Exhibit 4.1
EXECUTION COPY
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ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
9 3/8% Senior Subordinated Notes due 2009
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INDENTURE
Dated as of May 14, 1999
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IBJ WHITEHALL BANK & TRUST COMPANY,
Trustee
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TABLE OF CONTENTS
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ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions ................................................... 1
SECTION 1.02. Other Definitions ............................................. 23
SECTION 1.03. Incorporation by Reference of Trust Indenture Act ............. 24
SECTION 1.04. Rules of Construction ......................................... 24
ARTICLE II
The Securities
SECTION 2.01. Form and Dating ............................................... 25
SECTION 2.02. Execution and Authentication .................................. 25
SECTION 2.03. Registrar and Paying Agent .................................... 26
SECTION 2.04. Paying Agent To Hold Money in Trust ........................... 26
SECTION 2.05. Securityholder Lists .......................................... 27
SECTION 2.06. Transfer and Exchange ......................................... 27
SECTION 2.07. Replacement Securities ........................................ 27
SECTION 2.08. Outstanding Securities ........................................ 28
SECTION 2.09. Temporary Securities .......................................... 28
SECTION 2.10. Cancelation ................................................... 29
SECTION 2.11. Defaulted Interest ............................................ 29
SECTION 2.12. CUSIP Numbers ................................................. 29
ARTICLE III
Redemption
SECTION 3.01. Notices to Trustee ............................................ 29
SECTION 3.02. Selection of Securities To Be Redeemed ........................ 29
SECTION 3.03. Notice of Redemption .......................................... 30
SECTION 3.04. Effect of Notice of Redemption ................................ 30
SECTION 3.05. Deposit of Redemption Price ................................... 31
SECTION 3.06. Securities Redeemed in Part ................................... 31
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ARTICLE IV
Covenants
SECTION 4.01. Payment of Securities ......................................... 31
SECTION 4.02. SEC Reports ................................................... 31
SECTION 4.03. Limitation on Indebtedness .................................... 32
SECTION 4.04. Limitation on Restricted Payments ............................. 34
SECTION 4.05. Limitation on Restrictions on Distributions from Restricted
Subsidiaries ................................................ 38
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock ............ 39
SECTION 4.07. Limitation on Transactions with Affiliates .................... 43
SECTION 4.08. Change of Control ............................................. 44
SECTION 4.09. Compliance Certificate ........................................ 46
SECTION 4.10. Further Instruments and Acts .................................. 46
SECTION 4.11. Future Guarantors ............................................. 46
SECTION 4.12. Limitation on Lines of Business ............................... 46
SECTION 4.13. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries ..................................... 46
ARTICLE V
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets ..................... 47
ARTICLE VI
Defaults and Remedies
SECTION 6.01. Events of Default ............................................. 48
SECTION 6.02. Acceleration .................................................. 50
SECTION 6.03. Other Remedies ................................................ 51
SECTION 6.04. Waiver of Past Defaults ....................................... 51
SECTION 6.05. Control by Majority ........................................... 51
SECTION 6.06. Limitation on Suits ........................................... 51
SECTION 6.07. Rights of Holders to Receive Payment .......................... 52
SECTION 6.08. Collection Suit by Trustee .................................... 52
SECTION 6.09. Trustee May File Proofs of Claim .............................. 52
SECTION 6.10. Priorities .................................................... 52
SECTION 6.11. Undertaking for Costs ......................................... 53
SECTION 6.12. Waiver of Stay or Extension Laws .............................. 53
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ARTICLE VII
Trustee
SECTION 7.01. Duties of Trustee ............................................. 53
SECTION 7.02. Rights of Trustee ............................................. 54
SECTION 7.03. Individual Rights of Trustee .................................. 55
SECTION 7.04. Trustee's Disclaimer .......................................... 55
SECTION 7.05. Notice of Defaults ............................................ 55
SECTION 7.06. Reports by Trustee to Holders ................................. 55
SECTION 7.07. Compensation and Indemnity .................................... 56
SECTION 7.08. Replacement of Trustee ........................................ 56
SECTION 7.09. Successor Trustee by Merger ................................... 57
SECTION 7.10. Eligibility; Disqualification ................................. 58
SECTION 7.11. Preferential Collection of Claims Against Company ............. 58
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance .............. 58
SECTION 8.02. Conditions to Defeasance ...................................... 59
SECTION 8.03. Application of Trust Money .................................... 60
SECTION 8.04. Repayment to Company .......................................... 60
SECTION 8.05. Indemnity for Government Obligations .......................... 60
SECTION 8.06. Reinstatement ................................................. 60
ARTICLE IX
Amendments
SECTION 9.01. Without Consent of Holders .................................... 61
SECTION 9.02. With Consent of Holders ....................................... 62
SECTION 9.03. Compliance with Trust Indenture Act ........................... 63
SECTION 9.04. Revocation and Effect of Consents and Waivers ................. 63
SECTION 9.05. Notation on or Exchange of Securities ......................... 63
SECTION 9.06. Trustee To Sign Amendments .................................... 63
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ARTICLE X
Subordination
SECTION 10.01. Agreement To Subordinate ..................................... 64
SECTION 10.02. Liquidation, Dissolution, Bankruptcy ......................... 64
SECTION 10.03. Default on Senior Indebtedness ............................... 65
SECTION 10.04. Acceleration of Payment of Securities ........................ 66
SECTION 10.05. When Distribution Must Be Paid Over .......................... 66
SECTION 10.06. Subrogation .................................................. 66
SECTION 10.07. Relative Rights .............................................. 67
SECTION 10.08. Subordination May Not Be Impaired by Company ................. 67
SECTION 10.09. Rights of Trustee and Paying Agent ........................... 67
SECTION 10.10. Distribution or Notice to Representative ..................... 67
SECTION 10.11. Article X Not To Prevent Events of Default or Limit Right To
Accelerate ................................................. 67
SECTION 10.12. Trust Moneys Not Subordinated ................................ 67
SECTION 10.13. Trustee Entitled To Rely ..................................... 68
SECTION 10.14. Trustee To Effectuate Subordination .......................... 68
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness ..... 68
SECTION 10.16. Reliance by Holders of Senior Indebtedness on Subordination
Provisions ................................................. 68
SECTION 10.17. Trustee's Compensation Not Prejudiced ........................ 69
ARTICLE XI
Guarantees
SECTION 11.01. Guarantees ................................................... 69
SECTION 11.02. Limitation on Liability ...................................... 71
SECTION 11.03. Successors and Assigns ....................................... 71
SECTION 11.04. No Waiver .................................................... 72
SECTION 11.05. Modification ................................................. 72
SECTION 11.06. Execution of Supplemental Indenture for Future Guarantors .... 72
ARTICLE XII
Subordination of the Guarantees
SECTION 12.01. Agreement To Subordinate ..................................... 72
SECTION 12.02. Liquidation, Dissolution, Bankruptcy ......................... 72
SECTION 12.03. Default on Designated Senior Indebtedness of a Guarantor ..... 73
SECTION 12.04. Demand for Payment ........................................... 74
SECTION 12.05. When Distribution Must Be Paid Over .......................... 75
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SECTION 12.06. Subrogation .................................................. 75
SECTION 12.07. Relative Rights .............................................. 75
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor ............. 75
SECTION 12.09. Rights of Trustee and Paying Agent ........................... 75
SECTION 12.10. Distribution or Notice to Representative ..................... 76
SECTION 12.11. Article XII Not To Prevent Events of Default or Effect Right T
Demand Payment ............................................. 76
SECTION 12.12. Trustee Entitled To Rely ..................................... 76
SECTION 12.13. Trustee To Effectuate Subordination .......................... 76
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Indebtedness of a
Guarantor .................................................. 76
SECTION 12.15. Reliance by Holders of Senior Indebtedness of a Guarantor on
Subordination Provisions ................................... 77
SECTION 12.16. Defeasance ................................................... 77
ARTICLE XIII
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls ................................. 77
SECTION 13.02. Notices ...................................................... 77
SECTION 13.03. Communication by Holders with Other Holders .................. 78
SECTION 13.04. Certificate and Opinion as to Conditions Precedent ........... 78
SECTION 13.05. Statements Required in Certificate or Opinion ................ 78
SECTION 13.06. When Securities Disregarded .................................. 79
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar ................. 79
SECTION 13.08. Legal Holidays ............................................... 79
SECTION 13.09. GOVERNING LAW ................................................ 79
SECTION 13.10. No Recourse Against Others ................................... 79
SECTION 13.11. Successors ................................................... 79
SECTION 13.12. Multiple Originals ........................................... 80
SECTION 13.13. Table of Contents; Headings .................................. 80
Appendix A - Provisions Relating to Original Securities, Private Exchange
Securities and Exchange Securities
Exhibit A - Form of Face of Original
Exhibit B - Form of Face of Exchange Security
Exhibit C - Form of Supplemental Indenture
Exhibit D - Form of Transferee Letter of Representation
INDENTURE dated as of May 14, 1999, among ALASKA
COMMUNICATIONS SYSTEMS HOLDINGS, INC. (formerly known as
ALEC Acquisition Corporation), a Delaware corporation
(the "Company"), and each of (i) ALEC HOLDINGS, INC., a
Delaware corporation ("Holdings"), (ii) TELEPHONE
UTILITIES OF ALASKA, INC., TELEPHONE UTILITIES OF THE
NORTHLAND, INC., PTI COMMUNICATIONS OF ALASKA, INC.,
PACIFIC TELECOM OF ALASKA PCS, INC., PACIFIC TELECOM
CELLULAR OF ALASKA, INC., (iii) ATU COMMUNICATIONS,
INC., MACTEL, INC., MACTEL FAIRBANKS, INC., ATU LONG
DISTANCE, INC., PENINSULA CELLULAR SERVICES, INC.,
PRUDHOE COMMUNICATIONS, INC., (iv) ALASKA COMMUNICATIONS
SYSTEMS, INC., ALEC ACQUISITION SUB CORP., MACTEL
LICENSE SUB, INC., MACTEL FAIRBANKS LICENSE SUB, INC.
and PTINET, INC. (collectively, the "Guarantors"), as
guarantors, and IBJ WHITEHALL BANK & TRUST COMPANY, a
New York banking corporation, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of (i) the Company's 9 3/8%
Senior Subordinated Notes due 2009 issued on the date hereof (the "Original
Securities"), (ii) if and when issued as provided in the Registration Agreement
(as defined in Appendix A hereto (the "Appendix")), the Company's 9 3/8% Senior
Subordinated Notes due 2009 issued in the Registered Exchange Offer (as defined
in the Appendix) in exchange for any Original Securities (the "Exchange
Securities") and (iii) if and when issued as provided in the Registration
Agreement, the Private Exchange Securities (as defined in the Appendix, and
together with the Original Securities and any Exchange Securities issued
hereunder, the "Securities") issued in the Private Exchange (as defined in the
Appendix). Except as otherwise provided herein, the Securities will be limited
to $150,000,000 in aggregate principal amount outstanding.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Amounts" means any liquidated damages payable pursuant
to any exchange agreement, registration rights agreement or similar agreement
entered into in connection with the Indenture.
"Additional Assets" means:
(1) any property or assets (other than Indebtedness and Capital
Stock) to be used by the Company or a Restricted Subsidiary in a Related
Business;
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(2) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Company or another Restricted Subsidiary; or
(3) Capital Stock constituting a minority interest in any Person
that at such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary described in clauses (2)
or (3) above is primarily engaged in a Related Business.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any 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. For
purposes of Sections 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of shares representing 5% or more of the total voting power of
the Voting Stock (on a fully diluted basis) of Holdings or the Company or of
rights or warrants to purchase such Voting Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation, or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:
(1) any shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Subsidiary);
(2) all or substantially all the assets of any division or line of
business of the Company or any Restricted Subsidiary; or
(3) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such
Restricted Subsidiary;
(other than, in the case of (1), (2) and (3) above:
(a) a disposition by a Restricted Subsidiary to the Company or by
the Company or a Restricted Subsidiary to a Wholly Owned Subsidiary;
(b) for purposes of Section 4.06 only, a disposition subject to
Section 4.04;
(c) a disposition of assets with a fair market value of less than
$100,000;
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(d) a disposition of Temporary Cash Investments or goods held for
sale in the ordinary course of business or obsolete equipment or other
obsolete assets in the course of business consistent with past practices
of the Company;
(e) the disposition of all or substantially all of the assets of the
Company in a manner permitted under Section 5.01 or any disposition that
constitutes a Change of Control under the Indenture; and
(f) the lease, assignment or sub-lease of any real or personal
property in the ordinary course of business).
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing:
(1) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment
of such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by
(2) the sum of all such payments.
"Bank Indebtedness" means any and all amounts payable under or in
respect of the Credit Agreement, the notes issued pursuant thereto, the
guarantees thereof, the collateral documents relating thereto and any
Refinancing Indebtedness with respect thereto, as amended from time to time,
including principal, premium (if any), interest (including interest accruing on
or after the filing of any petition in bankruptcy or for reorganization relating
to the Company whether or not a claim for post-filing interest is allowed in
such proceedings), fees, charges, expenses, reimbursement obligations,
guarantees and all other amounts payable thereunder or in respect thereof.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of the Board of Directors
of the Company.
"Business Day" means each day that is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
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"Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be prepaid by the lessee
without payment of a penalty.
"Change of Control" means the occurrence of any of the following
events:
(1) prior to the earlier to occur of (a) the first public offering
of common stock of Holdings or (b) the first public offering of common
stock of the Company, the Permitted Holders, taken together, cease to be
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of a majority in the aggregate of
the total voting power of the Voting Stock of Holdings or the Company,
whether as a result of issuance of securities of Holdings or the Company,
any merger, consolidation, liquidation or dissolution of Holdings or the
Company, any direct or indirect transfer of securities by any Permitted
Holder or otherwise (for purposes of this clause (1) and clause (2) below,
the Permitted Holders shall be deemed to beneficially own any Voting Stock
of an entity (the "specified entity") held by any other entity (the
"parent entity") so long as the Permitted Holders beneficially own,
directly or indirectly, in the aggregate a majority of the voting power of
the Voting Stock of the parent entity);
(2) (a) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders, is
or becomes the beneficial owner (as defined in clause (1) above, except
that for purposes of this clause (2) such person shall be deemed to have
"beneficial ownership" of all shares that any 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 35% of the total
voting power of the Voting Stock of Holdings or the Company and (b) the
Permitted Holders beneficially own (as defined in clause (1) above),
directly or indirectly, in the aggregate a lesser percentage of the total
voting power of the Voting Stock of Holdings or the Company than such
other person and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of the
Board of Directors of Holdings or the Company, as the case may be (for the
purposes of this clause (2), such other person shall be deemed to
beneficially own any Voting Stock of a specified entity held by a parent
entity, if such other person is the beneficial owner (as defined in this
clause (2)), directly or indirectly, of more than 35% of the voting power
of the Voting Stock of such parent entity and the Permitted Holders
beneficially own (as defined in clause (1) above), directly or indirectly,
in the aggregate a lesser percentage of the voting power of the Voting
Stock of such parent entity and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a majority
of the board of directors of such parent entity);
(3) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Company or Holdings, as the case may be (together with any new directors
(a) whose election by such Board of Directors of Holdings or the Company,
as the case may be, or whose nomination for election by the
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shareholders of Holdings or the Company, as the case may be, was approved
by a majority vote of the directors of Holdings or the Company, as the
case may be, 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 or (b) who are designees of the Permitted Holders
or were nominated by the Permitted Holders) cease for any reason to
constitute a majority of the Board of Directors of the Company or
Holdings, as the case may be, then in office;
(4) the adoption of a plan relating to the liquidation or
dissolution of Holdings or the Company;
(5) the merger or consolidation of Holdings or the Company with or
into another Person or the merger of another Person with or into Holdings
or the Company, or the sale of all or substantially all the assets of
Holdings or the Company to another Person (other than a Person that is
controlled by the Permitted Holders), and, in the case of any such merger
or consolidation, the securities of Holdings or the Company that are
outstanding immediately prior to such transaction and that represent 100%
of the aggregate voting power of the Voting Stock of Holdings or the
Company are changed into or exchanged for cash, securities or property,
unless pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of the
surviving Person or transferee that represent immediately after such
transaction, at least a majority of the aggregate voting power of the
Voting Stock of the surviving Person or transferee; or
(6) the Company ceases to be a Wholly Owned Subsidiary of Holdings.
"Closing Date" means the date of the Indenture.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Alaska Communications Systems Holdings, Inc., a
Delaware corporation formerly known as ALEC Acquisition Corporation.
"Consolidated Current Liabilities" as of the date of determination
means the aggregate amount of liabilities of the Company and its Consolidated
Restricted Subsidiaries which may properly be classified as current liabilities
(including taxes accrued as estimated), on a Consolidated basis, after
eliminating:
(1) all intercompany items between the Company and any Restricted
Subsidiary; and
(2) all current maturities of long-term Indebtedness, all as
determined in accordance with GAAP consistently applied.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its Consolidated Restricted Subsidiaries,
plus, to the extent Incurred by the
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Company and its Consolidated Restricted Subsidiaries in such period but not
included in such interest expense:
(1) interest expense attributable to Capitalized Lease Obligations
and the interest expense attributable to leases constituting part of a
Sale/Leaseback Transaction;
(2) amortization of debt discount and debt issuance costs;
(3) capitalized interest;
(4) non-cash interest expense;
(5) commissions, discounts and other fees and charges attributable
to letters of credit and bankers' acceptance financing;
(6) interest accruing on any Indebtedness of any other Person to the
extent such Indebtedness is guaranteed by the Company or any Restricted
Subsidiary;
(7) amortization of net costs associated with Hedging Obligations
(including amortization of fees);
(8) dividends in respect of all Disqualified Stock of the Company
and all Preferred Stock of any of the Subsidiaries of the Company, to the
extent held by Persons other than the Company or a Wholly Owned
Subsidiary;
(9) interest Incurred in connection with investments in discontinued
operations; and
(10) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income of
the Company and its Consolidated Subsidiaries for such period; provided,
however, that there shall not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that:
(a) subject to the limitations contained in clause (4) below,
the Company's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the
aggregate amount of cash or other assets actually distributed by
such Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution made to a Restricted Subsidiary,
to the limitations contained in clause (3) below); and
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(b) the Company's equity in a net loss of any such Person for
such period shall be included in determining such Consolidated Net
Income;
(2) any net income (or loss) of any Person acquired by the Company
or a Subsidiary of the Company in a pooling of interests transaction for
any period prior to the date of such acquisition;
(3) any net income of any Restricted Subsidiary to the extent that
the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of its net income is not, at the date of
determination, permitted without any prior governmental approval (which
has not been obtained) or, directly or indirectly, by the operation of the
terms of its charter, or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders, unless such restrictions with
respect to the payment of dividends or similar distributions have been
legally waived, except that the net loss of any such Restricted Subsidiary
for such period shall be included in determining such Consolidated Net
Income;
(4) any gain (but not loss) realized upon the sale or other
disposition of any asset of the Company or its Consolidated Subsidiaries
(including pursuant to any Sale/Leaseback Transaction) that is not sold or
otherwise disposed of in the ordinary course of business and any gain (but
not loss) realized upon the sale or other disposition of any Capital Stock
of any Person;
(5) any extraordinary or otherwise nonrecurring gain or loss; and
(6) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall
be excluded from Consolidated Net Income any dividends, repayments of loans or
advances or other transfers of assets from Unrestricted Subsidiaries to the
Company or a Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted under clause
(1)(d)(iii)(E) of Section 4.04.
"Consolidated Net Tangible Assets" as of any date of determination,
means the total amount of assets (less accumulated depreciation and
amortization, allowances for doubtful receivables, other applicable reserves and
other properly deductible items) which would appear on a consolidated balance
sheet of the Company and its Consolidated Restricted Subsidiaries, determined on
a Consolidated basis in accordance with GAAP, and after giving effect to
purchase accounting and after deducting therefrom Consolidated Current
Liabilities and, to the extent otherwise included, the amounts of;
(1) minority interests in Consolidated Subsidiaries held by Persons
other than the Company or a Restricted Subsidiary;
(2) excess of cost over fair value of assets of businesses acquired,
as determined in good faith by the Board of Directors;
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(3) any revaluation or other write-up in book value of assets
subsequent to the Closing date as a result of a change in the method of
valuation in accordance with GAAP consistently applied;
(4) unamortized debt discount and expenses and other unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade
names, copyrights, licenses, organization or developmental expenses and
other intangible items;
(5) treasury stock;
(6) cash set apart and held in a sinking or other analogous fund
established for the purpose of redemption or other retirement of Capital
Stock to the extent such obligation is not reflected in Consolidated
Current Liabilities; and
(7) Investments in and assets of Unrestricted Subsidiaries.
"Consolidation" means the consolidation of the amounts of each of
the Restricted Subsidiaries with those of the Company in accordance with GAAP
consistently applied; provided, however, that "Consolidation" shall not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Company or any Restricted Subsidiary in an Unrestricted Subsidiary shall
be accounted for as an investment. The term "Consolidated" has a correlative
meaning.
"Credit Agreement" means the credit agreement to be entered into
among the Company, Holdings, the financial institutions named therein, The Chase
Manhattan Bank, as Administrative Agent, Canadian Imperial Bank of Commerce, as
Syndication Agent and Credit Suisse First Boston, as Documentation Agent, as
amended, waived or otherwise modified from time to time (except to the extent
that any such amendment, waiver or other modification thereto would be
prohibited by the terms of this Indenture, unless otherwise agreed to by the
Holders of at least a majority in aggregate principal amount of Securities at
the time outstanding), including any such amendments or modifications (or any
other credit agreement or credit agreements) that replace, refund or refinance
any or a portion of the commitments or loans thereunder, up to a maximum
principal amount not to exceed $585,000,000.
"Currency Agreement" means, with respect to any Person, any foreign
exchange contract, currency swap agreements or other similar agreement or
arrangement to which such Person is a party or of which it is a beneficiary.
"Debt to EBITDA Ratio" as of any date of determination means the
ratio of:
(1) Total Consolidated Indebtedness as of the date of determination
to
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(2) EBITDA for the period of the most recent four consecutive fiscal
quarters ending at the end of the most recent fiscal quarter for which
financial statements are publicly available; provided, however, that:
(a) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since
the beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case, other
than Indebtedness Incurred under any revolving credit facility
unless such Indebtedness has been permanently repaid and has not
been replaced) on the date of the transaction giving rise to the
need to calculate the Debt to EBITDA Ratio, EBITDA for such period
shall be calculated on a pro forma basis as if such discharge had
occurred on the first day of such period and as if the Company or
such Restricted Subsidiary has not earned the interest income
actually earned during such period in respect of cash or Temporary
Cash Investments used to repay, repurchase, defease or otherwise
discharge such Indebtedness;
(b) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition, the
EBITDA for such period shall be reduced by an amount equal to the
EBITDA (if positive) directly attributable to the assets that are
the subject of such Asset Disposition for such period or increased
by an amount equal to the EBITDA (if negative) directly attributable
thereto for such period;
(c) if since the beginning of such period, the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Person that is merged with or into the Company or
any Restricted Subsidiary (or any Person that becomes a Restricted
Subsidiary) or an acquisition of assets, including any acquisition
of assets occurring in connection with a transaction causing a
calculation to be made hereunder, which constitutes all or
substantially all of an operating unit of a business, EBITDA for
such period shall be calculated after giving pro forma effect
thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period;
any such pro forma calculation may include adjustments appropriate
to reflect, without duplication (x) any such acquisition to the
extent such adjustments may be reflected in the preparation of pro
forma financial information in accordance with the requirements of
GAAP and Article XI of Regulation S-X under the Exchange Act; (y)
the annualized amount of operating expense reductions reasonably
expected to be realized in the six months following any such
acquisition made during any of the four fiscal quarters constituting
the four-quarter reference period prior to the date of
determination; and (z) the annualized amount of operating expense
reductions reasonably expected to be realized in the six months
following any such acquisition made by the Company during either of
the two fiscal quarters immediately preceding the four-quarter
reference period prior to the date of determination; provided that
in either case such adjustments are set forth in an Officers'
Certificate signed by the Company's chief executive officer and
chief financial officer which states (i) the
10
amount of such adjustment or adjustments, (ii) that such adjustment
or adjustments are based on the reasonable good faith beliefs of the
officers executing such Officers' Certificate at the time of such
execution and (iii) that any related Incurrence of Indebtedness is
permitted pursuant to the Indenture; and
(d) if since the beginning of such period, any Person (that
subsequently became a Restricted Subsidiary or was merged with or
into the Company or any Restricted Subsidiary since the beginning of
such period) shall have made any Asset Disposition or any Investment
or acquisition of assets that would have required an adjustment
pursuant to clause (b) or (c) above if made by the Company or a
Restricted Subsidiary during such period, EBITDA for such period
shall be calculated after giving pro forma effect thereto as if such
Asset Disposition, Investment or acquisition of assets occurred on
the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets and the amount of income or earnings relating thereto, the
pro forma calculations shall be determined in good faith by a responsible
financial or accounting Officer of the Company. If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest
expense on such Indebtedness shall be calculated as if the rate in effect on the
date of determination had been the applicable rate for the entire period (taking
into account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term as at the date of determination in
excess of 12 months).
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Designated Senior Indebtedness" of the Company or a Guarantor
means:
(1) Bank Indebtedness; and
(2) any other Senior Indebtedness of the Company or such Guarantor
that, at the date of determination, has an aggregate principal amount
outstanding of, or under which, at the date of determination, the holders
thereof are committed to lend up to at least $15,000,000 and is
specifically designated by the Company or such Guarantor in the instrument
evidencing or governing such Senior Indebtedness as "Designated Senior
Indebtedness" for purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event:
(1) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise;
(2) is convertible or exchangeable for Indebtedness or Disqualified
Stock; or
11
(3) is redeemable at the option of the holder thereof, in whole or
in part;
in each case on or prior to the first anniversary of the Stated Maturity of the
Securities; provided, however, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof 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
first anniversary of the Stated Maturity of the Securities shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more favorable to the holders of such
Capital Stock than the provisions of Sections 4.06 and 4.08.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
other than a Foreign Subsidiary.
"EBITDA" for any period means the Consolidated Net Income for such
period, plus the following to the extent deducted in calculating such
Consolidated Net Income:
(1) income tax expense of the Company and its Consolidated
Restricted Subsidiaries;
(2) Consolidated Interest Expense;
(3) depreciation expense of the Company and its Consolidated
Restricted Subsidiaries;
(4) amortization expense of the Company and its Consolidated
Restricted Subsidiaries (excluding amortization expense attributable to a
prepaid cash item that was paid in a prior period); and
(5) all other non-cash charges of the Company and its Consolidated
Restricted Subsidiaries (excluding any such non-cash charge to the extent
it represents an accrual of or reserve for cash expenditures in any future
period, but that will not be expensed in such future periods),
in each case for such period.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization and non-cash charges of, a
Restricted Subsidiary of the Company shall be added to Consolidated Net Income
to compute EBITDA only to the extent (and in the same proportion) that the net
income of such Restricted Subsidiary was included in calculating Consolidated
Net Income and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Restricted
Subsidiary or its stockholders.
12
"Equity Offering" means any public or private sale of Capital Stock
(other than Disqualified Stock) of the Company or Holdings, other than offerings
of the Company or Holdings of the type that can be registered on Form S-8.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Foreign Subsidiary" means any Restricted Subsidiary of the Company
that is not organized under the laws of the United States of America or any
state thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including those set forth
in:
(1) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants;
(2) statements and pronouncements of the Financial Accounting
Standards Board;
(3) such other statements by such other entities as approved by a
significant segment of the accounting profession; and
(4) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in
periodic reports required to be filed pursuant to Section 13 of the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
SEC.
All ratios and computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of any Person:
(1) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation of such other Person
(whether arising by virtue of partnership arrangements, or by agreement to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise);
or
(2) entered into for purposes of assuring in any other manner the
obligee of such Indebtedness or other obligation of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in
part);
provided, however, that the term "guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "guarantee"
used as a verb has a
13
corresponding meaning. The term "guarantor" shall mean any Person guaranteeing
any obligation.
"Guarantee" means each guarantee of the obligations with respect to
the Notes issued by a Guarantor pursuant to the terms of the Indenture.
"Guarantor" means Holdings, each of Telephone Utilities of Alaska,
Inc., Telephone Utilities of the Northland, Inc., PTI Communications of Alaska,
Inc., Pacific Telecom of Alaska PCS, Inc., Pacific Telecom Cellular of Alaska,
Inc., ATU Communications, Inc., MACtel, Inc., MACtel Fairbanks, Inc., ATU Long
Distance, Inc., Peninsula Cellular Services, Inc., Prudhoe Communications, Inc.,
Alaska Communications Systems, Inc., ALEC Acquisition Sub Corp., MACtel License
Sub, Inc. and MACtel Fairbanks License Sub, Inc., PTINet, Inc. and any other
Domestic Subsidiary of the Company that has provided a guarantee.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Holdings" means ALEC Holdings, Inc., a Delaware corporation.
"Holdings Discount Debentures" means the discount debentures issued
by Holdings pursuant to the Holdings Discount Indenture for gross cash proceeds
of not less than $25,000,000.
"Holdings Discount Indenture" means the indenture to be entered into
between Holdings and The Bank of New York in connection with the issuance of the
Holdings Discount Debentures, together with all instruments and other agreements
entered into by Holdings in connection therewith.
"Incur" means issue, assume, guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person is merged or consolidated with the
Company or becomes a Subsidiary of the Company (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Person at the time of such merger or consolidation or at the time it becomes a
Subsidiary of the Company. The term "Incurrence" when used as a noun shall have
a correlative meaning. The accretion of principal of a non-interest bearing or
other discount security shall not be deemed the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money;
14
(2) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments;
(3) all obligations of such Person in respect of letters of credit
or other similar instruments (including reimbursement obligations with
respect thereto);
(4) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables and
contingent obligations to pay earn-outs), which purchase price is due more
than six months after the date of placing such property in service or
taking delivery and title thereto or the completion of such services;
(5) all Capitalized Lease Obligations and all Attributable Debt of
such Person;
(6) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such Person, any Preferred Stock (but
excluding, in each case, any accrued dividends);
(7) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such
Person; provided, however, that the amount of Indebtedness of such Person
shall be the lesser of:
(A) the fair market value of such asset at such date of
determination and
(B) the amount of such Indebtedness of such other Persons;
(8) to the extent not otherwise included in this definition, Hedging
Obligations of such Person; and
(9) all obligations of the type referred to in clauses (1) through
(8) above of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise, including by
means of any guarantee.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Interest Rate Agreement" means, with respect to any Person, any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
15
"Investment" in any Person means any, direct or indirect, advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of the lender) or other
extension of credit (including by way of guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary" and Section 4.04:
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however,
that, upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have a permanent "Investment"
in an Unrestricted Subsidiary in an amount (if positive) equal to:
(a) the Company's Investment in such Subsidiary at the time of
such redesignation, less
(b) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net
assets of such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its fair market value at the time of such transfer, in
each case, as determined in good faith by the Board of Directors.
"Legal Holiday" means a Saturday, Sunday or other day on which
banking institutions in the State of New York are authorized or required by law
to close.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Management Group" means the group consisting of current and former
directors and executive officers of the Company.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and proceeds
from the sale or other disposition of any securities received as consideration,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to the properties or assets that are the subject of such
Asset Disposition or received in any other non-cash form) therefrom, in each
case net of:
(1) all legal fees and expenses, title and recording tax expenses,
commissions and other fees and expenses incurred, and all federal, state,
provincial, foreign and local taxes
16
required to be paid or accrued as a liability under GAAP, as a consequence
of such Asset Disposition;
(2) all payments, including any prepayment premiums or penalties,
made on any Indebtedness that is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any Lien upon or other
security agreement of any kind with respect to such assets, or which must
by its terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law be repaid out of the proceeds from such
Asset Disposition;
(3) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of
such Asset Disposition; and
(4) appropriate amounts to be provided by the seller as a reserve,
in accordance with GAAP, against any liabilities associated with the
property or other assets disposed of in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such Asset
Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees and expenses actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee.
"Permitted Holders" means Fox Paine Capital Fund, L.P., and its
Affiliates, FPC Investors, L.P., ALEC Coinvestment Fund I, LLC, ALEC
Coinvestment Fund II, LLC, ALEC Coinvestment Fund III, LLC, ALEC Coinvestment
Fund IV, LLC, ALEC Coinvestment Fund V, LLC, ALEC Coinvestment Fund VI, LLC, the
Management Group and any Person acting in the capacity of an underwriter in
connection with a public or private offering of Holdings' or the Company's
Capital Stock.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that will, upon
the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a
Related Business;
17
(2) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted
Subsidiary; provided, however, that such Person's primary business is a
Related Business;
(3) Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
(5) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of
business;
(6) any loans or advances to employees made in the ordinary course
of business consistent with past practices of the Company or such
Restricted Subsidiary and not exceeding, when aggregated with amounts
loaned or advanced under clause (2)(f)(iv) of Section 4.04, $5,000,000 in
the aggregate outstanding at any one time;
(7) stock, obligations or securities received in settlement of (or
foreclosure with respect to) debts created in the ordinary course of
business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments;
(8) any Person to the extent such Investment represents the non-cash
or deemed cash portion of the consideration received for an Asset
Disposition that was made pursuant to and in compliance with Section 4.06;
(9) any Investment existing on the Closing Date;
(10) Hedging Obligations permitted under paragraph (2)(g) of Section
4.03;
(11) guarantees of Indebtedness permitted under Section 4.03;
(12) Investments which are made exclusively with Capital Stock of
Holdings or the Company (other than Disqualified Stock); and
(13) additional Investments having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause
(13) that are at the time outstanding, not to exceed $5,000,000 at the
time of such Investment (with the fair market value of each Investment
being measured at the time made and without giving effect to subsequent
changes in value).
18
"Permitted Joint Venture Interests" means equity interests
representing at least 35% of the Voting Stock of a Person engaged in a business
in which the Company was engaged at the Closing Date or a Related Business.
"Permitted Junior Securities" means debt or equity securities of the
Company or any successor corporation issued pursuant to a plan of reorganization
or readjustment of the Company that are subordinated to the payment of all
then-outstanding Senior Indebtedness of the Company at least to the same extent
that the Notes are subordinated to the payment of all Senior Indebtedness of the
Company on the Closing Date, so long as to the extent that any Senior
Indebtedness of the Company outstanding on the date of consummation of any such
plan of reorganization or readjustment is not paid in full in cash or cash
equivalents on such date, the holders of any such Senior Indebtedness not so
paid in full in cash or cash equivalents have consented to the terms of such
plan of reorganization or readjustment.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock," as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.
"principal" of a Security means the principal of the Security plus
the premium, if any, payable on the Security that is due or overdue or is to
become due at the relevant time.
"Purchase Money Indebtedness" means Indebtedness:
(1) consisting of the deferred purchase price of an asset,
conditional sale obligations, obligations under any title retention
agreement and other purchase money obligations, in each case where the
maturity of such Indebtedness does not exceed the anticipated useful life
of the asset being financed; and
(2) incurred to finance the acquisition by the Company or a
Restricted Subsidiary of such asset, including additions and improvements;
provided, however, that such Indebtedness is incurred within 180 days
before or after the acquisition by the Company or such Restricted
Subsidiary of such asset.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, replace, prepay, redeem, defease or retire, or to
issue other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, repay, redeem, retire, renew, repay or extend
(including pursuant to any defeasance or discharge mechanism) any Indebtedness
of the Company or any Restricted
19
Subsidiary existing on the Closing Date or Incurred in compliance with this
Indenture (including Indebtedness of the Company that Refinances Refinancing
Indebtedness); provided, however, that:
(1) other than with respect to Senior Indebtedness, the Refinancing
Indebtedness has a Stated Maturity no earlier than the Stated Maturity of
the Indebtedness being Refinanced;
(2) other than with respect to Senior Indebtedness, the Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness
is Incurred that is equal to or greater than the Average Life of the
Indebtedness being refinanced;
(3) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount
(or if issued with original issue discount, the aggregate accreted value)
then outstanding of the Indebtedness being Refinanced; and
(4) if the Indebtedness being Refinanced is subordinated in right of
payment to the Securities, such Refinancing Indebtedness is subordinated
in right of payment to the Securities at least to the same extent as the
Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall not include:
(a) other than with respect to Senior Indebtedness, Indebtedness of
a Restricted Subsidiary that Refinances Indebtedness of the Company; or
(b) Indebtedness of the Company or a Restricted Subsidiary that
Refinances Indebtedness of an Unrestricted Subsidiary.
"Related Business" means any business related, ancillary or
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Closing Date.
"Representative" means the trustee, agent or representative (if any)
for an issue of Senior Indebtedness.
"Restricted Subsidiary" means any Subsidiary of the Company other
than an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired by the Company or a Restricted
Subsidiary whereby the Company or a Restricted Subsidiary transfers such
property to a Person and the Company or such Restricted Subsidiary leases it
from such Person, other than leases between the Company and a Wholly Owned
Subsidiary or between Wholly Owned Subsidiaries.
"SEC" means the Securities and Exchange Commission.
20
"Secured Indebtedness" means any Indebtedness of the Company or any
Guarantor secured by a Lien.
"Senior Indebtedness" of the Company or any Guarantor means the
principal of, premium (if any) and accrued and unpaid interest on (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization of the Company or such Guarantor, regardless of whether or not a
claim for post-filing interest is allowed in such proceedings), and fees and
other amounts (including expenses, reimbursement obligations under letters of
credit and indemnities) owing in respect of, Bank Indebtedness and all other
Indebtedness of the Company or such Guarantor, whether outstanding on the
Closing Date or thereafter Incurred, unless in the instrument creating or
evidencing the same or pursuant to which the same is outstanding it is provided
that such obligations are not superior in right of payment to the Securities or
such Guarantor's Guarantee; provided, however, that Senior Indebtedness shall
not include:
(1) any obligation of the Company to Holdings or any Subsidiary of
the Company or of such Guarantor to the Company or Holdings or any
Subsidiary of the Company;
(2) any liability for federal, state, local or other taxes owed or
owing by the Company or such Guarantor;
(3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including guarantees thereof
or instruments evidencing such liabilities);
(4) any Indebtedness or obligation of the Company or such Guarantor
(and any accrued and unpaid interest in respect thereof) that is
subordinate or junior in any respect to any other Indebtedness or
obligation of the Company or such Guarantor, as applicable, including any
Senior Subordinated Indebtedness and any Subordinated Obligations;
(5) any obligations with respect to any Capital Stock; or
(6) any Indebtedness Incurred in violation of the Indenture.
If any Senior Indebtedness is disallowed, avoided or subordinated pursuant to
the provisions of Section 548 of Title 11 of the United States Bankruptcy Code
or any applicable state fraudulent conveyance law, such Senior Indebtedness
nevertheless will constitute Senior Indebtedness.
"Senior Subordinated Indebtedness" of the Company or any Guarantor
means the Securities or the Guarantees, as applicable, and any other
Indebtedness of the Company or such Guarantor that specifically provides that
such Indebtedness is to rank pari passu with the Securities or the Guarantees,
as applicable, in right of payment and is not subordinated by its terms in right
of payment to any Indebtedness or other obligation of the Company or such
Guarantor which is not Senior Indebtedness.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
21
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Company or
any Guarantor (whether outstanding on the Closing Date or thereafter Incurred)
that is subordinate or junior in right of payment to the Securities pursuant to
a written agreement.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity:
(1) of which securities or other ownership interests representing
more than 50% of the equity or more than 50% of the ordinary voting power
or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held; or
(2) that is, as of such date, otherwise controlled by the parent or
one or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"Telecommunications Assets" means (1) assets used or useful in the
operating businesses of the Company at the Closing Date or in a Related Business
or (2) equity interests representing a majority of the Voting Stock of Persons
engaged in such businesses.
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof;
(2) investments in time deposit accounts, certificates of deposit
and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company that is organized
under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States of America having capital,
surplus and undivided profits aggregating in excess of $250,000,000 (or
the foreign currency equivalent thereof) and whose long-term debt is rated
"A" (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule
436 under the Securities Act);
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above entered
into with a bank meeting the qualifications described in clause (2) above;
22
(4) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to Moody's Investors
Service, Inc. or "A-1" (or higher) according to Standard and Poor's
Ratings Service, a division of The McGraw-Hill Companies, Inc. ("S&P");
and
(5) investments in securities with maturities of six months or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by S&P or "A" by Moody's Investors Service, Inc.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the Closing Date.
"Total Consolidated Indebtedness" means, as of any date of
determination, an amount equal to the aggregate amount of all Indebtedness of
the Company and its Restricted Subsidiaries, determined on a Consolidated basis,
outstanding as of such date of determination, after giving effect to any
Incurrence of Indebtedness and the application of the proceeds therefrom giving
rise to such determination.
"Trade Payables" means, with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or guaranteed by such Person arising in the ordinary course of business
in connection with the acquisition of goods or services.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or
any other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors
in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary of the Company) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Capital Stock or Indebtedness of, or owns or
23
holds any Lien on any property of, the Company or any other Subsidiary of the
Company that is not a Subsidiary of the Subsidiary to be so designated;
provided, however, that either:
(1) the Subsidiary to be so designated has total Consolidated assets
of $1,000 or less; or
(2) if such Subsidiary has Consolidated assets greater than $1,000,
then such designation would be permitted under Section 4.04.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, however, that immediately after giving effect
to such designation:
(1) the Company could Incur $1.00 of additional Indebtedness under
paragraph (1) of Section 4.03 and
(2) no Default shall have occurred and be continuing.
Any such designation of a Subsidiary as a Restricted Subsidiary or Unrestricted
Subsidiary by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution of the Board of
Directors giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and that are not callable or redeemable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the
Company all the Capital Stock of which (other than directors' qualifying shares)
is owned by the Company or another Wholly Owned Subsidiary.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction" .................................. 4.07(1)
"Bankruptcy Law" ......................................... 6.01
"Blockage Notice" ........................................ 10.03
"covenant defeasance option" ............................. 8.01(b)
"Custodian" .............................................. 6.01
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"Event of Default" ..................................... 6.01
"legal defeasance option" .............................. 8.01(b)
"Offer" ................................................ 4.06(2)
"Offer Amount" ......................................... 4.06(3)(b)
"Offer Period" ......................................... 4.06(3)(b)
"pay the Securities" ................................... 10.03
"Paying Agent" ......................................... 2.03
"Payment Blockage Period" .............................. 10.03
"protected purchaser" .................................. 2.07
"Registrar" ............................................ 2.03
"Successor Company" .................................... 5.01(a)
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities and the Guarantees.
"indenture security holder" means a Holder or Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the
Guarantors and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
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(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared
in accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE II
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the Original
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Appendix, which is hereby incorporated in and expressly made a part
of this Indenture. The (i) Original Securities and the Trustee's certificate of
authentication and (ii) Private Exchange Securities and the Trustee's
certificate of authentication shall each be substantially in the form of Exhibit
A hereto, which is hereby incorporated in and expressly made a part of this
Indenture. The Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit B hereto, which is
hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company or any Guarantor is subject, if
any, or usage (provided that any such notation, legend or endorsement is in a
form acceptable to the Company). Each Security shall be dated the date of its
authentication. The Securities shall be issuable only in registered form without
interest coupons and only in denominations of $1,000 and integral multiples
thereof.
SECTION 2.02. Execution and Authentication. One or more Officers
shall sign the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery
Securities as set forth in the Appendix.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Any such appointment
shall be evidenced by an instrument signed by a Trust Officer, a copy of which
shall be furnished to the Company. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities
26
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent, and the
term "Registrar" includes any co-registrars. The Company initially appoints the
Trustee as (i) Registrar and Paying Agent in connection with the Securities and
(ii) the Securities Custodian (as defined in the Appendix) with respect to the
Global Securities (as defined in the Appendix).
The Company shall enter into an appropriate agency agreement with
any Registrar or Paying Agent not a party to this Indenture, which shall
incorporate the terms of the TIA. The agreement shall implement the provisions
of this Indenture that relate to such agent. The Company shall notify the
Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any of its domestically organized Wholly Owned Subsidiaries may act
as Paying Agent or Registrar.
The Company may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Trustee; provided, however,
that no such removal shall become effective until (1) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Company and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (2) notification to the Trustee that the Trustee
shall serve as Registrar or Paying Agent until the appointment of a successor in
accordance with clause (1) above. The Registrar or Paying Agent may resign at
any time upon written notice; provided, however, that the Trustee may resign as
Paying Agent or Registrar only if the Trustee also resigns as Trustee in
accordance with Section 7.08.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Security, the Company shall deposit
with the Paying Agent (or if the Company or a Subsidiary is acting as Paying
Agent, segregate and hold in trust for the benefit of the Persons entitled
thereto) a sum sufficient to pay such principal and interest when so becoming
due. The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary of the Company acts as Paying Agent, it shall segregate the
money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section 2.04, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
27
SECTION 2.05. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish, or cause the Registrar to furnish, to the
Trustee, in writing at least five Business Days before each interest payment
date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange. The Securities shall be issued
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer and in compliance with the Appendix. When
a Security is presented to the Registrar with a request to register a transfer,
the Registrar shall register the transfer as requested if the requirements of
Section 8-401(a)(l) of the Uniform Commercial Code are met. When Securities are
presented to the Registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's request. The Company
may require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges in connection with any transfer or exchange pursuant to
this Section 2.06. The Company shall not be required to make and the Registrar
need not register transfers or exchanges of Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion thereof
not to be redeemed) or any Securities for a period of 15 days before a selection
of Securities to be redeemed.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Guarantors, the Trustee, the Paying Agent, and the
Registrar may deem and treat the Person in whose name a Security is registered
as the absolute owner of such Security for the purpose of receiving payment of
principal of and interest, if any, on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
any Guarantor, the Trustee, the Paying Agent, or the Registrar shall be affected
by notice to the contrary.
Any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interest in such Global Security
may be effected only through a book-entry system maintained by (i) the Holder of
such Global Security (or its agent) or (ii) any Holder of a beneficial interest
in such Global Security, and that ownership of a beneficial interest in such
Global Security shall be required to be reflected in a book entry.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met, such that the Holder (i)
satisfies the Company or the Trustee within a reasonable time after he has
notice of
28
such loss, destruction or wrongful taking and the Registrar does not register a
transfer prior to receiving such notification, (ii) makes such request to the
Company or the Trustee prior to the Security being acquired by a protected
purchaser as defined in Section 8-303 of the Uniform Commercial Code (a
"protected purchaser") and (iii) satisfies any other reasonable requirements of
the Trustee. If required by the Trustee or the Company, such Holder shall
furnish an indemnity bond sufficient in the judgment of the Trustee to protect
the Company, the Trustee, the Paying Agent and the Registrar from any loss that
any of them may suffer if a Security is replaced. The Company and the Trustee
may charge the Holder for their expenses in replacing a Security. In the event
any such mutilated, lost, destroyed or wrongfully taken Security has become or
is about to become due and payable, the Company in its discretion may pay such
Security instead of issuing a new Security in replacement thereof.
Every replacement Security is an additional obligation of the
Company.
The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, lost, destroyed or wrongfully taken
Securities.
SECTION 2.08. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancelation and those described in this Section
2.08 as not outstanding. Subject to Section 13.06, a Security does not cease to
be outstanding because the Company or an Affiliate of the Company holds the
Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a protected purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest and Additional Amounts payable on that date with
respect to the Securities (or portions thereof) to be redeemed or maturing, as
the case may be, and the Paying Agent is not prohibited from paying such money
to the Securityholders on that date pursuant to the terms of this Indenture,
then on and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. Temporary Securities. In the event that Definitive
Securities (as defined in the Appendix) are to be issued under the terms of this
Indenture, until such Definitive Securities are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate Definitive Securities and deliver them in exchange for temporary
Securities upon surrender of such temporary Securities at the office or agency
of the Company, without charge to the Holder.
29
SECTION 2.10. Cancelation. The Company at any time may deliver
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancelation and deliver canceled Securities to the Company pursuant to written
direction by an Officer. The Company may not issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancelation.
The Trustee shall not authenticate Securities in place of canceled Securities
other than pursuant to the terms of this Indenture.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay the defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any
lawful manner. The Company may pay the defaulted interest to the Persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail or cause to be
mailed to each Securityholder a notice that states the special record date, the
payment date and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
ARTICLE III
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph (g) of Section 4.08 or paragraph 5 of the
Securities, it shall notify the Trustee in writing of the redemption date and
the principal amount of Securities to be redeemed.
The Company shall give each notice to the Trustee provided for in
this Section 3.01 at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. If fewer than all the
Securities are to be redeemed, the record date relating to such redemption shall
be selected by the Company and given to the Trustee, which record date shall be
not fewer than 15 days after the date of notice to the Trustee. Any such notice
may be canceled at any time prior to notice of such redemption being mailed to
any Holder and shall thereby be void and of no effect.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by
30
lot or by a method that complies with applicable legal and securities exchange
requirements, if any, and that the Trustee in its sole discretion shall deem to
be fair and appropriate and in accordance with methods generally used at the
time of selection by fiduciaries in similar circumstances. The Trustee shall
make the selection from outstanding Securities not previously called for
redemption. The Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $1,000. Securities and portions
of them the Trustee selects shall be in amounts of $1,000 or a whole multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of redemption by first-class mail to each Holder of Securities to be
redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price and the amount of accrued interest to the
redemption date;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the certificate numbers and principal amounts of the particular Securities
to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Securities (or
portion thereof) called for redemption ceases to accrue on and after the
redemption date;
(7) the CUSIP number, if any, printed on the Securities being
redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 3.03.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities
31
shall be paid at the redemption price stated in the notice, plus accrued
interest and Additional Amounts, if any, to the redemption date; provided,
however, that if the redemption date is after a regular record date and on or
prior to the interest payment date, the accrued interest shall be payable to the
Securityholder of the redeemed Securities registered on the relevant record
date. Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. on
the redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest and
Additional Amounts, if any, on all Securities to be redeemed on that date other
than Securities or portions of Securities called for redemption that have been
delivered by the Company to the Trustee for cancelation. On and after the
redemption date, interest will cease to accrue on Securities or portions thereof
called for redemption so long as the Company has deposited with the Paying Agent
funds sufficient to pay the principal of, plus accrued and unpaid interest and
Additional Amounts (if any) on, the Securities to be redeemed.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
Covenants
SECTION 4.01. Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Notwithstanding that the Company may not
be subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the SEC, and provide the Trustee and
Securityholders and prospective Securityholders (upon request) within 15 days
after it files them with the SEC, copies of its annual report and the
information, documents and other reports that are specified in Section 13 and
15(d) of the Exchange Act. In addition, following an Equity Offering, the
Company shall furnish to the Trustee and the Securityholders, promptly upon
their becoming available, copies of the annual report to shareholders and any
other information provided by the Company or Holdings to its
32
public shareholders generally. The Company also shall comply with the other
provisions of TIA ss. 314(a).
SECTION 4.03. Limitation on Indebtedness. (1) The Company shall not,
and shall not permit any Restricted Subsidiary to, Incur any Indebtedness;
provided, however, that the Company or any Restricted Subsidiary may Incur
Indebtedness if on the date of such Incurrence and after giving effect thereto
the Debt to EBITDA Ratio would be less than 7:1.
(2) Notwithstanding the foregoing paragraph (1), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness:
(a) Bank Indebtedness in an aggregate principal amount not to exceed
$585,000,000 less the aggregate amount of all prepayments of principal
applied to permanently reduce any such Indebtedness;
(b) Indebtedness of the Company owed to and held by any Wholly Owned
Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by
the Company or any Wholly Owned Subsidiary; provided, however, that (i)
any subsequent issuance or transfer of any Capital Stock or any other
event that results in any such Wholly Owned Subsidiary ceasing to be a
Wholly Owned Subsidiary or any subsequent transfer of any such
Indebtedness (except to the Company or a Wholly Owned Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such Indebtedness by
the issuer thereof and (ii) if the Company is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the prior
payment in full in cash of all obligations with respect to the Securities;
(c) Indebtedness (i) represented by the Securities and the
Guarantees, (ii) outstanding on the Closing Date (other than the
Indebtedness described in clauses (a) and (b) above), (iii) consisting of
Refinancing Indebtedness Incurred in respect of any Indebtedness described
in this clause (c) (including Indebtedness Refinancing Indebtedness) or
Section 4.03(1) or (iv) consisting of guarantees of any Indebtedness
permitted under clauses (a) and (b) of this paragraph (2);
(d)(i) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on which such Restricted Subsidiary
was acquired by the Company (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a
Subsidiary of, or was otherwise acquired by, the Company); provided,
however, that on the date that such Restricted Subsidiary is acquired by
the Company, the Company would have been able to Incur $1.00 of additional
Indebtedness pursuant to Section 4.03(1) after giving effect to the
Incurrence of such Indebtedness pursuant to this clause (d) and (ii)
Refinancing Indebtedness Incurred by the Company or a Restricted
Subsidiary in respect of Indebtedness Incurred pursuant to this clause
(d);
33
(e) Indebtedness in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds provided by the
Company and the Restricted Subsidiaries in the ordinary course of their
business;
(f) Purchase Money Indebtedness and Capitalized Lease Obligations in
an aggregate principal amount not in excess of $20,000,000 at any time
outstanding;
(g) Hedging Obligations of the Company or any Guarantor directly
related to Indebtedness permitted to be Incurred by the Company or any
Guarantor pursuant to the Indenture for the purpose of fixing or hedging
interest rate risk or currency fluctuations;
(h)(i) Indebtedness of another Person Incurred and outstanding on or
prior to the date on which such Person consolidates with or merges with or
into the Company (other than Indebtedness Incurred as consideration in, or
to provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to
which such Person consolidates with or merges with or into the Company);
provided, however, that on the date that such transaction is consummated,
the Company would have been able to Incur $1.00 of additional Indebtedness
pursuant to Section 4.03(1) after giving effect to the Incurrence of such
Indebtedness pursuant to this clause (h) and (ii) Refinancing Indebtedness
Incurred by the Company or the Successor Company in respect of
Indebtedness Incurred pursuant to subclause (i) of this clause (h); or
(i) Indebtedness (other than Indebtedness permitted to be Incurred
pursuant to Section 4.03(1) or any other clause of this Section 4.03(2))
in an aggregate principal amount on the date of Incurrence that, when
added to all other Indebtedness Incurred pursuant to this clause (i) and
then outstanding, shall not exceed $5,000,000.
(3) Notwithstanding the foregoing, the Company shall not Incur any
Indebtedness pursuant to Section 4.03(2) above if the proceeds thereof are used,
directly or indirectly, to repay, prepay, redeem, defease, retire, refund or
refinance any Subordinated Obligations, unless such Indebtedness shall be
subordinated to the Securities to at least the same extent as such Subordinated
Obligations. The Company shall not Incur any Indebtedness if such Indebtedness
is subordinate or junior in ranking in any respect to any Senior Indebtedness
unless such Indebtedness is Senior Subordinated Indebtedness or is expressly
subordinated in right of payment to Senior Subordinated Indebtedness. In
addition, the Company shall not Incur any Secured Indebtedness that is not
Senior Indebtedness unless contemporaneously therewith effective provision is
made to secure the Securities equally and ratably with (or on a senior basis to,
in the case of Indebtedness subordinated in right of payment to the Notes) such
Secured Indebtedness for so long as such Secured Indebtedness is secured by a
Lien. A Guarantor shall not Incur any Indebtedness if such Indebtedness is by
its terms expressly subordinate or junior in ranking in any respect to any
Senior Indebtedness of such Guarantor unless such Indebtedness is Senior
Subordinated Indebtedness of such Guarantor or is expressly subordinated in
right of payment to Senior Subordinated Indebtedness of such Guarantor. In
addition, a Guarantor shall not Incur any Secured Indebtedness that is not
Senior Indebtedness of such Guarantor unless contemporaneously therewith
effective provision is made to secure the Guarantee of such Guarantor equally
and ratably with (or on a senior basis to, in the case of Indebtedness
34
subordinated in right of payment to such Guarantee) such Secured Indebtedness
for as long as such Secured Indebtedness is secured by a Lien.
(4) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that the Company or any Restricted Subsidiary may
Incur pursuant to this Section 4.03 shall not be deemed to be exceeded solely as
a result of fluctuations in the exchange rates of currencies. For purposes of
determining the outstanding principal amount of any particular Indebtedness
Incurred pursuant to this Section 4.03:
(a) Indebtedness Incurred pursuant to the Credit Agreement prior to
or on the Closing Date shall be treated as Incurred pursuant to Section
4.03(2)(a);
(b) Indebtedness permitted by this Section 4.03 need not be
permitted solely by reference to one provision permitting such
Indebtedness but may be permitted in part by one such provision and in
part by one or more other provisions of this Section 4.03 permitting such
Indebtedness; and
(c) in the event that Indebtedness meets the criteria of more than
one of the types of Indebtedness described in this Section 4.03, the
Company, in its sole discretion, shall classify such Indebtedness and only
be required to include the amount of such Indebtedness in one of such
clauses.
SECTION 4.04. Limitation on Restricted Payments. (1) The Company
shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to:
(a) declare or pay any dividend or make any distribution on or in
respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company) or similar payment to the
holders of its Capital Stock except dividends or distributions payable
solely in its Capital Stock (other than Disqualified Stock) and except
dividends or distributions payable to the Company or another Restricted
Subsidiary (and, if such Restricted Subsidiary has shareholders other than
the Company or other Restricted Subsidiaries, to its other shareholders on
a pro rata basis);
(b) purchase, redeem, retire or otherwise acquire for value any
Capital Stock of Holdings, the Company or any Restricted Subsidiary held
by Persons other than the Company or another Restricted Subsidiary;
(c) purchase, repurchase, redeem, defease or otherwise acquire or
retire for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment any Subordinated Obligations (other than
the purchase, repurchase or other acquisition of Subordinated Obligations
purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case, due within one year
of the date of acquisition); or
(d) make any Investment (other than a Permitted Investment) in any
Person (any such dividend, distribution, purchase, redemption, repurchase,
defeasance, other
35
acquisition, retirement or Investment being herein referred to as a
"Restricted Payment") if at the time the Company or such Restricted
Subsidiary makes such Restricted Payment:
(i) a Default shall have occurred and be continuing (or would
result therefrom);
(ii) the Company could not Incur at least $1.00 of additional
Indebtedness under Section 4.03(1); or
(iii) the aggregate amount of such Restricted Payment and all
other Restricted Payments (the amount so expended, if other than in
cash, to be determined in good faith by the Board of Directors,
whose determination shall be conclusive and evidenced by a
resolution of the Board of Directors) declared or made subsequent to
the Closing Date would exceed the sum of, without duplication:
(A) (i) 100% of EBITDA accrued during the period
(treated as one accounting period) from the beginning of the
fiscal quarter immediately following the fiscal quarter during
which the Closing Date occurs to the end of the most recent
fiscal quarter for which financial statements are publicly
available (or, in case such EBITDA will be a deficit, minus
100% of such deficit), minus
(ii) 140% of Consolidated Interest Expense accrued
during the period (treated as one accounting period) from the
beginning of the fiscal quarter immediately following the
fiscal quarter during which the Closing Date occurs to the end
of the most recent fiscal quarter for which financial
statements are publicly available; plus
(B) the aggregate Net Cash Proceeds received by the
Company from the issue or sale of its Capital Stock (other
than Disqualified Stock) subsequent to the Closing Date (other
than (x) an issuance or sale to a Subsidiary of the Company,
(y) an issuance or sale to an employee stock ownership plan or
other trust established by the Company or any of its
Subsidiaries or (z) to the extent used in accordance with
Section 4.04(2)(e)(ii) or Section 4.04(2)(f)(iii)(B); plus
(C) the aggregate Net Cash Proceeds received by the
Company from the sale or other disposition (other than to the
Company or a Restricted Subsidiary) of any Investments
previously made by the Company or a Restricted Subsidiary and
treated as a Restricted Payment; provided that the amount
added pursuant to this clause (C) shall not exceed the amount
treated as a Restricted Payment and not previously added
pursuant to this paragraph (iii); plus
(D) the amount by which Indebtedness of the Company or
its Restricted Subsidiaries is reduced on the Company's
balance sheet upon the conversion or exchange (other than by a
Subsidiary of the Company) subsequent to the
36
Closing Date of any Indebtedness of the Company or its
Restricted Subsidiaries issued after the Closing Date that is
convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of the Company (less the amount of any
cash or the fair market value of other property distributed by
the Company or any Restricted Subsidiary upon such conversion
or exchange); plus
(E) the amount equal to the net reduction in Investments
in Unrestricted Subsidiaries resulting from (i) payments of
dividends, repayments of the principal of loans or advances or
other transfers of assets to the Company or any Restricted
Subsidiary from Unrestricted Subsidiaries or (ii) the
redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued, in each case, as provided in the
definition of "Investment") not to exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously
made by the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary, which amount was included in the
calculation of the amount of Restricted Payments; plus
(F) $5,000,000.
(2) The provisions of Section 4.04(1) shall not prohibit:
(a) any purchase, repurchase, retirement, defeasance or other
acquisition or retirement for value of Capital Stock or Subordinated
Obligations of the Company made by exchange for, or out of the proceeds
of, the substantially concurrent sale of, Capital Stock of the Company
(other than Disqualified Stock and other than Capital Stock issued or
sold to a Subsidiary of the Company or an employee stock ownership plan
or other trust established by the Company or any of its Subsidiaries);
provided, however, that:
(i) such Restricted Payment shall be excluded in the
calculation of the amount of Restricted Payments; and
(ii) the Net Cash Proceeds from such sale applied in the
manner set forth in this clause (a) shall be excluded from the
calculation of amounts under clause (iii)(B) of Section 4.04(1);
(b) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness of the Company that is permitted to be
Incurred pursuant to Section 4.03(2); provided, however, that such
purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value shall be excluded in the calculation of the amount of
Restricted Payments;
(c) any purchase or redemption of Subordinated Obligations from Net
Available Cash to the extent permitted by Section 4.06; provided, however,
that such purchase or redemption shall be excluded in the calculation of
the amount of Restricted Payments;
37
(d) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with Section 4.04; provided, however, that such dividend shall be included
in the calculation of the amount of Restricted Payments;
(e) the repurchase or other acquisition of shares of, or options to
purchase shares of, common stock of the Company or any of its Subsidiaries
from employees, former employees, consultants, former consultants,
directors or former directors of the Company or any of its Subsidiaries
(or permitted transferees of such employees, former employees,
consultants, former consultants, directors or former directors), pursuant
to the terms of agreements (including employment agreements) or plans (or
amendments thereto) approved by the Board of Directors under which such
individuals purchase or sell, or are granted the option to purchase or
sell, shares of such common stock; provided, however, that the aggregate
amount of such repurchases, together with any amounts or other
distributions to Holdings under Section 4.04(2)(f)(iii), shall not exceed
in any calender year the sum of (i) $5,000,000 plus (ii) the Net Cash
Proceeds received (A) since the date of this Indenture by the Company or
received by Holdings and contributed to the Company from the sale of
Capital Stock to employees, consultants and directors of Holdings or the
Company and (B) not previously credited to any repurchase or other
acquisition of such shares or options to purchase shares of common stock
pursuant to this clause (2)(e)(ii) or clause (2)(f)(iii)(B) of Section
4.04; provided further, however, that such repurchases and other
acquisitions of shares, or options to purchase shares of common stock
shall be included in the calculation of the amount of Restricted Payments;
and
(f) payment of dividends, other distributions or other amounts by
the Company solely for the purposes set forth in clauses (i) through (iv)
below; provided, however, that such dividend, distribution or amount set
forth in clauses (i), (iii) and (iv) (but not clause (ii)) shall be
included in the calculation of the amount of Restricted Payments for the
purposes of Section 4.04(1):
(i) to Holdings in amounts equal to the amounts required for
Holdings to pay franchise taxes and other fees required to maintain
its corporate existence, and provide for other operating costs of up
to $7,500,000 per fiscal year;
(ii) to Holdings in amounts equal to amounts required for
Holdings to pay U.S. federal, state and local income taxes to the
extent such income taxes are attributable to the income of the
Company and its Restricted Subsidiaries (and, to the extent of
amounts actually received from its Unrestricted Subsidiaries, in
amounts required to pay such taxes to the extent attributable to the
income of such Unrestricted Subsidiaries);
(iii) to Holdings in amounts equal to amounts expended by
Holdings to repurchase or otherwise acquire shares of, or options to
purchase shares of, common stock of Holdings from employees, former
employees, consultants, former consultants, directors or former
directors of Holdings, the Company or any of the Company's
Subsidiaries (or permitted transferees of such employees,
38
former employees, consultants, former consultants, directors or
former directors), pursuant to the terms of agreements (including
employment agreements) or plans (or amendments thereto) approved by
the Board of Directors of Holdings under which such individuals
purchase or sell, or are granted the option to purchase or sell,
shares of such common stock of Holdings; provided, however, that the
aggregate amount paid, loaned or advanced to Holdings pursuant to
this clause (iii), together with the amounts of any repurchases or
other acquisitions under Section 4.04(2)(e), shall not exceed in any
calender year the sum of (A) $5,000,000 plus (B) the Net Cash
Proceeds received (1) since the date of the Indenture by the Company
or received by Holdings and contributed to the Company from the sale
of Capital Stock to employees, consultants and directors of Holdings
or the Company and (2) not previously credited to any repurchase or
other acquisition of such shares or options to purchase shares of
common stock pursuant to this clause (2)(f)(iii)(B) or clause
(2)(e)(ii) of Section 4.04; and
(iv) to Holdings in amounts equal to amounts necessary for
Holdings to make loans or advances to employees in the ordinary
course of business in accordance with past practices of the Company,
but in any event not to exceed, when aggregated with amounts loaned
or advanced under clause (6) of the definition of "Permitted
Investments," $5,000,000 in the aggregate outstanding at any one
time.
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to the Company or
any of its Restricted Subsidiaries;
(2) make any loans or advances to the Company or any of its
Restricted Subsidiaries; or
(3) transfer any of its property or assets to the Company or any of
its Restricted Subsidiaries,
except:
(a) any encumbrance or restriction pursuant to applicable law
or an agreement in effect at or entered into on the Closing Date;
(b) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Subsidiary prior to the
date on which such Restricted Subsidiary was acquired by the Company
(other than Indebtedness Incurred as consideration in, in
contemplation of, or to provide all or any portion of the funds or
credit support
39
utilized to consummate the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was otherwise acquired by the Company) and
outstanding on such date;
(c) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in clause (a) or (b) of this Section 4.05 or
this clause (c) or contained in any amendment to an agreement
referred to in clause (a) or (b) of this Section 4.05 or this clause
(c); provided, however, that the encumbrances and restrictions
contained in any such Refinancing agreement or amendment are no less
favorable to the Securityholders than the encumbrances and
restrictions contained in such predecessor agreements;
(d) in the case of clause (3), any encumbrance or restriction:
(i) that restricts in a customary manner the subletting,
assignment or transfer of any property or asset that is
subject to a lease, license or similar contract; or
(ii) contained in security agreements securing
Indebtedness of a Restricted Subsidiary to the extent such
encumbrance or restriction restricts the transfer of the
property subject to such security agreements;
(e) with respect to a Restricted Subsidiary, any restriction
imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or assets
of such Restricted Subsidiary pending the closing of such sale or
disposition;
(f) any encumbrance or restriction relating to Purchase Money
Indebtedness or Capitalized Lease Obligations for property acquired
in the ordinary course of business that imposes restrictions on the
ability of the Company or a Restricted Subsidiary to sell, lease or
transfer the acquired property to the Company or its Restricted
Subsidiaries;
(g) restrictions on cash or other deposits imposed by
customers under contracts entered into in the ordinary course of
business; and
(h) any encumbrance or restriction contained in joint venture
agreements and other similar agreements entered into in the ordinary
course of business and customary for such types of agreements.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.
(1) The Company shall not, and shall not permit any Restricted Subsidiary to,
make any Asset Disposition unless:
(a) the Company or such Restricted Subsidiary receives consideration
(including by way of relief from, or by any other Person assuming sole
responsibility for, any liabilities, contingent or otherwise) at the time
of such Asset Disposition at least equal to
40
the fair market value, as determined in good faith by the Board of
Directors, of the shares and assets subject to such Asset Disposition;
(b) at least 75% of the consideration thereof received by the
Company or such Restricted Subsidiary is in the form of cash; provided
that the following shall be deemed to be cash for purposes of this clause
(b): (i) the amount of any liabilities (as shown on the Company's, or such
Restricted Subsidiary's, most recent balance sheet or in the notes
thereto) of the Company or any Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Securities or the
Guarantees) that are assumed by the transferee of any such assets, (ii)
the amount of any securities received by the Company or such Restricted
Subsidiary from such transferee that are converted by the Company or such
Restricted Subsidiary into cash (to the extent of the cash received)
within 90 days following the closing of such Asset Disposition, (iii) the
fair market value of any Telecommunications Assets received by the Company
in such Asset Disposition and (iv) the fair market value of any Permitted
Joint Venture Interests received by the Company or any Restricted
Subsidiary in such Asset Disposition; provided that the aggregate fair
market value of all Permitted Joint Venture Interests received pursuant to
this clause (iv), valued, in each case, at the time of receipt, shall not
exceed 10% of Consolidated Net Tangible Assets,
(for purposes of this Section 4.06(1)(b), all determinations of fair
market value shall be made in good faith by the Board of Directors and
evidenced by an Officers' Certificate delivered to the Trustee); and
(c) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be):
(i) first, to the extent the Company elects (or is required by
the terms of any Indebtedness), to prepay, repay, redeem, purchase
or otherwise acquire Senior Indebtedness of the Company or
Indebtedness (other than any Disqualified Stock) of a Wholly Owned
Subsidiary (in each case, other than Indebtedness owed to the
Company or an Affiliate of the Company and other than Preferred
Stock) within 180 days of the later of the date of such Asset
Disposition or the receipt of such Net Available Cash;
(ii) second, to the extent of the balance of Net Available
Cash after application in accordance with clause (i) of this Section
4.06(1)(c), to the extent the Company or such Restricted Subsidiary
elects to or enters into a binding agreement to, reinvest in
Additional Assets (including by means of an Investment in Additional
Assets by a Restricted Subsidiary with cash in an amount equal to
the amount of Net Available Cash received by, or to be received by,
the Company or another Restricted Subsidiary) within 180 days of the
later of such Asset Disposition or the receipt of such Net Available
Cash; and
(iii) third, to the extent of the balance of such Net
Available Cash after application in accordance with clauses (i) and
(ii) of this Section 4.06(l)(c), to
41
make an Offer to purchase Securities pursuant to and subject to the
conditions set forth in paragraph (2) below; provided, however,
that, if the Company elects (or is required by the terms of any
other Senior Subordinated Indebtedness), such Offer may be made
ratably to purchase the Securities and other Senior Subordinated
Indebtedness of the Company;
provided, however that, in connection with any prepayment, repayment
or purchase of Indebtedness pursuant to clause (i) or (iii) of this
Section 4.06(1)(c), the Company or such Restricted Subsidiary shall
retire such Indebtedness and shall cause the related loan commitment
(if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased.
Upon completion of any Offer, the amount of Net Available Cash shall
be reset at zero and the Company shall be entitled to use any remaining proceeds
for any corporate purposes to the extent permitted under this Indenture.
Notwithstanding the foregoing provisions of this Section 4.06, the Company and
the Restricted Subsidiaries shall not be required to apply any Net Available
Cash in accordance with this Section 4.06(1) except to the extent that the
aggregate Net Available Cash from all Asset Dispositions that is not applied in
accordance with this Section 4.06(1) exceeds $10,000,000.
(2) In the event of an Asset Disposition that requires the purchase
of Securities pursuant to clause (c)(iii) of Section 4.06(1), the Company shall
be required to offer to purchase Securities tendered pursuant to an offer by the
Company for the Securities (an "Offer") at a purchase price of 100% of their
principal amount plus accrued and unpaid interest thereon, and Additional
Amounts in respect thereof, if any, to the date of purchase in accordance with
the procedures (including prorating in the event of oversubscription) set forth
in Section 4.06(3) and to purchase other Senior Subordinated Indebtedness on the
terms and to the extent contemplated thereby. The Company will not be required
to make an Offer for Securities (and other Senior Subordinated Indebtedness)
pursuant to this Section 4.06 if the Net Available Cash available therefor
(after application of the proceeds as provided in clauses (c)(i) and (c)(ii) of
Section 4.06(1)) is less than $10,000,000 for any particular Asset Disposition
(which lesser amount shall be carried forward for purposes of determining
whether an Offer is required with respect to the Net Available Cash from any
subsequent Asset Disposition).
(3)(a) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall be obligated to deliver to
the Trustee and send, by first-class mail to each Holder, a written notice
stating that the Holder may elect to have his Securities purchased by the
Company either in whole or in part (subject to prorating as hereinafter
described in the event the Offer is oversubscribed) in integral multiples of
$1,000 of principal amount, at the applicable purchase price. The notice shall
specify a purchase date not less than 30 days nor more than 60 days after the
date of such notice (the "Purchase Date") and shall contain such information
concerning the business of the Company which the Company in good faith believes
will enable such Holders to make an informed decision (which at a minimum shall
include (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form l0-Q and any Current Report on Form
8-K of the Company filed subsequent to such Quarterly Report, other than Current
Reports describing Asset Dispositions otherwise described in
42
the offering materials (or corresponding successor reports), (ii) a description
of material developments in the Company's business subsequent to the date of the
latest of such reports, and (iii) if material, appropriate pro forma financial
information) and all instructions and materials necessary to tender Securities
pursuant to the Offer, together with the address referred to in clause (c).
(b) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided above, the Company shall deliver to the
Trustee an Officers' Certificate as to (i) the amount of the Offer (the "Offer
Amount"), (ii) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (iii) the compliance
of such allocation with the provisions of Section 4.06(1). On such date, the
Company shall also irrevocably 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) an amount equal to the Offer Amount to be invested in Temporary Cash
Investments and to be held for payment in accordance with the provisions of this
Section 4.06. Upon the expiration of the period for which the Offer remains open
(the "Offer Period"), the Company shall deliver to the Trustee for cancelation
the Securities or portions thereof that have been properly tendered to and are
to be accepted by the Company. The Trustee (or the Paying Agent, if not the
Trustee) shall, on the date of purchase, mail or deliver payment to each
tendering Holder in the amount of the purchase price. In the event that the
Offer Amount delivered by the Company to the Trustee is greater than the
purchase price of the Securities (and other Senior Subordinated Indebtedness)
tendered, the Trustee shall deliver the excess to the Company immediately after
the expiration of the Offer Period for application in accordance with this
Section 4.06.
(c) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was
delivered by the Holder for purchase and a statement that such Holder is
withdrawing his election to have such Security purchased. If at the expiration
of the Offer Period the aggregate principal amount of Securities and any other
Senior Subordinated Indebtedness included in the Offer surrendered by holders
thereof exceeds the Offer Amount, the Company shall select the Securities and
other Senior Subordinated Indebtedness to be purchased on a pro rata basis (with
such adjustments as may be deemed appropriate by the Company so that only
Securities and other Senior Subordinated Indebtedness in denominations of
$1,000, or integral multiples thereof, shall be purchased). Holders whose
Securities are purchased only in part will be issued new Securities equal in
principal amount to the unpurchased portion of the Securities surrendered.
(d) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section 4.06. A Security
shall be deemed to have been accepted for purchase at the time the Trustee,
directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
43
(4) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.06. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.06, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section by virtue thereof.
SECTION 4.07. Limitation on Transactions with Affiliates. (1) The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, enter into or conduct any transaction or series of related
transactions (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") unless such Affiliate Transaction is on terms:
(a) that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could be obtained at the
time of such transaction in arms'-length dealings with a Person who is not
such an Affiliate;
(b) that, in the event such Affiliate Transaction involves an
aggregate amount in excess of $5,000,000:
(i) are set forth in writing; and
(ii) have been approved by a majority of the members of the
Board of Directors having no personal stake, other than as a holder
of Capital Stock of Holdings, the Company or such Restricted
Subsidiary, in such Affiliate Transaction; and
(c) that, in the event such Affiliate Transaction involves an amount
in excess of $15,000,000, have been determined by a nationally recognized
appraisal or investment banking firm to be fair, from a financial
standpoint, to the Company and its Restricted Subsidiaries.
(2) The provisions of Section 4.07(1) shall not prohibit:
(a) any Restricted Payment permitted to be paid pursuant to Section
4.04;
(b) any issuance of securities, or other payments, awards or grants
in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans approved
by the Board of Directors;
(c) the grant of stock options or similar rights to employees and
directors of the Company pursuant to plans approved by the Board of
Directors;
(d) loans or advances to employees in the ordinary course of
business in accordance with past practices of the Company, but in any
event not to exceed $10,000,000 in the aggregate outstanding at any one
time;
44
(e) the payment of reasonable fees to directors of the Company and
its Subsidiaries who are not employees of the Company or its Subsidiaries;
(f) any transaction between the Company and a Restricted Subsidiary
or between Restricted Subsidiaries;
(g) customary indemnification and insurance arrangements in favor of
officers, directors, employees and consultants of Holdings, the Company or
any of the Restricted Subsidiaries;
(h) payments by the Company or any of its Restricted Subsidiaries to
Fox Paine and its Affiliates for any financial advisory, financing,
underwriting or other placement services or in respect of other investment
banking activities, including, without limitation, in connection with
acquisitions or divestitures which payments are approved by a majority of
the members of the Board of Directors referred to in clause (b)(ii) above
in good faith;
(i) the existence of, or the performance by the Company or any of
its Restricted Subsidiaries of the obligations under the terms of, any
stockholders agreements (including any registration rights agreement or
purchase agreement related thereto) to which it is a party as of the
Closing Date, as such agreements, may be amended from time to time
pursuant to the terms thereof; provided, however, that the terms of any
such amendment are no less favorable to the Holders than the terms of any
such agreements in effect as of the Closing Date; and
(j) the issuance of Capital Stock (other than Disqualified Stock) of
the Company for cash to any Permitted Holder.
SECTION 4.08. Change of Control. (a) Upon a Change of Control, each
Holder shall have the right to require that the Company repurchase all or any
part of such Holder's Securities at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest and Additional
Amounts, if any, to the date of purchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), in accordance with the terms contemplated in Section
4.08(b); provided, however, that notwithstanding the occurrence of a Change of
Control, the Company shall not be obligated to purchase the Securities pursuant
to this Section 4.08 in the event that it has exercised its right to redeem all
the Securities under paragraph 5 of the Securities. In the event that at the
time of such Change of Control the terms of the Bank Indebtedness restrict or
prohibit the repurchase of Securities pursuant to this Section 4.08, then prior
to the mailing of the notice to Holders provided for in Section 4.08(b) below
but in any event within 30 days following any Change of Control, the Company
shall:
(1) repay in full all Bank Indebtedness or, if doing so will allow
the repurchase of the Securities, offer to repay in full all Bank
Indebtedness and repay the Bank Indebtedness of each lender who has
accepted such offer; or
45
(2) obtain the requisite consent under the agreements governing the
Bank Indebtedness to permit the repurchase of the Securities as provided
for in Section 4.08(b).
(b) Within 30 days following any Change of Control (except as
provided in the proviso to the first sentence of Section 4.08(a)), the Company
shall mail a notice to each Holder with a copy to the Trustee (the "Change of
Control Offer") stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest thereon and Additional Amounts in respect
thereof, if any, to the date of purchase (subject to the right of Holders
of record on the relevant record date to receive interest on the relevant
interest payment date);
(2) the circumstances and relevant facts and financial information
regarding such Change of Control;
(3) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with this
Section 4.08, that a Holder must follow in order to have its Securities
purchased.
(c) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the purchase date a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the Company
under this Section 4.08 shall be delivered to the Trustee for cancelation, and
the Company shall pay the purchase price plus accrued and unpaid interest, if
any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section 4.08,
the Company will not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in Section
4.08(b) applicable to a Change of Control Offer made by the Company and
purchases all Securities validly tendered and not withdrawn under such Change of
Control Offer.
(f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.08. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.08, the Company shall
46
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.08 by virtue
thereof.
(g) In the event that Holders of not less than 98% of the principal
amount of the outstanding Securities accept a Change of Control Offer and the
Company purchases all of the Securities held by such Holders, the Company shall
have the right, on not less than 30 nor more than 60 days' prior notice, given
not more than 30 days following the purchase pursuant to the Change of Control
Offer, to redeem all of the Securities that remain outstanding following such
purchase at the purchase price specified in the Change of Control Offer plus, to
the extent not included in the purchase price specified in the Change of Control
Offer, accrued and unpaid interest thereon and Additional Amounts in respect
thereof, if any, to the date of redemption (subject to the right of Holders of
record on the relevant record date to receive interest on the relevant interest
payment date). Any redemption of Securities pursuant to this paragraph (g) shall
be subject to, and made in accordance with, the provisions and requirements of
Article III
SECTION 4.09. Compliance Certificate. The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with Section 314(a)(4) of
the TIA.
SECTION 4.10. Further Instruments and Acts. Upon request of the
Trustee, the Company shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.11. Future Guarantors. The Company shall cause each
Domestic Subsidiary that Incurs Indebtedness to become a Guarantor, and, if
applicable, execute and deliver to the Trustee a supplemental indenture
substantially in the form of Exhibit C pursuant to which such Domestic
Subsidiary will Guarantee payment of the Securities. Each Guarantee shall be
limited to an amount not to exceed the maximum amount that can be Guaranteed by
that Domestic Subsidiary without rendering the Guarantee, as it relates to such
Domestic Subsidiary, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
SECTION 4.12. Limitation on Lines of Business. The Company shall
not, and shall not permit any Restricted Subsidiary to, engage in any business,
other than a Related Business.
SECTION 4.13. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries. The Company shall not sell or otherwise dispose of any
shares of Capital Stock of a Restricted Subsidiary, and shall not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell or otherwise
dispose of any shares of its Capital Stock except:
(1) to the Company or a Wholly Owned Subsidiary;
47
(2) if, immediately after giving effect to such issuance, sale or
other disposition, neither the Company nor any of its Subsidiaries own any
Capital Stock of such Restricted Subsidiary; or
(3) if immediately after giving effect to such issuance or sale,
such Restricted Subsidiary would no longer constitute a Restricted
Subsidiary and any Investment in such Person remaining after giving effect
thereto would have been permitted to be made under Section 4.04 if made on
the date of such issuance, sale or other disposition.
The proceeds of any sale of such Capital Stock permitted hereby shall be treated
as Net Available Cash from an Asset Disposition and shall be applied in
accordance with Section 4.06.
ARTICLE V
Successor Company
SECTION 5.01. (a) When Company May Merge or Transfer Assets. The
Company shall not consolidate with or merge with or into, or convey, transfer or
lease all or substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation organized and existing under the laws of
the United States of America, any state thereof or the District of
Columbia, and the Successor Company (if not the Company) shall expressly
assume, by a supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of the
Company under the Securities and this Indenture;
(2) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Restricted Subsidiary as a result of such transaction as
having been Incurred by the Successor Company or such Restricted
Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing;
(3) immediately after giving effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(1);
(4) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture; and
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders will not recognize income, gain or
loss for Federal income tax purposes as a result of such transaction 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
transaction had not occurred.
48
Notwithstanding the foregoing clause (2) or (3), the Company may
merge with an Affiliate incorporated or formed solely for the purpose of
reincorporating the Company in another jurisdiction.
The Successor Company shall succeed to, and be substituted for, and
may exercise every right and power of, this Company under the Indenture, but the
Company, in the case of a conveyance, transfer or lease of all or substantially
all its assets, shall not be released from the obligation to pay the principal
of and interest on the Securities.
(b) The Company shall not permit any Guarantor to consolidate with
or merge with or into, or convey, transfer or lease all or substantially all of
its assets to any Person unless:
(1) the resulting, surviving or transferee Person will be a
corporation organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia, and such Person
(if not such Guarantor) shall expressly assume, by a supplemental
indenture, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of such Guarantor under its Guarantee;
(2) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the resulting,
surviving or transferee Person as a result of such transaction as having
been Incurred by such Person at the time of such transaction), no Default
shall have occurred and be continuing; and
(3) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture.
Notwithstanding the foregoing clause (2), any Restricted Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company or another Restricted Subsidiary.
ARTICLE VI
Defaults and Remedies
SECTION 6.01. Events of Default, An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, whether or not such payment shall
be prohibited by Article X, and such default continues for a period of 30
days;
(2) the Company (i) defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity,
upon required redemption or repurchase, upon declaration or otherwise,
whether or not such payment shall be prohibited by Article X or (ii) fails
to redeem or purchase Securities when required
49
pursuant to this Indenture or the Securities, whether or not such
redemption or purchase shall be prohibited by Article X;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.11, 4.12, 4.13 (other than a failure to purchase
Securities when required under Section 4.06 or 4.08) and such failure
continues for 30 days after the notice to the Company specified below;
(5) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in (1), (2),
(3) or (4) above) and such failure continues for 60 days after the notice
to the Company specified below;
(6) Indebtedness of the Company or any Subsidiary (other than
Indebtedness owing to the Company or a Subsidiary of the Company) is not
paid within any applicable grace period after final maturity or the
acceleration of such Indebtedness by the holders thereof because of a
default and the total amount of such Indebtedness unpaid or accelerated
exceeds $5,000,000 or its foreign currency equivalent at the time and such
failure continues for 10 days after the notice to the Company specified
below;
(7) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign laws
relating to insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
50
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of
$5,000,000 or its foreign currency equivalent against the Company or any
Subsidiary of the Company, to the extent such judgment or decree is not
covered by insurance or is in excess of insurance coverage, and there is a
period of 60 days following the entry of such judgment or decree during
which such judgment or decree is not discharged, waived or the execution
thereof stayed; or
(10) any Guarantee ceases to be in full force and effect (except as
contemplated by the terms thereof) or any Guarantor or Person acting by or
on behalf of such Guarantor denies or disaffirms its obligations under
this Indenture or any Guarantee and such Default continues for 10 days
after the notice to the Company specified below.
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
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.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4), (5) or (6) above is not an Event of
Default until the Trustee or the Holders of at least 25% in principal amount of
the outstanding Securities notify the Company of the Default and the Company
does not cure such Default within the time specified after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the outstanding Securities by
notice to the Company, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.01(7) or (8) with respect to the Company occurs,
the principal of and interest on all the Securities shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Securityholders. The Holders of a majority in principal
amount of the Securities by notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of
51
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of acceleration. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies. Notwithstanding any other provision of
the Indenture, if an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of or interest
on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding in its own name and as trustee
of an express trust even if it does not possess any of the Securities or does
not produce any of them in the proceeding. A delay or omission by the Trustee or
any Securityholder in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Security, (ii) a Default arising from the failure
to redeem or purchase any Security when required pursuant to the terms of this
Indenture or (iii) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Securityholder affected. When a
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder has previously given to the Trustee written notice
stating that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue the
remedy;
52
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction inconsistent with the request during
such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and Additional Amounts and interest on the Securities
held by such Holder, on or after the respective due dates expressed in the
Securities, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, any Subsidiary or
Guarantor, their creditors or their property and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness of the Company to the
extent required by Article X;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, and any Additional Amounts
without preference or priority
53
of any kind, according to the amounts due and payable on the Securities
for principal, any Additional Amounts and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company
nor any Guarantor (to the extent it may lawfully do so) shall 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 and each Guarantor (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE VII
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of
54
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur 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 to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.01 and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
55
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other paper or document or as to whether or not an Event of
Default shall have occurred unless requested in writing to do so by the Holders
of not less than a majority in principal amount of the Securities at the time
outstanding, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters or occurrence as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or co-paying
agent may do the same with like rights. However, the Trustee must comply with
Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication. The Trustee shall not be responsible
for any conduct or omission by the Company or the occurrence of any Event of
Default.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within the earlier of 90 days after it
occurs or 30 days after it is known to a trust officer. Except in the case of a
Default in payment of principal of or interest on any Security (including
payments pursuant to the mandatory redemption provisions of such Security, if
any), the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with Section 313(a) of the TIA. The Trustee shall also comply with
Section 313(b) of the TIA.
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A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall immediately reimburse the Trustee
upon request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents (including agents that are
not full-time employees of the Trustee or are not regularly employed by the
Trustee), counsel, accountants and experts. For so long as IBJ Whitehall Bank &
Trust Company shall serve as Trustee under this Indenture, compensation shall be
paid to the Trustee in the amounts and at the times set forth in that certain
letter agreement dated May 6, 1999, between IBJ Whitehall Bank & Trust Company
and the Company. The Company and each Guarantor, jointly and severally shall
indemnify, defend and hold harmless the Trustee against any and all loss,
liability or expense (including reasonable attorneys' fees) incurred by or in
connection with the administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Company of any claim for which it
may seek indemnity promptly upon obtaining actual knowledge thereof; provided,
however, that any failure so to notify the Company shall not relieve the Company
or any Guarantor of its indemnity obligations hereunder. The Company shall
defend the claim and the indemnified party shall provide reasonable cooperation
at the Company's expense in the defense. Such indemnified parties may have
separate counsel and the Company and the Guarantors, as applicable, shall pay
the fees and expenses of such counsel; provided, however, that the Company shall
not be required to pay such fees and expenses if it assumes such indemnified
parties' defense and, in such indemnified parties' reasonable judgment, there is
no conflict of interest between the Company and the Guarantors, as applicable,
and such parties in connection with such defense. The Company need not reimburse
any expense or indemnify, defend or hold harmless against any loss, liability or
expense incurred by an indemnified party through such party's own wilful
misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest and any Additional Amounts on particular
Securities.
The Company's obligations pursuant to this Section 7.07 shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 6.01(7) or (8) with respect to the Company, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company in writing in accordance with the provisions of
Section 13.02. Any
57
resignation of the Trustee shall be effective immediately upon receipt by the
Company of such notice (unless such notice shall specify a later time as the
effective time of such resignation, in which case such later time shall be the
effective time), and the resignation of the Trustee shall not prejudice any
rights of the Trustee to receive any compensation, any reimbursement of any
expenses or any indemnity or right to being defended and held harmless under the
Indenture. The Holders of a majority in principal amount of the Securities may
remove the Trustee by so notifying the Trustee and may appoint a successor
Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders
of a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
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In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility: Disqualification. The Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have
a combined capital and surplus of at least $100,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply
with TIA ss. 310(b); provided, however, that there shall be excluded from the
operation of TIA ss. 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities
of the Company are outstanding if the requirements for such exclusion set
forth in TIA ss. 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a)
When (i) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancelation or (ii) all
outstanding Securities have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article III hereof,
and the Company irrevocably deposits with the Trustee funds or U.S. Government
Obligations on which payment of principal and interest when due will be
sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.07), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Section 8.01(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel and at
the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time
may terminate (i) all of its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 4.13 and the operation
of Section 5.01(a)(3), 5.01(a)(4), 6.01(4), 6.01(6), 6.01(7) (with respect to
Significant Subsidiaries of the Company only), 6.01(8) (with respect to
Significant Subsidiaries of
59
the Company only) and 6.01(9) ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option. In the event that the Company terminates all of its
obligations under the Securities and this Indenture by exercising its legal
defeasance option, the obligations under the Guarantees shall each be terminated
simultaneously with the termination of such obligations.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Section 6.01(4),
6.01(6), 6.01(7) (with respect to Significant Subsidiaries of the Company only),
6.01(8) (with respect to Significant Subsidiaries of the Company only) or
6.01(9) or because of the failure of the Company to comply with clauses (3) and
(4) of Section 5.01(a).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07, 7.08 and in
this Article VIII shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal, premium (if
any) and interest on the Securities to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment in the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(7) or (8) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article X;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940;
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(6) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been a
change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Securityholders 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;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
VIII have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date
in accordance with Article III.
SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article VIII. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
Money and securities so held in trust are not subject to Article X.
SECTION 8.04. REPAYMENT TO COMPANY. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to
the Company for payment as general creditors.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Company shall
pay and shall indemnify, defend and hold harmless the Trustee against any
tax, fee or other charge imposed on or assessed against deposited U.S.
Government Obligations or the principal and interest received on such U.S.
Government Obligations.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority
61
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to this Article VIII until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations in accordance with this Article VIII; provided,
however, that, if the Company has made any payment of interest on or principal
of any Securities because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment from the money or U.S. Government Obligations held by the Trustee
or Paying Agent.
ARTICLE IX
Amendments
SECTION 9.01. Without Consent of Holders. The Company, the
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article V;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to make any change in Article X or Article XII that would limit
or terminate the benefits available to any holder of Senior Indebtedness
(or Representatives therefor) under Article X or Article XII;
(5) to add additional Guarantees with respect to the Securities or
to secure the Securities;
(6) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(7) to comply with any requirement of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA;
(8) to make any change that does not adversely affect the rights of
any Securityholder; or
(9) to provide for the issuance of the Exchange Securities or
Private Exchange Securities which shall have terms substantially identical
in all material respects to the Original Securities (except that the
transfer restrictions contained in the Original
62
Securities shall be modified or eliminated, as appropriate), and which
shall be treated, together with any outstanding Original Securities, as a
single issue of securities.
An amendment under this Section may not make any change that
adversely affects the rights under Article X or Article XII of any holder of
Senior Indebtedness then outstanding unless the holders of such Senior
Indebtedness (or any group or representative thereof authorized to give a
consent) consent to such change.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section 9.01.
SECTION 9.02. With Consent of Holders. The Company, the Guarantors
and the Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities then outstanding (including
consents obtained in connection with a tender offer or exchange for the
Securities). However, without the consent of each Securityholder affected, an
amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest or
any Additional Amounts on any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption of any Security
or change the time at which any Security may be redeemed in accordance
with Article III;
(5) make any Security payable in money other than that stated in the
Security;
(6) make any change in Article X or Article XII that adversely
affects the rights of any Securityholder under Article X or Article XII;
(7) make any change in Section 6.04 or 6.07 or the second sentence
of this Section 9.02; or
(8) modify the Guarantees in any manner adverse to the Holders.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section 9.02 may not make any change that
adversely affects the rights under Article X or Article XII of any holder of
Senior Indebtedness then
63
outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section 9.02.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officers'
Certificate from the Company certifying that the requisite number of consents
have been received. After an amendment or waiver becomes effective, it shall
bind every Securityholder. An amendment or waiver becomes effective upon the (i)
receipt by the Company or the Trustee of the requisite number of consents, (ii)
satisfaction of conditions to effectiveness as set forth in this Indenture and
any indenture supplemental hereto containing such amendment or waiver and (iii)
execution of such amendment or waiver (or supplemental indenture) by the Company
and the Trustee.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
64
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture and that such amendment
is the legal, valid and binding obligation of the Company and the Guarantors
enforceable against them in accordance with its terms, subject to customary
exceptions, and complies with the provisions hereof (including Section 9.03).
ARTICLE X
Subordination
SECTION 10.01. Agreement To Subordinate. The Company agrees, and
each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities is subordinated in right of payment, to the extent
and in the manner provided in this Article X, to the prior payment in full of
all Senior Indebtedness of the Company and that the subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness. The
Securities shall in all respects rank pari passu with all other Senior
Subordinated Indebtedness of the Company and only Indebtedness of the Company
that is Senior Indebtedness of the Company shall rank senior to the Securities
in accordance with the provisions set forth herein. For purposes of this Article
X, the Indebtedness evidenced by the Securities shall be deemed to include the
Additional Amounts payable pursuant to the provisions set forth in the
Securities and the Registration Agreement. All provisions of this Article X
shall be subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company upon a total or partial
liquidation or a total or partial dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property:
(1) holders of Senior Indebtedness of the Company shall be entitled
to receive payment in full in cash or cash equivalents of such Senior
Indebtedness (including interest accruing after, or that would accrue but
for, the commencement of such proceeding at the rate specified in the
applicable Senior Indebtedness, whether or not such claim for such
interest would be allowed) before the Securityholders are entitled to
receive any payment of principal or interest on the Securities; and
(2) until the Senior Indebtedness of the Company is paid in full in
cash or cash equivalents any payment or distribution to which
Securityholders would be entitled but for this Article X shall be made to
holders of such Senior Indebtedness as their interests may appear, except
that Holders may receive and retain:
(A) Permitted Junior Securities; and
(B) payments made from the trust described under Section 8.01
so long as, on the date or dates the respective amounts were paid
into the trust, such payments were made with respect to the
Securities without violating the subordination provisions described
herein.
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SECTION 10.03. Default on Senior Indebtedness. The Company may not
pay the principal of, premium (if any) or interest on (or Additional Amounts in
respect of), the Securities, or make any deposit pursuant to Section 8.01, and
may not otherwise purchase, redeem or otherwise retire any Securities
(collectively, "pay the Securities") if:
(1) a default in the payment of the principal of, premium, if any,
or interest on any Designated Senior Indebtedness of the Company occurs
and is continuing or any other amount owing in respect of any Designated
Senior Indebtedness of the Company is not paid when due; or
(2) any other default on Designated Senior Indebtedness of the
Company occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms,
unless, in either case,
(a) the default has been cured or waived and any such acceleration
has been rescinded; or
(b) such Designated Senior Indebtedness has been paid in full in
cash or cash equivalents;
provided, however, that the Company may pay the Securities without regard to the
foregoing if the Company and the Trustee receive written notice approving such
payment from the Representative of such Designated Senior Indebtedness with
respect to which either of the events set forth in clause (1) or (2) of this
sentence has occurred and is continuing.
During the continuance of any default (other than a default
described in clause (1) or (2) of the preceding sentence) with respect to any
Designated Senior Indebtedness of the Company pursuant to which the maturity
thereof may be accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or the expiration of any
applicable grace periods, the Company may not pay the Securities for a period (a
"Payment Blockage Period") commencing upon the receipt by the Trustee (with a
copy to the Company) of written notice (a "Blockage Notice") of such default
from the Representative of such Designated Senior Indebtedness specifying an
election to effect a Payment Blockage Period and ending 179 days thereafter (or
earlier if such Payment Blockage Period is terminated:
(1) by written notice to the Trustee and the Company from the Person
or Persons who gave such Blockage Notice;
(2) by repayment in full in cash or cash equivalents of such
Designated Senior Indebtedness; or
(3) because the default giving rise to such Blockage Notice is no
longer continuing).
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Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions contained in the preceding paragraph and in the
immediately succeeding paragraph), unless the holders of such Designated Senior
Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, the Company may resume payments
on the Securities after the end of such Payment Blockage Period.
Not more than one Blockage Notice may be given in any period of 360
consecutive days, irrespective of the number of defaults with respect to
Designated Senior Indebtedness during such period. However, if any Blockage
Notice within such 360-day period is given by or on behalf of any holders of
Designated Senior Indebtedness other than the Bank Indebtedness, the
Representative of the Bank Indebtedness may give another Blockage Notice within
such period. In no event, however, may the total number of days during which any
Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate
during any period of 360 consecutive days. For purposes of this Section 10.03,
no default or event of default that existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness initiating such Payment Blockage Period shall be, or be
made, the basis of the commencement of a subsequent Payment Blockage Period by
the Representative of such Designated Senior Indebtedness, whether or not within
a period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 10.04. Acceleration of Payment of Securities. If payment of
the Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of the Designated Senior Indebtedness
of the Company (or their Representative) of the acceleration. If any Designated
Senior Indebtedness of the Company is outstanding, the Company may not pay the
Securities until five Business Days after such holders or the Representative of
such Designated Senior Indebtedness receive notice of such acceleration and,
thereafter, may pay the Securities only if this Article X otherwise permits
payment at that time.
SECTION 10.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article X should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness of the Company and pay
it over to them as their interests may appear.
SECTION 10.06. Subrogation. After all Senior Indebtedness of the
Company is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to Senior Indebtedness. A
distribution made under this Article X to holders of such Senior Indebtedness
which otherwise would have been made to Securityholders is not, as between the
Company and Securityholders, a payment by the Company on such Senior
Indebtedness.
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SECTION 10.07. Relative Rights. This Article X defines the relative
rights of Securityholders and holders of Senior Indebtedness of the Company.
Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on and Additional Amounts in respect of, the
Securities in accordance with their terms; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness of the Company to receive distributions otherwise
payable to Securityholders.
SECTION 10.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of the Company to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture.
SECTION 10.09. Rights of Trustee and Paving Agent. Notwithstanding
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article X. The Company, the Registrar, the Paying Agent, a Representative or a
holder of Senior Indebtedness of the Company may give the notice; provided,
however, that, if an issue of Senior Indebtedness of the Company has a
Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of the Company with the same rights it would have if it were not
Trustee. The Registrar and the Paying Agent may do the same with like rights.
The Trustee shall be entitled to all the rights set forth in this Article X with
respect to any Senior Indebtedness of the Company which may at any time be held
by it, to the same extent as any other holder of such Senior Indebtedness; and
nothing in Article VII shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article X shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness
of the Company, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article X Not To Prevent Defaults or Effect Right To
Accelerate. The failure to make a payment pursuant to the Securities by reason
of any provision in this Article X shall not be construed as preventing the
occurrence of a Default. Nothing in this Article X shall have any effect on the
right of the Securityholders or the Trustee to accelerate the maturity of the
Securities.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government
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Obligations held in trust under Article VIII by the Trustee for the payment of
principal of and interest on the Securities shall not be subordinated to the
prior payment of any Senior Indebtedness of the Company or subject to the
restrictions set forth in this Article X, and none of the Securityholders shall
be obligated to pay over any such amount to the Company or any holder of Senior
Indebtedness of the Company or any other creditor of the Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article X, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness of the Company for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of such Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article X. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness of the Company to participate
in any payment or distribution pursuant to this Article X, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under this
Article X, and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall
be applicable to all actions or omissions of actions by the Trustee pursuant to
this Article X.
SECTION 10.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness of the Company as provided in this Article X and appoints
the Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company and shall not be liable to any
such holders if it shall mistakenly pay over or distribute to Securityholders or
the Company or any other Person, money or assets to which any holders of Senior
Indebtedness of the Company shall be entitled by virtue of this Article X or
otherwise.
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness of the Company, whether such Senior Indebtedness was created or
acquired before or after the issuance of the Securities, to acquire and continue
to hold, or to continue to hold, such Senior Indebtedness and such holder of
such Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness.
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SECTION 10.17. Trustee's Compensation Not Prejudiced. Nothing in
this Article shall apply to amounts due to the Trustee pursuant to other
sections of this Indenture.
ARTICLE XI
Guarantees
SECTION 11.01. Guarantees. Each Guarantor hereby jointly and
severally irrevocably and unconditionally guarantees, as a primary obligor and
not merely as a surety, to each Holder and to the Trustee and its successors and
assigns (a) the full and punctual payment when due, whether at Stated Maturity,
by acceleration, by redemption or otherwise, of all obligations of the Company
under this Indenture (including obligations to the Trustee) and the Securities,
whether for payment of principal of, interest on or Additional Amounts in
respect of the Securities and all other monetary obligations of the Company
under this Indenture and the Securities and (b) the full and punctual
performance within applicable grace periods of all other obligations of the
Company whether for expenses, indemnification or otherwise under this Indenture
and the Securities (all the foregoing being hereinafter collectively called the
"Guaranteed Obligations"). Each Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from each such Guarantor, and that each such Guarantor shall
remain bound under this Article XI notwithstanding any extension or renewal of
any Guaranteed Obligation.
Each Guarantor waives presentation to, demand of, payment from and
protest to the Company of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. Each Guarantor waives notice of any default
under the Securities or the Guaranteed Obligations. The obligations of each
Guarantor hereunder shall not be affected by (a) the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person under this Indenture, the Securities or
any other agreement or otherwise; (b) any extension or renewal of any thereof;
(c) any rescission, waiver, amendment or modification of any of the terms or
provisions of this Indenture, the Securities or any other agreement; (d) the
release of any security held by any Holder or the Trustee for the Guaranteed
Obligations or any of them; (e) the failure of any Holder or Trustee to exercise
any right or remedy against any other guarantor of the Guaranteed Obligations;
or (f) any change in the ownership of such Guarantor, except as provided in
Section 11.02(b).
Each Guarantor hereby waives any right to which it may be entitled
to have its obligations hereunder divided among the Guarantors, such that such
Guarantor's obligations would be less than the full amount claimed. Each
Guarantor hereby waives any right to which it may be entitled to have the assets
of the Company first be used and depleted as payment of the Company's or such
Guarantor's obligations hereunder prior to any amounts being claimed from or
paid by such Guarantor hereunder. Each Guarantor hereby waives any right to
which it may be entitled to require that the Company be sued prior to an action
being initiated against such Guarantor.
Each Guarantor further agrees that its Guarantee herein constitutes
a guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and waives
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any right to require that any resort be had by any Holder or the Trustee to any
security held for payment of the Guaranteed Obligations.
The Guarantee of each Guarantor is, to the extent and in the manner
set forth in Article XII, subordinated and subject in right of payment to the
prior payment in full of the principal of and premium, if any, and interest on
all Senior Indebtedness of the relevant Guarantor and is made subject to such
provisions of this Indenture.
Except as expressly set forth in Sections 8.01(b), 11.02 and 11.06,
the obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Securities or any other agreement, by any waiver or modification of any thereof,
by any default, failure or delay, wilful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
any Guarantor or would otherwise operate as a discharge of any Guarantor as a
matter of law or equity.
Each Guarantor agrees that its Guarantee shall remain in full force
and effect until payment in full of all the Guaranteed Obligations. Each
Guarantor further agrees that its Guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on any Guaranteed Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of or interest on any Guaranteed Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Guaranteed Obligation, each Guarantor hereby
promises to and shall, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (i) the unpaid principal amount of such Guaranteed Obligations,
(ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the
extent not prohibited by law) and (iii) all other monetary obligations of the
Company to the Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations and all
obligations to which the Guaranteed Obligations are subordinated as provided in
Article XII. Each Guarantor further agrees that, as between it, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Article VI for the purposes of any Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such
71
acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (y)
in the event of any declaration of acceleration of such Guaranteed Obligations
as provided in Article VI, such Guaranteed Obligations (whether or not due and
payable) shall forthwith become due and payable by such Guarantor for the
purposes of this Section 11.01.
Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Trustee or
any Holder in enforcing any rights under this Section 11.01.
Upon request of the Trustee, each Guarantor shall execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 11.02. Limitation on Liability. (a) Any term or provision of
this Indenture to the contrary notwithstanding, the maximum, aggregate amount of
the Guaranteed Obligations guaranteed hereunder by any Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
(b) A Guarantee as to any Guarantor shall terminate and be of no
further force or effect and such Guarantor shall be deemed to be released from
all obligations under this Article XI upon (i) (A) the merger or consolidation
of such Guarantor with or into any Person other than the Company or a Subsidiary
or Affiliate of the Company where such Guarantor is not the surviving entity of
such consolidation or merger or (B) the sale by the Company or any Subsidiary of
the Company (or any pledgee of the Company) of the Capital Stock, or all or
substantially all the assets, of any Guarantor that is a Subsidiary of the
Company, where, after such sale, such Guarantor is no longer a Subsidiary of the
Company; provided, however, that each such merger, consolidation or sale (or, in
the case of a sale by such a pledgee, the disposition of the proceeds of such
sale) shall comply with Section 4.06 and Section 5.01(b), (ii) the failure of
any Guarantor that is a Subsidiary of the Company to remain a Subsidiary of the
Company as a result of any foreclosure of any pledge or security interest
securing Bank Indebtedness or other exercise of remedies in respect thereof;
provided, however, that such Guarantor shall also be released from its
guarantees of the Credit Agreement and that all pledges and security interests
granted in connection with the Credit Agreement shall be terminated or (iii) the
release of any Guarantor from its guarantees of, and the termination of all
pledges and security interests granted in connection with, the Credit Agreement
and any other Indebtedness of the Company in respect of which such Guarantor has
provided a guarantee. At the request of the Company, the Trustee shall execute
and deliver an appropriate instrument evidencing such release.
SECTION 11.03. Successors and Assigns. This Article XI shall be
binding upon each Guarantor and its successors and assigns and shall inure to
the benefit of the successors and assigns of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges conferred upon that party in this Indenture and in the
Securities shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.
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SECTION 11.04. No Waiver. Neither a failure nor a delay on the part
of either the Trustee or the Holders in exercising any right, power or privilege
under this Article XI shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article XI at law,
in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver of
any provision of this Article XI, nor the consent to any departure by any
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice or demand in the same, similar or other
circumstances.
SECTION 11.06. Execution of Supplemental Indenture for Future
Guarantors. Each Subsidiary which is required to become a Guarantor pursuant to
Section 4.11 shall promptly execute and deliver to the Trustee a supplemental
indenture in the form of Exhibit C hereto pursuant to which such Subsidiary
shall become a Guarantor under this Article XI and shall guarantee the
Guaranteed Obligations. Concurrently with the execution and delivery of such
supplemental indenture, the Company shall deliver to the Trustee an Opinion of
Counsel and an Officers' Certificate to the effect that such supplemental
indenture has been duly authorized, executed and delivered by such Subsidiary
and that, subject to the application of bankruptcy, insolvency, moratorium,
fraudulent conveyance or transfer and other similar laws relating to creditors'
rights generally and to the principles of equity, whether considered in a
proceeding at law or in equity, the Guarantee of such Guarantor is a legal,
valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms.
ARTICLE XII
Subordination of the Guarantees
SECTION 12.01. Agreement To Subordinate. Each Guarantor agrees, and
each Securityholder by accepting a Security agrees, that the obligations of a
Guarantor hereunder are subordinated in right of payment, to the extent and in
the manner provided in this Article XII, to the prior payment in full of all
Senior Indebtedness of such Guarantor and that the subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness of such
Guarantor. The obligations hereunder with respect to a Guarantor shall in all
respects rank pari passu with all other Senior Subordinated Indebtedness of such
Guarantor and shall rank senior to all existing and future Subordinated
Obligations of such Guarantor; and only Indebtedness of such Guarantor that is
Senior Indebtedness of such Guarantor shall rank senior to the obligations of
such Guarantor in accordance with the provisions set forth herein.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of a Guarantor upon a total or partial
liquidation or a total or partial
73
dissolution of such Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Guarantor or its property:
(1) holders of Senior Indebtedness of such Guarantor shall be
entitled to receive payment in full in cash or cash equivalents of such
Senior Indebtedness (including interest accruing after, or that would
accrue but for, the commencement of such proceeding at the rate specified
in the applicable Senior Indebtedness, whether or not such claim for such
interest would be allowed) before the Securityholders are entitled to
receive any payment pursuant to any Guaranteed Obligations of such
Guarantor; and
(2) until the Senior Indebtedness of such Guarantor is paid in full
in cash or cash equivalents any payment or distribution to which
Securityholders would be entitled but for this Article XII shall be made
to holders of such Senior Indebtedness as their respective interests may
appear, except that Securityholders may receive and retain:
(A) Permitted Junior Securities; and
(B) payments made from the trust described under Section 8.01
so long as, on the date or dates the respective amounts were paid
into the trust, such payments were made with respect to the
Securities without violating the subordination provisions described
herein.
SECTION 12.03. Default on Designated Senior Indebtedness of a
Guarantor. A Guarantor may not make any payment pursuant to any of the
Guaranteed Obligations or repurchase, redeem or otherwise retire any Securities
(collectively, "pay its Guarantee") if:
(1) a default in the payment of the principal of, premium, if any,
or interest on any Designated Senior Indebtedness of such Guarantor occurs
and is continuing or any other amount owing in respect of any Designated
Senior Indebtedness of such Guarantor is not paid when due; or
(2) any other default on Designated Senior Indebtedness of such
Guarantor occurs and the maturity of such Designated Senior Indebtedness
is accelerated in accordance with its terms,
unless, in either case,
(a) the default has been cured or waived and any such acceleration
has been rescinded; or
(b) such Designated Senior Indebtedness has been paid in full in
cash or cash equivalents;
provided, however, that such Guarantor may pay its Guarantee without regard to
the foregoing if such Guarantor and the Trustee receive written notice approving
such payment from the Representative of the holders of such Designated Senior
Indebtedness with respect to which either of the events set forth in clause (1)
or (2) of this sentence has occurred and is continuing.
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During the continuance of any default (other than a default
described in clause (1) or (2) of the preceding sentence) with respect to any
Designated Senior Indebtedness of a Guarantor pursuant to which the maturity
thereof may be accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or the expiration of any
applicable grace periods, such Guarantor may not pay its Guarantee for a period
(a "Payment Blockage Period") commencing upon the receipt by the Trustee (with a
copy to such Guarantor and the Company) of written notice (a "Blockage Notice")
of such default from the Representative of the holders of the Designated Senior
Indebtedness of such Guarantor specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated:
(1) by written notice to the Trustee (with a copy to such Guarantor
and the Company) from the Person or Persons who gave such Blockage Notice;
(2) by repayment in full in cash or cash equivalents of such
Designated Senior Indebtedness; or
(3) because the default giving rise to such Blockage Notice is no
longer continuing).
Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions contained in the preceding paragraph and in the
immediately succeeding paragraph), unless the holders of such Designated Senior
Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, such Guarantor may resume
payments on its Guarantee after the end of such Payment Blockage Period.
Not more than one Blockage Notice may be given in any period of 360
consecutive days, irrespective of the number of defaults with respect to
Designated Senior Indebtedness of such Guarantor during such period. However, if
any Blockage Notice within such 360-day period is given by or on behalf of any
holders of Designated Senior Indebtedness other than the Bank Indebtedness, the
Representative of the Bank Indebtedness may give another Blockage Notice within
such period. In no event, however, may the total number of days during which any
Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate
during any period of 360 consecutive days. For purposes of this paragraph, no
default or event of default that existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness initiating such Payment Blockage Period shall be, or be
made, the basis of the commencement of a subsequent Payment Blockage Period by
the Representative of such Designated Senior Indebtedness, whether or not within
a period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 12.04. Demand for Payment. If payment of the Securities is
accelerated because of an Event of Default and a demand for payment is made on a
Guarantor pursuant to Article XI, the Trustee shall promptly notify the holders
of the Designated Senior Indebtedness of such Guarantor (or the Representative
of such holders) of such demand. If any Designated Senior Indebtedness of such
Guarantor is outstanding, such Guarantor may not pay its Guarantee until five
Business Days after such holders or the Representative of the holders of the
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Designated Senior Indebtedness of such Guarantor receive notice of such demand
and, thereafter, may pay its Guarantee only if this Article XII otherwise
permits payment at that time.
SECTION 12.05. When Distribution Must Be Paid Over. If a payment or
distribution is made to Securityholders that because of this Article XII should
not have been made to them, the Securityholders who receive the payment or
distribution shall hold such payment or distribution in trust for holders of the
Senior Indebtedness of the relevant Guarantor and pay it over to them as their
respective interests may appear.
SECTION 12.06. Subrogation. After all Senior Indebtedness of a
Guarantor is paid in full and until the Securities are paid in full in cash,
Securityholders shall be subrogated to the rights of holders of Senior
Indebtedness of such Guarantor to receive distributions applicable to Designated
Senior Indebtedness of such Guarantor. A distribution made under this Article
XII to holders of Senior Indebtedness of such Guarantor which otherwise would
have been made to Securityholders is not, as between such Guarantor and
Securityholders, a payment by such Guarantor on Senior Indebtedness of such
Guarantor.
SECTION 12.07. Relative Rights. This Article XII defines the
relative rights of Securityholders and holders of Senior Indebtedness of a
Guarantor. Nothing in this Indenture shall:
(1) impair, as between a Guarantor and Securityholders, the
obligation of a Guarantor which is absolute and unconditional, to make
payments with respect to the Guaranteed Obligations to the extent set
forth in Article XI; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a default by a Guarantor under its obligations
with respect to the Guaranteed Obligations, subject to the rights of
holders of Senior Indebtedness of such Guarantor to receive distributions
otherwise payable to Securityholders.
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor. No
right of any holder of Senior Indebtedness of a Guarantor to enforce the
subordination of the obligations of such Guarantor hereunder shall be impaired
by any act or failure to act by such Guarantor or by its failure to comply with
this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 12.03, the Trustee or the Paying Agent may continue to make payments on
the Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article XII. A Guarantor, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness of a Guarantor may give the
notice; provided, however, that if an issue of Senior Indebtedness of a
Guarantor has a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of a Guarantor with the same rights it would have if it were not
Trustee. The Registrar and
76
co-registrar and the Paying Agent may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article XII with respect
to any Senior Indebtedness of a Guarantor which may at any time be held by it,
to the same extent as any other holder of Senior Indebtedness of such Guarantor;
and nothing in Article VII shall deprive the Trustee of any of its rights as
such holder. Nothing in this Article XII shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness
of a Guarantor, the distribution may be made and the notice given to their
Representative (if any).
SECTION 12.11. Article XII Not To Prevent Defaults or Effect Right
To Demand Payment. The failure of a Guarantor to make a payment on any of its
obligations by reason of any provision in this Article XII shall not be
construed as preventing the occurrence of a default by such Guarantor under such
obligations. Nothing in this Article XII shall have any effect on the right of
the Securityholders or the Trustee to make a demand for payment on a Guarantor
pursuant to Article XI.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article XII, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness of a Guarantor for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness of a Guarantor and other Indebtedness of a Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XII. In the event that
the Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness of a Guarantor to
participate in any payment or distribution pursuant to this Article XII, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of such
Guarantor held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article XII, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article XII.
SECTION 12.13. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Securityholders and the
holders of Senior Indebtedness of each of the Guarantors as provided in this
Article XII and appoints the Trustee as attorney-in-fact for any and all such
purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness of a Guarantor. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of a Guarantor and shall
not be liable to any such holders if it shall mistakenly pay
77
over or distribute to Securityholders or the relevant Guarantor or any other
Person, money or assets to which any holders of Senior Indebtedness of such
Guarantor shall be entitled by virtue of this Article XII or otherwise.
SECTION 12.15. Reliance by Holders of Senior Indebtedness of a
Guarantor on Subordination Provisions. Each Securityholder by accepting a
Security acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder of
any Senior Indebtedness of a Guarantor, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Securities, to acquire
and continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.
SECTION 12.16. Defeasance. The terms of this Article XII shall not
apply to payments from money or the proceeds of U.S. Government Obligations held
in trust by the Trustee for the payment of principal of and interest on the
Securities pursuant to the provisions described in Section 8.03.
ARTICLE XIII
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Alaska Communications Systems Holdings, Inc.
510 L. Street
Suite 500
Anchorage, Alaska 99501
Attention of:
Michael E. Holmstrom
78
if to the Trustee:
IBJ Whitehall Bank & Trust Company
1 State Street
New York, New York 10004
Attention of:
Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(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;
79
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him 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 or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. When Securities Disregarded. In determining whether
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company, any Guarantor or
by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any Guarantor shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 13.09. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 13.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 13.11. Successors. All agreements of the Company and each
Guarantor in this Indenture and the Securities shall bind its successors. All
agreements of the Trustee in this Indenture shall bind its successors.
80
SECTION 13.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
ALASKA COMMUNICATIONS SYSTEMS
HOLDINGS, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
ALEC HOLDINGS, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
TELEPHONE UTILITIES OF ALASKA, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
TELEPHONE UTILITIES OF THE NORTHLAND,
INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
PTI COMMUNICATIONS OF ALASKA, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
PACIFIC TELECOM OF ALASKA PCS, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
PACIFIC TELECOM CELLULAR OF ALASKA,
INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
ATU COMMUNICATIONS, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
MACTEL, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
MACTEL FAIRBANKS, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
ATU LONG DISTANCE, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
PENINSULA CELLULAR SERVICES, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
PRUDHOE COMMUNICATIONS, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
ALASKA COMMUNICATIONS SYSTEMS, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
ALEC ACQUISITION SUB CORP.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
MACTEL LICENSE SUB, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
MACTEL FAIRBANKS LICENSE SUB, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President and Chief
Financial Officer
PTINET, INC.,
by /s/ Michael E. Holmstrom
--------------------------------------
Name: Michael E. Holmstrom
Title: Senior Vice President
IBJ WHITEHALL BANK & TRUST COMPANY, as
Trustee,
by /s/ Luis Perez
-------------------------------------
Name: Luis Perez
Title: Asst. Vice President
APPENDIX A
PROVISIONS RELATING TO ORIGINAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions.
1.01. Definitions. For the purposes of this Appendix A the following
terms shall have the meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Regulation S Global Security or beneficial interest
therein, the rules and procedures of the Depositary for such Global Security,
Euroclear and Cedel, in each case to the extent applicable to such transaction
and as in effect from time to time.
"Cedel" means Cedel Bank, S.A., or any successor securities clearing
agency.
"Definitive Security" means a certificated Original Security or
Exchange Security (bearing the Restricted Securities Legend if the transfer of
such Security is restricted by applicable law) that does not include the Global
Securities Legend.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Euroclear" means the Euroclear Clearance System or any successor
securities clearing agency.
"Global Securities Legend" means the legend set forth under that
caption in Exhibit A to this Indenture.
"IAI" means an institutional "accredited investor" as described in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Chase Securities Inc., CIBC World Markets
Corp. and Credit Suisse First Boston Corporation.
"Private Exchange" means an offer by the Company, pursuant to the
Registration Agreement, to issue and deliver to certain purchasers, in exchange
for the Original Securities held by such purchasers as part of their initial
distribution, a like aggregate principal amount of Private Exchange Securities.
"Private Exchange Securities" means the Securities of the Company
issued in exchange for Original Securities pursuant to this Indenture in
connection with a Private Exchange pursuant to the Registration Agreement.
"Purchase Agreement" means the Purchase Agreement dated May 11,
1999, among the Company, ALEC Holdings, Inc., Alaska Communications Systems,
Inc., ALEC
2
Acquisition Sub Corp., MACtel License Sub, Inc., MACtel Fairbanks License Sub,
Inc. and PTINet, Inc.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registered Exchange Offer" means an offer by the Company, pursuant
to the Registration Agreement, to certain Holders of Original Securities, to
issue and deliver to such Holders, in exchange for their Original Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Agreement" means the Exchange and Registration Rights
Agreement dated May 14, 1999, among the Company, the Guarantors and the Initial
Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Securities" means all Original Securities offered and
sold outside the United States in reliance on Regulation S.
"Restricted Period", with respect to any Securities, means the
period of 40 consecutive days beginning on and including the later of (i) the
day on which such Securities are first offered to persons other than
distributors (as defined in Regulation S under the Securities Act) in reliance
on Regulation S and (ii) the Issue Date with respect to such Securities.
"Restricted Securities Legend" means the legend set forth in Section
2.3(e)(i) herein.
"Rule 501" means Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Securities" means all Original Securities offered and
sold to QIBs in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depositary) or any successor person thereto, who
shall initially be the Trustee.
"Shelf Registration Statement" means a registration statement filed
by the Company in connection with the offer and sale of Original Securities
pursuant to the Registration Agreement.
"Transfer Restricted Securities" means Definitive Securities and any
other Securities that bear or are required to bear the Restricted Securities
Legend.
3
1.02. Other Definitions.
Term: Defined in Section:
----- -------------------
"Agent Members" ............................................. 2.1(b)
"IAI Global Security" ....................................... 2.1(a)
"Global Security" ........................................... 2.1(a)
"Regulation S Global Security" .............................. 2.1(a)
"Rule 144A Global Security" ................................. 2.1(a)
2. The Securities.
2.01. Form and Dating. The Original Securities issued on the date
hereof will be (i) offered and sold by the Company pursuant to the Purchase
Agreement and (ii) resold, initially only to (A) QIBs in reliance on Rule 144A
and (B) Persons other than U.S. Persons (as defined in Regulation S) in reliance
on Regulation S. Such Original Securities may thereafter be transferred to,
among others, QIBs, purchasers in reliance on Regulation S and, except as set
forth below, IAIs in accordance with Rule 501.
(a) Global Securities. Rule 144A Securities shall be issued
initially in the form of one or more permanent global Securities in definitive,
fully registered form (collectively, the "Rule 144A Global Security") and
Regulation S Securities shall be issued initially in the form of one or more
global Securities (collectively, the "Regulation S Global Security"), in each
case without interest coupons and bearing the Global Securities Legend and
Restricted Securities Legend, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Securities Custodian,
and registered in the name of the Depositary or a nominee of the Depositary,
duly executed by the Company and authenticated by the Trustee as provided in
this Indenture. One or more global securities in definitive, fully registered
form without interest coupons and bearing the Global Securities Legend and the
Restricted Securities Legend (collectively, the "IAI Global Security") shall
also be issued on the Closing Date, deposited with the Securities Custodian, and
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Company and authenticated by the Trustee as provided in this
Indenture to accommodate transfers of beneficial interests in the Securities to
IAIs subsequent to the initial distribution. Beneficial ownership interests in
the Regulation S Global Security shall not be exchangeable for interests in the
Rule 144A Global Security, the IAI Global Security or any other Security without
a Restricted Securities Legend until the expiration of the Restricted Period.
The Rule 144A Global Security, the IAI Global Security and the Regulation S
Global Security are each referred to herein as a "Global Security" and are
collectively referred to herein as "Global Securities." The aggregate principal
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depositary or its
nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b) and pursuant to an order of the Company, authenticate and
deliver initially one or
4
more Global Securities that (a) shall be registered in the name of the
Depositary for such Global Security or Global Securities or the nominee of such
Depositary and (b) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions or held by the Trustee as Securities
Custodian.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary or by the Trustee as Securities Custodian
or under such Global Security, 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 Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent 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 Agent Members, the operation of customary practices of such
Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
(c) Definitive Securities. Except as provided in Section 2.3 or 2.4,
owners of beneficial interests in Global Securities will not be entitled to
receive physical delivery of certificated Securities.
2.2. Authentication. The Trustee shall authenticate and make
available for delivery upon a written order of the Company signed by two
Officers (1) Original Securities for original issue on the date hereof in an
aggregate principal amount of $150,000,000, (2) the (A) Exchange Securities for
issue only in a Registered Exchange Offer and (B) Private Exchange Securities
for issue only in a Private Exchange, in the case of each of (A) and (B)
pursuant to the Registration Agreement and for a like principal amount of
Original Securities exchanged pursuant thereto. Such order shall specify the
amount of the Securities to be authenticated, the date on which the original
issue of Securities is to be authenticated and whether the Securities are to be
Original Securities, Exchange Securities or Private Exchange Securities. The
aggregate principal amount of Securities outstanding at any time may not exceed
$150,000,000 except as provided in Section 2.08 of this Indenture.
2.3. Transfer and Exchange. (a) Transfer and Exchange of Definitive
Securities. When Definitive Securities are presented to the Registrar with a
request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Definitive Securities surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing; and
5
(ii) are accompanied by the following additional information and
documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect
(in the form set forth on the reverse side of the Original
Security); or
(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect (in the form set forth on
the reverse side of the Original Security); or
(C) if such Definitive Securities are being transferred
pursuant to an exemption from registration in accordance with Rule
144 under the Securities Act or in reliance upon another exemption
from the registration requirements of the Securities Act, (i) a
certification to that effect (in the form set forth on the reverse
side of the Original Security) and (ii) if the Company so requests,
an opinion of counsel or other evidence reasonably satisfactory to
it as to the compliance with the restrictions set forth in the
legend set forth in Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Security, duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar,
together with:
(i) certification (in the form set forth on the reverse side of the
Original Security) that such Definitive Security is being transferred (A)
to a QIB in accordance with Rule 144A, (B) to an IAI that has furnished to
the Trustee a signed letter substantially in the form of Exhibit D or (C)
outside the United States in an offshore transaction within the meaning of
Regulation S and in compliance with Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books and
records with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the
Depositary account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so canceled. If no
Global Securities are then outstanding and the Global Security has not been
previously exchanged for certificated securities pursuant to Section 2.4, the
Company shall issue and the Trustee shall authenticate, upon written order of
the
6
Company in the form of an Officers' Certificate, a new Global Security in the
appropriate principal amount.
(c) Transfer and Exchange of Global Securities. (i) The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depositary therefor. A transferor of a beneficial interest in a Global Security
shall deliver a written order given in accordance with the Depositary's
procedures containing information regarding the participant account of the
Depositary to be credited with a beneficial interest in such Global Security or
another Global Security and such account shall be credited in accordance with
such order with a beneficial interest in the applicable Global Security and the
account of the Person making the transfer shall be debited by an amount equal to
the beneficial interest in the Global Security being transferred. Transfers by
an owner of a beneficial interest in the Rule 144A Global Security or the IAI
Global Security to a transferee who takes delivery of such interest through the
Regulation S Global Security, whether before or after the expiration of the
Restricted Period, shall be made only upon receipt by the Trustee of a
certification from the transferor to the effect that such transfer is being made
in accordance with Regulation S or (if available) Rule 144 under the Securities
Act and that, if such transfer is being made prior to the expiration of the
Restricted Period, the interest transferred shall be held immediately thereafter
through Euroclear or Cedel. In the case of a transfer of a beneficial interest
in either the Regulation S Global Security or the Rule 144A Global Security for
an interest in the IAI Global Security, the transferee must furnish a signed
letter substantially in the form of Exhibit D to the Trustee.
(ii) If the proposed transfer is a transfer of a beneficial interest
in one Global Security to a beneficial interest in another Global Security, the
Registrar shall reflect on its books and records the date and an increase in the
principal amount of the Global Security to which such interest is being
transferred in an amount equal to the principal amount of the interest to be so
transferred, and the Registrar shall reflect on its books and records the date
and a corresponding decrease in the principal amount of Global Security from
which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Security may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(iv) In the event that a Global Security is exchanged for Definitive
Securities pursuant to Section 2.4 prior to the consummation of the Registered
Exchange Offer or the effectiveness of a Shelf Registration Statement with
respect to such Securities, such Securities may be exchanged only in accordance
with such procedures as are substantially consistent with the provisions of this
Section 2.3 (including the certification requirements set forth on the reverse
of the Original Securities intended to ensure that such transfers comply with
Rule 144A, Regulation S or such other applicable exemption from registration
under the Securities Act, as the case may be) and such other procedures as may
from time to time be adopted by the Company.
7
(d) Restrictions on Transfer of Regulation S Global Security. (i)
Prior to the expiration of the Restricted Period, interests in the Regulation S
Global Security may only be held through Euroclear or Cedel. During the
Restricted Period, beneficial ownership interests in the Regulation S Global
Security may only be sold, pledged or transferred through Euroclear or Cedel in
accordance with the Applicable Procedures and only (A) to the Company, (B) so
long as such security is eligible for resale pursuant to Rule 144A, to a person
whom the selling holder reasonably believes is a QIB that purchases for its own
account or for the account of a QIB to whom notice is given that the resale,
pledge or transfer is being made in reliance on Rule 144A, (C) in an offshore
transaction in accordance with Regulation S, (D) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 (if applicable) under
the Securities Act, (E) to an IAI purchasing for its own account, or for the
account of such an IAI, in a minimum principal amount of Securities of $250,000
or (F) pursuant to an effective registration statement under the Securities Act,
in each case in accordance with any applicable securities laws of any state of
the United States. Prior to the expiration of the Restricted Period, transfers
by an owner of a beneficial interest in the Regulation S Global Security to a
transferee who takes delivery of such interest through the Rule 144A Global
Security or the IAI Global Security shall be made only in accordance with
Applicable Procedures and upon receipt by the Trustee of a written certification
from the transferor of the beneficial interest in the form provided on the
reverse of the Original Security to the effect that such transfer is being made
to (i) a person whom the transferor reasonably believes is a QIB within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A or
(ii) an IAI purchasing for its own account, or for the account of such an IAI,
in a minimum principal amount of the Securities of $250,000. Such written
certification shall no longer be required after the expiration of the Restricted
Period. In the case of a transfer of a beneficial interest in the Regulation S
Global Security for an interest in the IAI Global Security, the transferee must
furnish a signed letter substantially in the form of Exhibit D to the Trustee.
(ii) Upon the expiration of the Restricted Period, beneficial
ownership interests in the Regulation S Global Security shall be transferable in
accordance with applicable law and the other terms of this Indenture.
(e) Legend. (i) Except as permitted by the following paragraphs
(ii), (iii) or (iv), each Security certificate evidencing the Global Securities
and the Definitive Securities (and all Securities issued in exchange therefor or
in substitution thereof) shall bear a legend in substantially the following form
(each defined term in the legend being defined as such for purposes of the
legend only):
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.
"THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS
8
TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING
OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR"
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF
$250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR
SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE."
Each Definitive Security shall bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION
AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Security
that is a Definitive Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Security that does
not bear the legends set forth above and rescind any restriction on the transfer
of such Transfer Restricted Security if the Holder certifies in writing to the
Registrar that its request for such exchange was made in reliance on Rule 144
(such certification to be in the form set forth on the reverse of the Original
Security).
(iii) After a transfer of any Original Securities or Private
Exchange Securities during the period of the effectiveness of a Shelf
Registration Statement with respect to such Original
9
Securities or Private Exchange Securities, as the case may be, all requirements
pertaining to the Restricted Securities Legend on such Original Securities or
such Private Exchange Securities shall cease to apply and the requirements that
any such Original Securities or such Private Exchange Securities be issued in
global form shall continue to apply.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Original Securities pursuant to which Holders of such Original or
Securities are offered Exchange Securities in exchange for their Original
Securities, all requirements pertaining to Original Securities that Original
Securities be issued in global form shall continue to apply, and Exchange
Securities in global form without the Restricted Securities Legend shall be
available to Holders that exchange such Original Securities in such Registered
Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Original Securities pursuant to which Holders of such Original Securities are
offered Private Exchange Securities in exchange for their Original Securities,
all requirements pertaining to such Original Securities that Original Securities
be issued in global form shall continue to apply, and Private Exchange
Securities in global form with the Restricted Securities Legend shall be
available to Holders that exchange such Original Securities in such Private
Exchange.
(vi) Upon a sale or transfer after the expiration of the Restricted
Period of any Original Security acquired pursuant to Regulation S, all
requirements that such Original Security bear the Restricted Securities Legend
shall cease to apply and the requirements requiring any such Original Security
be issued in global form shall continue to apply.
(f) Cancelation or Adjustment of Global Security. At such time as
all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, transferred, redeemed, repurchased or canceled, such
Global Security shall be returned by the Depositary to the Trustee for
cancelation or retained and canceled by the Trustee. At any time prior to such
cancelation, if any beneficial interest in a Global Security is exchanged for
Definitive Securities, transferred in exchange for an interest in another Global
Security, redeemed, repurchased or canceled, the principal amount of Securities
represented by such Global Security shall be reduced and an adjustment shall be
made on the books and records of the Trustee (if it is then the Securities
Custodian for such Global Security) with respect to such Global Security, by the
Trustee or the Securities Custodian, to reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges of
Securities. (i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate, Definitive Securities and
Global Securities at the Registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge payable in
connection therewith (other than any such transfer taxes, assessments or similar
governmental charge payable upon exchange or transfer pursuant to Sections
3.06,4.06,4.08 and 9.05 of this Indenture).
(iii) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent or the Registrar may
deem and treat the person in whose
10
name a Security is registered as the absolute owner of such Security for the
purpose of receiving payment of principal of and interest on such Security and
for all other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent or the Registrar shall be
affected by notice to the contrary.
(iv) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be entitled
to the same benefits under this Indenture as the Securities surrendered upon
such transfer or exchange.
(h) No Obligation of the Trustee. (i) The Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in the Depositary or any other Person with respect
to the accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depositary) of any notice
(including any notice of redemption or repurchase) or the payment of any amount,
under or with respect to such Securities. All notices and communications to be
given to the Holders and all payments to be made to Holders under the Securities
shall be given or made only to the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the Depositary. The
Trustee may rely and shall be fully protected in relying upon information
furnished by the Depositary with respect to its members, participants and any
beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Depositary
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
2.4. Definitive Securities. (a) A Global Security deposited with the
Depositary or with the Trustee as Securities Custodian pursuant to Section 2.1
shall be transferred to the beneficial owners thereof in the form of Definitive
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depositary notifies the Company
that it is unwilling or unable to continue as a Depositary for such Global
Security or if at any time the Depositary ceases to be a "clearing agency"
registered under the Exchange Act, and a successor depositary is not appointed
by the Company within 90 days of such notice, or (ii) an Event of Default has
occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depositary to the Trustee, to be so transferred, in whole or from time to time
in part, without charge, and the Trustee shall
11
authenticate and deliver, upon such transfer of each portion of such Global
Security, an equal aggregate principal amount of Definitive Securities of
authorized denominations. Any portion of a Global Security transferred pursuant
to this Section 2.04 shall be executed, authenticated and delivered only in
denominations of $1,000 and any integral multiple thereof and registered in such
names as the Depositary shall direct. Any certificated Original Security in the
form of a Definitive Security delivered in exchange for an interest in the
Global Security shall, except as otherwise provided by Section 2.3(e), bear the
Restricted Securities Legend.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i), (ii) or (iii), the Company will promptly make available to
the Trustee a reasonable supply of Definitive Securities in fully registered
form without interest coupons.
EXHIBIT A
FORM OF FACE OF ORIGINAL SECURITY
Global Securities Legend
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
Restricted Securities Legend
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
"THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A 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
2
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF
THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE."
Each Definitive Security shall bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS."
No. $______
9 3/8% Senior Subordinated Note due 2009
CUSIP No.______
ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC., a Delaware
corporation, promises to pay to Cede & Co., or registered assigns, the principal
sum listed on the Schedule of Increases or Decreases in Global Security attached
hereto on May 15, 2009.
Interest Payment Dates: May 15 and May 15.
Record Dates: May 1 and November 1.
2
Additional provisions of this Security are set forth on the other
side of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to be
duly executed.
ALASKA COMMUNICATIONS SYSTEMS
HOLDINGS, INC.,
by
_____________________________________
Name:
Title:
by
_____________________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:_________________________________
Authorized Signatory
FORM OF REVERSE SIDE OF ORIGINAL SECURITY
9 3/8% Senior Subordinated Note due 2009
1. Interest
(a) ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC., a Delaware
corporation (such corporation, and its successors and assigns under the
Indenture hereinafter referred to, being herein called the "Company"), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. The Company shall pay interest semiannually on May 15 and November
15 of each year. Interest on the Securities shall accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from May
15, 1999. Interest shall be computed on the basis of a 360-day year of twelve
30-day months. The Company shall pay interest on overdue principal at the rate
borne by the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
(b) Additional Amounts. The holder of this Security is entitled to
the benefits of an Exchange and Registration Rights Agreement, dated May 14,
1999, among the Company and each of (i) ALEC Holdings, Inc., a Delaware
corporation, (ii) Telephone Utilities of Alaska, Inc., Telephone Utilities of
the Northland, Inc., PTI Communications of Alaska, Inc., Pacific Telecom
Cellular of Alaska PCS, Inc., Pacific Telecom Cellular of Alaska, Inc., (iii)
ATU Communications, Inc., MACtel, Inc., ATU Long Distance, Inc., Peninsula
Cellular Services, Inc., Prudhoe Communications, Inc. and (iv) Alaska
Communications Systems, Inc., ALEC Acquisition Sub Corp., MACtel License Sub,
Inc. and MACtel Fairbanks License Sub, Inc. (collectively, the "Guarantors") and
the Initial Purchasers named therein (the "Registration Agreement"). Capitalized
terms used in this paragraph (b) but not defined herein have the meanings
assigned to them in the Registration Agreement. If (i) the Shelf Registration
Statement or Exchange Offer Registration Statement, as applicable under the
Registration Agreement, is not filed with the Commission on or prior to 75 days
after the Issue Date, (ii) the Exchange Offer Registration Statement or the
Shelf Registration Statement, as the case may be, is not declared effective on
or prior to 150 days after the Issue Date, (iii) the Exchange Offer is not
consummated on or prior to 180 days after the Issue Date, or (iv) the Shelf
Registration Statement is filed and declared effective on or prior to 150 days
after the Issue Date but shall thereafter cease to be effective (at any time
that the Company and the Guarantors are obligated to maintain the effectiveness
thereof) without being succeeded within 45 days by an additional Registration
Statement filed and declared effective (each such event referred to in clauses
(i) through (iv), a "Registration Default"), the Company shall pay Additional
Amounts to each holder of Transfer Restricted Securities, during the period of
one or more such Registration Defaults, in an amount equal to $0.192 per week
per $1,000 principal amount of the Securities constituting Transfer Restricted
Securities held by such holder until the applicable Registration Statement is
filed or declared effective, the Registered Exchange Offer is consummated or the
Shelf Registration Statement again becomes effective, as the case may be. All
accrued Additional Amounts shall be paid to holders in the same manner as
interest payments on the Securities on semi-annual payment dates which
correspond to interest payment dates for the Securities. Following the cure of
all Registration Defaults, the accrual of Additional Amounts shall cease. The
Trustee shall have no responsibility with respect to the determination of the
amount of any such Additional Amounts.
2
For purposes of the foregoing, "Transfer Restricted Securities" means (i) each
Original Security until the date on which such Original Security has been
exchanged for a freely transferable Exchange Security in the Registered Exchange
Offer, (ii) each Original Security or Private Exchange Security until the date
on which such Original Security or Private Exchange Security has been
effectively registered under the Securities Act and disposed of in accordance
with a Shelf Registration Statement or (iii) each Original Security or Private
Exchange Security until the date on which such Original Security or Private
Exchange Security is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act.
2. Method of Payment
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the May 1 or November 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal, premium, Additional
Amounts and interest in money of the United States of America that at the time
of payment is legal tender for payment of public and private debts. Payments in
respect of the Securities represented by a Global Security (including principal,
premium, Additional Amounts and interest) shall be made by wire transfer of
immediately available funds to the accounts specified by The Depository Trust
Company. The Company will make all payments in respect of a certificated
Security (including principal, premium, Additional Amounts and interest), by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Securities may also be made, in the case of a
Holder of at least $1,000,000 aggregate principal amount of Securities, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 30 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).
3. Paving Agent and Registrar
Initially, IBJ WHITEHALL BANK & TRUST COMPANY, a New York banking
corporation (the "Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of May
14, 1999 (the "Indenture"), among the Company, the Guarantors and the Trustee.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss.77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all terms and provisions
of the
3
Indenture, and Securityholders are referred to the Indenture and the TIA for a
statement of such terms and provisions.
The Securities are senior subordinated unsecured obligations of the
Company limited to $150,000,000 aggregate principal amount at any one time
outstanding (subject to Section 2.07 of the Indenture). This Security is one of
the Original Securities referred to in the Indenture. The Securities include the
Original Securities and any Exchange Securities and Private Exchange Securities
issued in exchange for Original Securities. The Original Securities, the
Exchange Securities and the Private Exchange Securities are treated as a single
class of securities under the Indenture. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, make certain Investments and other Restricted Payments, pay
dividends and other distributions, incur Indebtedness, enter into consensual
restrictions upon the payment of certain dividends and distributions by such
Restricted Subsidiaries, issue or sell shares of capital stock of such
Restricted Subsidiaries, enter into or permit certain transactions with
Affiliates and asset sales. The Indenture also imposes limitations on the
ability of the Company to consolidate or merge with or into any other Person or
convey, transfer or lease all or substantially all of the property of the
Company.
To guarantee the due and punctual payment of the principal and
interest on the Securities and all other amounts payable by the Company under
the Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture, the Guarantors have jointly and severally
unconditionally guaranteed the Guaranteed Obligations on a senior subordinated
basis pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth in the following paragraph, the Securities shall
not be redeemable at the option of the Company prior to May 15, 2004.
Thereafter, the Securities shall be redeemable at the option of the Company, in
whole or in part, on not less than 30 nor more than 60 days prior notice, at the
following redemption prices (expressed as percentages of principal amount), plus
accrued and unpaid interest thereon, and Additional Amounts in respect thereof,
if any, to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on May 15 of the years
set forth below:
Redemption
Year Price
---- -----
2004 ................................. 104.688%
2005 ................................. 103.125%
2006 ................................. 101.563%
2007 and thereafter .................. 100.000%
In addition, prior to May 15, 2002, the Company may redeem up to a
maximum of 35% of the original aggregate principal amount of the Securities with
the Net Cash Proceeds of one or more Equity Offerings (i) by the Company or (ii)
by Holdings to the extent the Net Cash Proceeds thereof are contributed to the
Company or used to purchase Capital Stock (other than
4
Disqualified Stock) of the Company from the Company, at a redemption price equal
to 109 3/8% of the principal amount thereof, plus accrued and unpaid interest
on, and any Additional Amounts in respect of, the Securities, to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
that after giving effect to any such redemption, at least 65% of the original
aggregate principal amount of the Securities remains outstanding. Any such
redemption by the Company shall be made within 90 days of such related Equity
Offering by the Company or Holdings, as the case may be, and must be made upon
not less than 30 nor more than 60 days' notice mailed to each Holder of Notes
being redeemed and otherwise in accordance with the procedures set forth in the
Indenture.
6. Sinking Fund
The Securities are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at the registered address of such Holder. Securities
in denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued and unpaid interest and Additional Amounts, if any, on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
8. Repurchase of Securities at the Option of Holders upon Change of Control
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest and Additional Amounts, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date that is on or prior to the date of purchase) as provided in, and subject to
the terms of, the Indenture.
9. Subordination
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company and each Guarantor
agree, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such purpose.
5
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder of Securities, the Company and the
Trustee may amend the Indenture or the Securities (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to comply with Article V of the
Indenture; (iii) to provide for uncertificated Securities in addition to or in
place of certificated Securities; (iv) to add Guarantees with respect to the
Securities; (v) to secure the Securities; (vi) to add additional covenants or to
surrender rights and powers conferred on the Company; (vii) to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA; (viii) to make any change that does not adversely
affect the rights of any Securityholder; (ix) to make any change in the
subordination provisions of the Indenture that would limit or terminate the
benefits available to any holder of Senior Indebtedness of the Company (or any
6
representative thereof) under such subordination provisions; or (x) to provide
for the issuance of the Exchange Securities or Private Exchange Securities.
15. Defaults and Remedies
If an Event of Default occurs (other than an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of the
Company) and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the outstanding Securities may declare the principal of and
accrued but unpaid interest on all the Securities to be due and payable. If an
Event of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs, the principal of and interest on all the
Securities shall become immediately due and payable without any declaration or
other act on the part of the Trustee or any Holders. Under certain
circumstances, the Holders of a majority in principal amount of the outstanding
Securities may rescind any such acceleration with respect to the Securities and
its consequences.
If an Event of Default occurs and is continuing, the Trustee shall
be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the Holders unless such Holders
have offered to the Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no Holder may pursue any
remedy with respect to the Indenture or the Securities unless (i) such Holder
has previously given the Trustee notice that an Event of Default is continuing,
(ii) Holders of at least 25% in principal amount of the outstanding Securities
have requested the Trustee in writing to pursue the remedy, (iii) such Holders
have offered the Trustee reasonable security or indemnity against any loss,
liability or expense, (iv) the Trustee has not complied with such request within
60 days after the receipt of the request and the offer of security or indemnity
and (v) the Holders of a majority in principal amount of the outstanding
Securities have not given the Trustee a direction inconsistent with such request
within such 60-day period. Subject to certain restrictions, the Holders of a
majority in principal amount of the outstanding Securities are given the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. The Trustee, however, may refuse to follow any direction that conflicts
with law or the Indenture or that the Trustee determines is unduly prejudicial
to the rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under the Indenture, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
7
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder of Securities upon written
request and without charge to the Holder a copy of the Indenture which has in it
the text of this Security.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ________ agent to transfer this Security on the books of
the Company. The agent may substitute another to act for him.
Date: _______________ Your Signature: _________________________________________
Sign exactly as your name appears on the
other side of this Security.
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER
RESTRICTED SECURITIES
This certificate relates to $__________ principal amount of Securities held in
(check applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The undersigned (check one box below):
|_| has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above);
|_| has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act, the undersigned confirms that such Securities
are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) |_| to the Company; or
(2) |_| pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) |_| inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of
1933) that purchases for its own account or for the account of
a qualified institutional buyer to whom notice is given that
such transfer is being made in reliance on Rule 144A,
in each case pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(4) |_| outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act in
compliance with Rule 904 under the Securities Act of 1933; or
(5) |_| to an institutional "accredited investor" (as defined in
Rule 501(a)(l), (2), (3) or (7) under the Securities Act of
1933) that has furnished to the Trustee a signed letter
containing certain representations and agreements; or
(6) |_| pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
2
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
Person other than the registered holder thereof; provided, however, that
if box (4), (5) or (6) is checked, the Trustee may require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably
requested to confirm that such
3
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933.
________________________________________
Your Signature
Signature Guarantee:
Date: ______________________ ________________________________________
Signature must be guaranteed Signature of Signature Guarantee
by a participant in a
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Trustee
_______________________________________________________________
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated: ___________________ ______________________________________________
NOTICE: To be executed by an executive officer
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
The following increases or decreases in this Global Security have been made:
Date of Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Exchange Principal Amount of this Principal Amount of this Global Security following signatory of Trustee or
Global Security Global Security such decrease or increase Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the
Indenture, check the box:
Asset Sale |_| Change of Control |_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount:
$___________
Date: ____________ Your Signature: ___________________________________________
(Sign exactly as your name appears on the other side of the
Security)
Signature Guarantee: ___________________________________________________________
Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or other
signature guarantor acceptable to the Trustee
EXHIBIT B
FORM OF FACE OF EXCHANGE SECURITY
No. $______
9 3/8% Senior Subordinated Note due 2009
CUSIP No. ______
ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC., a Delaware
corporation, promises to pay to Cede & Co., or registered assigns, the principal
sum listed on the Schedule of Increases or Decreases in Global Security attached
hereto on May 15, 2009.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 15.
2
Additional provisions of this Security are set forth on the other
side of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to be
duly executed.
ALASKA COMMUNICATIONS SYSTEMS
HOLDINGS, INC.,
by ____________________________________
Name:
Title:
by ____________________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
IBJ WHITEHALL BANK & TRUST COMPANY,
Trustee
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by _______________________________
Authorized Signatory
FORM OF REVERSE SIDE OF EXCHANGE SECURITY
9 3/8% Senior Subordinated Note due 2009
1. Interest
ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC., a Delaware corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
interest on the principal amount of this Security at the rate per annum shown
above. The Company shall pay interest semiannually on May 15 and November 15 of
each year. Interest on the Securities shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from May 15,
1999. Interest shall be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne by
the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the May 1 or November 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal, premium and
interest in money of the United States of America that at the time of payment is
legal tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) shall be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company. The Company will make all
payments in respect of a certificated Security (including principal, premium and
interest), by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on the Securities may also be made, in the case
of a Holder of at least $1,000,000 aggregate principal amount of Securities, by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the United States if such Holder elects payment by wire transfer by giving
written notice to the Trustee or the Paying Agent to such effect designating
such account no later than 30 days immediately preceding the relevant due date
for payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, IBJ WHITEHALL BANK & TRUST COMPANY, a New York banking
corporation (the "Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
2
4. Indenture
The Company issued the Securities under an Indenture dated as of
May 14, 1999 (the "Indenture"), among the Company, the Guarantors and the
Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act
of 1939 (15 U.S.C.. ss.ss. 77aaa-77bbbb) as in effect on the date of the
Indenture (the "TIA"). Terms defined in the Indenture and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are
subject to all terms and provisions of the Indenture, and Securityholders are
referred to the Indenture and the TIA for a statement of such terms and
provisions.
The Securities are senior subordinated unsecured obligations of the
Company limited to $150,000,000 aggregate principal amount at any one time
outstanding (subject to Section 2.07 of the Indenture). This Security is one of
the Exchange Securities referred to in the Indenture. The Securities include the
Original Securities and any Exchange Securities and Private Exchange Securities
issued in exchange for Original Securities. The Original Securities, the
Exchange Securities and the Private Exchange Securities are treated as a single
class of securities under the Indenture. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, make certain Investments and other Restricted Payments, pay
dividends and other distributions, incur Indebtedness, enter into consensual
restrictions upon the payment of certain dividends and distributions by such
Restricted Subsidiaries, issue or sell shares of capital stock of such
Restricted Subsidiaries, enter into or permit certain transactions with
Affiliates and make asset sales. The Indenture also imposes limitations on the
ability of the Company to consolidate or merge with or into any other Person or
convey, transfer or lease all or substantially all of the property of the
Company.
To guarantee the due and punctual payment of the principal and
interest on the Securities and all other amounts payable by the Company under
the Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture, the Guarantors have jointly and severally
unconditionally guaranteed the Guaranteed Obligations on a senior subordinated
basis pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth in the following paragraph, the Securities shall
not be redeemable at the option of the Company prior to May 15, 2004.
Thereafter, the Securities shall be redeemable at the option of the Company, in
whole or in part, on not less than 30 nor more than 60 days prior notice, at the
following redemption prices (expressed is percentages of principal amount), plus
accrued and unpaid interest thereon, and Additional Amounts in respect thereof,
if any, to the redemption date (subject to the right of Holders of record on the
relevant record date to
3
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on May 15 of the years set forth below:
Redemption
Year Price
--------------------------------------
2004 104.688%
2005 103.125%
2006 101.563%
2007 and thereafter 100.000%
In addition, prior to May 15, 2002, the Company may redeem up to a
maximum of 35% of the original aggregate principal amount of the Securities with
the Net Cash Proceeds of one or more Equity Offerings (i) by the Company or (ii)
by Holdings to the extent the Net Cash Proceeds thereof are contributed to the
Company or used to purchase Capital Stock (other than Disqualified Stock) of the
Company from the Company, at a redemption price equal to 109 3/8% of the
principal amount thereof, plus accrued and unpaid interest on, and any
Additional Amounts in respect of, the Securities, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
that after giving effect to any such redemption, at least 65% of the original
aggregate principal amount of the Securities remains outstanding. Any such
redemption by the Company shall be made within 90 days of such related Equity
Offering by the Company or Holdings, as the case may be, and must be made upon
not less than 30 nor more than 60 days' notice mailed to each Holder of Notes
being redeemed and otherwise in accordance with the procedures set forth in the
Indenture.
6. Sinking Fund
The Securities are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at the registered address of such Holder. Securities
in denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued and unpaid interest and Additional Amounts, if any, on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
8. Repurchase of Securities at the Option of Holders upon Change of Control
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest and Additional Amounts, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to
4
receive interest due on the relevant interest payment date that is on or prior
to the date of purchase) as provided in, and subject to the terms of, the
Indenture.
9. Subordination
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company and each Guarantor
agrees and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such purpose.
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed or 15 days
before an interest payment date.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent
5
of the Holders of at least a majority in aggregate principal amount of the
outstanding Securities and (ii) any default or noncompliance with any provision
may be waived with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities. Subject to certain exceptions
set forth in the Indenture, without the consent of any Holder of Securities, the
Company and the Trustee may amend the Indenture or the Securities (i) to cure
any ambiguity, omission, defect or inconsistency; (ii) to comply with Article V
of the Indenture; (iii) to provide for uncertificated Securities in addition to
or in place of certificated Securities; (iv) to add Guarantees with respect to
the Securities; (v) to secure the Securities; (vi) to add additional covenants
or to surrender rights and powers conferred on the Company; (vii) to comply with
the requirements of the SEC in order to effect or maintain the qualification of
the Indenture under the TIA; (viii) to make any change that does not adversely
affect the rights of any Securityholder; (ix) to make any change in the
subordination provisions of the Indenture that would limit or terminate the
benefits available to any holder of Senior Indebtedness of the Company (or any
representative thereof) under such subordination provisions; or (x) to provide
for the issuance of the Exchange Securities or Private Exchange Securities.
15. Defaults and Remedies
If an Event of Default occurs (other than an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of the
Company) and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the outstanding Securities may declare the principal of and
accrued but unpaid interest on all the Securities to be due and payable. If an
Event of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs, the principal of and interest on all the
Securities shall become immediately due and payable without any declaration or
other act on the part of the Trustee or any Holders. Under certain
circumstances, the Holders of a majority in principal amount of the outstanding
Securities may rescind any such acceleration with respect to the Securities and
its consequences.
If an Event of Default occurs and is continuing, the Trustee shall
be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the Holders unless such Holders
have offered to the Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no Holder may pursue any
remedy with respect to the Indenture or the Securities unless (i) such Holder
has previously given the Trustee notice that an Event of Default is continuing,
(ii) Holders of at least 25% in principal amount of the outstanding Securities
have requested the Trustee in writing to pursue the remedy, (iii) such Holders
have offered the Trustee reasonable security or indemnity against any loss,
liability or expense, (iv) the Trustee has not complied with such request within
60 days after the receipt of the request and the offer of security or indemnity
and (v) the Holders of a majority in principal amount of the outstanding
Securities have not given the Trustee a direction inconsistent with such request
within such 60-day period. Subject to certain restrictions, the Holders of a
majority in principal amount of the outstanding Securities are given the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. The Trustee, however, may refuse to follow any direction that conflicts
with law or the Indenture or that the Trustee determines is unduly prejudicial
to the rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking
6
any action under the Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers
7
either as printed on the Securities or as contained in any notice of redemption
and reliance may be placed only on the other identification numbers placed
thereon.
The Company will furnish to any Holder of Securities upon written
request and without charge to the Holder a copy of the Indenture which has in it
the text of this Security.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint __________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
Date: ____________________ Your Signature: _____________________________________
Sign exactly as your name appears on
the other side of this Security.
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ]. The following
increases or decreases in this Global Security have been made:
Date of Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Exchange Principal Amount of this Principal Amount of this Global Security following signatory of Trustee or
Global Security Global Security such decrease or increase Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the
Indenture, check the box:
Asset Sale |_| Change of Control |_|
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount:
$_____________
Date: __________________ Your Signature: _______________________________________
(Sign exactly as your name appears on
the other side of the Security)
Signature Guarantee: ___________________________________________________________
Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or other
signature guarantor acceptable to the Trustee
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture")
dated as of , among [GUARANTOR] (the "New Guarantor"), a
subsidiary of ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC. (or
its successor), a Delaware corporation (the "Company"),
[EXISTING GUARANTORS] and IBJ WHITEHALL BANK & TRUST COMPANY,
a New York banking corporation, as trustee under the indenture
referred to below (the "Trustee").
W I T N E S S E T H:
WHEREAS the Company and [OLD GUARANTORS] (the "Existing Guarantors")
has heretofore executed and delivered to the Trustee an Indenture (the
"Indenture") dated as of May 14, 1999, providing for the issuance of an
aggregate principal amount of up to $150,000,000 of 9 3/8% Senior Subordinated
Notes due 2009 (the "Securities");
WHEREAS Section 4.11 of the Indenture provides that under certain
circumstances the Company is required to cause the New Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the New
Guarantor shall unconditionally guarantee all the Company's obligations under
the Securities pursuant to a Guarantee on the terms and conditions set forth
herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the
Company and the Existing Guarantors are authorized to execute and deliver this
Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Company, the Existing Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the
Securities as follows:
1. Agreement to Guarantee. The New Guarantor hereby agrees, jointly
and severally with all the Existing Guarantors, to unconditionally guarantee the
Company's obligations under the Securities on the terms and subject to the
conditions set forth in Article X of the Indenture and to be bound by all other
applicable provisions of the Indenture and the Securities.
2. Ratification of Indenture: Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.
2
3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
4. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
5. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
3
6. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR],
by _____________________________________
Name:
Title:
ALASKA COMMUNICATIONS SYSTEMS
HOLDINGS, INC.,
by _____________________________________
Name:
Title:
[EXISTING GUARANTORS],
by _____________________________________
Name:
Title:
IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee,
by _____________________________________
Name:
Title:
EXHIBIT D
Form of
Transferee Letter of Representation
Alaska Communications Systems Holdings, Inc.
510 L. Street
Suite 500
Anchorage, Alaska 99501
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal
amount of the 9 3/8% Senior Subordinated Notes due 2009 (the "Securities") of
Alaska Communications Systems Holdings, Inc. (the "Company").
Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:
Name:___________________________
Address:________________________
Taxpayer ID Number: ____________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(l), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We, and any accounts for which we are acting, are each
able to bear the economic risk of our or its investment.
2
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to the date that is two years after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement that has been declared effective under
the Securities Act, (c) in a transaction complying with the requirements of Rule
144A under the Securities Act ("Rule 144A"), to a person we reasonably believe
is a qualified institutional buyer under Rule 144A (a "QIB") that is purchasing
for its own account or for the account of a QIB and to whom notice is given that
the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Securities Act, (e) to an institutional "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is
purchasing for its own account or for the account of such an institutional
"accredited investor," in each case in a minimum principal amount of Securities
of $250,000, or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Securities
is proposed to be made pursuant to clause (e) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such Securities for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Company and the Trustee reserve the right
prior to the offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clause (d), (e) or (f) above to
require the delivery of an opinion of counsel, certifications or other
information satisfactory to the Company and the Trustee.
TRANSFEREE:_________________________________,
by:_________________________________