Telegroup, Inc., as Issuer
and
State Street Bank and Trust Company, as Trustee
---------------------------
INDENTURE
Dated as of October 23, 1997
---------------------
$150,000,000
10 1/2% Senior Discount Notes due 2004
TABLE OF CONTENTS
Page
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ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.....1
1.01 Definitions........................................................1
1.02 Incorporation by Reference of Trust Indenture Act.................25
1.03 Rules of Construction.............................................25
ARTICLE TWO THE NOTES..................................................26
2.01 Forms and Dating..................................................26
2.02 Execution and Authentication......................................27
2.03 Registrar and Paying Agent........................................29
2.04 Paying Agent To Hold Money in Trust...............................30
2.05 Noteholder Lists..................................................30
2.06 Transfer and Exchange.............................................30
2.07 Replacement Notes.................................................32
2.08 Outstanding Notes.................................................32
2.09 Treasury Notes....................................................33
2.10 Temporary Notes...................................................33
2.11 Cancellation......................................................33
2.12 Defaulted Interest................................................34
2.13 CUSIP Number......................................................34
2.14 Deposit of Moneys.................................................34
2.15 Book-Entry Provisions for Global Note.............................34
2.16 Special Transfer Provisions.......................................36
ARTICLE THREE REDEMPTION OF NOTES......................................39
3.01 Notices to the Trustee............................................39
3.02 Selection of Notes To Be Redeemed.................................39
3.03 Notice of Redemption..............................................40
3.04 Effect of Notice of Redemption....................................41
3.05 Deposit of Redemption Price.......................................41
3.06 Notes Redeemed or Purchased in Part...............................42
ARTICLE FOUR COVENANTS.................................................42
4.01 Payment of Notes..................................................42
4.02 Maintenance of Office or Agency...................................42
4.03 Corporate Existence...............................................43
4.04 Payment of Taxes and Other Claims.................................43
4.05 Maintenance of Properties; Insurance;
Books and Records; Compliance with Law...........................44
4.06 Compliance Certificate............................................45
4.07 Limitation on Indebtedness........................................46
4.08 Limitation on Other Indebtedness..................................47
4.09 Limitation on Restricted Payments.................................47
4.10 Limitation on Issuances and Sale of Preferred Stock by
Subsidiaries....................................................50
4.11 Limitation on Liens...............................................50
4.12 Change of Control.................................................51
4.13 Disposition of Proceeds of Asset Sales............................53
4.14 Limitation on Transactions with Interested Persons................57
4.15 Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries..........................................58
4.16 Limitations on Issuances of Guarantees of Indebtedness
by Subsidiaries.................................................59
4.17 Waiver of Stay, Extension or Usury Laws...........................60
4.18 Reporting Requirements............................................60
4.19 Limitation on Sale and Leaseback Transactions.....................60
ARTICLE FIVE SUCCESSOR CORPORATION.....................................61
5.01 When Company May Merge, etc.......................................61
5.02 Successor Substituted.............................................62
ARTICLE SIX REMEDIES...................................................63
6.01 Events of Default.................................................63
6.02 Acceleration......................................................65
6.03 Other Remedies....................................................66
6.04 Waiver of Past Defaults...........................................66
6.05 Control by Majority...............................................66
6.06 Limitation on Suits...............................................67
6.07 Right of Holders To Receive Payment...............................67
6.08 Collection Suit by Trustee........................................68
6.09 Trustee May File Proofs of Claims.................................68
6.10 Priorities........................................................69
6.11 Undertaking for Costs.............................................69
6.12 Restoration of Rights and Remedies................................70
ARTICLE SEVEN TRUSTEE..................................................70
7.01 Duties............................................................70
7.02 Rights of Trustee.................................................71
7.03 Individual Rights of Trustee......................................72
7.04 Trustee's Disclaimer..............................................73
7.05 Notice of Default.................................................73
7.06 Money Held in Trust...............................................73
7.07 Reports by Trustee to Holders.....................................73
7.08 Compensation and Indemnity........................................74
7.09 Replacement of Trustee............................................75
7.10 Successor Trustee by Merger, etc..................................76
7.11 Eligibility; Disqualification.....................................76
7.12 Preferential Collection of Claims Against Company.................77
ARTICLE EIGHT SATISFACTION AND DISCHARGE OF INDENTURE..................77
8.01 Termination of the Company's Obligations..........................77
8.02 Legal Defeasance and Covenant Defeasance..........................78
8.03 Application of Trust Money........................................83
8.04 Repayment to Company..............................................83
8.05 Reinstatement.....................................................84
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS.......................84
9.01 Without Consent of Holders........................................84
9.02 With Consent of Holders...........................................85
9.03 Compliance with Trust Indenture Act...............................87
9.04 Revocation and Effect of Consents.................................87
9.05 Notation on or Exchange of Notes..................................88
9.06 Trustee May Sign Amendments, etc..................................88
ARTICLE TEN MISCELLANEOUS..............................................88
10.01 Trust Indenture Act of 1939......................................88
10.02 Notices..........................................................89
10.03 Communication by Holders with Other Holders......................90
10.04 Certificate and Opinion as to Conditions Precedent...............90
10.05 Statements Required in Certificate or Opinion....................90
10.06 Rules by Trustee, Paying Agent, Registrar........................91
10.07 Governing Law....................................................91
10.08 No Interpretation of Other Agreements............................91
10.09 No Recourse Against Others.......................................91
10.10 Successors.......................................................92
10.11 Duplicate Originals..............................................92
10.12 Separability.....................................................92
10.13 Table of Contents, Headings, etc.................................92
10.14 Benefits of Indenture............................................92
EXHIBITS
Exhibit A. - Form of Face and Reverse of Initial Note................A-1
Exhibit B. - Form of Face and Reverse of Exchange Note...............B-1
Exhibit C. - Form of Certificate to be Delivered in Connection
with Transfers to Non-QIB Institutional
Accredited Investors....................................C-1
Exhibit D. - Intentionally Omitted
Exhibit E. - Intentionally Omitted
Exhibit F. - Form of Certificate to be Delivered in Connection
with Transfers Pursuant to Rule 144A....................F-1
Exhibit G. - Form of Certificate to be Delivered in Connection
with Transfers Pursuant to Regulation S.................G-1
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of October 23, 1997.
Trust Indenture Indenture
Act Section Section
310(a)(1) 7.11
(a)(2) 7.11
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.11
(b) 7.09; 7.11; 10.02
(c) N.A.
311(a) 7.12
(b) 7.12
(c) N.A.
312(a) 2.05
(b) 10.03
(c) 10.03
313(a) 7.07
(b) 7.07
(c) 7.07; 10.02
(d) 7.07
314(a) 4.07; 10.02
(b) N.A.
(c)(1) 10.04
(c)(2) 10.04
(c)(3) N.A.
(d) N.A.
(e) 10.05
315(a) 7.01(b)
(b) 7.05
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11
316(a) (last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 10.01
(c) 10.01
- -----------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the indenture.
INDENTURE, dated as of October 23, 1997, between TELEGROUP, INC., a
corporation incorporated under the laws of the State of Iowa ("the Company"),
and State Street Bank and Trust Company, a Massachusetts trust company, as
trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the Company's 10.5%
Senior Discount Notes due 2004 (the "Initial Notes") and, when and if issued
pursuant to a registered exchange for the Notes, the Company's 10.5% Senior
Discount Notes due 2004 (the "Exchange Notes").
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
1.01 Definitions.
"Accreted Value" is defined to mean, for any specified date (the
"Specified Date"), the amount calculated pursuant to (i), (ii), (iii) or (iv)
for each $1,000 principal amount at maturity of Notes:
(i) if the Specified Date occurs on one or more of the following dates
(each a "Semi-Annual Accrual Date"), the Accreted Value will equal
the amount set forth below for such Semi-Annual Accrual Date:
Semi-Annual Accreted
Accrual Date Value
November 1, 1997 $774.26
May 1, 1998 $814.91
November 1, 1998 $857.69
May 1, 1999 $902.72
November 1, 1999 $950.11
May 1, 2000 $1,000.00
(ii) if the Specified Date occurs before the first Semi-Annual Accrual
Date, the Accreted Value will equal the sum of (a) the original
issue price and (b) an amount equal to the product of (1) the
Accreted Value for the first Semi-Annual Accrual Date less the
original issue price multiplied by (2) a fraction, the numerator of
which is the number of days from the issue date of the Notes to the
Specified Date, using a 360-day year of twelve 30-day months, and
the denominator of which is the number of days elapsed from the
issue date of the Notes to the first Semi-Annual Accrual Date,
using
a 360-day year of twelve 30-day months;
(iii) if the Specified Date occurs between two Semi-Annual Accrual Dates,
the Accreted Value will equal the sum of (a) the Accreted Value for
the Semi-Annual Accrual Date immediately preceding such Specified
Date and (b) an amount equal to the product of (1) the Accreted
Value for the immediately following Semi-Annual Accrual Date less
the Accreted Value for the immediately preceding Semi-Annual
Accrual
Date multiplied by (2) a fraction, the numerator of which is the
number of days from the immediately preceding Semi-Annual Accrual
Date to the Specified Date, using a 360-day year of twelve 30-day
months, and the denominator of which is 180; or
(iv) if the Specified Date occurs after the last Semi-Annual Accrual
Date, the Accreted Value will equal $1,000.
"Acquired Indebtedness" means Indebtedness of a person (a) assumed in
connection with an Asset Acquisition from such person or (b) existing at the
time such person becomes a Subsidiary of any other person; provided that
Acquired Indebtedness shall not include any such Indebtedness that was
incurred in anticipation or contemplation of such Asset Acquisition or such
person becoming a Subsidiary.
"Affiliate" means, with respect to any specified person, any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person.
"Agent" means any Registrar, Paying Agent, co-registrar or agent for
service of notices and demands.
"Agent Members" shall have the meaning set forth in Section 2.15.
"Asset Acquisition" means (a) an Investment by the Company or any
Subsidiary of the Company in any other person pursuant to which such person
shall become a Subsidiary of the Company, or shall be merged with or into the
Company or any Subsidiary of the Company, (b) the acquisition by the Company
or any Subsidiary of the Company of the assets of any person (other than a
Subsidiary of the Company) which constitute all or substantially all of the
assets of such person or (c) the acquisition by the Company or any Subsidiary
of the Company of any division or line of business of any person (other than
a Subsidiary of the Company).
"Asset Disposition" means the sale or other disposition by the Company
or any of its Subsidiaries (other than to the Company or another Subsidiary
of the Company) of (i) all or substantially all of the Capital Stock of any
Subsidiary of the Company or (ii) all or substantially all of the assets that
constitute a division or line of business of the Company or any of its
Subsidiaries.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease or other disposition to any person other than the Company or
a Wholly-Owned Subsidiary of the Company, in one or a series of related
transactions, of (a) any Capital Stock of any Subsidiary of the Company
(other than in respect of director's qualifying shares or investments by
foreign nationals mandated by applicable law); (b) all or substantially all
of the properties and assets of any division or line of business of the
Company or any Subsidiary of the Company; or (c) any other properties or
assets of the Company or any Subsidiary of the Company other than in the
ordinary course of business. For the purposes of this definition, the term
"Asset Sale" shall not include (i) any sale, transfer or other disposition of
equipment, tools or
other assets (including Capital Stock of any Subsidiary of the Company) by
the Company or any of its Subsidiaries in one or a series of related
transactions in respect of which the Company or such Subsidiary receives cash
or property with an aggregate Fair Market Value of $1,000,000 or less or
(ii) any sale, issuance, conveyance, transfer, lease or other disposition of
properties or assets that is governed by the provisions of Article V.
"Asset Sale Offer" shall have the meaning set forth in Section 4.13.
"Asset Sale Offer Price" shall have the meaning set forth in Section
4.13.
"Asset Sale Purchase Date" shall have the meaning set forth in Section
4.13.
"Attributable Value" means, as to any particular lease and at any date
as of which the amount thereof is to be determined, the total net amount of
rent required to be paid by such Person under such lease during the initial
term thereof as determined in accordance with GAAP, discounted from the last
date of such initial term to the date of determination at a rate per annum
equal to the discount rate which would be applicable to a Capitalized Lease
Obligation with a like term in accordance with GAAP. The net amount of rent
required to be paid under any such lease for any such period shall be the
aggregate amount of rent payable by the lessee with respect to such period
after excluding amounts required to be paid on account of insurance, taxes,
assessments, utility, operating and labor costs and similar charges. In the
case of any lease which is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such penalty, but
no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated.
"Average Life to Stated Maturity" means, with respect to any
Indebtedness, as at any date of determination, the quotient obtained by
dividing (a) the sum of the products of (i) the number of years (or any
fraction thereof) from such date to the date or dates of each successive
scheduled principal payment (including, without limitation, any sinking fund
requirements) of such Indebtedness multiplied by (ii) the amount of each such
principal payment by (b) the sum of all such principal payments.
"Bankruptcy Law" means Title 11 United States Code or any similar law
for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors of the Company and to be in full force and effect
on the date of such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New
York, State of New York or the city in which the Corporate Trust Office is
located, are authorized or obligated by law, regulation or executive order to
close.
"Capital Stock" means, with respect to any person, any and all shares,
interests, participations, rights in or other equivalents (however
designated) of such person's capital stock, and any rights (other than debt
securities convertible into capital stock), warrants or options exchangeable
for or convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation under a lease of (or
other agreement conveying the right to use) any property (whether real,
personal or mixed) that is required to be classified and accounted for as a
capital lease obligation under GAAP, and the amount of any such obligation at
any date shall be the capitalized amount thereof at such date, determined in
accordance with GAAP.
"Cash Equivalents" means, at any time, (i) any evidence of Indebtedness
with a maturity of 180 days or less issued or directly and fully guaranteed
or insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States of
America is pledged in support thereof); (ii) certificates of deposit or
acceptances with a maturity of 180 days or less of any financial institution
that is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $500,000,000; (iii) Eurodollar
time deposits with a maturity of 180 days or less of any financial
institution that is not organized under the laws of the United States, any
state thereof or the District of Columbia that are rated at least A-1 by S&P
or at least P-1 by Moody's or at least an equivalent rating category of
another nationally recognized securities rating agency; (iv) commercial paper
with a maturity of 180 days or less that are rated at least A-1 by S&P, or at
least P-1 by Moody's or at least an equivalent rating category of another
nationally recognized securities rating agency; (v) tax-exempt investments
that are rated at least SP1/A1 by S&P and/or P1/VM1G1/M1G1 by Moody's; (vi)
money market accounts of any financial institution that is a member of the
Federal Reserve System having combined capital and surplus and undivided
profits of not less that $500,000,000; and (vii) repurchase agreements and
reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the government of the United States
of America or issued by any agency thereof and backed by the full faith and
credit of the United States of America, in each case maturing within 180 days
from the date of acquisition; provided that the terms of such agreements
comply with the guidelines set forth in the Federal Financial Agreements of
Depository Institutions With Securities Dealers and Others, as adopted by the
Comptroller of the Currency on October 31, 1985.
"Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), excluding Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of
all securities that such person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time, upon the
happening of an event or otherwise), directly or indirectly, of more than 35%
of the voting power of the total Voting Stock of the Company; provided,
however, that the Permitted Holders in the aggregate (i) "beneficially own"
(as so defined) a lower percentage of the voting power of the Voting Stock
than such other person or "group" and (ii) do not have the right or ability
by voting power, contract or otherwise to elect or designate for election a
majority of the Board of Directors of the Company; or (b) individuals who on
the Issue Date constitute the Board of Directors of the Company (together
with any new directors whose election by the Board of Directors of the
Company or whose nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the members of the Board of
Directors of the Company then in office who either were members of the Board
of Directors of the Company on the Issue Date of whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of the members of the Board of Directors of the Company then in
office.
"Change of Control Offer" shall have the meaning set forth in Section
4.12.
"Change of Control Purchase Date" shall have the meaning set forth in
Section 4.12.
"Change of Control Purchase Price" shall have the meaning set forth in
Section 4.12.
"Common Stock" means, with respect to any person, any and all shares,
interests or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of, such person's common stock,
whether outstanding at the Issue Date or issued after the Issue Date, and
includes, without limitation, all series and classes of such common stock.
"Company" means the party named as such in this Indenture until a
successor replaces it (or any previous successor) pursuant to this Indenture,
and thereafter means such successor.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board,
its Vice-Chairman, its President, an Executive Vice President or a Vice
President, and by any one of its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Consolidated Cash Flow" means, for any period, the sum of the amounts
for such period of (i) Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) income taxes, to the extent such amount was deducted in
calculating Consolidated Net Income (other than income taxes (either positive
or negative) attributable to extraordinary and non-recurring gains or losses
or sales of assets), (iv) depreciation expense, to the extent such amount was
deducted in calculating Consolidated Net Income, (v) amortization expense, to
the extent such amount was deducted in calculating Consolidated Net Income,
and (vi) all other non-cash items reducing Consolidated Net Income (excluding
any non-cash charge to the extent that it represents an accrual of or reserve
for cash charges in any future period), less all non-cash items increasing
Consolidated Net Income, all as determined on a consolidated basis for the
Company and its Subsidiaries in conformity with GAAP.
"Consolidated Fixed Charges" means, for any period, Consolidated
Interest Expense plus dividends declared and payable on Preferred Stock.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including capitalized
interest, amortization of original issue discount on any Indebtedness and the
interest portion of any deferred payment obligation, calculated in accordance
with the effective interest method of accounting; all commissions, discounts
and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing; the net costs associated with Interest Rate
Protection Agreements; and interest on Indebtedness that is guaranteed or
secured by the Company or any of its Subsidiaries) and all but the principal
component of rentals in respect of Capitalized Lease Obligations paid,
accrued or scheduled to be paid or to be accrued by the Company and its
Subsidiaries during such period.
"Consolidated Net Income" means, for any period, the aggregate net income
(or loss) of the Company and its Subsidiaries for such period determined in
conformity with GAAP; provided that the following items shall be excluded in
computing Consolidated Net Income (without duplication): (i) solely for the
purposes of calculating the amount of Restricted Payments that may be made
pursuant to clause (C) of the first paragraph of Section 4.09, the net income
(or loss) of any person accrued prior to the date it becomes a Subsidiary or
is merged into or consolidated with the Company or any of its Subsidiaries or
all or substantially all of the property and assets of such Person are
acquired by the Company or any of its Subsidiaries; (ii) any gains or losses
(on an after-tax basis) attributable to Asset Sales; (iii) except for
purposes of calculating the amount of Restricted Payments that may be
pursuant to clause (C) of the first paragraph of Section 4.09, any amount
paid or accrued as dividends on Preferred Stock of the Company or Preferred
Stock of any Subsidiary owned by Persons other than the Company and any of
its Subsidiaries; (iv) all extraordinary gains and extraordinary losses; and
(v) the net income (or loss) of any Person (other than net income (or loss)
attributable to a Subsidiary) in which any Person (other than the Company or
any of its Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to the Company or
any of its Subsidiaries by such other Person during such period.
"Consolidated Net Worth" means, with respect to any person at any date,
the consolidated stockholders' equity of such person less the amount of such
stockholders' equity attributable to Redeemable Capital Stock of such person
and its Subsidiaries, as determined in accordance with GAAP.
"consolidation" means, with respect to any person, the consolidation of
the accounts of such person and each of its Subsidiaries if and to the extent
the accounts of such person and each of its Subsidiaries would normally be
consolidated with those of such person, all in accordance with GAAP. The
term
"consolidated" shall have a meaning correlative to the foregoing.
"control" means, with respect to any specified person, the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Corporate Trust Office" means the corporate trust office of the Trustee
at which at any particular time this Indenture shall be principally
administered, which on the date hereof is located in Hartford, Connecticut.
"covenant defeasance" shall have the meaning set forth in Section 8.02.
"Credit Facilities" means, with respect to the Company, one or more debt
facilities or commercial paper facilities with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any of its Subsidiaries against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means, with respect to Global Notes, the Person designated
as Depositary pursuant to Section 2.01 until a successor Depositary shall
have become such pursuant to the applicable provisions of this Indenture, and
thereafter "Depositary" shall mean each Person who is then a Depositary
hereunder, and if at any time there is more than one such Person, such
Persons.
"Eligible Accounts Receivable" is defined to mean the accounts
receivables (net of any reserves and allowances for doubtful accounts in
accordance with GAAP) of any person that are not more than 60 days past their
due date and that were entered into in the ordinary course of business on
normal payment terms as shown on the most recent consolidated balance sheet
of such person filed with the SEC, all in accordance with GAAP.
"Event of Default" shall have the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement dated as of the Issue Date by and among the
Initial Purchasers and the Company, as such agreement may be amended,
modified or supplemented from time to time in accordance with the terms
thereof.
"Exchange Offer" shall have the meaning set forth in the Exchange and
Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset, the price, as
determined by the Board of Directors of the Company, acting in good faith,
which could be negotiated in an arm's-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of which is under
pressure or compulsion to complete the transaction; provided, however, that
with respect to any transaction which involves an asset or assets in excess
of $2,000,000, such determination shall be evidenced by a Board Resolution
delivered to the Trustee.
"Final Maturity Date" means November 1, 2004.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession of the United States of America, which are
applicable from time to time and are consistently applied.
"Global Note" shall have the meaning set forth in Section 2.01.
"guarantee" means, as applied to any obligation, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all
or any part of such obligation, including, without limiting the foregoing,
the payment of amounts drawn down by letters of credit.
"Holder" or "Noteholder" means the person in whose name a Note is
registered on the Registrar's books.
"IAI" shall have the meaning set forth in Section 2.01.
"Indebtedness" means, with respect to any person at any date of
determination (without duplication), (i) all indebtedness of such person for
borrowed money, (ii) all obligations of such person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto), (iv) all
obligations of such person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after
the date of placing such property in service or taking delivery and title
thereto or the completion of such services, except Trade Payables, (v) all
obligations of such person as lessee under Capitalized Lease Obligations,
(vi) all Indebtedness of other persons secured by a Lien on any asset of such
person, whether or not such Indebtedness is assumed by such person; provided
that the amount of such Indebtedness shall be the lesser of (A) the fair
market value of such asset at such date of determination and (B) the amount
of such
Indebtedness, (vii) all Indebtedness of other persons guaranteed by such
person to the extent such Indebtedness is guaranteed by such person, (viii)
the maximum fixed redemption or repurchase price of Redeemable Capital Stock
of such person at the time of determination and (ix) to the extent not
otherwise included in this definition, obligations under Currency Agreements
and Interest Rate Protection Agreements. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and, with respect to contingent
obligations, the maximum liability upon the occurrence of the contingency
giving rise to the obligation, provided (i) that the amount outstanding at
any time of any Indebtedness issued with original issue discount is the face
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
conformity with GAAP and (ii) that Indebtedness shall not include any
liability for federal, state, local or other taxes.
"Indenture" means this Indenture, as amended, modified or supplemented
from time to time.
"Independent Financial Advisor" means a firm (i) which does not, and
whose directors, officers and employees or Affiliates do not, have a direct
or indirect financial interest in the Company and (ii) which, in the judgment
of the Board of Directors of the Company, is otherwise independent and
qualified
to perform the task for which it is to be engaged.
"Initial Notes" shall have the meaning set forth in the Preamble.
"Initial Purchasers" means Smith Barney Inc. and BT Alex. Brown
Incorporated.
"Interest" means, with respect to any Note, the amount of all interest
accruing on such Note, including all interest accruing subsequent to the
occurrence of any events specified in Sections 6.01(f) and (g) or which would
have accrued but for any such event, whether or not such claims are allowable
under applicable law.
"Interested Persons" shall have the meaning set forth in Section 4.14.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes, as set forth therein.
"Interest Rate Protection Agreement" means any arrangement with any
other person whereby, directly or indirectly, such person is entitled to
receive from time to time periodic payments calculated by applying either a
floating or a fixed rate of interest on a stated notional amount in exchange
for periodic payments made by such person calculated by applying a fixed or a
floating rate of interest on the same notional amount and shall include
without limitation, interest rate swaps, caps, floors, collars and similar
agreements.
"Investment" means, with respect to any person, any direct or indirect,
loan, guarantee, or other extension of credit or capital contribution to (by
means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition by such person of any Capital Stock, bonds, notes, debentures or
other securities or evidences of Indebtedness issued by, any other person.
In addition, the Fair Market Value of the assets of any Subsidiary of the
Company at the time that such Subsidiary is designated as an Unrestricted
Subsidiary shall be deemed to be an Investment made by the Company in such
Unrestricted Subsidiary at such time. "Investments" shall exclude extensions
of trade credit by the Company and its Subsidiaries in the ordinary course of
business in accordance with normal trade practices of the Company or such
Subsidiary, as the case may be.
"Issue Date" means October 23, 1997.
"legal defeasance" shall have the meaning set forth in Section 8.02.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim, or
preference or priority or other encumbrance upon or with respect to any
property of any kind. A person shall be deemed to own subject to a Lien any
property which such person has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement.
"Maturity Date" means, with respect to any Note, the date on which any
principal of such Note becomes due and payable as therein or herein provided,
whether at the Stated Maturity with respect to such principal or by
declaration of acceleration, call for redemption or purchase or otherwise.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Subsidiary of the Company) net of
(i) brokerage commissions and other fees and expenses (including, without
limitation, fees and expenses of legal counsel and investment bankers)
related to such Asset Sale, (ii) provisions for all taxes payable as a result
of such Asset Sale, (iii) amounts required to be paid to any person (other
than the Company or any Subsidiary of the Company) owning a beneficial
interest in the assets subject to the Asset Sale and (iv) appropriate amounts
to be provided by the Company or any Subsidiary of the Company, as the case
may be, as a reserve required in accordance with GAAP against any liabilities
associated with such Asset Sale and retained by the Company or any Subsidiary
of the Company, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected
in an Officers' Certificate delivered to the Trustee.
"Non-U.S. Person" means a Person who is not a U.S. Person as defined in
Regulation S under the Securities Act.
"Notes" means the securities that are issued from time to time under
this Indenture.
"Officer" means the Chairman of the Board, the President, any Executive
Vice President, any Vice President, the Chief Financial Officer, the
Treasurer, the Secretary or the Controller of the Company.
"Officers' Certificate" means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or Assistant Secretary of the Company and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company.
"Pari Passu Indebtedness" means Indebtedness of the Company which ranks
pari passu in right of payment with the Notes.
"Paying Agent" has the meaning set forth in Section 2.03, except that,
for the purposes of Section 4.12 and Section 4.13 and Articles Three and
Eight, the Paying Agent shall not be the Company or a Subsidiary of the
Company or any of their respective Affiliates.
"Permitted Holder" means any of (x) Fred Gratzon, Shelley Levin-Gratzon
or Clifford Rees or (y) any Affiliate of any Person named in the foregoing
clause (x) or any trust for the benefit of any such Person or any of such
Person's family members or descendants.
"Permitted Indebtedness" means the following Indebtedness (each of which
shall be given independent effect):
(a) Indebtedness of the Company evidenced by the Notes issued and
outstanding on the Issue Date;
(b) Indebtedness of the Company and its Subsidiaries outstanding on the
Issue Date;
(c) Indebtedness, including Acquired Indebtedness, in an aggregate
principal amount at any one time outstanding not to exceed $25 million;
(d) Indebtedness (other than Acquired Indebtedness) incurred to finance
the cost (including the cost of design, development, construction,
acquisition, installation or integration) of equipment used in the
telecommunications business or ownership rights with respect to indefeasible
rights of use or minimum investment units (or similar ownership interests) in
transnational fiber optic cable or other transmission facilities, in each
case purchased or leased by the Company or a Subsidiary after the Issue Date;
(e) Indebtedness of the Company or any Subsidiary (A) in respect of
performance, surety or appeal bonds or letters of credit supporting trade
payables, in each case provided in the ordinary course of business, (B) under
Currency Agreements and Interest Rate Protection Agreements; provided that
such agreements do not increase the Indebtedness of the obligor outstanding
at any time other than as a result of fluctuations in foreign currency
exchange
rates or interest rates or by reason of fees, indemnities and compensation
payable thereunder; and (C) arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or from
guarantees or letters of credit, surety bonds or performance bonds securing
any obligations of the Company or any of its Subsidiaries pursuant to such
agreements, in any case incurred in connection with the disposition of any
business, assets or Subsidiary of the Company (other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such
acquisition), in a principal amount not to exceed the gross proceeds actually
received by the Company or any Subsidiary in connection with such
disposition;
(f) Indebtedness of a Wholly-Owned Subsidiary owed to and held by the
Company or another Wholly-Owned Subsidiary, in each case which is not
subordinated in right of payment to any Indebtedness of such Wholly-Owned
Subsidiary, except that any transfer of such Indebtedness by the Company or a
Wholly-Owned Subsidiary (other than to the Company or to a Wholly-Owned
Subsidiary) or any event which results in any such Wholly-Owned Subsidiary
ceasing to be a Wholly-Owned Subsidiary shall, in each case, be an incurrence
of Indebtedness by such Wholly-Owned Subsidiary subject to the provisions of
Section 4.07.
(g) Indebtedness of the Company owed to and held by a Wholly-Owned
Subsidiary of the Company which is unsecured and subordinated in right of
payment to the payment and performance of the Company's obligations under the
Indenture and the Notes except that any transfer of such Indebtedness by a
Wholly-Owned Subsidiary of the Company (other than to another Wholly-Owned
Subsidiary of the Company) or any event which results in any such Wholly-
Owned Subsidiary ceasing to be a Wholly-Owned Subsidiary shall, in each case,
be an incurrence of Indebtedness by the Company subject to the provisions of
Section 4.07;
(h) Indebtedness of (x) the Company not to exceed, at any one time
outstanding, 1.75 times the net cash proceeds (less the amount of such
proceeds applied as provided in clause (ii) or (iii) of the second paragraph
of Section 4.09 received by the Company after the Issue Date from the
issuance and sale of its Common Stock to a Person that is not a Subsidiary of
the Company and (y) the Company or Acquired Indebtedness of a Subsidiary not
to exceed, at one time outstanding, 1.5 times the Fair Market Value of any
Common Stock of the Company issued after the Issue Date as consideration for
an Asset Acquisition in the Company's line of business; provided that, in any
such case, such Indebtedness (other than Acquired Indebtedness) matures after
the Stated Maturity of the Notes and has an Average Life to Stated Maturity
longer than the Notes;
(i) Indebtedness of the Company, to the extent that the net proceeds
thereof are promptly (A) used to repurchase Notes tendered in a Change of
Control Offer or (B) deposited to defease all of the Notes pursuant to
Section 8.02;
(j) Indebtedness of a Subsidiary represented by a guarantee of the
Notes permitted by and made in accordance with Section 4.16;
(k) Indebtedness of the Company or any Subsidiary under one or more
Credit Facilities, provided that if any Indebtedness is incurred pursuant to
this clause (k), total Indebtedness under this clause (k) and clause (c)
above does not exceed at any one time outstanding an amount equal to the sum
of (x) 65% of Eligible Accounts Receivable and (y) without duplication of
amounts
included in the previous clause (x), 30% of the Company's unbilled, domestic
unencumbered accounts receivable; and
(l) (i) Indebtedness of the Company the proceeds of which are used
solely to refinance (whether by amendment, renewal, extension or refunding)
Indebtedness of the Company or any of its Subsidiaries and (ii) Indebtedness
of any Subsidiary of the Company the proceeds of which are used solely to
refinance (whether by amendment, renewal, extension or refunding)
Indebtedness of such Subsidiary, in each case other than the Indebtedness
incurred under clause (c) through (k) above (which clauses provide for the
refinancing of Indebtedness incurred thereunder); provided, however, that (x)
the principal amount of Indebtedness incurred pursuant to this clause (l)
(or, if such Indebtedness provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of acceleration of
the maturity thereof, the original issue price of such Indebtedness) shall
not exceed the sum of the principal amount of Indebtedness so refinanced,
plus the amount of any premium required to be paid in connection with such
refinancing pursuant to the terms of such Indebtedness or the amount of any
premium reasonably determined by the Board of Directors of the Company as
necessary to accomplish such refinancing by means of a tender offer or
privately negotiated purchase, plus the amount of expenses in connection
therewith, (y) in the case of Indebtedness incurred by the Company pursuant
to this clause (l) to refinance Subordinated Indebtedness, such Indebtedness
(A) has an Average Life to Stated Maturity greater than the remaining Average
Life to Stated Maturity of the Indebtedness being refinanced and (B) is
expressly subordinated to the Notes in the same manner and to the same extent
that the Subordinated Indebtedness being refinanced is subordinated to the
Notes and (z) in the case of Indebtedness incurred by the Company pursuant to
this clause (l) to refinance Pari Passu Indebtedness, such Indebtedness (A)
has an Average Life to Stated Maturity greater than the remaining Average
Life to Stated Maturity of the Indebtedness being refinanced and
(B) constitutes Pari Passu Indebtedness or Subordinated Indebtedness.
"Permitted Investments" means any of the following: (i) Investments in
any Subsidiary of the Company (including any person that pursuant to such
Investment becomes a Subsidiary of the Company) and any person that is merged
or consolidated with or into, or transfers or conveys all or substantially
all of its assets to, the Company or any Subsidiary of the Company at the
time such Investment is made; (ii) Investments in Cash Equivalents;
(iii) Investments in deposits with respect to leases or utilities provided to
third parties in the ordinary course of business; (iv) Investments in
Currency Agreements on commercially reasonable terms entered into by the
Company or any of its Subsidiaries in the ordinary course of business in
connection with the operations of the business of the Company or its
Subsidiaries to hedge against fluctuations in foreign exchange rates;
(v) loans or advances to officers, employees or consultants of the Company
and its Subsidiaries in the ordinary course of business for bona fide
business purposes of the Company and its Subsidiaries (including travel and
moving expenses) not in excess of $1,000,000 in the aggregate at any one time
outstanding; (vi) Investments in evidences of Indebtedness, securities or
other property received from another person by the Company or any of its
Subsidiaries in connection with any bankruptcy proceeding or by reason of a
composition or readjustment of debt or a reorganization of such person or as
a result of foreclosure, perfection or
enforcement of any Lien in exchange for evidences of Indebtedness, securities
or other property of such person held by the Company or any of its
Subsidiaries, or for other liabilities or obligations of such other person to
the Company or any of its Subsidiaries that were created in accordance with
the terms of this Indenture; and (vii) Investments in Interest Rate
Protection Agreements on commercially reasonable terms entered into by the
Company or any of its Subsidiaries in the ordinary course of business in
connection with the operations of the business of the Company or its
Subsidiaries to hedge against fluctuations in interest rates.
"Permitted Liens" means the following types of Liens:
(a) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or any of its Subsidiaries shall have
set aside on its books such reserves as may be required pursuant to GAAP;
(b) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent or
being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made in
respect thereof;
(c) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, governmental contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(d) judgment Liens not giving rise to an Event of Default so long as
such Lien is adequately bonded and any appropriate legal proceedings which
may have been duly initiated for the review of such judgment shall not have
been finally terminated or the period within which such proceedings may be
initiated shall not have expired;
(e) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company or
any of its Subsidiaries;
(f) any interest or title of a lessor under any Capitalized Lease
Obligation or operating lease;
(g) Liens to finance the acquisition, cost of design, development,
construction, installation or integration of property or assets of the
Company or any Subsidiary of the Company in the ordinary course of business;
provided, however, that (i) the related Indebtedness shall not be secured by
any property or assets of the Company or any Subsidiary of the Company other
than such property or assets and any improvements thereto and (ii) the Lien
securing such Indebtedness either (x) exists at the time of such acquisition
or construction or (y) shall be created within 90 days of such acquisition,
construction or commencement of full operation of such property or assets;
(h) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(i) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Company and its
Subsidiaries, taken as a whole;
(j) Liens encumbering property or assets under construction arising
from progress or partial payments by a customer of the Company or its
Subsidiaries relating to such property or assets;
(k) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(l) Liens on property of, or on shares of stock or Indebtedness of, any
corporation existing at the time such corporation becomes, or becomes a part
of, any Subsidiary; provided that such Liens do not extend to or cover any
property or assets of the Company or any Subsidiary other than the property
or assets acquired and were not created in contemplation of such transaction;
(m) Liens securing reimbursement obligations with respect to letters of
credit that encumber documents and other property relating to such letters of
credit and the products and proceeds thereof; and
(n) Liens encumbering customary initial deposits and margin deposits
and other Liens that are either within the general parameters customary in
the industry or incurred in the ordinary course of business, in each case
securing Indebtedness under Interest Rate Protection Agreements and Currency
Agreements.
"Person" or "person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock
company, trust, charitable foundation, unincorporated organization,
government or any agency or political subdivision thereof or any other
entity.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced
by such particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.07 hereof in exchange for a
mutilated Note or in lieu of a lost, destroyed or stolen Note shall be deemed
to evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Stock" means, with respect to any person, any and all shares,
interests, participations or other equivalents, however designated, whether
voting or nonvoting, of such persons preferred or preferred stock, whether
new outstanding or issued after the Issue Date, including without limitation,
all series and classes of such preferred or preferred stock.
"Principal" means, with respect to any debt security, the principal of
the security plus, when appropriate, the premium, if any, on the security and
any interest on overdue principal.
"Private Placement Legend" means the legend set forth under such caption
in the form of Initial Note in Exhibit A hereto.
"Pro Forma Consolidated Cash Flow" means, for any period, the
Consolidated Cash Flow of the Company for such period calculated on a pro
forma basis to give effect to any Asset Disposition or Asset Acquisition not
in the ordinary course of business (including acquisition of other persons by
merger, consolidation or purchase of Capital Stock) during such period as if
such Asset Disposition or Asset Acquisition had taken place on the first day
of such period.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, excluding Capital Stock in any other Person.
"Purchase Agreement" means the Purchase Agreement dated October 20, 1997
among the Company and the Initial Purchasers.
"QIBs" shall have the meaning set forth in Section 2.01.
"Redeemable Capital Stock" means any shares of any class or series of
Capital Stock that, either by the terms thereof, by the terms of any security
into which it is convertible or exchangeable or by contract or otherwise, is
or upon the happening of an event or passage of time would be, required to be
redeemed prior to the final Stated Maturity with respect to the principal of
any Note or is redeemable at the option of the Holder thereof at any time
prior to any such Stated Maturity, or is convertible into or exchangeable for
debt securities at any time prior to any such Stated Maturity.
"Redemption Date" means, with respect to any Note to be redeemed, the
date fixed by the Company for such redemption pursuant to this Indenture and
the Notes.
"Redemption Price" means, with respect to any Notes to be redeemed, the
price fixed for such redemption pursuant to the terms of this Indenture and
the Notes.
"Registered Exchange Offer" shall have the meaning set forth in the
Exchange and Registration Rights Agreement.
"Registrar" has the meaning set forth in Section 2.03.
"Regular Record Date" means, with respect to any Interest payable on any
Interest Payment Date, the April 15 and October 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
"Replacement Assets" has the meaning set forth in Section 4.13.
"Repurchase Date" has the meaning set forth in Section 4.18.
"Resale Restriction Termination Date" shall have the meaning set forth
in Section 2.16 hereof.
"Restricted Payment" has the meaning set forth in Section 4.09.
"Rule 144A" shall have the meaning set forth in Section 2.01.
"Sale and Leaseback Transaction" means, with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Subsidiaries.
"SEC" means the Securities and Exchange Commission, as from time to time
constituted, or if at any time after the execution of the Indenture such
Commission is not existing and performing the applicable duties now assigned
to it, then the body or bodies performing such duties at such time.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Significant Subsidiary" shall have the same meaning ascribed to it in
Rule 1.02(w) of Regulation S-X under the Securities Act.
"S&P" means Standard & Poor's Corporation, and its successors.
"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is
due and payable, and when used with respect to any other Indebtedness, means
the date specified in the instrument governing such Indebtedness as the fixed
date on which the principal of such Indebtedness, or any installment of
interest thereon, is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company which is
expressly subordinated in right of payment to the Notes.
"Subsidiary" means, with respect to any person, (i) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned
by such person, by one or more Subsidiaries of such person or by such person
and one or more Subsidiaries thereof and (ii) any other person (other than a
corporation), including, without limitation, a joint venture, in which such
person, one or more Subsidiaries thereof or such person and one or more
Subsidiaries thereof, directly or indirectly, at the date of determination
thereof, has at least majority ownership interest entitled to vote in the
election of directors, managers or trustees thereof (or other person
performing similar functions). For purposes of this definition, any
directors' qualifying shares or investments by foreign nationals mandated by
applicable law shall be disregarded in determining the ownership of a
Subsidiary. Notwithstanding the foregoing, an Unrestricted Subsidiary shall
not be deemed a Subsidiary of the Company under this Indenture, other than
for purposes of the definition of an Unrestricted Subsidiary, unless the
Company shall have designated an Unrestricted Subsidiary as a "Subsidiary" by
written notice to the Trustee under this Indenture, accompanied by an
Officers'
Certificate as to compliance with the Indenture; provided, however, that the
Company shall not be permitted to designate any Unrestricted Subsidiary as a
Subsidiary unless, after giving pro forma effect to such designation, (i) the
Company would be permitted to incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under Section 4.07 (assuming a market rate of
interest with respect to such Indebtedness) and (ii) all Indebtedness and
Liens of such Unrestricted Subsidiary would be permitted to be incurred by a
Subsidiary of the Company under this Indenture. A designation of an
Unrestricted Subsidiary as a Subsidiary may not thereafter be rescinded.
"Surviving Entity" shall have the meaning set forth in Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Secs. 77aaa-77bbbb) as in effect on the Issue Date.
"Trade Payables" means any accounts payable or any other indebtedness or
monetary obligation to trade creditors created, assumed or guaranteed by the
Company or any of its Subsidiaries arising in the ordinary course of business
in connection with the acquisition of goods and services.
"Transaction Date" means, with respect to the incurrence of any
Indebtedness by the Company or any of its Subsidiaries, the date such
Indebtedness is to be incurred.
"Trust Officer" means any officer in the Corporate Trust Administration
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.
"Trustee" means the party named as such in this Indenture until a
successor replaces such party (or any previous successor) in accordance with
the provisions of this Indenture, and thereafter means such successor.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
shall be designated an Unrestricted Subsidiary by the Board of Directors of
the Company in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary of the Company) to
be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock
of, or owns or holds any Lien on any property of, the Company or any
Subsidiary; provided that (A) any guarantee by the Company or any Subsidiary
of any Indebtedness of the Subsidiary being so designated shall be deemed an
"incurrence" of such Indebtedness and an "Investment" by the Company or such
Subsidiary (or both, if applicable) at the time of such designation; (B) such
designation would be permitted under Section 4.09 and (C) if applicable, the
Incurrence of Indebtedness and the Investment referred to in clause (A) of
this proviso would be permitted under the Section 4.07 and Section 4.09.
"U.S. Government Obligations" shall have the meaning set forth in
Section 8.02.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors,
managers or trustees of any person (irrespective of whether or not, at the
time, Capital Stock of any other class or classes shall have, or might have,
voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" means any Subsidiary of the Company of which
100% of the outstanding Capital Stock is owned by one or more Wholly-Owned
Subsidiaries of the Company, by the Company and one or more Wholly-Owned
Subsidiaries of the Company or by the Company. For purposes of this
definition, any directors' qualifying shares or investments by foreign
nationals mandated by applicable law shall be disregarded in determining the
ownership of a Subsidiary.
1.02 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Notes;
"indenture security holder" means a Noteholder or Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other obligor
on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
1.03 Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
1. a term has the meaning assigned to it;
2. words in the singular include the plural, and words in the plural
include the singular;
3. "or" is not exclusive;
4. provisions apply to successive events and transactions;
5. all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
6. the words "herein", "hereof" and "hereunder" and other words of
similar
import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
7. all references to $ or dollars shall refer to the lawful currency of
the United States of America.
ARTICLE TWO
THE NOTES
2.01 Forms and Dating.
The Initial Notes (including any Global Notes) and the Trustee's
certificate of authentication thereon, shall be in substantially the form of
Exhibit A hereto. Any Exchange Notes and the Trustee's certificate of
authentication thereon shall be in substantially the form of Exhibit B
hereto. The Initial Notes and the Exchange Notes may contain such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon
as may be required to comply with any applicable law or with the rules of any
securities exchange or as may, consistently herewith, be determined by the
Officers executing such Notes, as evidenced by their execution thereof. The
Notes shall be issuable only in registered form without coupons and only in
denominations of $1,000 in principal amount at maturity and integral
multiples thereof.
The Notes shall be printed, typewritten, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes
may be listed, all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes. Each Note shall be dated the
date of its authentication.
The terms and provisions contained in the forms of the Notes, annexed
hereto as Exhibits A and B shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.
The Notes are being offered and sold by the Company pursuant to the
Purchase Agreement. The Notes are being offered and sold to "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act
("Rule 144A")) ("QIBs") in accordance with Rule 144A as provided in the
Purchase Agreement and shall be issued on the Issue Date initially in the
form of a permanent Global Note substantially in the form set forth in
Exhibit A (the "Global Note"). On the Issue Date, the Global Note will be
deposited with the Trustee, as custodian for the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided in
accordance with the Trustee's and Depositary's standard operating procedures.
2.02 Execution and Authentication.
Two Officers shall execute the Notes on behalf of the Company by either
manual or facsimile signature. The Company's seal may be impressed, affixed,
imprinted or reproduced on the Notes.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note or at any time thereafter, the
Note shall be valid nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. Such signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee or an authenticating agent shall (1) authenticate Initial
Notes for original issue in an aggregate principal amount at maturity of up
to $150,000,000 and (2) authenticate Exchange Notes for issue only in a
Registered Exchange Offer, pursuant to the Exchange and Registration Rights
Agreement, for Initial Notes for a like principal amount of Initial Notes
exchanged pursuant thereto, in each case upon a Company Request. The
aggregate principal amount at maturity of Notes outstanding at any time may
not exceed $150,000,000 except as provided in Section 2.07 hereof. The Notes
shall be issuable only in registered form without coupons and only in
denominations of $1,000 and integral multiples thereof.
The Company Request directing the authentication and delivery of Notes
shall specify whether such Notes shall be issued in the form of definitive
Notes or Global Notes. Such Company Request shall specify the amount of the
Notes to be authenticated, the date on which the original issue of the Notes
is to be authenticated and whether the Notes are to be Initial Notes or
Exchange Notes. If the Company Request specifies that the Notes are to be
issued in the form of one or more Global Notes, then the Company shall
execute and the Trustee shall, in accordance with this Section and such
Company Request, authenticate and deliver one or more Global Notes in
definitive form that:
(a) shall be registered in the name of the Depositary or a nominee
of such Depositary,
(b) shall, at the instruction of the Company, be delivered by the
Trustee to the Depositary or held by the Trustee as custodian for the
Depositary, and
(c) shall include and bear a legend substantially to the effect that
unless and until it is exchanged in whole or in part for definitive Notes,
such Global Notes may not be transferred except as a whole by the Depositary
to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
The Depositary must, at the time of its designation and at all times
when it serves as Depositary, be a clearing agency registered under the
Exchange Act and any other applicable statute or regulation.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Any appointment shall be evidenced by
instrument signed by an authorized officer of the Trustee, a copy of which
shall be furnished to the Company. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same right as an Agent to deal with the Company
or an Affiliate of the Company.
2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be located
in the Borough of Manhattan, The City of New York, State of New York) where
Notes may be presented for registration of transfer, for exchange or for
conversion (the "Registrar"), an office or agency (which shall be located in
the Borough of Manhattan, The City of New York, State of New York) where
Notes may be presented for payment of principal, premium, if any, and
interest (the "Paying Agent") and an office or agency where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served. The Registrar shall keep a register of the Notes and of their
transfer and exchange. The Company may have one or more co-Registrars and
one or more additional paying agents. The term "Paying Agent" includes any
additional paying agent. Except as otherwise expressly provided in this
Indenture, the Company or any Affiliate thereof may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture, which shall
incorporate the provisions of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such Registrar or Paying Agent.
The Company shall notify the Trustee of the name and address of any such
Registrar or Paying Agent. If the Company fails to maintain a Registrar,
Paying Agent or agent for service of notices and demands, or fails to give
the foregoing notice, the Trustee shall act as such and shall be entitled to
appropriate compensation in accordance with Section 7.08.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notices and demands in connection with the Notes.
2.04 Paying Agent To Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all money held by the Paying Agent for the payment of principal of,
or interest on, the Notes (whether such money has been distributed to it by
the Company or any other obligor on the Notes), and the Company (or any other
obligor on the Notes) and the Paying Agent shall notify the Trustee of any
default by the Company (or any other obligor on the Notes) in making any such
payment. If the Company or an Affiliate of the Company acts as Paying Agent,
it shall segregate the money and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to distribute all money held
by it to the Trustee and account for any funds disbursed and the Trustee may
at any time during the continuance of any payment default with respect to the
Notes, upon written request to a Paying Agent, require such Paying Agent to
pay all money held by it to the Trustee and to account for any funds
distributed. Upon doing so, the Paying Agent (other than an obligor on the
Notes) shall have no further liability for the money so paid over to the
Trustee.
2.05 Noteholder 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 Holders and shall otherwise comply with TIA Sec. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least ten
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 Holders,
which list may be conclusively relied upon by the Trustee.
2.06 Transfer and Exchange.
Subject to Section 2.16, when Notes are presented to the Registrar or a
co-Registrar with a request to register the transfer of such Notes or to
exchange such Notes for an equal principal amount of Notes of other
authorized denominations, the Registrar or co-Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transaction are met; provided, however, that the Notes surrendered for
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar
or co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Notes at the
Registrar's or co-Registrar's request. No service charge shall be made for
any transfer, exchange or redemption, but the Company may require payment of
a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchanges or transfers pursuant to
Sections 2.02, 2.07, 2.10, 3.06, 4.12, 4.13 or 9.05). The Registrar or co-
Registrar shall not be required to register the transfer of or exchange of
any Note (i) during a period beginning at the opening of business 15 days
before the mailing of a notice of redemption of Notes and ending at the close
of business on the day of such mailing and (ii) selected for redemption in
whole or in part pursuant to Article Three, except the unredeemed portion of
any Note being redeemed in part.
Notwithstanding any other provision of this Section 2.06, unless and
until it is exchanged in whole or in part for definitive Notes, a Global Note
may not be transferred except as a whole by the Depositary to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.
If (i) the Depositary is at any time unwilling, unable or ineligible to
continue as Depositary and a successor Depositary is not appointed by the
Company within 60 days of the date the Company is so informed in writing or
becomes aware of the same, or (ii) an Event of Default has occurred and is
continuing, the Company promptly will execute and deliver to the Trustee
definitive Notes, and the Trustee, upon receipt of a Company Request for the
authentication and delivery of such definitive Notes (which the Company will
promptly execute and deliver to the Trustee), will authenticate and deliver
definitive Notes, without charge, in an aggregate principal amount at
maturity equal to the principal amount at maturity of the outstanding Global
Note, in exchange for and upon surrender of the Global Note.
Upon the exchange of a Global Note for definitive Notes, such Global
Note shall be canceled by the Trustee. Definitive Notes issued in exchange
for Global Notes pursuant to this Section 2.06 shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee.
2.07 Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if
the Trustee's requirements are met. If required by the Trustee or the
Company, such Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of both the Company and the Trustee, to protect
the Company, the Trustee or any Paying Agent or Registrar from any loss
which any of them may suffer if a Note is replaced. The Company may charge
such Holder for its reasonable, out-of-pocket expenses in replacing a Note,
including reasonable fees and expenses of counsel. Every replacement Note is
an additional obligation of the Company.
2.08 Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those canceled by it, those delivered to
it for cancellation and those described in this Section as not outstanding.
A Note does not cease to be outstanding because the Company or any of its
Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
bona fide purchaser. A mutilated Note ceases to be outstanding upon
surrender of such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or a Maturity Date the Paying Agent (other than
the Company or an Affiliate of the Company) holds cash or U.S. Government
Obligations sufficient to pay all of the principal and interest due on the
Notes payable on that date, and is not prohibited from paying such cash or
U.S. Government Obligations to the Holders of such Notes pursuant to the
terms of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them shall cease to accrue.
2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or any of its Affiliates shall be disregarded, except that, for the
purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes that a Trust Officer of the
Trustee knows are so owned shall be disregarded.
2.10 Temporary Notes.
Until definitive Notes are prepared and ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Notes. Temporary
Notes shall be substantially in the form of definitive Notes but may have
variations that the Company considers appropriate for temporary Notes.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes. Until such
exchange, temporary Notes shall be entitled to the same rights, benefits and
privileges as definitive Notes.
2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Notes surrendered to them for transfer, redemption, conversion,
exchange or payment. The Trustee, or at the direction of the Trustee, the
Registrar or the Paying Agent (other than the Company or an Affiliate of the
Company), and no one else, shall promptly cancel and, at the written
direction of the Company, shall dispose of all Notes surrendered for
transfer, redemption, conversion, exchange, payment or cancellation. Subject
to Section 2.07, the Company may not issue new Notes to replace Notes that it
has paid or delivered to the Trustee for cancellation. If the Company shall
acquire any of the Notes, such acquisition shall not operate as a redemption
or satisfaction of the Indebtedness represented by such Notes unless and
until the same are surrendered to the Trustee for cancellation pursuant to
this Section 2.11.
2.12 Defaulted Interest.
If the Company defaults on a payment of interest on the Notes, it shall
pay the defaulted interest, plus (to the extent permitted by law) any
interest payable on the defaulted interest, in accordance with the terms
hereof and the Notes, to the persons who are Holders on a subsequent special
record date, which date shall be at least five Business Days prior to the
payment date. The Company shall fix such special record date and payment
date in a manner satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each Holder a notice that
states the special record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if any, to be
paid.
2.13 CUSIP Number.
The Company in issuing the Notes may use a "CUSIP" number (if then
generally in use), and if so, the Trustee may use the CUSIP numbers in
notices of redemption or exchange as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to
the correctness or accuracy of the CUSIP number printed in the notice or on
the Notes, and that reliance may be placed only on the other identification
numbers printed on the Notes. The Company will promptly notify the Trustee
of any change in the CUSIP number.
2.14 Deposit of Moneys.
On or before each Interest Payment Date and Maturity Date, the Company
shall deposit with the Trustee or Paying Agent in immediately available funds
money sufficient to make cash payments, if any, due on such Interest Payment
Date or Maturity Date, as the case may be, in a timely manner which permits
the Paying Agent to remit payment to the Holders on such Interest Payment
Date or Maturity Date, as the case may be.
2.15 Book-Entry Provisions for Global Notes.
(a) Global Notes initially shall (i) be registered in the name of
the Depositary for such Global Note or the nominee of such Depositary and
(ii) be delivered to the Trustee as custodian for such Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Note held on their
behalf by the Depositary, or the Trustee as its custodian, or under such
Global Note, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such
Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Trustee or the Company from giving effect to
any written certification, proxy or other authorization furnished by the
Depositary or shall impair, as between the Depositary and its Agent Members,
the operation of customary practices governing the exercise of the rights of
a Holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Note
may be transferred in accordance with the rules and procedures of the
Depositary and the provisions of Section 2.16. If required to do so pursuant
to any applicable law or regulation, beneficial owners may obtain definitive
Notes in exchange for their beneficial interests in a Global Note upon
written request in accordance with the Depositary's and the Registrar's
procedures.
(c) In connection with any transfer of a portion of the beneficial
interest in a Global Note pursuant to subsection (b) of this Section 2.15 to
beneficial owners identified by the Depositary who are required to hold
definitive Notes, the Registrar shall reflect on its books and records the
date and a decrease in the principal amount at maturity of such Global Note
in an amount equal to the principal amount at maturity of the beneficial
interest in the Global Note to be transferred, and the Company shall execute,
and the Trustee shall authenticate and deliver, one or more definitive Notes
of like tenor and amount.
(d) In connection with the transfer of an entire Global Note to
beneficial owners pursuant to subsection (b) of this Section 2.15, such
Global Note shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall
authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in such Global Note, an
equal aggregate principal amount at maturity of definitive Notes of
authorized denominations.
(e) Any definitive Note delivered in exchange for an interest in a
Global Note pursuant to subsection (c) or subsection (d) of this Section 2.15
shall, except as otherwise provided by paragraph (d) of Section 2.16, bear
the Private Placement Legend.
(f) The registered holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
2.16. Special Transfer Provisions.
Unless and until an Initial Note is transferred or exchanged under an
effective registration statement under the Securities Act, the following
provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of an Initial Note to any IAI which is not a QIB (excluding
Non-U.S. Persons):
(i) The Registrar shall register the transfer of such Initial Note
if
(x) the requested transfer is after the date that is two years
after the later of the Issue Date and the last date on which the
Company or any of its Affiliates was the owner of such Initial
Note (such later date, the "Resale Restriction Termination
Date")
or (y) the proposed transferee has delivered to the Registrar a
certificate substantially in the form set forth in Exhibit C.
(ii) If the proposed transferee is entitled to receive a definitive
Note as provided in Section 2.15 and the proposed transferor is
an
Agent Member holding a beneficial interest in a Global Note, upon
receipt by the Registrar of (x) the documents, if any, required
by
paragraph (i) and (y) instructions given in accordance with the
Depositary's and the Registrar's procedures therefor, the
Registrar shall reflect on its books and records the date and a
decrease in the principal amount at maturity of such Global Note
in an amount equal to the principal amount at maturity of the
beneficial interest in such Global Note to be transferred, and
the
Company shall execute, and the Trustee shall authenticate and
deliver, one or more definitive Notes of like tenor and amount.
(iii) If the Initial Note to be transferred consists of definitive
Notes
and the proposed transferee is entitled to receive a definitive
Note as provided in Section 2.15, upon receipt by the Registrar
of
the document, if any, required by paragraph (i), the Registrar
shall register such transfer and the Company shall execute, and
the Trustee shall authenticate and deliver, one or more
definitive
Notes of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of an Initial Note to a
QIB (excluding Non-U.S. Persons):
(i) If the Note to be transferred consists of definitive Notes, the
Registrar shall register the transfer if the proposed transfer is
after the Resale Restriction Termination Date or such transfer is
being made by a proposed transferor who has provided the
Registrar
with a certificate substantially in the form set forth in
Exhibit F hereto.
(ii) If the proposed transferee is an Agent Member, and the Initial
Note to be transferred consists of definitive Notes, upon receipt
by the Registrar of (x) the document, if any, required by
paragraph (i) and (y) instructions given in accordance with the
Depositary's and the Registrar's procedures therefor, the
Registrar shall reflect on its books and records the date and an
increase in the principal amount at maturity of the Global Note
in
an amount equal to the principal amount at maturity of the
definitive Notes, to be transferred, and the Trustee shall cancel
the definitive Note so transferred.
(iii) If the proposed transferee is entitled to receive a definitive
Note as provided in Section 2.15 and the proposed transferor is
an
Agent Member holding a beneficial interest in a Global Note, upon
receipt by the Registrar of (x) the documents, if any, required
by
paragraph (i) and (y) instructions given in accordance with the
Depositary's and the Registrar's procedures therefor, the
Registrar shall reflect on its books and records the date and a
decrease in the principal amount at maturity of such Global Note
in an amount equal to the principal amount at maturity of the
beneficial interest in such Global Note to be transferred, and
the
Company shall execute, and the Trustee shall authenticate and
deliver, one or more definitive Notes of like tenor and amount.
(iv) If the Initial Note to be transferred consists of definitive
Notes
and the proposed transferee is entitled to receive a definitive
Note as provided in Section 2.15, upon receipt by the Registrar
of
the document, if any, required by paragraph (i), the Registrar
shall register such transfer and the Company shall execute, and
the Trustee shall authenticate and deliver, one or more
definitive
Notes of like tenor and amount.
(c) Transfers to Non-U.S. Persons. The following provisions shall
apply with respect to any transfer of an Initial Note to a Non-U.S. Person
(as defined in Regulation S under the Securities Act):
(i) The Registrar shall register any proposed transfer of an Initial
Note to a Non-U.S. Person if the proposed transfer is after the
Resale Restriction Termination Date or upon receipt of a
certificate substantially in the form set forth in Exhibit G from
the proposed transferor and the Company shall execute, and the
Trustee shall authenticate and make available for delivery, one
or
more definitive Notes.
(ii) If the proposed transferor is an Agent Member holding a
beneficial
interest in a Global Note, upon receipt by the Registrar of (x)
the document, if any, required by paragraph (i), and (y)
instructions in accordance with the Depositary's and the
Registrar's procedures therefor, the Registrar shall reflect on
its books and records the date and a decrease in the principal
amount at maturity equal to the principal amount at maturity of
the beneficial interest in the Global Note to be transferred and
the Company shall execute, and the Trustee shall authenticate and
deliver, one or more definitive Notes of like tenor and amount.
(d) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement
Legend, the Registrar shall deliver only Notes that bear the Private
Placement Legend unless either (i) such transfer, exchange or replacement of
such Notes occurs after the Resale Restriction Termination Date (which date
shall be set forth in an Officers' Certificate of the Company delivered to
the Trustee) or (ii) there is delivered to the Registrar an Opinion of
Counsel reasonably satisfactory to the Company and the Trustee to the effect
that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the
Securities Act.
(e) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Note only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section
2.16. The Company shall have the right to inspect and make copies of all
such letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION OF NOTES
3.01 Notices to the Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 3(a) of the
Notes, it shall notify the Trustee of the Redemption Date and principal
amount of Notes to be redeemed.
The Company shall notify the Trustee by an Officers' Certificate,
stating that such redemption will comply with the provisions hereof and of
the Notes, of any redemption at least 35 days before the Redemption Date.
3.02 Selection of Notes To Be Redeemed.
If less than all the Notes are to be redeemed, the particular Notes or
portions thereof to be redeemed shall be selected from the outstanding Notes
not previously called for redemption pro rata, by lot or by such other method
as the Trustee considers to be fair and appropriate. The amounts to be
redeemed shall be equal to $1,000 in principal amount at maturity or any
integral multiple thereof.
The Trustee shall promptly notify the Company and the Registrar in
writing of the Notes selected for redemption and, in the case of any Notes
selected for partial redemption, the principal amount at maturity thereof to
be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of
the principal amount at maturity of such Note which has been or is to be
redeemed.
3.03 Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Notes to be redeemed, at the address of
such Holder appearing in the Note register maintained by the Registrar.
All notices of redemption shall identify the Notes to be redeemed and
shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued interest, if any, to
be paid;
(c) that, unless the Company defaults in making the redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date, and original issue discount will cease to accrete, as the
case may be, and the only remaining right of the Holders of such Notes is to
receive payment of the Redemption Price upon surrender to the Paying Agent of
the Notes redeemed;
(d) if any Note is to be redeemed in part, the portion of the principal
amount (equal to $1,000 in principal amount at maturity or any integral
multiple thereof) of such Note to be redeemed and that on and after the
Redemption Date, upon surrender for cancellation of such original Note to the
Paying Agent, a new Note or Notes in the aggregate principal amount at
maturity equal to the unredeemed portion thereof will be issued without
charge to the Holder;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price and the name and address of the Paying
Agent;
(f) the CUSIP number, if any, relating to such Notes, but no
representation is made as to the correctness or accuracy of any such CUSIP
numbers; and
(g) the paragraph of the Notes pursuant to which the Notes are being
redeemed.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name and at the expense of the Company.
3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed, Notes called for redemption become
due and payable on the Redemption Date and at the Redemption Price. Upon
surrender to the Paying Agent, such Notes called for redemption shall be paid
at the Redemption Price plus accrued interest to the Redemption Date, but
interest installments whose maturity is on or prior to such Redemption Date
will be payable on the relevant Interest Payment Dates to the Holders of
record at the close of business on the relevant record dates referred to in
the Notes.
3.05 Deposit of Redemption Price.
On or prior to 12:00 p.m. New York time on any Redemption Date, the
Company shall deposit with the Paying Agent an amount of money in same day
funds sufficient to pay the Redemption Price of, and accrued interest on, all
the Notes or portions thereof which are to be redeemed on that date, other
than Notes or portions thereof called for redemption on that date which have
been delivered by the Company to the Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price, interest on the
Notes to be redeemed will cease to accrue and original issue discount will
cease to
accrete, as the case may be, on and after the applicable Redemption Date,
whether or not such Notes are presented for payment. If any Note called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal, premium, if any, and, to the extent lawful, accrued interest
thereon shall, until paid, bear interest from the Redemption Date at the rate
and in the manner provided in the Notes.
3.06 Notes Redeemed or Purchased in Part.
Upon surrender to the Paying Agent of a Note which is to be redeemed in
part, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Note without service charge, a new Note or
Notes, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to, and in exchange for, the unredeemed
portion of the principal of the Note so surrendered that is not redeemed.
ARTICLE FOUR
COVENANTS
4.01 Payment of Notes.
The Company will pay, or cause to be paid, the principal of and interest
on the Notes on the dates and in the manner provided in the Notes and this
Indenture. An installment of principal or interest shall be considered paid
on the date due if the Trustee or Paying Agent (other than the Company, a
Subsidiary of the Company or any Affiliate thereof) holds at 12:00 p.m. New
York time on that date money designated and set aside for and sufficient to
pay the installment in a timely manner and is not prohibited from paying such
money to the Holders of the Notes pursuant to the terms of this Indenture.
The Company will pay interest on overdue principal at the rate and in the
manner provided in the Notes; it shall pay interest on overdue installments
of interest at the same rate and in the same manner, to the extent lawful.
4.02 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where Notes may be surrendered for registration of
transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at
any time the Company 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
address of State Street Bank and Trust Company, N.A.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Company
will 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 Company hereby initially designates the office of State Street Bank
and Trust Company, N.A. located at 61 Broadway, 15th floor, in the Borough of
Manhattan, City of New York 10006, as such office of the Company in
accordance with this Section 4.02.
4.03 Corporate Existence.
Subject to Article Five, the Company shall do or cause to be done all
things necessary to and will cause each of its Subsidiaries to, preserve and
keep in full force and effect the corporate or partnership existence and
rights (charter and statutory), licenses and/or franchises of the Company and
each of its Subsidiaries; provided, however, that the Company or any of its
Subsidiaries shall not be required to preserve any such rights, licenses or
franchises if the Board of Directors of the Company shall reasonably
determine that (x) the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries taken as a whole
and (y) the loss thereof is not materially adverse to either the Company and
its Subsidiaries taken as a whole or to the ability of the Company to
otherwise satisfy its obligations hereunder.
4.04 Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any of its
Subsidiaries or upon the income, profits or property of the Company or any of
its Subsidiaries, and (b) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a Lien upon the property of the Company
or any Subsidiary of the Company; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim the amount, applicability or validity
of which is being contested in good faith by appropriate proceedings and for
which adequate provision has been made or where the failure to effect such
payment or discharge is not adverse in any material respect to the Company.
4.05 Maintenance of Properties; Insurance; Books and Records;
Compliance with Law.
(a) The Company shall, and shall cause each of its Subsidiaries to,
cause all properties and assets to be maintained and kept in good condition,
repair and working order (reasonable wear and tear excepted) and supplied
with all necessary equipment, and shall cause to be made all necessary
repairs, renewals, replacements, additions, betterments and improvements
thereto, as shall be reasonably necessary for the proper conduct of its
business; provided, however, that nothing in this Section 4.05(a) shall
prevent the Company or any of its Subsidiaries from discontinuing the
operation and maintenance of any of its properties or assets if such
discontinuance is, in the judgment of the Board of Directors of the Company
or such Subsidiary, desirable in the conduct of its business and if such
discontinuance is not materially adverse to either the Company and its
Subsidiaries taken as a whole
or the ability of the Company to otherwise satisfy its obligations hereunder.
(b) The Company shall, and shall cause each of its Subsidiaries to,
maintain with financially sound and reputable insurers such insurance as may
be required by law (other than with respect to any environmental impairment
liability insurance not commercially available) and such other insurance to
such extent and against such hazards and liabilities, as is customarily
maintained by companies similarly situated (which may include self-insurance
in the same form as is customarily maintained by companies similarly
situated).
(c) The Company shall, and shall cause each of its Subsidiaries to,
keep proper books of record and account, in which full and correct entries
shall be made of all business and financial transactions of the Company and
each Subsidiary of the Company and reflect on its financial statements
adequate accruals and appropriations to reserves, all in accordance with GAAP
consistently applied to the Company and its Subsidiaries taken as a whole.
(d) The Company shall and shall cause each of its Subsidiaries to
comply with all statutes, laws, ordinances, or government rules and
regulations to which it is subject, non-compliance with which would
materially adversely affect the business, earnings, properties, assets or
condition (financial or otherwise) of the Company and its Subsidiaries taken
as a whole.
4.06 Compliance Certificate.
(a) The Company will deliver to the Trustee within 60 days after the
end of each of the Company's first three fiscal quarters and within 90 days
after the end of the Company's fiscal year an Officers' Certificate stating
whether or not the signers know of any Default or Event of Default under this
Indenture by the Company or an event which, with notice or lapse of time or
both, would constitute a default by the Company under any Senior Indebtedness
that occurred during such fiscal period. If they do know of such a Default,
Event of Default or default, the certificate shall describe any such Default,
Event of Default or default and its status. The first certificate to be
delivered pursuant to this Section 4.06(a) shall be for the first fiscal
quarter of the Company beginning after the Issue Date. The Company shall
also deliver a certificate to the Trustee at least annually from its
principal executive, financial or accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture and the Company's Senior Indebtedness, such compliance to be
determined without regard to any period of grace or requirement of notice
provided herein or therein.
(b) The Company shall deliver to the Trustee within 90 days after
the end of each fiscal year a written statement by the Company's independent
certified public accountants stating (A) that their audit examination has
included a review of the terms of this Indenture and the Notes as they relate
to accounting matters, and (B) whether, in connection with their audit
examination, any Default or Event of Default under this Indenture has come to
their attention and, if such a Default or Event of Default has come to their
attention, specifying the nature and period of existence thereof; provided,
however, that, without any restriction as to the scope of the audit
examination, such independent certified public accountants shall not be
liable by reason of any failure to obtain knowledge of any such Default or
Event of Default that would not be disclosed in the course of an audit
examination conducted in accordance with GAAP.
(c) The Company will deliver to the Trustee as soon as possible, and
in any event within 10 days after the Company becomes aware or should
reasonably have become aware of the occurrence of any Default, Event of
Default or an event which, with notice or lapse of time or both, would
constitute a default by the Company under any Senior Indebtedness, an
Officers' Certificate specifying such Default, Event of Default or default
and what action the Company is taking or proposes to take with respect
thereto.
4.07 Limitation on Indebtedness.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or in any
manner become directly or indirectly liable, contingently or otherwise, for
the payment of (in each case, to "incur") any Indebtedness (including,
without limitation, any Acquired Indebtedness) other than Permitted
Indebtedness; provided, however, that the Company will be permitted to incur
Indebtedness (including, without limitation, Acquired Indebtedness) and any
Subsidiary will be permitted to incur Acquired Indebtedness, if immediately
thereafter the ratio of (i) the aggregate principal amount (or accreted
value, as the case may be) of Indebtedness of the Company and its
Subsidiaries on a consolidated basis outstanding as of the Transaction Date
to (ii) the Pro Forma Consolidated Cash Flow for the preceding two fiscal
quarters multiplied by two, determined on a pro forma basis as if any such
Indebtedness had been incurred and the proceeds thereof had been applied at
the beginning of such two fiscal quarters, would be greater than zero and
less than 5.0 to 1.
For purposes of determining any particular amount of Indebtedness under this
Section 4.07, guarantees, Liens or obligations with respect to letters of
credit supporting Indebtedness otherwise included in the determination of
such particular amount shall not be included. For purposes of determining
compliance with this Section 4.07, (A) in the event that an item of
Indebtedness meets the criteria of more than one of the clauses contained in
the definition of "Permitted Indebtedness" contained in Section 1.01, the
Company, in its sole discretion, shall classify such item of Indebtedness and
only be required to include the amount and type of such Indebtedness in one
of such clauses and (B) the principal amount of Indebtedness issued at a
price that is less than the principal amount thereof shall be equal to the
amount of the liability in respect thereof determined in conformity with
GAAP.
4.08 Limitation on Other Indebtedness.
The Company will not, directly or indirectly, incur any Indebtedness
(including Acquired Indebtedness) that is subordinate in right of payment to
any Indebtedness of the Company, unless such Indebtedness is expressly
subordinate in right of payment to the Notes.
4.09 Limitation on Restricted Payments.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly:
(a) declare or pay any dividend or make any other distribution or
payment on or in respect of Capital Stock of the Company or any of its
Subsidiaries or any payment made to the direct or indirect holders (in their
capacities as such) of Capital Stock of the Company or any of its
Subsidiaries (other than (x) dividends or distributions payable solely in
Capital Stock of the Company (other than Redeemable Capital Stock) or in
options, warrants or other rights to purchase Capital Stock of the Company
(other than Redeemable Capital Stock), (y) the declaration or payment of
dividends or other distributions to the extent declared or paid to the
Company or any Subsidiary of the Company and (z) the declaration or payment
of dividends or other distributions by any Subsidiary of the Company to all
holders of Common Stock of such Subsidiary on a pro rata basis),
(b) purchase, redeem, defease or otherwise acquire or retire for
value any Capital Stock of the Company or any of its Subsidiaries (other than
any such Capital Stock owned by a Wholly-Owned Subsidiary of the Company),
(c) make any principal payment on, or purchase, defease, repurchase,
redeem or otherwise acquire or retire for value, prior to any scheduled
maturity, scheduled repayment, scheduled sinking fund payment or other Stated
Maturity, any Subordinated Indebtedness (other than any such Indebtedness
owned by the Company or a Wholly-Owned Subsidiary of the Company), or
(d) make any Investment (other than any Permitted Investment) in any
person (such payments or Investments described in the preceding clauses (a),
(b), (c) and (d) are collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to the proposed Restricted
Payment (the amount of any such Restricted Payment, if other than cash, shall
be the Fair Market Value on the date of such Restricted Payment of the
asset(s) proposed to be transferred by the Company or such Subsidiary, as the
case may be, pursuant to such Restricted Payment), (A) no Default or Event of
Default shall have occurred and be continuing, (B) immediately prior to and
after giving effect to such Restricted Payment, the Company would be able to
incur $1.00 of additional Indebtedness pursuant to the first paragraph of
Section 4.07 (assuming a market rate of interest with respect to such
additional Indebtedness) and (C) the aggregate amount of all Restricted
Payments declared or made from and after the Issue Date would not exceed the
sum of (1) the remainder of (a) 100% of the aggregate amount of the
Consolidated Cash Flow accrued on a cumulative basis during the period (taken
as one accounting period) beginning on the first day of the last fiscal
quarter immediately preceding the Issue Date and ending on the last day of
the last fiscal quarter preceding the date of such proposed Restricted
Payment minus (b) the product of 2.00 times cumulative Consolidated Fixed
Charges accrued on a cumulative basis during the period (taken as one
accounting period) beginning on the first day of the last fiscal quarter
immediately preceding the Issue Date and ending on the last day of the last
fiscal quarter preceding the date of such proposed Restricted Payment plus
(2) the aggregate net cash proceeds received by the Company after the Issue
Date from the
issuance and sale permitted by this Indenture of its Capital Stock (other
than Redeemable Capital Stock) to a Person who is not a Subsidiary of the
Company (except to the extent such net cash proceeds are used to incur new
Indebtedness outstanding pursuant to clause (h) of the definition of
"Permitted Indebtedness") plus (3) the aggregate net cash proceeds received
after the Issue Date by the Company from the issuance or sale of debt
securities that have been converted into or exchanged for Capital Stock of
the Company (other than Redeemable Capital Stock) together with the aggregate
cash received by the Company at the time of such conversion or exchange plus
(4) without duplication of any amount included in the calculation of
Consolidated Cash Flow, in the case of repayment of, or return of capital in
respect of, any Investment constituting a Restricted Payment made after the
Issue Date, an amount equal to the lesser of the return of capital with
respect to such Investment and the cost of such Investment, in either case
less the cost of the disposition of such Investment.
None of the foregoing provisions will prohibit (i) the payment of any
dividend within 60 days after the date of its declaration, if at the date of
declaration such payment would be permitted by the foregoing paragraph; (ii)
so long as no Default or Event of Default shall have occurred and be
continuing, the redemption, repurchase or other acquisition or retirement of
any shares of any class of Capital Stock of the Company or any Subsidiary of
the Company in exchange for, or out of the net cash proceeds of, a
substantially concurrent (x) capital contribution to the Company from any
person (other than a Subsidiary of the Company) or (y) issue and sale of
other shares of Capital Stock (other than Redeemable Capital Stock) of the
Company to any person (other than to a Subsidiary of the Company); provided,
however, that the amount of any such net cash proceeds that are utilized for
any such redemption, repurchase or other acquisition or retirement shall be
excluded from clause (C)(2) and (3) of the preceding paragraph; (iii) so long
as no Default or Event of Default shall have occurred and be continuing, any
redemption, repurchase or other acquisition or retirement of Subordinated
Indebtedness by exchange for, or out of the net cash proceeds of, a
substantially concurrent (x) capital contribution to the Company from any
person (other than a Subsidiary of the Company) or (y) issue and sale of (1)
Capital Stock (other than Redeemable Capital Stock) of the Company to any
person (other than to a Subsidiary of the Company); provided, however, that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase or other acquisition or retirement shall be excluded
from clause (C)(2) and (3) of the preceding paragraph; or (2) Indebtedness of
the Company issued to any person (other than a Subsidiary of the Company),
so long as such Indebtedness is Subordinated Indebtedness which (x) has no
Stated Maturity earlier than the 91st day after the Final Maturity Date, (y)
has an Average Life to Stated Maturity equal to or greater than the remaining
Average Life to Stated Maturity of the Notes and (z) is subordinated to the
Notes in the same manner and at least to the same extent as the Subordinated
Indebtedness so purchased, exchanged, redeemed, acquired or retired; (iv)
Investments constituting Restricted Payments made as a result of the receipt
of non-cash consideration from any Asset Sale made pursuant to and in
compliance with Section 4.13; (v) so long as no Default or Event of Default
has occurred and is continuing, repurchases by the Company of Common Stock of
the Company from employees of the Company or any of its Subsidiaries or their
authorized representatives upon the death, disability or termination of
employment of such employees, in an aggregate amount not exceeding $1,000,000
in any calendar year; (vi) Investments in persons other than Subsidiaries at
any one time outstanding (measured on the date each such Investment was made
without giving effect to subsequent changes in value) not to exceed
$20 million in the aggregate provided that such persons primary business is
related, ancillary or complementary to the business of the Company and its
Subsidiaries on the date of such Investment; and (vii) Investments in any
person at any one time outstanding (measured on the date each such Investment
was made without giving effect to subsequent changes in value) in an
aggregate amount not to exceed 5.0% of the Company's total consolidated
assets. In computing the amount of Restricted Payments previously made for
purposes of clause (C) of the preceding paragraph, Restricted Payments made
under the preceding clauses (v), (vi) and (vii) shall be included and
clauses (i), (ii), (iii) and (iv) shall not be so included.
4.10 Limitation on Issuances and Sale of Preferred Stock by Subsidiaries.
The Company (a) will not permit any of its Subsidiaries to issue any
Preferred Stock (other than to the Company or a Wholly-Owned Subsidiary of
the Company) and (b) will not permit any person (other than the Company or a
Wholly-Owned Subsidiary of the Company) to own any Preferred Stock of any
Subsidiary of the Company; provided, however, that this covenant shall not
prohibit the issuance and sale of (x) all, but not less than all, of the
issued and outstanding Capital Stock of any Subsidiary of the Company owned
by the Company or any of its Subsidiaries in compliance with the other
provisions of this Indenture or (y) directors' qualifying shares or
investments by foreign nationals mandated by applicable law.
4.11 Limitation on Liens.
The Company will not, and will not permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Liens of any kind against or
upon any of its property or assets, or any proceeds therefrom, unless (x) in
the case of Liens securing Subordinated Indebtedness, the Notes are secured
by a Lien on such property, assets or proceeds that is senior in priority to
such Liens and (y) in all other cases, the Notes are equally and ratably
secured, except for (a) Liens existing as of the Issue Date; (b) Liens
securing the Notes; (c) Liens securing Indebtedness under Credit Facilities
incurred in compliance with clauses (c) and (k) of the definition of
"Permitted Indebtedness" contained in Section 1.01; (d) Liens on the
Company's headquarters and other business premises securing Indebtedness in
an aggregate principal amount not to exceed $10 million; (e) Liens in favor
of the Company or any Subsidiary; (f) Liens securing Indebtedness which is
incurred to refinance Indebtedness which has been secured by a Lien permitted
under this Indenture and which has been incurred in accordance with the
provisions of this Indenture; provided, however, that such Liens do not
extend to or cover any property or assets of the Company or any of its
Subsidiaries not securing the Indebtedness so refinanced; and (g) Permitted
Liens.
4.12 Change of Control.
Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase (a "Change of Control Offer"), and
shall purchase, on a business day (the "Change of Control Purchase Date") not
more than 60 nor less than 30 days following the occurrence of the Change of
Control, all of the then outstanding Notes at a purchase price (the "Change
of Control Purchase Price") equal to 101% of the Accreted Value thereof on
the Change of Control Purchase Date plus accrued and unpaid interest, if any,
to the Change of Control Purchase Date.
Notice of a Change of Control Offer shall be mailed by the Company not
later than the 30th day after the Change of Control Date to the Holders of
Notes at their last registered addresses with a copy to the Trustee and the
Paying Agent. The Change of Control Offer shall remain open from the time of
mailing for at least 20 Business Days and until 5:00 p.m., New York City
time, on the Change of Control Purchase Date. The notice, which shall govern
the terms of the Change of Control Offer, shall include such disclosures as
are required by law and shall state:
(a) that the Change of Control Offer is being made pursuant to this
Section 4.12 and that all Notes validly tendered into the Change of Control
Offer and not withdrawn will be accepted for payment;
(b) the Change of Control Purchase Price, the Change of Control
Purchase Date and the date on which the Change of Control Offer expires;
(c) that any Note not tendered for payment will continue to accrue
interest or accrete original issue discount, as the case may be, in
accordance with the terms thereof;
(d) that, unless the Company shall default in the payment of the
purchase price, any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest or accrete original issue
discount, as the case may be, after the Change of Control Purchase Date;
(e) that Holders electing to have Notes purchased pursuant to a Change
of Control Offer will be required to surrender their Securities to the Paying
Agent at the address specified in the notice prior to 5:00 p.m., New York
City time, on the Business Day immediately prior to the Change of Control
Purchase Date and must complete any form of letter of transmittal proposed by
the Company and reasonably acceptable to the Trustee and the Paying Agent;
(f) that Holders of Notes will be entitled to withdraw their election
if the Paying Agent receives, not later than 5:00 p.m., New York City time,
on the Business Day immediately prior to the Change of Control Purchase Date,
a tested telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of Notes the Holder delivered for purchase,
the Note certificate number (if any) and a statement that such Holder is
withdrawing its election to have such Securities purchased;
(g) that Holders whose Notes are purchased only in part will be issued
Notes equal in principal amount at maturity to the unpurchased portion of the
Notes surrendered;
(h) the instructions that Holders must follow in order to tender their
Notes; and
(i) information concerning the business of the Company, the most recent
annual and quarterly reports of the Company filed with the SEC pursuant to
the Exchange Act (or, if the Company is not then permitted to file any such
reports with the SEC, the comparable reports prepared pursuant to Section
4.18), a description of material developments in the Company's business,
information with respect to pro forma historical financial information after
giving effect to such Change of Control and such other information concerning
the circumstances and relevant facts regarding such Change of Control Offer
as would be material to a Holder of Notes in connection with the decision of
such Holder as to whether or not it should tender Notes pursuant to the
Change of Control Offer.
On the Change of Control Purchase Date, the Company shall (i) accept for
payment Notes or portions thereof validly tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent money, in immediately
available funds, sufficient to pay the purchase price of all Securities or
portions thereof so tendered and accepted and (iii) deliver to the Trustee
the Notes so accepted together with an Officers' Certificate setting forth
the Notes or portions thereof tendered to and accepted for payment by the
Company. The Paying Agent shall promptly mail or deliver to the Holders of
Notes so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Note equal in principal amount at maturity to any unpurchased portion of the
Note surrendered. Any Notes not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Change of Control Offer not later than the first
Business Day following the Change of Control Purchase Date.
The Company shall 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
applicable to a Change of Control Offer made by the Company and purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer.
The Company will comply with 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 the event that a Change of Control occurs and
the Company is required to purchase Notes as described above.
4.13 Disposition of Proceeds of Asset Sales.
(a) The Company will not, and will not permit any of its
Subsidiaries to, make any Asset Sale unless (a) the Company or such
Subsidiary, as the case may be, receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the shares or assets
sold or otherwise disposed of and (b) at least 80% of such consideration
consists of cash or Cash Equivalents. To the extent the Net Cash Proceeds of
any Asset Sale are not used to permanently repay unsubordinated Indebtedness
of the Company or Indebtedness of any Subsidiary, in each case owing to a
person other than the Company or any of its Subsidiaries, the Company or such
Subsidiary, as the case may be, may, within 180 days of such Asset Sale,
apply such Net Cash Proceeds to an investment in properties and assets that
replace the properties and assets that were the subject of such Asset Sale or
in properties and assets that will be used in the business of the Company and
its Subsidiaries existing on the Issue Date or in businesses reasonably
related thereto ("Replacement Assets"). Any Net Cash Proceeds from any Asset
Sale that are neither used to repay, and permanently reduce any commitments
under, such unsubordinated Indebtedness of the Company or Indebtedness of any
Subsidiary, nor invested in Replacement Assets within the 180 period
described above constitute "Excess Proceeds" subject to disposition as
provided below.
(b) When the aggregate amount of Excess Proceeds equals or exceeds
$10,000,000, the Company shall make an offer to purchase (an "Asset Sale
Offer"), from all Holders, on a day not more than 40 Business Days thereafter
(the "Asset Sale Purchase Date"), the maximum principal amount (expressed as
a multiple of $1,000) of Notes that may be purchased with such Excess
Proceeds, at a price in cash equal to 100% of the Accreted Value of the Notes
plus accrued and unpaid interest, if any, to the purchase date (the "Asset
Sale Offer Price").
(c) Notice of an Asset Sale Offer shall be mailed by the Company to
all Holders of Notes not less than 20 Business Days nor more than 40 Business
Days before the Asset Sale Purchase Date at their last registered address
with a copy to the Trustee and the Paying Agent. The Asset Sale Offer shall
remain open from the time of mailing for at least 20 Business Days and until
at least 5:00 p.m., New York City time, on the Asset Sale Purchase Date. The
notice, which shall govern the terms of the Asset Sale Offer, shall include
such disclosures as are required by law and shall state:
(1) that the Asset Sale Offer is being made pursuant to this Section 4.13;
(2) the Asset Sale Offer Price (including the amount of accrued interest,
if any) for each Note, the Asset Sale Purchase Date and the date on
which
the Asset Sale Offer expires;
(3) that any Note not tendered or accepted for payment will continue to
accrue interest or accrete original issue discount, as the case may be,
in accordance with the terms thereof;
(4) that, unless the Company shall default in the payment of the Asset Sale
Offer Price, any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest or accrete original issue discount,
as the case may be, after the Asset Sale Purchase Date;
(5) that Holders electing to have Notes purchased pursuant to an Asset Sale
Offer will be required to surrender their Notes to the Paying Agent at
the address specified in the notice prior to 5:00 p.m., New York City
time, on the Business Day immediately prior to the Asset Sale Purchase
Date and must complete any form of letter of transmittal proposed by the
Company and reasonably acceptable to the Trustee and the Paying Agent;
(6) that Holders will be entitled to withdraw their election if the Paying
Agent receives, not later than 5:00 p.m., New York City time, on the
Business Day immediately prior to the Asset Sale Purchase Date, a tested
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes the Holder delivered for purchase,
the Note certificate number (if any) and a statement that such Holder is
withdrawing its election to have such Notes purchased;
(7) that if Notes in a principal amount in excess of the Holder's pro rata
share of the amount of Excess Proceeds are tendered pursuant to the
Asset
Sale Offer, the Company shall purchase Notes on a pro rata basis among
the Notes tendered (with such adjustments as may be deemed appropriate
by
the Company so that only Notes in denominations of $1,000 or integral
multiples of $1,000 shall be acquired);
(8) that Holders whose Notes are purchased only in part will be issued new
Notes equal in principal amount at maturity to the unpurchased portion
of
the Notes surrendered;
(9) the instructions that Holders must follow in order to tender their
Notes;
and
(10) information concerning the business of the Company, the most recent
annual and quarterly reports of the Company filed with the SEC pursuant
to the Exchange Act (or, if the Company is not permitted to file any
such
reports with the Commission, the comparable reports prepared pursuant to
Section 4.18), a description of material developments in the Company's
business, information with respect to pro forma historical financial
information after giving effect to such Asset Sale and Asset Sale Offer
and such other information concerning the circumstances and relevant
facts regarding such Asset Sale Offer as would be material to a Holder
of
Notes in connection with the decision of such Holder as to whether or
not
it should tender Notes pursuant to the Asset Sale Offer.
(d) On the Asset Sale Purchase Date, the Company shall (i) accept for
payment, on a pro rata basis, Notes or portions thereof tendered pursuant to
the Asset Sale Offer, (ii) deposit with the Paying Agent money, in
immediately available funds, in an amount sufficient to pay the Asset Sale
Offer Price of all Notes or portions thereof so tendered and accepted and
(iii) deliver to the Trustee the Notes so accepted together with an Officers'
Certificate setting forth the Notes or portions thereof tendered to and
accepted for payment by the Company. The Paying Agent shall promptly mail or
deliver to Holders of Notes so accepted payment in an amount equal to the
Asset Sale Offer Price, and the Trustee shall promptly authenticate and mail
or deliver to such Holders a new Note equal in principal amount at maturity
to any unpurchased portion of the Security surrendered. Any Notes not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company will publicly announce the results of the Asset Sale
Offer not later than the first Business Day following the Asset Sale Purchase
Date. To the extent that the aggregate principal amount of Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
may use such deficiency for general corporate purposes. Upon completion of
such Asset Sale Offer, the amount of Excess Proceeds shall be reset to zero.
For purposes of
this Section 4.13, the Trustee shall act as Paying Agent.
(e) The Company will comply with 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 the event that an Asset Sale occurs and
the Company is required to purchase Notes as described above.
4.14 Limitation on Transactions with Interested Persons.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into or suffer to exist any transaction or
series of related transactions (including, without limitation, the sale,
transfer, disposition, purchase, exchange or lease of assets, property or
services) with, or for the benefit of, any Affiliate of the Company or any
beneficial owner (determined in accordance with this Indenture) of 5% or more
of the Company's Common Stock at any time outstanding ("Interested Persons"),
unless (a) such transaction or series of related transactions is on terms
that are no less favorable to the Company or such Subsidiary, as the case may
be, than those which could have been obtained in a comparable transaction at
such time from persons who are not Affiliates of the Company or Interested
Persons, (b) with respect to a transaction or series of transactions
involving aggregate payments or value equal to or greater than $10,000,000,
the Company has obtained a written opinion from an Independent Financial
Advisor stating that the terms of such transaction or series of transactions
are fair to the Company or its Subsidiary, as the case may be, from a
financial point of view and (c) with respect to a transaction or series of
transactions involving aggregate payments or value equal to or greater than
$2,000,000, the Company shall have delivered an Officer's Certificate to the
Trustee certifying that such transaction or series of transactions complies
with the preceding clause (a) and, if applicable, certifying that the opinion
referred to in the preceding clause (b) has been delivered and that such
transaction or series of transactions has been approved by a majority of the
disinterested members of the Board of Directors of the Company; provided,
however, that this Section 4.14 will not restrict the Company or any
Subsidiary from (i) making any payment permitted under Section 4.09,
(ii) paying reasonable and customary fees to directors of the Company who are
not employees of the Company, (iii) making loans or advances to officers,
employees or consultants of the Company and its Subsidiaries (including
travel and moving expenses) in the ordinary course of business for bona fide
business purposes of the Company or such Subsidiary not in excess of
$2,000,000 in the aggregate at any one time outstanding, (iv) from entering
into any transaction between the Company and any of its Subsidiaries or
between its Subsidiaries or (v) compensation arrangements with the Company's
executive officers.
4.15 Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
The Company will not, and will not permit any of its 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
Subsidiary of the Company to (a) pay dividends, in cash or otherwise, or make
any other distributions on or in respect of its Capital Stock or any other
interest or participation in, or measured by, its profits, (b) pay any
Indebtedness owed
to the Company or any other Subsidiary of the Company, (c) make loans or
advances to, or any Investment in, the Company or any other Subsidiary of the
Company, (d) transfer any of its properties or assets to the Company or any
other Subsidiary of the Company or (e) guarantee any Indebtedness of the
Company or any other Subsidiary of the Company, except for such encumbrances
or restrictions existing under or by reason of (i) applicable law, (ii)
customary non-assignment provisions of any contract or any lease governing a
leasehold interest of the Company or any Subsidiary of the Company, (iii)
customary restrictions on transfers of property subject to a Lien permitted
under this Indenture, (iv) any agreement or other instrument of a person
acquired by the Company or any Subsidiary of the Company (or a Subsidiary of
such person) in existence at the time of such acquisition (but not created in
contemplation thereof), which encumbrance or restriction is not applicable to
any person, or the properties or assets of any person, other than the person,
or the properties or assets of the person, so acquired, (v) provisions
contained in agreements or instruments relating to Indebtedness which
prohibit the transfer of all or substantially all of the assets of the
obligor thereunder unless the transferee shall assume the obligations of the
obligor under such agreement or instrument, (vi) any such encumbrance or
restriction existing on the Issue Date in this Indenture or any other
agreements in effect on the Issue Date, and any extensions, refinancings,
renewals or replacements of such agreements; provided that the encumbrances
and restrictions in any such extensions, refinancings, renewals or
replacements are no less favorable in any material respect to the Holders
than those encumbrances or restrictions that are then in effect and that are
being extended, refinanced, renewed or replaced; and (vii) contained in the
terms of any Indebtedness or any agreement pursuant to which such
Indebtedness was issued if the encumbrance or restriction applies only in the
event of a default with respect to a financial covenant contained in such
Indebtedness or agreement and such encumbrance or restriction is not
materially more disadvantageous to the Holders than is customary in
comparable financing (as determined by the Company) and the Company
determines that any such encumbrance or restriction will not materially
affect the Company's ability to make principal or interest payments on the
Notes. Nothing contained in this Section 4.15 shall prevent the Company or
any Subsidiary from (1) creating, incurring, assuming or suffering to exist
any Liens otherwise permitted in Section 4.11 or (2) restricting the sale or
other disposition of property or assets of the Company or any of its
Subsidiaries that secure Indebtedness of the Company or any of its
Subsidiaries.
4.16 Limitations on Issuances of Guarantees of Indebtedness by Subsidiaries.
The Company will not permit any Subsidiary, directly or indirectly, to
guarantee, assume or in any other manner become liable with respect to any
Indebtedness of the Company, other than Indebtedness under Credit Facilities
incurred under clauses (c) and (l) in the definition of "Permitted
Indebtedness" contained in Section 1.01, unless (i) such Subsidiary
simultaneously executes and delivers a supplemental indenture to the
Indenture providing for a guarantee of the Notes on terms substantially
similar to the guarantee of such Indebtedness, except that if such
Indebtedness is by its express terms subordinated in right of payment to the
Notes, any such assumption, guarantee or other liability of such Subsidiary
with respect to such Indebtedness shall be subordinated in right of payment
to such
Subsidiary's assumption, guarantee or other liability with respect to the
Notes substantially to the same extent as such Indebtedness is subordinated
to the Notes and (ii) such Subsidiary waives, and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any rights against the Company or
any other Subsidiary as a result of any payment by such Subsidiary under its
guarantee.
Notwithstanding the foregoing, any guarantee by a Subsidiary may provide
by its terms that it will be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer, to any person not an
Affiliate of the Company, of all of the Company's and each Subsidiary's
Capital Stock in, or all or substantially all of the assets of, such
Subsidiary (which sale, exchange or transfer is not prohibited by this
Indenture) or (ii) the release or discharge of the guarantee, which resulted
in the creation of such guarantee of the Notes, except a discharge or release
by or as a result of payment under such guarantee.
4.17 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury
law or other law which would prohibit or forgive the Company from paying all
or any portion of the principal of, premium, if any, or interest on the Notes
as contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) the Company hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
4.18 Reporting Requirements.
The Company will file with the Commission the annual reports, quarterly
reports and other documents required to be filed with the Commission pursuant
to Sections 13 and 15 of the Exchange Act, whether or not the Company has a
class of securities registered under the Exchange Act. The Company will file
with the Trustee and provide to each Noteholder within 15 days after it files
them with the Commission (or if any such filing is not permitted under the
Exchange Act, 15 days after the Company would have been required to make such
filing) copies of such reports and documents.
4.19 Limitation on Sale and Leaseback Transactions.
Neither the Company nor any Subsidiary will, directly or indirectly,
enter into any Sale and Leaseback Transaction, except that the Company or any
Subsidiary may enter into a Sale and Leaseback Transaction if (x) the
aggregate Fair Market Value of all Sale and Leaseback Transactions entered
into by the Company and its Subsidiaries after the Issue Date shall not
involve property or assets having an aggregate Fair Market Value of more than
$20 million or (y) (i) immediately prior thereto, and after giving effect to
such Sale and Leaseback Transaction (the Indebtedness thereunder being
equivalent to the Attributable Value thereof) the Company could incur at
least $1.00 of additional Indebtedness pursuant to the first paragraph of
Section 4.07 (other than Permitted Indebtedness) and (ii) the Sale and
Leaseback Transaction constitutes an Asset Sale effected in accordance with
the requirements of Section 4.13.
ARTICLE FIVE
SUCCESSOR CORPORATION
5.01 When Company May Merge, etc..
The Company will not, in any transaction or series of transactions,
merge or consolidate with or into, or sell, assign, convey, transfer, lease
or otherwise dispose of all or substantially all of its properties and assets
to, any person or persons, and the Company will not permit any of its
Subsidiaries to enter into any such transaction or series of transactions if
such transaction or series of transactions, in the aggregate, would result in
a sale, assignment, conveyance, transfer, lease or other disposition of all
or substantially all of the properties and assets of the Company or the
Company and its Subsidiaries, taken as a whole, to any other person or
persons, unless at the time of and after giving effect thereto (a) either
(i) if the transaction or series of transactions is a merger or
consolidation, the Company shall be the surviving person of such merger or
consolidation, or (ii) the person formed by such consolidation or into which
the Company or such Subsidiary is merged or to which the properties and
assets of the Company or such Subsidiary, as the case may be, are transferred
(any such surviving person or transferee person being the "Surviving Entity")
shall be a corporation organized and existing under the laws of the United
States of America, any state thereof or the District of Columbia and shall
expressly assume by a supplemental indenture executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all of the
obligations of the Company under the Notes and this Indenture and, in each
case, this Indenture shall remain in full force and effect; (b) immediately
before and immediately after giving effect to such transaction or series of
transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), no Default or Event
of Default shall have occurred and be continuing and the Company, or the
Surviving Entity, as the case may be, after giving effect to such transaction
or series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of transactions),
could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under Section 4.07 (assuming a market rate of interest with
respect to such additional Indebtedness); and (c) immediately after giving
effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or anticipated to
be incurred in connection with or in respect of such transaction or series of
transactions), the Consolidated Net Worth of the Company or the Surviving
Entity, as the case may be, is at least equal to the Consolidated Net Worth
of the Company immediately before such transaction or series of transactions.
In connection with any consolidation, merger, transfer, lease,
assignment or other disposition contemplated hereby, the Company shall
deliver, or cause to be delivered, to the Trustee, in form and substance
reasonably satisfactory to the Trustee, an Officer's Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, transfer,
lease, assignment or other disposition and the supplemental indenture in
respect thereof comply with the requirements under this Indenture; provided,
however, that solely for purposes of computing amounts described in
subclause (C) of Section 4.09, any such successor person shall only be deemed
to have succeeded to and be substituted for the Company with respect to
periods subsequent to the effective time of such merger, consolidation or
transfer of assets.
5.02 Successor Substituted.
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties
and assets of the Company in accordance with Section 5.01 hereof, the
successor person or persons formed by such consolidation or into which the
Company is merged or the successor person to which such sale, assignment,
conveyance, transfer, lease or other disposition is made, shall succeed to,
and be substituted for, and may exercise every right and power of, the
Company under this Indenture and the Notes with the same effect as if such
successor had been named as the Company herein; provided, however, that
solely for purposes of computing amounts described in subclause (C) of
Section 4.09, any such successor person shall only be deemed to have
succeeded to and be substituted for the Company with respect to periods
subsequent to the effective time of such merger, consolidation or transfer of
assets.
ARTICLE SIX
REMEDIES
6.01 Events of Default.
An "Event of Default" means any of the following events:
(a) default in the payment of the principal of or premium, if any,
on any Notes when the same becomes due and payable (upon Stated Maturity,
acceleration, optional redemption, required purchase, scheduled principal
payment or otherwise); or
(b) default in the payment of an installment of interest on any of
the Notes, when the same becomes due and payable, and any such Default
continues for a period of 30 days; or
(c) failure to perform or observe any other term, covenant or
agreement contained in the Notes or this Indenture (other than Defaults
specified in clause (a) or (b) above) and such Default continues for a period
of 30 days after written notice of such Default requiring the Company to
remedy the same shall have been given (i) to the Company by the Trustee or
(ii) to the Company and the Trustee by Holders of at least 25% in aggregate
principal amount of the Notes then outstanding; or
(d) default or defaults under one or more agreements, instruments,
mortgages, bonds, debentures or other evidences of Indebtedness under which
the Company or any Subsidiary of the Company then has outstanding
Indebtedness in excess of $10,000,000, individually or in the aggregate, and
either (i) such Indebtedness is already due and payable in full or (ii) such
default or defaults have resulted in the acceleration of the maturity of such
Indebtedness; or
(e) one or more judgments, orders or decrees of any court or
regulatory or administrative agency of competent jurisdiction for the payment
of money in excess of $10,000,000, either individually or in the aggregate,
shall be entered against the Company or any Subsidiary of the Company or any
of their respective properties and shall not be discharged or fully bonded
and there shall have been a period of 60 days after the date on which any
period for appeal has expired and during which a stay of enforcement of such
judgment, order or decree, shall not be in effect; or
(f) the Company or any Significant Subsidiary of the Company
pursuant to or under or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief against it in an
involuntary case or proceeding;
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property;
(iv) makes a general assignment for the benefit of its creditors; or
(v) shall generally not pay its debts when such debts become due or
shall admit in writing its inability to pay its debts generally;
or
(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any Significant Subsidiary
of the Company in an involuntary case or proceeding;
(ii) appoints a Custodian of the Company or any Significant
Subsidiary
of the Company for all or substantially all of its properties;
or
(iii) orders the liquidation of the Company or any Significant
Subsidiary of the Company;
and in each case the order or decree remains unstayed and in effect for 60
days.
Subject to the provisions of Sections 7.01 and 7.02, the Trustee shall
not be charged with knowledge of any Default or Event of Default unless
written notice thereof shall have been given to a Trust Officer of the
Trustee by the Company, the Paying Agent, any Holder, any holder of Senior
Indebtedness or any of their respective agents.
6.02 Acceleration.
If an Event of Default (other than as specified in Section 6.01(f) or
(g)) occurs and is continuing, the Trustee, by written notice to the Company,
or the Holders of at least 25% in aggregate principal amount at maturity of
the Notes then outstanding, by written notice to the Trustee and the Company,
may declare the Accreted Value, premium, if any, and accrued and unpaid
interest, if any, on all of the Notes to be due and payable immediately, upon
which declaration, all amounts payable in respect of the Notes shall be
immediately due and payable. If an Event of Default specified in Section
6.01(f) or 6.01(g) occurs and is continuing, then the Accreted Value,
premium, if any, and accrued and unpaid interest, if any, on all of the Notes
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder of Notes.
After a declaration of acceleration under this Indenture, but before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the Holders of a majority in aggregate principal amount of the
outstanding Notes, by written notice to the Company and the Trustee, may
rescind such declaration if (a) the Company has paid or deposited with the
Trustee a sum sufficient to pay (i) all amounts due the Trustee under Section
7.08 and the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, (ii) all overdue interest on all Notes,
(iii) the principal of and premium, if any, on any Notes which have become
due otherwise than by such declaration of acceleration and interest thereon
at the rate borne by the Notes, and (iv) to the extent that payment of such
interest is lawful, interest upon overdue interest which has become due
otherwise than by such declaration of acceleration at the rate borne by the
Notes; (b) the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction; and (c) all Events of Default, other than
the non-payment of principal of, premium, if any, and interest on the Notes
that has become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 6.04.
No such rescission shall affect any subsequent Default or Event of
Default or impair any right subsequent therein.
6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment
of principal of, premium, if any, or interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
All rights of action and claims under this Indenture or the Notes may be
enforced by the Trustee even if it does not possess any of the Notes or does
not produce any of them in the proceeding. A delay or omission by the
Trustee or any Holder 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. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted
by law.
6.04 Waiver of Past Defaults.
Subject to the provisions of Sections 6.02, 6.07 and 9.02, the Holders
of not less than a majority in aggregate principal amount at maturity of the
outstanding Notes by notice to the Trustee may, on behalf of the Holders of
all the Notes, waive any existing Default or Event of Default and its
consequences, except a Default or Event of Default specified in Section
6.01(a) or (b) or in respect of any provision hereof which cannot be modified
or amended without the consent of the Holder so affected pursuant to Section
9.02. When a Default or Event of Default is so waived, it shall be deemed
cured and shall cease to exist.
6.05 Control by Majority.
The Holders of not less than a majority in aggregate principal amount at
maturity of the outstanding Notes shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, provided,
however, that the Trustee may refuse to follow any direction (a) that
conflicts with any rule of law or this Indenture, (b) that the Trustee
determines may be unduly prejudicial to the rights of another Noteholder, or
(c) that may expose the Trustee to personal liability unless the Trustee has
been provided reasonable indemnity against any loss or expense caused by its
following such direction; and provided, further, that the Trustee may take
any other action deemed proper by the Trustee that is not inconsistent with
such direction.
6.06 Limitation on Suits.
No Holder of any Notes shall have any right to institute any proceeding
or pursue any remedy with respect to this Indenture or the Notes unless:
(a) the Holder gives written notice to the Trustee of a continuing
Event of Default;
(b) the Holders of at least 25% in aggregate principal amount at
maturity of the outstanding Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee reasonable indemnity against any loss, liability or expense;
(d) the Trustee does not comply with the request within 30 days
after receipt of the request and the offer and, if requested, provision of
indemnity; and
(e) during such 30-day period the Holders of a majority in aggregate
principal amount at maturity of the outstanding Notes do not give the Trustee
a direction which is inconsistent with the request.
The foregoing limitations shall not apply to a suit instituted by a
Holder for the enforcement of the payment of principal of, premium, if any,
or accrued interest on, such Notes on or after the respective due dates set
forth in such Notes.
A Holder may not use this Indenture to prejudice the rights of any other
Holders or to obtain priority or preference over such other Holders.
6.07 Right of Holders To Receive Payment.
Notwithstanding any other provision in this Indenture, the right of any
Holder of a Note to receive payment of the principal of, premium, if any, and
interest on such Note, on or after the respective Stated Maturities expressed
in such Note, or to bring suit for the enforcement of any such payment on or
after the respective Stated Maturities, is absolute and unconditional and
shall not be impaired or affected without the consent of the Holder.
6.08 Collection Suit by Trustee.
If an Event of Default specified in clause (a) or (b) of Section 6.01
occurs and is continuing, the Trustee may recover judgment in its own name
and as trustee of an express trust against the Company, or any other obligor
on the Notes for the whole amount of principal of, premium, if any, and
accrued interest remaining unpaid, together with interest on overdue
principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per
annum borne by the Notes and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
6.09 Trustee May File Proofs of Claims.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders allowed
in any judicial proceedings relative to the Company or the Subsidiaries of
the Company (or any other obligor upon the Notes), their creditors or their
property and shall be entitled and empowered to collect and receive any
monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agent and counsel, and any other amounts due the Trustee under Section
7.08. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
6.10 Priorities.
If the Trustee collects any money pursuant to this Article Six, it shall
pay out such money in the following order:
First: to the Trustee for amounts due under Section 7.08;
Second: to Holders for interest accrued on the Notes, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for interest;
Third: to Holders for principal amounts (including any premium) owing under
the Notes, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal
(including any premium); and
Fourth: the balance, if any, to the Company.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Noteholders pursuant to this Section
6.10.
6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as Trustee, a court may in its discretion require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section 6.11 does not apply to any suit by the Trustee,
any suit by a Holder pursuant to Section 6.07, or a suit by Holders of more
than 10% in aggregate principal amount of the outstanding Notes. This
Section 6.11 shall not be deemed to authorize any court to require an
undertaking or to make such an assessment in any suit instituted by the
Company or in any suit for the enforcement of the right to convert any Note
in accordance with Article 11.
6.12 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or any Note and such proceeding has
been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case the
Company, the Trustee and the Holders shall, subject to any determination in
such proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been
instituted.
ARTICLE SEVEN
TRUSTEE
7.01 Duties.
(a) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
(b) Except during the continuance of an Event of Default,
(i) the Trustee need perform only such duties as are specifically set
forth in this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the
requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05;
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
7.02 Rights of Trustee.
Subject to Section 7.01 hereof and the provisions of TIA Sec. 315:
(a) the Trustee may rely on any document reasonably believed by it
to be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 10.04 and 10.05. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.
(c) the Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) the Trustee shall not be liable for any action taken or omitted
by it in good faith and reasonably believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture other
than any liabilities arising out of its own negligence.
(e) the Trustee may consult with counsel of its own choosing and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken, omitted
or suffered by it hereunder in good faith and in accordance with the advice
or opinion of such counsel.
(f) the Trustee shall not be bound to make any investigation into
the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as
it may see fit.
(g) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
7.03 Individual Rights of Trustee.
The Trustee, any Paying Agent, Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Notes and, subject to Sections 7.11 and 7.12 and TIA Secs. 310 and
311, may otherwise deal with the Company and its Subsidiaries with the same
rights it would have if it were not the Trustee, Paying Agent, Registrar or
such other agent.
7.04 Trustee's Disclaimer.
The Trustee makes no representations as to the validity or sufficiency
of this Indenture or of the Notes, it shall not be accountable for the
Company's use or application of the proceeds from the Notes, 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 in the Notes other than the Trustee's certificate of
authentication.
7.05 Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it
is known to a Trust Officer of the Trustee, the Trustee shall mail to each
Holder notice of the Default or Event of Default within 30 days thereafter;
provided, however, that, except in the case of a Default in the payment of
the principal of, premium, if any, or interest on any Note, the Trustee shall
be protected
in withholding such notice if and so long as the board of directors, the
executive committee of the board of directors or a committee of the directors
of the Trustee and/or Trust Officers in good faith determines that the
withholding of such notice is in the interest of the Holders.
7.06 Money Held in Trust.
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required herein or by law. The Trustee shall not be under any liability for
interest on any moneys received by it hereunder, except as the Trustee may
agree with the Company.
7.07 Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall, to the extent that any of the
events described in TIA Sec. 313(a) shall have occurred within the previous
twelve months, but not otherwise, mail to each Holder a brief report dated as
of such May 15 that complies with TIA Sec. 313(a). The Trustee also shall
comply with TIA Secs. 313(b) and 313(c).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the SEC and each securities exchange, if
any, on which the Notes are listed.
The Company shall notify the Trustee in writing if the Notes become
listed on any securities exchange.
7.08 Compensation and Indemnity.
The Company covenants and agrees to pay the Trustee from time to time
reasonable compensation for its services. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust.
The Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability incurred by it arising out of or in connection
with the administration of this trust and its rights or duties hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder. The Trustee shall notify the Company promptly of any
claim asserted against the Trustee for which it may seek indemnity. The
Company shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for
any settlement made without its prior written consent. The Company need not
reimburse any expense or indemnify against any loss or liability to the
extent incurred by the Trustee through its negligence, bad faith or willful
misconduct.
To secure the Company's payment obligations in this Section 7.08, the
Trustee shall have a Lien prior to the Notes on all assets held or collected
by the Trustee, in its capacity as Trustee, except assets held in trust to
pay principal of, premium, if any, or interest on particular Notes.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 6.01(f) or (g), the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.08 and any Lien arising
hereunder shall survive the resignation or removal of any trustee, the
discharge of the Company's obligations pursuant to Article Eight and/or the
termination of this Indenture.
7.09 Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount at maturity of the outstanding Notes may remove
the Trustee by so notifying the Company and the Trustee and may appoint a
successor trustee with the Company's prior written consent. The Company may
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.11;
(2) 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;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of
such event and shall promptly appoint a successor Trustee. The Trustee shall
be entitled to payment of its fees and reimbursement of its expenses while
acting as Trustee, and to the extent such amounts remain unpaid, the Trustee
that has resigned or has been removed shall retain the Lien afforded by
Section 7.08. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the outstanding Notes may, with
the Company's prior written consent, appoint a successor Trustee to replace
the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all property held by it as Trustee
to the successor Trustee, subject to the Lien provided in Section 7.08, 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. A successor Trustee shall mail notice of its
succession
to each Noteholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.11, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.09, the Company's obligations under Section 7.08 shall continue for the
benefit of the retiring Trustee.
7.10 Successor Trustee by Merger, etc..
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation or national banking association, the resulting, surviving or
transferee corporation or national banking association without any further
act shall, if such resulting, surviving or transferee corporation or national
banking association is otherwise eligible hereunder, be the successor
Trustee.
7.11 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under TIA Secs. 310(a)(1) and 310(a)(5) and which shall
have a combined capital and surplus of at least $50,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
7.12 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Sec. 311(a), excluding any creditor
relationship listed in TIA Sec. 311(b). If the present or any future Trustee
shall resign or be removed, it shall be subject to TIA Sec. 311(a) to the
extent provided therein.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
8.01 Termination of the Company's Obligations.
The Company may terminate its obligations under the Notes and this
Indenture, except those obligations referred to in the penultimate paragraph
of this Section 8.01, if all Notes previously authenticated and delivered
(other than destroyed, lost or stolen Notes which have been replaced or paid
or Notes for whose payment money has theretofore been deposited with the
Trustee or the Paying Agent in trust or segregated and held in trust by the
Company and thereafter repaid to the Company, as provided in Section 8.04)
have been delivered to the Trustee for cancellation and the Company has paid
all sums payable by it hereunder, or if:
(a) either (i) pursuant to Article Three, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each Holder
of the redemption of all of the Notes under arrangements satisfactory to the
Trustee for the giving of such notice or (ii) all Notes have otherwise become
due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee reasonably satisfactory to the
Trustee, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, as trust funds in trust solely for the
benefit of the Holders for that purpose, money in such amount as is
sufficient without consideration of reinvestment of such interest, to pay
principal of, premium, if any, and interest on the outstanding Notes to
maturity or redemption, as certified in a certificate of a nationally
recognized firm of independent public accountants; provided that the Trustee
shall have been irrevocably instructed to apply such money to the payment of
said principal, premium, if any, and interest with respect to the Notes;
(c) no Default or Event of Default with respect to this Indenture or
the Notes shall have occurred and be continuing on the date of such deposit
or shall occur as a result of such deposit and such deposit will not result
in a breach or violation of, or constitute a default under, any other
instrument to which the Company is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it
hereunder;
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's obligation under the
Notes and this Indenture have been complied with.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02 and 7.08 shall survive until the
Notes are no longer outstanding pursuant to the last paragraph of
Section 2.08. After the Notes are no longer outstanding, the Company's
obligations in Sections 7.08, 8.03, 8.04 and 8.05 shall survive.
After such delivery or irrevocable deposit the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Notes and this Indenture except for those surviving obligations specified
above.
8.02 Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution of the Board
of Directors of the Company, at any time, with respect to the Notes, elect to
have either paragraph (b) or paragraph (c) below be applied to the
outstanding Notes upon compliance with the conditions set forth in
paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Notes on the date the conditions set forth below are satisfied (hereinafter,
"legal defeasance"). For this purpose, such legal defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of paragraph (e) below and the other
Sections of and matters under this Indenture referred to in (i) and (ii)
below, and to have satisfied all its other obligations under such Notes and
this Indenture insofar as such Notes are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in paragraph (d) below
and as more fully set forth in such paragraph, payments in respect of the
principal of, premium, if any, and interest on such Notes when such payments
are due, (ii) the Company's obligations with respect to such Notes under
Sections 2.06, 2.07 and 4.02 and, with respect to the Trustee, under
Section 7.08, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (iv) this Article Eight. Subject to compliance with
this Section 8.02, the Company may exercise its option under this
paragraph (b) notwithstanding the prior exercise of its option under
paragraph (c) below with respect to the Notes.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and
discharged from its obligations under any covenant contained in Articles Five
and Ten and in Sections 4.07 through 4.16 and Sections 4.18 and 4.19 with
respect to the outstanding Notes on and after the date the conditions set
forth below are satisfied (hereinafter, "covenant defeasance"), and the Notes
shall thereafter be deemed to be not "outstanding" for the purpose of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder. For
this purpose, such covenant defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document and such
omission to comply shall
not constitute a Default or an Event of Default under Section 6.01(c), but,
except as specified above, the remainder of this Indenture and such Notes
shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Notes:
(i) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.11 who shall agree to comply with the
provisions of this Section 8.02 applicable to it) as trust funds
in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of such Notes, (x) cash, in United
States dollars, in an amount or (y) direct non-callable
obligations of, or non-callable obligations guaranteed by, the
United States of America for the payment of which guarantee or
obligation the full faith and credit of the United States is
pledged ("U.S. Government Obligations") maturing as to
principal,
premium, if any, and interest in such amounts of cash, in United
States dollars, and at such times as are sufficient without
consideration of any reinvestment of such interest, to pay
principal of, premium, if any, and interest on the outstanding
Notes not later than one day before the due date of any payment,
or (z) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay and discharge and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge
principal of, premium, if any, and interest on the outstanding
Notes (except lost, stolen or destroyed Notes which have been
replaced or repaid) on the Final Maturity Date or otherwise in
accordance with the terms of this Indenture and of such Notes;
provided, however, that the Trustee (or other qualifying
trustee)
shall have received an irrevocable written order from the
Company
instructing the Trustee (or other qualifying trustee) to apply
such money or the proceeds of such U.S. Government Obligations
to
said payments with respect to the Notes;
(ii) no Default or Event of Default or event which with notice or
lapse of time or both would become a Default or an Event of
Default with respect to the Notes shall have occurred and be
continuing on the date of such deposit or, insofar as
Section 6.01(a) is concerned, at any time during the period
ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied
until the expiration of such period);
(iii) such legal defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest with respect to any
securities of the Company;
(iv) such legal defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a Default or Event of
Default under, this Indenture or any other material agreement or
instrument to which the Company is a party or by which it is
bound;
(v) in the case of an election under paragraph (b) above, the
Company
shall have delivered to the Trustee an Opinion of Counsel
stating
that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since
the date 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 shall confirm that, the
Holders of the outstanding Notes will not recognize income, gain
or loss for Federal income tax purposes as a result of such
legal
defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have
been the case if such legal defeasance had not occurred;
(vi) in the case of an election under paragraph (c) above, the
Company
shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of the outstanding Notes will not
recognize income, gain or loss for Federal income tax purposes
as
a result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and
at
the same times as would have been the case if such covenant
defeasance had not occurred;
(vii) in the case of an election under either paragraph (b) or (c)
above, an Opinion of Counsel to the effect that, (x) the trust
funds will not be subject to any rights of any other holders of
Indebtedness of the Company, and (y) after the 91st day
following
the deposit, the trust funds will not be subject to the effect
of
any applicable Bankruptcy Law; provided, however, that if a
court
were to rule under any such law in any case or proceeding that
the trust funds remained property of the Company, no opinion
needs to be given as to the effect of such laws on the trust
funds except the following: (A) assuming such trust funds
remained in the Trustee's possession prior to such court ruling
to the extent not paid to Holders of Notes, the Trustee will
hold, for the benefit of the Holders of Notes, a valid and
enforceable security interest in such trust funds that is not
avoidable in bankruptcy or otherwise, subject only to principles
of equitable subordination, (B) the Holders of Notes will be
entitled to receive adequate protection of their interests in
such trust funds if such trust funds are used, and (C) no
property, rights in property or other interests granted to the
Trustee or the Holders of Notes in exchange for or with respect
to any of such funds will be subject to any prior rights of any
other person, subject only to prior Liens granted under Section
364 of Title 11 of the U.S. Bankruptcy Code (or any section of
any other Bankruptcy Law having the same effect), but still
subject to the foregoing clause (B); and
(viii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (x) all
conditions precedent provided for relating to either the legal
defeasance under paragraph (b) above or the covenant defeasance
under paragraph (c) above, as the case may be, have been
complied
with and (y) if any other Indebtedness of the Company shall then
be outstanding or committed, such legal defeasance or covenant
defeasance will not violate the provisions of the agreements or
instruments evidencing such Indebtedness.
(e) All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this paragraph (e), the "Trustee") pursuant to
paragraph (d) above in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any
Paying Agent (other than the Company or any Affiliate of the Company) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and interest, but such
money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to paragraph (d) above or the principal, premium, if any,
and interest received in respect thereof other than any such tax, fee or
other charge which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Section 8.02 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the
request, in writing, by the Company any money or U.S. Government Obligations
held by it as provided in paragraph (d) above which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent legal defeasance or covenant defeasance.
8.03 Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Sections 8.01 and 8.02, and shall apply the
deposited money and the money from U.S. Government Obligations in accordance
with this Indenture to the payment of principal of, premium, if any, and
interest on the Notes.
8.04 Repayment to Company.
Subject to Sections 7.08, 8.01 and 8.02, the Trustee shall promptly pay
to the Company, upon receipt by the Trustee of an Officers' Certificate, any
excess money, determined in accordance with Section 8.02, held by it at any
time. The Trustee and the Paying Agent shall pay to the Company, upon
receipt by the Trustee or the Paying Agent, as the case may be, of an
Officers' Certificate, any money held by it for the payment of principal,
premium, if any, or interest that remains unclaimed for two years after
payment to the
Holders is required; provided, however, that the Trustee and the Paying Agent
before being required to make any payment may, but need not, at the expense
of the Company cause to be published once in a newspaper of general
circulation in The City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that after a date
specified therein, which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining
will be repaid to the Company. After payment to the Company, Holders
entitled to money must look solely to the Company for payment as general
creditors unless an applicable abandoned property law designates another
person, and all liability of the Trustee or Paying Agent with respect to such
money shall thereupon cease.
8.05 Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Indenture by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then and only then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had been made pursuant to this Indenture until such time as the Trustee is
permitted to apply all such money or U.S. Government Obligations in
accordance with this Indenture; provided, however, that if the Company has
made any payment of principal of, premium, if any, or interest on any Notes
because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
9.01 Without Consent of Holders.
The Company, when authorized by a Board Resolution of its Board of
Directors, and the Trustee may amend, waive or supplement this Indenture or
the Notes without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article Five;
(c) to provide for uncertificated Notes in addition to certificated
Notes;
(d) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional benefit or
rights
to the Holders or that does not adversely affect the rights of any
Holder.
Notwithstanding the above, the Trustee and the Company may not make any
change that adversely affects the rights of any Holders hereunder. The
Company shall be required to deliver to the Trustee an Opinion of Counsel
stating that any such change made pursuant to paragraph (a) or (e) of this
Section 9.01 does not adversely affect the rights of any Holder.
9.02 With Consent of Holders.
Subject to Section 6.04, the Company, when authorized by a Board
Resolution of its Board of Directors, and the Trustee may amend this
Indenture or the Notes with the written consent of the Holders of not less
than a majority in aggregate principal amount at maturity of the Notes then
outstanding, and the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding by written notice to the
Trustee may waive future compliance by the Company with any provision of this
Indenture or the Notes.
Notwithstanding the provisions of this Section 9.02, without the consent
of each Holder affected, an amendment or waiver, including a waiver pursuant
to Section 6.04, may not:
(a) reduce the percentage in outstanding aggregate principal amount
at maturity of Notes the Holders of which must consent to an amendment,
supplement or waiver of any provision of this Indenture or the Notes;
(b) reduce or change the rate or time for payment of interest on any
Note;
(c) change the currency in which any Note, or any premium or
interest thereon, is payable;
(d) reduce the principal amount outstanding of, or Accreted Value
of, or extend the fixed maturity of any Note or alter the redemption
provisions with respect thereto;
(e) waive a default in the payment of the principal of, premium, if
any, or interest on, or redemption or an offer to purchase required hereunder
with respect to, any Note;
(f) make the principal of, premium, if any, or interest on any Note
payable in money other than that stated in the Note;
(g) modify this Section 9.02 or Section 6.04 or Section 6.07;
(h) amend, alter, change or modify the obligation of the Company to
make and consummate a Change of Control Offer in the event of a Change of
Control or make and consummate the offer with respect to any Asset Sale or
modify any of the provisions or definitions with respect thereto;
(i) modify or change any provision of this Indenture affecting the
ranking of the Notes in a manner adverse to the Holders; or
(j) impair the right to institute suit for the enforcement of any
payment on or with respect to the Notes.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holder of each Note affected
thereby, with a copy to the Trustee, a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any amendment, supplement or waiver.
9.03 Compliance with Trust Indenture Act.
Every amendment of or supplement to this Indenture or the Notes shall
comply with the TIA as then in effect.
9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder is a continuing consent by such Holder and every subsequent
Holder of that Note or portion of that Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on
any Note. However, any such Holder or subsequent Holder may revoke the
consent as to his Note or portion of a Note prior to such amendment,
supplement or waiver becoming effective. Such revocation shall be effective
only if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective. Notwithstanding the
above, nothing in this paragraph shall impair the right of any Holder under
Sec. 316(b) of the TIA.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
second and third sentences of the immediately preceding paragraph, those
persons who were Holders at such record date (or their duly designated
proxies), and only those persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders after such record date.
Such consent shall be effective only for actions taken within 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder; unless it makes a change described in any of clauses (a)
through (j) of Section 9.02; if it makes such a change, the amendment,
supplement or waiver shall bind every subsequent Holder of a Note or portion
of a Note that evidences the same debt as the consenting Holder's Note.
9.05 Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee shall (in accordance with the specific direction of the Company)
request the Holder of the Note to deliver it to the Trustee. The Trustee
shall (in accordance with the specific direction of the Company) place an
appropriate notation on the Note about the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note shall issue and the Trustee shall
authenticate a new Note that reflects the changed terms. Failure to make the
appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.
9.06 Trustee May Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article Nine if the amendment, supplement or waiver does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment, supplement or waiver, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver is authorized or permitted by this
Indenture, that it is not inconsistent herewith and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE TEN
MISCELLANEOUS
10.01 Trust Indenture Act of 1939.
This Indenture is subject to the provisions of the TIA that are required
to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions.
If any provision of this Indenture modifies or excludes any provision of
the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
10.02 Notices.
Any notice or communication shall be sufficiently given if in writing
and delivered in person or mailed by first class mail, postage prepaid,
addressed as follows:
If to the Company to:
Telegroup, Inc.
2098 Nutmeg Avenue
Fairfield, IA 52556
Attention: Corporate Secretary
With a copy to:
Swidler & Berlin, Chartered
3000 K Street, N.W.
Suite 300
Washington, DC 20007-5116
Attn: Morris F. DeFeo, Jr.
If to the Trustee to:
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, CT 06103
Attention: Corporate Trust Administration
The parties hereto by notice to the other parties may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, postage prepaid, to a Holder, including
any notice delivered in connection with TIA Sec. 310(b), TIA Sec. 313(c), TIA
Sec. 314(a) and TIA Sec. 315(b), shall be mailed by first class mail to such
Holder at the address of such Holder as it appears on the Notes register
maintained by the Registrar and shall be sufficiently given to such Holder if
so mailed within the time prescribed. Copies of any such communication or
notice to a Holder shall also be mailed to the Trustee.
Failure to mail a notice or communication to a Noteholder or any defect
in it shall not affect its sufficiency with respect to other Holders. Except
for a notice to the Trustee, which is deemed given only when received, if a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
10.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Sec. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The
obligors, the Trustee, the Registrar and any other person shall have the
protection of TIA Sec. 312(c).
10.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, such obligor shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
10.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture 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 statement or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express an
opinion as to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with; provided, however, that
with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
10.06 Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Noteholders. The Paying Agent or Registrar may make reasonable rules for its
functions.
10.07 Governing Law.
The laws of the State of New York shall govern this Indenture and the
Notes without regard to principles of conflicts of law. The Trustee, the
Company and the Holders agree to submit to the jurisdiction of the courts of
the State of New York in any action or proceeding arising out of or relating
to this Indenture or the Notes.
10.08 No Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this
Indenture.
10.09 No Recourse Against Others.
A director, officer, employee, stockholder or Affiliate, as such, of the
Company shall not have any liability for any obligations of the Company under
the Notes or this Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability.
10.10 Successors.
All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
10.11 Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all such executed copies together
represent the same agreement.
10.12 Separability.
In case any provision in this Indenture or the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby,
and a Holder shall have no claim therefor against any party hereto.
10.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
10.14 Benefits of Indenture.
Except as provided in Article Ten, nothing in this Indenture or in the
Notes, express or implied, shall give to any person, other than the parties
hereto and their successors hereunder, and the Holders, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
TELEGROUP, INC.
By:
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
Name:
Title:
[FORM OF FACE OF INITIAL NOTE]
[Global Notes Legend]
Unless and until it is exchanged in whole or in part for Notes in definitive
form, this Note may not be TRANSFERRED except as a whole by the depository to
a nominee of the depository or by a nominee of the depository to the
depository or any such nominee to a successor DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY. unless this certificate is presented by an authorized
representative of the depository trust company ("DTC") to the company or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of cede & co. or such other name as
REQUESTED BY an authorized representative of dtc (and any payment is made to
cede & co. or such other entity as is requested by an authorized
representative of dtc), any transfer, pledge or other use hereof for value or
otherwise or to any person is wrongful inasmuch as the registered owner
hereof, cede & co., has an interest herein.<FN1>
<FN1> This paragraph should only be added if the Security is issued in
global
form.
[Private Placement Legend]
This Security has not been registered under the securities act of 1933, as
amended (the "Securities Act"), or any state securities laws. Neither this
security nor any interest or participation herein may be reoffered, sold,
assigned, transferred, pledged, encumbered or otherwise disposed of in the
absence of such registration or unless such transaction is exempt from, or
not subject to, registration.
The holder of this security by its acceptance hereof agrees to offer, sell or
otherwise transfer such security, prior to the date (the "resale restriction
termination date") which is two years after the later of the original issue
date hereof and the last date on which the company or any affiliate of the
company was the owner of this security (or any predecessor of such security)
only (a) to the company, (b) pursuant to a registration statement that has
been declared effective under the securities act, (c) for so long as the
securities are eligible for resale pursuant to rule 144A under the securities
act, to a person it reasonably believes is a "qualified institutional buyer"
as defined in rule 144A under the securities act that purchases for its own
account or for the account of a qualifieD institutional buyer to whom notice
is given that the transfer is being made in reliance on rule 144A, (d)
pursuant to offers and sales that occur outside the united states within the
meaning of regulation s under the securities act, (e) to an institutional
"accredited investor" within the meaning of rule 501(a)(1), (2), (3) or (7)
under the securities act that is acquiring the security for its own account,
or for the account of such an institutional accredited investor, in each case
in a transaction for such securities for investment purposes and not with a
view to or for offer or sale in connection with any distribution in violation
of the securities act, or (f) pursuant to another available exemption from
the registration requirements of the securities act, subject to the company's
and the trustee's right prior to any such offer, sale or transfer pursuant to
clause (d), (e) or (f) to require the delivery of an opinion of counsel,
certification or other information satisfactory to each of them, and in the
case of any of the foregoing Cases, a certificate of transfer in the form
appearing on the other side of this security is completed and delivered by
the transferor to the company and the trustee. This legend will be removed
upon the request of the holder after the resale Restriction Termination Date.
TELEGROUP, INC.
10 1/2% SENIOR DISCOUNT NOTE DUE 2004
No. ______ $__________
CUSIP:
[The following information is supplied for purposes of Sections 1273 and 1275
of the Internal Revenue Code:]
Issue Date: October 23, 1997
Yield to maturity for period from Issue Date to November 1, 2004: 10 1/2%,
compounded semi-annually on May 1 and November 1, and commencing November 1,
2000 (computed without giving effect to the additional payments of interest
in the event the issuer fails to commence the exchange offer or cause the
registration statement to be declared effective, each as described on the
reverse hereof)
Original issue discount under Section 1273 of the Internal Revenue Code (for
each $1,000 principal amount): ___________
Issue Price (for each $1,000 principal amount): ___________
TELEGROUP, INC., a corporation incorporated under the laws of the State
of Iowa (herein called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to _______________ or registered assigns, the
principal sum of _______________ Dollars on November 1, 2004, at the office
or agency of the Company referred to below, and to pay interest thereon,
accruing from May 1, 2000, on May 1 and November 1, in each year, commencing
on November 1, 2000. After May 1, 2000, interest on the Notes will accrue
from the most recent Interest Payment Date to which interest has been paid or
duly provided for or, if no interest has been paid, from May 1, 2000, at the
rate of 10.5% per annum, until the principal hereof is paid or duly provided
for. Interest shall be computed on the basis of a 360-day year of twelve
30-day months.
If an exchange offer registered under the Securities Act is not consummated
and a shelf registration statement under the Securities Act with respect to
resales of the Notes is not declared effective by the Commission, in
accordance with the terms of the Registration Rights Agreement dated
October 23, 1997 among the Company, Smith Barney Inc. and BT Alex. Brown
Incorporated (the "Registration Rights Agreement"), interest (in addition to
the accrual of original issue discount during the period ending May 1, 2000
and in addition to the interest otherwise due on the Notes after such date)
will accrue in accordance with the terms of the Registration Rights Agreement
as set forth on the reverse of this Note. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture referred to on
the reverse hereof, be paid to the person in whose name this Note (or one or
more Predecessor Notes) is registered at the close of business on the Regular
Record Date for such interest, which shall be April 15 or October 15 (whether
or not a Business Day), as the case may be, next preceding such Interest
Payment Date (each a "Regular Record Date"). Any such interest not so
punctually paid, or duly provided for, and interest on such defaulted
interest at the rate borne by the Notes, to the extent lawful, shall
forthwith cease to be payable to the Holder on such Regular Record Date, and
may be paid to the person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on a special record date for
the payment of such defaulted interest to be fixed by the Trustee, notice of
which shall be given to Holders of Notes not less than 10 days prior to such
special record date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which
the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this Note
will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan in The City of New York, or at such other
office or agency of the Company as may be maintained for such purpose, in
such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided, however, that
payment of interest may be made at the option of the Company by check mailed
to the address of the person entitled thereto as such address shall appear on
the security register maintained by the Registrar.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, and a
seal has been affixed hereon, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: October 23, 1997 TELEGROUP, INC.
By:
Name:
Title:
Attest:
- ---------------------
Authorized Signature
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
----------------------------------
Authorized Officer
[Form of Reverse Side of Initial Note]
1. Indenture. This Note is one of a duly authorized issue of Notes of
the Company designated as its 10.5% Senior Discount Notes due 2004, limited
(except as otherwise provided in the Indenture referred to below) in
aggregate principal amount at maturity to $150,000,000, which may be issued
under an indenture (herein called the "Indenture") dated as of October 23,
1997, among Telegroup, Inc., an Iowa corporation, as issuer (the "Company"),
and State Street Bank and Trust Company, a Massachusetts trust company, as
trustee (herein called the "Trustee," which term includes any successor
Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Notes, and of
the terms upon which the Notes are, and are to be, authenticated and
delivered.
All capitalized terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
No reference herein to the Indenture and no provisions of this Note or
of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed.
2. Additional Interest.
(a) if (1) neither a registration statement (the "Exchange Offer
Registration Statement") with respect to a registered offer to exchange the
Notes (the "Exchange Offer") for notes of the Company which will have terms
substantially identical in all material respects to the Notes (the "Exchange
Notes") nor a shelf registration statement covering the resale of the Notes
(a "Shelf Registration Statement") is filed with the Commission on or prior
to 90 days from the Issue Date (the "Filing Date") or (2) notwithstanding
that the Company has consummated or will consummate an Exchange Offer, the
Company is required to file a Shelf Registration Statement and such Shelf
Registration Statement is not filed on or prior to the Filing Date, then
commencing on the day after either such required Filing Date, additional
interest ("Additional Interest") shall accrue on the Accreted Value of the
Notes at a rate of .50% per annum for the first 90 days immediately following
each such Filing Date, such Additional Interest rate increasing by an
additional .50% per annum at the beginning of each subsequent 90-day period;
or
(b) if (1) neither the Exchange Offer Registration Statement nor a
Shelf Registration Statement is declared effective by the Commission on or
prior to 180 days after the Issue Date or (2) notwithstanding that the
Company has consummated or will consummate an Exchange Offer, the Company is
required to file a Shelf Registration Statement and such Shelf Registration
Statement is not declared effective by the Commission on or prior to the 75th
day following the date of such Shelf Registration Statement was filed, then,
commencing on the day after the date such registration statement is required
to be declared effective, Additional Interest shall accrue on the Accreted
Value of the Notes at a rate of .50% per annum for the first 90 days
immediately following such date, such Additional Interest rate increasing by
an additional .50% per annum at the beginning of each subsequent 90-period;
or
(c) if (1) the Company has not exchanged Exchange Notes for all
Notes validly tendered in accordance with the terms of the Exchange Offer on
or prior to the 30th day after the date on which the Exchange Offer
Registration Statement was declared effective or (2) if applicable, the Shelf
Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the second
anniversary of its effective date (other than after such time as all Notes
have been disposed of thereunder), Additional Interest shall accrue on the
Accreted Value of the Notes at a rate of .50% per annum for the first 90 days
commencing on (x) the
31st day after such effective date, in the case of (1) above, or (y) the day
such Shelf Registration Statement ceases to be effective in the case of (2)
above, such Additional Interest rate increasing by an additional .50% per
annum at the beginning of each subsequent 90-day period; provided, however,
that the Additional Interest rate on the Notes may not exceed in the
aggregate 2.00% per annum, and provided, further, that (1) upon the filing of
the Exchange Offer Registration Statement or a Shelf Registration Statement
(in the case of clause (a) above), (2) upon the effectiveness of the Exchange
Offer Registration Statement or a Shelf Registration (in the case of clause
(b) above), or (3) upon the exchange of Exchange Notes for all Notes tendered
(in the case of clause (c) (1) above), or upon the effectiveness of the Shelf
Registration Statement which had ceased to remain effective (in the case of
clause (c)(2) above), Additional Interest on the Notes as a result of such
clause (or the relevant subclause thereof), as the case may be, shall cease
to accrue.
Any amounts of Additional Interest due pursuant to clause (a), (b) or
(c) above will be payable in cash on May 1 and November 1 of each year to the
holders of record on the preceding April 15 or October 15, respectively. The
amount of Additional Interest will be determined by multiplying the
applicable Additional Interest rate by the Accreted Value of the Notes,
multiplied by a fraction, the numerator of which is the number of days such
Additional Interest rate was applicable during such period (determined on the
basis of a 360-day year comprised of twelve 30-day months, and, in the case
of a partial month, the actual number of days elapsed), and the denominator
of which is 360. The Company shall notify the Trustee within a reasonable
time of the incurrence of any Additional Interest due pursuant to clauses
(a), (b) or (c) above.
3. Redemption.
(a) Optional Redemption. The Notes will not be subject to
redemption prior to November 1, 2001 and will be redeemable on or after such
date, at the option of the Company, as a whole or in part, in principal
amounts at maturity of $1,000 or any integral multiple of $1,000, upon not
less than 30 nor more than 60 days' prior notice at the following Redemption
Prices (expressed as percentages of the principal amount) if redeemed during
the 12-month period beginning November 1 of the years indicated below.
Year Redemption Price
2001...................105.25%
2002...................103.50%
2003 and thereafter....101.75%
plus accrued and unpaid interest, if any, to the Redemption Date, all as
provided in the Indenture.
(b) Interest Payments. In the case of any redemption of Notes,
interest installments whose Stated Maturity is on or prior to the Redemption
Date will be payable to the Holders of such Notes, or one or more Predecessor
Notes, of record at the close of business on the Record Date referred to on
the face hereof. Notes (or portions thereof) for whose redemption and
payment provision is made in accordance with the Indenture shall cease to
bear interest from and after the Redemption Date.
(c) Partial Redemption. In the event of redemption of this Note in
part only, a new Note or Notes for the unredeemed portion hereof shall be
issued in the name of the Holder hereof upon the cancellation hereof.
4. Offers to Purchase. Sections 4.12 and 4.13 of the Indenture provide
that upon the occurrence of a Change of Control and following certain Asset
Sales, and subject to further limitations contained therein, the Company
shall make an offer to purchase certain amounts of the Notes in accordance
with the procedures set forth in the Indenture.
5. Public Offerings. In the event that on or prior to November 1, 2000,
the Company consummates one or more public offerings of its Common Stock, the
Company may, at its option, redeem from the net proceeds of such public
offerings of the Company's Common Stock no later than 60 days following the
consummation of such offerings up to 33% of the aggregate principal amount at
maturity of the Notes originally issued at a redemption price equal to
110.50% of the Accreted Value on the date of redemption of the Notes so
redeemed plus accrued and unpaid interest, if any; provided, however, that
immediately after giving effect to any such redemption, not less than 66.0%
of the aggregate principal amount at maturity of the Notes originally issued
remains outstanding.
6. Defaults and Remedies. If an Event of Default shall occur and be
continuing, the principal of all of the outstanding Notes, plus all accrued
and unpaid interest, if any, to and including the date the Notes are paid,
may be declared due and payable in the manner and with the effect provided in
the Indenture.
7. Defeasance. The Indenture contains provisions (which provisions apply
to this Note) for defeasance at any time of (a) the entire indebtedness of
the Company under this Note and (b) certain restrictive covenants and related
Defaults and Events of Default, in each case upon compliance by the Company
with certain conditions set forth therein.
8. Amendments and Waivers. The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders under
the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount at
maturity of the Notes at the time outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount at maturity of the Notes at the time outstanding, on behalf
of the Holders of all the Notes, to waive compliance by the Company with
certain provisions of the Indenture and certain past Defaults under the
Indenture and this Note and their consequences. Any such consent or waiver
by or on behalf of the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange here for or in
lieu hereof whether or not notation of such consent or waiver is made upon
this Note.
9. Denominations, Transfer and Exchange. The Notes are issuable only in
registered form without coupons in principal denominations of $1,000 and any
integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, the Notes are exchangeable for a like
aggregate principal amount of Notes of a different authorized denomination,
as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable on the security register
of the Company, upon surrender of this Note for registration of transfer at
the office or agency of the Company maintained for such purpose in the
Borough of Manhattan in The City of New York or at such other office or
agency of the Company as may be maintained for such purpose, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
10. Persons Deemed Owners. Prior to and at the time of due presentment
of this Note for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the person in whose name this
Note is registered as the owner hereof for all purposes, whether or not this
Note shall be overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice to the contrary.
11. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to
conflicts of law principles.
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER
RESTRICTED SECURITIES
This certificate relates to $ principal amount at maturity of
Notes held in (check applicable space) book-entry or definitive
form by the undersigned.
The undersigned (check one box below):
/___/ has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Note held by the Depository a Note or
Notes in definitive, registered form of authorized denominations and an
aggregate principal amount at maturity equal to its beneficial interest in
such Global Note (or the portion thereof indicated above);
/___/ has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes. In connection with any transfer of any of the
Notes evidenced by this certificate occurring prior to the expiration of the
period referred to in Rule 144(k) under the Securities Act after the later of
the date of original issuance of such Notes and the last date, if any, on
which such Notes were owned by the Company or any Affiliate of the Company,
the undersigned confirms that such Notes are being transferred in accordance
with its terms:
CHECK ONE BOX BELOW:
(1) to the Company; or
(2) pursuant to an effective registration statement under the Securities Act
of 1933; or
(3) inside the United States to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act of 1933) that purchases for its own
account or for the account of a qualified institutional buyer to whom
notice is given that such transfer is being made in reliance on Rule
144A,
in each case pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(4) outside the United States in an offshore transaction within the meaning
of
Regulation S under the Securities Act in compliance with Rule 904 under
the Securities Act of 1933; or
(5) pursuant to another available exemption from registration such as the
exemption provided by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Notes evidenced by this certificate in the name of any person
other than the registered holder thereof; provided, however, that if box
(4) or (5) is checked, the Trustee may require, prior to registering any
such transfer of the Notes, such legal opinions, certifications and other
information as the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act of
1933, such as the exemption provided by Rule 144 under such Act.
----------------------------
Signature
Signature Guarantee:
Signature must be guaranteed
- -------------------------------
Signature
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:
NOTICE: To be executed by an executive officer
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Note have been made:
Date of Amount of Decrease Amount of Increase Maturity of Signature of
Exchange in Principal in Principal this Global Authorized
Amount at Amount at Note following Officer of
Maturity of Maturity of Such Decrease Trustee or
This Global This Global or Increase Custodian
Note Note
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section 4.12
or 4.13
of the Indenture, check the appropriate box:
Section 4.12 [ ]
Section 4.13 [ ]
If you wish to have a portion of this Note purchased by the Company pursuant to
Section
4.12 or 4.13 of the Indenture, state the amount:
$
Date: _____________ Your signature:
--------------------------
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to
--------------------------------
(Insert assignee's social security
or tax ID number)
- ----------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
- ------------------------------------ agent to transfer this Note on the books of
of the Company. The agent may substitute another to act for him.
Date: _____________ Your signature:
--------------------------
(Sign exactly as your name
appears on the other side
of this Note)
Signature Guarantee:
[FORM OF FACE OF EXCHANGE NOTE]
[Global Notes Legend]
Unless and until it is exchanged in whole or in part for securities in
definitive form, this Note may not be TRANSFERREd except as
a whole by the depository to a nominee of the depository or by a nominee of
the depository to the depository or any such nominee to a successor
depository or a nominee of such successor depository. unless this
certificate is presented by an authorized representative of the depository
trust company ("DTC") to the company or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in
the name of cede & co. or such other name as REQUESTED BY an authorized
representative of dtc (and any payment is made to cede & co. or such other
entity as is requested by an authorized representative of dtc), any transfer,
pledge or other use hereof for value or otherwise or to any person is
wrongful inasmuch as the registered owner hereof, cede & co., has an interest
herein.
TELEGROUP, INC.
10 1/2% SENIOR DISCOUNT NOTE DUE 2004
No. ______ $__________
CUSIP:
The following information is supplied for purposes of Sections 1273 and 1275 of
the Internal Revenue Code:
Issue Date: October 23, 1997
Yield to maturity for period from Issue Date to November 1, 2004: 10.5%,
compounded semi-annually on May 1 and November 1, and
commencing November 1, 2000 (computed without giving effect to the additional
payments of interest in the event the issuer fails to commence the exchange
offer or cause the registration statement to be declared effective, each as
described on the reverse hereof)
Original issue discount under Section 1273 of the Internal Revenue Code (for
each $1,000 principal amount): ___________
Issue Price (for each $1,000 principal amount): ___________
TELEGROUP, INC., a corporation incorporated under the laws of the State
of Iowa (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to _______________ or
registered assigns, the principal sum of _______________ Dollars on November
1, 2004, at the office or agency of the Company referred to below, and to pay
interest thereon, accruing from May 1, 2000, on May 1 and November 1, in each
year, commencing on November 1, 2000. After May 1, 2000, interest on the
Notes will accrue from the most recent Interest Payment Date to which
interest has been paid or duly provided for or, if no interest has been paid,
from May 1, 2000, at the rate of 10.5% per annum, until the principal hereof
is paid or duly provided for. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture
referred to on the reverse hereof, be paid to the person in whose name this
Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest, which shall be April
15 or October 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date (each a "Regular Record Date"). Any
such interest not so punctually paid, or duly provided for, and interest on
such defaulted interest at the rate borne by the Notes, to the extent lawful,
shall forthwith cease to be payable to the Holder on such Regular Record
Date, and may be paid to the person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on a special record
date for the payment of such defaulted interest to be fixed by the Trustee,
notice of which shall be given to Holders of Notes not less than 10 days
prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this Note
will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan in The City of New
York, or at such other office or agency of the Company as may be maintained
for such purpose, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private
debts; provided, however, that payment of interest may be made at the option
of the Company by check mailed to the address of the person entitled thereto
as such address shall appear on the security register maintained by the
Registrar.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof by
manual signature, and a seal has been affixed hereon, this Note shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: October 23, 1997 TELEGROUP, INC.
By:
Name:
Title:
By:
Name:
Title:
Attest:
____________________
Authorized Signature
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
------------------------------------
Authorized Officer
[Form of Reverse Side of Exchange Note]
1. Indenture. This Note is one of a duly authorized issue of Notes of the
Company designated as its 10.5% Senior Discount Notes
due 2004, limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount at maturity to $150,000,000, which may
be issued under an indenture (herein called the "Indenture") dated as of
October 23, 1997, among Telegroup, Inc., an Iowa corporation, as issuer (the
"Company"), and State Street Bank and Trust Company, a Massachusetts trust
company, as trustee (herein called the "Trustee," which term includes any
successor Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Notes, and of
the terms upon which the Notes are, and are to be, authenticated and
delivered.
All capitalized terms used in this Note which are defined in the Indenture and
not otherwise defined herein shall have the meanings
assigned to them in the Indenture.
No reference herein to the Indenture and no provisions of this Note or of
the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Note at the times, place and rate, and
in the coin or currency, herein prescribed.
2. Redemption.
(a) Optional Redemption. The Notes will not be subject to redemption
prior to November 1, 2001 and will be redeemable on
or after such date, at the option of the Company, as a whole or in part, in
principal amounts at maturity of $1,000 or any integral multiple of $1,000,
upon not less than 30 nor more than 60 days' prior notice at the following
Redemption Prices (expressed as percentages of the principal amount) if
redeemed during the 12-month period beginning November 1 of the years
indicated below.
Redemption Year Price
2001 105.25%
2002 103.50%
2003 and thereafter 101.75%
plus accrued and unpaid interest, if any, to the Redemption Date, all as
provided in the Indenture.
(b) Interest Payments. In the case of any redemption of Notes,
interest installments whose Stated Maturity is on or prior
to the Redemption Date will be payable to the Holders of such Notes, or one
or more Predecessor Notes, of record at the close of business on the Record
Date referred to on the face hereof. Notes (or portions thereof) for whose
redemption and payment provision is made in accordance with the Indenture
shall cease to bear interest from and after the Redemption Date.
(c) Partial Redemption. In the event of redemption of this Note
in part only, a new Note or Notes for the unredeemed portion hereof shall be
issued in the name of the Holder hereof upon the cancellation hereof.
3. Offers to Purchase. Sections 4.12 and 4.13 of the Indenture provide
that upon the occurrence of a Change of Control and
following certain Asset Sales, and subject to further limitations contained
therein, the Company shall make
an offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.
4. Public Offerings. In the event that on or prior to November 1, 2000,
the Company consummates one or more public offerings of its Common Stock, the
Company may, at its option, redeem from the net proceeds of such public
offerings of the Company's Common Stock no later than 60 days following the
consummation of such offerings up to 33% of the aggregate principal amount at
maturity of the Notes originally issued at a redemption price equal to
110.50% of the Accreted Value on the date of redemption of the Notes so
redeemed plus accrued and unpaid interest, if any; provided, however, that
immediately after giving effect to any such redemption, not less than 66.0%
of the aggregate principal amount at maturity of the Notes originally issued
remains outstanding.
5. Defaults and Remedies. If an Event of Default shall occur and be
continuing, the principal of all of the outstanding Notes, plus all accrued
and unpaid interest, if any, to and including the date the Notes are paid, may
be declared due and payable in the manner and with the effect provided in the
Indenture.
6. Defeasance. The Indenture contains provisions (which provisions apply
to this Note) for defeasance at any time of (a) the entire indebtedness of the
Company under this Note and (b) certain restrictive covenants and related
Defaults and Events of Default, in each case upon compliance by the Company
with certain conditions set forth therein.
7. Amendments and Waivers. The Indenture permits, with certain exceptions
as therein provided, the amendment thereof and the modification of the rights
and obligations of the Company and the rights of the Holders under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Notes at the time outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount
of the Notes at the time outstanding, on behalf of
the Holders of all the Notes, to waive compliance by the Company with certain
provisions of the Indenture and certain past Defaults under the Indenture and
this Note and their consequences. Any such consent or waiver by or on behalf
of the Holder of this Note shall be conclusive and binding upon such Holder
and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange here for or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.
8. Denominations, Transfer and Exchange. The Notes are issuable only in
registered form without coupons in principal denominations of $1,000 and any
integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, the Notes are exchangeable for a like
aggregate principal amount of Notes of a different authorized denomination,
as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable on
the security register of the Company, upon surrender of this Note for
registration of transfer at the office or agency of the Company maintained
for such purpose in the Borough of Manhattan in The City of New York or at
such other office or agency of the Company as may be maintained for such
purpose, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
9. Persons Deemed Owners. Prior to and at the time of due presentment
of this Note for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the person in whose name this
Note is registered as the owner hereof for all purposes, whether or not this
Note shall be overdue, and neither the Company, the Trustee nor any agent shall
be affected by notice to the contrary.
10. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to conflicts
of law principles.
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Note have been made:
Date of Amount of Decrease Amount of Increase Maturity of Signature of
Exchange in Principal in Principal this Global Authorized
Amount at Amount at Note following Officer of
Maturity of Maturity of Such Decrease Trustee or
This Global This Global or Increase Custodian
Note Note
[FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS TO
NON-QIB INSTITUTIONAL ACCREDITED INVESTORS]
Transferee Letter of Representation
Telegroup, Inc.
c/o State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Location: Corporate Trust Department
Dear Ladies and Gentlemen:
This certificate is delivered to request a transfer of $
principal amount at maturity of the 10.5% Senior
Discount Notes due 2004 (the "Notes") of Telegroup, Inc. (the "Company").
Upon transfer, the Notes would be registered in the name of the new beneficial
owner as follows:
Name:
Address:
Taxpayer ID Number:
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933, as amended (the "Securities Act")) purchasing for our own account or
for the account of such an institutional "accredited investor" and we are
acquiring the Notes not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act. We have such
knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risk of our investment in the Notes and invest
in or purchase securities
similar to the Notes in the normal course of our business. We and any
accounts for which we are acting are each able to bear the
economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold
except as permitted in the following sentence. We agree on our own behalf
and on behalf of any investor account for which we are purchasing Notes to
offer, sell or otherwise transfer such Notes prior to the date which is two
years after the later of the date of original issue and the last date on
which the Company or any affiliate of the Company was the owner of such Notes
(or any predecessor thereto) (the "Resale Restriction Termination Date") only
(a) to the Company, (b) pursuant to a registration statement which has been
declared effective under the Securities Act, (c) in a transaction complying
with the requirements of Rule 144A under the Securities Act, to a person we
reasonably believe is a qualified institutional buyer under Rule 144A (a
"QIB") that purchases for its own account or for the account of a QIB and to
whom notice is given that the transfer is being made in reliance on Rule
144A, (d) pursuant to offers and sales that occur outside the United States
within the meaning of Regulation S under the Securities Act or (e) to an
institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act that is purchasing for its own
account or for the account of such an institutional "accredited investor", or
(f) pursuant to any other available exemption from the registration
requirements of the Securities Act, subject in each of the foregoing cases to
any requirement of law that the disposition of our property or the property
of such investor account or accounts be at all times within our or their
control and in compliance with any applicable state securities laws. The
foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Notes
is proposed to be made pursuant to clause (e) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is
acquiring such Notes for investment purposes and not for
distribution in violation of the Securities Act. Each purchaser acknowledges
that the Company and the Trustee reserve the right prior to any offer, sale
or other transfer prior to the Resale Termination Date of the Notes pursuant
to clause (d), (e) or (f) above to require the delivery of an opinion of
counsel, certifications and/or other information satisfactory to the Company
and the Trustee.
TRANSFEREE:
BY
-----------------------
[FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS
PURSUANT TO RULE 144A]
Telegroup, Inc.
c/o State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Location:Corporate Trust Department
[date]
Re: Telegroup, Inc. (the "Company") 10.5% Senior Discount Notes due
2004 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $ aggregate principal
amount at maturity of the Notes, we hereby certify that
such 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, we hereby further certify that the Notes are being
transferred to a person that we reasonably believe is purchasing the Notes
for its own account, or for one or more accounts with respect to which such
person exercises sole investment discretion, and such person and each such
account is a "qualified institutional buyer" within the meaning of Rule 144A
in a transaction meeting the requirements of Rule 144A and such Notes are
being transferred in compliance with any applicable blue sky securities laws
of any state of the United States.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferor]
By:
-------------------------
Authorized Signature
[Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Regulation S]
[date]
Telegroup, Inc.
c/o State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Location: Corporate Trust Department
Re: Telegroup, Inc. (the "Company") 10.5% Senior Discount Notes due 2004
(the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $ aggregate principal
amount at maturity of the Notes, we confirm that such
sale has been effected pursuant to and in accordance with Regulation S under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy order was originated, the
transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee was outside the
United States or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor any
person acting on our behalf knows that the transaction has been prearranged
with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule Rule 904(b) of Regulation S, and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the provisions
of Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 904(c)(1).
You and the Company are entitled to rely upon this letter and are
rrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in
this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
---------------------------
Authorized Signature