Exhibit 10.19
EXECUTION COPY
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PATHNET, INC.
TO
THE BANK OF NEW YORK,
Trustee
--------------------
Indenture
Dated as of April 8, 1998
---------------------
$350,000,000 Aggregate Principal Amount
12 1/4% Senior Notes due 2008
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PATHNET, INC.
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of April 8, 1998
Trust Indenture
Act Section Indenture Section
ss. 310(a)(1) .......................................... 607
(a)(2) .......................................... 607
(b) .......................................... 608
ss. 312(c) .......................................... 701
ss. 314(a) .......................................... 703
(a)(4) .......................................... 1008(a)
(c)(1) .......................................... 102
(c)(2) .......................................... 102
(e) .......................................... 102
ss. 315(b) .......................................... 601
ss. 316(a)(last
sentence) .......................................... 101 ("Outstanding")
(a)(1)(A) .......................................... 502, 512
(a)(1)(B) .......................................... 513
(b) .......................................... 508
(c) .......................................... 104(d)
ss. 317(a)(1) .......................................... 503
(a)(2) .......................................... 504
(b) .......................................... 1003
ss. 318(a) .......................................... 111
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Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
Page
RECITALS OF THE COMPANY..................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION................................................ 1
SECTION 101. Definitions............................................. 1
Accounts Receivable Subsidiary........................................ 2
Acquired Indebtedness................................................. 2
Act ................................................................ 2
Affiliate............................................................. 2
Asset Sale............................................................ 3
Board of Directors.................................................... 4
Board Resolution...................................................... 4
Business Day.......................................................... 4
Capital Stock......................................................... 4
Capitalized Lease Obligation.......................................... 4
Cash Equivalents...................................................... 5
Change of Control..................................................... 5
Commission............................................................ 6
Common Stock.......................................................... 6
Company............................................................... 6
Company Request....................................................... 6
Company Order......................................................... 6
Consolidated Adjusted Net Income...................................... 6
Consolidated Indebtedness............................................. 7
Consolidated Indebtedness to Consolidated Operating Cash Flow Ratio... 7
Consolidated Interest Expense......................................... 8
Consolidated Operating Cash Flow...................................... 8
Consolidated Tax Expense.............................................. 9
Corporate Trust Office................................................ 9
Corporation........................................................... 9
Credit Facilities..................................................... 9
Currency Agreement.................................................... 9
Debt Securities....................................................... 9
Default............................................................... 10
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Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
Page
Defaulted Interest.................................................... 10
Disinterested Director................................................ 10
Escrow Account........................................................ 10
Event of Default...................................................... 10
Exchange Act.......................................................... 10
Exchange Notes........................................................ 10
Exchange Offer........................................................ 10
Exchange Offer Registration Statement................................. 11
Fair Market Value..................................................... 11
Federal Bankruptcy Code............................................... 11
GAAP ................................................................ 11
Government Securities................................................. 11
Guarantee............................................................. 11
guarantee............................................................. 11
Holder................................................................ 11
Incumbent............................................................. 11
Incumbent Agreement................................................... 12
Incur ................................................................ 12
incur ................................................................ 12
Indebtedness.......................................................... 12
Indirect Participant.................................................. 13
Initial Notes......................................................... 13
Initial Purchasers.................................................... 13
Initial System........................................................ 13
Indenture............................................................. 14
Interest Payment Date................................................. 14
Interest Rate Agreement............................................... 14
Invested Capital...................................................... 14
Investment............................................................ 14
Issue Date............................................................ 14
Lien ................................................................ 15
Liquidated Damages.................................................... 15
Maturity.............................................................. 15
Moody's............................................................... 15
Net Cash Proceeds..................................................... 15
Note ................................................................ 16
Notes ................................................................ 16
Note Register......................................................... 16
Note Registrar........................................................ 16
Notes Registration Rights Agreement................................... 16
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Page
Officers' Certificate................................................. 16
Offshore Note Exchange Date........................................... 16
Opinion of Counsel.................................................... 16
Outstanding........................................................... 16
Participant........................................................... 17
Paying Agent.......................................................... 17
Permitted Holder...................................................... 17
Permitted Indebtedness................................................ 17
Permitted Liens....................................................... 21
Permitted Telecommunications Asset Sale............................... 23
Permitted Telecommunications Joint Venture............................ 24
Person................................................................ 24
Pledge Agreement...................................................... 24
Pledged Securities.................................................... 24
Predecessor Note...................................................... 24
Preferred Stock....................................................... 24
Public Equity Offering................................................ 24
Qualified Capital Stock............................................... 24
Redeemable Capital Stock.............................................. 25
Redemption Date....................................................... 25
Redemption Price...................................................... 25
Regular Record Date................................................... 25
Responsible Officer................................................... 25
Restricted Subsidiary................................................. 25
S&P ................................................................ 25
Sale-Leaseback Transaction............................................ 26
Shelf Registration Statement.......................................... 26
Significant Subsidiary................................................ 26
Special Record Date................................................... 26
Stated Maturity....................................................... 26
Subsidiary............................................................ 27
Telecommunications Assets............................................. 27
Telecommunications Business........................................... 27
Telecommunications Indebtedness....................................... 27
Trust Indenture Act................................................... 28
TIA ................................................................ 28
Trustee............................................................... 28
Unrestricted Subsidiary............................................... 28
Vendor Credit Facility................................................ 28
Vice President........................................................ 29
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Page
Voting Stock.......................................................... 29
Wholly Owned.......................................................... 29
SECTION 102. Compliance Certificates and Opinions.................... 29
SECTION 103. Form of Documents Delivered to Trustee.................. 30
SECTION 104. Acts of Holders......................................... 30
SECTION 105. Notices, etc., to Trustee, Company...................... 32
SECTION 106. Notice to Holders; Waiver............................... 32
SECTION 107. Effect of Headings and Table of Contents................ 32
SECTION 108. Successors and Assigns.................................. 33
SECTION 109. Separability Clause..................................... 33
SECTION 110. Benefits of Indenture................................... 33
SECTION 111. Governing Law........................................... 33
SECTION 112. Legal Holidays.......................................... 33
ARTICLE TWO
NOTE FORMS............................................................ 34
SECTION 201. Forms Generally......................................... 34
SECTION 202. Form of Face of Note.................................... 35
SECTION 203. Form of Reverse of Note................................. 37
SECTION 204. Form of Trustee's Certificate of Authentication......... 40
SECTION 205. Restrictive Legends..................................... 41
ARTICLE THREE
THE SECURITIES........................................................ 43
SECTION 301. Title and Terms......................................... 43
SECTION 302. Denominations........................................... 44
SECTION 303. Execution, Authentication, Delivery and Dating.......... 44
SECTION 304. Temporary Notes......................................... 45
SECTION 305. Registration, Registration of Transfer and Exchange..... 46
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes............. 47
SECTION 307. Payment of Interest; Interest Rights Preserved.......... 48
SECTION 308. Persons Deemed Owners................................... 49
SECTION 309. Cancellation............................................ 49
SECTION 310. Computation of Interest................................. 50
SECTION 311. Book-Entry Provisions for Global Notes.................. 50
SECTION 312. Transfer Provisions..................................... 51
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Page
ARTICLE FOUR
SATISFACTION AND DISCHARGE............................................ 60
SECTION 401. Satisfaction and Discharge of Indenture................. 60
SECTION 402. Application of Trust Money.............................. 61
ARTICLE FIVE
REMEDIES.............................................................. 61
SECTION 501. Events of Default....................................... 61
SECTION 502. Acceleration of Maturity; Rescission and Annulment...... 63
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee ............................. 64
SECTION 504. Trustee May File Proofs of Claim........................ 65
SECTION 505. Trustee May Enforce Claims Without Possession of Notes.. 66
SECTION 506. Application of Money Collected.......................... 66
SECTION 507. Limitation on Suits..................................... 67
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest................................ 67
SECTION 509. Restoration of Rights and Remedies...................... 68
SECTION 510. Rights and Remedies Cumulative.......................... 68
SECTION 511. Delay or Omission Not Waiver............................ 68
SECTION 512. Control by Holders...................................... 68
SECTION 513. Waiver of Past Defaults................................. 69
SECTION 514. Waiver of Stay or Extension Laws........................ 69
ARTICLE SIX
THE TRUSTEE........................................................... 69
SECTION 601. Notice of Defaults...................................... 69
SECTION 602. Certain Rights of Trustee............................... 70
SECTION 603. Trustee Not Responsible for Recitals or Issuance
of Notes ........................................... 71
SECTION 604. May Hold Notes.......................................... 72
SECTION 605. Money Held in Trust..................................... 72
SECTION 606. Compensation and Reimbursement.......................... 72
SECTION 607. Corporate Trustee Required; Eligibility................. 73
SECTION 608. Resignation and Removal; Appointment of Successor....... 73
SECTION 609. Acceptance of Appointment by Successor.................. 75
SECTION 610. Merger, Conversion, Consolidation or Succession
to Business ........................................ 75
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Page
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY...................... 76
SECTION 701. Disclosure of Names and Addresses of Holders............ 76
SECTION 702. Reports by Trustee...................................... 76
SECTION 703. Reports by Company...................................... 76
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.................. 77
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.... 77
SECTION 802. Successor Substituted................................... 78
SECTION 803. Notes to Be Secured in Certain Events................... 79
ARTICLE NINE
SUPPLEMENTAL INDENTURES............................................... 79
SECTION 901. Supplemental Indentures Without Consent of Holders...... 79
SECTION 902. Supplemental Indentures with Consent of Holders......... 80
SECTION 903. Execution of Supplemental Indentures.................... 81
SECTION 904. Effect of Supplemental Indentures....................... 82
SECTION 905. Conformity with Trust Indenture Act..................... 82
SECTION 906. Reference in Notes to Supplemental Indentures........... 82
SECTION 907. Notice of Supplemental Indentures....................... 82
ARTICLE TEN
COVENANTS............................................................. 82
SECTION 1001. Payment of Principal, Premium, if any, and Interest.... 82
SECTION 1002. Maintenance of Office or Agency........................ 83
SECTION 1003. Money for Note Payments to Be Held in Trust............ 83
SECTION 1004. Corporate Existence.................................... 85
SECTION 1005. Payment of Taxes and Other Claims...................... 85
SECTION 1006. Maintenance of Properties.............................. 85
SECTION 1008. Statement by Officers As to Default.................... 86
SECTION 1009. Provision of Financial Statements...................... 86
SECTION 1010. Purchase of Notes upon Change of Control............... 87
SECTION 1011. Limitation on Indebtedness............................. 88
SECTION 1012. Limitation on Restricted Payments...................... 88
SECTION 1013. Limitation on Issuances and Sales of Capital Stock
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Page
of Restricted Subsidiaries......................... 92
SECTION 1014. Limitation on Transactions with Affiliates............. 92
SECTION 1015. Limitations on Liens................................... 93
SECTION 1016. Limitation on Issuances of Certain Guarantees by, and
Debt Securities of, Restricted Subsidiaries........ 94
SECTION 1017. Limitation on Sale of Assets........................... 94
SECTION 1018. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries..... 96
SECTION 1019. Waiver of Certain Covenants............................ 97
ARTICLE ELEVEN
REDEMPTION OF NOTES................................................... 97
SECTION 1101. Right of Redemption.................................... 97
SECTION 1102. Applicability of Article............................... 97
SECTION 1103. Election to Redeem; Notice to Trustee.................. 98
SECTION 1104. Selection by Trustee of Notes to Be Redeemed........... 98
SECTION 1105. Notice of Redemption................................... 98
SECTION 1106. Deposit of Redemption Price............................ 99
SECTION 1107. Notes Payable on Redemption Date....................... 99
SECTION 1108. Notes Redeemed in Part................................ 100
ARTICLE TWELVE
Security............................................................. 100
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE................................... 102
SECTION 1301. Company's Option to Effect Defeasance or Covenant
Defeasance........................................ 102
SECTION 1302. Defeasance and Discharge.............................. 102
SECTION 1303. Covenant Defeasance................................... 103
SECTION 1304. Conditions to Defeasance or Covenant Defeasance....... 103
SECTION 1305. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions..... 105
SECTION 1306. Reinstatement......................................... 105
vii
EXHIBIT A -- Form of Rule 144A Certificate
EXHIBIT B -- Form of Regulation S Certificate
EXHIBIT C -- Form of Certificate to Be Delivered following Resale Restriction
Termination Date
viii
INDENTURE, dated as of April 8, 1998 between PATHNET, INC., a
Delaware corporation (herein called the "Company"), having its principal office
at 1015 31st Street, N.W., Washington, D.C. 20007, and THE BANK OF NEW YORK, a
New York banking corporation, Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 12 1/4%
Senior Notes due 2008 (the "Initial Notes"), and its 12 1/4% Series B Senior
Notes due 2008 (the "Exchange Notes" and, together with the Initial Notes, the
"Notes"), of substantially the tenor and amount hereinafter set forth, and to
provide therefor the Company has duly authorized the execution and delivery of
this Indenture.
Upon the issuance of the Exchange Notes, if any, or the
effectiveness of the Shelf Registration Statement (as defined herein), this
Indenture shall be subject to, and shall be governed by the provisions of, the
Trust Indenture Act that are required to be part of or deemed to be part of and
to govern the indentures qualified thereunder.
All things necessary have been done to make the Notes, when executed
by the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company and to make this Indenture a valid
agreement of the Company, in accordance with their and its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
2
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper", as used in TIA Section 311, shall have the
meanings assigned to them in the rules of the Commission adopted under the
Trust Indenture Act;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are in effect on the date hereof; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision and the word "including"
means "including without limitation.".
Certain terms, used principally in Article Ten, are defined in that
Article and certain terms, used principally in Articles Two and Three, are
defined in Article Two.
"Accounts Receivable Subsidiary" means any Restricted Subsidiary of
the Company that is, directly or indirectly, wholly owned by the Company (other
than directors' qualifying shares) and organized for the purpose of and engaged
in (i) purchasing, financing and collecting accounts receivable obligations of
customers of the Company or its Restricted Subsidiaries, (ii) the sale or
financing of accounts receivable or interests therein and (iii) other activities
directly related thereto.
"Acquired Indebtedness" means Indebtedness of a Person (a) existing
at the time such Person becomes a Restricted Subsidiary or (b) assumed in
connection with an acquisition of assets from such Person, in each case, other
than Indebtedness incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary or such acquisition.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" means, with respect to any specified Person, (i) any
other Person directly or indirectly controlling or controlled by, or under
direct or indirect common control with, such specified Person or (ii) any other
Person that owns, directly or indirectly, 10% or more of such specified Person's
Voting Stock or any executive officer or director of any such specified Person
or other Person or, with respect to any natural Person, any other Person in such
Person's immediate family. For the purposes of this definition, "control," when
used
3
with respect to any specified Person, means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Notwithstanding the foregoing, no individual shall be deemed to be an Affiliate
of a Person solely by reason of (a) such Person being party to an Incumbent
Agreement or (b) such Person owning an interest in a Restricted Subsidiary
pursuant to, or as the result of, an Incumbent Agreement.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease
or other disposition (including, without limitation, by way of merger,
consolidation or sale and leaseback transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, of (i) any
Capital Stock of any Subsidiary; (ii) all or substantially all of the properties
and assets of the Company or any Subsidiary; or (iii) any other properties or
assets of the Company or any Subsidiary, other than in the ordinary course of
business (it being understood that the ordinary course of business includes, but
is not restricted to, any transfer or sale of, or the grant of a right to use,
an asset to an Incumbent pursuant to (x) an Incumbent Agreement, (y) applicable
law or (z) an agreement to which such Incumbent is a party which exists on the
date of, and is not entered into in contemplation of, such Incumbent Agreement).
For the purposes of this definition, the term "Asset Sale" shall not include any
transfer of properties or assets (A) that is governed by the provisions of
Article Eight of this Indenture (B) of the Company to any Restricted Subsidiary,
or of any Restricted Subsidiary to the Company or any other Restricted
Subsidiary in accordance with the terms of this Indenture, (C) having an
aggregate Fair Market Value of less than $2,000,000 in any given fiscal year,
(D) by the Company or a Restricted Subsidiary to a Person who is not an
Affiliate of the Company in exchange for Telecommunications Assets (or not less
than 66 2/3% of the outstanding Voting Stock of a Person that becomes a
Restricted Subsidiary, the assets of which consist primarily of
Telecommunications Assets) or related telecommunications services where, in the
good faith judgment of the board of directors of the Company evidenced by a
board resolution, the Fair Market Value of such Telecommunications Assets (or
such Voting Stock) or services so received is at least equal to the Fair Market
Value of the properties or assets disposed of or, if less, the difference is
received by the Company in cash in an amount at least equal to such difference,
(E) constituting Capital Stock of an Unrestricted Subsidiary or other Investment
that was permitted under Section 1012 when made, (F) constituting accounts
receivable of the Company or a Restricted Subsidiary to an Accounts Receivable
Subsidiary or in consideration of Fair Market Value thereof, to Persons that are
not Affiliates of the Company or any Subsidiary of the Company in the ordinary
course of business, including in connection with financing transactions, (G) in
connection with a Sale-Leaseback Transaction otherwise permitted to be incurred
under Section 1011, (H) to a Permitted Telecommunications Joint Venture if such
transfer of properties or assets is permitted under the definition of "Permitted
Investments", (I) in connection with a Permitted Telecommunications Asset Sale
or (J) to an Unrestricted Subsidiary if permitted under Section 1012.
4
"Attributable Value" means, with respect to any lease at the time of
determination, the present value (discounted at the interest rate implicit in
the lease or, if not known, at the Company's incremental borrowing rate) of the
obligations of the lessee of the property subject to such lease for rental
payments during the remaining term of the lease included in such transaction,
including any period for which such lease has been extended or may, at the
option of the lessor, be extended, or until the earliest date on which the
lessee may terminate such lease without penalty or upon payment of penalty (in
which case the rental payments shall include such penalty), after excluding from
such rental payments all amounts required to be paid on account of maintenance
and repairs, insurance, taxes, assessments, water, utilities and similar
charges.
"Average Life" means, as of the date of determination with respect
to any Indebtedness, the quotient obtained by dividing (a) the sum of the
products of (i) the number of years from the date of determination 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.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" shall mean any day on which (i) banks in the City of
New York, (ii) the principal U.S. securities exchange or market, if any, on
which any Common Stock is listed or admitted to trading and (iii) the principal
U.S. securities exchange or market, if any, on which the Warrants are listed or
admitted to trading are open for business.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, partnership interests, participations, rights in or other
equivalents (however designated and whether voting or non-voting) in equity of
such Person, including, without limitation, all common stock or Preferred Stock,
and any rights (other than debt securities convertible into capital stock),
warrants or options exchangeable for or convertible into such capital stock,
whether now outstanding or issued after the Issue Date.
"Capitalized Lease Obligation" means, with respect to any Person,
any obligation of such Person 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,
for the purposes of this Indenture, the
5
amount of such obligation at any date shall be the capitalized amount thereof at
such date, determined in accordance with GAAP.
"Cash Equivalents" means (a) 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); (b) 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, in each case having combined capital and surplus and
undivided profits of not less than $500,000,000; (c) commercial paper with a
maturity of 180 days or less issued by a corporation that is not an Affiliate of
the Company and is organized under the laws of any state of the United States or
the District of Columbia and rated at least A-1 by S&P or at least P-l by
Moody's; and (d) money market mutual funds that invest substantially all of
their assets in securities of the type described in the preceding clauses.
"Change of Control" means any of the following events:
(a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), other than Permitted Holders, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and l3d-5 under
the Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 50% of the total outstanding
Voting Stock of the Company;
(b) the Company consolidates with, or merges with or into, another
Person or conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates
with, or merges with or into, the Company, in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Company is
converted into or exchanged for cash, securities or other property, other
than any such transaction (i) where the outstanding Voting Stock of the
Company is not converted or exchanged at all (except to the extent
necessary to reflect a change in the jurisdiction of incorporation of the
Company) or is converted into or exchanged for (A) Voting Stock (other
than Redeemable Capital Stock) of the surviving or transferee corporation
or (B) cash, securities and other property (other than Capital Stock of
the Surviving Entity) in an amount that could be paid by the Company as a
Restricted Payment as described in Section 1012 and (ii) immediately after
such transaction, no "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than Permitted
Holders, is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of
6
time), directly or indirectly, of more than 50% of the total outstanding
Voting Stock of the surviving or transferee corporation;
(c) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election to such Board of
Directors, or whose nomination for election by the stockholders of the
Company, was approved by a vote of 66 2/3% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of the
Company then in office; or
(d) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution other than in a transaction which complies with
the provisions of Article Eight of this Indenture.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations and other equivalents (however designated,
whether voting or non-voting) of such Persons common stock, whether now
outstanding or issued after the date of this Indenture, and includes, without
limitation, all series and classes of such common stock.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman, its Chief Executive
Officer ("CEO"), its President, any executive vice president or vice president
or the Treasurer and delivered to the Trustee.
"Consolidated Adjusted Net Income" means, for any period, the
consolidated net income (or loss) of the Company and all Restricted Subsidiaries
for such period as determined in accordance with GAAP, adjusted by excluding,
without duplication, (a) any net after-tax extraordinary gains or losses (less
all fees and expenses relating thereto), (b) any net after-tax gains or losses
(less all fees and expenses relating thereto) attributable to asset
7
dispositions other than in the ordinary course of business, (c) the portion of
net income (or loss) of any Person (other than the Company or a Restricted
Subsidiary), including Unrestricted Subsidiaries, in which the Company or any
Restricted Subsidiary has an ownership interest, except to the extent of the
amount of dividends or other distributions actually paid to the Company or any
Restricted Subsidiary in cash dividends or distributions during such period, (d)
the net income (or loss) of any Person combined with the Company or any
Restricted Subsidiary on a "pooling of interests" basis attributable to any
period prior to the date of combination, (e) the net income of any Restricted
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is not at the date of determination
permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary or its
stockholders (except, for purposes of determining compliance with Section 1011,
any restriction permitted under clause (vii) or (viii) of Section 1018, and (f)
any net income (or loss) from any Restricted Subsidiary that was an Unrestricted
Subsidiary at any time during such period other than any amounts actually
received from such Restricted Subsidiary.
"Consolidated Indebtedness" means, with respect to any period, the
aggregate amount of Indebtedness of the Company and its Restricted Subsidiaries
outstanding at the date of determination as determined on a consolidated basis
in accordance with GAAP.
"Consolidated Indebtedness to Consolidated Operating Cash Flow
Ratio" means, at any date of determination, the ratio of (i) Consolidated
Indebtedness to (ii) Consolidated Operating Cash Flow for the two preceding
fiscal quarters for which financial information is available immediately prior
to the date of determination multiplied by two; provided that any Indebtedness
incurred or retired by the Company or any of its Restricted Subsidiaries during
the fiscal quarter in which the transaction date occurs shall be calculated as
if such Indebtedness were so incurred or retired on the first day of the fiscal
quarter in which the date of determination occurs (provided that, in making any
such computation, the aggregate amount of Indebtedness under any revolving
credit or similar facility shall be deemed to include an amount of funds equal
to the average daily balance of such Indebtedness during such two fiscal quarter
period); and provided further that (x) if the transaction giving rise to the
need to calculate the Consolidated Indebtedness to Consolidated Operating Cash
Flow Ratio would have the effect of increasing or decreasing Consolidated
Indebtedness or Consolidated Operating Cash Flow in the future, Consolidated
Indebtedness and Consolidated Operating Cash Flow shall be calculated on a pro
forma basis as if such transaction had occurred on the first day of such two
fiscal quarter period preceding the date of determination; (y) if during such
two fiscal quarter period, the Company or any of its Restricted Subsidiaries
shall have engaged in any Asset Sale in respect of any company, entity or
business, Consolidated Operating Cash Flow for such period shall be reduced by
an amount equal to the Consolidated Operating Cash Flow (if positive), or
increased by an amount equal to the Consolidated Operating Cash Flow (if
negative), directly attributable to
8
the company, entity or business that is the subject of such Asset Sale and any
related retirement of Indebtedness as if such Asset Sale and any related
retirement of Indebtedness had occurred on the first day of such period; or (z)
if during such two fiscal quarter period the Company or any of its Restricted
Subsidiaries shall have acquired any company, entity or business, Consolidated
Operating Cash Flow shall be calculated on a pro forma basis as if such
acquisition and related financing had occurred on the first day of such period.
"Consolidated Interest Expense" means, for any period, without
duplication, the sum of (a) the interest expense of the Company and its
Restricted Subsidiaries for such period, including, without limitation, (i)
amortization of debt discount, (ii) the net cost of Interest Rate Agreements
(including amortization of discounts), (iii) the interest portion of any
deferred payment obligation, (iv) accrued interest, (v) the consolidated amount
of any interest capitalized by the Company and (vi) amortization of debt
issuance costs, plus (b) the interest component of Capitalized Lease Obligations
of the Company and its Restricted Subsidiaries paid, accrued and/or scheduled to
be paid or accrued during such period; excluding, however, any amount of such
interest of any Restricted Subsidiary if the net income of such Restricted
Subsidiary is excluded in the calculation of Consolidated Adjusted Net Income
pursuant to clause (e) of the definition thereof (but only in the same
proportion as the net income of such Restricted Subsidiary is excluded from the
calculation of Consolidated Adjusted Net Income pursuant to clause (e) of the
definition thereof); provided that in making such computation, (x) the
Consolidated Interest Expense attributable to interest on any Indebtedness
computed on a pro forma basis and (A) bearing a floating interest rate shall be
computed as if the rate in effect on the date of computation had been the
applicable rate for the entire period and (B) which was not outstanding during
the period for which the computation is being made but which bears, at the
option of the Company, a fixed or floating rate of interest, shall be computed
by applying, at the option of the Company, either the fixed or floating rate,
(y) the Consolidated Interest Expense attributable to interest on any
Indebtedness under a revolving credit facility computed on a pro forma basis
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period and (z) the interest rate with respect to any
Indebtedness covered by an Interest Rate Agreement shall be deemed to be the
effective interest rate with respect to such Indebtedness after taking into
account such Interest Rate Agreement.
"Consolidated Operating Cash Flow" means, with respect to any
period, the Consolidated Adjusted Net Income for such period (a) increased by
(to the extent deducted in computing Consolidated Adjusted Net Income) the sum
of (i) the Consolidated Tax Expense for such period (other than taxes
attributable to extraordinary, unusual or non-recurring gains or losses); (ii)
Consolidated Interest Expense for such period; (iii) depreciation of the Company
and the Restricted Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP; (iv) amortization of the Company and its
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP; and (v) any other non-cash charges that were deducted in
computing Consolidated Adjusted Net Income
9
(excluding any non-cash charge which requires an accrual or reserve for cash
charges for any future period) of the Company and its Restricted Subsidiaries
for such period in accordance with GAAP and (b) decreased by any non-cash gains
that were included in computing Consolidated Adjusted Net Income.
"Consolidated Tax Expense" means, for any period, the provision for
U.S. federal, state, provincial, local and foreign income taxes of the Company
and all Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.
"Corporate Trust Office" means the principal corporate trust office
of the Trustee, at which at any particular time its corporate trust business
shall be administered, which office at the date of execution of this Indenture
is located at 101 Barclay Street, Floor 21 West, New York, New York 10286,
except that with respect to presentation of Notes for payment or for
registration of transfer or exchange, such term shall mean the office or agency
of the Trustee at which, at any particular time, its corporate agency business
shall be conducted.
"Corporation" or "corporation" includes corporations, associations,
companies and business trusts.
"Credit Facilities" means, with respect to the Company or its
Restricted Subsidiaries, 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 spot or forward foreign exchange
agreements and currency swap, currency option or other similar financial
agreements or arrangements entered into by the Company or any of its Restricted
Subsidiaries.
"Debt Securities" means any debt securities (including any Guarantee
of such securities) issued by the Company and/or any Restricted Subsidiary in
connection with a public offering (whether or not underwritten) or a private
placement (provided that such private placement is underwritten for resale
pursuant to Rule 144A, Regulation S or otherwise under the Securities Act or
sold on an agency basis by a broker-dealer or one of its Affiliates to 10 or
more non-affiliated beneficial holders); it being understood that the term "Debt
Securities" shall not include any evidence of indebtedness under the Vendor
Credit Facility, any financing by a Restricted Subsidiary similar to the Vendor
Credit Facility or any Credit Facility or other commercial bank borrowings, any
vendor equipment financing
10
facility or any similar financings, recourse transfers of financial assets,
capital leases or other types of borrowings incurred in a manner not customarily
viewed as a "securities offering".
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the board of directors of the Company
is required to deliver a resolution thereof under this Indenture, a member of
the board of directors of the Company who does not have any material direct or
indirect financial interest in or with respect to such transaction or series of
transactions. For purposes of this definition, no Person shall be deemed not to
be a Disinterested Director solely because such Person or an Affiliate of such
Person holds or beneficially owns Capital Stock of the Company or any of its
Restricted Subsidiaries.
"Escrow Account" means an account established with the Trustee in
its name as Trustee pursuant to the terms of the Pledge Agreement for the
deposit of the Pledged Securities purchased by the Company with a portion of the
net proceeds from the offering of the initial offer and sale by the Company of
the Initial Notes.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" has the meaning stated in the first recital of this
Indenture and refers to any Exchange Notes containing terms substantially
identical to the Initial Notes (except that such Exchange Notes shall not
contain terms with respect to transfer restrictions and Liquidated Damages and
shall be registered under the Securities Act) that are issued and exchanged for
the Initial Notes in accordance with the Exchange Offer, as provided for in
theNotes Registration Rights Agreement and this Indenture.
"Exchange Offer" means the offer by the Company to the Holders of
the Initial Notes to exchange all of the Initial Notes for Exchange Notes as
provided for in the Notes Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Notes Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or property,
the sale value that would be obtained in an arm's length transaction between an
informed and willing
11
seller under no compulsion to sell and an informed and willing buyer under no
compulsion to buy. Unless otherwise specified in this Indenture, Fair Market
Value shall be determined by the Board of Directors of the Company acting in
good faith and as of the date on which such determination is made.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of
the United States Code, as amended from time to time.
"GAAP" means generally accepted accounting principles in the United
States that are in effect on the Issue Date.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which obligations
or guarantees the full faith and credit of the United States of America is
pledged which, in any case, are not callable or redeemable at the option of the
issuer of the issuer thereof.
"Guarantee" or "guarantee" means, as applied to any obligation, (a)
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 (b) 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.
When used as a verb, "Guarantee" or "guarantee" shall have a corresponding
meaning.
"Holder" means a Person in whose name a Note is registered in the
Note Register.
"Incumbent" means any railroad, utility, governmental entity,
pipeline or other licensed owner (which ownership is determined immediately
prior to any transaction with the Company or a Restricted Subsidiary) of
Telecommunications Assets to be used in the Company's network pursuant to an
Incumbent Agreement (and any subsidiary or affiliate of such Person that is a
party to an Incumbent Agreement for the sole purpose of receiving payments from
the Company or a Restricted Subsidiary pursuant to such agreement).
"Incumbent Agreement" means an agreement between an Incumbent and
the Company or a Restricted Subsidiary pursuant to which, among other things,
such Incumbent receives a payment equal to a percentage of the Company's or such
Restricted Subsidiary's revenues, if any, attributable, in whole or in part, to
Telecommunications Assets transferred or leased, or with respect to which a
right of use has been granted, by such Incumbent to the Company or such
Restricted Subsidiary and upon or with respect to which the Company or such
Restricted Subsidiary has constructed or intends to construct a portion of its
network.
12
"Incur" or "incur" means, with respect to any Indebtedness, to
incur, create, issue, assume, guarantee or otherwise become directly or
indirectly liable or responsible for the payment of, or otherwise incur, such
Indebtedness, contingently or otherwise; provided that neither the accrual of
interest nor the accretion of original issue discount shall be considered an
incurrence of Indebtedness. With respect to Indebtedness to be borrowed under a
binding commitment previously entered into that provides for the Company to
Incur Indebtedness on a revolving basis, the Company shall be deemed to have
Incurred the greater of (a) the Indebtedness actually Incurred or (b) all or a
portion of the amount of such unborrowed commitment that the Company shall have
so designated to be Incurred in an Officer's Certificate delivered to the
Trustee (in which case the Company shall not be deemed to incur such unborrowed
amount at the time or times it is actually borrowed).
"Indebtedness" means, with respect to any Person at any date of
determination, without duplication: (a) all liabilities, contingent or
otherwise, of such Person: (i) for borrowed money (including overdrafts), (ii)
in connection with any letters of credit and acceptances issued under letter of
credit facilities, acceptance facilities or other similar facilities (including
reimbursement obligations with respect thereto), (iii) evidenced by bonds,
notes, debentures or other similar instruments, (iv) for the deferred and unpaid
purchase price of property or services or created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person or (v) for Capitalized Lease Obligations (including any
Sale-Leaseback Transaction); (b) all obligations of such Person under or in
respect of Interest Rate Agreements and Currency Agreements; (c) all
Indebtedness referred to in (but not excluded from) the preceding clauses of
other Persons and all dividends of other Persons, the payment of which is
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or with respect to any
property (including, without limitation, accounts and contract rights) owned by
such Person, whether or not such Person has assumed or become liable for the
payment of such Indebtedness (the amount of such obligation being deemed to be
the lesser of (i) the Fair Market Value of such property or asset and (ii) the
amount of such obligation so secured); (d) all guarantees by such Person of
Indebtedness referred to in this definition of any other Person; and (e) all
Redeemable Stock of such Person valued at the greater of its voluntary or
involuntary maximum fixed repurchase price, plus accrued and unpaid dividends.
The amount of Indebtedness of any Person at any date will be the
outstanding balance at such date (or, in the case of a revolving credit or other
similar facility, the total amount of funds outstanding and/or designated as
incurred and certified by an officer of the Company to have been Incurred on
such date pursuant to clause (b) of the last sentence of the definition of
"Incur") 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
equals the face amount of such Indebtedness less the
13
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 U.S. federal, state, local or
other taxes owed by such Person. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on
any date on which Indebtedness shall be required to be determined pursuant to
this Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Redeemable Capital Stock, such Fair Market Value will be
determined in good faith by the board of directors of the issuer of such
Redeemable Capital Stock. Notwithstanding the foregoing, trade accounts and
accrued liabilities arising in the ordinary course of business will not be
considered Indebtedness for purposes of this definition.
"Independent financial expert" means a nationally or regionally
recognized investment banking or public accounting firm or, if the Company
believes that an investment banking or public accounting firm is generally not
qualified to give a particular opinion, a nationally or regionally recognized
appraisal firm.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Initial Notes" has the meaning stated in the first recital of this
Indenture.
"Initial Purchasers" means Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith, Incorporated, Bear, Stearns & Co., TD Securities (US),
Inc. and Salomon Brothers Inc.
"Initial System" means all property, rights and assets necessary to
own and operate an Incumbent's base microwave network system and shall include,
without limitation, the initial microwave radio and protect microwave radio,
software, antennae, waveguide, multiplexors, towers, shelters, licenses
(including Federal Communications Commission and Federal Aviation Administration
licenses), permits, leases, rights-of-way, easements and other related assets.
An Initial System shall not include any additional microwave radios and related
equipment installed as part of an expansion of an Initial System.
"Indenture" means this instrument as originally executed and as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Notes.
14
"Interest Rate Agreement" means any interest rate protection
agreements and other types of interest rate hedging agreements or arrangements
(including, without limitation, interest rate swaps, caps, floors, collars and
other similar agreements).
"Invested Capital" means the sum of (a) 75% of the aggregate net
cash proceeds received by the Company from the issuance of (or capital
contributions with respect to) any Qualified Capital Stock subsequent to the
Issue Date, other than the issuance of Qualified Capital Stock to a Restricted
Subsidiary of the Company, and (b) 75% of the aggregate net cash proceeds from
sales of Redeemable Capital Stock of the Company or Indebtedness of the Company
convertible into Qualified Capital Stock of the Company, in each case upon such
redemption or conversion thereof into Qualified Capital Stock.
"Investment" means, with respect to any Person, any direct or
indirect advance, loan 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,
acquisition or ownership by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued or owned by,
any other Person and all other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP. In addition, the portion
(proportionate to the Company's equity interest in such Subsidiary) of the Fair
Market Value of the net assets of any Subsidiary at the time that such
Subsidiary is designated an Unrestricted Subsidiary shall be deemed to be an
"Investment" made by the Company in such Unrestricted Subsidiary at such time
and the portion (proportionate to the Company's equity interest in such
Subsidiary) of the Fair Market Value of the net assets of any Subsidiary at the
time that such Subsidiary is designated a Restricted Subsidiary shall be
considered a reduction in outstanding Investments. "Investments" shall exclude
extensions of trade credit on commercially reasonable terms in accordance with
normal trade practices.
"Issue Date" means the date of this Indenture.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation, assignment for
security, claim, or preference or priority or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired. 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.
"Liquidated Damages" means all liquidated damages then owing
pursuant to Section 2 of the Notes Registration Rights Agreement.
15
"Maturity" means, with respect to any Note, the date on which any
principal of such Note becomes due and payable as provided therein or in this
Indenture, 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: (a) 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, or stock
or other assets when disposed of for, cash or Cash Equivalents (except to the
extent that such obligations are financed or sold with recourse to the Company
or any Restricted Subsidiary), net of (i) brokerage commissions and other fees
and expenses (including fees and expenses of legal counsel and investment banks)
related to such Asset Sale, (ii) provisions for all taxes payable as a result of
such Asset Sale, (iii) payments made to retire Indebtedness where payment of
such Indebtedness is secured by the assets or properties which are the subject
of such Asset Sale, (iv) amounts required to be paid to any Person (other than
the Company or any Restricted Subsidiary) owning a beneficial interest in the
assets subject to the Asset Sale and (v) appropriate amounts to be provided by
the Company or any Restricted Subsidiary, as the case may be, as a reserve
required in accordance with GAAP against any liabilities associated with such
Asset Sale and retained by the Company or any Restricted Subsidiary, as the case
may be, after such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as reflected in an officers' certificate delivered to the
Trustee; and (b) with respect to any issuance or sale of Capital Stock or
options, warrants or rights to purchase Capital Stock, or debt securities or
Redeemable Capital Stock that has been converted into or exchanged for Qualified
Capital Stock, as referred to in Section 1012, the proceeds of such issuance or
sale in the form of cash or Cash Equivalents, including payments in respect of
deferred payment obligations when received in the form of, or stock or other
assets when disposed for, 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 fees, commissions and expenses actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Note" or "Notes" has the meaning stated in the first recital of
this Indenture and more particularly means any Notes authenticated and delivered
under this Indenture.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 305.
"Notes Registration Rights Agreement" means the Notes Registration
Rights Agreement dated as of the Issue Date, by and between the Initial
Purchasers and the
16
Company, concerning the registration and exchange of the Notes, a conformed copy
of which has been delivered to the Trustee.
"Officers' Certificate" means a certificate signed by the Chairman,
the CEO, the President or any executive vice president or vice president, and by
the Treasurer, an assistant treasurer, the Secretary or an assistant secretary
of the Company, and delivered to the Trustee.
"Offshore Note Exchange Date" means the 40th day after the Issue
Date.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, including an employee of the Company.
"Outstanding", when used with respect to Notes, means, as of the
date of determination, all Notes theretofore authenticated and delivered under
this Indenture, except: (i) Notes theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation; (ii) Notes, or portions thereof, for
whose payment or redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Notes; provided that, if such
Notes are to be redeemed, notice of such redemption has been duly given pursuant
to this Indenture or provision therefor satisfactory to the Trustee has been
made; (iii) Notes, except to the extent provided in Sections 1302 and 1303, with
respect to which the Company has effected defeasance and/or covenant defeasance
as provided in Article Thirteen; and (iv) Notes which have been paid pursuant to
Section 306 or in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture, other than any such
Notes in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Notes are held by a bona fide purchaser in whose
hands the Notes are valid obligations of the Company; provided, however, that in
determining whether the Holders of the requisite principal amount of Outstanding
Notes have given any request, demand, authorization, direction, consent, notice
or waiver hereunder, and for the purpose of making the calculations required by
TIA Section 313, Notes owned by the Company or any other obligor upon the Notes
or any Affiliate of the Company or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in making such calculation or in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
which a Responsible Officer of the Trustee knows to be so owned shall be so
disregarded. Notes so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgees right so to act with respect to such Notes and that the
pledgee is not the Company or any other obligor upon the Notes or any Affiliate
of the Company or such other obligor.
17
"Participant" means, with respect to the Depositary Trust Company
(the "Depository") or its nominee, an institution that has an account therewith.
"Paying Agent" means any Person (including the Company acting as
Paying Agent) authorized by the Company to pay the principal of (and premium, if
any) or interest on any Notes on behalf of the Company.
"Permitted Holder" means Spectrum Equity Investors, L.P., New
Enterprise Associates VI, Limited Partnership, Onset Enterprise Associates II,
L.P., FBR Technology Venture Partners L.P., Toronto Dominion Capital (USA), Inc.
and Grotech Partners IV, L.P., any general partner of any such Person on the
Issue Date, any Person controlled by any such general partner, David Schaeffer
or Richard A. Jalkut.
"Permitted Indebtedness" means:
(a) Indebtedness of the Company pursuant to the Notes or of any
Restricted Subsidiary pursuant to a Guarantee of the Notes;
(b) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the Issue Date;
(c) Indebtedness of the Company owing to any Restricted Subsidiary
(but only so long as such Indebtedness is held by such Restricted
Subsidiary); provided that any Indebtedness of the Company owing to any
such Restricted Subsidiary is subordinated in right of payment from and
after such time as the Notes shall become due and payable (whether at
Stated Maturity, by acceleration or otherwise) to the payment and
performance of the Company's obligations under the Notes; and provided
further that any transaction pursuant to which any Restricted Subsidiary
to which such Indebtedness is owed ceases to be a Restricted Subsidiary
shall be deemed to be an incurrence of Indebtedness by the Company that is
not permitted by this clause (c);
(d) Indebtedness of any Restricted Subsidiary to the Company or of
any Restricted Subsidiary to another Restricted Subsidiary;
(e) Indebtedness of the Company or any Restricted Subsidiary in
respect of performance, surety or appeal bonds or under letter of credit
facilities provided in the ordinary course of business and, in the case of
letters of credit, under which recourse to the Company is limited to the
cash securing such letters of credit;
(f) Indebtedness of the Company under Currency Agreements and
Interest Rate Agreements entered into in the ordinary course of business;
provided that such agreements are designed to protect the Company or any
Restricted Subsidiary against, or manage exposure to, fluctuations in
currency exchange rates and interest rates,
18
respectively, and 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;
(g) Telecommunications Indebtedness and any Indebtedness issued in
exchange for, or the net proceeds of which are used to refinance or refund
such Telecommunications Indebtedness in an amount not to exceed the amount
so refinanced or refunded (plus premiums, accrued interest, and reasonable
fees and expenses);
(h) Indebtedness of the Company or any Restricted Subsidiary
consisting of guarantees, indemnities or obligations in connection with
Telecommunications Indebtedness, Indebtedness permitted under clause (j)
or (m) of this "Permitted Indebtedness" definition or in respect of
purchase price adjustments in connection with the acquisition of or
disposition of assets, including, without limitation, shares of Capital
Stock;
(i) Indebtedness of the Company not to exceed, at any time
outstanding, 2.0 times the Net Cash Proceeds from the issuance and sale
after the Issue Date, other than to a Restricted Subsidiary, of Qualified
Capital Stock of the Company, to the extent such Net Cash Proceeds have
not been used to make Restricted Payments pursuant to clause (a)(3)(B) or
clauses (b)(ii) and (iii) of Section 1012 to make a Restricted Payment or
to make any Permitted Investments under clause (h) of the definition of
Permitted Investments; provided that such Indebtedness does not mature
prior to the Stated Maturity of the Notes and has an Average Life longer
than the Notes;
(j) Indebtedness of the Company or any Restricted Subsidiary under
one or more Credit Facilities; provided that the aggregate principal
amount of any Indebtedness incurred pursuant to this clause (j) (including
any amounts refinanced or refunded under this clause (j)) does not exceed
at any time outstanding the greater of (x) 80% of eligible accounts
receivable of the Company as of the last fiscal quarter for which
financial statements are prepared or (y) $50,000,000; and any Indebtedness
issued in exchange for, or the net proceeds of which are used to refinance
or refund, Indebtedness issued under this clause (j) in an amount not to
exceed the amount so refinanced or refunded (plus premiums, accrued
interest, and reasonable fees and expenses);
(k) Indebtedness of the Company or a Restricted Subsidiary issued in
exchange for, or the net proceeds of which are used to refinance or
refund, then outstanding Indebtedness of the Company or a Restricted
Subsidiary, incurred under the ratio test set forth in clause (i) or (ii)
of Section 1011 or under clauses (b) through (f), (h), (i) and (m) of this
definition of "Permitted Indebtedness," and any refinancings thereof in an
amount not to exceed the amount so refinanced or refunded (plus premiums,
accrued interest, and reasonable fees and expenses); provided that such
new
19
Indebtedness shall only be permitted under this clause (k) if (A) in case
the Notes are refinanced in part, or the Indebtedness to be refinanced
ranks equally with the Notes, such new Indebtedness, by its terms or by
the terms of any agreement or instrument pursuant to which such new
Indebtedness is issued or remains outstanding, is expressly made to rank
equally with, or subordinate in right of payment to, the remaining Notes,
(B) in case the Indebtedness to be refinanced is subordinated in right of
payment to the Notes, such new Indebtedness, by its terms or by the terms
of any agreement or instrument pursuant to which such new Indebtedness is
issued or remains outstanding, is expressly made subordinate in right of
payment to the Notes at least to the same extent that the Indebtedness to
be refinanced is subordinated to the Notes and (C) such new Indebtedness,
determined as of the date of incurrence of such new Indebtedness, does not
mature prior to the Stated Maturity of the Indebtedness to be refinanced
or refunded, and the Average Life of such new Indebtedness is at least
equal to the remaining Average Life of the Indebtedness being refinanced
or refunded; provided further that no Indebtedness incurred under this
clause (k) in exchange for, or the proceeds of which refinance or refund
any Indebtedness incurred under the ratio test set forth under clause (i)
or (ii) of Section 1011 will mature prior to the Stated Maturity of the
Notes or have an Average Life shorter than the Notes; provided further
that in no event may Indebtedness of the Company be refinanced by means of
any Indebtedness of any Restricted Subsidiary issued pursuant to this
clause (k);
(l) Indebtedness arising by reason of the recharacterization of a
sale of accounts receivable to an Accounts Receivable Subsidiary; and
(m) Indebtedness of the Company or any Restricted Subsidiary in
addition to that permitted to be incurred pursuant to clauses (a) through
(l) above in an aggregate principal amount not in excess of $30,000,000 at
any time outstanding.
"Permitted Investment" means any of the following:
(a) Investments in Cash Equivalents; provided that the term "with a
maturity of 180 days or less" in clauses (a), (b) and (c) of the
definition of "Cash Equivalents" is changed to "with a maturity of one
year or less" for the purposes of this definition of "Permitted
Investments" only;
(b) Investments in the Company or any Restricted Subsidiary;
(c) Investments by the Company or any Restricted Subsidiary in
another Person if, as a result of such Investment, (i) such other Person becomes
a Restricted Subsidiary or (ii) such other Person is merged or consolidated with
or into, or transfers or conveys all or substantially all of its assets to, the
Company or a Restricted Subsidiary;
20
(d) Investments in the form of intercompany Indebtedness to the
extent permitted under clauses (c) and (d) of the definition of "Permitted
Indebtedness;"
(e) Investments in existence on the Issue Date;
(f) Investments in the Pledged Securities to the extent required by
the Pledge Agreement;
(g) Investments in an amount not to exceed $1,000,000 at any one
time outstanding;
(h) Investments in an aggregate amount not to exceed the sum of (1)
Invested Capital, (2) the Fair Market Value of Qualified Capital Stock of the
Company, Redeemable Capital Stock of the Company, or Indebtedness of the Company
convertible into Qualified Capital Stock of the Company, in the latter two cases
upon such redemption or conversion thereof into Qualified Capital Stock of the
Company, issued by the Company or any Restricted Subsidiary of the Company as
consideration for any such Investments made pursuant to this clause (h), and (3)
in the case of the disposition or repayment of any Investment made pursuant to
this clause (h) after the Issue Date (including by redesignation of an
Unrestricted Subsidiary of the Company to a Restricted Subsidiary of the
Company), an amount equal to the lesser of the return of capital with respect to
such Investment and the initial amount of such Investment, in either case, less
the cost of the disposition of such Investment; provided, however, that the
amount of any Permitted Investments under this clause (h) shall be excluded from
the computation of the amount of any Restricted Payment under Section 1012;
(i) Investments in trade receivables, prepaid expenses, negotiable
instruments held for collection and lease, utility and worker's compensation,
performance and other similar deposits or escrow;
(j) Loans, advances and extensions of credit to employees made in
the ordinary course of business of the Company not in excess of $500,000 in any
fiscal year;
(k) Bonds, notes, debentures or other securities received as a
result of Asset Sales permitted under Section 1017;
(l) Endorsements for collection or deposit in the ordinary course of
business by such Person of bank drafts and similar negotiable instruments of
such other person received as payment for ordinary course of business trade
receivables;
(m) Investments deemed to have been made as a result of the
acquisition of a Person that at the time of such acquisition held instruments
constituting Investments that were not acquired in contemplation of, or in
connection with, the acquisition of such Person;
21
(n) Investments in or acquisitions of Capital Stock, indebtedness,
securities or other property of Persons (other than Affiliates of the Company)
received by the Company or any of its Restricted Subsidiaries in the bankruptcy
or reorganization of or by such Person or any exchange of such Investment with
the issuer thereof or taken in settlement of or other resolution of claim or
disputes, and, in each case, extensions, modifications and renewals thereof;
(o) Investments in any Person to which Telecommunications Assets
used in an Initial System have been transferred and which person has provided to
the Company or a Restricted Subsidiary the right to use such assets pursuant to
an Incumbent Agreement; provided that, in the good faith determination of the
Board of Directors, the present value of the future payments expected to be
received by the Company in respect of any such Investment plus the Fair Market
Value of any capital stock or other securities received in connection therewith
shall be at least equal to the Fair Market Value of such Investment; and
(p) Investments in one or more Permitted Telecommunications Joint
Ventures; provided that the total original cost of all such Permitted
Telecommunications Joint Ventures plus the cost or Fair Market Value, as
applicable, of all additions thereto less the sum of all amounts received as
returns thereon shall not exceed $20,000,000.
"Permitted Liens" means: (a) Liens existing on the Issue Date;
(b) Liens on any property or assets of a Restricted Subsidiary
granted in favor of the Company or any Restricted Subsidiary;
(c) Liens on any property or assets of the Company or any Restricted
Subsidiary securing the Notes or any Guarantees thereof;
(d) any interest or title of a lessor under any Capitalized Lease
Obligation or operating lease permitted by this Indenture;
(e) Liens securing Indebtedness incurred under clauses (g), (j) or
(m) of the definition of "Permitted Indebtedness";
(f) statutory Liens of landlords and carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen or other like Liens arising in the
ordinary course of business of the Company or any Restricted Subsidiary and with
respect to amounts not yet delinquent or being contested in good faith by
appropriate proceeding, if a reserve or other appropriate provision, if any, as
required in conformity with GAAP shall have been made therefor;
(g) Liens for taxes, assessments, government charges or claims that
are being contested in good faith by appropriate proceedings promptly instituted
and diligently
22
conducted and if a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor;
(h) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance bonds, escrows and other obligations of a like
nature incurred in the ordinary course of business (other than contracts for the
payment of money);
(i) easements, rights-of-way, restrictions and other similar charges
or encumbrances not interfering in any material respect with the business of the
Company or any Restricted Subsidiary incurred in the ordinary course of
business;
(j) Liens arising by reason of any judgment, decree or order of any
court so long as such Lien is adequately bonded and any appropriate legal
proceedings that may have been duly initiated for the review of such judgment,
decree or order shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired;
(k) Liens securing Acquired Indebtedness created prior to (and not
in connection with or in contemplation of) the incurrence of such Indebtedness
by the Company or any Restricted Subsidiary; provided that such Lien does not
extend to any property or assets of the Company or any Restricted Subsidiary
other than the assets acquired in connection with the incurrence of such
Acquired Indebtedness;
(l) Liens securing obligations of the Company under Interest Rate
Agreements or Currency Agreements permitted to be incurred under clause (f) of
the definition of "Permitted Indebtedness" or any collateral for the
Indebtedness to which such Interest Rate Agreements or Currency Agreements
relate;
(m) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security;
(n) Liens securing reimbursement obligations of the Company or any
Restricted Subsidiary with respect to letters of credit that encumber documents
and other property relating to such letters of credit and the products and
proceeds thereof;
(o) Liens arising from purchase money mortgages and purchase money
security interests; provided that (i) the related Indebtedness shall not be
secured by any property or assets of the Company or of any Restricted Subsidiary
other than the property and assets so acquired and (ii) the Lien securing such
Indebtedness shall be created within 60 days of such acquisition;
23
(p) Liens securing the Escrow Account, the Pledged Securities and
the proceeds thereof and the security interest created by the Pledge Agreement;
(q) any extension, renewal or replacement, in whole or in part, of
any Lien described in the foregoing clauses (a) through (o); provided that any
such extension, renewal or replacement shall be no more restrictive in any
material respect than the Lien so extended, renewed or replaced and shall not
extend to any additional property or assets;
(r) Liens with respect to the equipment and related assets of the
Company installed on its network in favor of Persons that have licensed, leased,
transferred or granted to the Company or any Restricted Subsidiary a right to
use Telecommunications Assets or financed the purchase of Telecommunications
Assets or securing the obligations of the Company or such Restricted Subsidiary
under an Incumbent Agreement; provided that such Liens will (1) be created on
terms that the Company reasonably believes to be no less favorable to the
Company than Liens granted under clause (e) of this definition and (2) not
secure any Indebtedness in excess of the Fair Market Value of the equipment and
assets so secured;
(s) Liens relating to revenues of the Company or any Restricted
Subsidiary arising as a result of obligations under an Incumbent Agreement; and
(t) Liens on the property or assets or Capital Stock of Accounts
Receivable Subsidiaries and Liens arising out of any sale of Accounts Receivable
in the ordinary course of business (including in connection with a financing
transaction) to or by an Accounts Receivable Subsidiary or to Persons that are
not Affiliates of the Company.
"Permitted Telecommunications Asset Sale" means any transfer,
conveyance, sale, lease or other disposition of a capital asset that is a
Telecommunications Asset, the proceeds of which are treated as revenues
(including deferred revenues) by the Company in accordance with GAAP.
"Permitted Telecommunications Joint Venture" means a corporation,
partnership or other entity engaged in one or more Telecommunications Businesses
in which the Company owns, directly or indirectly, an equity interest.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
business trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Pledge Agreement" means the Pledge Agreement dated as of the Issue
Date, by and between the Trustee and the Company, governing the disbursement of
funds from the Escrow Account.
24
"Pledged Securities" means the securities purchased by the Company
with a portion of the net proceeds from the initial offer and sale by the
Company of the Initial Notes, which shall consist of Government Securities, to
be deposited in the Escrow Account.
"Predecessor Note" of any particular Note means 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 306 in exchange for a mutilated
security 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, rights or other equivalents (however
designated, whether voting or non-voting) of such Person's preferred or
preference stock, whether now outstanding or issued after the Issue Date,
including, without limitation, all series and classes of such preferred or
preference stock of such Person.
"Public Equity Offering" means an offer and sale of Common Stock
(which is Qualified Capital Stock) of the Company pursuant to a registration
statement that has been declared effective by the Commission pursuant to the
Securities Act (other than a registration statement on Form S-8 or otherwise
relating to equity securities issuable under any employee benefit plan of the
Company) and resulting in Net Cash Proceeds to the Company of not less than
$45,000,000.
"Qualified Capital Stock" means, with respect to any Person, any and
all Capital Stock of such Person other than Redeemable Capital Stock.
"Redeemable Capital Stock" means any class or series of Capital
Stock that, either by its terms, 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 of the Notes or is redeemable at the option of the
holder thereof at any time prior to such final Stated Maturity, or is
convertible into or exchangeable for debt securities at any time prior to such
final Stated Maturity; provided that any Capital Stock that would not otherwise
constitute Redeemable Capital Stock but for provisions giving holders thereof
the right to require such Person to repurchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
Stated Maturity of the Notes shall not constitute Redeemable Capital Stock if
the "asset sale" or "change of control" provisions applicable to such Capital
Stock are no more favorable in any material respect to holders of such Capital
Stock than the provisions contained in Section 1017 and Section 1010 are to
holders of the Notes, and such Capital Stock specifically provides that such
Person will not repurchase or redeem any such Capital Stock pursuant to any such
provision prior to the Company's repurchase of such Notes as are required to be
repurchased pursuant to Section 1017 and Section 1010.
25
"Redemption Date", when used with respect to any Note to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Note to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the April 1 or October 1 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above-designated
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary of the Company other
than an Unrestricted Subsidiary.
"S&P" means Standard and Poor's Ratings Services, a division of
McGraw-Hill, Inc., and its successors.
"Sale-Leaseback Transaction" means any direct or indirect
arrangement, or series of related arrangements, with any Person (other than the
Company or a Restricted Subsidiary) or to which any Person (other than the
Company or a Restricted Subsidiary) is a party, providing for the leasing to the
Company or to a Restricted Subsidiary of any property for an aggregate term
exceeding three years, whether owned by the Company or by any Subsidiary of the
Company at the Issue Date or later acquired, which has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person or to
any other Person from whom funds have been or are to be advanced by such Person
on the security of such property; provided that the transfer by the Company or
any Restricted Subsidiary of Telecommunications Assets to, and the leasing by
the Company or any Restricted Subsidiary of such assets from, a Permitted
Telecommunications Joint Venture shall not constitute a Sale-Leaseback
Transaction.
"Separability Date" shall mean the earliest to occur of: (i) October
5, 1998, (ii) the date on which a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to a registered
exchange offer for the Notes or covering the sale by holders of the Notes is
declared effective under the Securities Act, (iii) the
26
occurrence of an Exercise Event (as defined in the Warrant Agreement, (iv) the
occurrence of an Event of Default (as defined herein), or (v) such date as may
be determined by Merrill Lynch, Pierce, Fenner & Smith Incorporated in its sole
discretion and specified to the Company, the Trustee and the Warrant Agent in
writing. The separation of the Warrants and the Notes is herein referred to as
the "Separation."
"Shelf Registration Statement" means the Shelf Registration as
defined in the Notes Registration Rights Agreement.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries, (ii) as of
the end of such fiscal year, was the owner of more than 10% of the consolidated
assets of the Company and its Restricted Subsidiaries, or (iii) owns one or more
FCC licenses the aggregate cost or Fair Market Value of which represents 5% or
more of the net asset value of the Company and its Restricted Subsidiaries on a
consolidated basis as of the end of such fiscal year, in the case of (i), (ii)
or (iii) as set forth on the most recently available consolidated financial
statements of the Company for such fiscal year.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"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.
"Subsidiary" means any Person a majority of the equity ownership or
Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries or by the Company and one or more
other Subsidiaries.
"Telecommunications Assets" means, with respect to any Person,
assets (including, without limitation, rights of way, trademarks and licenses)
other than current assets that are utilized by such Person, directly or
indirectly, for the design, development, construction, installation, integration
or provision of the Company's network, including, without limitation, any
businesses or services in which the Company is currently engaged and including
any computer systems used in a Telecommunications Business. Telecommunications
Assets shall also include 66 2/3% of the Voting Stock of another Person,
provided that substantially all of the assets of such other Person consist of
Telecommunications Assets, and provided further such Voting Stock shall be held
by the Company or a Restricted Subsidiary, such other Person either is, or
immediately following the relevant transaction shall become, a
27
Restricted Subsidiary of the Company pursuant to this Indenture or a Permitted
Telecommunications Joint Venture subject to the limitations set forth under
clause (p) of the definition of "Permitted Investment." The determination of
what constitutes Telecommunications Assets shall be made by the Board of
Directors and evidenced by a Board Resolution delivered to the Trustee.
"Telecommunications Business" means, the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through owned or leased transmission facilities, (ii)
constructing, creating, developing, acquiring or marketing Telecommunication
Assets or other communications related network equipment, software and other
devices for use in a telecommunications business or (iii) evaluating,
participating or pursuing any other activity or opportunity that is primarily
related to those identified in clause (i) or (ii) above; provided that the
determination of what constitutes a Telecommunications Business shall be made in
good faith by the board of directors of the Company.
"Telecommunications Indebtedness" means Indebtedness of the Company
or any Restricted Subsidiary incurred at any time within 315 days of, and for
the purpose of financing all or any part of the cost of, the construction,
expansion, installation, acquisition or improvement by the Company or any
Restricted Subsidiary of any new Telecommunications Assets; provided that the
proceeds of such Indebtedness are expended for such purposes within such 315-day
period; and provided further that the Net Cash Proceeds from the issuance of
such Indebtedness does not exceed, as of the date of incurrence thereof, 100% of
the lesser of the cost or Fair Market Value of such Telecommunications Assets;
provided further that, to the extent an Incumbent Agreement is characterized as
a Capitalized Lease Obligation, it shall be considered Telecommunications
Indebtedness.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force at the date as of which this Indenture was executed, except as
provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Subsidiary" means (a) any Subsidiary that at the time
of determination shall be an Unrestricted Subsidiary (as designated by the Board
of Directors as provided below) and (b) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary so
long as (i) neither the Company nor any other Subsidiary is directly or
indirectly liable for any Indebtedness of such Subsidiary, (ii) no default with
respect to any Indebtedness of such Subsidiary would permit (upon notice, lapse
of time or otherwise) any holder of any other Indebtedness of the Company or any
Restricted Subsidiary to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its Stated Maturity,
(iii) any Investment in such Subsidiary made as a
28
result of designating such Subsidiary an Unrestricted Subsidiary will not
violate the provisions of Section 1012, (iv) neither the Company nor any
Restricted Subsidiary has a contract, agreement, arrangement, understanding or
obligation of any kind, whether written or oral, with such Subsidiary other than
those that might be obtained at the time from persons who are not Affiliates of
the Company, and (v) neither the Company nor any other Subsidiary has any
obligation (1) to subscribe for additional shares of Capital Stock or other
equity interest in such Subsidiary, or (2) to maintain or preserve such
Subsidiary's financial condition or to cause such Subsidiary to achieve certain
levels of operating results. Any such designation by the board of directors of
the Company shall be evidenced to the Trustee by filing a board resolution with
the Trustee giving effect to such designation. The Board of Directors may
designate any Unrestricted Subsidiary as a Restricted Subsidiary if, immediately
after giving effect to such designation, there would be no Default or Event of
Default under this Indenture and the Company could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to Section 1011.
"Vendor Credit Facility" means, collectively, (i) the revolving
credit facility to be entered into by and among the Company, a finance
subsidiary of the Company and NEC Industries, Inc. (or any of its affiliates,
including NEC Corporation and NEC America, Inc.), substantially in the form
outlined by the commitment letter dated October 14, 1997; (ii) the revolving
credit facility to be entered into by and among the Company, a finance
subsidiary of the Company and Andrew Corporation (or its affiliates),
substantially in the form outlined by the commitment letter dated December 8,
1997; and (iii) the takeout credit facility substantially in the form of the
Commitment Letters dated October 7, 1997 and October 8, 1997, among the Company,
a finance subsidiary of the Company and each of the financial institutions party
thereto.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Voting Stock" means, with respect to any Person, 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, stock of any other class or classes shall have, or might
have, voting power by reason of the happening of any contingency).
"Wholly Owned" means, with respect to the Subsidiary of any Person,
the ownership of all of the outstanding Capital Stock of such Subsidiary (other
than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) by such Person or one or more Wholly Owned
Subsidiaries of such Person.
SECTION 102. Compliance Certificates and Opinions.
29
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture (including any covenant compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1008(a)) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by,
30
an officer or officers of the Company, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that the Trustee deems sufficient.
(c) The principal amount and serial numbers of Notes held by any
Person, and the date of holding the same, shall be proved by the Note Register.
(d) If the Company shall solicit from the Holders of Notes any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than
31
the date such solicitation is completed. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Notes shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.
SECTION 105. Notices, etc., to Trustee, Company
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee
by any Holder or by the Company shall be sufficient for every purpose hereunder
if made, given, furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Trust Administration Division, or
(2) the Company by the Trustee or by any Holder shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to the Company addressed to it at the
address of its principal office, Attention: Corporate Secretary, specified in
the first paragraph of this Indenture, or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders by
the Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at its address as it
appears in the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice. Where this Indenture provides for
32
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
SECTION 107. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause.
In case any provision in this Indenture or in 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.
SECTION 110. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent, any Notes
Registrar and their successors hereunder, the Holders any benefit or any legal
or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Upon the issuance of Exchange
Notes, if any, or the effectiveness of the Shelf Registration Statement, this
Indenture shall be subject to the provisions of the Trust Indenture Act that are
required to be part of this Indenture and shall, to the extent applicable, be
governed by such provisions.
33
SECTION 112. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity or Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of principal (or premium, if any) or interest need not be made on such date, but
may be made on the next succeeding Business Day with the same force and effect
as if made on the Interest Payment Date, Redemption Date or sinking fund payment
date, or at the Stated Maturity or Maturity; provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption
Date, Stated Maturity or Maturity, as the case may be.
ARTICLE TWO
NOTE FORMS
SECTION 201. Forms Generally.
The Initial Notes shall be known and designated as the "12 1/4%
Senior Notes due 2008" of the Company and the Exchange Notes shall be known and
designated as the "12 1/4% Series B Senior Notes due 2008" of the Company. The
Notes and the Trustee's certificate of authentication shall be in substantially
the forms set forth in this Article, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
The definitive Notes shall be printed, typewritten, photocopied,
lithographed or engraved on steel-engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing such
Notes, as evidenced by their execution of such Notes.
34
Initial Notes offered and sold to qualified institutional buyers
("Qualified Institutional Buyers" or "QIBs") in reliance on Rule 144A under the
Securities Act shall contain each of the legends set forth in Section 205 and
shall be issued in the form of one or more permanent global Notes (the "Rule
144A Global Notes"), registered in the name of the Depositary or the nominee of
the Depositary, 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 Rule 144A Global Notes 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.
Initial Notes offered and sold in offshore transactions in reliance
on Regulation S under the Securities Act shall be issued initially in the form
of a single permanent global Note (the "Offshore Global Note"), registered in
the name of the Depositary or the nominee of the Depositary, 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 Offshore Global Note may from time to time be increased or
decreased by adjustments made in the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
Initial Notes issued pursuant to Section 305 in exchange for or upon
transfer of beneficial interests in the U.S. Global Note or the Offshore Global
Note may be in the form of either (i) U.S. permanent certificated Notes (the
"U.S. Physical Notes") or (ii) offshore permanent certificated Notes (the
"Offshore Physical Notes") containing the Private Placement Legend (as defined
in Section 205) as set forth in Section 205 until such time as the conditions
set forth in Section 205 are satisfied, respectively, as provided in Section
312.
The Offshore Physical Notes and the U.S. Physical Notes are
sometimes collectively referred to herein as the "Physical Notes". The U.S.
Global Note and the Offshore Global Note are sometimes collectively referred to
herein as the "Global Notes".
The Exchange Notes shall be issued in substantially the form set
forth in Sections 202 and 203.
35
SECTION 202. Form of Face of Note.
PATHNET, INC.
12 1/4% Senior Note due 2008
[CUSIP] ______________
[ISIN] ______________
No. __________ $________
Pathnet, Inc., a Delaware corporation (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ____________________
or registered assigns, the principal sum of ____________________ Dollars on
April 15, 2008, at the office or agency of the Company referred to below, and to
pay interest thereon on October 15, 1998 and semi-annually thereafter, on April
15 and October 15 in each year, from April 8, 1998, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, at
the rate of 12 1/4% per annum, until the principal hereof is paid or duly
provided for, and (to the extent lawful) to pay on demand interest on any
overdue interest at the rate borne by the Notes from the date on which such
overdue interest becomes payable to the date payment of such interest has been
made or duly provided for. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date, as provided in such Indenture, shall
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 the April 1 or October 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. This Note
has been issued with original issue discount for U.S. federal income tax
purposes.
36
The following information is supplied for purposes of Sections 1273 and 1275 of
the Internal Revenue Code:
Issue Date: April 8, 1998
Issue Price: $988.29
Original issue discount under
Section 1273 of the Internal
Revenue Code (for each $1,000
principal amount): $11.71
Yield Maturity 12.46%
Any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date, and such
defaulted interest, and (to the extent lawful) interest on such defaulted
interest at the rate borne by the Notes, 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 whereof 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 said Indenture.
Payment of the principal of (and premium, if any, on) and interest on this Note
will be made to the Depositary or its nominee, as the case may be, as the
registered owner thereof, 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 (i) by its check mailed to the address of the Person
entitled thereto as such address shall appear on the Note Register or (ii) by
wire transfer to an account maintained by the payee located in the United
States.
The Holder of this Note is entitled to the benefits of the Notes
Registration Rights Agreement, dated as of April 8, 1998 (the "Notes
Registration Rights Agreement"), between the Company and the Initial Purchasers
named therein. In the event that either (i) the Company fails to file with the
Commission the Exchange Offer Registration Statement required by the Notes
Registration Rights Agreement on or before the 60th day following the Issue
Date, (ii) the Exchange Offer Registration Statement is not declared effective
by the Commission on or prior to the 150th day following the Issue Date, (iii)
the Exchange Offer has not been consummated or, if required, a Shelf
Registration Statement with respect to the Notes is not declared effective on or
prior to the 180th day following the Issue Date or (iv) the Exchange Offer
Registration Statement or the Shelf Registration Statement is declared effective
but thereafter ceases to be effective or usable except under certain
circumstances (each event referred to in clauses (i) through (iv) above, a
"Registration Default"), additional
37
cash interest ("Liquidated Damages") shall accrue to each Holder of the Notes
commencing upon the occurrence of such Registration Default in an amount equal
to 0.50% per annum of the principal amount of Notes held by such Holder. The
amount of Liquidated Damages will increase by an additional 0.50% per annum of
the principal amount of Notes with respect to each subsequent 90-day period (or
portion thereof) until all Registration Defaults have been cured, up to a
maximum rate of Liquidated Damages of 1.50% per annum of the principal amount of
Notes. All accrued Liquidated Damages will be paid to Holders by the Company in
the same manner as interest is paid pursuant to the Indenture. Following the
cure of all Registration Defaults, the accrual of Liquidated Damages with
respect to such Transfer Restricted Notes will cease.*
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,
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.
Dated: PATHNET, INC.
By
-------------------------------
Attest:
- ----------------------------------
Authorized Signature
SECTION 203. Form of Reverse of Note.
This Note is one of a duly authorized issue of securities of the
Company designated as its 12 1/4% Senior Notes due 2008 (herein called the
"Notes"), limited (except as otherwise provided in the Indenture) in aggregate
principal amount to $350,000,000, which may be issued under an indenture dated
as of April 8, 1998 (herein called the "Indenture")
- ----------
* Paragraph to be included in Initial Notes only.
38
between the Company and The Bank of New York, 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.
The Notes are subject to redemption upon not less than 30 nor more
than 60 days notice, at any time after April 15, 2003 as a whole or in part, at
the election of the Company, at a Redemption Price (expressed as percentages of
the principal amount) set forth below if redeemed during the 12-month period
beginning April 15, of the years indicated (subject to the right of Holders of
record on the relevant Regular Record Dates to receive interest due on an
interest payment date):
Redemption
Year Price
---- ----------
2003 106.125%
2004 104.083%
2005 102.042%
2006 and thereafter 100.00%
together in the case of any such redemption with accrued interest, if any, to
the Redemption Date, all as provided in the Indenture.
Notwithstanding the foregoing, at any time on or prior to April 15,
2001, the Company may redeem within 60 days of one or more Public Equity
Offerings up to 35% of the aggregate principal amount of the Notes issued on the
Issue Date at a redemption price equal to 112.25% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the Redemption Date (subject to the right of Holders of record on the
relevant Regular Record Date to receive interest due on an Interest Payment
Date) with the Net Cash Proceeds of one or more Public Equity Offerings;
provided that at least 65% of the principal amount of the Notes issued on the
Issue Date remain Outstanding.
If less than all the Notes are to be redeemed, the Trustee will
select the particular Notes to be redeemed not more than 60 days prior to the
redemption date by such method as the Trustee deems fair and appropriate;
provided that no such partial redemption will reduce the principal amount of a
Note not redeemed to less than $1,000. Notice of redemption will be mailed,
first-class postage prepaid, at least 30 but not more than 60 days before the
redemption date to each holder of Notes to be redeemed at its registered
address.
39
On and after the date of redemption, interest will cease to accrue on Notes or
portions thereof called for redemption and accepted for payment
Upon the occurrence of a Change of Control, the Holder of this Note
may require the Company, subject to certain limitations provided in Section 1010
of the Indenture and otherwise in this Indenture, to repurchase this Note at a
purchase price in cash in an amount equal to 101% of the principal amount
thereof, plus accrued and unpaid interest thereon to the Change of Control
Purchase Date (as defined in Section 1010 of the Indenture).
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 record of such Notes, or one or more Predecessor Notes, at the close
of business on the relevant 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.
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.
If an Event of Default shall occur and be continuing, the principal
of all the Notes may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on this Note and (b) certain restrictive
covenants and the related Defaults and Events of Default, upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Note.
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 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
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 herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note.
40
No reference herein to the Indenture and no provision 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 (and premium and
Liquidated Damages, if any) and interest on this Note at the times, place, and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registerable on the Note
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 City of New York, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Note 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.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to 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 be overdue, and neither the
Company, the Trustee nor any agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
SECTION 204. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
41
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
Dated: ____________________
This is one of the Notes referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK, Trustee
By
----------------------------------
Authorized Signatory
SECTION 205. Restrictive Legends.
Unless and until (i) an Initial Note is sold pursuant to an
effective Shelf Registration Statement or (ii) an Initial Note is exchanged for
an Exchange Note in an Exchange Offer pursuant to an effective Exchange Offer
Registration Statement, in either case pursuant to the Notes Registration Rights
Agreement, (A) each U.S. Global Note and U.S. Physical Note shall bear the
following legend set forth below (the "Private Placement Legend") on the face
thereof and (B) the Offshore Global Note shall bear the Private Placement Legend
on the face thereof until (x) the later of the 40th day after the Issue Date and
the Separability Date (the "Offshore Note Exchange Date") and (y) receipt by the
Company and the Trustee of a certificate substantially in the form of Exhibit A:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR
OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. HEDGING TRANSACTIONS
INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS SUCH TRANSACTIONS ARE
CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING ITS NOTE
IN AN "OFFSHORE TRANSACTION" PURSUANT TO REGULATION S UNDER THE SECURITIES
ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS
(OR SUCH SHORTER PERIOD AS PERMITTED BY RULE 144(K) (OR ANY SUCCESSOR
PROVISION THEREOF) UNDER THE SECURITIES ACT) AFTER THE LATER OF THE
ORIGINAL ISSUE
42
DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE LAST DAY ON
WHICH THE COMPANY OR AN AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY OR ANY PREDECESSOR OF THIS SECURITY AND (Y) SUCH LATER DATE, IF
ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION
TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT
(A) TO PATHNET, INC. OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE NOTES 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 TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO
RULE 904 OF REGULATION S OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES
THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE
COMPANY AND THE TRUSTEE SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM. IN CONNECTION WITH ANY TRANSFER OF THESE SECURITIES WITHIN THE TIME
PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
43
Each Global Note, whether or not an Initial Note, shall also bear
the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED, BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 311 AND 312 OF THE INDENTURE.
Each Note issued prior to the Separability Date shall bear the
following legend (the "Unit Legend") on the face thereof:
THE NOTES EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS PART OF AN
ISSUANCE OF UNITS, EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL AMOUNT OF
THE 12 1/4% SENIOR NOTES DUE 2008 OF PATHNET, INC. (THE "NOTES") AND ONE
WARRANT (A "WARRANT"), EACH INITIALLY ENTITLING THE HOLDER THEREOF TO
PURCHASE 1.1 SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE (THE
"COMMON STOCK"), OF PATHNET, INC. PRIOR TO THE CLOSE OF BUSINESS UPON THE
EARLIEST TO OCCUR OF (i) OCTOBER 5, 1998; (ii) THE DATE ON WHICH A
REGISTRATION STATEMENT WITH RESPECT TO AN EXCHANGE OFFER FOR THE NOTES OR
COVERING THE SALE BY HOLDERS OF THE NOTES IS DECLARED EFFECTIVE UNDER THE
SECURITIES ACT OF 1933, AS AMENDED; (iii) THE OCCURRENCE OF AN EXERCISE
EVENT (AS DEFINED IN THE WARRANT AGREEMENT); (iv) THE OCCURRENCE OF AN
EVENT OF DEFAULT (AS DEFINED IN THE INDENTURE); OR (v) SUCH EARLIER DATE
44
AS DETERMINED BY MERRILL LYNCH (AS DEFINED IN THE WARRANT AGREEMENT) IN
ITS SOLE DISCRETION, THE NOTES EVIDENCED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR
EXCHANGED ONLY TOGETHER WITH, THE WARRANTS.
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount of Notes which may be authenticated
and delivered under this Indenture is limited to $350,000,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to the Exchange Offer or Section 304,
305, 306, 906, 1010, 1017 or 1108.
The Stated Maturity of the Notes shall be April 15, 2008, and they
shall bear interest at the rate of 12 1/4% per annum from April 8, 1998, or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, payable on October 15, 1998 and semi-annually thereafter on April
15 and October 15 of each year and at said Stated Maturity, until the principal
thereof is paid or duly provided for.
The principal of (and premium and Liquidated Damages, if any) and
interest on the Notes shall be payable to the Depositary or its nominee, as the
case may be, as the registered owner thereof provided, however, that, at the
option of the Company, interest may be paid (i) by its check mailed to addresses
of the Persons entitled thereto as such addresses shall appear on the Note
Register or (ii) by wire transfer to an account maintained by the payee located
in the United States.
The Notes shall be redeemable as provided in Article Eleven.
SECTION 302. Denominations.
The Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Notes shall be executed on behalf of the Company by its
Chairman, its CEO, its President or any executive vice president or vice
president, under its corporate seal reproduced thereon and attested by its
Secretary or an assistant secretary. The signature of
45
any of these officers on the Notes may be manual or facsimile signatures of the
present or any future such authorized officer and may be imprinted or otherwise
reproduced on the Notes.
Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
On Company Order, the Trustee shall manually authenticate for
original issue Initial Notes in an aggregate principal amount not to exceed
$350,000,000. On Company Order, the Trustee shall authenticate for original
issue Exchange Notes in an aggregate principal amount at Maturity not to exceed
$350,000,000; provided that such Exchange Notes shall be issuable only upon the
valid surrender for cancellation of Initial Notes of a like aggregate principal
amount at Maturity in accordance with an Exchange Offer pursuant to the Notes
Registration Rights Agreement. In each case, the Trustee shall receive an
Officers' Certificate and an Opinion of Counsel of the Company in connection
with such authentication of Notes. Such order shall specify the amount of Notes
to be authenticated and the date on which the original issue of Notes is to be
authenticated.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture.
In case the Company, pursuant to Article Eight, shall be
consolidated or merged with or into any other Person or shall convey, transfer,
lease or otherwise dispose of its properties and assets substantially as an
entirety to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Company shall have
been merged, or the Person which shall have received a conveyance, transfer,
lease or other disposition as aforesaid, shall have executed an indenture
supplemental hereto with the Trustee pursuant to Article Eight, any of the Notes
authenticated or delivered prior to such consolidation, merger, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other Notes executed in the name of the
successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Notes surrendered
for such exchange and of like principal amount; and the Trustee, upon Company
Request of the successor Person, shall authenticate and deliver Notes as
specified in such request for the purpose of such exchange. If Notes shall at
any time be authenticated and delivered in any new name of a successor Person
pursuant to this Section 303 in exchange or substitution for
46
or upon registration of transfer of any Notes, such successor Person, at the
option of the Holders but without expense to them, shall provide for the
exchange of all Notes at the time Outstanding for Notes authenticated and
delivered in such new name.
SECTION 304. Temporary Notes.
Pending the preparation of definitive Notes, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Notes which are printed, lithographed, typewritten, photocopied or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Notes may determine, as conclusively evidenced by their
execution of such Notes.
If temporary Notes are issued, the Company will cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive Notes
upon surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 1002, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute, and the Trustee shall authenticate and deliver in
exchange therefor, a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Note Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. The Note Register shall be in written form
or any other form capable of being converted into written form within a
reasonable time. At all reasonable times, the Note Register shall be open to
inspection by the Trustee. The Trustee is hereby initially appointed as security
registrar (the "Note Registrar") for the purpose of registering Notes and
transfers of Notes as herein provided.
Upon surrender for registration of transfer of any Note at the
office or agency of the Company designated pursuant to Section 1002, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Notes of any
authorized denomination or denominations of a like aggregate principal amount.
47
At the option of the Holder, Notes may be exchanged for other Notes
of any authorized denomination and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes which the Holder making the
exchange is entitled to receive; provided that no exchange of Initial Notes for
Exchange Notes shall occur until an Exchange Offer Registration Statement shall
have been declared effective by the Commission, the Trustee shall have received
an Officer's Certificate confirming that the Exchange Offer Registration
Statement has been declared effective by the Commission and the Initial Notes to
be exchanged for the Exchange Notes shall be cancelled by the Trustee.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Note Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Note Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
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 that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 304, 906, 1010, 1017 or 1108 not involving any
transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the selection of Notes to be redeemed under Section 1104
and ending at the close of business on the day of such mailing of the relevant
notice of redemption, or (ii) to register the transfer of or exchange any Note
so selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes.
If (i) any mutilated Note is surrendered to the Trustee, or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, and there is delivered to the Company
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Note has been acquired by a bona fide purchaser, the Company
shall execute and upon Company Order the Trustee shall authenticate and deliver,
48
in exchange for any such mutilated Note or in lieu of any such destroyed, lost
or stolen Note, a new Note of like tenor and principal amount, bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Note which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered at the
close of business on the Regular Record Date for such interest at the office or
agency of the Company maintained for such purpose pursuant to Section 1002;
provided, however, that each installment of interest may at the Company's option
be paid by (i) mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section 308, to the address of
such Person as it appears in the Note Register or (ii) transfer to an account
located in the United States maintained by the payee.
Any interest on any Note which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date shall forthwith cease to
be payable to the Holder on the Regular Record Date by virtue of having been
such Holder, and such defaulted interest and (to the extent lawful) interest on
such defaulted interest at the rate borne by the Notes (such defaulted interest
and interest thereon herein collectively called "Defaulted Interest") may be
paid by the Company, at its election in each case, as provided in clause (1) or
(2) below:
49
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest
as in this clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date, and in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be given in the
manner provided for in Section 106, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so given, such
Defaulted Interest shall be paid to the Persons in whose names the Notes
(or their respective Predecessor Notes) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company
to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 308. Persons Deemed Owners.
Prior to the due presentment of a 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 such Note is registered as the owner of such Note for
the purpose of receiving payment of principal of (and premium and Liquidated
Damages, if any) and (subject to Sections 305 and 307) interest on such Note and
for all other purposes whatsoever, whether or
50
not such Note be overdue, and none of the Company, the Trustee or any agent of
the Company or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Notes surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold, and all Notes so delivered
shall be promptly cancelled by the Trustee. If the Company shall so acquire any
of the Notes, however, 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. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section, except as expressly permitted by this Indenture. All cancelled
Notes held by the Trustee shall be disposed of by the Trustee in accordance with
its customary procedures and certification of their disposal delivered to the
Company unless by Company Order the Company shall direct that cancelled Notes be
returned to it.
SECTION 310. Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months.
SECTION 311. Book-Entry Provisions for Global Notes.
(a) Each Global Note initially shall (i) be registered in the name
of the Depositary for such Global Notes or the nominee of such Depositary, (ii)
be delivered to the Trustee as custodian for such Depositary and (iii) bear
legends as set forth in Section 203.
Except as provided in Section 311(b), owners of beneficial interests
in the Global Notes will not have Notes registered in their names, will not
receive physical delivery of Notes in certificated form and will not be
considered the registered owner or Holder thereof under this Indenture for any
purpose.
Members of, or Participants in, the Depositary shall have no rights
under this Indenture with respect to any 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
51
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Participants, the
operation of customary practices governing the exercise of the rights of a
beneficial owner of any Note. The registered Holder of a Global Note may grant
proxies and otherwise authorize any person, including Participants and persons
that may hold interests through Participants, to take any action which a Holder
is entitled to take under this Indenture or the Notes.
(b) Interests of beneficial owners in a Global Note may be
transferred in accordance with the applicable rules and procedures of the
Depositary and the provisions of Section 312. Transfers of a Global Note shall
be limited to transfers of such Global Note in whole, but not in part, to the
Depositary, a nominee of the Depositary, its successors or their respective
nominees, except (i) as otherwise set forth in Section 312 and (ii) U.S.
Physical Notes or Offshore Physical Notes shall be transferred to beneficial
owners in exchange for their beneficial interests in the U.S. Global Note or the
Offshore Global Note, as the case may be, if the Depositary (1) notifies the
Company that it is unwilling or unable to continue as depository for the
applicable Global Note and the Company thereupon fails to appoint a successor
depository or (2) has ceased to be a clearing agency registered under the
Exchange Act. In connection with a transfer of an entire Global Note to
beneficial owners pursuant to clause (ii) of this paragraph (b), the applicable
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 the applicable Global Note, an equal aggregate principal
amount of U.S. Physical Notes (in the case of the U.S. Global Note) or Offshore
Physical Notes (in the case of the Offshore Global Note), as the case may be, of
authorized denominations.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a Person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) Any U.S. Physical Note delivered in exchange for an interest in
the U.S. Global Note pursuant to paragraph (b) of this Section shall, unless
such exchange is made on or after (i) an Initial Note is sold pursuant to an
effective Shelf Registration Statement, pursuant to the Notes Registration
Rights Agreement, (ii) an Initial Note is exchanged for an Exchange Note in an
Exchange Offer pursuant to an effective Exchange Offer Registration Statement,
pursuant to the Notes Registration Rights Agreement, or (iii) two years after
the later of the Issue Date and the last date on which the Company or any
affiliate of the Company was the owner of the Initial Note (the "Resale
Restriction Termination Date") evidenced by an opinion of counsel to such Holder
reasonably satisfactory to the Company and except as otherwise provided in
Section 312, bear the Private Placement Legend.
52
SECTION 312. Transfer Provisions.
Unless and until (i) an Initial Note is sold pursuant to an
effective Registration Statement, or (ii) an Initial Note is exchanged for an
Exchange Note in connection with an effective Registration Statement pursuant to
the Notes Registration Rights Agreement, the following provisions shall apply:
(a) General. The provisions of this Section 312 shall apply to all
transfers involving any Physical Note and any beneficial interest in any Global
Note.
(b) Certain Definitions. As used in this Section 312 only,
"delivery" of a certificate by a transferee or transferor means the delivery to
the Note Registrar by such transferee or transferor of the applicable
certificate duly completed; "holding" includes both possession of a Physical
Note and ownership of a beneficial interest in a Global Note, as the context
requires; "transferring" a Global Note means transferring that portion of the
principal amount of the transferor's beneficial interest therein that the
transferor has notified the Note Registrar that it has agreed to transfer; and
"transferring" a Physical Note means transferring that portion of the principal
amount thereof that the transferor has notified the Note Registrar that it has
agreed to transfer.
As used in this Indenture, "Regulation S Certificate" means a
certificate substantially in the form set forth as Exhibit B; "Rule 144A
Certificate" means a certificate substantially in the form set forth as Exhibit
A; and "Non-Registration Opinion and Supporting Evidence" means a written
opinion of counsel reasonably acceptable to the Company to the effect that, and
such other certification or information as the Company may reasonably require to
confirm that, the proposed transfer is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act.
(c) [Intentionally Omitted]
(d) Deemed Delivery of a Rule 144A Certificate in Certain
Circumstances. A Rule 144A Certificate, if not actually delivered, will be
deemed delivered if (i) (A) the transferor advises the Company and the Trustee
in writing that the relevant offer and sale were made in accordance with the
provisions of Rule 144A (or, in the case of a transfer of a Physical Note, the
transferor checks the box provided on the Physical Note to that effect) and (B)
the transferee advises the Company and the Trustee in writing that (x) it and,
if applicable, each account for which it is acting in connection with the
relevant transfer, is a QIB within the meaning of Rule 144A, (y) it is aware
that the transfer of Notes to it is being made in reliance on the exemption from
the provisions of Section 5 of the Securities Act provided by Rule 144A
53
and (z) prior to the proposed date of transfer it has been given the opportunity
to obtain from the Company the information referred to in Rule 144A(d)(4), and
has either declined such opportunity or has received such information (or, in
the case of a transfer of a Physical Note, the transferee signs the
certification provided on the Physical Note to that effect); or (ii) the
transferor holds the U.S. Global Note and is transferring to a transferee that
will take delivery in the form of the U.S. Global Note.
(e) Procedures and Requirements.
1. If the proposed transfer occurs prior to the Offshore Note
Exchange Date, and the proposed transferor holds:
(A) a U.S. Physical Note which is surrendered to the Note Registrar,
and the proposed transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee requests delivery in the form of a U.S. Physical Note,
then the Note Registrar shall (x) register such transfer in the name
of such transferee and record the date thereof in its books and
records, (y) cancel such surrendered U.S. Physical Note and (z)
deliver a new U.S. Physical Note to such transferee duly registered
in the name of such transferee in principal amount equal to the
principal amount being transferred of such surrendered U.S. Physical
Note;
(ii) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through a Participant and requests that
the proposed transferee receive a beneficial interest in the U.S.
Global Note, then the Note Registrar shall (x) cancel such
surrendered U.S. Physical Note, (y) record an increase in the
principal amount of the U.S. Global Note equal to the principal
amount being transferred of such surrendered U.S. Physical Note and
(z) notify the Depositary in accordance with the procedures of the
Depositary that it has effected such transfer; or
(iii) delivers a Regulation S Certificate and the proposed
transferee is or is acting through a Participant and requests that
the proposed transferee receive a beneficial interest in the
Offshore Global Note, then the Note Registrar shall (x) cancel such
surrendered U.S. Physical Note, (y) record an increase in the
principal amount of the Offshore Global Note equal to the principal
amount being transferred of such surrendered U.S. Physical Note and
(z) notify the Depositary in accordance with the procedures of the
Depositary that it has effected such transfer; provided, however,
that until the Offshore Note Exchange
54
Date occurs, beneficial interests in the Offshore Global Note may be
held only in or through accounts maintained at the Depositary by
Euroclear or Cedel (or by Participants acting for the account
thereof), and no person shall be entitled to effect any transfer or
exchange that would result in any such interest being held otherwise
than in or through such an account.
In any of the cases described in this Section 312(e)(1)(A), the Note
Registrar shall deliver to the transferor a new U.S. Physical Note in
principal amount equal to the principal amount not being transferred of
such surrendered U.S. Physical Note, as applicable.
(B) a beneficial interest in the U.S. Global Note, and the proposed
transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee requests delivery in the form of a U.S. Physical Note,
then the Note Registrar shall (w) register such transfer in the name
of such transferee and record the date thereof in its books and
records, (x) record a decrease in the principal amount of the U.S.
Global Note in an amount equal to the beneficial interest therein
being transferred, (y) deliver a new U.S. Physical Note to such
transferee duly registered in the name of such transferee in
principal amount equal to the amount of such decrease and (z) notify
the Depositary in accordance with the procedures of the Depositary
that it has effected such transfer;
(ii) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through a Participant and requests that
the proposed transferee receive a beneficial interest in the U.S.
Global Note, then the transfer shall be effected in accordance with
the procedures of the Depositary therefor; or
(iii) delivers a Regulation S Certificate and the proposed
transferee is or is acting through a Participant and requests that
the proposed transferee receive a beneficial interest in the
Offshore Global Note, then the Note Registrar shall (w) register
such transfer in the name of such transferee and record the date
thereof in its books and records, (x) record a decrease in the
principal amount of the U.S. Global Note in an amount equal to the
beneficial interest therein being transferred, (y) record an
increase in the principal amount of the Offshore Global Note equal
to the amount of such decrease and (z) notify the Depositary in
accordance with the procedures of the Depositary that it has
effected such transfer; provided, however, that until the Offshore
Note Exchange Date occurs, beneficial interests in the Offshore
Global Note may be held only in or through accounts maintained at
the Depositary by Euroclear or Cedel (or by Participants acting for
the account thereof), and no person shall be entitled to effect any
transfer or exchange that would result in any such interest being
held otherwise than in or through such an account.
55
(C) a beneficial interest in the Offshore Global Note, and the
proposed transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee requests delivery in the form of a U.S. Physical Note,
then the Note Registrar shall (w) register such transfer in the name
of such transferee and record the date thereof in its books and
records, (x) record a decrease in the principal amount of the
Offshore Global Note in an amount equal to the beneficial interest
therein being transferred, (y) deliver a new U.S. Physical Note to
such transferee duly registered in the name of such transferee in
principal amount equal to the amount of such decrease and (z) notify
the Depositary in accordance with the procedures of the Depositary
that it has effected such transfer;
(ii) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through a Participant and requests that
the proposed transferee receive a beneficial interest in the U.S.
Global Note, then the Note Registrar shall (x) record a decrease in
the principal amount of the Offshore Global Note in an amount equal
to the beneficial interest therein being transferred, (y) record an
increase in the principal amount of the U.S. Global Note equal to
the amount of such decrease and (z) notify the Depositary in
accordance with the procedures of the Depositary that it has
effected such transfer; or
(iii) delivers a Regulation S Certificate and the proposed
transferee is or is acting through a Participant and requests that
the proposed transferee receive a beneficial interest in the
Offshore Global Note, then the transfer shall be effected in
accordance with the procedures of the Depositary therefor; provided,
however, that until the Offshore Note Exchange Date occurs,
beneficial interests in the Offshore Global Note may be held only in
or through accounts maintained at the Depositary by Euroclear or
Cedel (or by Participants acting for the account thereof), and no
person shall be entitled to effect any transfer or exchange that
would result in any such interest being held otherwise than in or
through such an account.
2. If the proposed transfer occurs on or after the Offshore Note
Exchange Date and the proposed transferor holds:
(A) a U.S. Physical Note which is surrendered to the Note Registrar,
and the proposed transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee requests delivery in
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the form of a U.S. Physical Note, then the procedures set forth in
Section 312(e)(1)(A)(i) shall apply;
(ii) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through a Participant and requests that
the proposed transferee receive a beneficial interest in the U.S.
Global Note, then the procedures set forth in Section
312(e)(1)(A)(ii) shall apply; or
(iii) delivers a Regulation S Certificate, then the Note
Registrar shall cancel such surrendered U.S. Physical Note and at
the direction of the transferee, either:
(x) register such transfer in the name of such
transferee, record the date thereof in its books and records
and deliver a new Offshore Physical Note to such transferee in
principal amount equal to the principal amount being
transferred of such surrendered U.S. Physical Note, or
(y) if the proposed transferee is or is acting through
an Participant, record an increase in the principal amount of
the Offshore Global Note equal to the principal amount being
transferred of such surrendered U.S. Physical Note and notify
the Depositary in accordance with the procedures of the
Depositary that it has effected such transfer.
In any of the cases described in this Section 312(e)(2)(A), the Note
Registrar shall deliver to the transferor a new U.S. Physical Note in
principal amount equal to the principal amount not being transferred of
such surrendered U.S. Physical Note, as applicable.
(B) a beneficial interest in the U.S. Global Note, and the proposed
transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee requests delivery in the form of a U.S. Physical Note,
then the procedures set forth in Section 312(e)(1)(B)(i) shall
apply; or
(ii) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through a Participant and requests that
the proposed transferee receive a beneficial interest in the U.S.
Global Note, then the procedures set forth in Section
312(e)(1)(B)(ii) shall apply; or
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(iii) delivers a Regulation S Certificate, then the Note
Registrar shall (x) record a decrease in the principal amount of the
U.S. Global Note in an amount equal to the beneficial interest
therein being transferred, (y) notify the Depositary in accordance
with the procedures of the Depositary that it has effected such
transfer and (z) at the direction of the transferee, either:
(x) register such transfer in the name of such
transferee, record the date thereof in its books and records
and deliver a new Offshore Physical Note to such transferee in
principal amount equal to the amount of such decrease in the
principal amount of the U.S. Global Note, or
(y) if the proposed transferee is or is acting through a
Participant, record an increase in the principal amount of the
Offshore Global Note equal to the amount of such decrease in
the principal amount of the U.S. Global Note.
(C) an Offshore Physical Note which is surrendered to the Note
Registrar, and the proposed transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through a Participant and requests
delivery in the form of the U.S. Global Note, then the Note
Registrar shall (x) cancel such surrendered Offshore Physical Note,
(y) record an increase in the principal amount of the U.S. Global
Note equal to the principal amount being transferred of such
surrendered Offshore Physical Note and (z) notify the Depositary in
accordance with the procedures of the Depositary that it has
effected such transfer;
(ii) where the proposed transferee is or is acting through a
Participant, requests that the proposed transferee receive a
beneficial interest in the Offshore Global Note, then the Note
Registrar shall (x) cancel such surrendered Offshore Physical Note,
(y) record an increase in the principal amount of the Offshore
Global Note equal to the principal amount being transferred of such
surrendered Offshore Physical Note and (z) notify the Depositary in
accordance with the procedures of the Depositary that it has
effected such transfer; or
(iii) does not make a request covered by Section
312(e)(2)(C)(i) or Section 312(e)(2)(C)(ii), then the Note Registrar
shall (x) register such transfer in the name of such transferee and
record the date thereof in its books and records, (y) cancel such
surrendered Offshore Physical Note and (z) deliver a new Offshore
Physical Note to such transferee duly registered in the name of
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such transferee in principal amount equal to the principal amount
being transferred of such surrendered Offshore Physical Note.
In any of the cases described in this Section 312(e)(2)(C), the Note
Registrar shall deliver to the transferor a new U.S. Physical Note in
principal amount equal to the principal amount not being transferred of
such surrendered U.S. Physical Note, as applicable.
(D) the Offshore Global Note, and the proposed transferee or
transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through a Participant and requests
delivery in the form of the U.S. Global Note, then the Note
Registrar shall (x) record a decrease in the principal amount of the
Offshore Global Note in an amount equal to the beneficial interest
therein being transferred, (y) record an increase in the principal
amount of the U.S. Global Note equal to the amount of such decrease
and (z) notify the Depositary in accordance with the procedures of
the Depositary that it has effected such transfer;
(ii) where the proposed transferee is or is acting through a
Participant, requests that the proposed transferee receive a
beneficial interest in the Offshore Global Note, then the transfer
shall be effected in accordance with the procedures of the
Depositary therefor; or
(iii) does not make a request covered by Section
312(e)(2)(D)(i) or Section 312(e)(2)(D)(ii), then the Note Registrar
shall (w) register such transfer in the name of such transferee and
record the date thereof in its books and records, (x) record a
decrease in the principal amount of the Offshore Global Note in an
amount equal to the beneficial interest therein being transferred,
(y) deliver a new Offshore Physical Note to such transferee duly
registered in the name of such transferee in principal amount equal
to the amount of such decrease and (z) notify the Depositary in
accordance with the procedures of the Depositary that it has
effected such transfer.
(f) Execution, Authentication and Delivery of Physical Notes. In any
case in which the Note Registrar is required to deliver a Physical Note to a
transferee or transferor, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, such Physical Note.
(g) Certain Additional Terms Applicable to Physical Notes. Any
transferee entitled to receive a Physical Note may request that the principal
amount thereof be evidenced
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by one or more Physical Notes in any authorized denomination or denominations
and the Note Registrar shall comply with such request if all other transfer
restrictions are satisfied.
(h) Transfers Not Covered by Section 312(e). The Note Registrar
shall effect and record, upon receipt of a written request from the Company so
to do, a transfer not otherwise permitted by Section 312(e), such recording to
be done in accordance with the otherwise applicable provisions of Section
312(e), upon the furnishing by the proposed transferor or transferee of a
Non-Registration Opinion and Supporting Evidence.
(i) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such 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 Note Registrar shall not register a transfer of any Note unless
such transfer complies with the restrictions with respect thereto set forth in
this Indenture. The Note Registrar shall not be required to determine (but may
rely upon a determination made by the Company) the sufficiency of any such
certifications, legal opinions or other information.
(j) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Note
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 Note Registrar shall deliver only Notes that bear the
Private Placement Legend unless (i) the circumstances exist contemplated by the
fourth paragraph of Section 201 (with respect to an Offshore Physical Note) or
the requested transfer is at least two years after the original issue date of
the Initial Note (with respect to any Physical Note), (ii) there is delivered to
the Note 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 or (iii) such Notes are exchanged for Exchange
Notes pursuant to an Exchange Offer.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture upon Company Request shall cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
the Notes as expressly provided for herein or pursuant hereto), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when
(1) either
(a) all Notes theretofore authenticated and delivered (other
than (i) Notes which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306 and (ii) Notes
for whose payment money has theretofore been deposited in trust with
the Trustee or any Paying Agent or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to the
Trustee for cancellation; or
(b) all Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (b)(i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose an amount sufficient to pay
and discharge the entire Indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation, for principal (and
premium and Liquidated Damages, if any) and interest to the date of
such deposit (in the case of Notes which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case
may be;
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(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 606 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of clause
(1) of this Section, the obligations of the Trustee under Section 402 and the
last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of any interest or Liquidated Damages, if
any, on any Note when it becomes due and payable, and continuance of such
default for a period of 30 days or more (provided that such 30-day grace
period shall not be applicable to the first four interest payments due on
the Notes);
(2) default in the payment of the principal of (or premium, if any,
on) any Note at its Maturity (upon acceleration, optional redemption,
required purchase or otherwise);
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(3) (A) default in the performance, or breach, of any covenant or
agreement of the Company contained in this Indenture (other than a default
in the performance, or breach, of a covenant or agreement which is
specifically dealt with in the immediately preceding clause (1) or (2) or
in clause (B), (C) or (D) of this clause (3)) and continuance of such
default or breach for a period of 30 days after written notice shall have
been given to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in aggregate principal amount of the Notes
then Outstanding; (B) default in the performance or breach of the
provisions of Section 1017; (C) default in the performance or breach of
the provisions of Article Eight; and (D) default in the performance or
breach of Section 1010;
(4) (A) one or more defaults in the payment of principal of or
premium, if any, or interest on Indebtedness of the Company or any
Significant Subsidiary aggregating $7,500,000 or more, when the same
becomes due and payable at the Stated Maturity thereof, and such default
or defaults shall have continued after any applicable grace period and
shall not have been cured or waived or (B) Indebtedness of the Company or
any Significant Subsidiary aggregating $7,500,000 or more shall have been
accelerated or otherwise declared due and payable, or required to be
prepaid or repurchased (other than by regularly scheduled required
prepayment), prior to the Stated Maturity thereof);
(5) one or more final judgments, orders or decrees of any court or
regulatory agency shall be rendered against the Company or any Significant
Subsidiary or their respective properties for the payment of money, either
individually or in an aggregate amount, in excess of $7,500,000 and either
(A) an enforcement proceeding shall have been commenced by any creditor
upon such judgment or order or (B) there shall have been a period of 30
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, was not in effect;
(6) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company or any Significant Subsidiary as
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Significant Subsidiary under the Federal Bankruptcy
Code or any other applicable federal or state law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or any Significant Subsidiary or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 90 consecutive days;
(7) the institution by the Company or any Significant Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by
it to the institution of bankruptcy or insolvency proceedings against it,
or the filing by it of a petition or answer or consent seeking
reorganization or relief under the Federal
63
Bankruptcy Code or any other applicable federal or state law, or the
consent by it to the filing of any such petition or to the appointment of
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or any Significant Subsidiary or of any
substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due; or
(8) the Pledge Agreement ceases to be in full force and effect
before payment in full of the obligations thereunder.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 501(6) or 501(7)) occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than 25% in aggregate principal amount of
the Notes then Outstanding by written notice to the Company (and to the Trustee,
if such notice is given by the Holders) may, and the Trustee upon the written
request of such Holders shall, declare the principal amount, premium if any and
accrued and unpaid interest and Liquidated Damages, if any, on all of the
Outstanding Notes to be due and payable immediately, and upon any such
declaration all such amounts payable in respect of the Notes shall become
immediately due and payable. If an Event of Default specified in Section 501(6)
or 501(7) occurs and is continuing, then the principal of, premium, if any,
accrued interest and Liquidated Damages, 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.
At any time after a declaration of acceleration has been made but
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article, the holders of a majority
in aggregate principal amount of the Outstanding Notes, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay,
(i) all overdue interest on all Outstanding Notes,
(ii) all unpaid principal of (and premium, if any, on) any
Outstanding Notes that have become due otherwise than by such
declaration of acceleration, together with interest on such unpaid
principal at the rate borne by the Notes,
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest and Liquidated Damages, if any, and
overdue principal at the rate borne by the Notes, and
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(iv) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel; and
(b) all Events of Default, other than the non-payment of amounts of
principal of (or premium, if any, on) or interest and Liquidated Damages,
if any, on the Notes that have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
Notwithstanding the preceding paragraph, in the event of a
declaration of acceleration in respect of the Notes because of an Event of
Default specified in Section 501(4) shall have occurred and be continuing, such
declaration of acceleration shall be automatically annulled if the Indebtedness
that is the subject of such Event of Default has been discharged or the holders
thereof have rescinded their declaration of acceleration in respect of such
Indebtedness, and written notice of such discharge or rescission, as the case
may be, shall have been given to the Trustee by the Company and countersigned by
the holders of such Indebtedness or a trustee, fiduciary or agent for such
holders, within 30 days after such declaration of acceleration in respect of the
Notes, and no other Event of Default has occurred during such 30-day period
which has not been cured or waived during such period.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(a) default is made in the payment of any installment of interest
and Liquidated Damages, if any, on any Note when such interest becomes due
and payable and such default continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium,
if any, on) any Note at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee for the benefit
of the Holders of such Notes, the whole amount then due and payable on such
Notes for principal (and premium and Liquidated Damages, if any) and interest,
and interest on any overdue principal (and premium, if any) and, to the extent
that payment of such interest shall be legally enforceable, upon any overdue
installment of interest and Liquidated Damages, if any, at the rate borne by the
Notes, and, in addition thereto, 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.
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If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Notes or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal, premium, if any, or interest or Liquidated
Damages, if any) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606.
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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.
SECTION 505. Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes
may be prosecuted and enforced by the Trustee without the possession of any of
the Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name and
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Notes in respect of which such judgment
has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium or
Liquidated Damages, if any) or interest, upon presentation of the Notes and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
first: To the payment of all amounts due to the Trustee under
Section 606;
second: To the payment of the amounts then due and unpaid for
principal of (and premium and Liquidated Damages, if any) and interest on
the Notes in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Notes for principal (and
premium and Liquidated Damages, if any) and interest, respectively;
third: To the payment of any and all amounts due to the Person or
Persons entitled thereto; and
fourth: The balance, if any, to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Notes shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
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(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate principal amount
of the Outstanding Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to
be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority or more in principal amount of the Outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, Article Thirteen) and in
such Note of the principal of (and premium and Liquidated Damages, if any) and
(subject to Section 307) interest on such Note on the respective Stated
Maturities expressed in such Note (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture 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, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions
68
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of not less than a majority in principal amount 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 that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not
consenting.
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SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Notes may on behalf of the Holders of all the Notes
waive any past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium and Liquidated
Damages, if any) or interest on any Note, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Note.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Stay or Extension 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 wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.
Within five days after the earlier of receipt from the Company of
notice of the occurrence of a Default or Event of Default hereunder or the date
when such occurrence hereunder actually becomes known to a Responsible Officer
of the Trustee, the Trustee shall transmit in the manner and to the extent
provided in TIA Section 313(c), notice of such Default hereunder known to the
Trustee, unless such Default shall have been cured or waived; provided, however,
that, except in the case of a Default in the payment of the principal of (or
premium or Liquidated Damages, if any) or interest on any Note or in the payment
of any
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sinking fund installment, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders; and provided further that in the case of any Default of the character
specified in Section 501(4) no such notice to Holders shall be given until at
least 30 days after the occurrence thereof.
SECTION 602. Certain Rights of Trustee.
Subject to the provisions of TIA Sections 315(a) through 315(d):
(1) the Trustee may rely conclusively and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or
direction;
(6) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness 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,
and, if
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the Trustee shall determine to make such further inquiry or investigation,
it shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(8) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture; and
(9) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
The Trustee shall not be required 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.
SECTION 603. Trustee Not Responsible for Recitals or Issuance of
Notes.
The recitals contained herein and in the Notes, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Notes and
perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility on Form T-1 supplied to the Company are true and
accurate, subject to the qualifications set forth therein. The Trustee shall not
be accountable for the use or application by the Company of Notes or the
proceeds thereof.
SECTION 604. May Hold Notes.
The Trustee, any Paying Agent, any Note Registrar or any other agent
of the Company or of the Trustee, in its individual or any other capacity, may
become the owner or pledgee of Notes and, subject to TIA Sections 310(b) and
311, may otherwise deal with the Company with the same rights it would have if
it were not Trustee, Paying Agent, Note Registrar or such other agent.
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SECTION 605. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time such compensation for
all services rendered by it hereunder as the parties shall agree from time
to time (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this trust, 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 obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such obligations
of the Company, the Trustee shall have a claim prior to the Notes upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (and 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 501(6) or (7), the expenses
(including the reasonable charges and expenses of its counsel) of and the
compensation for such services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
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SECTION 607. Corporate Trustee Required; Eligibility.
There shall be at all times a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and 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, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 609 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
not less than a majority in principal amount of the Outstanding Notes, delivered
to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six months,
or
(2) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Note for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
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then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) The Trustee may be removed at any time by Act of Holders of not
less than a majority in principal amount of the Outstanding Notes. If the
instrument of acceptance by a successor Trustee required by Section 609 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of removal, the Trustee being removed may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Notes delivered to
the Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(g) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to the
Holders of Notes in the manner provided for in Section 106. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 609. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
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certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes. In case at
that time any of the Notes shall not have been authenticated, any successor
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee. In all such cases such
certificates shall have the full force and effect which this Indenture provides
for the certificate of authentication of the Trustee shall have; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Notes, by receiving and holding the same, agrees
with the Company and the Trustee that none of the Company or the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
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SECTION 702. Reports by Trustee.
Within 60 days after May 15 of each year commencing with the first
May 15 after the first issuance of Notes, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief
report dated as of such May 15 if required by TIA Section 313(a).
SECTION 703. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Company may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to
file information, documents or reports pursuant to either of said
Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents
and reports which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance
by the Company with the conditions and covenants of this Indenture as may
be required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, in the manner and to the extent
provided in TIA Section 313(c), within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (1) and (2) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.
The Company will not, in a single transaction or a series of
transactions, consolidate with or merge with or into any other Person or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
of its properties and assets to any other Person or Persons, and the Company
will not permit any Restricted Subsidiary to enter into any such transaction or
series of transactions, if such transaction or series of transactions, in the
aggregate, would result in the sale, assignment, conveyance, transfer, lease or
other disposition of all or substantially all of the properties and assets of
the Company and its Restricted Subsidiaries on a consolidated basis to any other
Person or Persons, unless at the time and immediately after giving effect
thereto:
(1) either (A) the Company shall be the continuing corporation or
(B) the Person (if other than the Company) formed by such consolidation or
into which the Company or such Restricted Subsidiary is merged or the
Person that acquires by sale, assignment, conveyance, transfer, lease or
disposition all or substantially all the properties and assets of the
Company and its Restricted Subsidiaries on a consolidated basis, as the
case may be (the "Surviving Entity"), (i) shall be a corporation organized
and validly existing under the laws of the United States of America, any
state thereof or the District of Columbia and (ii) shall expressly assume,
by a supplemental indenture to this Indenture in form satisfactory to the
Trustee, the Company's obligations pursuant to the Notes for the due and
punctual payment of the principal of, premium, if any, and interest on all
the Notes and the performance and observance of every covenant herein on
the part of the Company to be performed or observed;
(2) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (and treating
any obligation of the Company or any Restricted Subsidiary incurred in
connection with or as a result of such transaction or series of
transactions as having been incurred at the time of such transaction), no
Default or Event of Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction or series of
transactions on a pro forma basis (on the assumption that the transaction
or series of transactions occurred on the first day of the two fiscal
quarter period ending immediately prior to the consummation of such
transaction or series of transactions, with the appropriate adjustments
with respect to the transaction or series of transactions being included
in such pro forma calculation), the Company (or the Surviving Entity if
the Company is not the continuing obligor hereunder) could incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) under
Section 1011; and
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(4) the Company or such Person shall have delivered to the Trustee,
in form and substance reasonably satisfactory to the Trustee, an Officers'
Certificate (attaching the computations to demonstrate compliance with
clause (3) above) and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, conveyance, transfer or lease or
other disposition and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture, comply with
this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Any merger or consolidation of a Restricted Subsidiary with and into
the Company (with the Company being the surviving entity) or another Restricted
Subsidiary need only comply with clauses (3) and (4) above. Further, this
section shall not apply to any reincorporation of the Company or any Restricted
Subsidiary under the laws of the United States of America, any state thereof or
the District of Columbia.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with or merger of the Company
with or into any other corporation or any sale, assignment, conveyance,
transfer, lease or disposition of the properties and assets of the Company
substantially as an entirety to any Person in accordance with Section 801 in
which the Company is not the continuing obligor hereunder, the Surviving Entity
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company hereunder with the same effect as if such successor Person had
been named as the Company herein. When a successor assumes all of the
obligations of its predecessor under the Indenture, the predecessor shall be
released from such obligations; provided that, in the case of a transfer by
lease, the predecessor shall not be released from the payment of principal of,
premium and Liquidated Damages, if any, and interest on the Notes. (Section 802)
SECTION 803. Notes to Be Secured in Certain Events.
If, upon any such consolidation of the Company with or merger of the
Company into any other corporation, or upon any sale, assignment, conveyance,
lease or transfer of the property of the Company substantially as an entirety to
any other Person, any property or assets of the Company would thereupon become
subject to any Lien, then unless such Lien could be created pursuant to Section
1015 without equally and ratably securing the Notes, the Company, prior to or
simultaneously with such consolidation, merger, sale, assignment, conveyance,
lease or transfer, shall as to such property or assets, secure the Notes
Outstanding (together with, if the Company shall so determine any other
Indebtedness of the Company now existing or hereinafter created which is not
subordinate in right of payment to the Notes) equally and ratably with (or prior
to) the Indebtedness which upon such consolidation, merger, conveyance, lease or
transfer is to become secured as to such property or assets by such Lien, or
shall cause such Notes to be so secured.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company or
any other obligor on the Notes, and the assumption by any such successor
of the covenants of the Company or such obligor contained herein and in
the Notes in accordance with Article Eight of this Indenture;
(2) to add to the covenants of the Company or any other obligor upon
the Notes for the benefit of the Holders or to surrender any right or
power herein conferred upon the Company or any other obligor upon the
Notes, as applicable, in this Indenture or the Notes;
(3) to cure any ambiguity, to correct or supplement any provision
herein or in the Notes that may be defective or inconsistent with any
other provision herein or in the Notes, or to make any other provisions
with respect to matters or questions arising under this Indenture or the
Notes; provided that, in each case, such action shall not adversely affect
the interests of the Holders;
(4) to comply with the requirements of the Commission in order to
effect or maintain the qualification, if any, of the Indenture under the
Trust Indenture Act;
(5) to evidence and provide the acceptance of the appointment of a
successor Trustee under this Indenture;
(6) to mortgage, pledge, hypothecate or grant a security interest in
favor of the Trustee for the benefit of the Holders as additional security
for the payment and performance of the Company's obligations hereunder, in
any property or assets, including any of which are required to be
mortgaged, pledged or hypothecated, or in which a security interest is
required to be granted to the Trustee pursuant to this Indenture or
otherwise;
(7) to add a guarantor of the Notes under the Indenture;
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(8) to secure the Notes pursuant to the requirements of Section 803
or Section 1015 or otherwise;
(9) to add any additional Events of Default; or
(10) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of Section
609.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Notes, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby:
(1) change the Stated Maturity of the principal of or any
installment of interest on, any Note, or reduce the principal amount
thereof (or premium or Liquidated Damages, if any) or the rate of interest
thereon, alter any redemption provision with respect to any Note or change
the coin or currency in which any Note or any premium or Liquidated
Damages or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment after the Stated
Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);
(2) amend, change or modify the obligation of the Company to make
and consummate an Excess Proceeds Offer with respect to any Asset Sale in
accordance with Section 1017 or the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of Control
in accordance with Section 1010, including, in each case amending,
changing or modifying any definition relating thereto;
(3) reduce the percentage of the principal amount of the Outstanding
Notes, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions and defaults of this Indenture and
their consequences provided for in this Indenture;
(4) modify any of the provisions of this Section or Sections 513 and
Section 1019, except to increase the percentage of the aggregate principal
amount of Outstanding Notes required for such actions thereunder or to
provide that certain other provisions of
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this Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby;
(5) except as otherwise permitted under Article Eight consent to the
assignment or transfer by the Company of any of their rights or
obligations under the Indenture; or
(6) release any Lien created by the Pledge Agreement, except in
accordance with the terms of the Pledge Agreement.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to the Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of
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the Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
SECTION 907. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall give notice thereof to the Holders of each Outstanding Note affected, in
the manner provided for in Section 106, setting forth in general terms the
substance of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders that
it shall duly and punctually pay the principal of (and premium and Liquidated
Damages, if any) and interest on the Notes in accordance with the terms of the
Notes and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company shall maintain in The City of New York, an office or
agency where Notes may be presented or surrendered for payment, where Notes may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Corporate Trust Office of the Trustee shall be such office or agency
of the Company, unless the Company shall designate and maintain some other
office or agency for one or more of such purposes. The Company will give prompt
written notice to the Trustee of any change in the location of any such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Administration office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all such purposes and may from time to
time rescind any such designation; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in The City of New York for such purposes. The
Company will give prompt written notice to the Trustee of
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any such designation or rescission and any change in the location of any such
other office or agency.
SECTION 1003. Money for Note Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of (or premium and Liquidated
Damages, if any) or interest on any of the Notes, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal of (or premium and Liquidated Damages, if any) or interest so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure so
to act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it will, on or before 10:00 a.m. on each due date of the principal of (or
premium and Liquidated Damages, if any) or interest on any Notes, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium and Liquidated
Damages, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of such action or any failure so to act.
The Company shall cause each Paying Agent (other than the Trustee)
to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium and Liquidated Damages, if any) or interest on Notes in trust
for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal
(and premium and Liquidated Damages, if any) or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any
84
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such sums.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (or premium
and Liquidated Damages, if any) or interest on any Note and remaining unclaimed
for two years after such principal, premium, interest or Liquidated Damages has
become due and payable shall be paid to the Company on Company Request, or (if
then held by the Company) shall be discharged from such trust. The Holder of
such Note, as an unsecured general creditor, shall look thereafter only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Subsidiary; provided, however, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries as a whole.
SECTION 1005. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary or upon the income, profits or property of the Company or any
Restricted Subsidiary and (b) all material 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; 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 whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
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SECTION 1006. Maintenance of Properties.
The Company shall, or shall cause its Restricted Subsidiaries to,
cause all material properties owned by the Company or any Restricted Subsidiary
or used or held for use in the conduct of its business or the business of any
Restricted Subsidiary to be maintained and kept in good condition, repair and
working order (reasonable wear and tear excepted) and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 1006 shall prevent the Company or a
Restricted Subsidiary from discontinuing the maintenance of any of such
properties or disposing of them as otherwise permitted herein if such
discontinuance or disposition is, in the judgment of the Company, desirable in
the conduct of its business or the business of the Company or such Restricted
Subsidiary and not disadvantageous in any material respect to the Holders.
SECTION 1007. Insurance.
The Company shall at all times keep all of its and its Restricted
Subsidiaries properties which are of an insurable nature insured with insurers,
believed by the Company to be responsible, against loss or damage to the extent
that property of similar character is usually so insured by corporations
similarly situated and owning like properties.
SECTION 1008. Statement by Officers As to Default.
(a) The Company shall deliver to the Trustee, within 50 days after
the end of each fiscal quarter and within 120 days after the end of each fiscal
year, a brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his or her knowledge of
the Company's compliance with all conditions and covenants under this Indenture
since beginning of such quarter or year, as the case may be. For purposes of
this Section 1008(a), such compliance shall be determined without regard to any
period of grace or requirement of notice under this Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of
Indebtedness of the Company or any Subsidiary gives any notice or takes any
other action with respect to a claimed default (other than with respect to
Indebtedness in the principal amount of less than $7,500,000), the Company shall
deliver to the Trustee by registered or certified mail or by facsimile
transmission an Officers' Certificate specifying such event, notice or other
action within five Business Days of an officer of the Company becoming aware of
its occurrence.
(c) When any Registration Default (as defined in the Notes
Registration Rights Agreement) occurs, the Company shall deliver to the Trustee
by registered or certified
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mail or by facsimile transmission an Officers' Certificate specifying the nature
of such Registration Default within 10 days of its occurence. In addition, the
Company shall deliver to the Trustee on each Interest Payment Date during the
continuance of a Registration Default and on the Interest Payment Date following
the cure of a Registration Default, an Officers' Certificate specifying the
amount of Liquidated Damages which have accrued and which are then owing under
the Notes Registration Rights Agreement.
SECTION 1009. Provision of Financial Statements.
(a) The Company shall file on a timely basis with the Commission, to
the extent such filings are accepted by the Commission and whether or not the
Company has a class of securities registered under the Exchange Act, the annual
reports, quarterly reports and other documents that the Company would be
required to file if it were subject to Section 13 or 15(d) of the Exchange Act.
(b) The Company shall also be required (i) to file with the Trustee,
and provide to each Holder of Notes, without cost to such Holder, copies of such
reports and documents within 15 days after the date on which the Company files
such reports and documents with the Commission or the date on which the Company
would be required to file such reports and documents if the Company were so
required, and (ii) if filing such reports and documents with the Commission is
not accepted by the Commission or is prohibited under the Exchange Act, to
supply at the Company's cost copies of such reports and documents to any
prospective holder promptly upon request. Delivery of such reports, information
and documents to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 1010. Purchase of Notes upon Change of Control.
(a) Upon the occurrence of a Change of Control at any time and
subject to the compliance by the Company with the requirements of paragraph (b)
of this Section 1010, each Holder shall have the right to require that the
Company repurchase all of such Holder's Notes, in whole or in part in integral
multiples of $1,000, at a purchase price (the "Change of Control Purchase
Price") in cash in an amount equal to 101% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the date
of purchase, in accordance with the procedures set forth in paragraphs (b) and
(c) of this Section 1010 (the "Change of Control Offer").
(b) Within 15 days following any Change of Control, the Company
shall notify the Trustee thereof and give to each Holder of the Notes in the
manner provided in Section 105 a notice stating:
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(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to repurchase such Holder's Notes at the
Purchase Price;
(2) the circumstances and relevant facts regarding such Change of
Control (including but not limited to information with respect to pro
forma historical income, cash flow and capitalization after giving effect
to such Change of Control);
(3) the Change of Control purchase price and a purchase date (the
"Change of Control Purchase Date") which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is
mailed, or such later date as is necessary to comply with requirements
under the Exchange Act or any applicable securities laws or regulations;
(4) that any Note not tendered will continue to accrue interest;
(5) that, unless the Company defaults in the payment of the Change
of Control Purchase Price, any Notes accepted for payment pursuant to the
Change of Control Offer will cease to accrue interest and Liquidated
Damages, if any, on and after the Change of Control Purchase Date; and
(6) the instructions a Holder must follow in order to have its Notes
repurchased in accordance with paragraph (d) of this Section.
(d) Holders electing to have Notes purchased shall be required to
surrender such Notes to the Company at the address specified in the notice at
least five Business Days prior to the Change of Control Purchase Date. Holders
shall be entitled to withdraw their election if the Company receives, not later
than three Business Days prior to the Change of Control Purchase Date, a
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Notes delivered for purchase by the Holder as to which
his election is to be withdrawn and a statement that such Holder is withdrawing
his election to have such Notes purchased. Holders whose Notes are purchased
only in part shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion shall be
equal to $1,000 in principal amount or integral multiples thereof.
SECTION 1011. Limitation on Indebtedness.
The Company shall not, and shall not permit any Restricted
Subsidiary to Incur any Indebtedness (including any Acquired Indebtedness) other
than Permitted Indebtedness; provided that the Company may Incur Indebtedness
if, at the time of such incurrence, the Consolidated Indebtedness to
Consolidated Operating Cash Flow Ratio would have been less than or equal to (i)
6.0 to 1.0 but greater than zero, for Indebtedness incurred on or prior to
December 31, 2001, or (ii) 5.0 to 1.0 but greater than zero, for Indebtedness
incurred
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thereafter. For the purposes of determining compliance with this Section 1011,
in the event that an item of Indebtedness or any portion thereof meets the
criteria of more than one of the type of Indebtedness that the Company and the
Restricted Subsidiaries are permitted to Incur, the Company will have the right,
in its sole discretion, to classify such item of Indebtedness or portion thereof
at the time of its incurrence and will only be required to include the amount
and type of such Indebtedness or portion thereof under the clause permitting the
Indebtedness as so classified.
SECTION 1012. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to take, directly or indirectly, any of the following actions:
(1) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Capital Stock of the Company (other than
dividends or distributions payable solely in shares of its Qualified
Capital Stock or in options, warrants or other rights to acquire such
shares of Qualified Capital Stock);
(2) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of Capital Stock of the Company or any
Capital Stock of any of its Affiliates (other than Capital Stock of any
Wholly Owned Restricted Subsidiary) or any options, warrants or other
rights to acquire such shares of Capital Stock;
(3) make any principal payment on, or repurchase, redeem, defease or
otherwise acquire or retire for value, prior to the Stated Maturity of any
principal payment or any sinking fund payment, any Indebtedness of the
Company that is expressly subordinated in right of payment to the Notes;
or
(4) make any Investment (other than any Permitted Investment) in any
Person;
(such payments or other actions described in (but not excluded from) clauses (1)
through (4) are collectively referred to as "Restricted Payments"); unless at
the time of, and immediately after giving effect to, the proposed Restricted
Payment (the amount of any such Restricted Payment, if other than cash, as
determined by the Board of Directors of the Company, whose determination shall
be conclusive and evidenced by a Board Resolution), (A) no Default or Event of
Default shall have occurred and be continuing, (B) the Company could incur at
least $1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 1011 and (C) the aggregate amount of all Restricted Payments
declared or made after the Issue Date shall not exceed the sum of:
(i)(a) 100% of Consolidated Operating Cash Flow less 1.5 times
Consolidated Interest Expense or (ii) if Consolidated Operating Cash Flow
is a negative, minus 100%
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of such negative amount, in each case on a cumulative basis for the period
beginning on the first day of the Company's first fiscal quarter after the
Issue Date and ending on the last day of the Company's last fiscal quarter
ending prior to the date of such proposed Restricted Payment; plus
(ii) the aggregate Net Cash Proceeds and the Fair Market Value of
Telecommunications Assets or Voting Stock of a Person that becomes a
Restricted Subsidiary, the assets of which consist primarily of
Telecommunications Assets, received by the Company after the Issue Date as
capital contributions or from the issuance or sale (other than to any
Subsidiary) of shares of Qualified Capital Stock of the Company (including
upon the exercise of options, warrants or rights) or warrants, options or
rights to purchase shares of Qualified Capital Stock of the Company; plus
(iii) the aggregate Net Cash Proceeds and the Fair Market Value of
Telecommunications Assets or Voting Stock of a Person that becomes a
Restricted Subsidiary, the assets of which consist primarily of
Telecommunications Assets, received by the Company after the Issue Date
from the issuance or sale (other than to any Subsidiary) of debt
securities or Redeemable Capital Stock that have been converted into or
exchanged for Qualified Capital Stock of the Company, together with the
aggregate Net Cash Proceeds and the Fair Market Value of
Telecommunications Assets or Voting Stock of a Person that becomes a
Restricted Subsidiary, the assets of which consist primarily of
Telecommunications Assets, received by the Company at the time of such
conversion or exchange; plus
(iv) to the extent not otherwise included in Consolidated Operating
Cash Flow, an amount equal to the sum of (a) the net reduction in
Investments (other than Permitted Investments) in any Person (other than a
Restricted Subsidiary) resulting from the payment in cash of dividends,
repayments of loans or advances or other transfers of assets, in each case
to the Company or any Restricted Subsidiary after the Issue Date from such
Person and (b) the amount of any net reduction in Investments resulting
from the redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary (valued as provided in the definition of "Investment") at the
time of such redesignation; provided that, in the case of (a) or (b)
above, the foregoing sum shall not exceed the total amount of Investments
(other than Permitted Investments) previously made in such Person or
Unrestricted Subsidiary by the Company and its Restricted Subsidiaries.
(b) Notwithstanding paragraph (a) above, the Company and any
Restricted Subsidiary may take the following actions so long as (with respect to
clauses (2) through (6) below) no Default or Event of Default shall have
occurred and be continuing:
(1) the payment of any dividend within 60 days after the date
of declaration thereof, if at such date of declaration the payment
of such dividend would have complied with the provisions of
paragraph (a) above and such
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payment will be deemed to have been paid on such date of declaration
for purposes of the calculation required by paragraph (a) above;
(2) the purchase, redemption or other acquisition or
retirement for value of any shares of Capital Stock of the Company
(x) in exchange for, or out of the Net Cash Proceeds of a
substantially concurrent issuance and sale (other than to a
Subsidiary) of, shares of Qualified Capital Stock of the Company;
(y) that are held by former officers, employees or directors (or
their estates or beneficiaries under their estates) of the Company
or any of its Subsidiaries; provided that the aggregate amount of
such purchase, redemption or other acquisition or retirement for
value under this clause (y) will not exceed $250,000 in any given
fiscal year; or (z) pursuant to the employment agreement dated
August 4, 1997, between the Company and Richard Jalkut, as amended
and as in effect on the Issue Date (and any extensions or renewals
thereof); provided that the amount of such purchase, redemption or
other acquisition or retirement for value under this clause (z) will
not exceed $1,000,000 in any given fiscal year;
(3) the purchase, redemption, defeasance or other acquisition
or retirement for value of any Indebtedness of the Company that is
expressly subordinated in right of payment to the Notes in exchange
for, or out of the Net Cash Proceeds of a substantially concurrent
issuance and sale (other than to a Subsidiary) of, shares of
Qualified Capital Stock of the Company;
(4) the purchase of any Indebtedness of the Company that is
expressly subordinated in right of payment to the Notes at a
purchase price not greater than 101% of the principal amount thereof
in the event of a Change of Control in accordance with provisions
similar to Section 1010; provided that prior to such purchase the
Company has made the Change of Control Offer as provided in such
covenant with respect to the Notes and has purchased all Notes
validly tendered for payment in connection with such Change of
Control Offer;
(5) the purchase, redemption, defeasance or other acquisition
or retirement for value of Indebtedness (other than Redeemable
Capital Stock) of the Company that is expressly subordinated in
right of payment to the Notes in exchange for, or out of the Net
Cash Proceeds of a substantially concurrent incurrence (other than
to a Subsidiary) of, new Indebtedness of the Company that is
expressly subordinated in right of payment to the Notes, so long as
(A) the principal amount of such new Indebtedness does not exceed
the principal amount (or, if such Indebtedness being refinanced
provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration thereof, such
lesser amount as of the date of
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determination) of the Indebtedness being so purchased, redeemed,
defeased, acquired or retired, plus the lesser of (x) the amount of
any premium required to be paid in connection with such refinancing
pursuant to the terms of the Indebtedness being refinanced or (y)
the amount of any premium reasonably determined by the Company as
necessary to accomplish such refinancing, plus, in either case, the
amount of expenses of the Company incurred in connection with such
refinancing; (B) such new Indebtedness is subordinated to the Notes
to the same extent as such Indebtedness so purchased, redeemed,
defeased, acquired or retired; and (C) such new Indebtedness has an
Average Life longer than the Average Life of the Indebtedness being
refinanced and a final Stated Maturity of principal later than the
final Stated Maturity of the Indebtedness being refinanced; and
(6) the payment of cash in lieu of fractional shares of Common
Stock pursuant to the Warrant Agreement.
The actions described in clauses (1) through (4) and (6) of this
paragraph (b) shall be Restricted Payments that shall be permitted in accordance
with this paragraph (b) but shall reduce the amount that would otherwise be
available for Restricted Payments under clause (C) of paragraph (a) above. The
actions described in clause (5) of this paragraph (b) shall be Restricted
Payments that shall be permitted in accordance with this paragraph (b) and shall
not reduce the amount that would otherwise be available for Restricted Payments
under clause (C) of paragraph (a).
SECTION 1013. Limitation on Issuances and Sales of Capital Stock of
Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, issue or sell any Capital Stock of a Restricted Subsidiary (other
than to the Company or to a Restricted Subsidiary); provided, however, that this
covenant shall not prohibit (i) issuances or sales of Capital Stock of a
Restricted Subsidiary if, immediately after giving effect to such issuance or
sale, such Restricted Subsidiary would no longer be a Restricted Subsidiary and
any Investment in such Person remaining after giving effect to such issuance or
sale would have been permitted to be made under Section 1012 if made on the date
of such issuance and sale, (ii) the ownership by directors of director's
qualifying shares or the ownership by foreign nationals of Capital Stock of any
Restricted Subsidiary, to the extent mandated by applicable law, (iii) the
issuance and sale of Capital Stock of any Restricted Subsidiary owned by the
Company and the Restricted Subsidiaries in compliance with Section 1017;
provided that such Restricted Subsidiary would remain a Restricted Subsidiary
after such transaction or (iv) the issuance and sale of Capital Stock of any
Restricted Subsidiary to any Person that transfers, leases, licenses or grants a
right to use Telecommunications Assets to the Company pursuant to an Incumbent
Agreement; provided that, after such issuance and sale, such subsidiary remains
a Restricted Subsidiary and, in the good faith determination of the Board
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of Directors of the Company, the Fair Market Value of any such transfer, lease,
license or grant is not less than the Fair Market Value of the Capital Stock of
such Restricted Subsidiary issued and sold in respect thereof.
SECTION 1014. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into or suffer to exist, directly or indirectly, any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, property or services) with, or
for the benefit of, any Affiliate of the Company or any Restricted Subsidiary
(other than the Company or a Restricted Subsidiary so long as no Affiliate of
the Company (other than a Restricted Subsidiary) shall beneficially own Capital
Stock in such Restricted Subsidiary) unless (i) such transaction or series of
related transactions are on terms, taken as a whole, that are no less favorable
to the Company or such Restricted Subsidiary, as the case may be, than those
that could have been obtained in an arm's length transaction with unrelated
third parties that are not Affiliates; (ii) with respect to any transaction or
series of related transactions involving aggregate consideration equal to or
greater than $5,000,000, the Company will deliver an Officers' Certificate to
the Trustee certifying that such transaction or series of related transactions
complies with clause (i) above; and (iii) with respect to any transaction or
series of related transactions involving aggregate consideration in excess of
$10,000,000, the Company will deliver the Officers' Certificate described in
clause (ii) above which will also certify that such transaction or series of
related transactions has been approved by a majority of the Disinterested
Directors of the Board of Directors of the Company or that the Company has
obtained a written opinion from an independent financial expert, certifying that
the financial terms of such transaction or series of related transactions, taken
as a whole, are fair to the Company or such Restricted Subsidiary, as the case
may be, from a financial point of view; provided, however, that this covenant
shall not restrict (1) any transaction or series of related transactions among
the Company and one or more of its Restricted Subsidiaries or among its
Restricted Subsidiaries, (2) the Company from paying reasonable and customary
regular compensation and fees to directors of the Company or any Restricted
Subsidiary who are not employees of the Company or any Restricted Subsidiary,
(3) the performance of the Company's obligations under the Investment and
Stockholders' Agreement, dated as of October 31, 1997, among the Company, David
Schaeffer and the Investors named therein, as amended; the Investment and
Stockholders' Agreement, dated as of August 28, 1995, by and among the Company
and the Investors named therein; the Investment and Stockholders' Agreement,
dated as of December 23, 1996, by and among the Company and the Investors named
therein; the Non-Qualified Stock Option Agreement, dated August 4, 1997, between
the Company and Richard Jalkut; and the Employment Agreement, dated August 4,
1997, between the Company and Richard Jalkut, in each case as amended through
the Issue Date; provided that any amendments or modifications to the terms of
transactions described in this clause (3) will be (x) no less favorable to the
Company than those that could have been obtained in an arm's length transaction
with unrelated third parties who are not Affiliates and (y) approved by the
Board of Directors of the Company (including
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a majority of the Disinterested Directors), (4) the making of any Restricted
Payment not prohibited by Section 1012 and (5) loans or advances made to
directors, officers or employees of the Company or any Restricted Subsidiary, or
guarantees in respect thereof or otherwise made on their behalf, in respect of
expenses incurred in the ordinary course of business, in an aggregate principal
amount not to exceed $500,000 in any calendar year.
SECTION 1015. Limitations on Liens.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien (other than Permitted Liens) on or with respect to any of its property
or assets (including, without limitation, any shares of Capital Stock or
Indebtedness of any Restricted Subsidiary) whether owned at the Issue Date or
thereafter acquired, or any income, profits or proceeds therefrom, or assign or
otherwise convey any right to receive income thereon, unless (x) in the case of
any Lien securing Indebtedness of the Company that is expressly subordinated in
right of payment to the Notes, the Notes are secured by a Lien on such property,
assets or proceeds that is senior in priority to such Lien and (y) in the case
of any other Lien, the Notes are secured by a Lien on such property, assets or
proceeds that is senior in priority to, or equally and ratably secured with, the
obligation or liability secured by such Lien.
SECTION 1016. Limitation on Issuances of Certain Guarantees by, and
Debt Securities of, Restricted Subsidiaries.
The Company shall not permit any Restricted Subsidiary to (i)
directly or indirectly guarantee, assume or in any other manner become liable
with respect to any Debt Securities ("Guaranteed Indebtedness") or (ii) issue
any Debt Securities, unless, in either such case, such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture providing for the
guarantee (a "Subsidiary Guarantee") of payment of the Notes. If the Guaranteed
Indebtedness (A) ranks equally in right of payment with the Notes, then the
guarantee of such Guaranteed Indebtedness will rank equally in right of payment
with, or be subordinated in right of payment to, the Subsidiary Guarantee or (B)
is subordinated in right of payment to the Notes, then the guarantee of such
Guaranteed Indebtedness will be subordinated in right of payment to the
Subsidiary Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated in right of payment to the Notes. The obligations of each
Restricted Subsidiary under a Subsidiary Guarantee will be limited to the
maximum amount, as will, after giving effect to all other contingent and fixed
liabilities of such Restricted Subsidiary, result in the obligations of such
Restricted Subsidiary under the Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under applicable law.
Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Subsidiary of the Notes shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon (i) the sale or
other disposition, by way of
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merger or otherwise, to any Person not an Affiliate of the Company, of all of
the Company's and its Restricted Subsidiaries' Capital Stock in such Restricted
Subsidiary, (ii) the merger or consolidation of the applicable Restricted
Subsidiary with and into the Company or another Restricted Subsidiary that has
guaranteed the Notes and that is the surviving Person in such merger or
consolidation and (iii) the release by all of the holders of Debt Securities of
the Company of such Restricted Subsidiary's obligations under all of its
Guarantees in respect thereof and the release by all of the holders of Debt
Securities of such Restricted Subsidiary of its obligations thereunder.
SECTION 1017. Limitation on Sale of Assets.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, engage in any Asset Sale unless (i) the
consideration received by the Company or such Restricted Subsidiary for such
Asset Sale is not less than the Fair Market Value of the shares or other assets
sold (as determined by the board of directors of the Company, whose
determination shall be conclusive and evidenced by a resolution thereof) and
(ii) the consideration received by the Company or the relevant Restricted
Subsidiary in respect of such Asset Sale consists of at least 75% cash or Cash
Equivalents; provided, however, that for purposes of this Section 1017, "Cash
Equivalents" shall include (i) the amount of any liabilities (other than
liabilities that are by their terms subordinated to the Notes) of the Company or
such Restricted Subsidiary (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet or in the notes thereto) that are assumed
by the transferee of any such assets or other property in such Asset Sale or are
no longer a liability of the Company or any Restricted Subsidiary (and excluding
any liabilities that are incurred in connection with or in anticipation of such
Asset Sale), but only to the extent that such assumption is effected on a basis
under which there is no further recourse to the Company or any of its Restricted
Subsidiaries with respect to such liabilities and (ii) any securities, notes or
other obligations received by the Company or any such Restricted Subsidiary in
connection with such Asset Sale that are converted by the Company or such
Restricted Subsidiary into cash within 60 days of receipt.
(b) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company may use the Net Cash Proceeds thereof, within 12 months after
such Asset Sale, to (i) permanently repay or prepay the Notes or any then
outstanding Indebtedness of the Company that ranks equally with the Notes or
Indebtedness of any Restricted Subsidiary or permanently reduce (without making
any prepayment) the amount that is at the time available to be borrowed under
the Notes or any Indebtedness of the Company ranking equally with the Notes or
any Indebtedness of a Restricted Subsidiary or (ii) invest (or enter into a
legally binding agreement to invest) in properties and assets to replace the
properties and assets that were the subject of the Asset Sale or in properties
and assets that are or will be used in the Telecommunications Business of the
Company or a Restricted Subsidiary, as the case may be. If any such legally
binding agreement to invest such Net Cash Proceeds is terminated, then the
Company may, within 60 days of such termination or within 12 months of such
Asset
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Sale, whichever is later, apply or invest such Net Cash Proceeds as provided in
clause (i) or (ii) (without regard to the parenthetical contained in such clause
(ii)) above. The amount of such Net Cash Proceeds not so used as set forth above
in this paragraph (b) constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds
$10,000,000, the Company shall, within 15 business days, make an offer to
purchase (an "Excess Proceeds Offer"), on a proportional basis, the Notes and
Indebtedness described in the second succeeding sentence, in accordance with the
procedures set forth below, the maximum principal amount of Notes (expressed as
a multiple of $1,000) and such other Indebtedness that may be purchased with the
Excess Proceeds. Any Excess Proceeds Offer shall include a pro rata offer under
similar circumstances to purchase all other Indebtedness of the Company ranking
equally with the Notes which Indebtedness contains similar provisions requiring
the Company to purchase such Indebtedness. The offer price as to each Note (the
"Excess Proceeds Offer Price") will be payable in cash in an amount equal to
100% of the principal amount of such Note, plus accrued and unpaid interest, if
any, thereon to the date of purchase. To the extent that the aggregate principal
amount of Notes validly tendered and not withdrawn by holders thereof pursuant
to an Excess Proceeds Offer is less than the Excess Proceeds, the Company may
use such deficiency for general corporate purposes. If the aggregate principal
amount of Notes validly tendered and not withdrawn by holders thereof pursuant
to an Excess Proceeds Offer exceeds the Excess Proceeds, Notes to be purchased
will be selected on a proportional basis. Upon completion of such Exceeds
Proceeds Offer, the amount of Excess Proceeds shall be reset to zero.
SECTION 1018. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (a) pay dividends, in cash or otherwise,
or make any other distributions on or in respect of any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,
(b) pay any Indebtedness owed to the Company or any other Restricted Subsidiary,
(c) make Investments in the Company or any other Restricted Subsidiary, (d)
transfer any of its property or assets to the Company or any other Restricted
Subsidiary or (e) guarantee any Indebtedness of the Company or any other
Restricted Subsidiary, except for such encumbrances or restrictions existing
under or by reason of (i) any agreement in effect on the Issue Date, (ii)
applicable law, (iii) customary non-assignment provisions in leases entered into
in the ordinary course of business and other agreements of the Company or any
Restricted Subsidiary, (iv) any agreement or other instrument of a Person
acquired by the Company or any Restricted Subsidiary 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 property or
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assets of the Person, so acquired, (v) customary restrictions on transfers of
property contained in any security agreement (including a capital lease
obligation) securing Indebtedness of the Company or a Restricted Subsidiary
otherwise permitted hereunder, (vi) any encumbrance or restriction with respect
to a Restricted Subsidiary of the Company entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of such
Restricted Subsidiary permitted under Section 1017, (vii) any agreement or
instrument governing or relating to Indebtedness under any senior financing
facility permitted to be incurred under clause (g), (j) or (m) of the definition
of "Permitted Indebtedness" if such encumbrance or restriction applies only (A)
to amounts which at any point in time (other than during such periods as are
described in the following clause (B)) (1) exceed scheduled amounts due and
payable (or which are to become due and payable within 30 days) in respect of
the Notes or this Indenture for interest, premium, and Liquidated Damages, if
any, and principal less the amount of cash that is otherwise available to the
Company at such time for the payment of interest, premium and Liquidated
Damages, if any, and principal due and payable in respect of the Notes or this
Indenture or (2) if paid, would result in an event described in the following
clause (B) of this sentence, or (B) during the pendency of any event that
causes, permits or, after notice or lapse of time, would cause or permit the
holder or holders of such Indebtedness to declare such Indebtedness to be
immediately due and payable or to require cash collateralization or cash cover
for such Indebtedness for so long as such cash collateralization or cash cover
has not been provided; (viii) any encumbrance or restriction under the Vendor
Credit Facility; (ix) any encumbrance or restriction relating to transfer of
property or assets comprising an Initial System pursuant to an Incumbent
Agreement, and (x) any encumbrance or restriction under any agreement that
extends, renews, refinances or replaces agreements containing the encumbrances
or restrictions in the foregoing clauses (i) through (vi) and (viii), so long as
the Board of Directors of the Company determines in good faith that the terms
and conditions of any such encumbrances or restrictions, taken as a whole, are
no less favorable to the Company, any Restricted Subsidiary and the holders of
the Notes than those so extended, renewed, refinanced or replaced.
SECTION 1019. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 803 or Sections 1005 through
1018, inclusive, if before or after the time for such compliance the Holders of
at least a majority in aggregate principal amount of the Outstanding Notes, by
Act of such Holders, waive such compliance in such instance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
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ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. Right of Redemption.
The Notes may be redeemed at the option of the Company, as a whole
or from time to time in part, at any time after April 15, 2003, subject to the
conditions and at the Redemption Prices specified in the form of Note, together
with accrued and unpaid interest and Liquidated Damages, if any, to the
Redemption Date.
SECTION 1102. Applicability of Article.
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Notes pursuant to Section
1101 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Notes to be redeemed and shall deliver to the Trustee
such documentation and records as shall enable the Trustee to select the Notes
to be redeemed pursuant to Section 1104.
SECTION 1104. Selection by Trustee of Notes to Be Redeemed.
If less than all the Notes are to be redeemed, the Trustee shall
select the particular Notes to be redeemed from the Outstanding Notes not
previously called for redemption not more than 60 days prior to the Redemption
Date, by lot or by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions of the
principal of Notes; provided, however, that no such partial redemption shall
reduce the portion of the principal amount of a Note not redeemed to less than
$1,000.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount 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
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be redeemed only in part, to the portion of the principal amount of such Note
which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Notes to be redeemed.
All notices of redemption shall include a description of the Notes, including a
CUSIP number, and shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued and unpaid
interest and Liquidated Damages, if any, to the Redemption Date payable as
provided in Section 1107, if any,
(3) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of a partial redemption, the principal
amounts) of the particular Notes to be redeemed,
(4) in case any Note is to be redeemed in part only, the notice
which relates to such Note shall state that on and after the Redemption
Date, upon surrender of such Note, the holder will receive, without
charge, a new Note or Notes of authorized denominations for the principal
amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price (and accrued
and unpaid interest, and Liquidated Damages, if any, to the Redemption
Date payable as provided in Section 1107) will become due and payable upon
each such Note, or the portion thereof, to be redeemed, and that interest
thereon will cease to accrue on and after said date, and
(6) the place or places where such Notes are to be surrendered for
payment of the Redemption Price and accrued interest, if any.
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 request, by the
Trustee in the name and at the expense of the Company.
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SECTION 1106. Deposit of Redemption Price.
Prior to 10:00 a.m. on any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust as provided in Section 1003)
an amount of money sufficient to pay the Redemption Price of, and Liquidated
Damages, if any, and accrued and unpaid interest on, all the Notes which are to
be redeemed on that date.
SECTION 1107. Notes Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Notes so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with Liquidated Damages and accrued
and unpaid interest, if any, to the Redemption Date), and from and after such
date (unless the Company shall default in the payment of the Redemption Price
and accrued interest) such Notes shall cease to bear interest; provided,
however, that if any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Notes.
Upon surrender of any such Note for redemption in accordance with
said notice, such Note shall be paid by the Company at the Redemption Price,
together with Liquidated Damages and accrued and unpaid interest, if any, to the
Redemption Date; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Notes, or one or more Predecessor Notes, registered as such at the close
of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
SECTION 1108. Notes Redeemed in Part.
Any Note which is to be redeemed only in part (pursuant to the
provisions of this Article) shall be surrendered at the office or agency of the
Company maintained for such purpose pursuant to Section 1002 (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or such Holders attorney duly authorized in writing), and
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.
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ARTICLE TWELVE
Security
SECTION 1201. Security.
(a) On the Issue Date, the Company shall purchase, and at all times,
subject to the Pledge Agreement, pledge to the Trustee the Pledged Securities as
security for the benefit of the Holders. The Pledged Securities must be in such
amount as will be sufficient upon receipt of scheduled interest on and principal
payments of such Pledged Securities, in the opinion of a nationally recognized
firm of independent public accountants selected by the Company, to provide for
payment in full of the first four scheduled interest payments due on the
Outstanding Notes. The Pledged Securities shall be pledged by the Company to the
Trustee for the benefit of the Holders pursuant to the Pledge Agreement and
shall be held by the Trustee in the Escrow Account pending disposition pursuant
to the Pledge Agreement.
(b) Each Holder, by its acceptance of a Note, consents and agrees to
the terms of the Pledge Agreement (including, without limitation, the provisions
providing for foreclosure and release of the Pledged Securities) as the same may
be in effect or may be amended from time to time in accordance with its terms,
and authorizes and directs the Trustee to enter into the Pledge Agreement and to
perform its respective obligations and exercise its respective rights thereunder
in accordance therewith. The Company shall do or cause to be done all such acts
and things as may be reasonably necessary or proper, or as may be required by
the provisions of the Pledge Agreement, to assure and confirm to the Trustee the
security interest in the Pledged Securities contemplated hereby, by the Pledge
Agreement or any part thereof, as from time to time constituted, so as to render
the same available for the security and benefit of this Indenture and of the
Notes secured hereby, according to the intent and purposes herein expressed. The
Company shall take, or shall cause to be taken, any and all actions reasonably
required (and any action reasonably requested by the Trustee) to cause the
Pledge Agreement to create and maintain, as security for the obligations of the
Company under this Indenture and the Notes, valid and enforceable first priority
liens in and on all the Pledged Securities, in favor of the Trustee, superior to
and prior to the rights of third Persons and subject to no other Liens.
(c) The release of any Pledged Securities pursuant to the Pledge
Agreement will not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Pledged
Securities are released pursuant to this Indenture and the Pledge Agreement. To
the extent applicable, the Company shall cause TIA Section 314(d), relating to
the release of property or securities from the Lien and security interest of the
Pledge Agreement and relating to the substitution therefor of any property or
securities to be subjected to the Lien and security interest of the Pledge
Agreement, to be complied with. Any certificate or opinion required by TIA
Section 314(d) may be made by an officer of the Company, except in cases where
TIA Section 314(d) requires that such
101
certificate or opinion be made by an independent Person, which Person shall be
an independent appraiser or other expert selected or approved by the Company in
the exercise of reasonable care.
(d) The Company shall cause TIA Section 314(b), relating to opinions
of counsel regarding the Lien under the Pledge Agreement, to be complied with.
The Trustee may, to the extent permitted by Section 602 hereof, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such instruments.
(e) The Trustee, in its sole discretion and without the consent of
the Holders, may, and at the request of the Holders of at least 25% in aggregate
principal amount of Notes then Outstanding shall, on behalf of the Holders, take
all actions it deems necessary or appropriate in order to (i) enforce any of the
terms of the Pledge Agreement and (ii) collect and receive any an all amounts
payable in respect of the obligations of the Company thereunder. The Trustee
shall have power to institute and to maintain such suits and proceedings as the
Trustee may deem expedient to preserve or protect its interests and the
interests of the Holders in the Pledged Securities (including power to institute
and maintain suits or proceedings to restrain the enforcement of or compliance
with any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interest of the Holders or of the Trustee).
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant
Defeasance.
The Company may, at its option by Board Resolution, at any time,
with respect to the Notes, elect to have either Section 1302 or Section 1303 be
applied to all Outstanding Notes upon compliance with the conditions set forth
below in this Article Thirteen.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise under Section 1301 of the option
applicable to this Section 1302, the Company shall be deemed to have been
discharged from its obligations with respect to all Outstanding Notes on the
date the conditions set forth in Section 1304 are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by
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the Outstanding Notes, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 1305 and the other Sections of this Indenture
referred to in (A) and (B) 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: (A) the rights of
Holders of Outstanding Notes to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments in respect of
the principal of (and premium, if any, on) and interest and Liquidated Damages,
if any, on such Notes when such payments are due, (B) the Company's obligations
with respect to such Notes under Sections 304, 305, 306, 1002 and 1003, (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and (D)
this Article Thirteen. Subject to compliance with this Article Thirteen, the
Company may exercise its option under this Section 1302 notwithstanding the
prior exercise of its option under Section 1303 with respect to the Notes.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise under Section 1301 of the option
applicable to this Section 1303, the Company shall be released from its
obligations under any covenant contained in Section 801(2) and (3) and Section
803 and in Sections 1007 through 1018 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 not to be
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to the 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
501(4), but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 1302 or Section 1303 to the Outstanding Notes:
(1) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee (or another trustee satisfying the
requirements of Section 607 who shall agree to comply with the provisions
of this Article Thirteen 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,
(A) cash
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in United States dollars, (B) U.S. Government Obligations which through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before
the due date of any payment, money in an amount, or (C) a combination
thereof, 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,
(i) the principal of (and premium, if any) and interest and Liquidated
Damages, if any, on, Outstanding Notes on the Stated Maturity (or
Redemption Date, if applicable) of such principal (and premium, if any) or
installment of interest and Liquidated Damages, if any, and (ii) any
payments applicable to the Outstanding Notes on the day on which such
payments are due and payable in accordance with the terms of this
Indenture and of such Notes; provided that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to the Notes. Before
such a deposit, the Company may give to the Trustee, in accordance with
Section 1103 hereof, a notice of its election to redeem all of the
Outstanding Notes at a future date in accordance with Article Eleven
hereof, which notice shall be irrevocable. Such irrevocable redemption
notice, if given, shall be given effect in applying the foregoing. For
this purpose, "U.S. Government Obligations" means securities that are (x)
direct obligations of the United States of America for the timely payment
of which its full faith and credit is pledged or (y) obligations of a
Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the timely payment of
which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which, in either case, are not callable
or redeemable at the option of the issuer thereof, and shall also include
a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended), as custodian with respect to any
such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for
the account of the holder of such depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt
from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest
on the U.S. Government Obligation evidenced by such depository receipt.
(2) No Default or Event of Default with respect to the Notes shall
have occurred and be continuing on the date of such deposit or, insofar as
paragraphs (6) and (7) of Section 501 hereof are concerned, at any time
during the period ending on the 123rd day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than the Indenture) to which the Company is
a party or by which it is bound.
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(4) In the case of an election under Section 1302, 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 April 1, 1998, 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 defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred.
(5) In the case of an election under Section 1303, 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 U.S. federal income tax purposes as a result of such covenant
defeasance and will be subject to U.S. 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.
(6) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section
1302 or the covenant defeasance under Section 1303 (as the case may be)
have been complied with.
SECTION 1305. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 1305, the "Trustee") pursuant to Section 1304 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 (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such Notes of
all sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Notes.
Anything in this Article Thirteen to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or
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U.S. Government Obligations held by it as provided in Section 1304 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 defeasance or covenant defeasance, as applicable, in
accordance with this Article.
SECTION 1306. Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1305 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1302 or 1303, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1305; provided, however, that if the Company makes any payment of principal of
(or premium, if any) or interest on any Note following 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 held by the Trustee or Paying
Agent.
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This Indenture may be signed in any number of counterparts each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
PATHNET, INC.
By /s/ David Schaeffer
------------------------------
Name: David Schaeffer
Title: Chairman
THE BANK OF NEW YORK,
Trustee
By /s/ Mary Beth A. Lewicki
------------------------------
Name: Mary Beth A. Lewicki
Title: Assistant Vice President
EXHIBIT A
Form of Rule 144A Certificate
To: The Bank of New York,
Trustee (the "Trustee")
101 Barclay Street, 21W
New York, New York 10286
Attention: Corporate Trust Administration
Re: Pathnet, Inc. (The "Company")
12 1/4% Senior Notes due 2008 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $350,000,000 aggregate principal
amount at Maturity of Notes, we confirm that such sale has been effected
pursuant to and in accordance with Rule 144A ("Rule 144A") under the Securities
Act of 1933, as amended (the "Securities Act"). We are aware that the transfer
of Notes to us is being made in reliance on the exemption from the provisions of
Section 5 of the Securities Act provided by rule 144A. Prior to the date of this
Certificate we have been given the opportunity to obtain from the Company the
information referred to in Rule 144A(d)(4), and have either declined such
opportunity or have received such information.
You and the company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[NAME OF PURCHASER]
By:______________________________________
Name:
Title:
Address:
Date of this Certificate:_______________
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EXHIBIT B
Form of Regulation S Certificate
[DATE]
The Bank of New York, Trustee (the "Trustee")
101 Barclay Street, 21W
New York, New York 10286
Attention: Corporate Trust Administration
Re: Pathnet, Inc. (the "Company")
12 1/4% Senior Notes due 2008 (the "Notes")
Ladies and Gentlemen:
This Certificate relates to our proposed transfer of $1,000
principal amount of Notes issued under the Indenture dated as of April 8, 1998
relating to the Notes. Terms are used in this Certificate as defined in
Regulation S under the Securities Act of 1933, as amended (the "Securities
Act"). We hereby certify as follows:
1. The offer of the Notes was not made to a person in the United
States (unless such person or the account held by it for which it is
acting is excluded from the definition of "U.S. person" pursuant to Rule
902(o) of Regulation S under the circumstances described in Rule 902(i)(3)
of Regulation S) or specifically targeted at an identifiable group of U.S.
citizens abroad.
2. Either (a) at the time the buy order was originated, the buyer
was outside the United States or we and any person acting on our behalf
reasonably believed that the buyer was outside the United States or (b)
the transaction was executed in, on or through the facilities of a
designated offshore securities market, and neither we nor any person
acting on our behalf knows that the transaction was pre-arranged with a
buyer in the United States.
3. Neither we, any of our affiliates, nor any person acting on our
or their behalf, has made any directed selling efforts in the United
States.
4. The proposed transfer of Notes is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
5. If we are a dealer or a person receiving a selling concession or
other fee or remuneration in respect of the Notes, and the proposed
transfer takes place before
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the Offshore Date referred to in the Indenture, or we are an officer or
director of the Company or a distributor, we certify that the proposed
transfer is being made in accordance with the provisions of Rule 904(c) of
Regulation S.
You and the Company are entitled to rely upon this Certificate and
are irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[NAME OF SELLER]
By______________________________________
Authorized Signature
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EXHIBIT C
Form of Certificate
to Be Delivered following
Resale Restriction Termination Date
[DATE]
The Bank of New York
101 Barclay Street, 21W
New York, New York 10286
Attention: Corporate Trust Administration
Re: Pathnet, Inc. (the "Company")
12 1/4% Senior Notes due 2008 (the "Notes")
Ladies and Gentlemen:
This letter relates to $1,000 principal amount of Notes represented
by the offshore global note certificate (the "Regulation S Global Note").
Pursuant to Section 201 of the Indenture dated as of April 8, 1998 relating to
the Notes (the "Indenture"), we hereby certify that (1) we are the beneficial
owner of such principal amount of Notes represented by the Regulation S Global
Note and (2) we are a Non-U.S. Person to whom the Notes could be transferred in
accordance with Rule 904 of Regulation S promulgated under the Securities Act of
1933, as amended ("Regulation S"). Accordingly, you are hereby requested to
issue a Regulation S Permanent Global Note representing the undersigned's
interest in the principal amount of Notes represented by the Global Note, all in
the manner provided by the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By______________________________________
Authorized Signature
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