COMMONWEALTH TELEPHONE ENTERPRISES, INC., CITIZENS COMMUNICATIONS COMPANY AND THE BANK OF NEW YORK as Trustee First Supplemental Indenture Dated as of March 8, 2007 3¼% Convertible Notes due 2023
Exhibit
10.1
COMMONWEALTH
TELEPHONE ENTERPRISES, INC.,
AND
THE
BANK
OF NEW YORK
as
Trustee
____________________
First
Supplemental Indenture
Dated
as
of March 8, 2007
___________________
3¼%
Convertible Notes due 2023
FIRST
SUPPLEMENTAL INDENTURE dated as of March 8, 2007 (the “First
Supplemental Indenture”)
among
COMMONWEALTH TELEPHONE ENTERPRISES, INC., a Pennsylvania corporation (the
“Company”),
CITIZENS COMMUNICATIONS COMPANY, a Delaware corporation (“Citizens”
or
in
its capacity as guarantor, the “Guarantor”),
and
THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the
“Trustee”).
RECITALS
OF THE COMPANY
WHEREAS,
the Company and the
Trustee
have
heretofore executed and delivered the Indenture dated as of July 18, 2003
(the
“Base
Indenture”)
relating to the Company’s 3¼% Convertible Notes due 2023 (each a “Note”
and
collectively, the “Notes”);
WHEREAS,
the Company has entered into the Agreement and Plan of Merger dated as of
September 17, 2006 (the “Merger
Agreement”)
among
the Company, Citizens and CF Merger Corp., a wholly owned subsidiary of Citizens
(“Merger
Subsidiary”),
pursuant to which Merger Subsidiary will be merged with and into the Company
(the “Merger”),
whereupon the separate existence of Merger Subsidiary shall cease, and the
Company shall be the surviving corporation and become a wholly owned subsidiary
of Citizens;
WHEREAS,
pursuant to the Merger Agreement, at the effective time of the Merger (the
“Effective
Time”),
each
share of the Company’s outstanding common stock, par value $1.00 per share (the
“Common
Shares”),
shall
be converted into the right to receive 0.768 shares of common stock, par
value
$0.25 per share, of Citizens (“Citizens’
Stock”)
and
$31.31 in cash, without interest (collectively, the “Merger
Consideration”);
WHEREAS,
Section 12.01 of the Base Indenture provides that the Company shall only
consolidate or merge with or into any other Person or Persons (whether or
not
affiliated with the Company) upon certain terms and upon the satisfaction
of
certain conditions specified therein;
WHEREAS,
pursuant to Section 15.06 of the Base Indenture, following the consummation
of
the Merger, the Company and Citizens shall execute with the Trustee a
supplemental indenture, which shall provide for the conversion and settlement
of
the Notes as set forth in the Base Indenture;
WHEREAS,
Section 11.01(a) of the Base Indenture provides that the Company, when
authorized by the resolutions of the Board of Directors, and the Trustee
may,
from time to time, and at any time, without the consent of any Noteholders,
enter into an indenture or indentures supplemental thereto to make provisions
with respect to the conversion rights of the Noteholders pursuant to the
requirements of Section 15.06 of the Base Indenture and the repurchase
obligations of the Company pursuant to the requirements of Section 3.05(e)
of
the Base Indenture;
2
WHEREAS,
pursuant to Section 11.05 of the Base Indenture, the Trustee was provided
with
an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that
this First Supplemental Indenture complies with the requirements of Article
11
of the Base Indenture and is otherwise authorized or permitted by the Base
Indenture; and
WHEREAS,
all things necessary to make this First Supplemental Indenture a valid agreement
of the Company, Citizens and the Trustee, and a valid supplement to the Base
Indenture, have been done.
NOW,
THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For
and
in consideration of the premises, the parties hereby mutually agree, for
the
benefit of the Company and the equal and proportionate benefit of all
Noteholders, as follows:
ARTICLE 1
Authorization;
Definitions
Section
1.01. First
Supplemental Indenture.
This
First Supplemental Indenture is supplemental to, and is entered into in
accordance with Section 11.01 of the Base Indenture, and except as modified,
amended and supplemented by this First Supplemental Indenture, the provisions
of
the Base Indenture are in all respects ratified and confirmed and shall remain
in full force and effect.
Section
1.02. Capitalized
Terms. Capitalized
terms used herein but not defined shall have the meanings assigned to them
in
the Base Indenture.
ARTICLE
2
Amendments
To The Base Indenture
Section
2.01. Amendments
To The Base Indenture. The
Base
Indenture is hereby amended in the following manner:
(a) The
following definitions shall be added to Section 1.01 of the Base
Indenture:
“Citizens”
means
Citizens Communications Company.
“First
Supplemental Indenture”
means
the First Supplemental Indenture dated as of March 8, 2007 among the Company,
Citizens, and the Trustee.
“Per
Note Unit Value”
means,
on any date and with respect to each $1,000 principal amount of Note, the
sum of
(i) $804.84 in cash, without interest, and (ii) the product of (x) 0.768
shares
of Citizens’ common stock, par value $0.25 per share (“Citizens’
Stock”),
(y)
the Conversion Rate then in effect and (z) the Closing Sale Price of Citizens’
Stock on such date.
3
“Per
Share Unit Value”
means,
on any date, the sum of (i) 0.768 shares of Citizens’ Stock multiplied by the
Closing Sale Price of Citizens’ Stock on such date and (ii) $31.31 in cash,
without interest; provided
that, if
the Conversion Rate is adjusted, the 0.768 amount (as it may previously have
been adjusted) shall be adjusted by the same percentage amount as the adjustment
to the Conversion Rate.
“Unit”
means,
on any date of determination and with respect to each $1,000 principal amount
of
Notes, (i) 0.768 shares of Citizens’ Stock multiplied by the Conversion Rate
then in effect and (ii) $804.84 in cash, without interest.
(b) The
definition of “Common Stock” in Section 1.01 of the Base Indenture shall be
amended, effective as of the Effective Time of the Merger, by replacing it
in
its entirety with the following:
“Common
Stock”
means
any stock of any class of Citizens which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of Citizens and which is not subject
to
redemption by Citizens. Subject to the provisions of Section 15.06,
however, shares issuable on conversion of Notes shall include only shares
of the
class designated as common stock of Citizens at the date of the First
Supplemental Indenture (namely, Citizens’ common stock, par value $0.25 per
share) or shares of any class or classes resulting from any reclassification
or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of Citizens and which are not subject to redemption
by
Citizens;
provided
that if
at any time there shall be more than one such resulting class, the shares
of
each such class then so issuable on conversion shall be substantially in
the
proportion which the total number of shares of such class resulting from
all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
(c) Paragraph
(d) of the definition of “Outstanding” in Section 1.01 of the Base Indenture
shall be amended by deleting the phrase “into Common Stock”.
(d) Section
3.05(e) of the Base Indenture shall be amended by replacing it in its entirety
with the following:
4
“(e) In
the
case of a reclassification, change, consolidation, merger, combination, sale
or
conveyance to which Section 15.06 applies, in which the Common Stock is changed
or exchanged as a result into the right to receive stock, securities or other
property or assets (including cash), which includes shares of Common Stock
or
shares of common stock of another Person that are, or upon issuance will
be,
traded on a United States national securities exchange or approved for trading
on an established automated over-the-counter trading market in the United
States
and such shares constitute at the time such change or exchange becomes effective
in excess of 50% of the aggregate Fair Market Value of such stock, securities
or
other property or assets (including cash) (as determined by the Company,
which
determination shall be conclusive and binding), then the Person formed by
such
consolidation or resulting from such merger or which acquires such assets,
as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture (accompanied by an Opinion of Counsel that such supplemental indenture
complies with the Trust Indenture Act as in force at the date of execution
of
such supplemental indenture) modifying the provisions of this Indenture relating
to the right of holders of the Notes to cause the Company to repurchase the
Notes following a Designated Event, including without limitation the applicable
provisions of this Section 3.05 and the definitions of Common Stock and
Designated Event, as appropriate, as determined in good faith by the Company
(which determination shall be conclusive and binding), to make such provisions
apply to such other Person if different from Citizens and the common stock
issued by such Person (in lieu of Citizens and the Common Stock of
Citizens).”
(e) Section
15.01 of the Base Indenture shall be amended by replacing it in its entirety
with the following:
“Section
15.01. Right
To Convert.
(a) Subject to and upon compliance with the provisions of this Indenture,
prior to July 15, 2023, the holder of any Note shall have the right, at
such holder’s option, to convert the principal amount of the Note, or any
portion of such principal amount which is a multiple of $1,000, into cash
and
fully paid and non-assessable shares of Common Stock (as such shares shall
then
be constituted) constituting a Unit (the “Conversion
Obligation”),
by
surrender of the Note so to be converted in whole or in part, together with
any
required funds, under the circumstances described in this Section 15.01 and
in
the manner provided in Section 15.02. The Notes shall be convertible only
upon
the occurrence of one of the following events:
(i) during
any Fiscal Quarter (and only during such Fiscal Quarters) commencing after
September 30, 2003, if the Per Share Unit Value exceeds 120% of the
then-effective Conversion Price for at least 20 Trading Days in the
30 consecutive Trading Day period ending on the last Trading Day of the
immediately preceding Fiscal Quarter (it being understood for purposes of
this
Section 15.01(a)(i) that the Conversion Price in effect at the close of business
on each of the 30 consecutive Trading Days should be used);
5
(ii) during
the five Business Day period immediately following any five consecutive Trading
Day period (the “Measurement
Period”)
in
which the Trading Price per $1,000 principal amount of the Notes for each
day of
such Measurement Period was less than 98% of the Per Note Unit Value on such
date;
provided
that
no
conversion pursuant to this clause (ii)
may be made after July 15, 2018, if on any Trading Day during the
Measurement Period, the Per Share Unit Value is more than 100%, but less
than
120% of the Conversion Price on such Trading Day;
(iii) if
such
Note has been called for redemption, at any time on or after the date the
notice
of redemption has been given until the close of business on the second Business
Day immediately preceding the redemption date; or
(iv) as
provided in Section (b) of this Section 15.01.
The
Trustee (or other conversion agent appointed by the Company) shall, on behalf
of
the Company, determine on a daily basis during the time period specified
in
Section 15.01(a)(i) whether the Notes shall be convertible as a result of
the
occurrence of an event specified in clause (i) above and, if the Notes
shall be so convertible, the Trustee (or other conversion agent appointed
by the
Company) shall promptly deliver to the Company and the Trustee (if the Trustee
is not the conversion agent) written notice thereof. Whenever the Notes shall
become convertible pursuant to this Section 15.01, the Company or, at the
Company’s request, the Trustee in the name and at the expense of the Company,
shall notify the holders of the event triggering such convertibility in the
manner provided in Section 16.03, and the Company shall also publicly announce
such information and publish it on the Company’s web site. Any notice so given
shall be conclusively presumed to have been duly given, whether or not the
holder receives such notice.
The
Trustee (or other conversion agent appointed by the Company) shall have no
obligation to determine the Trading Price under this Section 15.01 unless
the
Company has requested such a determination; and the Company shall have no
obligation to make such request unless a holder provides it with reasonable
evidence that the Trading Price per $1,000 principal amount of Notes would
be
less than 98% of the Per Note Unit Value. If such evidence is provided, the
Company shall instruct the Trustee (or other conversion agent) to determine
the
Trading Price of the Notes beginning on the next Trading Day and on each
successive Trading Day until the Trading Price per $1,000 principal amount
of
Notes is greater than or equal to 98% of the Per Note Unit Value; provided
that the
Trustee shall be under no duty or obligation to make the calculations described
in Section 15.01(a)(ii) hereof or to determine whether the Notes are convertible
pursuant to such section. For the avoidance of doubt, the Company shall make
the
calculations described in Section 15.01(a)(ii), using the Trading Price provided
by the Trustee.
6
The
Trustee shall be entitled at its sole discretion to consult with the Company
and
to request the assistance of the Company in connection with the Trustee’s duties
and obligations pursuant to Section 15.01(a)(i) and Section 15.01(a)(ii)
hereof
(including without limitation the calculation or determination of the Conversion
Price, the Closing Sale Price and the Trading Price), and the Company agrees,
if
requested by the Trustee, to cooperate with, and provide assistance to, the
Trustee in carrying out its duties under this Section 15.01; provided
that
nothing herein shall be construed to relieve the Trustee of its duties pursuant
to Section 15.01(a)(i) and Section 15.01(a)(ii) hereof.
(b) In
addition, if:
(i) (A) Citizens
distributes to all holders of its Common Stock rights or warrants entitling
them
(for a period expiring within 45 days of the record date for the determination
of the stockholders entitled to receive such distribution) to subscribe for
or
purchase shares of Common Stock, at a price per share less than the average
of
the Closing Sale Price of the Common Stock for the ten Trading Days immediately
preceding, but not including, the date such distribution is first publicly
announced by the Company, or (B) Citizens distributes to all holders of its
Common Stock, cash or other assets, debt securities or rights to purchase
its
securities, where the Fair Market Value of such distribution per share of
Common
Stock exceeds 5% of the Closing Sale Price of the Common Stock on the Trading
Day immediately preceding the date such distribution is first publicly announced
by Citizens, then, in either case, the Notes may be surrendered for conversion
at any time on and after the date that Citizens gives notice to the holders
of
such distribution, which shall be not less than 20 days prior to the
Ex-Dividend Time for such distribution, until the earlier of the close of
business on the second Business Day immediately preceding, but not including,
the Ex-Dividend Time or the date Citizens publicly announces that such
distribution will not take place;
provided
that if
the holder will otherwise participate in such distribution without conversion
(as if such holder had held a number of shares equal to the Conversion Rate
multiplied by 0.768), neither any adjustment to the Conversion Rate will
be made
nor will a holder of a Note have the ability to convert pursuant to this
Section
15.01(b); or
(ii) Citizens
consolidates with or merges with or into another Person or is a party to
a
binding share exchange or conveys, transfers, sells, leases or otherwise
disposes of all or substantially all of its properties and assets in each
case
pursuant to which the Common Stock is converted into cash, securities or
other
property, then the Notes may be surrendered for conversion at any time from
and
after the date fifteen (15) days prior to the anticipated effective date of
the transaction and ending on and including the date fifteen (15) days
after the consummation of the transaction. If such transaction constitutes
a
Designated Event, the Notes may be surrendered for conversion until the
corresponding Designated Event Repurchase Date. In such an event, a holder
of
Notes may elect to exercise its option to require the Company to repurchase
all
or a portion of such holder’s Notes pursuant to Section 3.05. The Board of
Directors shall determine the anticipated effective date of the transaction,
and
such determination shall be conclusive and binding on the holders and shall
be
publicly announced by the Company and posted on its web site not later than
two
Business Days prior to such 15th day.
7
“Ex-Dividend
Time”
means,
with respect to any distribution on shares of Common Stock, the first date
on
which the shares of Common Stock trade regular way on the principal securities
market on which the shares of Common Stock are then traded without the right
to
receive such distribution.
Notwithstanding
anything to the contrary in this Article 15, the proposed reclassification
and conversion of the outstanding class B common stock of the Company into
Common Stock in accordance with the Recapitalization Agreement (the
“Recapitalization
Transaction”),
will
not trigger any conversion rights for any holder of Notes.
(c) A
Note in
respect of which a holder is electing to exercise its option to require the
Company to repurchase such holder’s Notes upon a Designated Event pursuant to
Section 3.05, or at the option of the holder pursuant to Section 3.06, may
be converted only if such holder withdraws its election in accordance with
Section 3.05(c) or Section 3.08, respectively. A holder of Notes is not entitled
to any rights of a holder of Common Stock until such holder has converted
his
Notes to Units and only to the extent such Notes are deemed to have been
converted to Common Stock under this Article 15.”
(f) The
third
paragraph of Section 15.02 of the Base Indenture shall be amended by replacing
it in its entirety with the following:
“As
promptly as practicable after satisfaction of the requirements for conversion
set forth above, subject to compliance with any restrictions on transfer
if
shares issuable on conversion are to be issued in a name other than that
of the
Noteholder (as if such transfer were a transfer of the Note or Notes (or
portion
thereof) so converted), the Company shall deliver to such Noteholder at the
office or agency maintained by the Company for such purpose pursuant to Section
5.02, for each $1,000 principal amount of Note, the cash and number of full
shares of Common Stock (and cash in respect of any fractional interest in
respect of a share of Common Stock arising upon such conversion, calculated
by
the Company as provided in Section 15.03) then constituting a Unit on such
Conversion Date. In case any Note of a denomination greater than $1,000 shall
be
surrendered for partial conversion, and subject to Section 2.03, the Company
shall execute and the Trustee shall authenticate and deliver to the holder
of
the Note so surrendered, without charge to him, a new Note or Notes in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.”
8
(g) The
seventh and eighth paragraphs of Section 15.02 of the Base Indenture shall
be
amended by replacing them in their entirety with the
following:
“Upon
the
conversion of a Note, that portion of the accrued but unpaid Interest, including
accrued Contingent Interest, if any, and Additional Interest, if any, to
the
Conversion Date, with respect to the converted Note shall not be cancelled,
extinguished or forfeited, but rather shall be deemed to be paid in full
to the
holder thereof through delivery of the cash and the Common Stock (together
with
the cash payment, if any in lieu of fractional shares) in exchange for the
Note
being converted pursuant to the provisions hereof; and the cash and the Fair
Market Value of such shares of Common Stock (together with any such cash
payment
in lieu of fractional shares) shall be treated as delivered, to the extent
thereof, first in exchange for and in satisfaction of our obligation to pay
the
principal amount of the converted Note, the accrued but unpaid Interest,
including Contingent Interest, if any, and Additional Interest, if any, through
the Conversion Date and the balance, if any, of such cash and the Fair Market
Value of such Common Stock (and any such cash payment) shall be treated as
delivered in exchange for and in satisfaction of the right to convert the
Note
being converted pursuant to the provisions hereof.
The
Company agrees, and by acceptance of a beneficial interest in a Note each
holder
and any beneficial owner of a Note shall be deemed to have agreed to treat,
for
United States federal income tax purposes, the cash and the Fair Market Value
of
the Common Stock received upon a conversion of the Note (together with any
cash
payment in lieu of fractional shares) as a contingent payment on the Note
for
purposes of Treasury Regulation Section 1.1275-4 or any successor
provision.”
(h) Section
15.04 of the Base Indenture shall be amended by replacing it in its entirety
with the following:
“Section
15.04.
Conversion Rate.
Each
$1,000 principal amount of the Notes shall be convertible at a rate specified
in
the form of Note (herein called the “Conversion
Rate”)
attached as Exhibit A hereto, subject to adjustment as provided in this Article
15.”
(i) The
first
paragraph of Section 15.06 of the Base Indenture shall be amended by replacing
it in its
entirety with the following:
9
“Section
15.06.
Effect Of Reclassification, Consolidation, Merger or Sale.
If
any of
the following events occur, namely (i) any reclassification or change of
the
outstanding shares of Common Stock (other than (x) a subdivision or
combination to which Section 15.05(c) applies and (y) the Recapitalization
Transaction), (ii) any consolidation, merger or combination of Citizens with
another Person as a result of which holders of Common Stock shall be entitled
to
receive stock, other securities or other property or assets (including cash)
with respect to or in exchange for such Common Stock, or (iii) any sale or
conveyance of all or substantially all of the properties and assets of Citizens
to any other Person as a result of which holders of Common Stock shall be
entitled to receive stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then
the
Company and Citizens or the successor or purchasing Person, as the case may
be,
shall execute with the Trustee a supplemental indenture (which shall comply
with
the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) providing that each $1,000 principal amount Note
shall
be convertible into (i) $804.84 in cash, without interest, and (ii) the kind
and
amount of shares of stock, other securities or other property or assets
(including cash) or any combination thereof receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
by a holder of Common Stock holding, immediately prior to the transaction,
a
number of shares of Common Stock equal to the Conversion Rate immediately
prior
to such transaction multiplied by 0.768, assuming such holder of Common Stock
did not exercise his rights of election, if any, as to the kind or amount
of
stock, other securities or other property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale
or
conveyance (provided
that, if
the kind or amount of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance is not the same for each share of
Common
Stock in respect of which such rights of election shall not have been exercised
(“non-electing
share”),
then
for the purposes of this Section 15.06 the kind and amount of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Article
15.”
(j) Section
15.09 of the Base Indenture shall be amended by replacing it in its entirety
with the following:
“Section
15.09.
Responsibility Of Trustee.
The
Trustee and any other conversion agent shall not at any time be under any
duty
or responsibility to any holder of Notes to determine the Conversion Rate
or
whether any facts exist which may require any adjustment of the Conversion
Rate,
or with respect to the nature or extent or calculation of any such adjustment
when made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same. The Trustee
and any other conversion agent shall not be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock,
or of
any securities or property, which may at any time be issued or delivered
upon
the conversion of any Note; and the Trustee and any other conversion agent
make
no representations with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company and Citizens to
issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Note for the purpose
of
conversion or to comply with any of the duties, responsibilities or covenants
of
the Company and Citizens contained in this Article 15. Without limiting the
generality of the foregoing, neither the Trustee nor any conversion agent
shall
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to Section
15.06
relating either to the kind or amount of shares of stock or securities or
property (including cash) receivable by Noteholders upon the conversion of
their
Notes after any event referred to in such Section 15.06 or to any adjustment
to
be made with respect thereto, but, subject to the provisions of Section 8.01,
may accept as conclusive evidence of the correctness of any such provisions,
and
shall be protected in relying upon, the Officers’ Certificate (which the Company
shall be obligated to file with the Trustee prior to the execution of any
such
supplemental indenture) with respect thereto.”
10
(k) Sections
15.08, 15.10 and 15.11 of the Base Indenture shall be amended such that
references to “the Company” shall mean “Citizens”.
ARTICLE
3
Base
Indenture Obligations
Section
3.01. Reaffirmation
Of Obligations. Pursuant
to Section 12.01(ii) of the Base Indenture, the Company hereby reaffirms
its
obligations under the Base Indenture to pay the principal of and Interest
on all
of the Notes, according to their tenor, and to perform and observe all of
the
covenants and conditions contained in the Base Indenture to be performed
by the
Company.
ARTICLE
4
Merger-related
Mechanics
Section
4.01. Conversion
Mechanics. For
the
avoidance of doubt, the amendments herein to Sections 15.01 of the Base
Indenture shall not nullify elections to convert Notes made before the Effective
Time of the Merger.
Section
4.02. Repurchase
and Conversion Upon Designated Event. For
the
avoidance of doubt, notwithstanding the provisions herein, the Merger shall
constitute a “Designated Event” under the Base Indenture. Each Noteholder’s
right to require the Company to repurchase all of such holder’s Notes (or any
portion thereof that is a multiple of $1,000 principal amount) as a result
of
the Merger, pursuant to Section 3.05 of the Base Indenture, shall survive,
notwithstanding this First Supplemental Indenture. Furthermore, each
Noteholder’s right to convert such holder’s Notes until the Designated Event
Repurchase Date related to the Merger, pursuant to Section 15.01(b)(ii) of
the
Base Indenture, shall survive, notwithstanding this First Supplemental
Indenture, provided
that the
cash and Common Stock deliverable in respect of any Notes so tendered for
conversion will be determined as provided in the Base Indenture as amended
by
this First Supplemental Indenture.
11
ARTICLE
5
Conversion
Rate Adjustments
Section
5.01. Conversion
Rate. Effective
as of the date hereof, the Conversion Rate shall be adjusted from time to
time
by the Company upon the occurrence of an event with respect to Citizens which
would have required an adjustment to the Conversion Rate pursuant to Section
15.05 of the Base Indenture if such event had occurred with respect to the
Company prior to the Merger in a manner equivalent to the adjustment to the
Conversion Rate which would have been required pursuant to Article 15 of
the
Base Indenture if such event had occurred with respect to the Company prior
to
the Merger. For the avoidance of doubt, effective as of the date hereof,
the
Conversion Rate shall not be adjusted upon the occurrence of an event with
respect to the Company which would have required an adjustment to the Conversion
Rate pursuant to Section 15.05 of the Base Indenture if such event had occurred
prior to the date hereof.
ARTICLE
6
Guarantee
of
Citizens
Section
6.01. Guarantee.
By
its
execution hereof, the Guarantor acknowledges and agrees that it receives
substantial benefits from the Company and that the Guarantor is providing
its
Guarantee for good and valuable consideration, including, without limitation,
such substantial benefits. Accordingly, subject to the provisions of this
Article
6,
the
Guarantor hereby unconditionally guarantees to each Holder of a Note
authenticated and delivered (whether before or after the date of this First
Supplemental Indenture) by the Trustee and its successors and assigns that:
(i)
the principal of (including the redemption price or repurchase price upon
redemption or repurchase pursuant to Article
3
of the Base Indenture),
and
interest and Additional Interest, if any, on the Notes shall be duly and
punctually paid in full when due, whether at the maturity date of the Notes,
upon acceleration, upon redemption, upon a repurchase, upon repurchase due
to a
Designated Event or otherwise, and interest on overdue principal, Additional
Interest, if any, and (to the extent permitted by law) interest on any interest,
if any, on the Notes and all other obligations of the Company to the Holders
(including, without limitation, in connection with a conversion of Notes)
or the
Trustee hereunder or under the Notes (including fees, expenses or other)
shall
be promptly paid in full or performed, all in accordance with the terms hereof;
and (ii) in case of any extension of time of payment or renewal of any Notes
or
any of such other obligations, the same shall be promptly paid in full when
due
or performed in accordance with the terms of the extension or renewal, whether
at the maturity date of the Notes, by acceleration, call for redemption,
xxxx
xxxxxxxxxx, xxxx xxxxxxxxxx due to a Designated Event or otherwise, subject,
however, in the case of clauses (i) and (ii) above, to the limitations set
forth
in Section
6.03
hereof
(collectively, the “Guarantee
Obligations”).
12
Subject
to the provisions of this Article
6,
the
Guarantor hereby agrees that its Guarantee hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or
the
Base Indenture (as amended by this First Supplemental Indenture), the absence
of
any action to enforce the same, any waiver or consent by any Holder of the
Notes
with respect to any thereof, the entry of any judgment against the Company,
any
action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of the Guarantor. The
Guarantor hereby waives and relinquishes: (a) any right to require the Trustee,
the Holders or the Company (each, a “Benefited
Party”)
to
proceed against the Company or any other Person or to proceed against or
exhaust
any security held by a Benefited Party at any time or to pursue any other
remedy
in any secured party’s power before proceeding against the Guarantor; (b) any
defense that may arise by reason of the incapacity, lack of authority, death
or
disability of any other Person or Persons or the failure of a Benefited Party
to
file or enforce a claim against the estate (in administration, bankruptcy
or any
other proceeding) of any other Person or Persons; (c) demand, protest and
notice
of any kind (except as expressly required by this Indenture), including but
not
limited to notice of the existence, creation or incurring of any new or
additional indebtedness or obligation or of any action or non-action on the
part
of the Guarantor, the Company, any Benefited Party, any creditor of the
Guarantor or the Company or on the part of any other Person whomsoever in
connection with any obligations the performance of which are hereby guaranteed;
(d) any defense based upon an election of remedies by a Benefited Party,
including but not limited to an election to proceed against the Guarantor
for
reimbursement; (e) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount
nor in
other respects more burdensome than that of the principal; (f) any defense
arising because of a Benefited Party’s election, in any proceeding instituted
under the Bankruptcy Law, of the application of Section 1111(b)(2) of the
Bankruptcy Code; and (g) any defense based on any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code. The Guarantor
hereby
covenants that, except as otherwise provided therein, the Guarantee shall
not be
discharged except by payment in full of all Guarantee Obligations, including
the
principal and interest on the Notes and all other costs provided for under
the
Base Indenture (as amended by this First Supplemental Indenture).
If
any
Holder or the Trustee is required by any court or otherwise to return to
either
the Company or the Guarantor, or any trustee or similar official acting in
relation to either the Company or the Guarantor, any amount paid by the Company
or the Guarantor to the Trustee or such Holder, the Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. The
Guarantor agrees that it shall not be entitled to any right of subrogation
in
relation to the Holders in respect of any Guarantee Obligations hereby until
payment in full of all such obligations guaranteed hereby. The Guarantor
agrees
that, as between it, on the one hand, and the Holders of Notes and the Trustee,
on the other hand, (x) the maturity of the obligations guaranteed hereby
may be
accelerated as provided in Article
6
of the Base Indenture
for the
purposes hereof, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Guarantee Obligations, and
(y) in
the event of any acceleration of such obligations as provided in Article
6
of the Base Indenture,
such
Guarantee Obligations (whether or not due and payable) shall forthwith become
due and payable by the Guarantor for the purpose of the Guarantee.
13
Section
6.02. Execution
and Delivery of Guarantee. To
evidence the Guarantee set forth in Section
6.01
hereof,
the Guarantor agrees that a notation of the Guarantee substantially in the
form
included in Exhibit A hereto shall be endorsed on each Note authenticated
and
delivered by the Trustee and that this First Supplemental Indenture shall
be
executed on behalf of the Guarantor by an officer of the Guarantor.
The
Guarantor agrees that the Guarantee set forth in this Article
6
shall
remain in full force and effect and apply to all the Notes notwithstanding
any
failure to endorse on each Note a notation of the Guarantee.
If
an
officer whose facsimile signature is on a Note or a notation of Guarantee
no
longer holds that office at the time the Trustee authenticates the Note on
which
the Guarantee is endorsed, the Guarantee shall be valid
nevertheless.
The
delivery of any Note by the Trustee, after the authentication thereof hereunder,
shall constitute due delivery of the Guarantee set forth in this Indenture
on
behalf of the Guarantor.
Section
6.03. Limitation
of Guarantor’s Liability; Certain Bankruptcy Events. It
is the
intention of the parties hereto that the Guarantee Obligations of the Guarantor
pursuant to its Guarantee not constitute a fraudulent transfer or conveyance
for
purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law. To
effectuate the foregoing intention, the parties hereto hereby irrevocably
agree
that the Guarantee Obligations of the Guarantor under this Article
6
shall be
limited to the maximum amount as shall, after giving effect to all other
contingent and fixed liabilities of the Guarantor, result in the Guarantee
Obligations of the Guarantor under the Guarantee not constituting a fraudulent
transfer or conveyance.
Section
6.04. Application
of Certain Terms and Provisions to the Guarantor. For
purposes of any provision of the Base Indenture (as amended by this First
Supplemental Indenture) which provides for the delivery by the Guarantor
of an
Officers’ Certificate and/or an Opinion of Counsel, the definitions of such
terms in Section 1.01 of the Base Indenture hereof shall apply to the Guarantor
as if references therein to the Company or the Guarantor, as applicable,
were
references to the Guarantor.
14
Any
request, direction or demand which by any provision of the Base Indenture
(as
amended by this First Supplemental Indenture) is to be made by the Guarantor
shall be sufficient if evidenced as described in Section 16.03 of the Base
Indenture as if references therein to the Company were references to the
Guarantor.
Any
notice or demand which by any provision of the Base Indenture (as amended
by
this First Supplemental Indenture) is required or permitted to be given or
served by the Trustee or by the Holders of Notes to or on the Guarantor may
be
given or served as described in Section 16.03 of the Base Indenture as if
references therein to the Company were references to the Guarantor and addressed
as follows: to Citizens Communications Company, 0 Xxxx Xxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, Attention: General Counsel, Telecopier No.
000-000-0000.
Upon
any
demand, request or application by the Guarantor to the Trustee to take any
action under the Base Indenture (as amended by this First Supplemental
Indenture), the Guarantor shall furnish to the Trustee such certificates
and
opinions as are required in Section 16.05 of the Base Indenture as if all
references therein to the Company were references to the Guarantor.
ARTICLE
7
Authentication
Of New Global Note
Section
7.01. New
Global Note. The
Trustee shall (i) deliver and cancel the Global Note (numbered “No. 1”) in
accordance with the standing procedures and instructions existing between
the
Depositary and the Custodian and (ii) authenticate a new Global Note
substantially in the form set forth in Exhibit A hereto. The terms and
provisions contained in the form of Note attached as Exhibit A hereto shall
constitute, and are hereby expressly made, a part of the Base Indenture and,
to
the extent applicable, the Company, Citizens and the Trustee, by their execution
and delivery of this First Supplemental Indenture, expressly agree to such
terms
and provisions and to be bound thereby.
ARTICLE
8
Miscellaneous
Section
8.01. Recitals.
The
recitals contained herein shall be taken as the statements of the Company
and
the Trustee assumes no responsibility for their correctness. The Trustee
makes
no representation as to the validity or sufficiency of this First Supplemental
Indenture except that the Trustee represents that it is duly authorized to
execute and deliver this First Supplemental Indenture and perform its
obligations hereunder.
15
Section
8.02. Conflict
with Trust Indenture Act. If
any
provision hereof limits, qualifies or conflicts with a provision of the Trust
Indenture Act that is required under such Act to be a part of and govern
this
First Supplemental Indenture, the Trust Indenture Act shall control. If any
provision of this First Supplemental Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded,
the
Trust Indenture Act shall be deemed to apply to this First Supplemental
Indenture as so modified or to be excluded, as the case may be.
Section
8.03. Effect
Of Headings. The
Section headings herein are for convenience only and shall not affect the
construction hereof.
Section
8.04. Successors
and Assigns. All
covenants and agreements in this First Supplemental Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section
8.05. Separability
Clause. In
case
any provision in this First Supplemental Indenture or in the Notes shall
be
invalid, illegal or unenforceable, the validity, legality and enforceability
of
the remaining provisions shall not in any way be affected or impaired
thereby.
Section
8.06. Benefits
of First Supplemental Indenture. Nothing
in this First Supplemental Indenture or in the Notes, express or implied,
shall
give to any Person, other than the parties hereto and their respective
successors hereunder and the Holders of Notes, any benefit or any legal or
equitable right, remedy or claim under this First Supplemental
Indenture.
Section
8.07. Concerning
The Trustee. The
Trustee accepts the Base Indenture, as supplemented by this First Supplemental
Indenture, and agrees to perform the same upon the terms and conditions set
forth therein as so supplemented.
Section
8.08. Governing
Law. This
First Supplemental Indenture and the Notes shall be governed by and construed
in
accordance with the laws of the State of New York.
Section
8.09. Execution
In Counterparts. This
First Supplemental Indenture may be executed in any number of counterparts,
each
of which shall be an original, but such counterparts shall together constitute
but one and the same instrument.
Section
8.10. Effectiveness.
This
First Supplemental Indenture shall become effective upon the effectiveness
of
the Merger.
16
IN
WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the day and year first above
written.
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COMMONWEALTH
TELEPHONE ENTERPRISES, INC.
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By
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/s/
Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx
X. Xxxxxxxx
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By
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/s/
Xxxxxx X. Xxxxxx
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Name: Xxxxxx
X. Xxxxxx
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Title: Senior
Vice President, Finance
and Treasurer
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THE
BANK OF NEW YORK, AS TRUSTEE
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By
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/s/
Xxxx Xxxxxxxx
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Name: Xxxx
Xxxxxxxx
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Title: Vice
President
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17
EXHIBIT
A
[FORM
OF
GLOBAL NOTE]
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) (THE “DEPOSITARY”,
WHICH
TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES) TO THE COMPANY
OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), 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.
THE
NOTE
EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A
“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED HEREBY UNDER
RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL
OR OTHERWISE TRANSFER THIS NOTE OR THE COMMON STOCK ISSUABLE UPON CONVERSION
OF
THIS NOTE EXCEPT (A) TO COMMONWEALTH TELEPHONE ENTERPRISES, INC. OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE
AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), IT WILL FURNISH TO THE BANK OF
NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, AND (4) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND, THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THIS NOTE PURSUANT TO CLAUSE 2(D) ABOVE OR UPON ANY TRANSFER OF
THIS NOTE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE
TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING
RESTRICTION.
18
COMMONWEALTH
TELEPHONE ENTERPRISES, INC.
3¼%
CONVERTIBLE NOTE DUE 2023
CUSIP:
000000XX0
No.
2 Up
to
$[ ]
Commonwealth
Telephone Enterprises, Inc., a corporation duly organized and validly
existing under the laws of the State of Pennsylvania (herein called the
“Company”,
which
term includes any successor corporation under the Indenture referred to on
the
reverse hereof), for value received hereby promises to pay to CEDE &
CO. or its registered assigns, the principal sum as set forth on Schedule I
hereto on July 15, 2023, at the office or agency of the Company maintained
for that purpose in accordance with the terms of the Indenture, in such coin
or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest,
semiannually on January 15 and July 15 of each year, commencing
January 15, 2004, on said principal sum at said office or agency, in like
coin or currency, at the rate per annum of 3.25%, from the January 15 or
July 15, as the case may be, next preceding the date of this Note to which
interest has been paid or duly provided for, unless the date hereof is a date
to
which interest has been paid or duly provided for, in which case from the date
of this Note, or unless no interest has been paid or duly provided for on the
Notes, in which case from July 18, 2003, until payment of said principal
sum has been made or duly provided for. Notwithstanding the foregoing, if the
date hereof is after any January 1 or July 1, as the case may be, and
before the following January 15 or July 15, this Note shall bear
interest from such January 15 or July 15;
provided
that if
the Company shall default in the payment of interest due on such January 15
or July 15, then this Note shall bear interest from the next preceding
January 15 or July 15 to which interest has been paid or duly provided
for or, if no interest has been paid or duly provided for on such Note, from
July 18, 2003. Contingent interest, if any, will accrue for any six month
interest period and be payable to holders of this Note on the applicable
interest payment date to the person in whose name this Note is registered on
the
corresponding record date. Except as otherwise provided in the Indenture, the
interest payable on the Note pursuant to the Indenture on any January 15 or
July 15 will be paid to the Person entitled thereto as it appears in the
Note Register at the close of business on the record date, which shall be the
January 1 or July 1 (whether or not a Business Day) next preceding
such January 15 or July 15, as provided in the Indenture;
provided
that any
such interest not punctually paid or duly provided for shall be payable as
provided in the Indenture. The Company shall pay interest (i) on any Notes
in certificated form by check mailed to the address of the Person entitled
thereto as it appears in the Note Register (provided
that the
holder of Notes with an aggregate principal amount in excess of $2,000,000
shall, at the written election of such holder, be paid by wire transfer of
immediately available funds) or (ii) on any Global Note by wire transfer of
immediately available funds to the account of the Depositary or its
nominee.
19
The
Company promises to pay interest on overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) interest at the
rate of 1% per annum.
Reference
is made to the further provisions of this Note set forth on the reverse hereof,
including, without limitation, provisions giving the holder of this Note the
right to convert this Note on the terms and subject to the limitations referred
to on the reverse hereof and as more fully specified in the Indenture. Such
further provisions shall for all purposes have the same effect as though fully
set forth at this place.
This
Note
shall be deemed to be a contract made under the laws of the State of New York,
and for all purposes shall be construed in accordance with and governed by
the
laws of the State of New York, without regard to conflicts of laws principles
thereof.
This
Note
shall not be valid or become obligatory for any purpose until the certificate
of
authentication hereon shall have been manually signed by the Trustee or a duly
authorized authenticating agent under the Indenture.
20
IN
WITNESS WHEREOF, the Company has caused this Note to be duly
executed.
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By
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Name:
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Title
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TRUSTEE’S
CERTIFICATE OF AUTHENTICATION
This
is
one of the Notes described in the within-named Indenture.
THE
BANK
OF NEW YORK, as Trustee
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By
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Authorized
Signatory
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,
or
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By
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As
Authenticating Agent
(if
different from Trustee)
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| By | ||
| Authorized Signatory | ||
21
FORM
OF
REVERSE OF NOTE
COMMONWEALTH
TELEPHONE ENTERPRISES, INC.
3¼%
CONVERTIBLE NOTE DUE 2023
This
Note
is one of a duly authorized issue of Notes of the Company, designated as its
3¼%
Convertible Notes due 2023 (herein called the “Notes”),
limited in aggregate principal amount to $300,000,000, issued and to be issued
under and pursuant to an Indenture dated as of July 18, 2003, between the
Company and The Bank of New York, as trustee (herein called the “Trustee”)
(the
“Base
Indenture”),
as
amended by the First Supplemental Indenture dated as of March 8, 2007 among
the
Company, Citizens Communications Company, a Delaware corporation (“Citizens”)
and
the Trustee (the “First
Supplemental Indenture”
and
together with the Base Indenture, the “Indenture”),
to
which Indenture and all indentures supplemental thereto reference is hereby
made
for a description of the rights, limitations of rights, obligations, duties
and
immunities thereunder of the Trustee, the Company, Citizens and the holders
of
the Notes.
In
case
an Event of Default shall have occurred and be continuing, the principal of
and
accrued and unpaid Interest on all Notes may be declared by either the Trustee
or the holders of not less than 25% in aggregate principal amount of the Notes
then outstanding, and upon said declaration shall become, due and payable,
in
the manner, with the effect and subject to the conditions provided in the
Indenture.
The
Indenture contains provisions permitting the Company and the Trustee, with
the
consent of the holders of at least a majority in aggregate principal amount
of
the Notes at the time outstanding, to execute supplemental indentures adding
any
provisions to or changing in any manner or eliminating any of the provisions
of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the Notes;
provided
that no
such supplemental indenture shall (i) extend the fixed maturity of any
Note, or reduce the rate or extend the time of payment of Interest thereon,
or
reduce the principal amount thereof or reduce any amount payable upon redemption
or repurchase thereof, or change the obligation of the Company to repurchase
any
Note at the option of a Noteholder on a Repurchase Date in a manner adverse
to
the holders of Notes, or change the obligation of the Company to repurchase
any
Note upon the happening of a Designated Event in a manner adverse to the holders
of Notes, or impair the right of any Noteholder to institute suit for the
payment thereof, or make the principal thereof or interest thereon payable
in
any coin or currency other than that provided in the Notes, or impair the right
to convert the Notes in accordance with the terms set forth in the Indenture,
including Section 15.06 thereof, in each case, without the consent of the holder
of each Note so affected, or modify any of the provisions of Section 11.02
or
Section 7.07 thereof, except to increase any such percentage or to provide
that
certain other provisions of the Indenture cannot be modified or waived without
the consent of the holder of each Note so affected, or change any obligation
of
the Company to maintain an office or agency in the places and for the purposes
set forth in Section 5.02 thereof, or reduce the quorum or voting requirements
set forth in Article 10 or (ii) reduce the aforesaid percentage of Notes,
the holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Notes then outstanding. Subject to
the
provisions of the Indenture, the holders of a majority in aggregate principal
amount of the Notes at the time outstanding may on behalf of the holders of
all
of the Notes waive any past Default or Event of Default under the Indenture
and
its consequences except (A) a default in the payment of Interest on, or the
principal of, any of the Notes, (B) a failure by the Company to convert any
Notes in accordance with the terms set forth in the Indenture, (C) a
default in the payment of the redemption price pursuant to Article 3 of the
Indenture, (D) a default in the payment of the repurchase price pursuant to
Article 3 of the Indenture, or (E) a default in respect of a covenant
or provisions of the Indenture which under Article 11 of the Indenture cannot
be
modified or amended without the consent of the holders of each or all Notes
then
outstanding or affected thereby. Any such consent or waiver by the holder of
this Note (unless revoked as provided in the Indenture) shall be conclusive
and
binding upon such holder and upon all future holders and owners of this Note
and
any Notes which may be issued in exchange or substitution hereof, irrespective
of whether or not any notation thereof is made upon this Note or such other
Notes.
22
No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and Interest on this Note at the
place, at the respective times, at the rate and in the coin or currency herein
prescribed.
Interest
on the Notes shall be computed on the basis of a 360-day year of twelve 30-day
months.
The
Notes
are issuable in fully registered form, without coupons, in denominations of
$1,000 principal amount and any multiple of $1,000. At the office or agency
of
the Company referred to on the face hereof, and in the manner and subject to
the
limitations provided in the Indenture, without payment of any service charge
but
with payment of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in connection with any registration
or
exchange of Notes, Notes may be exchanged for a like aggregate principal amount
of Notes of any other authorized denominations.
At
any
time on or after July 18, 2008 and prior to maturity, the Notes may be
redeemed at the option of the Company, in whole or in part, upon mailing a
notice of such redemption not less than 30 days but not more than
60 days before the redemption date to the holders of Notes at their last
registered addresses, all as provided in the Indenture, at a cash redemption
price equal to 100% of the principal amount of the Notes being redeemed and
accrued and unpaid Interest, to, but excluding, the redemption date;
provided
that if
the redemption date falls after a record date and on or prior the corresponding
interest payment date, then accrued and unpaid Interest to, but excluding,
the
redemption date shall be paid on such interest payment date to the holders
of
record of such Notes on the applicable record date instead of to the holders
surrendering such Notes for redemption on such date.
The
Company may not give notice of any redemption of the Notes if a default in
the
payment of Interest on the Notes has occurred and is continuing.
23
The
Notes
are not subject to redemption through the operation of any sinking
fund.
If
a
Designated Event occurs at any time prior to maturity of the Notes, the Company
shall become obligated to purchase, at the option of the holder, all or any
portion of the Notes held by such holder, on a date specified by the Company
that is thirty (30) days after notice thereof at a cash repurchase price of
100% of the principal amount, plus any accrued and unpaid Interest, on such
Note
up to, but excluding, the Designated Event Repurchase Date;
provided
that if
the repurchase date falls after a record date and on or prior the corresponding
interest payment date, then accrued and unpaid Interest to, but excluding,
the
Designated Event Repurchase Date shall be paid on such interest payment date
to
the holders of record of such Notes on the applicable record date instead of
to
the holders surrendering such Notes for repurchase on such date. The Notes
will
be subject to repurchase in multiples of $1,000 principal amount. The Company
shall mail to all holders of record of the Notes a notice of the occurrence
of a
Designated Event and of the repurchase right arising as a result thereof on
or
before the 15th day
after the occurrence of such Designated Event. To exercise such right, a holder
shall deliver to the Company such Note with the form entitled “Designated
Event Repurchase
Notice”
on
the
reverse thereof duly completed, together with the Note, duly endorsed for
transfer, at any time prior to the close of business on the Designated Event
Repurchase Date, and shall deliver the Notes to the Trustee (or other paying
agent appointed by the Company) as set forth in the Indenture.
Subject
to the terms and conditions of the Indenture, the Company shall become obligated
to purchase, at the option of the holder, all or any portion of the Notes held
by such holder on July 15, 2008, 2013 and 2018 in whole multiples of $1,000
at a cash repurchase price of 100% of the principal amount, plus any accrued
and
unpaid Interest, on such Note up to the Repurchase Date. To exercise such right,
a holder shall deliver to the Company such Note with the form entitled
“Repurchase
Notice”
on
the
reverse thereof duly completed, together with the Note, duly endorsed for
transfer, at any time from the opening of business on the date that is 20
Business Days prior to such Repurchase Date until the close of business on
the
date that is two Business Days prior to the Repurchase Date, and shall deliver
the Notes to the Trustee (or other paying agent appointed by the Company) as
set
forth in the Indenture.
24
Holders
have the right to withdraw any Designated Event Repurchase Notice or the
Repurchase Notice, as the case may be, by delivering to the Trustee (or other
paying agent appointed by the Company) a written notice of withdrawal up to
the
close of business on the Designated Event Repurchase Date or the Repurchase
Date, as the case may be, all as provided in the Indenture.
If
money
or cash, sufficient to pay the repurchase price of all Notes or portions thereof
to be purchased as of the Designated Event Repurchase Date or the Repurchase
Date, as the case may be, is deposited with the Trustee (or other paying agent
appointed by the Company), on the Designated Event Repurchase Date or the
Repurchase Date, as the case may be, interest will cease to accrue on such
Notes
(or portions thereof) immediately after such Repurchase Date, and the holder
thereof shall have no other rights as such other than the right to receive
the
repurchase price upon surrender of such Note.
Subject
to the occurrence of certain events and in compliance with the provisions of
the
Indenture, prior to the final maturity date of the Notes, the holder hereof
has
the right, at its option, to convert each $1,000 principal amount of the Notes
into $804.84 in cash, without interest, and Common Stock based on a conversion
rate (the “Conversion
Rate”)
of
25.7055 (a conversion price of approximately $38.90) multiplied by 0.768,
subject to adjustment from time to time as provided in the Indenture, upon
surrender of this Note with the form entitled “Conversion
Notice”
on
the
reverse thereof duly completed, to the Company at the office or agency of the
Company maintained for that purpose in accordance with the terms of the
Indenture, or at the option of such holder, the Corporate Trust Office, and,
unless the shares and cash issuable on conversion are to be issued in the same
name as this Note, duly endorsed by, or accompanied by instruments of transfer
in form satisfactory to the Company duly executed by, the holder or by his
duly
authorized attorney. The Company will notify the holder thereof of any event
triggering the right to convert the Notes as specified above in accordance
with
the Indenture.
No
adjustment in respect of interest on any Note converted or dividends on any
shares issued upon conversion of such Note will be made upon any conversion
except as set forth in the next sentence. If this Note (or portion hereof)
is
surrendered for conversion during the period from the close of business on
any
record date for the payment of interest to the close of business on the Business
Day preceding the following interest payment date, this Note (or portion hereof
being converted) must be accompanied by payment, in immediately available funds
or other funds acceptable to the Company, of an amount equal to the interest
otherwise payable on such interest payment date on the principal amount being
converted;
provided
that no
such payment shall be required (1) if the Company has specified a redemption
date that is after a record date and prior to the next interest payment date,
(2) if the Company has specified a Designated Event Repurchase Date that is
during such period or (3) to the extent of any overdue Interest, if any overdue
interest exists at the time of conversion with respect to such Note.
25
No
fractional shares will be issued upon any conversion, but an adjustment and
payment in cash will be made, as provided in the Indenture, in respect of any
fraction of a share which would otherwise be issuable upon the surrender of
any
Note or Notes for conversion.
A
Note in
respect of which a holder is exercising its right to require repurchase upon
a
Designated Event or repurchase on a Repurchase Date may be converted only if
such holder withdraws its election to exercise either such right in accordance
with the terms of the Indenture.
Any
Notes
called for redemption, unless surrendered for conversion by the holders thereof
on or before the close of business on the Business Day preceding the redemption
date, may be deemed to be redeemed from the holders of such Notes for an amount
equal to the applicable redemption price, together with accrued but unpaid
interest to, but excluding, the date fixed for redemption, by one or more
investment banks or other purchasers who may agree with the Company (i) to
purchase such Notes from the holders thereof and convert them in accordance
with
the terms of the Indenture and (ii) to make payment for such Notes as aforesaid
to the Trustee in trust for the holders.
Upon
due
presentment for registration of transfer of this Note at the office or agency
of
the Company maintained for that purpose in accordance with the terms of the
Indenture, a new Note or Notes of authorized denominations for an equal
aggregate principal amount will be issued to the transferee in exchange thereof,
subject to the limitations provided in the Indenture, without charge except
for
any tax, assessment or other governmental charge imposed in connection
therewith.
The
Company, the Trustee, any authenticating agent, any paying agent, any conversion
agent and any Note Registrar may deem and treat the registered holder hereof
as
the absolute owner of this Note (whether or not this Note shall be overdue
and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Company or any Note Registrar) for the purpose of receiving
payment hereof, or on account hereof, for the conversion hereof and for all
other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor other conversion agent nor any
Note Registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of
the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.
No
recourse for the payment of the principal of or Interest on this Note, or for
any claim based hereon or otherwise in respect hereof, and no recourse under
or
upon any obligation, covenant or agreement of the Company in the Indenture
or
any supplemental indenture or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, officer or director or subsidiary, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
26
For
purposes of sections 1272, 1273 and 1275 of the Internal Revenue Code of 1986,
as amended, this Note is being issued with Tax Original Issue Discount and
the
issue date of this Note is July 18, 2003. In addition, this Note is subject
to
the United States federal income tax regulations governing contingent payment
debt instruments. For purposes of sections 1272, 1273 and 1275 of the Internal
Revenue Code, the comparable yield of this Note is 8.00% per year, compounded
semi-annually (which will be treated as the yield to maturity for United States
federal income tax purposes).
The
Company agrees, and by acceptance of a beneficial interest in a Note each holder
and any beneficial owner of a Note shall be deemed to have agreed to treat
the
Note as indebtedness of the Company for United States federal income tax
purposes that is subject to Treasury Regulation Section 1.1275-4 or any
successor provision (the “contingent payment regulations”) and to be bound (in
the absence of an administrative determination or judicial ruling to the
contrary) by the Company’s determination of the comparable yield and the
projected payment schedule within the meaning of the contingent payment
regulations. A holder of Notes may obtain the issue price amount of Tax Original
Issue Discount, issue date, yield to maturity, comparable yield and projected
payment schedule for the Notes, determined by the Company pursuant to the
contingent payment regulations, by submitting a written request for it to the
Company at the following address: Commonwealth Telephone Enterprises, Inc.,
000 XXX Xxxxx, Xxxxxx, Xxxxxxxxxxxx 00000-0000, Attention: Vice
President, Investor Relations.
This
Note
shall be deemed to be a contract made under the laws of New York, and for all
purposes shall be construed in accordance with the laws of New York, without
regard to conflicts of laws principles thereof.
Terms
used in this Note and defined in the Indenture are used herein as therein
defined.
27
ABBREVIATIONS
The
following abbreviations, when used in the inscription of the face of this Note,
shall be construed as though they were written out in full according to
applicable laws or regulations.
|
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT MIN ACT -___ Custodian ___
|
|
TEN
ENT -
|
as
tenant by the entireties
|
(Cust) (Minor)
|
|
JT
TEN -
|
as
joint tenants with right of survivorship and not as tenants in
common
|
under
Uniform Gifts to Minors Act
____________________________
(State)
|
Additional
abbreviations may also be used though not in the above list.
28
GUARANTEE
The
Guarantor listed below (hereinafter referred to as the “Guarantor,”
which
term includes any successors or assigns under the Indenture dated as of July
18,
2003, between the Commonwealth Telephone Enterprises, Inc. (the “Company”)
and
The Bank of New York, as trustee (herein called the “Trustee”)
(the
“Base
Indenture”),
as
amended by the First Supplemental Indenture dated as of March 8, 2007 among
the
Company, Citizens Communications Company, a Delaware corporation (“Citizens”)
and
the Trustee (the “First
Supplemental Indenture”,
and
together with the Base Indenture, the “Indenture”),
has
irrevocably and unconditionally guaranteed on a senior basis the Guarantee
Obligations (as defined in Section 6.01 of the First Supplemental Indenture),
which include (i) the due and punctual payment of the principal of and interest
and Additional Interest, if any, on the 3¼% Convertible Notes due 2023 (the
“Notes”)
of the
Company, whether at maturity, by acceleration, call for redemption, upon a
repurchase or otherwise, the due and punctual payment of interest on the overdue
principal and (to the extent permitted by law) interest on any interest on
the
Notes, and the due and punctual performance of all other obligations of the
Company, to the Holders of the Notes or the Trustee all in accordance with
the
terms set forth in Article
6
of the
First Supplemental Indenture, and (ii) in case of any extension of time of
payment or renewal of any Notes or any such other obligations, that the same
shall be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at maturity, by acceleration, call
for redemption, upon a repurchase or otherwise.
The
obligations of the Guarantor to the Holders of the Notes and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in
Article
6
of the
First Supplemental Indenture and reference is hereby made to such First
Supplemental Indenture for the precise terms of this Guarantee.
The
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of the Company, any
right to require a proceeding first against the Company, the benefit of
discussion, protest or notice with respect to the Notes and all demands
whatsoever.
This
is a
continuing Guarantee and shall remain in full force and effect and shall be
binding upon the Guarantor and its successors and assigns until full and final
payment of all of the Company’s obligations under the Notes and Indenture or
until legally discharged in accordance with the Indenture and shall inure to
the
benefit of the successors and assigns of the Trustee and the Holders of the
Notes, and, in the event of any transfer or assignment of rights by any Holder
of the Notes or the Trustee, the rights and privileges herein conferred upon
that party shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. This is a Guarantee
of
payment and performance and not of collectibility.
29
This
Guarantee shall not be valid or obligatory for any purpose until the certificate
of authentication on the Note upon which this Guarantee is noted shall have
been
executed by the Trustee under the Indenture by the manual or facsimile signature
of one of its authorized officers.
The
obligations of the Guarantor under this Guarantee shall be limited to the extent
necessary to insure that it does not constitute a fraudulent conveyance under
applicable law.
THE
TERMS
OF ARTICLE 6 OF THE FIRST SUPPLEMENTAL INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
Capitalized
terms used herein have the same meanings given in the Indenture unless otherwise
indicated.
30
IN
WITNESS WHEREOF, the Guarantor has caused this instrument to be duly
executed.
Dated:
31
CONVERSION
NOTICE
|
TO:
|
COMMONWEALTH
TELEPHONE ENTERPRISES, INC.
THE
BANK OF NEW YORK
|
The
undersigned registered owner of this Note hereby irrevocably exercises the
option to convert this Note, or the portion thereof (which is $1,000 or a
multiple thereof) below designated, in accordance with the terms of the
Indenture referred to in this Note, and directs that the shares, if any,
issuable and deliverable upon such conversion, together with any check in
payment of any cash and any Notes representing any unconverted principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. Capitalized terms used herein but
not
defined shall have the meanings ascribed to such terms in the Indenture. If
shares, any portion of this Note not converted or a check for cash payable
are
to be issued in the name of a person other than the undersigned, the undersigned
will provide the appropriate information below and pay all transfer taxes
payable with respect thereto. Any amount required to be paid by the undersigned
on account of interest, including contingent interest, if any, accompanies
this
Note.
| Dated: ______________________________________________________ | |
| _____________________________________________________________ | |
|
_____________________________________________________________
|
|
| Signature(s) | |
| Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. | |
| _____________________________________________________________ | |
| Signature Guarantee |
32
Fill
in
the registration of shares of Common Stock if to be issued, and Notes if to
be
delivered, other than to and in the name of the registered holder:
___________________________________
(Name)
___________________________________
(Xxxxxx
Xxxxxxx)
___________________________________
(City,
State and Zip Code)
___________________________________
Please
print name and address
Principal
amount to be converted
(if
less
than all):
$__________________________________
Social
Security or Other Taxpayer
Identification
Number:
___________________________________
33
DESIGNATED
EVENT REPURCHASE NOTICE
|
TO:
|
COMMONWEALTH
TELEPHONE ENTERPRISES, INC.
THE
BANK OF NEW YORK
|
The
undersigned registered owner of this Note hereby irrevocably acknowledges
receipt of a notice from Commonwealth Telephone Enterprises, Inc. (the
“Company”)
regarding the right of holders to elect to require the Company to repurchase
the
Notes upon the occurrence of a Designated Event with respect to the Company
and
requests and instructs the Company to repay the entire principal amount of
this
Note, or the portion thereof (which is $1,000 or an integral multiple thereof)
below designated, in accordance with the terms of the Indenture at the price
of
100% of such entire principal amount or portion thereof, together with accrued
Interest to, but excluding, the Designated Event Repurchase Date, to the
registered holder hereof. Capitalized terms used herein but not defined shall
have the meanings ascribed to such terms in the Indenture. The Notes shall
be
repurchased by the Company as of the portion thereof, together with accrued
interest to, but excluding, the Designated Event Repurchase Date pursuant to
the
terms and conditions specified in the Indenture.
$
principal amount of the Notes to which this Designated Event Repurchase Notice
relates (if less than entire principal amount)
Dated:
Signature(s):
NOTICE:
The above signatures of the holder(s) hereof must correspond with the name
as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatever.
Note
Certificate Number (if applicable):
Principal
amount to be repurchased (if less than all):
Social
Security or Other Taxpayer Identification Number:
34
REPURCHASE
NOTICE
|
TO:
|
COMMONWEALTH
TELEPHONE ENTERPRISES, INC.
THE
BANK OF NEW YORK
|
The
undersigned registered owner of this Note hereby irrevocably acknowledges
receipt of a notice from Commonwealth Telephone Enterprises, Inc. (the
“Company”)
regarding the right of holders to elect to require the Company to repurchase
the
Notes and requests and instructs the Company to repay the entire principal
amount of this Note, or the portion thereof (which is $1,000 or an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued Interest to, but excluding, the Repurchase Date,
to the registered holder hereof. Capitalized terms used herein but not defined
shall have the meanings ascribed to such terms in the Indenture. The Notes
shall
be repurchased by the Company as of the Repurchase Date pursuant to the terms
and conditions specified in the Indenture.
$
principal amount of the Notes to which this Repurchase Notice relates (if
less than entire principal amount)
Dated:
Signature(s):
NOTICE:
The above signatures of the holder(s) hereof must correspond with the name
as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatever.
Note
Certificate Number (if applicable):
Principal
amount to be repurchased (if less than all):
Social
Security or Other Taxpayer Identification Number:
35
ASSIGNMENT
For
value
received ______________________________hereby sell(s) assign(s) and transfer(s)
unto ___________________________________ (Please insert social security or
other
Taxpayer Identification Number of assignee) the within Note, and hereby
irrevocably constitutes and appoints ______________________________________
attorney to transfer said Note on the books of the Company, with full power
of
substitution in the premises.
In
connection with any transfer of the Note prior to the expiration of the holding
period applicable to sales thereof under Rule 144(k) under the Securities Act
(or any successor provision) (other than any transfer pursuant to a registration
statement that has been declared effective under the Securities Act), the
undersigned confirms that such Note is being transferred:
| o |
To
Commonwealth Telephone Enterprises, Inc. or a subsidiary thereof;
or
|
| o |
To
a “qualified
institutional buyer”
in compliance with Rule 144A under the Securities Act of 1933, as
amended;
or
|
| o |
Pursuant
to and in compliance with Rule 144 under the Securities Act of 1933,
as
amended; or
|
| o |
Pursuant
to a Registration Statement which has been declared effective under
the
Securities Act of 1933, as amended, and which continues to be effective
at
the time of transfer;
|
and
unless the Note has been transferred to Commonwealth Telephone
Enterprises, Inc. or a subsidiary thereof, the undersigned confirms that
such Note is not being transferred to an “affiliate”
of
the
Company as defined in Rule 144 under the Securities Act of 1933, as
amended.
Unless
one of the boxes is checked, the Trustee will refuse to register any of the
Notes evidenced by this certificate in the name of any person other than the
registered holder thereof.
| Dated: ______________________________________________________ | |
| _____________________________________________________________ | |
|
_____________________________________________________________
|
|
| Signature(s) |
36
| Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, al in accordance with the Securities Exchange Act of 1934, as amended. | |
| _____________________________________________________________ | |
| Signature Guarantee |
NOTICE:
The signature on the Conversion Notice, the Designated Event Repurchase Notice,
the Repurchase Notice or the Assignment must correspond with the name as written
upon the face of the Note in every particular without alteration or enlargement
or any change whatever.
37
Schedule
I
COMMONWEALTH
TELEPHONE
ENTERPRISES, INC.
3¼%
Convertible Note due 2023
No.
2
The
original principal amount of this Note is
$[
] DOLLARS
($[ ]).
The principal amount has been adjusted in accordance with the terms of the
Indenture as set forth below:
|
Date
|
Principal
Amount
|
Notation
Explaining Principal Amount Recorded
|
Authorized
Signature of Trustee or Custodian
|
38
