor:
Avalon Cable of Michigan Holdings, Inc.
Avalon Cable of New England, LLC
Avalon Cable Holdings Finance, Inc.
800 Third Avenue, Suite 3100
New York, New York 10022
Attn: President
ABRY Partners, Inc.
18 Newbury Street
Boston, MA 02166
Attn: Jay Grossman
If to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Telecopier No.: (212) 815-5915
Attn: Corporate Trust Administration
The Issuers, the Guarantors or the Trustee, by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five
91
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA (S) 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it, except for notices or communications to the Trustee, which shall be
effective only upon actual receipt thereof.
If the Issuers mail a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.3 COMMUNICATION BY HOLDERS OF SENIOR SUBORDINATED NOTES WITH OTHER
HOLDERS OF SENIOR DISCOUNT NOTES.
Holders may communicate pursuant to TIA (S) 312(b) with other
Holders with respect to their rights under this Indenture or the Senior Discount
Notes. The Issuers, the Trustee, the Registrar and anyone else shall have the
protection of TIA (S) 312(c).
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Issuers to the Trustee to
take any action under this Indenture, the Issuers shall furnish to the Trustee:
(a) an Officers' Certificate (which shall include the statements
set forth in Section 11.5 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 (which shall include the statements set
forth in Section 11.5 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
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SECTION 11.5 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 (S) 314(a)(4)) shall comply with the provisions of TIA
(S) 314(e) and shall 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 11.6 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 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS.
No director, officer, employee, incorporator, member, manager or
stockholder of any Person who is or was an Issuer or Parent Guarantor, as such,
shall have any liability for any obligations under the Senior Discount Notes,
the Senior Discount Note Guarantees, this Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder
of Senior Discount Notes by accepting a Senior Discount Notes waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Senior Discount 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.
SECTION 11.8 GOVERNING LAW.
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE, THE
SENIOR DISCOUNT NOTES AND ANY SENIOR DISCOUNT NOTE GUARANTEES.
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SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Issuers or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
SECTION 11.10 SUCCESSORS.
All agreements of the Issuers in this Indenture and the Senior
Discount Notes shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 11.11 SEVERABILITY.
In case any provision in this Indenture or in the Senior Discount
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 11.12 COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
94
SIGNATURES
Dated as of December 10, 1998
AVALON CABLE OF MICHIGAN
HOLDINGS, INC.
By: /s/ Joel C. Cohen
---------------------------------
Name: Joel C. Cohen
Title: President, Chief Executive
Officer and Secretary
AVALON CABLE OF NEW ENGLAND, LLC
By: /s/ Joel C. Cohen
---------------------------------
Name: Joel C. Cohen
Title: President, Chief Executive
Officer and Secretary
AVALON CABLE HOLDINGS FINANCE, INC.
By: /s/ Joel C. Cohen
---------------------------------
Name: Joel C. Cohen
Title: President, Chief Executive
Officer and Secretary
THE BANK OF NEW YORK
By: /s/ Mary La Gumina
---------------------------------
Name: Mary La Gumina
Title: Assistant Vice President
EXHIBIT A
(Face of Note)
[Insert the Regulation S Temporary Global Note Legend, if applicable pursuant to
the provisions of the Indenture]
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
[Insert the Original Issue Discount Legend pursuant to the provisions of the
Indenture]
11 7/8% Senior Discount Notes due 2008
CUSIP/CINS_________
No.______ $_________
AVALON CABLE OF MICHIGAN HOLDINGS, INC.
AVALON CABLE LLC
AVALON CABLE HOLDINGS FINANCE, INC.
promises to pay to __________________________________________________________
or registered assigns,
the principal sum of________________________________________________
Dollars on December 1, 2008.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
AVALON CABLE OF MICHIGAN HOLDINGS,
INC.
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
A-1
AVALON CABLE LLC
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
AVALON CABLE HOLDINGS FINANCE, INC.
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
This is one of the Notes
referred to in the
within-mentioned Indenture:
THE BANK OF NEW YORK,
By:__________________________
Name:
Title:
Dated:
A-2
(Back of Note)
11 7/8% Senior Discount Notes due 2008
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Avalon Cable of Michigan Holdings, Inc. a Delaware corporation,
Avalon Cable LLC, a Delaware limited liability company, and Avalon Cable
Holdings Finance, Inc., a Delaware corporation (collectively the "Issuers")
promise to pay interest on the principal amount of this Senior Discount Note at
11 7/8% per annum as described below and shall pay the Liquidated Damages, if
any, payable pursuant to Section 5 of the Registration Rights Agreement referred
to below. Until December 1, 2003, interest will not be paid currently on the
Senior Discount Notes, but the Accreted Value will increase (representing
amortization of original issue discount) between the date of original issuance
and December 1, 2003, on a semi-annual basis using a 360-day year comprised of
twelve 30-day months, such that the Accreted Value shall be equal to the full
principal amount at maturity of the Senior Discount Notes on December 1, 2003
(the "Full Accretion Date"). Beginning on the Full Accretion Date, interest on
the Senior Discount Notes will accrue at the rate of 11 7/8% per annum and will
be payable semi-annually in arrears on June 1 and December 1 of each year, to
Holders of record on the immediately preceding May 15 and November 15. The
Issuers shall pay interest and Liquidated Damages, if any, semi-annually on June
1 and December 1 of each year, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date"). Interest on the
Senior Discount Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from the Full Accretion Date;
provided that if there is no existing Default in the payment of interest, and if
this Senior Discount 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 1, 2004. The Issuers shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; they
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if
any (without regard to any applicable grace periods) from time to time on demand
at the same rate to the extent lawful. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
2. Method of Payment. After the Full Accretion Date, the Issuers will pay
interest on the Senior Discount Notes (except defaulted interest) and Liquidated
Damages, if any, to the Persons who are registered Holders of Senior Discount
Notes at the close of business on the May 15 or November 15 next preceding the
Interest Payment Date, even if such Senior Discount Notes are canceled after
such record date and on or before such Interest Payment Date, except as provided
in Section 2.12 of the Indenture (as herein defined) with respect to defaulted
interest. The Senior Discount Notes will be payable as to principal, premium and
Liquidated Damages, if any, and
A-3
interest at the office or agency of the Issuers maintained for such purpose
within the City and State of New York, or, at the option of the Issuers, payment
of interest and Liquidated Damages, if any, may be made by check mailed to the
Holders at their addresses set forth in the register of Holders, and provided
that all payments of $1,000 or more principal, premium, if any, interest and
Liquidated Damages, if any, with respect to Senior Discount Notes the Holders of
which have given wire transfer instructions to the Issuers at least ten business
days prior to the applicable payment date will be required to be made by wire
transfer of immediately available funds to the accounts specified by the Holders
thereof. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
3. Mandatory Payment of Accrued Interest. Prior to December 1, 2003, interest
on the Senior Discount Notes will accrete at an annual rate of 11 7/8% per
annum, compounded semi-annually, but will not be paid until December 1, 2003. On
December 1, 2003, the Issuers will be required to redeem an amount equal to
$369.79 per $1,000 principal amount at maturity of each Senior Discount Note
then outstanding (the "Accreted Interest Redemption Amount") on a pro rata basis
at a redemption price of 100% of the principal amount at maturity of the Senior
Discount Notes so redeemed.
4. Paying Agent and Registrar. Initially, The Bank of New York, the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Issuers may
change any Paying Agent or Registrar without notice to any Holder. The Issuers,
any of their Subsidiaries or any Guarantor may act in any such capacity.
5. Indenture.
The Issuers issued the Senior Discount Notes under an Indenture dated as of
December 10, 1998, as amended or supplemented from time to time ("Indenture"),
among the Issuers and the Trustee. The terms of the Senior Discount Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code (S)(S)
77aaa-77bbbb). The Senior Discount 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 Senior Discount Note conflicts with
the express provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Senior Discount Notes are obligations of the
Issuers limited to $160.4 million in aggregate principal amount at issuance.
Upon completion of the Reorganization, it is anticipated that (i) the
Issuers will be (a) Finance Holdings and (b) Avalon Holdings, (ii) Michigan
Holdings will cease to be obligated as an Issuer and (iii) Avalon Cable of
Michigan, Inc. ("Avalon Michigan") and Michigan Holdings (collectively with
Avalon Michigan, the "Parent Guarantors") will become guarantors of Avalon
Holdings' obligations under the Senior Discount Notes.
6. Optional Redemption.
A-4
(a) Except as described in subparagraph (b) of this Paragraph 6, the Senior
Discount Notes will not be redeemable at the Issuers' option prior to December
1, 2003. Thereafter, the Senior Discount Notes will be subject to redemption at
any time at the option of the Issuers, in whole or in part, upon not less than
30 nor more than 60 days notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on December 1 of the
years indicated below:
Year Redemption Price
- ---- -----------------
2003................... 105.938%
2004................... 103.958%
2005................... 101.979%
2006 and thereafter.... 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5,
at any time prior to December 1, 2001, the Issuers may on any one or more
occasions redeem up to 35% of the aggregate principal amount at maturity of
Senior Discount Notes originally issued under the Indenture at a redemption
price equal to 111.875% of the Accreted Value at the date of redemption, plus
Liquidated Damages, if any, to the redemption date, with the Net Cash Proceeds
of any Equity Offering and/or the Net Cash Proceeds of a Strategic Equity
Investment; provided that at least 65% of the aggregate principal amount at
maturity of Senior Discount Notes originally issued remain outstanding
immediately after each occurrence of such redemption; and provided further that
each such redemption shall occur within 45 days of the date of the closing of
such Equity Offering and/or Strategic Equity Investment.
"Equity Offering" means any public or private sale of Capital Stock of any
of the Issuers or Avalon or any Subsidiary of Avalon pursuant to which the
Issuers together receive net proceeds of at least $25.0 million, other than
issuances of Capital Stock pursuant to employee benefit plans or as compensation
to employees; provided that to the extent such Capital Stock is issued by Avalon
or any Subsidiary of Avalon, the Net Cash Proceeds thereof shall have been
contributed to one or more of the Issuers in the form of an equity contribution.
7. Mandatory Redemption.
Except as set forth in paragraph 3 or 8 of this Senior Discount Note, the
Issuers are not required to make mandatory redemption or sinking fund payments
with respect to the Senior Discount Notes.
8. Repurchase at the Option of Holders.
A-5
(a) Upon the occurrence of a Change of Control, each Holder of Senior
Discount Notes will have the right to require the Issuers to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of such Holder's
Senior Discount Notes pursuant to a Change of Control Offer (as defined below)
at an offer price in cash equal to 101% of the aggregate principal amount at
maturity thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase (or, in the case of repurchases of
Senior Discount Notes prior to the Full Accretion Date, at a purchase price
equal to 101% of the Accreted Value thereof as of the date of purchase)
(collectively, the "Change of Control Payment"). Within 20 days following any
Change of Control, the Issuers will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offer (a
"Change of Control Offer") to repurchase Senior Discount Notes on the date
specified in such notice, which date 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"), pursuant to the procedures required by this Indenture and
described in such notice. The Issuers will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Senior Discount Notes as a result of a Change of
Control.
(b) When the aggregate amount of Excess Proceeds from Asset Sales by the
Issuers and their Restricted Subsidiaries exceeds $10.0 million, to the extent
permitted by the Senior Subordinated Note Indenture, the Issuers shall commence
an offer to all Holders of Senior Discount Notes and all holders of other pari
passu Indebtedness of the Issuers 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 3.9 of
the Indenture to purchase the maximum principal amount of Senior Discount Notes
and such other pari passu Indebtedness of the Issuers 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 and Liquidated
Damages thereon, if any, to the date of purchase (or, in the case of repurchases
of Senior Discount Notes prior to the Full Accretion Date, at a purchase price
equal to 100% of the Accreted Value thereof as of the date of purchase), in
accordance with the procedures set forth in the Indenture and such other
Indebtedness. To the extent that any Excess Proceeds remain after consummation
of an Asset Sale Offer, the Issuers may use such Excess Proceeds for any purpose
not otherwise prohibited by the Indenture. If the aggregate principal amount at
maturity or Accreted Value (as applicable) of Senior Discount Notes tendered
into such Asset Sale surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Senior Discount Notes to be purchased on
a pro rata basis, by lot or other customary method; provided that no Senior
Discount Notes of $1,000 or less shall be redeemed in part. Upon completion of
such offer to purchase, the amount of Excess Proceeds shall be reset at zero.
(c) Holders of Senior Discount Notes that are the subject of a Change of
Control Offer or an Asset Sale Offer, as the case may be, may elect to have such
Senior Discount Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Senior Discount Notes.
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9. Notice of Redemption. Subject to Section 3.9 of the Indenture, notices of
redemption shall be mailed by first class mail at least 30 but not more than 60
days before the redemption date to each Holder of Senior Discount Notes to be
redeemed at its registered address. Notices of redemption may not be
conditional. If any Senior Discount Note is to be redeemed in part only, the
notice of redemption that relates to such Senior Discount Note shall state the
portion of the principal amount thereof to be redeemed. On and after the
redemption date, interest ceases to accrue on Senior Discount Notes or portions
of them called for redemption.
10. Denominations, Transfer, Exchange. The Senior Discount Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples thereof. A Holder may transfer or exchange Senior Discount Notes in
accordance with the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Issuers may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Issuers are not required to
transfer or exchange any Senior Discount Notes selected for redemption. Also,
the Issuers are not required to transfer or exchange any Senior Discount Notes
for a period of 15 business days before a selection of Senior Discount Notes to
be redeemed or during the period between a record date and the next succeeding
Interest Payment Date.
11. Persons Deemed Owners. The registered Holder of a Senior Discount Note may
be treated as its owner for all purposes.
12. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture, or the Senior Discount Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount at maturity of
the then outstanding Senior Discount Notes voting as a single class, and any
existing default or compliance with any provision of the Indenture or the Senior
Discount Notes may be waived with the consent of the Holders of a majority in
principal amount at maturity of the then outstanding Senior Discount Notes
voting as a single class. Without the consent of any Holder of a Senior Discount
Note, the Indenture or the Senior Discount Notes may be amended or supplemented
to cure any ambiguity, omission, defect or inconsistency, to provide for
uncertificated Senior Discount Notes in addition to or in place of certificated
Senior Discount Notes, to provide for the assumption of the Issuers' obligations
to Holders of the Senior Discount Notes in case of a merger, consolidation or
sale of assets (including the Reorganization), to add additional guarantees with
respect to the Senior Discount Notes, to make any change that would provide any
additional rights or benefits to the Holders of the Senior Discount Notes or
that does not adversely affect the legal rights under the Indenture of any such
Holder, or to comply with the requirements of the Commission in order to effect
or maintain the qualification of the Indenture under the Trust Indenture Act.
13. Defaults and Remedies.
The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Senior Discount Notes; (ii) default in
payment when due of the Accreted Value of or the
A-7
principal of or premium, if any, on the Senior Discount Notes; (iii) failure by
any of the Issuers or any of their Restricted Subsidiaries to comply with the
covenants contained in Sections 4.7, 4.9 or 5.1; (iv) failure by any of the
Issuers or any of their Restricted Subsidiaries for 30 days after notice to
comply with the covenants contained in Sections 4.10 or 4.15; (v) failure by any
of the Issuers or any of their Restricted Subsidiaries for 60 days after notice
to comply with any of its other agreements in the Indenture or the Senior
Discount Notes; (vi) 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 any of the Issuers or any of their Restricted
Subsidiaries (or the payment of which is guaranteed by any of the Issuers or any
of their Restricted Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the Issue Date, which default (a) is caused by a
failure to pay principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (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 under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates without duplication $5.0 million or
more; (vii) failure by any of the Issuers or any of their Restricted
Subsidiaries to pay final judgments aggregating in excess of $5.0 million
(excluding amounts covered by insurance), which judgments are not paid,
discharged or stayed for a period of 60 days; and (viii) certain events of
bankruptcy or insolvency with respect to any of the Issuers or any of their
Restricted Subsidiaries that constitute 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 principal amount at maturity of the then outstanding
Senior Discount Notes may declare all the Senior Discount Notes to be due and
payable immediately; provided that so long as any Indebtedness permitted to be
incurred pursuant to the Senior Credit Facility shall be outstanding, such
acceleration shall not be effective until the earlier of (i) an acceleration of
such Indebtedness under the Senior Credit Facility and (ii) five business days
after receipt by the Issuers of written notice of such acceleration of the
Senior Discount Notes. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, with respect to
any of the Issuers or any of their Restricted Subsidiaries, all outstanding
Senior Discount Notes will become due and payable without further action or
notice. Holders of the Senior Discount Notes may not enforce the Indenture or
the Senior Discount Notes except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in principal amount at maturity of
the then outstanding Senior Discount Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Senior Discount Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest.
The Holders of a majority in aggregate principal amount at maturity of the
Senior Discount Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Senior Discount Notes waive any existing Default or
Event of Default and its consequences
A-8
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the Accreted Value or principal of, the Senior
Discount Notes.
The Issuers are required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Issuers are required upon
becoming aware of any Default or Event of Default that is continuing, to deliver
to the Trustee a statement specifying such Default or Event of Default.
14. Trustee Dealings With Issuers. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Issuers or their Affiliates, and may otherwise deal with the Issuers or their
Affiliates, as if it were not the Trustee.
15. No Recourse Against Others. No past, present or future director, officer,
employee, incorporator, manager, member or stockholder of any Person who is or
was an Issuer or Parent Guarantor, as such, shall have any liability for any
obligations of the Issuers under the Senior Discount Notes or the Indenture or
any related documents or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder of Senior Discount Notes by
accepting a Senior Discount Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Senior
Discount Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.
16. Authentication. This Senior Discount Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. 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).
18. Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders of Senior
Discount Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of December 10, 1998, among the Issuers
and the parties named on the signature pages thereof or, in the case of
Additional Senior Discount Notes, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have the rights set forth in one or more
registration rights agreements, if any, between the Issuers and the other
parties thereto, relating to rights given by the Issuers to the purchasers of
any Additional Senior Discount Notes (collectively, the "Registration Rights
Agreement").
19. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers have caused CUSIP numbers to be
printed on the Senior
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Discount 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 Senior Discount Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.
In the event that the Issuers shall issue and the Trustee shall
authenticate any Additional Senior Discount Notes pursuant to the Indenture, the
Issuers shall use their best efforts to obtain the same CUSIP number for such
Additional Senior Discount Notes as is printed on the Senior Discount Notes
outstanding at such time; provided, however, that if any series of Additional
Senior Discount Notes is determined, pursuant to an Opinion of Counsel, to be a
different class of security than the Senior Discount Notes outstanding at such
time for federal income tax purposes, the Issuers may obtain a CUSIP number for
such series of Additional Senior Discount Notes that is different from the CUSIP
number printed on the Senior Discount Notes then outstanding.
20. Guarantees. This Senior Discount Note may be entitled to the benefits of
certain Guarantees made for the benefit of the Holders. Reference is hereby made
to the Indenture for a statement of the respective rights, limitations of
rights, duties and obligations thereunder of the Guarantors, the Trustee and the
Holders.
The Issuers will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Avalon Cable of Michigan Holdings, Inc.
Avalon Cable LLC
Avalon Cable Holdings Finance, Inc.
800 Third Avenue, Suite 3100
New York, New York 10022
Attention: Vice President--Finance
A-10
Assignment Form
To assign this Senior Discount Note, fill in the form below: (I) or (we) assign
and transfer this Senior Discount Note to
- ------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_______________________________________________________
to transfer this Senior Discount Note on the books of the Issuers. The agent may
substitute another to act for him.
- ------------------------------------------------------------------------------
Date: _______________________
Your Signature:________________________________
(Sign exactly as your name appears on the face of
this Senior Discount Note)
Tax Identification No.:________________________
SIGNATURE GUARANTEE:
-----------------------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements
of the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may
be determined by the Registrar in addition to, or
in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
A-11
Option of Holder to Elect Purchase
If you want to elect to have this Senior Discount Note purchased by
the Issuers pursuant to Section 4.10 or 4.15 of the Indenture, check the box
below:
[_] Section 4.10 [_] Section 4.15
If you want to elect to have only part of the Senior Discount Note
purchased by the Issuers 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 Senior Discount Note)
Tax Identification No.:__________________________
SIGNATURE GUARANTEE:
________________________
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
A-12
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE/(1)/
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 Amount of increase of this Global Note authorized
decrease in in Principal following such signatory
Principal Amount Amount of this decrease (or of Trustee or Note
Date of Exchange of this Global Note Global Note increase) Custodian
- ---------------- ------------------- ----------- --------- ---------
- ------------------------
/(1)/ This should be included only if the Senior Discount Note is issued in
global form.
A-13
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Avalon Cable of Michigan Holdings, Inc.
Avalon Cable LLC
Avalon Cable Holdings Finance, Inc.
800 Third Avenue, Suite 3100
New York, NY 10022
Attention:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: 11 7/8% Senior Subordinated Senior Discount Notes due 2008
----------------------------------------------------------
Reference is hereby made to the Indenture, dated as of December 10,
1998 (the "Indenture"), among Avalon Cable of Michigan Holdings, Inc. ("Michigan
Holdings"), Avalon Cable LLC ("Avalon Holdings"), Avalon Cable Holdings
Finance, Inc. ("Finance Holdings") and The Bank of New York, as trustee.
Initially, Michigan Holdings, Avalon Holdings and Finance Holdings or any
successor thereto will be the Issuers of the Senior Discount Notes (the
"Issuers"); provided that subsequent to the Reorganization, the Issuers shall be
Avalon Holdings, as successor to Michigan Holdings, and Finance Holdings or any
successor thereto. 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 Senior Discount Note[s] or interest in such Senior Discount Note[s]
specified in Annex A hereto, in the principal amount of $____ in such Senior
Discount 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 Definitive Note Pursuant to Rule 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred in a transaction meeting the
requirements of Rule 144A to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which
B-1
such Person exercises sole investment discretion, and such Person and each such
account is a "qualified institutional buyer" within the meaning 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
Definitive Note and in the Indenture and the Securities Act.
2. [_] Check if Transferee will take delivery of a beneficial interest in the
Temporary Regulation S Global Note, the Regulation S Global Note or a Definitive
Note pursuant to Regulation S. The Transfer is being effected pursuant to and in
accordance with Rule 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, (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, the
Temporary Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
3. [_] Check and complete if Transferee will take delivery of a beneficial
interest in the IAI Global Note or a Definitive Note pursuant to any provision
of the Securities Act other than Rule 144A or Regulation S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [_] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) [_] such Transfer is being effected to the Issuers or a
subsidiary thereof;
B-2
or
(c) [_] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) [_] such Transfer is being effected to an institutional
"accredited investor" and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904,
and the Transferor hereby further certifies that it has not engaged in any
general solicitation within the meaning of Regulation D under the Securities Act
and the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is supported
by (1) a certificate executed by the Transferee and (2) if such Transfer is in
respect of a principal amount of Senior Discount Notes at the time of transfer
of less than $250,000, an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this certification),
to the effect that such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the IAI Global Note and/or the Definitive Notes and in the
Indenture and the Securities Act.
4. [_] Check 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
B-3
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 Issuers.
_____________________________
[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
(iii) [_] IAI 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) [_] a IAI Global Note (CUSIP _____), or
(iv) [_] Unrestricted Global Note (CUSIP _____); or
(b) [_] a Restricted Definitive Note; or
(c) [_] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-5
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Avalon Cable of Michigan Holdings, Inc.
Avalon Cable LLC
Avalon Cable Holdings Finance, Inc.
800 Third Avenue, Suite 3100
New York, NY 10022
Attention: Vice President--Finance
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: 11 7/8% Senior Subordinated Senior Discount Notes due 2008
----------------------------------------------------------
(CUSIP ____________________)
Reference is hereby made to the Indenture, dated as of December __,
1998 (the "Indenture"), among Avalon Cable of Michigan Holdings, Inc. ("Michigan
Holdings"), Avalon Cable LLC ("Avalon Holdings"), Avalon Cable Holdings
Finance, Inc. ("Finance Holdings") and The Bank of New York, as trustee.
Initially, Michigan Holdings, Avalon Holdings and Finance Holdings or any
successor thereto will be the Issuers of the Senior Discount Notes (the
"Issuers"); provided that subsequent to the Reorganization, the Issuers shall be
Avalon Holdings, as successor to Michigan Holdings, and Finance Holdings or any
successor thereto. 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
Senior Discount Note[s] or interest in such Senior Discount Note[s] specified
herein, in the principal amount of $______, for the Senior Discount Note[s] or
interests specified herein (the "Exchange"). In connection with the Exchange,
the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such
C-1
Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with the United
States Securities Act of 1933, 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
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(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, [_] IAI Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued 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 Issuers.
_________________________
[Insert Name of Owner]
By:______________________
Name:
Title:
Dated:______________________
C-3
EXHIBIT D
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______________, among _______________ (the "Guarantor"), a __________ of
_____________________________________________________, as issuers under the
indenture referred to below, the other Guarantors (as defined in the indenture
referred to herein) and The Bank of New York, as trustee under the indenture
referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Issuers have heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of December 10, 1998 providing
for the issuance of an aggregate principal amount at issuance of up to $160.4
million of 11 7/8% Senior Discount Notes due 2008 (the "Senior Discount
Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guarantor shall execute and deliver to the Trustee a supplemental indenture
pursuant to which the Guarantor shall unconditionally guarantee all of the
Issuers' Obligations under the Senior Discount Notes and the Indenture on the
terms and conditions set forth herein (the "Senior Discount Note Guarantee");
and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Senior Discount Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guarantor hereby agrees as follows:
(a) Along with all Guarantors named in the Indenture, to jointly and
severally Guarantee to each Holder of a Senior Discount Note
authenticated and delivered by the Trustee and to the Trustee and
its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Senior Discount Notes or the
obligations of the Issuers hereunder or thereunder, that:
D-1
(i) the principal of and interest on the Senior Discount 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 on the
Senior Discount Notes, if any, if lawful, and all other
obligations of the Issuers 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 Senior Discount 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 shall be jointly and severally
obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Senior Discount
Notes or the Indenture, the absence of any action to enforce the
same, any waiver or consent by any Holder of the Senior Discount
Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Issuers, any action to
enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a
Guarantor.
(c) The following is hereby waived: diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency
or bankruptcy of the Issuers, any right to require a proceeding
first against the Issuers, protest, notice and all demands
whatsoever.
(d) This Senior Discount Note Guarantee shall not be discharged
except by complete performance of the obligations contained in
the Senior Discount Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Issuers, the Guarantors, or any
custodian, Trustee, liquidator or other similar official acting
in relation to either the Issuers or the Guarantors, any amount
paid by either to the Trustee or such Holder, this Senior
Discount Note Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
D-2
(f) The Guarantor shall not be entitled to any right of subrogation
in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders and
the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in
Article 6 of the Indenture for the purposes of this Senior
Discount Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided in
Article 6 of the Indenture, such obligations (whether or not due
and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Senior Discount Note
Guarantee.
(h) Each Guarantor, and by its acceptance hereof each Holder and the
Trustee, hereby confirms that it is the intention of all such
parties that each Senior Discount Note Guarantee not constitute a
fraudulent transfer or conveyance for purposes of Title 11 of the
United States Code, as amended, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar U.S.
Federal or state or other applicable law. To effectuate the
foregoing intention, the Holders and each Guarantor hereby
irrevocably agree that the obligations of each Guarantor under
each Senior Discount Note Guarantee shall be limited to the
maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after
giving effect to any collections from or payments made by or on
behalf of any other Guarantor in respect of the obligations of
such other Guarantor pursuant to Section 2(i), result in the
obligations of such Guarantor not constituting such a fraudulent
transfer or conveyance.
(i) In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any
payment or distribution is made by any Guarantor (a "Funding
Guarantor") under a Senior Discount Note Guarantee, as the case
may be, such Funding Guarantor shall be entitled to a
contribution from all other Guarantors (if any) in a pro rata
amount, based on the net assets of each Guarantor (including the
Funding Guarantor), determined in accordance with GAAP, subject
to Section 2(h), for all payments, damages and expenses incurred
by such Funding Guarantor in discharging the Issuers' obligations
with respect to the Senior Discount Notes or any other
Guarantor's obligations under a Senior Discount Note Guarantee,
as the case may be.
D-3
(j) This Senior Discount Note Guarantee inures to the benefit of and
is enforceable by the Trustee, the Holders and their successors,
transferees and assigns.
3. Execution and Delivery. Each Guarantor agrees that the Senior
Discount Note Guarantees shall remain in full force and effect notwithstanding
any failure to endorse on each Senior Discount Note a notation of such Senior
Discount Note Guarantee.
4. Guarantor May Consolidate, Etc. on Certain Terms. Each Guarantor
which is a Restricted Subsidiary, if any, shall not, and the Issuers will not
permit a Guarantor which is a Restricted Subsidiary to, consolidate or merge
with or into or wind up into (whether or not such Guarantor is the surviving
corporation), or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its properties or assets in one or more related
transactions to, any Person unless (i) such Guarantor is the surviving
corporation or the Person formed by or surviving any such consultation or merger
(if other than such Guarantor) or to which such sale, assignment, transfer,
lease, conveyance or other disposition will have been made is a corporation,
partnership or limited liability company organized or existing under the laws of
the United States, any state thereof, the District of Columbia, or any territory
thereof (such Guarantor or such Person, as the case may be, being herein called
the "Successor Guarantor"); (ii) the Successor Guarantor (if other than such
Guarantor) expressly assumes all the obligations of such Guarantor under this
Indenture and such Guarantor's Senior Discount Note Guarantee pursuant to a
supplemental indenture or other documents or instruments in form reasonably
satisfactory to the Trustee; and (iii) if such merger or consolidation is with a
Person other than the Issuers or a Restricted Subsidiary, (x) immediately after
such transaction no Default or Event of Default shall have occurred and be
continuing any (y) the Issuers will, at the time of such transaction after
giving pro forma effect thereto, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the first paragraph of Section 4.9 of the
Indenture. The Successor Guarantor will succeed to, and be substituted for, such
Guarantor under this Indenture, the Registration Rights Agreement and such
Guarantor's Senior Discount Note Guarantee.
5. Releases.
(a) In the event of a sale or other disposition of all of the assets
of any Guarantor, by way of merger, consolidation or otherwise,
or a sale or other disposition of all to the capital stock of any
Guarantor, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all
of the capital stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under
its Senior Discount Note Guarantee; provided that the Net
Proceeds of such sale or other disposition in the case of a
Restricted Subsidiary are applied in accordance with the
applicable provisions of the Indenture, including without
limitation Section
D-4
4.10 of the Indenture. Upon delivery by the Issuers to the
Trustee of an Officers' Certificate and an Opinion of Counsel to
the effect that such sale or other disposition was made by the
Issuers in accordance with the provisions of the Indenture,
including without limitation Section 4.10 of the Indenture, the
Trustee shall execute any documents reasonably required in order
to evidence the release of any Guarantor from its obligations
under its Senior Discount Note Guarantee.
(b) Any Guarantor not released from its obligations under its Senior
Discount Note Guarantee shall remain liable for the full amount
of principal of and interest on the Senior Discount Notes.
6. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, manager, member or stockholder of any Person
who is or was an Issuer or guarantor under the Senior Discount Notes, as such,
shall have any liability for any obligations of the Issuers under the Senior
Discount Notes or the Indenture or hereunder or any related documents or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Senior Discount Notes by accepting a Senior Discount
Note waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Senior Discount Notes. Such waiver may not
be effective to waive liabilities under the federal securities laws and it is
the view of the Commission that such a waiver is against public policy.
7. Fees and Expenses. The Guarantor hereby agrees to pay any and
all expenses (including reasonable counsel fees and expenses) incurred by the
Trustee or the Holders in enforcing any rights under this Senior Discount Note
Guarantee.
8. NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
9. 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.
10. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
11. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guarantor and the Issuers.
D-5
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: __________ [Guarantor]
By:_______________________
Name:
Title:
THE BANK OF NEW YORK, as
Trustee
By:_______________________
Name:
Title:
D-6