Exhibit 4.1
Execution Copy
================================================================================
INDENTURE
Dated as of December 26, 2002
Among
QWEST SERVICES CORPORATION,
THE GUARANTORS NAMED HEREIN
and
BANK ONE TRUST COMPANY, N.A.
as
Trustee
Providing for the Issuance of
up to $4,000,000,000 aggregate principal amount of
13% Senior Subordinated Secured Notes due 2007
13 1/2% Senior Subordinated Secured Notes due 2010
14% Senior Subordinated Secured Notes due 2014
and
Additional Notes (as defined herein)
================================================================================
CROSS-REFERENCE TABLE
TIA Section Indenture Section
----------- -----------------
310 (a)(1)................................................... 7.10
(a)(2)................................................... 7.10
(a)(3)................................................... N/A
(a)(4)................................................... N/A
(b)...................................................... 7.08; 7.10
(c)...................................................... N/A
311 (a)...................................................... 7.11
(b)...................................................... 7.11
(c)...................................................... N/A
312 (a)...................................................... 2.05
(b)...................................................... 13.03
(c)...................................................... 13.03
313 (a)...................................................... 7.06
(b)(1)................................................... N/A
(b)(2)................................................... 7.06
(c)...................................................... 13.02
(d)...................................................... 7.06
314 (a)...................................................... 4.03
(b)...................................................... 11.02
(c)(1)................................................... 13.04
(c)(2)................................................... 13.04
(c)(3)................................................... 13.04
(d)...................................................... N/A
(e)...................................................... 13.05
(f)...................................................... N/A
315 (a)...................................................... 7.01
(b)...................................................... 7.05
(c)...................................................... 7.01
(d)...................................................... 7.01
(e)...................................................... 6.11
316 (a)(last sentence)....................................... 13.06
(a)(1)(A)................................................ 6.05
(a)(1)(B)................................................ 6.04
(a)(2)................................................... N/A
(b)...................................................... 6.07
317 (a)(1)................................................... 6.08
(a)(2)................................................... 6.09
(b)...................................................... 2.04, 7.12
318 (a)...................................................... 13.01
N/A means Not Applicable
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions..........................................................................1
SECTION 1.02. Other Definitions...................................................................27
SECTION 1.03. Incorporation by Reference of Trust Indenture Act...................................28
SECTION 1.04. Rules of Construction...............................................................28
ARTICLE II
THE NOTES
SECTION 2.01. Form and Dating.....................................................................29
SECTION 2.02. Execution and Authentication........................................................30
SECTION 2.03. Registrar and Paying Agent..........................................................30
SECTION 2.04. Paying Agent To Hold Money in Trust.................................................31
SECTION 2.05. Noteholder Lists....................................................................31
SECTION 2.06. Transfer and Exchange...............................................................32
SECTION 2.07. Replacement Notes...................................................................32
SECTION 2.08. Outstanding Notes...................................................................33
SECTION 2.09. Temporary Notes.....................................................................33
SECTION 2.10. Cancellation........................................................................33
SECTION 2.11. Defaulted Interest..................................................................33
SECTION 2.12. CUSIP Numbers.......................................................................34
SECTION 2.13. Book-Entry Provisions for Global Notes..............................................34
SECTION 2.14. Special Transfer Provisions.........................................................35
SECTION 2.15. Issuance of Additional Notes........................................................36
ARTICLE III
REDEMPTION
SECTION 3.01. Notices to Trustee..................................................................37
SECTION 3.02. Selection...........................................................................37
SECTION 3.03. Notice..............................................................................37
SECTION 3.04. Effect of Notice of Redemption......................................................38
SECTION 3.05. Deposit of Redemption Price.........................................................38
SECTION 3.06. Notes Redeemed in Part..............................................................38
SECTION 3.07. No Sinking Fund.....................................................................39
SECTION 3.08. Asset Sale Offers..................................................................39
-i-
Page
----
ARTICLE IV
COVENANTS
SECTION 4.01. Payment of Notes....................................................................40
SECTION 4.02. Maintenance of Office or Agency.....................................................40
SECTION 4.03. Reports.............................................................................41
SECTION 4.04. Taxes...............................................................................41
SECTION 4.05. Stay, Extension and Usury Laws......................................................41
SECTION 4.06. Incurrence of Indebtedness..........................................................41
SECTION 4.07. Restricted Payments.................................................................43
SECTION 4.08. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries...........44
SECTION 4.09. Asset Sales.........................................................................45
SECTION 4.10. Transactions with Affiliates........................................................48
SECTION 4.11. Change of Control...................................................................48
SECTION 4.12. Compliance Certificate..............................................................50
SECTION 4.13. Limitation on Designations of Unrestricted Subsidiaries.............................50
SECTION 4.14. Liens...............................................................................51
SECTION 4.15. Business Activities.................................................................51
SECTION 4.16. Suspension of Covenants.............................................................52
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All Assets of
the Company or the Guarantors...................................................52
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default and Remedies......................................................55
SECTION 6.02. Acceleration........................................................................57
SECTION 6.03. Other Remedies......................................................................57
SECTION 6.04. Waiver of Past Defaults.............................................................58
SECTION 6.05. Control by Majority.................................................................58
SECTION 6.06. Limitation on Suits.................................................................58
SECTION 6.07. Rights of Holders To Receive Payment................................................58
SECTION 6.08. Collection Suit by Trustee..........................................................59
SECTION 6.09. Trustee May File Proofs of Claim....................................................59
SECTION 6.10. Priorities..........................................................................59
SECTION 6.11. Undertaking for Costs...............................................................59
SECTION 6.12. Waiver of Stay or Extension Laws....................................................59
-ii-
Page
----
ARTICLE VII
TRUSTEE
SECTION 7.01. Duties of Trustee...................................................................60
SECTION 7.02. Rights of Trustee...................................................................61
SECTION 7.03. Individual Rights of Trustee........................................................62
SECTION 7.04. Trustee's Disclaimer................................................................62
SECTION 7.05. Notice of Defaults..................................................................62
SECTION 7.06. Reports by Trustee to Holders.......................................................62
SECTION 7.07. Compensation and Indemnity..........................................................62
SECTION 7.08. Replacement of Trustee..............................................................63
SECTION 7.09. Successor Trustee by Merger.........................................................64
SECTION 7.10. Eligibility; Disqualification.......................................................64
SECTION 7.11. Preferential Collection of Claims Against the Company...............................64
ARTICLE VIII
SUBORDINATION OF NOTES
SECTION 8.01. Notes Subordinated to Senior Debt...................................................65
SECTION 8.02. No Payment on Notes in Certain Circumstances........................................65
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc......................................66
SECTION 8.04. Subrogation.........................................................................67
SECTION 8.05. Obligations of Company Unconditional................................................67
SECTION 8.06. Notice to Trustee...................................................................67
SECTION 8.07. Reliance on Judicial Order or Certificate of Liquidating Agent......................68
SECTION 8.08. Trustee's Relation to Senior Debt...................................................68
SECTION 8.09. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Debt...............................................68
SECTION 8.10. Holders Authorize Trustee To Effectuate Subordination of Notes......................68
SECTION 8.11. This Article Not To Prevent Events of Default.......................................69
SECTION 8.12. Trustee's Compensation Not Prejudiced...............................................69
SECTION 8.13. No Waiver of Subordination Provisions...............................................69
SECTION 8.14. Subordination Provisions Not Applicable to Money Held in Trust for
Holders; Payments May Be Paid Prior to Dissolution..............................69
SECTION 8.15. Acceleration of Notes...............................................................69
ARTICLE IX
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Legal Defeasance and Covenant Defeasance............................................69
SECTION 9.02. Conditions to Legal or Covenant Defeasance..........................................70
SECTION 9.03. Deposited Money and Government Securities To Be Held in Trust;
Other Miscellaneous Provisions..................................................71
SECTION 9.04. Repayment to the Issuer.............................................................72
SECTION 9.05. Reinstatement.......................................................................72
SECTION 9.06. Satisfaction and Discharge of Indenture.............................................72
-iii-
Page
----
ARTICLE X
AMENDMENTS
SECTION 10.01. Without Consent of Holders..........................................................73
SECTION 10.02. With Consent of Holders.............................................................73
SECTION 10.03. Compliance with Trust Indenture Act.................................................75
SECTION 10.04. Revocation and Effect of Consents and Waivers.......................................75
SECTION 10.05. Notation on or Exchange of Notes....................................................75
SECTION 10.06. Trustee To Sign Amendments..........................................................75
ARTICLE XI
COLLATERAL DOCUMENTS
SECTION 11.01. Security Documents..................................................................75
SECTION 11.02. Recording and Opinions..............................................................76
SECTION 11.03. Release of Collateral upon Asset Sale...............................................76
SECTION 11.03. Release of Collateral...............................................................76
SECTION 11.05. Certificates of the Trustee.........................................................77
SECTION 11.06. Authorization of Actions To Be Taken by the Trustee Under the
Security Documents..............................................................77
SECTION 11.07. Authorization of Receipt of Funds by the Trustee Under the Security
Documents.......................................................................78
SECTION 11.08. Termination of Security Interest....................................................78
SECTION 11.09. Collateral Agent....................................................................78
SECTION 11.10. Suits to Protect the Collateral.....................................................78
SECTION 11.11. Powers Exercisable by Receiver or Trustee...........................................79
ARTICLE XII
NOTES GUARANTEES
SECTION 12.01. Notes Guarantees....................................................................79
SECTION 12.02. Limitation on Liability; Release....................................................80
SECTION 12.03. Successors and Assigns..............................................................80
SECTION 12.04. No Waiver...........................................................................80
SECTION 12.05. Modification........................................................................81
SECTION 12.06. Evidence of Guarantee...............................................................81
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls........................................................81
SECTION 13.02. Notices.............................................................................81
SECTION 13.03. Communication by Holders with Other Holders.........................................82
SECTION 13.04. Certificate and Opinion as to Conditions Precedent..................................82
SECTION 13.05. Statements Required in Certificate or Opinion.......................................82
-iv-
Page
----
SECTION 13.06. When Notes Disregarded..............................................................83
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar........................................83
SECTION 13.08. Legal Holidays......................................................................83
SECTION 13.09. Governing Law.......................................................................83
SECTION 13.10. No Recourse Against Others..........................................................83
SECTION 13.11. Successors..........................................................................83
SECTION 13.12. Multiple Originals..................................................................83
SECTION 13.13. Table of Contents; Headings.........................................................83
SECTION 13.14. Severability........................................................................83
SECTION 13.15. No Adverse Interpretation of Other Agreements.......................................84
EXHIBIT A - FORM OF INITIAL NOTE
EXHIBIT B - FORM OF EXCHANGE OR PERMANENT REGULATION S NOTE
EXHIBIT C - FORM OF GUARANTEE
EXHIBIT D - FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFER TO INSTITUTIONAL ACCREDITED INVESTORS
EXHIBIT E - FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO RULE 144A
EXHIBIT F - FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S
EXHIBIT G - FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S
EXHIBIT H - FORM OF QSC SECURITY AND PLEDGE AGREEMENT
EXHIBIT I - FORM OF QCII PLEDGE AGREEMENT
-v-
INDENTURE dated as of December 26, 2002, among QWEST SERVICES
CORPORATION, a Colorado corporation, the GUARANTORS (as defined) and BANK ONE
TRUST COMPANY, N.A. (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 13% Senior
Subordinated Secured Notes due 2007, Series A (the "Initial 2007 Notes"), issued
on the date hereof, (ii) the Company's 13 1/2% Senior Subordinated Secured Notes
due 2010, Series A (the "Initial 2010 Notes"), issued on the date hereof, (iii)
the Company's 14% Senior Subordinated Secured Notes due 2014, Series A (the
"Initial 2014 Notes"), issued on the date hereof (all such Notes in clauses (i)
through (iii) being referred to collectively as the "Initial Notes"), (iv) any
Additional Notes and (v) if and when issued as provided in the Registration
Rights Agreement of the Company, 13% Senior Subordinated Secured Notes due 2007,
Series B, 13 1/2% Senior Subordinated Secured Notes due 2010, Series B and 14%
Senior Subordinated Secured Notes due 2014, Series B, in exchange for Initial
Notes of the same maturity (collectively the "Exchange Notes" and, together with
the Initial Notes and any Additional Notes, the "Notes").
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
------------------------------------------
SECTION 1.01. Definitions.
"Acquired Indebtedness" means (1) with respect to any Person that
becomes a Restricted Subsidiary after the Issue Date, Indebtedness of such
Person and its Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary that was not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary and (2) with
respect to the Company or any of its Restricted Subsidiaries, any Indebtedness
of a Person (other than the Company or its Restricted Subsidiary) existing at
the time such Person is merged with or into the Company or any of its Restricted
Subsidiaries, or Indebtedness expressly assumed by the Company or any of its
Restricted Subsidiaries in connection with the acquisition of an asset or assets
from another Person, which Indebtedness was not, in any case, incurred by such
other Person in connection with, or in contemplation of, such merger or
acquisition.
"Additional Interest" shall have the meaning set forth in the
Registration Rights Agreement.
"Additional Notes" means Notes (other than the Initial Notes) issued
pursuant to Article II hereof and otherwise in compliance with the provisions of
this Indenture.
"Affiliate" of any Person means any other Person which directly or
indirectly controls or is controlled by, or is under direct or indirect common
control with, the referent Person. For purposes of this definition, "control" of
a Person shall mean 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.
"amend" means to amend, supplement, restate, amend and restate or
otherwise modify; and "amendment" shall have a correlative meaning.
"Asset Acquisition" means
(1) an Investment by the Company or any of its Restricted
Subsidiaries in any other Person if, as a result of such
Investment, such Person shall become a Restricted Subsidiary
of the Company, or shall be merged with or into the Company or
any of its Restricted Subsidiaries, or
(2) the acquisition by the Company or any of its Restricted
Subsidiaries of all or substantially all of the assets of any
other Person or any division or line of business of any other
Person.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease,
assignment or other disposition by QCII or any Restricted Subsidiary to any
Person other than QCII or any Restricted Subsidiary (including by means of a
Sale and Leaseback Transaction or a merger or consolidation) (collectively, for
purposes of this definition, a "transfer"), in one transaction or a series of
related transactions, of any assets of QCII or any of its Restricted
Subsidiaries other than in the ordinary course of business. Notwithstanding the
foregoing, the following will not be Asset Sales:
(1) transfers of cash or Cash Equivalents or any repayment of
permitted intercompany Indebtedness;
(2) transfers of assets (including Equity Interests) that are
governed by, and made in accordance with, Section 5.01;
(3) the creation or realization of any Lien permitted hereunder;
(4) transfers of damaged, worn-out or obsolete equipment or assets
that, in the Company's reasonable judgment, are no longer used
or useful in the business of the Company or its Restricted
Subsidiaries;
(5) Permitted Telecommunications Capital Asset Dispositions; or
(6) any transfer or series of related transfers that, but for this
clause, would be Asset Sales, if after giving effect to such
transfers, the aggregate Fair Market Value of the assets
transferred in such transaction or any such series of related
transactions does not exceed $25.0 million.
"Attributable Indebtedness" when used with respect to any Sale and
Leaseback Transaction means, as at the time of determination, the present value
(discounted at a rate equivalent to the Company's then-current weighted average
cost of funds for borrowed money as at the time of determination, compounded on
a semiannual basis) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in any such Sale and Leaseback
Transaction.
"Bankruptcy Law" means Title 11 of the United States Code, as amended,
or any similar federal or state law for the relief of debtors.
"Board of Directors" means, with respect to any Person, the board of
directors or comparable governing body of such Person.
"Business Day" means a day other than a Saturday, Sunday or other day
on which banking institutions in New York are authorized or required by law to
close.
"Capitalized Lease" means a lease required to be capitalized for
financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" of any Person means the obligation of
such Person to pay rent or other amounts under a Capitalized Lease, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"Cash Equivalents" means
-2-
(1) marketable obligations with a maturity of 360 days or less
issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof);
(2) demand and time deposits and certificates of deposit or
acceptances with a maturity of 365 days or less of any
financial institution that is a member of the Federal Reserve
System having combined capital and surplus and undivided
profits of not less than $500 million and is assigned at least
a "B" rating by Thomson Financial BankWatch;
(3) commercial paper maturing no more than 365 days from the date
of creation thereof issued by a corporation that is not the
Company or an Affiliate of the Company, and is organized under
the laws of any State of the United States of America or the
District of Columbia and rated at least A-1 by S&P or at least
P-1 by Moody's;
(4) repurchase obligations with a term of not more than ten days
for underlying securities of the types described in clause (1)
above entered into with any commercial bank meeting the
specifications of clause (2) above; and
(5) investments in money market or other mutual funds
substantially all of whose assets comprise securities of the
types described in clauses (1) through (4) above.
"Change of Control" means any "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act), other than Xxxxxxx X.
Xxxxxxxx, Anschutz Company or any of their controlled affiliates, is or becomes
the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that for purposes of this clause such person or group shall be
deemed to have "beneficial ownership" of all securities that any such person or
group has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of Voting Stock
representing more than 50% of the voting power of the total outstanding Voting
Stock of QCII. Notwithstanding the foregoing, no "Change of Control" shall have
occurred if the aforementioned ultimate beneficial owner is a corporation or
other entity in which no one person or group (each, as defined above)
beneficially owns (as determined above) more than 50% of the Voting Stock of
such corporation or other entity.
"Change of Control Triggering Event" means the occurrence of both a
Change of Control and a Rating Decline.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means the QSC Collateral and the QCII Collateral.
"Collateral Agents" mean the QSC Collateral Agent and the QCII
Collateral Agent.
"Company" means Qwest Services Corporation, a Colorado corporation, and
its permitted successors and assigns.
"Comparable Treasury Issue" means the United States Treasury security
selected by a Reference Treasury Dealer appointed by the Company as having a
maturity comparable to the remaining term to maturity or the applicable
redemption date of the Notes to be redeemed that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
to maturity or the applicable redemption date of such Notes.
-3-
"Comparable Treasury Price" means with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities," or (ii) if such release (or any successor release) is
not published or does not contain such prices on such business day, (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Company obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Reference Treasury Dealer
Quotations.
"Consolidated Amortization Expense" means, with respect to any Person
for any period, the amortization expense of the relevant Person and the
Restricted Subsidiaries of the relevant Person for such period, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Cash Flow" means, for any period, without duplication,
the sum of the amounts for such period of
(1) Consolidated Net Income of the Company, plus
(2) in each case only to the extent (and in the same proportion)
deducted in determining Consolidated Net Income and with
respect to the portion of Consolidated Net Income attributable
to any Restricted Subsidiary of the Company,
(a) Consolidated Income Tax Expense of the
Company,
(b) Consolidated Amortization Expense (but only
to the extent not included in Consolidated Interest Expense of
the Company),
(c) Consolidated Depreciation Expense of the
Company,
(d) Consolidated Interest Expense of the Company
and its Restricted Subsidiaries,
(e) all other non-cash items reducing the
Consolidated Net Income (excluding any non-cash charge that
results in an accrual of a reserve for cash charges in any
future period) of the Company for such period, and
(f) cash restructuring charges for actions taken
prior to the Issue Date,
in each case determined on a consolidated basis in accordance
with GAAP, minus
(3) the aggregate amount of all non-cash items (including the
amortization of revenues for which cash was received in a
period prior to the issuance of the Notes), determined on a
consolidated basis, to the extent such items increased
Consolidated Net Income of the Company for such period, minus
(4) an amount equal to the Consolidated Interest Expense of QCII
and its Subsidiaries (other than the Company and its
Subsidiaries) to the extent paid, accrued or scheduled to be
paid or accrued for the period and other cash expenses
reducing Consolidated Net Income of QCII and its Subsidiaries
(other than the Company and its Subsidiaries) paid or
-4-
scheduled to be paid or accrued by the Company and its
Subsidiaries that are not reflected in the Consolidated Cash
Flow of the Company.
"Consolidated Depreciation Expense" means for any period, the
depreciation expense of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Income Tax Expense" means for any period, the provision
for taxes of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum, without duplication, of the total interest expense of the
relevant Person and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP and including without duplication,
(1) imputed interest on Capitalized Lease Obligations and
Attributable Indebtedness,
(2) commissions, discounts and other fees and charges owed with
respect to letters of credit securing financial obligations,
bankers' acceptance financing and receivables financings,
(3) the net costs associated with Hedging Obligations,
(4) amortization of debt issuance costs, debt discount or premium
and other financing fees and expenses,
(5) the interest portion of any deferred payment obligations,
(6) all other non-cash interest expense,
(7) capitalized interest,
(8) all interest payable with respect to discontinued operations,
and
(9) all interest on any Indebtedness of any other Person
guaranteed by the relevant Person or any Restricted Subsidiary
of the relevant Person.
"Consolidated Leverage Ratio" means, as of the date of the transaction
giving rise to the need to calculate the Consolidated Leverage Ratio (the
"Transaction Date"), the ratio of (x) the total principal amount of Indebtedness
(or in the case of Indebtedness issued at less than its principal amount at
maturity, the accreted value thereof) of the Company and its Restricted
Subsidiaries as of the Transaction Date on a pro forma basis after giving effect
to all incurrences and repayments of Indebtedness to occur on or substantially
concurrently with such Transaction Date, but excluding any Permitted
Subordinated Indebtedness ("Total Indebtedness"), determined on a consolidated
basis, to (y) the Consolidated Cash Flow during the most recent four consecutive
full fiscal quarters for which financial statements are available (the
"Four-Quarter Period") ending on or prior to the Transaction Date. For purposes
of this definition, Total Indebtedness and Consolidated Cash Flow shall be
calculated after giving effect on a pro forma basis to:
(1) the elimination from Total Indebtedness of any existing or
future intercompany Indebtedness permitted under 4.06(b)(v)";
(2) any Asset Sale or other disposition or Asset Acquisition
(including, without limitation, any Asset Acquisition giving
rise to the need to make such calculation as a result of the
Company or any of its Restricted Subsidiaries (including any
-5-
Person who becomes a Restricted Subsidiary as a result of such
Asset Acquisition) incurring Indebtedness and also including
any Consolidated Cash Flow (including any pro forma expense
and cost reductions calculated on a basis consistent with
Regulation S-X under the Exchange Act) associated with any
such Asset Acquisition) occurring during the Four-Quarter
Period or at any time subsequent to the last day of the
Four-Quarter Period and on or prior to the Transaction Date,
as if such Asset Sale or Asset Acquisition or other
disposition (including the incurrence of, or assumption or
liability for, any such Indebtedness or Acquired Indebtedness)
occurred on the first day of the Four-Quarter Period; and
(3) the Designation of an Unrestricted Subsidiary or Redesignation
of a Restricted Subsidiary pursuant to Section 4.13 (as if
such designation were an Asset Sale or Asset Acquisition under
clause (2) of the definition of "Consolidated Interest
Expense").
If the Company or any of its Restricted Subsidiaries directly or indirectly
guarantees Indebtedness of a third Person, the preceding sentence shall give
effect to the incurrence of such guaranteed Indebtedness as if the Company or
such Restricted Subsidiary had directly incurred or otherwise assumed such
guaranteed Indebtedness. Notwithstanding the foregoing, solely for purposes of
calculating the Consolidated Leverage Ratio, there shall be excluded (1) $1.5
billion of Indebtedness (to the extent such amount is the amount that is
contractually required to be repaid from the sale of the Xxxxxx Assets, a sale
of the Xxxxxx Assets has not occurred and the Xxxxxx Assets are classified as
"discontinued operations") and (2) the Consolidated Cash Flow associated with
businesses accounted for as "discontinued operations" in accordance with GAAP as
of the Issue Date until, in the case of each of clauses (1) and (2), the earlier
of such time as they cease to be classified as such or are sold by the Company
or any Restricted Subsidiary.
"Consolidated Net Income" means, with respect to any Person for any
period, the net income (or loss) of any Person and its Restricted Subsidiaries
for such period, determined on a consolidated basis, in accordance with GAAP;
provided that there shall be excluded from such net income (to the extent
otherwise included therein) without duplication:
(1) the net income (or loss) of any Person (other than a
Restricted Subsidiary of the relevant Person) in which any
Person other than the relevant Person and the Restricted
Subsidiaries of the relevant Person has an ownership interest,
except to the extent that cash in an amount equal to any such
income has actually been received by the relevant Person or
any of its Wholly Owned Restricted Subsidiaries during such
period;
(2) except to the extent included in the Consolidated Net Income
of the relevant Person pursuant to the foregoing clause (1),
the net income (or loss) of any Person that accrued prior to
the date that (a) such Person becomes a Restricted Subsidiary
of the relevant Person or is merged into or consolidated with
the relevant Person or any Restricted Subsidiary of the
relevant Person or (b) the assets of such Person are acquired
by the relevant Person or any Restricted Subsidiary of the
relevant Person;
(3) except for purposes of calculating Consolidated Cash Flow, the
net income of any Restricted Subsidiary of the relevant Person
during such period to the extent that the declaration or
payment of dividends or similar distributions by such
Restricted Subsidiary of the relevant Person of that income is
not permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted
Subsidiary during such period, except that the relevant
-6-
Person's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining
Consolidated Net Income;
(4) for the purposes of calculating the Restricted Payments Basket
only, in the case of a successor to the relevant Person by
consolidation, merger or transfer of its assets, any income
(or loss) of the successor prior to such merger, consolidation
or transfer of assets;
(5) other than for purposes of calculating the Restricted Payments
Basket, any gain (or loss), together with any related
provision for taxes on any such gain (or the tax effect of any
such loss), realized during such period by the relevant Person
or any Restricted Subsidiary of the relevant Person upon (a)
the acquisition of any securities, or the extinguishment of
any Indebtedness, of the relevant Person or any Restricted
Subsidiary of the relevant Person or (b) any Asset Sale by the
relevant Person or any Restricted Subsidiary of QCII;
(6) other than for purposes of calculating the Restricted Payments
Basket, any extraordinary gain (or extraordinary loss),
together with any related provision for taxes on any such
extraordinary gain (or the tax effect of any such
extraordinary loss), realized by the relevant Person or any
Restricted Subsidiary of the relevant Person during such
period;
(7) for purposes of calculating Consolidated Cash Flow, any cost,
charge or gain (including financing fees and related expenses)
arising from the Exchange Offer and the issuance of Equity
Interests or incurrence of Indebtedness; and
(8) the effect of any non-cash gain (or loss) as a result of the
impairment of goodwill as required by Statement of Financial
Accounting Standards ("SFAS") No. 142 and the impairment of
assets as required by SFAS 144.
In addition, any return of capital with respect to an Investment that
increased the Restricted Payments Basket pursuant to Section 4.08(c)(ii) or
decreased the amount of Investments outstanding pursuant to clause (13) of the
definition of "Permitted Investments" shall be excluded from Consolidated Net
Income for purposes of calculating the Restricted Payments Basket.
Notwithstanding anything to the contrary in the foregoing, for the purposes of
calculating the Restricted Payments Basket only, "Consolidated Net Income" for
the period from and including the Start Date through and including the Issue
Date shall have the same meaning as provided in the Existing 2008 Note
Indentures.
"Consolidated Total Assets" of any Person means the total amount of
assets (less applicable reserves and other properly deductible items) which
under GAAP would be included on a consolidated balance sheet of such Person and
its Subsidiaries.
"Credit Agreement" means the Second Amended and Restated Credit
Agreement dated as of August 30, 2002 among QCII, the Company, QwestDex
Holdings, QwestDex Inc., Bank of America, N.A., as administrative agent, and the
other lenders named therein, including any notes, guarantees, collateral and
security documents, instruments and agreements executed in connection therewith
(including Hedging Obligations related to the Indebtedness incurred thereunder),
and in each case as amended or refinanced from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of borrowings or other
Indebtedness outstanding or available to be borrowed thereunder) all or any
portion of the Indebtedness under such agreement, and any successor or
replacement agreement or agreements with the same or any other agents, creditor,
lender or group of creditors or lenders.
-7-
"Debt Securities" means any debt securities, as such term is commonly
understood, issued in any public offering or private placement and in an
outstanding principal amount of more than $100.0 million.
"Default" means (1) any Event of Default or (2) any event, act or
condition that after notice or the passage of time or both would be an Event of
Default.
"Definitive Notes" means Notes that are in the form of Exhibit A or
Exhibit B attached hereto that do not include the Global Notes Legend therein.
"Depository" means, with respect to the Notes issuable or issued in
whole or in part in global form, the person specified in Section 2.03 as the
Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depository" shall mean or include such successor.
"Designated Senior Debt" means (1) Senior Debt under or in respect of
the Credit Agreement to the extent permitted under Section 4.06(a) or (2) in the
event no amounts are outstanding or available under the Credit Agreement, any
other Indebtedness constituting Senior Debt in an aggregate amount of $100.0
million or more which, at the time of determination, is specifically designated
in the instrument evidencing such Senior Debt as "Designated Senior Debt" by the
Company.
"Designation" has the meaning given to this term in Section 4.13.
"Designation Amount" has the meaning given to this term in Section
4.13.
"Directory Publishing Subsidiary" means any Restricted Subsidiary
engaged substantially only in a directory publishing business or solely in the
ownership of the Equity Interests in a Directory Publishing Subsidiary.
"Disqualified Equity Interests" of any Person means any Equity
Interests of such Person that, by their terms, or by the terms of any related
agreement or of any security into which they are convertible, puttable or
exchangeable, are, or upon the happening of any event or the passage of time
would be, required to be redeemed by such Person, whether or not at the option
of the holder thereof, or mature or are mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, in whole or in part, on or prior to the
date which is 91 days after the final maturity date of the applicable series of
Notes; provided, however, that any class of Equity Interests of such Person
that, by its terms, authorizes such Person to satisfy in full its obligations
with respect to the payment of dividends or upon maturity, redemption (pursuant
to a sinking fund or otherwise) or repurchase thereof or otherwise by the
delivery of Equity Interests that are not Disqualified Equity Interests, and
that are not convertible, puttable or exchangeable for Disqualified Equity
Interests or Indebtedness, will not be deemed to be Disqualified Equity
Interests so long as such Person satisfies its obligations with respect thereto
solely by the delivery of Equity Interests that are not Disqualified Equity
Interests; provided, further, however, that any Equity Interests that would not
constitute Disqualified Equity Interests but for provisions thereof giving
holders thereof (or the holders of any security into or for which such Equity
Interests are convertible, exchangeable or exercisable) the right to require
such Person to redeem such Equity Interests upon the occurrence of a change in
control occurring prior to the final maturity date of the Notes shall not
constitute Disqualified Equity Interests if the change in control provisions
applicable to such Equity Interests are no more favorable to such holders than
the provisions described under Section 4.11 and such Equity Interests
specifically provides that such Person will not redeem any such Equity Interests
pursuant to such provisions prior to the Company's purchase of the Notes as
required pursuant to Section 4.11.
-8-
"Equity Interests" of any Person means (1) any and all shares or other
equity interests (including common stock, preferred stock, limited liability
company interests and partnership interests) in such Person and (2) all rights
to purchase, warrants or options (whether or not currently exercisable),
participations or other equivalents of or interests in (however designated) such
shares or other interests in such Person.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Exchange Notes" has the meaning stated in the first recital of this
Indenture.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Existing 2008 Note Indentures" means the Indentures dated as of
November 4, 1998 and November 27, 1998, respectively, between QCII and Bankers
Trust Company relating to the Existing 2008 Notes.
"Existing 2008 Notes" means the $750,000,000 aggregate principal amount
of 7.50% Senior Notes due 2008 of QCII and the $300,000,000 aggregate principal
amount of 7.25% Senior Notes due 2008 of QCII issued under the Existing 2008
Note Indentures.
"Fair Market Value" means, with respect to any asset, the price (after
taking into account any liabilities relating to such assets) that would be
negotiated in an arm's-length transaction for cash between a willing seller and
a willing and able buyer, neither of which is under any compulsion to complete
the transaction, as such price is determined in good faith by the applicable
Board of Directors or a duly authorized committee thereof, as evidenced by a
resolution of such Board or committee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession of the United States as in effect from time to time.
"Global Note" means a Note that is in the form of Exhibit A or Exhibit
B hereto that includes the Global Notes Legend therein.
"Global Notes Legend" means the legend set forth in the first paragraph
of Exhibit A hereto.
"guarantee" means a direct or indirect guarantee by any Person of any
Indebtedness of any other Person and includes any obligation, direct or
indirect, contingent or otherwise, of such Person: (1) to purchase or pay (or
advance or supply funds for the purchase or payment of) Indebtedness of such
other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), 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 of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part). "guarantee," when used as a verb, and "guaranteed" have correlative
meanings.
"Guarantors" means QCII, QCF and each other Person that is required to
become a Guarantor by the terms hereof after the Issue Date, in each case until
such Person is released from its Note Guarantee.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to (1) any interest rate swap agreement, interest rate collar
agreement or other similar agreement or arrangement designed to protect such
-9-
Person against fluctuations in interest rates, (2) agreements or arrangements
designed to protect such Person against fluctuations in foreign currency
exchange rates in the conduct of its operations, or (3) any forward contract,
commodity swap agreement, commodity option agreement or other similar agreement
or arrangement designed to protect such Person against fluctuations in commodity
prices, in each case entered into in the ordinary course of business for bona
fide hedging purposes and not for the purpose of speculation.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Indebtedness" of any Person at any date means, without duplication:
(1) all liabilities, contingent or otherwise, of such Person for
borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion
thereof);
(2) all 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 (or 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 accrued expenses incurred by such Person in the ordinary
course of business in connection with obtaining goods,
materials or services;
(5) the maximum fixed redemption or repurchase price of all
Disqualified Equity Interests of such Person or liquidation
preference of any Preferred Stock of any Restricted Subsidiary
of such Person;
(6) all Capitalized Lease Obligations of such Person;
(7) all Indebtedness of others secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by
such Person;
(8) all Indebtedness of others guaranteed by such Person to the
extent of such guarantee; provided that Indebtedness of such
Person or its Subsidiaries that is guaranteed by such Person
or its Subsidiaries shall only be counted once in the
calculation of the amount of Indebtedness of such Person and
its Subsidiaries on a consolidated basis;
(9) all Attributable Indebtedness;
(10) to the extent not otherwise included in this definition,
Hedging Obligations of such Person; and
(11) all obligations of such Person under conditional sale or other
title retention agreements relating to assets purchased by
such Person.
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, the maximum liability of such Person for any such contingent obligations
at such date and, in the case of clause (7), the lesser of (a) the Fair Market
Value of any asset subject to a Lien securing the Indebtedness of others and (b)
the amount of the Indebtedness secured. For purposes of clause (5), the
principal amount of any "Indebtedness" which is in the form of Preferred Stock
-10-
or Disqualified Equity Interests shall be the greater of the maximum fixed
redemption or repurchase price or liquidation preference thereof.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Independent Director" means a director of QCII who
(1) is independent with respect to the transaction at issue;
(2) does not have any material financial interest in QCII or any
of its Affiliates (other than as a result of holding
securities of QCII and its Subsidiaries); and
(3) has not and whose Affiliates or affiliated firm has not, at
any time during the twelve months prior to the taking of any
action hereunder, directly or indirectly, received, or entered
into any understanding or agreement to receive, any material
compensation, payment or other benefit, of any type or form,
from QCII or any of its Affiliates, other than customary
directors' fees for serving on the Board of Directors of QCII
or any committee thereof or any Affiliate and reimbursement of
out-of-pocket expenses for attendance at QCII's or an
Affiliate's board and board committee meetings.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable judgment of the Company's Board of Directors, qualified to perform
the task for which it has been engaged and disinterested and independent with
respect to the Company and its Affiliates.
"Initial Notes" has the meaning stated in the first recital of this
Indenture.
"Insolvency Event" means an event of the type set forth in Section
6.01(g) or (h).
"interest" means with respect to the Notes, interest and Additional
Interest, if any, on the Notes.
"Investment Grade Rating" means (i) with respect to Xxxxx'x (or any
successor to the rating agency business thereof), a rating equal to or higher
than Baa3 (or the equivalent), and (ii) with respect to S&P (or any successor to
the rating agency business thereof), a rating equal to or higher than BBB- (or
the equivalent).
"Investments" of any Person means:
(1) all direct or indirect investments by such Person in any other
Person in the form of loans, advances or capital contributions
or other credit extensions constituting Indebtedness of such
other Person, and any guarantee of Indebtedness of any other
Person;
(2) all purchases (or other acquisitions for consideration) by
such Person of Indebtedness, Equity Interests or other
securities of any other Person;
(3) all other items that would be classified as investments
(including purchases of assets outside the ordinary course of
business) on a balance sheet of such Person prepared in
accordance with GAAP; and
(4) the Designation of any Subsidiary as an Unrestricted
Subsidiary.
-11-
Except as otherwise expressly specified in this definition, the amount of any
Investment (other than an Investment made in cash) shall be the Fair Market
Value thereof on the date such Investment is made. The amount of Investment
pursuant to clause (4) shall be the Designation Amount determined in accordance
with Section 4.13. If the relevant Person or any Subsidiary of the relevant
Person sells or otherwise disposes of any Equity Interests of any direct or
indirect Subsidiary such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary, the relevant Person shall be
deemed to have made an Investment on the date of any such sale or other
disposition equal to the Fair Market Value of the Equity Interests of and all
other Investments in such Subsidiary not sold or disposed of, which amount shall
be determined by the Board of Directors of QCII. The acquisition by the relevant
Person or any Restricted Subsidiary of the relevant Person of a Person that
holds an Investment in a third Person shall be deemed to be an Investment by the
relevant Person or such Restricted Subsidiary in the third Person in an amount
equal to the Fair Market Value of the Investment held by the acquired Person in
the third Person. Notwithstanding the foregoing, purchases or redemptions of
Equity Interests of the relevant Person shall be deemed not to be Investments.
"Issue Date" means the date on which any Notes are first issued under
this Indenture.
"Lien" means, with respect to any asset, any mortgage, deed of trust,
lien (statutory or other), pledge, lease, easement, restriction, covenant,
charge, security interest or other encumbrance of any kind or nature in respect
of such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, and any lease in the nature thereof, any option or other agreement to
sell, and any filing of, or agreement to give, any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction (other than
cautionary filings in respect of operating leases).
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Available Proceeds" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents, net of
(1) brokerage commissions and other fees and expenses (including
fees and expenses of legal counsel, accountants and investment
banks) of such Asset Sale;
(2) provisions for taxes payable as a result of such Asset Sale
(after taking into account any available tax credits or
deductions and any tax sharing arrangements);
(3) except in the case of Collateral, amounts required to be paid
to any Person (other than QCII or any Restricted Subsidiary of
QCII) owning a beneficial interest in the assets subject to
the Asset Sale or having a Lien thereon;
(4) payments of unassumed liabilities (not constituting
Indebtedness) relating to the assets sold at the time of, or
within 30 days after the date of, such Asset Sale; and
(5) appropriate amounts to be provided by QCII or any Restricted
Subsidiary of QCII, as the case may be, as a reserve required
in accordance with GAAP against any liabilities associated
with such Asset Sale and retained by QCII or any Restricted
Subsidiary of QCII, as the case may be, after such Asset Sale,
including pensions and other postemployment benefit
liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated
with such Asset Sale, all as reflected in an Officers'
Certificate delivered to the Trustee; provided, however, that
any amounts remaining after adjustments, revaluations or
liquidations of such reserves shall constitute Net Available
Proceeds.
-12-
"Non-Recourse Debt" means, with respect to any Person, Indebtedness of
such Person:
(1) in the case of an Unrestricted Subsidiary, as to which neither
QCII nor any Restricted Subsidiary of QCII and, in the case of
any Directory Publishing Subsidiary, no Subsidiary other than
a Directory Publishing Subsidiary (a) provides credit support
of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is
directly or indirectly liable as a guarantor or otherwise, or
(c) constitutes the lender;
(2) in the case of an Unrestricted Subsidiary only, no default
with respect to which (including any rights that the holders
thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of
time or both any holder of any other Indebtedness of QCII or
any Restricted Subsidiary of QCII to declare a default on the
other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and
(3) in the case of an Unrestricted Subsidiary only, as to which
the lenders have been notified in writing that they will not
have any recourse to the Equity Interests or assets of QCII or
any Restricted Subsidiary of QCII (other than the Equity
Interests in the Unrestricted Subsidiary).
"Note Guarantee" means, in respect of any Guarantor, the unconditional
guarantee by such Guarantor of the Company's Obligations under the Notes.
"Notes" has the meaning stated in the first recital of this Indenture
and more particularly means any Notes authenticated and delivered under this
Indenture. For all purposes of this Indenture, the term "Notes" shall include
any Additional Notes and Exchange Notes to be issued and exchanged for any
Initial Notes pursuant to the Registration Rights Agreement and this Indenture.
All Notes including any such Additional Notes shall vote together as one series
of Notes under this Indenture.
"Notes Custodian" or "Custodian" means the custodian with respect to
any Global Note (as appointed by the Depository), or any successor entity
thereto covered in Section 2.03.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, costs, expenses, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Officers" means for any Person: the Chairman of the Board of
Directors, the Chief Executive Officer, the Chief Financial Officer, the
President, any Vice President, the Treasurer or the Secretary.
"Officers' Certificate" means a certificate signed by two Officers.
"Old QCF Notes" means the QCF's 5.875% Senior Notes due 2004, 6.250%
Senior Notes due 2005, 7.750% Senior Notes due 2006, 6.375 % Senior Notes due
2008, 7.0% Senior Notes due 2009, 7.9% Senior Notes due 2010, 7.25% Senior Notes
due 2011, 6.5% Senior Notes due 2018, 7.625% Senior Notes due 2021, 6.875%
Senior Notes due 2028, 7.75% Senior Notes due 2031.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee. As to matters of fact, an Opinion of
Counsel may conclusively rely on an Officers' Certificate, without any
independent investigation.
"Pari Passu Indebtedness" means any Indebtedness of the Company or any
Guarantor that ranks pari passu as to payment (whether with respect to security
or Liens on Collateral) with the Notes or the relevant Note Guarantee, as
applicable.
-13-
"Permitted Collateral Liens" means
(1) Liens on QSC Collateral to secure Senior Debt, including
Obligations under the Credit Agreement and the QwestDex Credit
Agreement;
(2) Liens on the QSC Collateral to secure the Notes and Liens on
the QCII Collateral to secure the QCII Note Guarantee;
(3) Permitted Equal Liens on the QSC Collateral;
(4) Liens on the QSC Collateral to secure Permitted Subordinated
Indebtedness and related Obligations to the extent that such
Liens are junior and subordinate in priority to the Liens
securing the Obligations in respect of the Notes and this
Indenture, Liens securing Senior Debt and Permitted Equal
Liens in the same manner and to the same extent (including
with respect to control rights in favor of senior lienholders)
as the Liens securing the Notes and this Indenture are to the
Liens securing Senior Debt; and
(5) Liens on the QCII Collateral to secure Indebtedness under the
Existing 2008 Notes and the New QCII Notes under the QCII
Pledge Agreement and to secure any future Pari Passu
Indebtedness of QCII (other than the unexchanged Old QCF Notes
and any guarantees thereof), all of which Liens will rank
equally and ratably with the Liens securing the QCII Note
Guarantee.
"Permitted Equal Liens" means Liens on the QSC Collateral to secure
(1) Indebtedness of the Company and related Obligations in respect
of the Existing 2008 Notes and the Existing 2008 Note
Indentures and any refinancing thereof that would comply with
clauses (2) and (3) of the definition of "Refinancing
Indebtedness,"
(2) Indebtedness (other than Subordinated Indebtedness) of the
Company and related Obligations initially incurred after the
Issue Date pursuant to and in compliance with the Leverage
Ratio Exception or Section 4.06(b)(xii) or at a time when a
Suspension Period is in effect and any refinancing of any of
the foregoing that would comply with clauses (2) and (3) of
the definition of "Refinancing Indebtedness," or
(3) Indebtedness of the Company as to which the Company has made
an election to have it treated as secured by Permitted Equal
Liens pursuant to the proviso at the end of the first sentence
of the definition of "Senior Debt" and any refinancing
thereof,
provided, in the case of each of clauses (1), (2) and (3) that such Liens are
junior to Liens to secure Senior Debt and equal and ratable with the Liens to
secure the Notes and this Indenture in the same manner and to the same extent
(including with respect to control rights in favor of lienholders of prior Liens
on the QSC Collateral to secure Senior Debt) as the Liens securing the Notes and
this Indenture are to Senior Debt. In addition, Liens on the QSC Collateral may
be granted to secure on an equal and ratable basis permitted refinancings of the
Notes in part.
"Permitted Investments" means:
(1) Investments by QCII or any Restricted Subsidiary of QCII in
(a) any Restricted Subsidiary or (b) any Person that is or
will become immediately after such Investment a Restricted
-14-
Subsidiary of the Company or that will merge or consolidate
into the Company or a Restricted Subsidiary of the Company;
(2) Investments in QCII by any Restricted Subsidiary of QCII;
(3) Investments by QCII in, or Investments in the Company by, a
newly formed Wholly Owned Restricted Subsidiary of QCII formed
in accordance with the penultimate paragraph of Section 5.01;
(4) loans and advances to directors, employees and officers of
QCII and the Restricted Subsidiaries of QCII for bona fide
business purposes and to purchase Equity Interests of the
Company not in excess of $10.0 million at any one time
outstanding;
(5) Hedging Obligations incurred pursuant to Section 4.06(b)(5);
(6) Cash Equivalents;
(7) receivables owing to QCII or any Restricted Subsidiary of QCII
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 QCII or any such Restricted
Subsidiary of QCII deems reasonable under the circumstances;
(8) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of such trade
creditors or customers;
(9) Investments made by QCII or any Restricted Subsidiary of QCII
as a result of consideration received in connection with an
Asset Sale made in compliance with Section 4.09 (except to the
extent allocated to clause (13) below by the terms thereof);
(10) lease, utility and other similar deposits in the ordinary
course of business;
(11) Investments made by QCII or a Restricted Subsidiary of QCII
for consideration consisting only of Qualified Equity
Interests of QCII;
(12) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to
QCII or any Restricted Subsidiary of QCII or in satisfaction
of judgments; and
(13) from and after the SEC Filing Date, other Investments in
Persons other than QCII or any of its Restricted Subsidiaries
in an aggregate amount not to exceed 5% of QCII's Consolidated
Total Assets at any one time outstanding (with each Investment
being valued as of the date made and without regard to
subsequent changes in value).
The amount of Investments outstanding at any time pursuant to clause
(13) above shall be deemed to be reduced upon the disposition or repayment of or
return on any Investment made pursuant to clause (13) above, by an amount equal
to the return of capital with respect to such Investment to QCII or any
Restricted Subsidiary of QCII (to the extent not included in the computation of
Consolidated Net Income), less the cost of the disposition of such Investment
and net of taxes. Upon a Redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary, there shall be deemed a return of the Investment by an
amount equal to the lesser of (x) the Fair Market Value of QCII's direct or
-15-
indirect Investment in such Subsidiary immediately following such Redesignation,
and (y) the aggregate amount of Investments in such Subsidiary that either
increased (and did not previously decrease) the amount of Investments
outstanding pursuant to clause (13) above or reduced the Restricted Payments
Basket.
"Permitted Junior Securities" means
(1) Equity Interests in the Company or any Guarantor; or
(2) debt securities provided for in a plan of reorganization under
any Bankruptcy Law that are subordinated to (a) all Senior
Debt and (b) any debt securities issued in exchange for Senior
Debt to substantially the same extent as, or to a greater
extent than, the Notes are subordinated to Senior Debt under
this Indenture.
"Permitted Liens" means
(1) Liens for taxes, assessments, governmental charges, levies or
claims which are not yet delinquent or which are being
contested in good faith by appropriate proceedings, if a
reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made
therefor;
(2) other Liens incidental to the conduct of the Company's
business or the ownership of its property and assets not
securing any Indebtedness, and which do not in the aggregate
materially detract from the value of the Company's property or
assets, or materially impair the use thereof in the operation
of its business;
(3) Liens, pledges and deposits made in the ordinary course of
business in connection with workers' compensation,
unemployment insurance and other types of statutory
obligations;
(4) Liens, pledges or deposits made to secure the performance of
tenders, bids, leases, public or statutory obligations,
sureties, stays, appeals, indemnities, performance or other
similar bonds and other obligations of like nature incurred in
the ordinary course of business (exclusive of obligations for
the payment of borrowed money);
(5) zoning restrictions, servitudes, easements, rights-of-way,
restrictions and other similar charges or encumbrances
incurred in the ordinary course of business which, in the
aggregate, do not materially detract from the value of the
property subject thereto or materially interfere with the
ordinary conduct of the business of the Company or its
Restricted Subsidiaries;
(6) Liens arising out of judgments or awards against or other
court proceedings concerning the Company with respect to which
the Company is prosecuting an appeal or proceeding for review
and the Company is maintaining adequate reserves in accordance
with GAAP;
(7) any interest or title of a lessor in the property subject to
any lease other than a Capitalized Lease;
(8) Liens existing on the Issue Date securing Indebtedness
permitted under Section 4.06(b)(iv), and Liens securing any
Refinancing Indebtedness of such Indebtedness; provided that
such Liens do not extend to any additional assets (other than
improvements thereon or replacements thereof);
-16-
(9) Liens securing Obligations incurred under the Credit Agreement
and Liens securing treasury management arrangements or other
cash management services as described under Section
4.06(b)(iii);
(10) Liens securing Obligations incurred under the QwestDex Credit
Agreement permitted under Section 4.06(b)(ii);
(11) Liens in favor of the Company or a Guarantor;
(12) Liens on the assets of a Restricted Subsidiary of the Company
other than assets constituting or required to be pledged as
Collateral; and
(13) Liens on Equity Interests of any Restricted Subsidiary held by
the Company securing Indebtedness of the Company incurred in
compliance with this Indenture that is incurred to finance the
acquisition of the relevant Restricted Subsidiary; provided
that no material assets of any other Restricted Subsidiary are
at the time held by the relevant Restricted Subsidiary.
"Permitted Other Future Senior Debt" means
(1) a principal amount of the Indebtedness of the Company not to
exceed the principal amount of Indebtedness of Qwest
Corporation outstanding on the Issue Date ("Outstanding QC
Debt") to the extent such Indebtedness of the Company (x) is
incurred to refinance within the next 365 days of incurrence
any Outstanding QC Debt or any permitted refinancing of
Outstanding QC Debt incurred by Qwest Corporation, in any case
complying with clauses (2) and (3) of the definition of
"Refinancing Indebtedness" (and including interest and any
related fees, premium or expenses), or (y) is in an amount
equal to any Outstanding QC Debt repaid after the Issue Date
with cash flow from operations and not from Indebtedness of
QCII or any of its Subsidiaries,
(2) any other Indebtedness (other than Indebtedness of the type
referred to in the preceding clause (1)) in an aggregate
principal amount not to exceed $1.625 billion incurred after
the Issue Date) and
(3) the QSC Guaranty of the Existing 2008 Notes to the extent and
solely to the extent that the Company grants a Lien on the QSC
Collateral to secure other Senior Debt after the Issue Date (a
"New Senior Lien") and the provisions of the Existing 2008
Note Indentures require that a new Lien (a "2008 Notes Lien")
must be granted to secure the Obligations in respect of the
Existing 2008 Notes on an equal and ratable basis with the New
Senior Lien and any refinancing thereof (if such a 2008 Notes
Lien has been granted) that would comply with clauses (2) and
(3) of the definition of "Refinancing Indebtedness";
provided that, in the case of clauses (1), (2) and (3) of this definition, such
Indebtedness shall constitute Permitted Other Future Senior Debt to the extent
subject to and to the extent secured by a Lien on all or any portion of the QSC
Collateral and to the extent designated by the Company from time to time as
Senior Debt under the QSC Security and Pledge Agreement or any other Security
Document.
"Permitted Subordinated Indebtedness" means Subordinated Indebtedness
of the Company; provided that such new Subordinated Indebtedness (1) is
subordinated to Senior Debt, the Notes and any Pari Passu Indebtedness in the
same manner and to the same extent as set forth herein and (2) matures no
earlier than the seventh anniversary of the Issue Date.
-17-
"Permitted Telecommunications Capital Asset Disposition" means the
transfer, conveyance, sale, lease or other disposition of a capital asset that
is a Telecommunications Asset (including fiber, conduit and related equipment)
(i) the proceeds of which are treated as revenues by QCII in accordance with
GAAP and (ii) that, in the case of the sale of fiber, would not result in QCII
and its Restricted Subsidiaries retaining less than 24 fibers per route mile on
any segment of QCII's and its Restricted Subsidiaries' network.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint-stock company, trust, unincorporated organization, government or any
agency or political subdivision thereof or any other entity.
"Pledge Agreements" means the QSC Security and Pledge Agreement and the
QCII Pledge Agreement.
"Preferred Stock" means with respect to any Person, any and all
preferred or preference stock or other equity interests (however designated) of
such Person whether now outstanding or issued after the Issue Date.
"Primary Treasury Dealer" means a primary U.S. Government Obligations
dealer in The City of New York.
"principal" means, with respect to the Notes, the principal of and
premium, if any, on the Notes.
"Purchase Money Indebtedness" means Indebtedness, including Capitalized
Lease Obligations, of the Company or any of its Restricted Subsidiaries incurred
after the Issue Date for the purpose of financing all or any part of the cost of
the construction, installation, acquisition or improvement by the Company or any
of its Restricted Subsidiaries of any new Telecommunications Assets constructed,
installed, acquired or improved after the 270th day prior to the Issue Date;
provided, however, that (1) the amount of such Indebtedness shall not exceed
such purchase price or cost, and (2) such Indebtedness shall be incurred within
270 days of such acquisition of such asset by the Company or such Restricted
Subsidiary or such construction, installation, acquisition or improvement and
the proceeds of such Indebtedness shall be expended for such purposes within
such 270-day period.
"QCC" means Qwest Communications Corporation, a Delaware corporation,
and its permitted successors and assigns.
"QCF" means Qwest Capital Funding, Inc., a Colorado corporation, and
its permitted successors and assigns.
"QCII" means Qwest Communications International Inc., a Delaware
corporation, and its permitted successors and assigns.
"QCII Collateral" means all of the outstanding Equity Interests of the
Company and QCF, and all rights and privileges of QCII with respect thereto,
including all dividends, distributions and other payments with respect thereto
and all proceeds therefrom.
"QCII Collateral Agent" means the collateral agent under the QCII
Pledge Agreement.
"QCII Note Guarantee" means the Note Guarantee of QCII.
"QCII Pledge Agreement" means the Pledge Agreement between QCII and the
QCII Collateral Agent dated as of December 26, 2002, as amended, modified or
supplemented from time to time, in accordance with the terms hereof and thereof.
-18-
"QCII Ratio" means (a) the ratio of (A) the aggregate consolidated
principal amount of Indebtedness of QCII outstanding as of the most recent
available quarterly or annual balance sheet date, after giving pro forma effect
to the incurrence of such Indebtedness and the incurrence of any other
Indebtedness incurred or repaid since the balance sheet date and the receipt and
application of the proceeds thereof, to (B) Consolidated Cash Flow (but
determined by reference to QCII and its Restricted Subsidiaries, rather than the
Company and its Restricted Subsidiaries) for the four fiscal quarters preceding
the incurrence of such Indebtedness for which consolidated financial statements
are available, and (b) QCII's Consolidated Capital Ratio (as defined in the
Existing 2008 Note Indentures, as in effect on the Issue Date) as of the most
recent available quarterly or annual balance sheet date, after giving pro forma
effect to the incurrence of such Indebtedness and the incurrence of any other
Indebtedness incurred or repaid since the balance sheet date and the receipt and
application of the proceeds thereof. The QCII Ratio will be satisfied and QCII
will be considered as permitted to incur $1.00 of Indebtedness if either (1) the
ratio in the preceding clause (a) is less than 5.0:1.0 or (2) the ratio in the
preceding clause (b) is less than 2.0:1.0.
"QSC Collateral" means the following items or assets, in each case,
whether now owned or hereafter acquired:
(1) all of the outstanding Equity Interests in Qwest Corporation,
and all rights and privileges of the Company with respect
thereto, including all dividends, distributions and other
payments with respect to such Equity Interests and all
proceeds therefrom;
(2) any debt owing to the Company, and all rights and privileges
of the Company with respect thereto, including all interest,
distributions and other payments with respect thereto and all
proceeds therefrom;
(3) all of the outstanding Equity Interests in QwestDex Holdings,
and all rights and privileges of the Company with respect
thereto, including all dividends, distributions and other
payments with respect to such Equity Interests and, following
the occurrence of an Insolvency Event solely, all proceeds
therefrom;
(4) any other assets of the Company constituting Equity Interests
in Restricted Subsidiaries of the Company made subject to a
Lien to secure Qualified Senior Debt in the future to the
extent it secures obligations of the Company; and
(5) all proceeds and products of any and all of the foregoing
(subject, in the case of clause (3), to the limitation
expressed therein).
"QSC Collateral Agent" means the collateral agent under the QSC
Security and Pledge Agreement.
"QSC Guaranty" means the Company's guarantee of QCII's obligations
under the Existing 2008 Notes.
"QSC Security and Pledge Agreement" means the Security and the Pledge
Agreement between the Company and the QSC Collateral Agent dated as of December
26, 2002, as amended, modified or supplemented from time to time, in accordance
with the terms hereof and thereof.
"Qualified Equity Interests" means Equity Interests of QCII other than
Disqualified Equity Interests; provided that such Equity Interests shall not be
deemed Qualified Equity Interests to the extent sold or owed to a Subsidiary of
QCII or financed, directly or indirectly, using funds (1) borrowed from QCII or
any Subsidiary of QCII until and to the extent such borrowing is repaid or (2)
contributed, extended, guaranteed or advanced by QCII or any Subsidiary of QCII
-19-
(including, without limitation, in respect of any employee stock ownership or
benefit plan).
"Qualified Senior Debt" means Senior Debt other than Senior Debt
incurred to finance the acquisition of the relevant Restricted Subsidiary whose
Equity Interests are to be pledged; provided that no material assets of any
other Restricted Subsidiary are at any time held by the relevant Restricted
Subsidiary.
"Qwest Corporation" means Qwest Corporation, a Colorado corporation,
and its successors.
"QwestDex Credit Agreement" means the Term Loan Agreement dated as of
August 30, 2002 among the Company, QwestDex Holdings, QwestDex Inc., Bank of
America, N.A., as administrative agent, and the other lenders named therein,
including any notes, guarantees, collateral and security documents, instruments
and agreements executed in connection therewith (including Hedging Obligations
related to the Indebtedness incurred thereunder), and in each case as amended or
refinanced from time to time, including any agreement extending the maturity of,
refinancing or otherwise restructuring (including increasing the amount of
borrowings or other Indebtedness outstanding or available to be borrowed
thereunder) all or any portion of the Indebtedness under such agreement, and any
successor agreement or agreements with the same or any other agents, creditor,
lender or group of creditors or lenders.
"QwestDex Holdings" means QwestDex Holdings, Inc., a Delaware
corporation, and its successors.
"QwestDex Inc." means QwestDex., Inc., a Colorado corporation, and its
successors.
"QwestDex Purchaser" means Dex Holdings LLC, a Delaware limited
liability company, and its successors.
"QwestDex Xxxxxx Purchase Agreement" means the Purchase Agreement
between QCII, the Company, QwestDex Inc. and the QwestDex Purchaser with respect
to the Xxxxxx Assets, as amended, restated, modified or supplemented from time
to time.
"Rating Agencies" means Moody's and S&P.
"Rating Category" means (i) with respect to S&P, any of the following
categories: BB, B, CCC, CC, C and D (or equivalent successor categories); (ii)
with respect to Moody's, any of the following categories: Ba, B, Caa, Ca, C and
D (or equivalent successor categories); and (iii) the equivalent of any such
category of S&P or Moody's used by another Rating Agency. In determining whether
the rating of the Notes has decreased by one or more gradations, gradations
within Rating Categories (+ and - for S&P; 1, 2 and 3 for Moody's; or the
equivalent gradations for another Rating Agency) shall be taken into account
(e.g., with respect to S&P, a decline in a rating from BB+ to BB, as well as
from BB to B+, will constitute a decrease of one gradation).
"Rating Date" means the date which is 90 days prior to the earlier of
(x) a Change of Control and (y) public notice of the occurrence of a Change of
Control or of the intention by QCII to effect a Change of Control.
"Rating Decline" means the decrease (as compared with the Rating Date)
by one or more gradations (including gradations within Rating Categories as well
as between Rating Categories) of the rating of the Notes by both Rating Agencies
on or within six months after the date of public notice of the occurrence of a
Change of Control or of the intention by QCII to effect a Change of Control
(which period shall be extended for so long as the rating of the Notes is under
publicly announced consideration for possible downgrade by any of the Rating
Agencies).
-20-
"redeem" means to redeem, repurchase, purchase, defease, retire,
discharge or otherwise acquire or retire for value; and "redemption" shall have
a correlative meaning; provided that this definition shall not apply for
purposes of Section 3.07.
"Redesignation" has the meaning given to such term in Section 4.13.
"Reference Treasury Dealer" means each of Banc of America Securities
LLC, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and UBS Warburg LLC and
their respective successors or any of their affiliates; provided, however, that
if any of the foregoing shall cease to be a Primary Treasury Dealer, the Company
shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotation" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Company, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Company by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.
"refinance" means to refinance, repay, prepay, replace, renew or
refund.
"Refinancing Indebtedness" means, without duplication for any other
incurrence of Indebtedness (of any type), Indebtedness (of any type) of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the
proceeds of which are in an amount which is to be used within the next 365 days
to redeem or refinance in whole or in part, any Indebtedness (of any type) of
the Company or any of its Restricted Subsidiaries (the "Refinanced
Indebtedness") in a principal amount not in excess of the principal amount of
the Refinanced Indebtedness so repaid or amended (or, if such Refinancing
Indebtedness refinances Indebtedness under a revolving credit facility or other
agreement providing a commitment for subsequent borrowings, with a maximum
commitment not to exceed the maximum commitment under such revolving credit
facility or other agreement); provided that:
(1) if the Refinanced Indebtedness was Subordinated Indebtedness,
then such Refinancing Indebtedness, by its terms, is
Subordinated Indebtedness and such Refinancing Indebtedness is
the obligation of the same Person as that of the Refinanced
Indebtedness;
(2) the Refinancing Indebtedness is scheduled to mature either (a)
no earlier than the Refinanced Indebtedness being repaid or
amended or (b) after the maturity date of the Notes; and
(3) the portion, if any, of the Refinancing Indebtedness that is
scheduled to mature on or prior to the maturity date of the
Notes has a Weighted Average Life to Maturity at the time such
Refinancing Indebtedness is incurred that is equal to or
greater than the Weighted Average Life to Maturity of the
portion of the Refinanced Indebtedness being repaid that is
scheduled to mature on or prior to the maturity date of the
Notes.
"Registration Rights Agreement" means (i) with respect to the Initial
Notes issued on the date hereof, the Registration Rights Agreement dated
December 26, 2002, among the Company, the Guarantors and the other parties named
on the signature pages thereof, as such agreement may be amended, modified, or
supplemented from time to time in accordance with the terms thereof and (ii)
with respect to any Additional Notes, one or more Registration Rights Agreements
among the Company, the Guarantors and the other parties thereto, as such
agreements may be amended, modified or supplemented from time to time, relating
to the rights given by the Company to the purchasers of Additional Notes to
register such Additional Notes under the Securities Act.
"Representative" means any agent or representative in respect of any
Designated Senior Debt; provided that if, and for so long as, any Designated
Senior Debt lacks such representative, then the Representative for such
-21-
Designated Senior Debt shall at all times constitute the holders of a majority
in outstanding principal amount of such Designated Senior Debt.
"Restricted Notes Legend" means the legend set forth in the second
paragraph of Exhibit A hereto.
"Restricted Payment" means any of the following:
(1) the declaration or payment of any dividend or any other
distribution on Equity Interests of QCII or any Restricted
Subsidiary of QCII or any payment made to the direct or
indirect holders (in their capacities as such) of Equity
Interests of QCII or any Restricted Subsidiary of QCII,
excluding (a) dividends or distributions payable solely in
Qualified Equity Interests and (b) in the case of Restricted
Subsidiaries of QCII, dividends or distributions payable to
QCII or to a Restricted Subsidiary and pro rata dividends or
distributions payable to minority stockholders of any
Restricted Subsidiary;
(2) the purchase, retirement, redemption or other acquisition for
value of any Equity Interests of QCII or any Restricted
Subsidiary of QCII, but excluding any such Equity Interests
held by QCII or any Restricted Subsidiary;
(3) any Investment other than a Permitted Investment; or
(4) any purchase, retirement, redemption or other acquisition for
value prior to the date which is 180 days prior to any
scheduled maturity, scheduled repayment of principal or
sinking fund payment, as the case may be, in respect of
Subordinated Indebtedness.
"Restricted Payments Basket" has the meaning given to such term in the
first paragraph of the covenant described under Section 4.07.
"Restricted Subsidiary" means any Subsidiary of QCII or the Company, as
the case may be, other than an Unrestricted Subsidiary.
"Xxxxxx Assets" means any assets of any QwestDex which are to be sold
pursuant to the QwestDex Xxxxxx Purchase Agreement, which assets constitute
assets located in Arizona, Idaho, Montana, Oregon, Utah, Washington and Wyoming
or are used by QwestDex primarily in the conduct of its business in any of the
foregoing states.
"Sale and Leaseback Transaction" means any arrangement with any Person
providing for the leasing to the Company or any Restricted Subsidiary of any
real or tangible personal property (except for leases between or among the
Company and any of the Restricted Subsidiaries), which property has been or is
to be sold or transferred by the Company or such Restricted Subsidiary to such
Person in contemplation of such leasing.
"S&P" means Standard & Poor's Ratings Services, a division of the
XxXxxx-Xxxx Companies, Inc., and its successors.
"SEC" means the U.S. Securities and Exchange Commission.
"SEC Filing Date" means the date on which QCII shall have recommenced
the filings of its annual and quarterly reports in the form required to be filed
by a registrant under the Exchange Act.
"Secretary's Certificate" means a certificate signed by the Secretary
of the Company.
-22-
"Securities Act" means the U.S. Securities Act of 1933, as amended.
"Security Documents" means, collectively,
(1) the QSC Security and Pledge Agreement relating to QSC
Collateral;
(2) the QCII Pledge Agreement relating to the QCII Collateral; and
all security agreements, mortgages, deeds of trust, pledges, collateral
assignments and other agreements or instruments evidencing or creating any
security in favor of the Trustee or the Collateral Agents in any or all of the
Collateral, in each case as amended from time to time in accordance with their
terms.
"Senior Debt" means the principal of, premium, if any, interest
(including any interest accruing subsequent to (or that would accrue but for)
the filing of a petition of bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such interest is an allowed
claim under applicable law) on, and all other amounts owing in respect of:
(1) all monetary obligations of the Company of every nature under,
or with respect to, the Credit Agreement to the extent
permitted under, Section 4.06(b)(i), including, without
limitation, obligations to pay principal and interest,
reimbursement obligations under letters of credit, fees,
expenses and indemnities (and guarantees thereof); provided,
that the aggregate principal amount of Indebtedness under this
clause shall not exceed $2.0 billion (it being understood that
monetary obligations described in this clause (1) not
constituting Indebtedness shall not be included in the
calculation of the $2.0 billion amount but shall nonetheless
constitute "Senior Debt");
(2) all monetary obligations of the Company of every nature under,
or with respect to, the QwestDex Credit Agreement (and not the
Non-Recourse Debt) to the extent permitted under Section
4.06(b)(ii) including, without limitation, obligations to pay
principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities (and
guarantees thereof); provided, that the aggregate principal
amount of Indebtedness under this clause shall not exceed
$750.0 million (it being understood that monetary obligations
described in this clause (2) not constituting Indebtedness
shall not be included in the calculation of the $750.0 million
amount but shall nonetheless constitute "Senior Debt");
(3) additional Indebtedness of the Company otherwise permitted to
be incurred under Section 4.06 to the extent that such
Indebtedness, when aggregated with Indebtedness contemplated
under clauses (1) and (2) this definition of "Senior Debt,"
does not exceed $2.75 billion to the extent and solely to the
extent secured by Liens on QSC Collateral and designated as
"Senior Debt" in the governing instruments;
(4) Permitted Other Future Senior Debt;
(5) all Hedging Obligations in respect of the Credit Agreement,
the QwestDex Credit Agreement and any other Senior Debt;
(6) all monetary obligations of the Company in respect of treasury
management arrangements or other cash management services
performed by lenders (or their affiliates) under the Credit
Agreement or any other credit facility in an aggregate amount
at any time outstanding not to exceed $350.0 million; and
-23-
(7) all monetary obligations of the Company, if any, in respect of
Indebtedness incurred pursuant to and in compliance with
Section 4.06(b)(ix) that is designated as "Senior Debt" in the
governing instruments and any refinancing thereof that would
comply with clauses (2) and (3) of the definition of
"Refinancing Indebtedness" to the extent and solely to the
extent secured by Liens on QSC Collateral;
in each case whether outstanding on the Issue Date or thereafter incurred;
provided, that, notwithstanding anything to the contrary herein, the Company may
elect to secure amounts which could be treated as Senior Debt with Permitted
Equal Liens and, correspondingly, reduce the amount of permitted Senior Debt for
so long as such Permitted Equal Liens are outstanding. In the event that an item
of Senior Debt meets the criteria of more than one of the categories of Senior
Debt described in clauses (1) through (7) above, the Company shall, in its sole
discretion, classify such item of Senior Debt and may divide and classify such
Senior Debt in more than one of the types of Senior Debt described.
Notwithstanding the foregoing, "Senior Debt" shall not include:
(1) any Indebtedness of the Company to QCII or any of its
Subsidiaries;
(2) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of QCII or any of its Subsidiaries
(including, without limitation, amounts owed for
compensation);
(3) obligations to trade creditors;
(4) Indebtedness represented by Disqualified Equity Interests or
Preferred Stock of any Person;
(5) any liability for taxes owed or owing by the Company;
(6) that portion of any Indebtedness incurred in violation of
Section 4.06 (but, as to any such obligation, no such
violation shall be deemed to exist for purposes of this clause
(6) if the holder(s) of such obligation or their
representative shall have received an Officers' Certificate of
the Company to the effect that the incurrence of such
Indebtedness does not (or, in the case of revolving credit
indebtedness, that the incurrence of the entire committed
amount thereof at the date on which the initial borrowing
thereunder is made would not) violate such provisions
hereunder);
(7) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx
Code, is without recourse to the Company;
(8) any Indebtedness represented by the Company's guarantee of the
Existing 2008 Notes, except to the extent the guarantee
becomes Permitted Other Future Senior Debt;
(9) any Indebtedness that is secured by a Lien on QSC Collateral
that does not rank prior to the Lien on the QSC Collateral
securing the Notes; and
(10) any Indebtedness (other than Indebtedness secured by the QSC
Collateral and possessing a priority senior to the Notes) of
the Company which is, by its express terms, subordinated in
right of payment to any other Indebtedness of the Company (but
excluding in any event Indebtedness described in clauses (1),
(2), (5) and (6) of the definition of "Senior Debt"; it being
understood that the mere subordination of liens on Collateral
to secure Indebtedness which would otherwise constitute Senior
Debt is not disqualifying under this clause (10)).
-24-
"Significant Subsidiary" means (1) any Restricted Subsidiary that would
be a "significant subsidiary" as defined in Regulation S-X promulgated pursuant
to the Securities Act as such Regulation is in effect on the Issue Date and (2)
any Restricted Subsidiary that, when aggregated with all other Restricted
Subsidiaries that are not otherwise Significant Subsidiaries and as to which any
event described in clause (g) or (h) under Section 6.01 has occurred and is
continuing, would constitute a Significant Subsidiary under clause (1) of this
definition.
"Start Date" means March 31, 1997.
"Subordinated Indebtedness" means (1) Indebtedness of the Company, the
Guarantors or any Restricted Subsidiary that is subordinated in right of payment
to the Notes or the Note Guarantees, as applicable, and (2) any other
Indebtedness of QCII and its Subsidiaries (other than the Company and its
Restricted Subsidiaries) that is an Obligation solely of a Person or Persons
other than the Company and its Restricted Subsidiaries.
"Subsidiary" means, with respect to any Person, (i) any corporation,
limited liability company, association or other business entity of which more
than 50% of the total voting power of the Equity Interests entitled (without
regard to the occurrence of any contingency) to vote in the election of the
Board of Directors thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and (ii) any partnership (a) the sole general
partner or the managing general partner of which is such Person or a Subsidiary
of such Person or (b) the only general partners of which are such Person or of
one or more Subsidiaries of such Person (or any combination thereof). Unless
otherwise specified, "Subsidiary" refers to a Subsidiary of QCII or the Company,
as the context requires.
"tax" shall mean any tax, duty, levy, impost, assessment or other
governmental charge (including penalties, interest and any other liabilities
related thereto).
"Telecommunications Assets" means all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used or intended for
use in connection with a Telecommunications Business.
"Telecommunications Business" means the business of (i) transmitting,
or providing services relating to the transmission of, voice, data or video
through owned or leased transmission facilities, (ii) constructing, creating,
developing or marketing communications related network equipment, software and
other devices for use in a telecommunications business or (iii) any other
activity or opportunity that is in any manner related to those identified in (i)
or (ii) above as determined in good faith by the Board of Directors of QCII
(which determination shall be conclusive).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of this Indenture, unless as stated in
Section 10.03 hereof.
"Transfer" means to sell, assign, transfer, lease (other than pursuant
to an operating lease entered into in the ordinary course of business), convey
or otherwise dispose of, including by sale and leaseback transaction,
consolidation, merger, liquidation, dissolution or otherwise, in one transaction
or a series of related transactions.
"Transfer Restricted Notes" means Notes that bear or are required to
bear the Restricted Notes Legend.
"Treasury Rate" means with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
-25-
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"2007 Notes" means the 13% Senior Subordinated Secured Notes due 2007,
Series A, and the 13% Senior Subordinated Secured Notes due 2007, Series B.
"2010 Notes" means the 13 1/2% Senior Subordinated Secured Notes due
2010, Series A, and the 13 1/2% % Senior Subordinated Secured Notes due 2010,
Series B.
"2014 Notes" means the 14% Senior Subordinated Secured Notes due 2014,
Series A, and the 14% Senior Subordinated Secured Notes due 2014, Series B.
"Uniform Commercial Code" means the New York Uniform Commercial Code as
in effect from time to time.
"Unrestricted Subsidiary" means (1) any Subsidiary that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors of QCII in the manner provided in Section 4.13 and (2) any Subsidiary
of a Restricted Subsidiary.
"U.S. Government Obligation" means direct non-callable obligations of,
or obligations guaranteed by, the United States of America for the payment of
which guarantee or obligations the full faith and credit of the United States is
pledged.
"Voting Stock" with respect to any Person, means securities of any
class of Equity Interests of such Person entitling the holders thereof (whether
at all times or only so long as no senior class of stock or other relevant
equity interest has voting power by reason of any contingency) to vote in the
election of members of the Board of Directors of such Person.
"Weighted Average Life to Maturity", when applied to any Indebtedness
at any date, means the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary of
which 100% of the Equity Interests (except for directors' qualifying shares or
certain minority interests owned by other Persons solely due to local law
requirements that there be more than one stockholder, but which interest is not
in excess of what is required for such purpose) are owned directly by QCII or
through one or more Wholly Owned Restricted Subsidiaries.
-26-
SECTION 1.02. Other Definitions.
Term Defined in Section
-------------------------------------------- --------------------------
"Accredited Investors"...................... 2.01(b)
"Affiliate Transaction"..................... 4.10
"Agent Members"............................. 2.13(a)
"Asset Sale Offer".......................... 4.09
"Change of Control Offer"................... 4.11
"Change of Control Payment"................. 4.11
"Covenant Defeasance"....................... 9.01(c)
"CUSIP"..................................... 2.12
"Debt Instrument"........................... 6.01(a)(5)
"Defeasance Trust Payment".................. 8.02
"Designation"............................... 4.13
"Designation Amount......................... 4.13
"DTC"....................................... 2.03
"Event of Default".......................... 6.01
"Excess Proceeds"........................... 4.09
"Guaranteed Obligations".................... 12.01
"IAI Global Note"........................... 2.01(b)
"IAIs"...................................... 2.01(b)
"incur"..................................... 4.06(a)
"Indemnified Party"......................... 7.07
"Legal Defeasance".......................... 9.01(b)
"Legal Holiday"............................. 13.08
"Leverage Ratio Exception".................. 4.06(a)
"Offer Amount".............................. 3.08
"Offer Period".............................. 3.08
"outstanding"............................... 8.01(b)
"Outstanding UPOs".......................... 4.06(b)(ix)
"Paying Agent".............................. 2.03
"Payment Blockage Notice"................... 8.02
"Permanent Regulation S Global Note"........ 2.01
"Permitted Indebtedness".................... 4.06(b)
"Physical Notes"............................ 2.01(c)
"protected purchaser"....................... 2.07
"Purchase Date"............................. 3.08
"QIBs"...................................... 2.01(b)
"QIB Global Note"........................... 2.01(b)
"qualified institutional buyers"............ 2.01(b)
"Redesignation.............................. 4.13
"Registrar"................................. 2.03
"Regulation S".............................. 2.01(b)
"Regulation S Global Note".................. 2.01(b)
"Released Interests"........................ 11.03
"Restricted Payments"....................... 4.07(a)
"Restricted Payments Basket"................ 4.047a)(3)
"Revocation"................................ 4.13
"Rule 144A"................................. 2.01(b)
-27-
Term Defined in Section
-------------------------------------------- --------------------------
"SEC Reports"............................... 4.03
"Successor"................................. 5.01
"Suspended Covenants"....................... 4.16
"Suspension Period"......................... 4.16
"Temporary Regulation S Global Note"........ 2.01(b)
"Trustee"................................... 9.03
"U.S. Global Notes"......................... 2.01(b)
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 Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the Notes means the Company and any other obligor on the
Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule 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;
(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 non-interest bearing or
other discount security at any date shall be the principal amount
thereof that would be shown on a balance sheet of the Company dated
such date prepared in accordance with GAAP and accretion of principal
on such security shall not be deemed to be the incurrence of
Indebtedness;
-28-
(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; and
(9) references to sections of or rules under the
Securities Act will be deemed to include substitute, replacement or
successor sections or rules adopted by the Commission from time to
time.
ARTICLE II
THE NOTES
---------
SECTION 2.01. Form and Dating. (a) The Initial Notes issued on the
date hereof and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture, and as otherwise provided in this
Article II. The Exchange Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit B, which is hereby incorporated in
and expressly made a part of this Indenture, and as otherwise provided in this
Article II. Any Additional Notes shall be issued in the form of either (i)
Exhibit A, if such Note is a Transfer Restricted Note, or (ii) Exhibit B, if
such Note is not a Transfer Restricted Note. The Notes (including the Note
Guarantee) 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. Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in Exhibit A and Exhibit B are part of the terms of
this Indenture. The Notes shall be issuable only in registered form without
coupons and only in denominations of $1,000 and integral multiples thereof.
(b) The Initial Notes are being issued by the Company only (i) to
"qualified institutional buyers" (as defined in Rule 144A under the Securities
Act ("Rule 144A")) ("QIBs"), (ii) to institutional "Accredited Investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) ("IAIs")
and (iii) in reliance on Regulation S under the Securities Act ("Regulation S").
After such initial offers, Initial Notes that are Transfer Restricted Notes may
be transferred to, among others, QIBS, in reliance on Rule 144A or Regulation D,
and to IAIs, in accordance with certain transfer restrictions. Initial Notes
that are offered in reliance on Rule 144A shall be issued initially in the form
of one or more permanent Global Notes substantially in the form set forth in
Exhibit A (collectively, the "QIB Global Note") deposited with the Trustee, as
Notes Custodian, duly executed by the Company and authenticated by the Trustee
as hereinafter provided. Initial Notes that are offered in reliance on an
exemption from registration under the Securities Act (other than Rule 144A or
Regulation S) shall be issued initially in the form of one or more permanent
Global Notes substantially in the form set forth in Exhibit A (collectively, the
"IAI Global Note" and, together with the QIB Global Note, the "U.S. Global
Notes"). Initial Notes that are offered in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more temporary
Global Notes substantially in the form set forth in Exhibit A (collectively, the
"Temporary Regulation S Global Note") deposited with the Trustee, as Notes
Custodian, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. At any time on or after February 5, 2003, upon receipt by
the Trustee and the Company of a certificate substantially in the form of
Exhibit G hereto, one or more permanent Global Notes substantially in the form
set forth in Exhibit B (collectively, the "Permanent Regulation S Global Note";
and together with the Temporary Regulation S Global Note, the "Regulation S
Global Note") duly executed by the Company and authenticated by the Trustee as
hereinafter provided shall be deposited with the Trustee, as Notes Custodian.
The QIB Global Note, the IAI Global Note and the Regulation S Global Note shall
each be issued with separate CUSIP numbers. The aggregate principal amount of
each Global Note may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as Notes Custodian. Transfers of Initial
Notes between QIBs and IAIs and to or by purchasers pursuant to Regulation S
-29-
shall be represented by appropriate increases and decreases to the respective
amounts of the appropriate Global Notes, as more fully provided in Section 2.14.
(c) Initial Notes offered other than as described in the preceding
two paragraphs, if any, shall be issued in the form of permanent certificated
Notes in registered form in substantially the form set forth in Exhibit A
attached hereto without the Global Notes Legend (the "Physical Notes").
(d) Any transfer of a Regulation S Global Note shall be pursuant
to the procedures of Euroclear and Clearstream, as applicable.
SECTION 2.02. Execution and Authentication. One or more Officers
of the Company shall sign the Notes by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate and make available for delivery upon a
written order of the Company signed by two of its Officers (1) Initial 2007
Notes for original issue on the date hereof in an aggregate principal amount of
$546,711,000; (2) Initial 2010 Notes for original issue on the date hereof in an
aggregate principal amount of $2,110,457,000; (3) Initial 2014 Notes for
original issue on the date hereof in an aggregate principal amount of
$640,879,000; (4) Additional Notes in an aggregate principal amount of up to
$701,953,000; and (5) Exchange Notes for issue only in a registered Exchange
Offer pursuant to the Registration Rights Agreement and for a like principal
amount of Initial Notes of the same maturity exchanged pursuant thereto. Such
order shall specify the amount of Notes of each maturity to be authenticated,
the date on which the original issue of Notes of each maturity is to be
authenticated and whether the Notes of each maturity are to be Initial Notes,
Additional Notes or Exchange Notes. The aggregate principal amount of Notes
outstanding at any time may not exceed $4,000,000,000, except as provided in
Section 2.07.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Notes. Any such appointment shall be
evidenced by an instrument signed by a Trust Officer of the Trustee, a copy of
which shall be furnished to the Company. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. After any such appointment, 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 in the Borough of Manhattan, The City of New York,
where Notes may be presented for registration of transfer or for exchange (the
"Registrar") and an office or agency where Notes may be presented for payment
(the "Paying Agent"). The Registrar shall keep a register of the Notes and of
their transfer and exchange. The Company may have one or more co-registrars and
one or more additional paying agents. The term "Paying Agent" includes any
additional paying agent.
The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 13.02.
-30-
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The
Company will give prompt notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company initially designates the Corporate Trust Office of the
Trustee specified in Section 13.02 as such office of the Company in accordance
with this Section 2.03.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar 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 may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Notes.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depository with respect to the Global Notes, and the Trustee shall
initially be the Notes Custodian with respect to the Global Notes.
The Company may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Trustee, provided 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
not less than three Business Days' prior written notice to the Company;
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 10:00
a.m. on each due date of the principal and interest on any Note, the Company
shall deposit with the Paying Agent (or if the Company 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
Noteholders or the Trustee all money held by the Paying Agent for the payment of
principal of or interest on the Notes and shall notify the Trustee in writing of
any default by the Company in making any such payment within one Business Day
thereof. If 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, the Paying Agent shall have no further liability for the money
delivered to the Trustee.
Any money deposited with any Paying Agent or then held by the Company
in trust for the payment of principal or interest on any Note and remaining
unclaimed for two years after such principal and interest has become due and
payable shall be paid to the Company at its request, or, if then held by the
Company, shall be discharged from such trust; and the Noteholders shall
thereafter, as general unsecured creditors, look only to the Company for payment
thereof, and all liability of the Paying Agent with respect to such money, and
all liability of the Company as trustee thereof, shall thereupon cease.
SECTION 2.05. Noteholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Noteholders and shall otherwise comply with TIA
-31-
ss. 312(a). 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 Noteholders and the
Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. Transfer and Exchange. The Notes shall be issued in
registered form and shall be transferable only upon the surrender of a Note for
registration of transfer. When a Note is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401 of the Uniform
Commercial Code or any successor provisions thereto are met. When a Note is
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Notes 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 Notes at the Registrar's or co-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. The Company shall not be required to make,
and the Registrar need not register, transfers or exchanges of Notes selected
for redemption (except, in the case of Notes to be redeemed in part, the portion
thereof not to be redeemed) or transfers or exchanges of any Notes for a period
of 15 days before a selection of Notes to be redeemed.
Prior to the due presentation for registration of transfer of any Note,
the Company, the Guarantors, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the Person in whose name a Note is registered as
the absolute owner of such Note for the purpose of receiving payment of,
principal of and accrued and unpaid interest and Additional Interest, if any, on
such Note and for all other purposes whatsoever, whether or not such Note is
overdue, and none of the Company, the Trustee, the Paying Agent, the Registrar
or any co-registrar shall be affected by notice to the contrary.
Any Holder of a Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Note may be effected
only through a book-entry system maintained by (i) the Holder of such Global
Note (or its agent) or (ii) any holder of such beneficial interest, and that
ownership of a beneficial interest in such Global Note shall be required to be
reflected in a book entry.
All Notes issued upon any transfer or exchange pursuant to this Section
2.06 will evidence the same debt and will be entitled to the same benefits under
this Indenture as the Notes surrendered upon such transfer or exchange.
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 Note (including any transfers between or among Persons who have accounts
with the Depository or beneficial owners of interests in any Global Note) 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.
SECTION 2.07. Replacement Notes. If a mutilated Note is surrendered
to the Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note if the requirements of Section 8-405 of the
Uniform Commercial Code (or any successor provision thereto) are met, such that
the Holder (i) satisfies the Company or the Trustee within a reasonable time
after he has notice of 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 Note being
-32-
acquired by a protected purchaser as defined in Section 8-303 of the Uniform
Commercial Code (or any successor provision thereto) (a "protected purchaser")
and (iii) satisfies any other reasonable requirements of the Trustee and the
Company including evidence of the destruction, loss or theft of the Note. Such
Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee
to protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss that any of them may suffer if a Note is replaced.
The Company and the Trustee may charge the Holder for their expenses in
replacing a Note including the payment of a sum sufficient to cover any tax or
other governmental charge that may be required. In the event any such mutilated,
lost, destroyed or wrongfully taken Note has become or is about to become due
and payable, the Company in its discretion may pay such Note instead of issuing
a new Note in replacement thereof.
Every replacement Note is an additional obligation of the Company and
will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
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 Notes.
SECTION 2.08. Outstanding Notes. Notes outstanding at any time are
all Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section 2.08 as not
outstanding. A Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note 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 Note 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 payable on that date with respect to the Notes (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 Noteholders on that date
pursuant to the terms of this Indenture, then on and after that date such Notes
(or portions thereof) cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.09. Temporary Notes. Until Definitive Notes and Global
Notes are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of Definitive Notes but may have variations that the Company considers
appropriate for temporary Notes. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate Definitive Notes and deliver them in
exchange for temporary Notes upon surrender of such temporary Notes at the
office or agency of the Company, without charge to the Holder.
SECTION 2.10. Cancellation. The Company at any time may deliver
Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment or
cancellation and deliver canceled Notes to the Company in accordance with the
Trustee's customary procedures. The Company may not issue new Notes to replace
Notes it has redeemed, paid or delivered to the Trustee for cancellation. The
Trustee shall not authenticate Notes in place of canceled Notes 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 Notes, 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
Noteholders 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
-33-
satisfaction of the Trustee and shall promptly mail or cause to be mailed to
each Noteholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
The Company may make payment of any defaulted interest in any other
lawful manner not inconsistent with the requirements (if applicable) of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this paragraph, such manner of
payment shall be deemed practicable by the Trustee.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Notes may
use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in "CUSIP" numbers.
SECTION 2.13. Book-Entry Provisions for Global Notes. (a) Each
Global Note initially shall (i) be registered in the name of the Depository for
such Global Note or the nominee of such Depository and (ii) be delivered to the
Trustee as the initial Notes Custodian for such Depository. Beneficial interests
in Global Notes may be held indirectly through members of or participants in
("Agent Members") the Depository (including Clearstream Banking and Euroclear in
the case of the Regulation S Global Note).
Agent Members shall have no rights under this Indenture with respect to
any Global Note held on their behalf by the Depository, or the Trustee as Notes
Custodian, or under such Global Note, and the Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of such Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the 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 Depository or shall impair, as
between the Depository and its Agent Members, the operation of customary
practices governing the exercise of the rights of a Holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers of
such Global Note in whole, but not in part, to the Depository, its successors or
their respective nominees. Interests of beneficial owners in a Global Note may
be transferred in accordance with the rules and procedures of the Depository
(and Agent Member, if applicable) and the provisions of Section 2.14. The
Trustee shall register the transfer of Physical Notes to all beneficial owners
in exchange for their beneficial interests in a Global Note if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for such Global Note or the Depository ceases to be a clearing agency
registered under the Exchange Act, at a time when the Depository is required to
be so registered in order to act as Depository, and in each case a successor
Depository is not appointed by the Company within 90 days of such notice, (ii)
the Company executes and delivers to the Trustee and Registrar an Officers'
Certificate stating that such Global Note shall be so exchangeable or (iii) an
Event of Default has occurred and is continuing and the Registrar has received a
request from the Depository to permit such transfers. Except in procedures under
Section 2.14, Restricted Global Notes shall only be exchanged for Physical Notes
bearing the Restricted Notes Legend, and, in connection with any exchange of
Global Notes for Physical Notes, the Trustee may request certificates or other
evidence from the Holder thereof prior to exchange necessary to evidence
compliance with this Article II.
Notwithstanding the previous sentence, in no event shall Physical Notes
be delivered to investors who purchased Notes in reliance on Regulation S prior
to (i) the day that is forty days after the Issue Date with respect to such
Notes and (ii) the receipt by the Registrar of any certificates required
pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act.
-34-
(c) The registered holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action that a Holder is
entitled to take under this Indenture or the Notes.
SECTION 2.14. Special Transfer Provisions. Unless and until a
Transfer Restricted Note is transferred or exchanged under an effective
registration statement under the Securities Act, the following provisions shall
apply:
(a) Transfers to Non-QIB IAIs. The following provisions
shall apply with respect to the registration of any proposed transfer
of a Transfer Restricted Note to any IAI that is not a QIB (other than
pursuant to Regulation S):
(i) The Registrar shall register the transfer of
any Transfer Restricted Note by a Holder if (x) the requested
transfer is (1) at least two years after the later of (A) the
Issue Date with respect to such Transfer Restricted Note and
(B) the date such Transfer Restricted Note was acquired from
an affiliate of the Company and (2) at least three months
after the last date such Holder was an affiliate of the
Company or (y) the proposed transferor has delivered to the
Registrar a letter substantially in the form set forth in
Exhibit D hereto.
(ii) If the proposed transferee is an Agent
Member and the Transfer Restricted Note to be transferred
consists of a beneficial interest in the QIB Global Note or
the Regulation S Global Note, upon receipt by the Registrar of
(x) the letter, if any, required by paragraph (i) above and
(y) instructions given in accordance with the Depository's and
the Registrar's procedures therefor, the Registrar shall
reflect on its books and records the date and an increase in
the principal amount of the IAI Global Note in an amount equal
to the principal amount of the beneficial interest in the QIB
Global Note or the Regulation S Global Note to be so
transferred and the Registrar shall reflect on its books and
records the date and an appropriate decrease in the principal
amount of such QIB Global Note or Regulation S Global Note.
(b) Transfers to QIBs. The following provisions shall
apply with respect to the registration of any proposed transfer of a
Transfer Restricted Note to a QIB (other than pursuant to Regulation
S):
(i) The Registrar shall register the transfer of
a Transfer Restricted Note by a Holder if (x) the requested
transfer is (1) at least two years after the later of (A) the
Issue Date with respect to such Transfer Restricted Note and
(B) the date such Transfer Restricted Note was acquired from
an affiliate of the Company and (2) at least three months
after the last date such Holder was an affiliate of the
Company or (y) such transfer is being made by a proposed
transferor who has provided the Registrar with a letter
substantially in the form set forth in Exhibit E hereto.
(ii) If the proposed transferee is an Agent
Member and the Transfer Restricted Note to be transferred
consists of an interest in the IAI Global Note or the
Regulation S Global Note, upon receipt by the Registrar of (x)
the letter, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depository's and the
Registrar's procedures therefor, the Registrar shall reflect
on its books and records the date and an increase in the
principal amount of the QIB Global Note in an amount equal to
the principal amount of the beneficial interest in the IAI
Global Note or the Regulation S Global Note to be so
transferred, and the Registrar shall reflect on its books and
records the date and an appropriate decrease in the principal
amount of such IAI Global Note or Regulation S Global Note.
-35-
(c) Transfers Pursuant to Regulation S. The Registrar
shall register the transfer of any Permanent Regulation S Global Note
without requiring any additional certification. The following
provisions shall apply with respect to registration of any proposed
transfer of a Transfer Restricted Note pursuant to Regulation S:
(i) The Registrar shall register any proposed
transfer of a Transfer Restricted Note by a Holder if (x) the
requested transfer is at least two years after the Issue Date
with respect to such Transfer Restricted Note and at least
three months after the last date such Holder was an affiliate
of the Company or (y) upon receipt of a letter substantially
in the form set forth in Exhibit F hereto from the proposed
transferor.
(ii) If the proposed transferee is an Agent
Member holding a beneficial interest in a U.S. Global Note,
upon receipt by the Registrar of (x) the letter, if any,
required by paragraph (i) above and (y) instructions in
accordance with the Depository's and the Registrar's
procedures therefor, the Registrar shall reflect on its books
and records the date and an increase in the principal amount
of the Regulation S Global Note in an amount equal to the
principal amount of the beneficial interest in such U.S.
Global Note to be transferred, and the Registrar shall reflect
on its books and records the date and an appropriate decrease
in the principal amount of the applicable U.S. Global Note.
(d) Restricted Notes Legend. Upon the transfer, exchange
or replacement of Notes not bearing the Restricted Notes Legend, the
Registrar shall deliver Notes that do not bear the Restricted Notes
Legend. Upon the transfer, exchange or replacement of Notes bearing the
Restricted Notes Legend, the Registrar shall deliver only Notes that
bear the Restricted Notes Legend unless either (i) the circumstances
contemplated by paragraph (a)(i)(x), (b)(i)(x) or (c)(i)(x) of this
Section exist or (ii) there is delivered to the Registrar an Opinion of
Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(e) General. By its acceptance of any Note bearing the
Restricted Notes Legend, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and
in the Restricted Notes Legend and agrees that it shall transfer such
Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to this Section 2.14. The Company shall
have the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Registrar.
SECTION 2.15. Issuance of Additional Notes.
The Company shall be entitled to issue Additional Notes under this
Indenture that shall have identical terms as the Initial Notes, other than with
respect to the date of issuance, issue price, interest rate, amount of interest
payable on the first interest payment date applicable thereto, maturity date and
dates and premiums for optional redemption (and, if such Additional Notes shall
be issued in the form of Transfer Restricted Notes, other than with respect to
transfer restrictions; a Registration Rights Agreement and Additional Interest
with respect thereto); provided that such issuance is not prohibited by Section
4.06. The Initial Notes and any Additional Notes and all Exchange Notes shall be
treated as a single class for all purposes under this Indenture.
-36-
With respect to any Additional Notes, the Company shall set forth in a
resolution of its Board of Directors and in an Officers' Certificate, a copy of
each of which shall be delivered to the Trustee, the following information:
(1) the aggregate principal amount of such Additional
Notes to be authenticated and delivered pursuant to this Indenture;
(2) the issue price, the issue date, the CUSIP number of
such Additional Notes, the first interest payment date and the amount
of interest payable on such first interest payment date applicable
thereto and the date from which interest shall accrue; and
(3) whether such Additional Notes shall be Transfer
Restricted Notes.
ARTICLE III
REDEMPTION
----------
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
any of the Notes pursuant to paragraph 5 of the Notes, it shall notify the
Trustee in writing of the redemption date, the principal amount of Notes to be
redeemed and the paragraph of the Notes pursuant to which the redemption will
occur.
The Company shall give each notice to the Trustee provided for in this
Section 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 to the effect that such redemption will comply with the conditions
herein. If fewer than all of the Notes of a particular maturity 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. If less than all of the Notes of a
particular maturity are to be redeemed at any time, selection of such Notes for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which such Notes are
listed, or, if such Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate; provided that no
Notes of $1,000 or less shall be redeemed in part. If any Note is to be redeemed
in part only, the notice of redemption that relates to such Note shall state the
portion of the principal amount of such Note to be redeemed. On and after the
redemption date, interest shall cease to accrue on Notes or portions thereof
called for redemption so long as the Company has deposited with the Paying Agent
funds in satisfaction of the redemption price (including accrued and unpaid
interest on the Notes to be redeemed) pursuant to the terms of this Indenture.
SECTION 3.03. Notice. Notices of redemption shall be mailed by
first-class mail at least 30 but not more than 60 days before the redemption
date to each Holder of Notes to be redeemed at its registered address. Notices
of redemption may not be conditional. The Trustee shall notify the Company
promptly of the Notes or portions of Notes to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
-37-
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Notes of a
particular maturity are to be redeemed, the certificate numbers and
principal amounts of the particular Notes 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 Notes (or
portion thereof) called for redemption ceases to accrue on and after
the redemption date;
(7) the paragraph of the Notes and/or section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed;
(8) the CUSIP number, if any, printed on the Notes being
redeemed; and
(9) 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 Notes.
At the Company's request (which may be revoked at any time in writing
prior to the time at which the Trustee shall have given such notice to the
Holders), 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.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Notes shall be paid at the redemption price stated in
the notice, plus accrued interest and Additional Interest, if any, to the
redemption date; provided 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 Noteholder of the redeemed Notes registered on the relevant
record date. If mailed in the manner required herein, the notice shall be
conclusively presumed to have been given whether or not the Holder receives such
notice. 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 is the Paying Agent, shall segregate and hold in trust) money sufficient
to pay the redemption price of and accrued interest and Additional Interest, if
any, on all Notes to be redeemed on the redemption date other than Notes or
portions of Notes called for redemption that have been delivered by the Company
to the Trustee for cancellation. The Trustee or the Paying Agent will promptly
return to the Company any money deposited with the Trustee or Paying Agent by
the Company in excess of the amounts necessary to pay the redemption or purchase
price of and accrued interest and Additional Interest, if any, on all Notes to
be redeemed or purchased.
SECTION 3.06. Notes Redeemed in Part. Upon surrender of a Note of a
particular maturity that is redeemed in part, the Company shall execute and the
Trustee shall authenticate for the Holder (at the Company's expense) a new Note
of the same maturity equal in principal amount to the unredeemed portion of the
Note surrendered.
-38-
SECTION 3.07. No Sinking Fund. There shall be no sinking fund for
the payment of principal on the Notes to the Noteholders.
SECTION 3.08. Asset Sale Offers. In the event that the Company
shall be required to commence an offer to all Holders to purchase Notes pursuant
to an Asset Sale Offer under Section 4.09 hereof, the Company shall follow the
procedures specified in this Section 3.08:
The Asset Sale Offer shall be made to all Holders and all holders of
other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain
open for a period of at least 20 Business Days following its commencement and
not more than 30 Business Days, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than five Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Company will apply all Excess Proceeds (the "Offer Amount") to the purchase the
principal amount of Notes of each maturity required to be purchased pursuant to
Section 4.06 and such other pari passu Indebtedness (on a pro rata basis, if
applicable) or, if less than the Offer Amount has been tendered, all Notes
tendered in response to the Asset Sale Offer. Payment for any Notes so purchased
will be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest, and
Additional Interest, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:
(a) that the Asset Sale Offer is being made pursuant to
this Section 3.08 and Section 4.09 hereof and the length of time the
Asset Sale Offer will remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment
will continue to accrue interest;
(d) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Asset Sale Offer
will cease to accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased
pursuant to an Asset Sale Offer may elect to have Notes purchased in
integral multiples of $1,000 only;
(f) that Holders electing to have a Note purchased
pursuant to any Asset Sale Offer will be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Note completed, or transfer by book-entry transfer,
to the Company, a Depository, if appointed by the Company, or a Paying
Agent at the address specified in the notice at least three days before
the Purchase Date;
(g) that Holders will be entitled to withdraw their
election if the Company, the Depositary or the Paying Agent, as the
case may be, receives, not later than the expiration of the Offer
Period, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note the
-39-
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(h) that subject to Section 4.09, if the aggregate
principal amount of Notes of a particular maturity and other pari passu
Indebtedness surrendered by Holders exceeds the Offer Amount, the
Company will select the Notes of a particular maturity and other pari
passu Indebtedness to be purchased on a pro rata basis based on the
principal amount of Notes and such other pari passu Indebtedness
surrendered (with such adjustments as may be deemed appropriate by the
Company so that only Notes in denominations of $1,000, or integral
multiples thereof, will be purchased); and
(i) that subject to Section 4.09, Holders whose Notes
were purchased only in part will be issued new Notes of the same
maturity equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.08. The Company, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company will promptly issue a new Note, and the
Trustee, upon written request from the Company will authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
will publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.08, any purchase
pursuant to this Section 3.08 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE IV
COVENANTS
---------
SECTION 4.01. Payment of Notes. The Company shall promptly pay the
principal of and interest on the Notes on the dates and in the manner provided
in the Notes 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 (but only
if other than the Company) holds by 11:00 a.m., New York City time, in
accordance with this Indenture available funds 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 Noteholders 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 Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, the City of New York, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee, Registrar
or co-registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company fails to maintain any such
required office or agency or fails to furnish the Trustee with the address
-40-
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission will in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03
hereof.
SECTION 4.03. Reports. (a) To the extent permitted by the Exchange
Act, QCII shall file with the SEC, and simultaneously provide to the Trustee and
the Holders, annual, quarterly and current reports and all other information,
documents and reports that QCII is required to file with the SEC pursuant to
Sections 13 and 15(d) of the Exchange Act ("SEC Reports"). In the event QCII is
not permitted or able to file such reports, documents and information with the
SEC, QCII will provide substantially similar information to the Trustee and the
Holders, as if QCII were subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act. QCII also shall comply with the other provisions of
TIA ss. 314(a).
(b) In addition to the delivery of reports, documents and
information required by subsection (a) above, QCII will publish information in
the SEC Reports relating to the Consolidated Leverage Ratio for any quarterly
period in which Consolidated Cash Flow of the Company would be materially
different from that of QCII and the Leverage Ratio Exception was relied upon for
any action during such period. At the time QCII is required to file the SEC
Reports with the Trustee, QCII will furnish copies of such SEC Reports to
Holders of the Notes who request such SEC Reports in writing.
(c) For so long as any Notes remain outstanding, unless QCII is
subject to Section 13 or 15(d) of the Exchange Act, QCII will furnish to the
Holders and to securities analysts and prospective investors, upon their
request, any information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
SECTION 4.04. Taxes. The Company shall pay, and shall cause each of
its Restricted Subsidiaries to pay, prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested in good faith
and by appropriate proceedings or where the failure to effect such payment is
not adverse in any material respect to the Holders of the Notes.
SECTION 4.05. Stay, Extension and Usury Laws. The Company and each
of its Restricted Subsidiaries covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of its Restricted Subsidiaries (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law has been enacted.
SECTION 4.06. Incurrence of Indebtedness. (a) The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable, contingently or otherwise, with respect to (collectively,
"incur") any Indebtedness; provided that subsequent to the SEC Filing Date, the
Company or any of its Restricted Subsidiaries may incur additional Indebtedness
-41-
if, after giving effect thereto, the Consolidated Leverage Ratio would be a
positive number that is less than 3.50 to 1.00 (the "Leverage Ratio Exception").
In addition, QCII shall not, and shall not permit any of its Restricted
Subsidiaries (other than the Company and its Restricted Subsidiaries) to, incur
any Indebtedness, unless the QCII Ratio is satisfied; provided that QCII and its
Restricted Subsidiaries (other than the Company and its Restricted Subsidiaries)
shall be permitted to refinance any Indebtedness of QCII or any of its
Restricted Subsidiaries to incur Indebtedness that would otherwise constitute
Permitted Indebtedness.
(b) The provisions of Section 4.06(a) will not apply to the
incurrence by the Company or any of its Restricted Subsidiaries of any of the
following items of Indebtedness (collectively, "Permitted Indebtedness"):
(i) Indebtedness under the Credit Agreement or otherwise;
provided that the aggregate principal amount of such Indebtedness at
any time outstanding pursuant to this clause (i), without duplication,
does not exceed an amount equal to $2.0 billion;
(ii) (a) Indebtedness under the QwestDex Credit Agreement
or other Indebtedness; provided that the aggregate principal amount of
such Indebtedness at any time outstanding pursuant to this clause (ii),
without duplication, does not exceed an amount equal to $750.0 million;
and (b) other Indebtedness of any Directory Publishing Subsidiary
constituting Non-Recourse Debt with respect to any Directory Publishing
Subsidiary;
(iii) Indebtedness in respect of treasury management
arrangements or other cash management services provided by lenders (or
their affiliates) under the Credit Agreement or any other credit
facility in aggregate principal amount at any time outstanding not to
exceed $350.0 million;
(iv) Indebtedness outstanding on the Issue Date (other
than Indebtedness referred to in clauses (i), (ii) and (iii) above and
clause (v) below), the guarantee by the Company of the Existing 2008
Notes or any other Restricted Subsidiary required to provide a
guarantee of the Existing 2008 Notes and up to $4.0 billion in
aggregate principal amount of Notes;
(v) Indebtedness of the Company owed to a Restricted
Subsidiary of the Company and Indebtedness of any Restricted Subsidiary
of the Company owed to the Company or any other Restricted Subsidiary
of the Company; provided that upon any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or such Indebtedness being owed
to any Person other the Company or any of its Restricted Subsidiaries,
the Company or such Restricted Subsidiary, as applicable, shall be
deemed to have incurred Indebtedness not permitted by this clause (v);
and Indebtedness of the Company or any of its Restricted Subsidiaries
owed to QCII or QCF as of the Issue Date and any other such
Indebtedness owed to QCII or QCF incurred in the ordinary course of
business and consistent with past practice; provided that upon any
disposition of QCF by QCII or such Indebtedness being owed to any
Person other than QCII, QCF or the Company or any Restricted Subsidiary
of the Company, the relevant obligor shall be deemed to have incurred
Indebtedness not permitted by this clause (v);
(vi) Indebtedness under Hedging Obligations; provided that
(a) such Hedging Obligations relate to payment obligations on
Indebtedness otherwise permitted to be incurred by this Section 4.06,
and (b) the notional principal amount of such Hedging Obligations at
the time incurred does not exceed the principal amount of the
Indebtedness to which such Hedging Obligations relate;
(vii) Indebtedness in respect of bid, performance or surety
bonds or letters of credit issued for the account of the Company or any
of its Restricted Subsidiaries in the ordinary course of business,
including guarantees or obligations of the Company or any of its
Restricted Subsidiaries with respect to letters of credit supporting
-42-
such bid, performance or surety obligations (in each case other than
for an obligation for money borrowed);
(viii) Purchase Money Indebtedness incurred by the Company
or any of its Restricted Subsidiaries;
(ix) Indebtedness of the Company or any Restricted
Subsidiary in an aggregate principal amount not to exceed $750.0
million so long as the net proceeds thereof do not exceed the cash
consideration paid to retire unconditional purchase obligations of QCC
and QCII outstanding on the Issue Date ("Outstanding UPOs"); provided
that such Indebtedness has no scheduled payments of principal greater
than the scheduled payments with respect to the replaced Outstanding
UPOs as in effect on the Issue Date;
(x) Permitted Subordinated Indebtedness;
(xi) Refinancing Indebtedness of the Company or any of its
Restricted Subsidiaries with respect to Indebtedness incurred (a)
pursuant to the Leverage Ratio Exception, (b) under clauses (iv),
(viii), (ix) and (x) above or (c) during any Suspension Period; and
(xii) Indebtedness of the Company or any Restricted
Subsidiary in an aggregate amount not to exceed $1.625 billion at any
time outstanding.
For purposes of determining compliance with this Section 4.06, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (i) through (xii)
above (but excluding Indebtedness incurred pursuant to the Leverage Ratio
Exception), the Company shall, in its sole discretion, classify or later
reclassify such item of Indebtedness and may divide and classify such
Indebtedness in more than one of the types of Indebtedness described, except
that (1) Indebtedness incurred under the Credit Agreement as of the Issue Date
shall be deemed to have been incurred under clause (i) above, (2) Indebtedness
incurred under the QwestDex Credit Agreement as of the Issue Date shall be
deemed to have been incurred under clause (ii) above, (3) Indebtedness of the
type referred to in clause (iii) above outstanding as of the Issue Date shall be
deemed to have been incurred under clause (iii) above, and (4) Indebtedness to
the extent outstanding on the Issue Date (other than Indebtedness referred to in
clauses (1), (2), and (3) above) referred to in clause (iv) shall be deemed to
have been incurred under clause (iv) above.
SECTION 4.07. Restricted Payments. (a) The Company shall not, and
shall not permit any Restricted Subsidiary of QCII to, directly or indirectly,
make any Restricted Payment if at the time of such Restricted Payment:
(i) a Default shall have occurred and be continuing or
shall occur as a consequence thereof;
(ii) QCII cannot incur $1.00 of additional Indebtedness
pursuant to the second sentence Section 4.06(a); or
(iii) the amount of such Restricted Payment, when added to
the aggregate amount of all other Restricted Payments made after the
Start Date (other than Restricted Payments made pursuant to clause
(iii) of the next paragraph), exceeds the sum (the "Restricted Payments
Basket") of (without duplication):
-43-
(A) 50% of Consolidated Net Income of QCII for
the period (taken as one accounting period) commencing on the
first day of the first full fiscal quarter commencing after
the Start Date to and including the last day of the fiscal
quarter ended immediately prior to the date of such
calculation for which consolidated financial statements are
available (or, if such Consolidated Net Income shall be a
deficit, minus 100% of such aggregate deficit), plus
(B) in the case of the disposition or repayment
of or return on any Investment that was treated as a
Restricted Payment made after the Issue Date, an amount (to
the extent not included in the computation of Consolidated Net
Income) equal to the lesser of (i) the return of capital with
respect to such Investment and (ii) the amount of such
Investment that was treated as a Restricted Payment, in either
case, less the cost of the disposition of such Investment and
net of taxes, plus
(C) upon a Redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary, the lesser of (i) the
Fair Market Value of the Company's direct or indirect interest
in such Subsidiary immediately following such Redesignation,
and (ii) the aggregate amount of the Company's Investments in
such Subsidiary to the extent such Investments reduced the
Restricted Payments Basket and were not previously repaid or
otherwise reduced.
(b) The provisions of Section 4.07(a) shall not prohibit any of
the following:
(i) the payment of any dividend within 60 days after the
date of declaration thereof, if on the date of declaration the payment
would have complied with the provisions of this Indenture;
(ii) the payment of dividends on Disqualified Equity
Interests permitted to be incurred under Section 4.06 and the other
terms of this Indenture;
(iii) the redemption of Subordinated Indebtedness in
exchange for, or out of the proceeds of the incurrence within 180 days
prior to such exchange of, other Subordinated Indebtedness permitted to
be incurred under Section 4.06 and the other terms of this Indenture;
(iv) payments made pursuant to and in accordance with
stock or other benefit plans for management employed by QCII and its
Subsidiaries so long as such plans are for the benefit of a broad range
of management and other employees generally; and
(v) so long as QCII could incur $1.00 of Indebtedness
pursuant to the second sentence of Section 4.06(a), QCII or any of its
Restricted Subsidiaries may make Restricted Payments in the amount of
(i) 100% of the aggregate net cash proceeds received as capital
contributions by QCII or from the issuance of Qualified Equity
Interests of QCII on or after the Start Date and (ii) the aggregate
amount by which Indebtedness of QCII has been converted into Qualified
Equity Interests (other than by a Subsidiary of QCII) after the Start
Date;
provided that, in the case of any Restricted Payment pursuant to clause (ii),
(iii) or (v) above, no Default shall have occurred and be continuing or occur as
a consequence thereof.
SECTION 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any consensual encumbrance or consensual
restriction on the ability of any Restricted Subsidiary to: (a) pay dividends or
make any other distributions on or in respect of its Equity Interests, (b) make
loans or advances or pay any Indebtedness or other obligation owed to the
-44-
Company or any other Restricted Subsidiary or (c) transfer any of its assets to
the Company or any other Restricted Subsidiary, except for such encumbrances or
restrictions existing or by reason of:
(i) applicable law;
(ii) this Indenture, the Notes and the Note Guarantees;
(iii) non-assignment provisions of any contract or any
lease entered into in the ordinary course of business;
(iv) agreements existing on the Issue Date (including,
without limitation, the Credit Agreement and the QwestDex Credit
Agreement) as in effect on that date or any encumbrances or
restrictions not more materially restrictive than the Credit Agreement
as in effect on the Issue Date;
(v) restrictions on the transfer of assets subject to any
Lien permitted under this Indenture imposed by the holder of such Lien;
(vi) restrictions on the transfer of assets imposed under
any agreement to sell such assets permitted under this Indenture to any
Person pending the closing of such sale;
(vii) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the
properties or assets of the Person so acquired;
(viii) any customary encumbrance or restriction applicable
to a Restricted Subsidiary that is contained in an agreement or
instrument governing Indebtedness incurred under Section 4.06;
(ix) customary provisions in partnership agreements,
limited liability company organizational governance documents, joint
venture agreements and other similar agreements entered into in the
ordinary course of business that restrict the transfer of ownership
interests in such partnership, limited liability company, joint venture
or similar Person;
(x) Purchase Money Indebtedness incurred in compliance
with Section 4.06 that impose restrictions of the nature described in
clause (c) above on the assets acquired; and
(xi) any encumbrances or restrictions imposed by any
amendments or refinancings of the contracts, instruments or obligations
referred to in clauses (i) through (x) above; provided that such
amendments or refinancings are, in the good faith judgment of QCII's
Board of Directors, no more materially restrictive with respect to such
encumbrances and restrictions than those prior to such amendment or
refinancing.
SECTION 4.09. Asset Sales. (a) QCII shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly, consummate any
Asset Sale unless:
(i) QCII or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the assets included in such Asset Sale;
(ii) at least 75% of the total consideration received in
such Asset Sale consists of cash or Cash Equivalents; and
-45-
(iii) if such Asset Sale involves Collateral, it complies
with all applicable provisions of this Indenture, and all consideration
in any form representing proceeds that would constitute Collateral
shall be expressly made subject to a Lien securing the Notes, subject
to Permitted Collateral Liens.
(b) The provisions of clause (a)(ii) above shall not apply to
assets (other than Collateral) of QCII and its Restricted Subsidiaries (other
than the Company and its Subsidiaries) owned as of the Issue Date and
Investments made by such Persons after the Issue Date in exchange for, or out of
the proceeds of, Qualified Equity Interests of QCII issued after the Issue Date.
In addition, for purposes of clause (a)(ii) above, the following shall be deemed
to be cash:
(i) the amount (without duplication) of any Indebtedness
(other than Subordinated Indebtedness) of QCII or such Restricted
Subsidiary of QCII that is expressly assumed by the transferee in such
Asset Sale and with respect to which QCII or such Restricted Subsidiary
of QCII, as the case may be, is unconditionally released by the holder
of such Indebtedness;
(ii) the amount of any obligations received from such
transferee that are within 30 days converted by QCII or such Restricted
Subsidiary of QCII to cash (to the extent of the cash actually so
received);
(iii) the Fair Market Value of any Telecommunications
Assets received by the Company or any Restricted Subsidiary of QCII;
and
(iv) the amount of any Permitted Investment received
pursuant to and in compliance with clause (13) of the definition of
"Permitted Investments" or pursuant to and in compliance with the
Restricted Payments Basket or Section 4.07(b)(v).
(c) If at any time any non-cash consideration or other
consideration referred to in clause (b)(ii), (b) (iii) or (b)(iv) above received
by QCII or any Restricted Subsidiary of QCII, as the case may be, in connection
with any Asset Sale is repaid or converted into or sold or otherwise disposed of
for cash (other than interest received with respect to any such non-cash
consideration), then the date of such repayment, conversion or disposition shall
be deemed to constitute the date of an Asset Sale hereunder and the Net
Available Proceeds thereof shall be applied in accordance with this Section
4.09.
(d) Within 365 days after the receipt of any Net Available
Proceeds from an Asset Sale, QCII or such Restricted Subsidiary may, subject to
the following paragraph, cause the Net Available Proceeds to be applied as
follows:
(i) to the extent the Asset Sale involves Collateral, to
any Indebtedness secured by Liens on the assets sold in such Asset Sale
which are senior in priority to the Liens securing the Notes, in
accordance with the applicable Security Documents or governing debt
instruments; and
(ii) to the extent the Asset Sale does not involve
Collateral:
(A) to invest or use all or any part of the Net
Available Proceeds thereof in the Telecommunications Business
of the Company and its Restricted Subsidiaries; and/or
(B) to redeem any outstanding Indebtedness of
the Company and its Restricted Subsidiaries (other than
Subordinated Indebtedness or Pari Passu Indebtedness).
-46-
(e) Any Net Available Proceeds from Asset Sales that are not
applied or invested as provided in clause (d) above will be deemed to constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $50.0
million, the Company will:
(i) make an offer to all Holders of the Notes (an "Asset
Sale Offer"); and
(ii) at the same time, purchase, retire, redeem or
otherwise acquire (or make an offer to do so):
(A) to the extent the Asset Sale involves
Collateral, any other Indebtedness secured equally and ratably
with the Notes by a Lien on the Collateral, and
(B) to the extent the Asset Sale does not
involve Collateral, any other Pari Passu Indebtedness,
in each case in accordance with the provisions governing such other Indebtedness
to the extent it requires QCII or the Company, as applicable, to purchase,
retire, redeem or otherwise acquire such Indebtedness with the proceeds from the
applicable Asset Sale (or offer to do so), pro rata in proportion to the
respective principal amounts of the Notes and such other Indebtedness required
to be purchased, retired, redeemed or otherwise acquired for and, in the case of
the Notes to be purchased pursuant to the Asset Sale Offer, to purchase the
maximum principal amount of the Notes that may be purchased out of such pro rata
portion of the Excess Proceeds, at an offer price in cash in an amount equal to
100% of their principal amount plus accrued and unpaid interest to the date of
purchase, in accordance with the procedures set forth in this Indenture;
provided that, to the extent the holders of Pari Passu Indebtedness do not
require the entire pro rata portion allocated thereto to be applied to any
purchase, retirement, redemption or other acquisition as contemplated hereunder,
such unused proceeds shall be made available as additional Excess Proceeds to
the Holders of the Notes in the Asset Sale Offer.
(f) To the extent that the aggregate principal amount of the Notes
and Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer or other
offer is less than the Excess Proceeds, the Company may use any remaining Excess
Proceeds for any purpose not otherwise prohibited by this Indenture; provided
that, notwithstanding anything to the contrary in the foregoing, to the extent
that all or any portion of any remaining Excess Proceeds comprises proceeds of
Asset Sales of Collateral, such Excess Proceeds shall be subject to the Lien of
the applicable Security Documents in favor of the Holders of the Notes. If the
aggregate principal amount of the Notes surrendered by Holders thereof exceeds
the pro rata portion of such Excess Proceeds to be used to purchase the Notes
and other Indebtedness, the Trustee shall select the Notes and the other
Indebtedness to be purchased on a pro rata basis. Upon completion of such offer
to purchase, the amount of Excess Proceeds shall be reset at zero.
(g) Notwithstanding anything to the contrary in this covenant, the
Company and its Restricted Subsidiaries shall not be required to make an Asset
Sale Offer with respect to any Excess Proceeds from the sale of any Directory
Publishing Subsidiary or any of its assets, unless a similar offer is required
to be made in respect of the Existing 2008 Notes.
(h) The Company will comply with applicable tender offer rules,
including the requirements of Rule 14e-1 under the Exchange Act and any other
applicable laws and regulations in connection with the purchase of the Notes
pursuant to an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.09, the Company
shall comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 4.09 by virtue of
this compliance.
-47-
SECTION 4.10. Transactions with Affiliates. (a) QCII shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
in one transaction or a series of related transactions, sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any assets
from, or enter into any contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate (an "Affiliate
Transaction"), unless:
(i) such Affiliate Transaction is on terms that are no
less favorable to QCII or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction at such time
on an arm's-length basis by QCII or that Restricted Subsidiary from a
Person that is not an Affiliate of QCII or that Restricted Subsidiary;
and
(ii) the Company delivers to the Trustee, with respect to
any Affiliate Transaction involving aggregate value in excess of $100.0
million, an Officers' Certificate certifying that such Affiliate
Transaction complies with this Section 4.10 and a Secretary's
Certificate certifying that such Affiliate Transaction has been
approved by either a majority of the Independent Directors of QCII or
by a majority of the members of the Audit Committee of the Board of
Directors of QCII.
(b) Notwithstanding the foregoing, none of the following shall be
prohibited by this Section 4.10 (or be deemed to be Affiliate Transactions):
(i) transactions exclusively between or among (A) QCII
and one or more Restricted Subsidiaries or (B) Restricted Subsidiaries;
provided, in each case, that no Affiliate of QCII (other than another
Restricted Subsidiary) owns Equity Interests of any such Restricted
Subsidiary;
(ii) director, officer and employee compensation
(including bonuses) and other benefits (including retirement, health,
stock option and other benefit plans) and indemnification arrangements,
in each case approved by a majority of the Independent Directors of
QCII;
(iii) any agreement in effect on the Issue Date or any
amendment thereto (so long as such amendment is not disadvantageous to
the Holders in any material respect) or any transaction contemplated
thereby; provided the terms of any such agreement in effect on the
Issue Date have been previously disclosed in QCII's periodic and
current reports filed under the Exchange Act in accordance with Rule
404 of Regulation S-K (or its successor);
(iv) Restricted Payments which are made in accordance with
Section 4.07; or
(v) any transaction with an Affiliate where the only
consideration paid by QCII or any Restricted Subsidiary is Qualified
Equity Interests.
SECTION 4.11. Change of Control. (a) Upon the occurrence of a
Change of Control Triggering Event, unless all Notes have been called for
redemption pursuant to paragraph 5 of the Notes, each Holder of Notes shall have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's Notes (a "Change of Control
Offer") made pursuant to this Section 4.11 at an offer price in cash (the
"Change of Control Payment") equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Additional Interest thereon, if
any, to the date of purchase.
Within 45 days following any Change of Control Triggering Event, the
Company shall mail, or cause to be mailed, a notice to each Holder describing
the transaction or transactions that constitute the Change of Control Triggering
Event and stating:
-48-
(i) that the Change of Control Offer is being made
pursuant to this Section 4.11 and that all Notes tendered will be
accepted for payment;
(ii) the purchase price and the purchase date, which shall
be a Business Day no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the "Change of Control Payment
Date");
(iii) that any Note not tendered will continue to accrue
interest;
(iv) that, unless the Company defaults in the payment of
the Change of Control Payment, all Notes accepted for payment pursuant
to the Change of Control Offer will cease to accrue interest after the
Change of Control Payment Date;
(v) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer will be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes
delivered for purchase, and a statement that such Holder is withdrawing
his election to have the Notes purchased; and
(vii) that Holders whose Notes are being purchased only in
part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple
thereof.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Sections 3.08 or 4.11 of this Indenture, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under Section 3.08 or this Section 4.11 by virtue
of such conflict.
(b) On the Change of Control Payment Date, the Company will, to
the extent lawful:
(i) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions of Notes
properly tendered; and
(iii) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions of Notes being
purchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note will be in a
-49-
principal amount of $1,000 or an integral multiple thereof. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
Prior to complying with any of the provisions of this Section 4.14, but
in any event within 90 days following a Change of Control, the Company will
either repay all outstanding Senior Debt or obtain the requisite consents, if
any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Notes required by this Section 4.14.
(c) The Company shall not be required to make a Change of Control
Offer upon a Change of Control Triggering Event if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance
with the requirements set forth in this Section 4.11 applicable to a Change of
Control Offer made by the Company and purchases all Notes properly tendered and
not withdrawn under such Change of Control Offer.
SECTION 4.12. 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 have such knowledge, 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.
The Company shall deliver to the Trustee, as soon as possible and in
any event within five days after the Company becomes aware of the occurrence of
any Event of Default or an event which, with notice or the lapse of time or
both, would constitute an Event of Default, an Officers' Certificate setting
forth the details of such Event of Default or Default and the action which the
Company proposes to take with respect thereto.
SECTION 4.13. Limitation on Designations of Unrestricted
Subsidiaries. (a) The Board of Directors of the Company may designate any
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company) as an Unrestricted Subsidiary (a "Designation") only
if (i) no Default shall have occurred and is continuing at the time of or after
giving effect to such Designation and (ii) (A) QCII would be permitted to make
at the time of such Designation (1) a Permitted Investment or (2) an Investment
pursuant to Section 4.07(a), in either case, in an amount ( the "Designation
Amount") equal to the Fair Market Value of the Company's direct or indirect
Investment in such Subsidiary on such date, and (B) QCII would be permitted to
incur $1.00 of additional Indebtedness under the second sentence of Section
4.06(a) on a pro forma basis after giving effect to such Designation.
(b) Notwithstanding the foregoing, no Subsidiary shall be
Designated as an Unrestricted Subsidiary unless such Subsidiary:
(i) has no Indebtedness other than Non-Recourse Debt;
(ii) is not party to any agreement, contract, arrangement
or understanding with QCII or any of its Restricted Subsidiaries unless
the terms of the agreement, contract, arrangement or understanding
comply with Section 4.10;
(iii) is a Person with respect to which neither QCII nor
any of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve the Person's financial condition or to cause the
Person to achieve any specified levels of operating results except if
-50-
limited to that which would be permitted by its terms as Permitted
Investment under Section 4.07; and
(iv) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of QCII or any
of its Restricted Subsidiaries, except for any guarantee given solely
to support the pledge by QCII or any of its Restricted Subsidiaries of
the Equity Interests of such Unrestricted Subsidiary, which guarantee
is not recourse to QCII or any of its Restricted Subsidiaries, and
except to the extent the amount thereof constitutes a Restricted
Payment permitted pursuant to Section 4.07.
If, at any time, any Unrestricted Subsidiary fails to meet the
preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of the Subsidiary and any Liens on assets of such Subsidiary shall
be deemed to be incurred by a Restricted Subsidiary as of the date and, if the
Indebtedness is not permitted to be incurred under Section 4.06 or the Lien is
not permitted under Section 4.14, the Company shall be in default of the
applicable Section.
(c) The Board of Directors of QCII may redesignate an Unrestricted
Subsidiary as a Restricted Subsidiary (a "Redesignation"), only if:
(i) no Default shall have occurred and be continuing at
the time of or after giving effect to such Redesignation; and
(ii) all Liens, Indebtedness and Investments of such
Unrestricted Subsidiary outstanding immediately following such
Redesignation would, if incurred at such time, have been permitted to
be incurred or made for all purposes of this Indenture.
Any such Designations or Redesignations by the Board of Directors of
the Company after the Issue Date 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 or Redesignation and an Officers' Certificate
certifying that such Designation or Redesignation complied with the foregoing
provisions.
SECTION 4.14. Liens. (a) QCII shall not, and shall not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or otherwise cause or suffer to exist or become effective any Lien of any kind
upon any of their assets (other than Collateral), whether now owned or hereafter
acquired, to secure Indebtedness other than Permitted Liens; unless all payments
due under this Indenture, the Notes and the Note Guarantees are secured on an
equal and ratable basis with the Indebtedness so secured until such time as the
Indebtedness is no longer secured by a Lien.
In the case of the preceding sentence, if the obligations so secured
are subordinated by their terms to the Notes or a Note Guarantee, the Lien
securing such obligations will also be so subordinated by its terms at least to
the same extent.
(b) QCII shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
cause or suffer to exist or become effective any Lien of any kind upon any of
the Collateral or any asset required to be pledged as Collateral, whether now
owned or hereafter acquired, other than Permitted Collateral Liens.
SECTION 4.15. Business Activities. QCII (and any intermediate
company directly or indirectly owning Equity Interests of the Company) shall
conduct its business as a holding company that shall not be permitted to engage
in any business or activity other than those incidental to its ownership of the
Equity Interests of the Company, QCF and the other direct Subsidiaries of QCII
in existence on the Issue Date, functioning as public company and financing
-51-
activities relating to the foregoing; provided that QCII shall be permitted to
make Investments in any Person engaged in any business in compliance with
Section 4.07 to the extent funded with the net cash proceeds from, or in
exchange for, the issuance of Qualified Equity Interests of QCII. In addition,
in no event shall QCII hold, directly or indirectly, less than 100% of the
Equity Interests of the Company. QCF's operations and the operations of any
Restricted Subsidiaries of QCII (other than the Company and its Restricted
Subsidiaries) shall be limited to those conducted by it as of and on the Issue
Date and activities reasonably related thereto (as well as to Investments
referred to in the proviso of the preceding sentence).
SECTION 4.16. Suspension of Covenants. During any period of time (a
"Suspension Period") that (i) the ratings assigned to the Notes by either of the
Rating Agencies are Investment Grade Ratings and (ii) no Default or Event of
Default has occurred and is continuing under this Indenture, QCII and its
Restricted Subsidiaries shall not be subject to the terms of Sections 4.06,
4.07, 4.08, 4.09 (to the extent not relating to Collateral), 4.10, 4.13, any
provisions of this Indenture limiting the ability of the Company to xxxxx xxxx
passu or equal and ratable Liens on the QSC Collateral) and Section 5.01(a)(iii)
(collectively, the "Suspended Covenants"). In the event that QCII and its
Restricted Subsidiaries are not subject to the Suspended Covenants with respect
to the Notes for any period of time as a result of the preceding sentence and,
subsequently, both Rating Agencies have, in effect, withdrawn or downgraded the
ratings assigned to such Notes below the required Investment Grade Ratings, then
QCII and its Restricted Subsidiaries will thereafter again be subject to the
Suspended Covenants and compliance with respect to Restricted Payments made
after the time of such withdrawal or downgrade will be calculated in accordance
with the provisions of Section 4.07 as if such covenant had been in effect since
the date of the execution of this Indenture. Notwithstanding the foregoing,
neither (a) the continued existence, after the date of such withdrawal or
downgrade, of facts and circumstances or obligations that were incurred or
otherwise came into existence during a Suspension Period nor (b) the performance
of any such obligations shall constitute a breach of any covenant set forth in
this Indenture or cause a Default or Event of Default thereunder; provided that
(1) QCII and its Restricted Subsidiaries did not incur or otherwise cause such
facts and circumstances or obligations to exist in anticipation of a withdrawal
or downgrade by one or both of the Rating Agencies below an Investment Grade
Rating and (2) QCII and the Company reasonably believed that such incurrence or
actions would not result in such a withdrawal or downgrade. For purposes of
clauses (1) and (2) in the preceding sentence, anticipation and reasonable
belief may be determined by QCII and the Company and shall be conclusively
evidenced by a board resolution to such effect adopted in good faith by the
Board of Directors of QCII. In reaching their determination, the Board of
Directors of QCII may, but need not, consult with the Rating Agencies.
ARTICLE V
SUCCESSOR COMPANY
-----------------
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially
All Assets of the Company or the Guarantors. (a) Neither QCII nor the Company
shall, directly or indirectly, in a single transaction or a series of related
transactions, consolidate or merge with or into any Person (other than a merger
with a Wholly Owned Restricted Subsidiary solely for the purpose of changing
QCII's or the Company's, as the case may be, jurisdiction of incorporation to
another State of the United States), or sell, lease, transfer, convey or
otherwise dispose of or assign all or substantially all of the assets of QCII or
QCII and its Restricted Subsidiaries (taken as a whole), or the Company or the
Company and its Restricted Subsidiaries (taken as a whole), as the case may be,
to any Person unless, in either case:
(i) either:
(A) QCII or the Company, as the case may be,
will be the surviving or continuing Person; or
-52-
(B) the Person formed by or surviving such
consolidation or merger or to which such sale, lease,
conveyance or other disposition shall be made (the
"Successor") is a corporation organized and existing under the
laws of any State of the United States of America or the
District of Columbia, and the Successor expressly assumes, by
supplemental indenture in form and substance satisfactory to
the Trustee, all of the obligations of QCII or the Company, as
the case may be, under the Notes (and the QCII Note Guarantee
endorsed thereon), this Indenture, the Registration Rights
Agreement and the Security Documents to which it is a party;
(ii) immediately after and giving effect to such
transaction and the assumption of the obligations as set forth in
clause (i)(B) above and the incurrence of any Indebtedness to be
incurred in connection therewith, no Default shall have occurred and be
continuing; and
(iii) immediately after and giving effect to such
transaction and the assumption of the obligations set forth in clause
(i)(B) above and the incurrence of any Indebtedness to be incurred in
connection therewith, and the use of any net proceeds therefrom on a
pro forma basis, the Company (or, in the case of a transaction
involving the Company in which the Company is not the surviving entity,
the Company's Successor) could incur $1.00 of additional Indebtedness
pursuant to the Leverage Ratio Exception, in the case of a transaction
involving the Company, or the QCII Ratio, in the case of a transaction
involving QCII.
(b) No Guarantor (other than QCII) will, directly or indirectly,
in a single transaction or a series of related transactions, consolidate or
merge with or into (other than a merger with a Wholly Owned Restricted
Subsidiary solely for the purpose of changing such Guarantor's jurisdiction of
incorporation to another State of the United States), or sell, lease, transfer,
convey or otherwise dispose of or assign all or substantially all of the assets
of such Guarantor or such Guarantor and the Restricted Subsidiaries of such
Guarantor (taken as a whole) unless, in either case:
(i) either:
(A) such Guarantor will be the surviving or
continuing Person; or
(B) the Successor is a corporation organized and
existing under the laws of any State of the United States of
America or the District of Columbia, and the Successor
expressly assumes, by supplemental indenture in form and
substance satisfactory to the Trustee, all of the obligations
of such Guarantor under the Notes, this Indenture, the
Registration Rights Agreement and the Security Documents to
which it is a party; and
(ii) immediately after and giving effect to such
transaction and the assumption of the obligations as set forth in
clause (1)(B) above and the incurrence of any Indebtedness to be
incurred in connection therewith, no Default shall have occurred and be
continuing.
For purposes of this Section 5.01, any Indebtedness of the
Successor which was not Indebtedness of the Company or the applicable Guarantor,
as the case may be, immediately prior to the transaction shall be deemed to have
been incurred in connection with such transaction.
(c) The following additional conditions shall apply to each
transaction described in paragraphs (a) and (b) above:
(1) the Company, such Guarantor or the relevant surviving
entity, as applicable, shall cause such amendments or other instruments
to be filed and recorded in such jurisdictions as may be required by
-53-
applicable law to preserve and protect the Lien of the Security
Documents on the Collateral owned by or Transferred to such Person;
(2) the Collateral owned by or Transferred to the Company
(except in the case of the last paragraph of this section), such
Guarantor or the relevant surviving entity, as applicable, shall
(A) continue to constitute Collateral under this
Indenture and the Security Documents;
(B) be subject to the Lien in favor of the
applicable Collateral Agent for the benefit of the Holders;
and
(C) not be subject to any Lien other than Liens
permitted by the Security Documents;
(3) the assets of the Person which is merged or
consolidated with or into the relevant surviving entity, to the extent
that they are assets of the types which would constitute Collateral
under the Security Documents, shall be treated as after acquired
property and such surviving entity shall take such action as may be
reasonably necessary to cause such assets to be made subject to the
Lien of the Security Documents in the manner and to the extent required
in this Indenture; and
(4) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
transaction and, if a supplemental indenture or supplemental Security
Documents are required in connection with such transaction, such
supplemental indenture and Security Documents comply with the
applicable provisions of this Indenture, that all conditions precedent
in this Indenture relating to such transaction have been satisfied and
that such supplemental indenture and Security Documents are
enforceable.
(d) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of a Person, the Equity Interests of which
constitute all or substantially all of the properties and assets of such Person,
will be deemed to be the transfer of all or substantially all of the properties
and assets of such Person.
Upon any consolidation, combination or merger of the Company or a
Guarantor, or any transfer of all or substantially all of the assets of the
Company or a Guarantor in accordance with the foregoing, in which the Company or
such Guarantor is not the continuing obligor under the Notes or its Note
Guarantee, the surviving entity formed by such consolidation or into which the
Company or such Guarantor is merged or to which the conveyance, lease or
transfer is made will succeed to, and be substituted for, and may exercise every
right and power of, the Company or such Guarantor under this Indenture, the
Notes and the Note Guarantees with the same effect as if such surviving entity
had been named therein as the Company or such Guarantor and, except in the case
of a conveyance, transfer or lease, the Company or such Guarantor, as the case
may be, will be released from the obligation to pay the principal of and
interest on the Notes or in respect of its Note Guarantee, as the case may be,
and all of the Company's or such Guarantor's other obligations and covenants
under the Notes, this Indenture and its Note Guarantee, if applicable.
The foregoing will not prevent (i) the contribution by QCII of all of
the outstanding Equity Interests of the Company to a Wholly Owned Restricted
Subsidiary of QCII; provided, such Wholly Owned Subsidiary becomes a Guarantor
of the Notes to the same extent that QCII guarantees the Notes by execution of a
supplemental indenture to this Indenture, and QCII and such Wholly Owned
Restricted Subsidiary take all actions necessary under the applicable Security
-54-
Documents such that all of the outstanding Equity Interests of such Wholly Owned
Restricted Subsidiary (and the rights and privileges associated therewith) is
substituted for the Equity Interests of the Company held as QCII Collateral, or
(ii) the merger of any Restricted Subsidiary of the Company into the Company or
another Restricted Subsidiary of the Company.
With respect to any disposition of assets, the phrase "all or
substantially all" as used above varies according to the facts and circumstances
of the subject transaction, has no clearly established meaning under New York
law (which governs this Indenture) and is subject to judicial interpretation.
Accordingly, in certain circumstances there may be a degree of uncertainty in
ascertaining whether a particular transaction would involve a disposition of
"all or substantially all" of the assets of the Company.
ARTICLE VI
DEFAULTS AND REMEDIES
---------------------
SECTION 6.01. Events of Default and Remedies. Each of the following
constitutes an "Event of Default" with respect to any series of Notes:
(a) failure to pay interest on such series of Notes when
it becomes due and payable and the continuance of any such failure for
30 days (whether or not such payment is prohibited by the subordination
provisions of this Indenture);
(b) failure to pay the principal of such series of Notes
when it becomes due and payable, whether at stated maturity, upon
redemption, upon purchase, upon acceleration or otherwise (whether or
not such payment is prohibited by the subordination provisions of this
Indenture);
(c) failure to comply with any of the agreements or
covenants described above under Section 5.01 or in respect of any
obligation to make a Change of Control Offer as described above in
Section 4.11 (whether or not such payment is prohibited by the
subordination provisions of this Indenture);
(d) failure to comply with any other agreement or
covenant in this Indenture and continuance of this failure for 45 days
after notice of the failure has been given to the Company by the
Trustee or by the Holders of at least 25% of the aggregate principal
amount of the series of the Notes to which such failure relates then
outstanding;
(e) default under any mortgage, indenture or other
instrument or agreement ("Debt Instrument") under which there may be
issued or by which there may be secured or evidenced Indebtedness of
QCII, the Company or any Restricted Subsidiary of QCII (other than QCC
to the extent that none of QCII, the Company or QCF have outstanding a
Debt Instrument governing Debt Securities under which there is a
similar default as this clause (e) with respect to QCC that applies to
such default) whether such Indebtedness now exists or is incurred after
the Issue Date, which default:
(i) is caused by a failure to pay, when due, principal on
such Indebtedness at the final maturity thereof,
(ii) results in the acceleration of such Indebtedness
prior to its express final maturity or
(iii) results in the commencement of judicial proceedings
to foreclose upon, or to exercise remedies under
applicable law or applicable security documents to
take ownership of or to cause the sale of, the assets
-55-
securing such Indebtedness (other than the consensual
provision of assets securing non-recourse
Indebtedness),
and in each case, the principal amount of such Indebtedness, together
with any other Indebtedness with respect to which an event described in
clause (i), (ii) or (iii) has occurred and is continuing, aggregates
more than $100.0 million;
(f) one or more final and non-appealable judgments or
orders that exceed $100.0 million in the aggregate (net of amounts
covered by insurance or bonded) for the payment of money have been
entered by a court or courts of competent jurisdiction against QCII,
the Company or any Restricted Subsidiary of QCII and such judgment or
judgments have not been satisfied, stayed, annulled or rescinded within
60 days of being entered;
(g) QCII, the Company or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against
it in an involuntary case,
(iii) consents to the appointment of a Custodian of it or
for all or substantially all of its assets, or
(iv) makes a general assignment for the benefit of its
creditors;
(h) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against QCII, the Company or
any Significant Subsidiary as debtor in an
involuntary case,
(ii) appoints a Custodian of QCII, the Company
or any Significant Subsidiary or a Custodian for
all or substantially all of the assets of the
Company or any Significant Subsidiary, or
(iii) orders the liquidation of QCII, the Company
or any Significant Subsidiary, and the order or
decree remains unstayed and in effect for 60
days;
(i) (i) any Note Guarantee shall be held in a judicial
proceeding before a court of competent jurisdiction not to be in full
force and effect (other than in accordance with the terms of such Note
Guarantee and this Indenture) or is declared in such a proceeding null
and void and unenforceable or found to be invalid or (ii) any Guarantor
denies its liability under its Note Guarantee (other than by reason of
release of a Guarantor from its Note Guarantee in accordance with the
terms of this Indenture and the Note Guarantee); or
(j) default by the Company or any Guarantor in the
performance of the Security Documents which adversely affects the
enforceability or the validity of either Collateral Agent's Lien on the
Collateral or which adversely affects the condition or value of the
Collateral, taken as a whole, in any material respect, repudiation or
disaffirmation by the Company or any Guarantor of its obligations under
the Security Documents or the determination in a judicial proceeding
before a court of competent jurisdiction that the Security Documents
-56-
are unenforceable or invalid against the Company or any Guarantor for
any reason.
SECTION 6.02. Acceleration. (a) If an Event of Default (other than
an Event of Default specified in Section 6.01(g) or (h) with respect to the
Company) occurs and is continuing with respect to the Notes of a particular
maturity, the Trustee by written notice to the Company, or the Holders of at
least 25% in aggregate principal amount of any series of Notes then outstanding
by written notice to the Company and the Trustee, may declare the principal of,
premium, if any, and accrued but unpaid interest on all such Notes to be due and
payable; provided, however, that if there are any amounts outstanding under the
Credit Agreement, such amounts shall become immediately due and payable upon the
first to occur of (i) an acceleration under the Credit Agreement; (ii) exercise
of any remedies against Collateral therefor; or (iii) five Business Days after
the giving of written notice to the Company and the Representative under the
Credit Agreement (provided that the name and address of such Representative has
been delivered to the Trustee in writing) of such acceleration, but only if such
Event of Default is then continuing. Upon the effectiveness of such a
declaration, the aggregate principal of, premium, if any, and accrued and unpaid
interest, if any, on the outstanding Notes of such series shall be due and
payable immediately. Notwithstanding the foregoing, if an Event of Default
specified in Section 6.01(g) or (h) with respect to the Company occurs, the
principal of and accrued and unpaid interest and premium, if any, on all
outstanding Notes shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Noteholders.
(b) Notwithstanding the foregoing, if an Event of Default
specified in Section 6.01(e) occurs resulting in a declaration of acceleration
of the Notes, such declaration of acceleration shall be automatically annulled
if such Event of Default triggering such declaration of acceleration pursuant to
Section 6.01(e) shall have been remedied or cured by QCII or any of its
Subsidiaries or waived by the holders of the relevant Indebtedness within 60
days of the declaration of acceleration with respect thereto and if (i) the
annulment of the acceleration of the Notes would not conflict with any judgment
or decree of a court of competent jurisdiction and (ii) all existing Events of
Default, except nonpayment of principal, premium or interest on the Notes that
became due and payable solely because of the acceleration of the Notes, have
been cured or waived.
(c) At any time after a declaration of acceleration with respect
to the Notes of a particular maturity as described in Section 6.02(a), the
Holders of a majority in aggregate principal amount of the outstanding Notes of
such maturity may rescind and cancel such declaration and its consequences: (i)
if the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction; (ii) if all existing Events of Default have been cured
or waived except nonpayment of principal or interest that has become due solely
because of the acceleration; (iii) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid; and (iv) if the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements and
advances. No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing with respect to the Notes of a particular maturity, the Trustee may
pursue any available remedy to collect the payment of principal of or interest
on such Notes or to enforce the performance of any provision of such Notes or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of such Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
-57-
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Notes of a single maturity then outstanding by
written notice to the Trustee may on behalf of the Holders of all of such Notes
waive any existing Default or Event of Default and its consequences under this
Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of or premium on, any such Note. When a Default is
waived, it is deemed cured and ceases to exist and any Event of Default arising
therefrom shall be deemed to have been cured and waived for every purpose under
this Indenture, but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
aggregate principal amount of the then outstanding Notes of a single maturity
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 by this Indenture. 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 another
Holder of such Notes 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, interest or Additional Interest
when due, no Noteholder may pursue any remedy with respect to this Indenture or
the Notes unless:
(1) such Holder has previously given the Trustee notice
that an Event of Default with respect to the Notes of a particular
maturity owned by such Holder is continuing;
(2) Holders of at least 25% in aggregate principal amount
of the outstanding Notes of that maturity have made a written request
to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee security
or indemnity reasonably satisfactory to it against any loss, liability
or expense;
(4) 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
(5) the Holders of a majority in aggregate principal
amount of the outstanding Notes of that maturity have not given the
Trustee a direction inconsistent with such request within such 60-day
period.
A Noteholder may not use this Indenture or the Security Documents to
prejudice the rights of another Holder of Notes of the same maturity or to
obtain a preference or priority over another Holder of Notes of the same
maturity.
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 Interest and interest on the Notes held
by such Holder, on or after the respective due dates expressed in the Notes, 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; provided that a Holder shall not have the right to institute any such
suit for the enforcement of payment if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would, under applicable
-58-
law, result in the surrender, impairment, waiver or loss of the Lien of this
Indenture and the Security Documents upon any Collateral.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a) or (b) 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 Noteholders allowed
in any judicial proceedings relative to the Company, any Subsidiary or any
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 or pursuant to Section 11 of the QSC
Security and Pledge Agreement and Section 10 of the QCII Pledge Agreement, 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 Notes for amounts due and unpaid on the
Notes for principal and interest, ratably, and any Additional Interest
without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, any Additional Interest and
interest, respectively; and
THIRD: subject to the Pledge Agreements, to the Company.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section. At least 15 days before such record date,
the Trustee shall mail to each Noteholder 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 and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 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 Notes of a
particular maturity then outstanding.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company
nor any Guarantor (to the extent they 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 they may
lawfully do so) hereby expressly waive all benefit or advantage of any such law,
-59-
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 its
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
the Security Documents, and no implied covenants or obligations shall
be read into this Indenture or the Security Documents 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
this Indenture and the Security Documents. However, in the case of any
such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture or the Security
Documents.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of Section
7.01(b);
(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.
(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 or the Security Documents 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 thereunder 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.
-60-
(h) Upon request from the Company, the Trustee is hereby
authorized to and shall enter into the Pledge Agreements in connection with the
Credit Agreement or any amendment, restatement, supplement, renewal, replacement
or other modification thereof, entered into in accordance with the terms of this
Indenture, including Section 4.06 hereof.
(i) 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 and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. Subject to Section 7.01:
(a) The Trustee may conclusively rely, and shall be
protected in acting or refraining from acting, upon any document
believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter
stated in any such 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 such 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.
(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 willful misconduct or negligence.
(e) The Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to
legal matters relating to this Indenture and the Notes 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 unless requested in writing to do so by the Holders of not
less than a majority in principal amount of the Notes of a particular
maturity at the time outstanding, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by agent
or attorney at the sole cost of the Company and shall incur no
liability or additional liability of any kind by reason of such inquiry
or investigation.
(g) The Trustee shall not be required to give any note,
bond or surety in respect of the execution of the trusts and powers
under this Indenture.
(h) The permissive rights of the Trustee to take any
action enumerated in this Indenture shall not be construed as a duty to
take such action.
(i) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Trust Officer has actual knowledge
thereof or unless a Trust Officer receives written notice thereof at
its Corporate Trust Office specified in Section 13.02, from the Company
or a Holder that such Default or Event of Default has occurred, and
such notice references the Notes and this Indenture.
-61-
(j) The rights, privileges, protections, immunities and
benefits given to the Trustee, including its right to be indemnified,
are extended to, and shall be enforceable by, the Trustee in each of
its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
(k) The Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which Officers' Certificate may be signed
by any person authorized to sign an Officers' Certificate, including
any person specified as so authorized in any such certificate
previously delivered and not superseded.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes 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, co-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 Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, 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 Notes or in the Notes other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default with respect to any
maturity of Notes occurs and is continuing and is known to the Trustee, the
Trustee shall mail to each Holder thereof notice of the Default within 30 days
after it is known to a Trust Officer or written notice of it is received by the
Trustee. Except in the case of a Default in the payment of principal of,
premium, if any, interest or Additional Interest on any Note or a Default in
complying with Section 5.01, the Trustee may withhold notice if and so long as a
committee of its trust officers in good faith determines that withholding notice
is in the interests of Noteholders. If a Default occurs and is continuing and a
Senior Officer of the Company has actual knowledge of such Default, the Company
shall deliver to the Trustee written notice of such Default, which notice shall
include the status of such Default and any action being taken or proposed to be
taken by the Company with respect thereto. Notwithstanding anything to the
contrary expressed in this Indenture, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default hereunder, except in the case of an
Event of Default under Section 6.01(a) or (b) hereof (provided that the Trustee
is Paying Agent), unless and until a Trust Officer receives written notice
thereof at its Corporate Trust Office specified in Section 13.02, from the
Company or a Holder that such Default or Event of Default has occurred.
SECTION 7.06. Reports by Trustee to Holders. The Trustee shall
transmit to the Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the TIA at the times and in
the manner provided pursuant thereto. To the extent that any such report is
required by the TIA with respect to any 12-month period, such report shall cover
the 12-month period ending May 15 and shall be transmitted by the next
succeeding July 15.
A copy of each report at the time of its mailing to Noteholders shall
be filed with the SEC and each stock exchange (if any) on which the Notes are
listed. The Company agrees to notify promptly the Trustee whenever the Notes
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 such compensation as is agreed to in writing by
the Trustee and the Company for the Trustee's services hereunder and under the
Security Documents. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable out-of-pocket disbursements,
-62-
advances and 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, counsel, accountants and experts. The Company shall indemnify
the Trustee and its officers, directors, shareholders, agents and employees
(each, an "Indemnified Party") for and hold each Indemnified Party harmless
against any and all loss, damage, claims, liability or expense (including
reasonable attorneys' fees and expenses) including taxes (other than taxes based
upon, measured by or determined by the income of the Trustee) incurred by it
without negligence or bad faith on their part arising out of or in connection
with the acceptance or administration of this Indenture, the Notes or any
Security Document and the performance of its duties hereunder or under the
Security Documents, including the cost and expense of enforcing this Indenture
against the Company (including this Section 7.07), and defending itself against
any claim (whether asserted by a Holder or any other Person). The Trustee and
its officers, directors, shareholders, agents and employees in its capacity as
Paying Agent, Registrar, Custodian and agent for service of notice and demands
shall have the full benefit of the foregoing indemnity as well as all other
benefits, rights and privileges accorded to the Trustee in this Indenture when
acting in such other capacity. The Trustee shall notify the Company of any claim
for which it may seek indemnity promptly upon obtaining actual knowledge
thereof; provided 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 shall pay the reasonable fees and
expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by an Indemnified
Party through such party's own willful misconduct, negligence or bad faith. The
Company need not pay any settlement made without its consent (which consent
shall not be unreasonably withheld).
To secure the Company's payment obligations in this Section and all
other obligations to the Trustee pursuant to this Indenture and the Security
Documents, including all fees, expenses, and rights to indemnification, the
Trustee shall have a lien 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 Interest on particular Notes. Such lien shall
survive the satisfaction and discharge of this Indenture and the termination of
any Security Document and the resignation or removal of the Trustee. The
Trustee's right to receive payment of any amounts due under this Indenture and
the termination of any Security Document shall not be subordinated to any other
Indebtedness of the Company and the Notes shall be subordinate to the Trustee's
rights to receive such payment.
The Company's payment obligations pursuant to this Section 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(i) or (j) 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. The Holders of a majority in
principal amount of the then outstanding Notes of a particular maturity may
remove the Trustee by so notifying the Trustee and the Company in writing 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.
-63-
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the then outstanding Notes of a particular
maturity, the Company will promptly appoint a successor Trustee. Within one year
after the successor Trustee takes office, the Holders of a majority in principal
amount of the then outstanding Notes may appoint a successor Trustee to replace
the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. 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 Noteholders. 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
at least 10% in aggregate principal amount of the then outstanding Notes of a
particular maturity may petition any court of competent jurisdiction for the
appointment of a successor Trustee at the expense of the Company.
If the Trustee fails to comply with Section 7.10, any Noteholder 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, 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, provided, that such Person shall be
qualified and eligible under this Article VII.
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 Notes 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 Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee.
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 $50,000,000 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 the
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 therein.
-64-
ARTICLE VIII
SUBORDINATION OF NOTES
----------------------
SECTION 8.01. Notes Subordinated to Senior Debt . The Company
covenants and agrees, and the Trustee and each Holder of the Notes by his
acceptance thereof likewise covenant and agree, that all Notes shall be issued
subject to the provisions of this Article VIII, and each person holding any
Note, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees that payments of all Obligations on or relating to
the Notes by the Company shall, to the extent and in the manner set forth in
this Article VIII, be subordinated and junior in right of payment to the prior
payment in full in cash or Cash Equivalents of all Obligations due in respect of
Senior Debt of the Company whether outstanding on the Issue Date or incurred
thereafter.
SECTION 8.02. No Payment on Notes in Certain Circumstances. (a) No
direct or indirect payment or distribution (excluding any payment or
distribution of Permitted Junior Securities and excluding any payment from funds
held in trust for the benefit of the Holders pursuant to Article IX (a
"Defeasance Trust Payment")) by or on behalf of the Company with respect to any
Obligations on or relating to the Notes or to acquire any Notes for cash, assets
or otherwise, whether pursuant to the terms of the Notes, upon acceleration or
otherwise, will be made if, at the time of such payment or distribution, (i)
there exists a default in payment of all or any portion of the Obligations due
in respect of Senior Debt or (ii) there exists a default with respect to any
Designated Senior Debt pursuant to which the maturity thereof may be immediately
accelerated, and upon receipt by the Trustee of written notice of such default
(a "Payment Blockage Notice") from the Representative of such Designated Senior
Debt. In addition, no direct or indirect payment or distribution (excluding any
payment or distribution of Permitted Junior Securities and excluding any
Defeasance Trust Payment) will be made by or on behalf of the Company with
respect to any Obligation on or relating to the Notes to such Holders or to
acquire any Notes for cash, assets or otherwise, (a) during the continuance of
any payment default referred to in clause (i) above, unless and until such
default has been cured or waived or has ceased to exist or the benefits of these
provisions have been waived by the holders of such Senior Debt, or (b) during
the continuance of any nonpayment default referred to in clause (ii) above (a
"Payment Blockage Period"), unless and until the earlier of (1) the date on
which any nonpayment defaults referred to in clause (ii) above shall have been
cured or waived or the benefits of these provisions have been waived by the
holders of such Designated Senior Debt, (2) 179 days after the date on which the
applicable Payment Blockage Notice is received or (3) the Trustee receives
notice from the Representative for such Designated Senior Debt rescinding the
Payment Blockage Notice, provided that in the case of clause (3) above the
maturity of any Designated Senior Debt has not been accelerated.
Notwithstanding anything in the subordination provisions of this
Indenture or the Notes to the contrary, (1) in no event will a Payment Blockage
Period extend beyond 179 days from the date the Payment Blockage Notice in
respect thereof was given and (2) no subsequent Payment Blockage Period may be
commenced with respect to the Notes of a particular maturity unless and until
360 consecutive days have elapsed since the delivery of the immediately prior
Payment Blockage Notice. No nonpayment default that existed or was continuing on
the date of delivery of any Payment Blockage Notice with respect to any
Designated Senior Debt initiating such Payment Blockage Period may be, or be
made, the basis for the commencement of any other Payment Blockage Period by the
holder or holders of such Designated Senior Debt or the trustee or agent acting
on behalf of such Designated Senior Debt, whether or not within a period of 360
consecutive days, unless such event of default has been cured or waived for a
period of not less than 90 consecutive days. Any subsequent action or breach of
any financial covenants for a period ending after the date of delivery of the
initial Payment Blockage Notice that in either case would give rise to a default
pursuant to any provisions under which a default in respect of Designated Senior
Indebtedness previously existed or was continuing shall constitute a new default
for the purposes of this paragraph.
-65-
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 8.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Designated Senior Debt or
their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Designated Senior Debt may have been
issued, as their respective interests may appear, but only to the extent that,
upon notice from the Trustee to the holders of Designated Senior Debt that such
prohibited payment has been made, the holders of the Designated Senior Debt (or
their representative or representatives or a trustee or trustees) notify the
Trustee in writing of the amounts then due and owing on the Designated Senior
Debt, if any, and only the amounts specified in such notice to the Trustee shall
be paid to the holders of Designated Senior Debt.
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc. (a)
Upon any payment or distribution of assets or securities of the Company of any
kind or character, whether in cash, property or securities (excluding any
payment or distribution of Permitted Junior Securities and excluding Defeasance
Trust Payment), upon any dissolution or winding-up or total liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all Obligations due
in respect of Senior Debt (including interest after the commencement of any
bankruptcy proceeding) shall first be paid in full in cash or Cash Equivalents
before the Holders of the Notes or the Trustee on behalf of such Holders shall
be entitled to receive any payment by the Company with respect to any
Obligations on or relating to the Notes, or any payment by the Company to
acquire any of the Notes for cash, property or securities, or any distribution
by the Company with respect to the Notes of any cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities and
excluding any Defeasance Trust Payment). Before any payment may be made by, or
on behalf of, the Company with respect to any Obligations on or relating to the
Notes upon any such dissolution or winding-up or total liquidation or
reorganization, any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities and
excluding any Defeasance Trust Payment), to which the Holders of the Notes or
the Trustee on their behalf would be entitled, but for the subordination
provisions of this Indenture, shall be made by the Company or by any receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, directly to the holders of the Senior Debt (pro rata to
such holders on the basis of the respective amounts of Senior Debt held by such
holders) or their representatives or to the trustee or trustees or agent or
agents under any agreement or indenture pursuant to which any of such Senior
Debt may have been issued, as their respective interests may appear, to the
extent necessary to pay all such Senior Debt in full in cash after giving effect
to any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities (excluding any payment or distribution of Permitted Junior
Securities and excluding any Defeasance Trust Payment), shall be received by the
Trustee or any Holder of Notes at a time when such payment or distribution is
prohibited by Section 8.03(a) and before all obligations in respect of Senior
Debt are paid in full in cash, such payment or distribution shall be received
and held in trust for the benefit of, and shall be paid over or delivered to,
the holders of Senior Debt (pro rata to such holders on the basis of the
respective amounts of Senior Debt held by such holders) or their respective
representatives, or to the trustee or trustees or agent or agents under any
indenture pursuant to which any of such Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of Senior
Debt remaining unpaid until all such Senior Debt has been paid in full in cash
after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt.
The consolidation of the Company with, or the merger of the Company
with or into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article V shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 8.03 if such
other corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article V.
-66-
SECTION 8.04. Subrogation. Upon the payment in full in cash or Cash
Equivalents of all Senior Debt, or provision for payment, the Holders of the
Notes shall be subrogated to the rights of the holders of Senior Debt to receive
payments or distributions of cash, property or securities of the Company made on
such Senior Debt until all Obligations due in respect of the Notes shall be paid
in full in cash; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of any cash, property or
securities to which the Holders of the Notes or the Trustee on their behalf
would be entitled except for the provisions of this Article VIII, and no payment
over pursuant to the provisions of this Article VIII to the holders of Senior
Debt by Holders of the Notes or the Trustee on their behalf shall, as between
the Company, its creditors other than holders of Senior Debt, and the Holders of
the Notes, be deemed to be a payment by the Company to or on account of the
Senior Debt. It is understood that the provisions of this Article VIII are and
are intended solely for the purpose of defining the relative rights of the
Holders of the Notes, on the one hand, and the holders of the Senior Debt, on
the other hand.
If any payment or distribution to which the Holders of the Notes would
otherwise have been entitled but for the provisions of this Article VIII shall
have been applied, pursuant to the provisions of this Article VIII, to the
payment of all amounts payable under Senior Debt, then and in such case, the
Holders of the Notes shall be entitled to receive from the holders of such
Senior Debt any payments or distributions received by such holders of Senior
Debt in excess of the amount required to make payment in full in cash of such
Senior Debt.
SECTION 8.05. Obligations of Company Unconditional. Nothing
contained in this Article VIII or elsewhere in this Indenture or in the Notes is
intended to or shall impair, as among the Company and the Holders of the Notes,
the obligation of the Company, which is absolute and unconditional, to pay to
the Holders of the Notes, all Obligations due in respect of the Notes as and
when the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Notes and
creditors of the Company other than the holders of the Senior Debt, nor shall
anything herein or therein prevent the Holder of any Note or the Trustee on
their behalf from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article VIII of the holders of the Senior Debt in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained in
this Article VIII shall restrict the right of the Trustee or the Holders of
Notes to take any action to declare the Notes to be due and payable prior to
their stated maturity pursuant to Section 6.01 or to pursue any rights or
remedies hereunder; provided, however, that all Senior Debt then due and payable
shall first be paid in full in cash or Cash Equivalents before the Holders of
the Notes or the Trustee are entitled to receive any direct or indirect payment
from the Company of all Obligations due in respect of the Notes.
SECTION 8.06. Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in respect of the Notes
pursuant to the provisions of this Article VIII. The Trustee shall not be
charged with knowledge of the existence of any event of default with respect to
any Senior Debt or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing at its Corporate Trust Office to that effect signed by an
Officer of the Company, or by a holder of Senior Debt or trustee or agent
therefor; and prior to the receipt of any such written notice, the Trustee
shall, subject to Article VII, be entitled to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section 8.06 at least two Business Days prior to the date
upon which by the terms of this Indenture any moneys shall become payable for
any purpose (including, without limitation, the payment of the principal of or
interest on any Note), then, regardless of anything herein to the contrary, the
-67-
Trustee shall have full power and authority to receive any moneys from the
Company and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary which may be received by it
on or after such prior date. Nothing contained in this Section 8.06 shall limit
the right of the holders of Senior Debt to recover payments as contemplated by
Section 8.03. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of any
Senior Debt (or a trustee on behalf of, or other representative of, such holder)
to establish that such notice has been given by a holder of such Senior Debt or
a trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article VIII, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article VIII, 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.
SECTION 8.07. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article VIII, the Trustee and the Holders of the Notes shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Trustee or to the Holders of the Notes
for the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt 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
VIII.
SECTION 8.08. Trustee's Relation to Senior Debt. The Trustee and
any Paying Agent shall be entitled to all the rights set forth in this Article
VIII with respect to any Senior Debt which may at any time be held by it in its
individual or any other capacity to the same extent as any other holder of
Senior Debt, and nothing in this Indenture shall deprive the Trustee or any
Paying Agent of any of its rights as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article VIII, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt (except as provided in Section
8.03(b)). The Trustee shall not be liable to any such holders if the Trustee
shall in good faith mistakenly pay over or distribute to Holders of Notes or to
the Company or to any other person cash, property or securities to which any
holders of Senior Debt shall be entitled by virtue of this Article VIII or
otherwise.
SECTION 8.09. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt . No right of any present or
future holders of any Senior Debt to enforce subordination as provided herein
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms of
this Indenture, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with. The provisions of this Article VIII are
intended to be for the benefit of, and shall be enforceable directly by, the
holders of Senior Debt.
SECTION 8.10. Holders Authorize Trustee To Effectuate Subordination
of Notes. Each Holder of Notes by the Holder's acceptance of such Notes
authorizes and expressly directs the Trustee on the Holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
-68-
provided in this Article VIII, and appoints the Trustee his attorney-in-fact for
such purposes, including, in the event of any dissolution, winding-up, total
liquidation or reorganization of the Company (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of the Company, the filing of a claim for the unpaid balance
of its or his Notes in the form required in those proceedings.
SECTION 8.11. This Article Not To Prevent Events of Default. The
failure to make a payment on account of any Obligation due in respect of the
Notes by reason of any provision of this Article VIII shall not be construed as
preventing the occurrence of an Event of Default specified in clause (a), (b) or
(c) of Section 6.01.
SECTION 8.12. Trustee's Compensation Not Prejudiced. Nothing in
this Article VIII shall apply to amounts due to the Trustee pursuant to other
sections in this Indenture.
SECTION 8.13. No Waiver of Subordination Provisions. Without in any
way limiting the generality of Section 8.09, the holders of Senior Debt may, at
any time and from time to time, without the consent of or notice to the Trustee
or the Holders of the Notes, without incurring responsibility to the Holders of
the Notes and without impairing or releasing the subordination provided in this
Article VIII or the obligations hereunder of the Holders of the Notes to the
holders of Senior Debt, do any one or more of the following: (a) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Debt or any instrument evidencing the same or any agreement under
which Senior Debt is outstanding or secured; (b) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Debt; (c) release any Person liable in any manner for the collection of Senior
Debt; and (d) exercise or refrain from exercising any rights against the Company
and any other Person.
SECTION 8.14. Subordination Provisions Not Applicable to Money Held
in Trust for Holders; Payments May Be Paid Prior to Dissolution. All cash in
U.S. legal tender and U.S. Government Obligations deposited in trust with the
Trustee pursuant to and in accordance with Article IX shall be for the sole
benefit of the Holders and shall not be subject to this Article VIII.
Nothing contained in this Article VIII or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Section
8.02, from making payments of any Obligation due in respect of the Notes or from
depositing with the Trustee any moneys for such payments or from effecting a
termination of the Company's obligations under the Notes and this Indenture as
provided in Article IX, or (ii) the application by the Trustee of any moneys
deposited with it for the purpose of making such payments of any Obligations due
in respect of the Notes, to the holders entitled thereto unless at least two
Business Days prior to the date upon which such payment becomes due and payable,
the Trustee shall have received the written notice provided for in Section
8.02(b) or in Section 8.06. The Company shall give prompt written notice to the
Trustee of any dissolution, winding-up, liquidation or reorganization of the
Company.
SECTION 8.15. Acceleration of Notes. If payment of the Notes is
accelerated because of an Event of Default, the Company shall promptly notify
holders of the Senior Debt of the acceleration.
ARTICLE IX
DISCHARGE OF INDENTURE; DEFEASANCE
----------------------------------
SECTION 9.01. Legal Defeasance and Covenant Defeasance. (a) The
Company may, at the option of its Board of Directors evidenced by a resolution
set forth in an Officers' Certificate, at any time, elect to have either Section
9.01(b) or 9.01(c) hereof be applied to all outstanding Notes of a designated
maturity upon compliance with the conditions set forth below in this Article IX.
-69-
(b) Upon the Company's exercise in Section 9.01(a) hereof of the
option applicable to this Section 9.01(b), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 9.02 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes of a designated maturity and any related Note Guarantee on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"), each such reference below being only to such designated maturity
of Notes. For this purpose, Legal Defeasance means that the Company and each
Guarantor shall be deemed to have paid and discharged the entire Indebtedness
represented by such outstanding Notes and any related Note Guarantee, which
Notes and Notes Guarantees shall thereafter be deemed to be "outstanding" only
for the purposes of Section 9.03 hereof and the other Sections of this Indenture
referred to in (i) and (ii) below, and to have satisfied all their other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (i) the rights of Holders of
such outstanding Notes to receive solely from the trust fund described in this
Article IX, as more fully set forth in such Article, payments in respect of the
principal of, premium, if any, and interest and Additional Interest, if any, on
such Notes when such payments are due, (ii) the Company's obligations with
respect to the Notes in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.09, 7.07 and
7.08, which shall survive until the Notes have been paid in full (thereafter,
the Company's obligations in Section 7.07 shall survive), and (iii) this Article
IX. Subject to compliance with this Article IX, the Company may exercise its
option under this Section 9.01(b) notwithstanding the prior exercise of its
option under Section 9.01(c) hereof.
(c) Upon the Company's exercise under Section 9.01(a) hereof of
the option applicable to this Section 9.01(c), the Company and each Guarantor
shall, subject to the satisfaction of the conditions set forth in Section 9.02
hereof, be released from their obligations under Sections 4.06, 4.07, 4.08,
4.09, (other than with respect to collateral) 4.10, 4.13, 4.14, and 4.15 and
5.01 hereof with respect to the outstanding Notes of a designated maturity on
and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), each such reference below being only to such designated
maturity of Notes, and such Notes shall thereafter be deemed not "outstanding"
for the purposes of any direction, waiver, consent or declaration of act of
Holders (and the consequences of any thereof) in connection with such Sections,
but shall continue to be deemed "outstanding" for all the other purposes
hereunder (it being understood that such Notes and the related Notes Guarantees
shall not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect of any term, condition or
limitation set forth in any such Section, whether directly or indirectly, by
reason of any reference elsewhere herein to any such Section or by reason of any
reference in any such Section to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.01 hereof, but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Company's exercise under Section 9.01(a) hereof of the option
applicable to this Section 9.01(c) hereof, subject to the satisfaction of the
conditions set forth in Section 9.02, Sections 6.01(a), 6.01(b), 6.01(d) (with
respect to compliance with Sections 4.08, 4.10, 4.13, 4.14, and 4.15), 6.01(e)
and (f) shall not constitute Events of Default.
SECTION 9.02. Conditions to Legal or Covenant Defeasance. The
following shall be the conditions to the application of either Section 9.01(b)
or 9.01(c) hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) (i) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders, cash in U.S. legal
tender, U.S. Government Obligations or a combination thereof, in such
amounts as will be sufficient (without reinvestment), in the opinion of
a nationally recognized firm of independent public accountants selected
by the Company, to pay the principal of, premium, if any, and interest
and Additional Interest, if any, on such outstanding Notes on the
stated date for payment or on the applicable redemption date, as the
case may be, (ii) the Holders must have a valid, perfected exclusive
-70-
security interest in such trust, and (iii) the Company must specify
whether such Notes are being defeased to maturity or to a particular
redemption date;
(b) in the case of an election under Section 9.01(b)
hereof, the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States reasonably acceptable to the Trustee
confirming 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 U.S.
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of such
outstanding Notes will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of such Legal Defeasance and
will be subject to U.S. federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
Legal Defeasance had not occurred;
(c) in the case of an election under Section 9.01(c)
hereof, the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States, reasonably acceptable to the Trustee,
confirming that the Holders of such outstanding Notes will not
recognize income, gain or loss for U.S. federal income tax purposes as
a result of such Covenant Defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had
not occurred;
(d) no Default shall have occurred and be continuing on
the date of such deposit (other than a Default resulting from the
borrowing of funds to be applied to such deposit and the grant of any
Lien securing such borrowing);
(e) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default under,
this Indenture or any other material agreement or instrument (other
than this Indenture) to which the Company or any of its Subsidiaries is
a party or by which QCII, the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or the
Guarantors, as applicable, or others; and
(g) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that the
conditions precedent provided for in, in the case of the Officers'
Certificate, clauses (a) through (f) and, in the case of the Opinion of
Counsel, clauses (a) (with respect to the validity and perfection of
the security interest), (b) and/or (c) and (e) above have been complied
with.
SECTION 9.03. Deposited Money and Government Securities To Be Held
in Trust; Other Miscellaneous Provisions. Subject to Section 9.04 hereof, all
cash in U.S. legal tender and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 9.03, the "Trustee") pursuant to
Section 9.02 hereof in respect of outstanding Notes of a particular maturity
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
-71-
Anything in this Article IX to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any cash in U.S. legal tender or U.S. Government Obligations held
by it as provided in Section 9.02 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 9.02(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 9.04. Repayment to the Company. Any money deposited with
the Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium and Additional Interest, if any, or
interest on any Note and remaining unclaimed for two years after such principal,
premium and Additional Interest, if any, or interest has become due and payable
shall be paid to the Company on its request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company, cause to be published once, in the New York Times
(national edition) and the Wall Street Journal (national edition), notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 9.05. Reinstatement. If the Trustee or Paying Agent is
unable to apply any cash in U.S. legal tender or U.S. Government Obligations in
accordance with this Article IX by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application or the funds deposited are insufficient to pay the principal of,
premium, if any, interest and Additional Interest on the outstanding Notes, then
the Company's obligations under this Indenture and the Notes shall be revived
and reinstated as though no deposit had occurred pursuant to this Article IX
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with this Article IX; provided, however, that, if the
Company or any Guarantor makes any payment of principal of, premium and
Additional Interest, if any, or interest on any Note following the reinstatement
of its obligations, the Company or any Guarantor, as the case may be, shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
SECTION 9.06. Satisfaction and Discharge of Indenture. Upon the
request of the Company, this Indenture will cease to be of further effect
(except as to rights of registration of transfer or exchange of the Notes, which
shall survive until all Notes of each maturity have been canceled), and all
Liens on the Collateral shall be released and terminated, the Company and the
Guarantors will be discharged from their obligations under the designated
maturity of Notes and the related Note Guarantees, and the Trustee, at the
expense of the Company, will execute proper instruments acknowledging
satisfaction and discharge of this Indenture, such Note Guarantees, the
Registration Rights Agreement and such Notes when:
(a) either (i) all such Notes of a particular maturity
theretofore authenticated and delivered (other than mutilated,
destroyed, lost or stolen Notes that have been replaced or paid and
Notes that have been subject to defeasance under this Article IX) have
been delivered to the Trustee for cancellation or (ii) (A) all such
Notes of a particular maturity not theretofore delivered to the Trustee
for cancellation have become due and payable or have been called for
redemption pursuant to Section 3.07 and the Company, has irrevocably
deposited or caused to be deposited with the Trustee funds in trust in
an amount sufficient to pay and discharge the entire Indebtedness on
such Notes not theretofore delivered to the Trustee for cancellation;
(B) the Company has paid or caused to be paid all sums payable under
this Indenture; (C) the Company has delivered irrevocable instructions
to the Trustee to apply the deposited money toward the payment of the
Notes of such series at maturity or on the date of redemption, as the
-72-
case may be; and (D) the Holders have a valid, perfected exclusive
security interest in this trust; and an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided
in this Indenture relating to the satisfaction and discharge of this
Indenture, the Note Guarantees, the security agreements relating
thereto and the Notes have been complied with.
(b) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that the
conditions precedent relating to this Section 9.06 have been complied
with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.07 and, if money shall
have been deposited with the Trustee pursuant to clause (a)(ii) of this Section,
the obligations of the Trustee under Section 9.03 and Section 2.04 shall
survive.
ARTICLE X
AMENDMENTS
----------
SECTION 10.01. Without Consent of Holders. The Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Notes (as
to a designated maturity of Notes or as to all of the Notes), the Notes
Guarantees or the Security Documents applicable thereto without notice to or
consent of any Noteholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or
in place of certificated Notes (provided that the uncertificated Notes
are issued in registered form for purposes of Section 163(f) of the
Code, or in a manner such that the uncertificated Notes are described
in Section 163(f)(2)(B) of the Code);
(c) to provide for the assumption of the Company's and
Guarantors' obligations to Holders of such Notes, and related releases
of the Company and Guarantors, in the case of a merger, consolidation
or sale of assets pursuant to Section 5.01;
(d) to make any change that would provide any additional
rights or benefits to the Holders of such Notes or that, as determined
by the Board of Directors of the Company in good faith, does not
materially adversely affect the rights of any such Holder under this
Indenture, the Notes or the Notes Guarantees, or the Security
Documents;
(e) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
(f) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in this Indenture; or
(g) to add collateral, as required.
After an amendment under this Section becomes effective, the Company
shall mail to the Holders of such Notes a notice briefly describing such
amendment. The failure to give such notice to all the Holders of such Notes, or
any defect therein, shall not impair or affect the validity of an amendment
under this Section.
SECTION 10.02. With Consent of Holders. The Company, the Guarantors
and the Trustee may amend or supplement this Indenture, the Notes (as to a
designated maturity of Notes or as to all of the Notes), the Note Guarantees or
-73-
the Security Documents with the written consent of the Holders of at least a
majority in aggregate principal amount of all series of the Notes then
outstanding (including Additional Notes, if any), voting together as a single
group; provided that any such amendments that affect the terms of a particular
maturity of Notes as distinct from any other maturity of Notes will require the
consent of at least a majority in aggregate principal amount of such affected
maturity of Notes then outstanding and any existing Default under, or compliance
with any provisions of, this Indenture, the Notes, any Note Guarantee thereon or
the Security Documents applicable thereto may be waived (other than any
continuing Default in the payment of the principal of or interest on the Notes)
with the consent of the Holders of a majority in aggregate principal amount of
the Notes then outstanding to be affected thereby (including consents obtained
in connection with a tender offer or exchange offer for such Notes) and provided
further that any such amendment may not effect any change that adversely affects
the rights under Article VIII of any holder of Senior Debt then outstanding
unless such holder, or its representative, shall have consented in writing to
such amendment. Notwithstanding the foregoing, without the consent of each
Noteholder affected, an amendment or waiver may not (with respect to any Notes
held by a non-consenting Holder):
(i) change the maturity of such Notes;
(ii) reduce the amount, extend the due date or otherwise
affect the terms of any scheduled payment of interest on or principal
of any such Note;
(iii) reduce any premium payable upon optional redemption
of any such Notes, change the date on which any such Notes are subject
to redemption or otherwise alter the provisions with respect to the
redemption of such Notes;
(iv) make any such Notes payable in money or currency
other than that stated therein;
(v) modify or change any provision of this Indenture or
the related definitions to modify the ranking of such Notes or any Note
Guarantee thereon or the subordination provisions thereof, or alter the
relative priority of the security interests as provided for in the
Security Documents, in a manner that adversely affects the Holder
thereof;
(vi) reduce the percentage of Holders necessary to consent
to an amendment or waiver to this Indenture or any such Notes;
(vii) impair the rights of Holders to receive payments of
principal of or interest on such Notes;
(viii) release any Guarantor from any of its obligations
under its applicable Note Guarantee or this Indenture, except as
permitted by this Indenture; or
(x) make any changes in the foregoing amendment or waiver
provisions.
It shall not be necessary for the consent of the Holders under this
Section 10.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to the Holders of such Notes a notice briefly describing such
amendment. The failure to give such notice to all the Holders of such Notes, or
any defect therein, shall not impair or affect the validity of an amendment
under this Section.
-74-
Notwithstanding the foregoing, no amendment may, without the consent of
66 2/3% in aggregate principal amount of the Notes of all series then
outstanding, voting together as single group, release any Collateral from any
Lien under this Indenture, the Notes of a particular series or the Security
Documents relating thereto, except in accordance with Sections 4.10 and 11.03;
provided that such a release may be obtained as to a particular series with the
consent of Holders of 66 2/3% in aggregate principal amount of such series.
SECTION 10.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Notes shall comply with the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Note shall bind the Holder
and every subsequent Holder of that Note or portion of the Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
or waiver is not made on the Note. However, any such Holder or subsequent Holder
may revoke the consent or waiver as to such Holder's Note or portion of the Note
if the Trustee receives written notice of revocation before the date the
amendment or waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Noteholder. Except if otherwise specified in such
amendment or waiver, an amendment or waiver becomes effective once the requisite
number of consents are received by the Company or the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders 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 Noteholders 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.
SECTION 10.05. Notation on or Exchange of Notes. If an amendment
changes the terms of a Note, the Trustee may require the Holder of the Note to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Note 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 Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Note
shall not affect the validity of such amendment.
SECTION 10.06. Trustee To Sign Amendments. The Trustee shall sign
any amendment authorized pursuant to this Article X 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
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture 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 10.03).
ARTICLE XI
COLLATERAL DOCUMENTS
--------------------
SECTION 11.01. Security Documents. The due and punctual payment of
the principal of, interest and Additional Interest, if any, on the Notes and the
Note Guarantees when and as the same shall be due and payable, whether on an
interest payment date, at maturity, by acceleration, repurchase, redemption or
otherwise, and interest on the overdue principal of and interest and Additional
Interest (to the extent permitted by law), if any, on the Notes and the Note
Guarantees and performance of all other obligations of the Company and QCII to
-75-
the Holders of Notes or the Trustee under this Indenture and the Notes,
according to the terms hereunder or thereunder, are secured as provided in the
Security Documents which the Company and QCII have entered into simultaneously
with the execution of this Indenture. Each Holder of Notes, by its acceptance
thereof, consents and agrees to the terms of the Security Documents (including,
without limitation, the provisions providing for foreclosure and release of
Collateral) as the same may be in effect or may be amended from time to time in
accordance with its terms and authorizes and directs each of the Collateral
Agents to enter into the Security Documents and to perform their obligations and
exercise their rights thereunder in accordance therewith. The Company and QCII
shall deliver to the Trustee (if it is not itself then the QSC Collateral Agent
or the QCII Collateral Agent) copies of all documents delivered to each of the
Collateral Agents pursuant to the Security Documents, and will do or cause to be
done all such acts and things as may be required by the next sentence of this
Section 11.01, to assure and confirm to the Trustee and the Collateral Agents,
the security interest in the Collateral contemplated hereby, by the Security
Documents or any part thereof, as from time to time constituted, so as to render
the same available for the security and benefit of this Indenture and of the
Notes and the Note Guarantees secured hereby, according to the intent and
purposes herein expressed. The Company shall take any and all actions reasonably
required to cause the Security Documents to create and maintain, as security for
the Obligations of the Company hereunder, a valid and enforceable perfected Lien
in and on all of the Collateral, in favor of the applicable Collateral Agent for
the benefit of the Holders of Notes, with such priority as provided for in the
applicable Security Documents.
SECTION 11.02. Recording and Opinions. (a) The Company and QCII
shall each furnish to the Trustee:
(1) promptly after issuance of the Exchange Notes, an
Opinion of Counsel that complies with TIAss.314(b)(1); and
(2) at least annually thereafter, an Opinion of Counsel
that complies with TIAss. 314(b)(2).
(b) The Company and QCII will otherwise comply with any successor
provisions to TIAss. 314(b).
SECTION 11.03. Release of Collateral upon Asset Sale. (a) Subject to
subsections (b) and (c) of this Section 11.03, QSC Collateral may be released
from the Lien and security interest created by the Security Documents at any
time or from time to time in accordance with the provisions hereof. Upon the
request of the Company and without the consent of any Holder of the Notes and
the Note Guarantees, the Company will be entitled to an automatic release of
assets included in the QSC Collateral ("Released Interests") from the Liens
securing the Notes in connection with an Asset Sale if the Company shall have
delivered to the Trustee and the QSC Collateral Agent:
(i) a notice requesting the release of the Released
Interests, which notice shall (A) describe the proposed Released
Interests, (B) state that the purchase price received is at least equal
to the Fair Market Value of the Released Interest, and (C) in the event
that any assets other than cash or Cash Equivalents comprise a portion
of the consideration received in such Asset Sale, specifically describe
such assets;
(ii) an Officers' Certificate stating that: (A) (1) the
stated Fair Market Value of such Asset Sale of Collateral does not
include the sale of assets other than the Released Interest and (2)
such Asset Sale complies with the terms and conditions of this
Indenture with respect to Asset Sales; (B) all Net Available Proceeds
from the sale of the Released Interest will be applied pursuant to the
provisions of the QSC Pledge Agreement and this Indenture and the
documents governing any Indebtedness secured by a Lien on the Released
Interest senior to the Lien of the Notes with respect to Asset Sales;
and (C) all conditions precedent in this Indenture relating to the
release in question have been complied with;
-76-
(iii) the Net Available Proceeds and other non-cash
consideration from the Asset Sale required to be pledged to secure the
Notes have been so pledged in a manner that creates a perfected
security interest therein of the same priority as the Collateral sold;
(iv) all documentation necessary or reasonably requested
by the Trustee to evidence the grant to the QSC Collateral Agent, on
behalf of the Holders of the Notes, of a security interest in and Lien
(of the same priority as the Lien on the assets subject to the Asset
Sale) on all assets comprising a portion of the consideration received
in such Asset Sale, if any; and
(v) all documentation required by the TIA prior to the
release of Collateral by the Trustee.
Upon receipt of such notice and Officers' Certificate each Collateral
Agent shall execute, deliver or acknowledge any necessary or proper instruments
of termination, satisfaction or release to evidence the release of any
Collateral permitted to be released pursuant to this Indenture or the Security
Documents.
The Trustee may, to the extent permitted by Sections 7.01 and 7.02
hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such documents and such
Opinion of Counsel.
(b) Except as otherwise provided in the Pledge Agreements, no
Collateral may be released from the Lien and security interest created by the
Security Documents pursuant to the provisions of the Security Documents unless
the Officers' Certificate required by this Section 11.03 has been delivered to
the Collateral Agents.
(c) The release of any Collateral from the terms of this Indenture
and the Security Documents shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the terms of the Security Documents and this
Indenture. To the extent applicable, the Company and QCII will cause TIA ss.
313(b), relating to reports, and TIA ss. 314(d), relating to the release of
property or securities from the Lien and security interest of the Security
Documents and relating to the substitution therefor of any property or
securities to be subjected to the Lien and security interest of the Security
Documents, to be complied with. Any certificate or opinion required by TIA ss.
314(d) may be made by an Officer of the Company and QCII, as applicable, except
in cases where TIA ss. 314(d) requires that such certificate or opinion be made
by an independent Person, which Person will be an independent engineer,
appraiser or other expert selected or approved by the Trustee and the Collateral
Agents in the exercise of reasonable care.
SECTION 11.04. Certificates of the Trustee. In the event that the
Company and QCII wish to release Collateral in accordance with the Security
Documents at a time when the Trustee is not itself also both the QSC Collateral
Agent and the QCII Collateral Agent and has delivered the certificates and
documents required by the Security Documents and Section 11.03 hereof, the
Trustee will determine whether it has received all documentation required by TIA
ss. 314(d) in connection with such release and, based on such determination and
the Opinion of Counsel delivered pursuant to Section 11.03(a) (ii), will deliver
a certificate to the Collateral Agents setting forth such determination.
SECTION 11.05. Authorization of Actions To Be Taken by the Trustee
Under the Security Documents. Subject to the provisions of Sections 7.01 and
7.02 hereof, the Trustee may, in its sole discretion and without the consent of
the Holders of Notes, direct, on behalf of the Holders of Notes, the Collateral
Agents to take all actions it deems necessary or appropriate in order to:
-77-
(1) enforce any of the terms of the Security Documents;
and
(2) collect and receive any and all amounts payable in
respect of the Obligations of the Company and QCII hereunder.
SECTION 11.06. Authorization of Receipt of Funds by the Trustee
Under the Security Documents. The Trustee is authorized to receive any funds for
the benefit of the Holders of Notes distributed under the Security Documents,
and to make further distributions of such funds to the Holders of Notes
according to the provisions of this Indenture.
SECTION 11.07. Termination of Security Interest. The Trustee will,
at the request of the Company and QCII, deliver a certificate to the Collateral
Agents stating that all Obligations due in respect of the Notes have been paid
in full, and instruct the Collateral Agents to release the Liens pursuant to
this Indenture and the Security Documents upon (1) payment in full of the
principal of, accrued and unpaid interest and Additional Interest, if any, on
the Notes and all other Obligations under this Indenture, (2) a satisfaction and
discharge of this Indenture as described in Section 9.06 hereof or (3) a legal
defeasance or covenant defeasance as described in Article IX. Upon receipt of
such instruction, the Collateral Agents shall execute, deliver or acknowledge
any necessary or proper instruments of termination, satisfaction or release to
evidence the release of all such Liens.
SECTION 11.08. Collateral Agent. (a) Bank of America, N.A. shall
initially act as the QSC Collateral Agent and the Trustee shall initially act as
the QCII Collateral Agent pursuant to the terms of the Security Documents and
each shall be authorized to appoint co-Collateral Agents as necessary in its
sole discretion. None of the Collateral Agents nor any of their officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any other Person or to take any other action whatsoever with regard
to the Collateral or any part thereof. The powers conferred on the Collateral
Agents hereunder are solely to protect the Collateral Agents' interests in the
Collateral and shall not impose any duty upon the Collateral Agents to exercise
any such powers. The Collateral Agents shall be accountable only for amounts
that it actually receives as a result of the exercise of such powers, and
neither the Collateral Agents nor any of their officers, directors, employees or
agents shall be responsible for any act or failure to act hereunder, except for
its own gross negligence or willful misconduct.
(b) The Trustee, and the Collateral Agents, are each authorized
and directed to (i) enter into the Security Documents, (ii) bind the Holders on
the terms as set forth therein and (iii) perform and observe its obligations
under the Security Documents.
(c) If (i) the Company or QCII at any time incurs any Indebtedness
which is permitted to be secured by a Lien on the Collateral by the terms hereof
and desires to secure such Indebtedness, (ii) the Company or QCII delivers to
the Collateral Agents an Officers' Certificate so stating and requesting that
the Collateral Agents enter into Security Documents so providing and (iii) the
Company or QCII delivers to the Collateral Agents an Opinion of Counsel stating
that, in the opinion of such counsel, such Liens are permitted hereby; then such
Liens may be granted with such priority and rank as set forth in such Officers'
Certificate and permitted hereby.
SECTION 11.09. Suits to Protect the Collateral. Subject to the
provisions of the Security Documents, the Trustee shall have power to institute
and to maintain such suits and proceedings as it may deem expedient to prevent
any impairment of the Collateral by any acts which may be unlawful or in
violation of any of the Security Documents or this Indenture, and such suits and
proceedings as the Trustee may deem expedient to preserve or protect its
interests and the interests of the Trustee and the Holders in the Collateral
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
-78-
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interests or be prejudicial to the interests of the Holders
or the Trustee).
SECTION 11.10. Powers Exercisable by Receiver or Trustee. In case
the Collateral shall be in the possession of a receiver or trustee, lawfully
appointed, the powers conferred in this Article XI upon the Company and QCII, as
applicable, with respect to the release, sale or other disposition of such
property may be exercised by such receiver or trustee, and an instrument signed
by such receiver or trustee shall be deemed the equivalent of any similar
instrument of the Company or of any officer or officers thereof required by the
provisions of this Article XI.
ARTICLE XII
NOTES GUARANTEES
----------------
SECTION 12.01. Notes Guarantees. Each Guarantor hereby jointly and
severally unconditionally and irrevocably 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 of principal of, premium, if any, and
interest and Additional Interest, if any, on the Notes when due, whether at
maturity, by acceleration, by redemption or otherwise, subject to any applicable
grace period, and all other monetary Obligations of the Company under this
Indenture (including obligations to the Trustee) and the Notes 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 Notes (all of 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 XII 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 Notes 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 Notes or any other
agreement or otherwise; (b) any extension or renewal of any Guaranteed
Obligations; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Notes 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 12.02(b).
Each Guarantor further agrees that its Note Guarantee herein
constitutes a Guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives 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 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
Notes or any other agreement, by any waiver or modification of any thereof, by
any default, failure or delay, willful or otherwise, in the performance of the
Guaranteed Obligations, or by any other act or thing or omission or delay to do
-79-
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 further agrees that its Note 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, premium or Additional Interest, if any, 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, premium and Additional Interest, if any, on such Guaranteed
Obligations (but only to the extent not prohibited by law) and (iii) all other
monetary Guaranteed 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. 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 Note Guarantee herein, notwithstanding any stay, injunction
or other prohibition preventing such 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.
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.
SECTION 12.02. Limitation on Liability; Release. Any term or
provision of this Indenture to the contrary notwithstanding, the maximum,
aggregate amount of the obligations guaranteed hereunder by any Guarantor shall
not exceed the maximum amount that can be guaranteed without rendering this
Indenture, as it relates to any Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
SECTION 12.03. Successors and Assigns. This Article XII shall be
binding upon each Guarantor and its successors and assigns and shall ensure 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
Notes shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.
SECTION 12.04. 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 XII 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 XII at
law, in equity, by statute or otherwise.
-80-
SECTION 12.05. Modification. No modification, amendment or waiver of
any provision of this Article XII, 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 12.06. Evidence of Guarantee. To evidence their guarantees
to the Holders set forth in this Article XII, each of the Guarantors hereby
agrees to execute the notation of Note Guarantee in substantially the form
included in Exhibit C. Each such notation of Note Guarantee shall be signed on
behalf of each Guarantor by an Officer.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 12.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.
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:
Qwest Services Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
with a copy to:
O'Melveny & Xxxxx
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
if to the Trustee:
Bank One Trust Company, N.A.
1 Bank One Plaza
Mail Code: IL1-0120
Xxxxxxx, XX 00000-0000
-81-
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 Noteholder shall be made in
compliance with Section 313(c) of the TIA and mailed to the Noteholder at the
Noteholder'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 Noteholder or any defect
in it shall not affect its sufficiency with respect to other Noteholders. 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.
Noteholders may communicate pursuant to TIA ss. 312(b) with other Noteholders
with respect to their rights under this Indenture or the Notes. The Company, the
Guarantors, 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, at the request of the Trustee the
Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 13.05 hereof) 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 (which shall include the
statements set forth in Section 13.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent have been
complied with.
To the extent applicable, the Company shall comply with Section
314(c)(3) of the TIA.
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;
(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 or satisfied; and
(4) a statement as to whether or not, in the opinion of
such individual, such covenant or condition has been complied with.
-82-
SECTION 13.06. When Notes Disregarded. In determining whether the
Holders of the required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company 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
Notes which the Trustee actually knows are so owned shall be so disregarded.
Also, subject to the foregoing, only Notes 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 a meeting of Noteholders. 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 NOTES 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,
incorporator, employee, stockholder or Affiliate as such, of the Company or any
Guarantor shall not have any liability for any obligations of the Company or any
Guarantor under the Notes, the Notes Guarantees, this Indenture, the
Registration Rights Agreement or the Security Documents or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Noteholder waives and releases all such liability. The
waiver and release shall be part of the consideration for the issue of the
Notes.
SECTION 13.11. Successors. All agreements of the Company and each
Guarantor in this Indenture and the Notes shall bind their successors. All
agreements of the Trustee in this Indenture shall bind its successors.
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.
SECTION 13.14. Severability. In case any one or more of the
provisions in this Indenture, in the Notes or in the Guarantees shall be held
invalid, illegal or unenforceable, in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions shall not in any way be affected or impaired thereby,
it being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.
-83-
SECTION 13.15. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any of its Subsidiaries. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
-84-
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
QWEST SERVICES CORPORATION
By: /s/ XXXX X. XXXX
-------------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
QWEST COMMUNICATIONS INTERNATIONAL INC.
QWEST CAPITAL FUNDING, INC.
By: /s/ XXXX X. XXXX
-------------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
BANK ONE TRUST COMPANY, N.A.
By: /s/ XXXXXX XXXXXXX
-------------------------------------
Name: Xxxxxx XxXxxxx
Title: Vice President
-85-
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
[GLOBAL NOTES LEGEND]
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
[RESTRICTED NOTES LEGEND]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE
BENEFIT OF THE COMPANY THAT NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION THEREIN MAY BE OFFERED, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR
TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF OR (Y) AT ANY TIME BY ANY
TRANSFEROR THAT WAS AN AFFILIATE OF THE COMPANY DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH OFFER, RESALE, PLEDGE OR OTHER TRANSFER, IN EITHER
CASE, OTHER THAN (1) TO THE COMPANY, (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
WHOM THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, IN EACH CASE, TO WHOM NOTICE IS
GIVEN THAT THE OFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE
ON RULE 144A, (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR (WITHIN THE MEANING OF
RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE WITH A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM
OF WHICH CAN BE OBTAINED FROM THE TRUSTEE), (5) TO NON-U.S. PERSONS IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT,
OR (6) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT, INCLUDING THAT PROVIDED BY RULE 144 (IF AVAILABLE)
UNDER THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION.
A-1
_______ % SENIOR SUBORDINATED SECURED NOTE DUE 20__
No. ___ CUSIP No.
$__________
QWEST SERVICES CORPORATION, a Colorado corporation (the "Company"),
promises to pay to, or its registered assigns, the principal sum of in U.S.
Dollars on December 15, 20__.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Additional provisions of this Note are set forth on the other side of
this Note.
A-2
QWEST SERVICES CORPORATION
By:
-------------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
BANK ONE TRUST COMPANY, N.A.
as Trustee, certifies that
this is one of the Notes [Seal]
referred to in the Indenture,
by
-------------------------------------
Authorized Signatory
A-3
[FORM OF REVERSE SIDE OF INITIAL NOTE]
_______% Senior Subordinated Secured Note due 20__
1. Interest
--------
QWEST SERVICES CORPORATION, a Colorado corporation (the "Company"),
promises to pay interest on the principal amount of this Note at the rate per
annum shown above and shall pay Additional Interest, if any, payable pursuant to
the Registration Rights Agreement.
The Company will pay interest and Additional Interest, if any,
semi-annually in arrears on June 15 and December 15 of each year commencing on
June 15, 2003. Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the Issue
Date with respect to this Note. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months. The Company shall pay interest
on overdue principal at the rate borne by the Notes, and it shall pay interest
on overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
-----------------
The Company will pay interest (except defaulted interest) on and
Additional Interest, if any, in respect of the Notes to the Persons who are
registered holders of Notes at the close of business on the 1st of June or the
1st of December immediately preceding the interest payment date even if Notes
are canceled after the record date and on or before the interest payment date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
The Company will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
However, the Company may pay principal and interest by check payable in such
money or by wire transfer of federal funds.
3. Paying Agent and Registrar
--------------------------
Initially, Bank One Trust Company, N.A. (the "Trustee") will act as
Paying Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice to the Holders. The Company may act as
Paying Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Notes under an Indenture dated as of December
26, 2002 (the "Indenture"), among the Company, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the TIA. Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The Notes
are subject to all such terms, and Noteholders are referred to the Indenture and
the TIA for a statement of those terms.
The Notes are the senior subordinated secured obligations of the
Company and are limited to $4,000,000,000 in aggregate principal amount
outstanding, of which $[ ] in aggregate principal amount will be initially
issued on the Issue Date. [This Note is one of the Initial Notes of the Company
designated as its _____% Senior Subordinated Secured Notes due 20__, of which
$[ ] in aggregate principal amount will be initially issued on the Issue
Date.] [This Note is one of the Additional Notes of the Company designated as
its _____% Senior Subordinated Secured Notes due 20__, of which $[ ] in
aggregate principal amount will be initially issued on the Issue Date.] The
Notes include the Initial Notes and the Exchange Notes and issued in exchange
for the Initial Notes pursuant to the Indenture. The Initial Notes and the
Exchange Notes of this maturity are treated as a single class of Notes under the
Indenture. The Indenture imposes certain limitations on the incurrence of
A-4
Indebtedness by the Company and its Restricted Subsidiaries; the payment of
dividends and other payments by the Company and its Restricted Subsidiaries;
Investments; sales of assets of the Company and Restricted Subsidiaries; certain
transactions with Affiliates; Liens; and consolidations, mergers and transfers
of all or substantially all of the Company's or a Guarantor's assets. In
addition, the Indenture prohibits certain restrictions on distributions from
Restricted Subsidiaries.
5. Optional Redemption
-------------------
[The applicable redemption provisions for a particular series of
Initial Notes shall include only one of the following and will be set forth in
the Note; applicable redemption provisions for Additional Notes shall be set
forth herein as applicable. This paragraph applies only to this Indenture
Exhibit A form of Note, and shall not appear in a definitive Note.]
[2007 Notes. (i) Except as set forth below, the 2007 Notes may not be
redeemed prior to December 15, 2005. Thereafter, the 2007 Notes will be subject
to redemption at any time at the option of the Company, in whole or in part, at
the redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest and Additional Interest, if any, thereon
to the applicable redemption date (subject to the right of Holders on the
relevant record date to receive interest due on the relevant interest payment
date) if redeemed during the twelve-month period beginning on December 15 of the
years indicated below.
Year Price
---- -----
2005 106.500%
2006 103.250%
(ii) In addition, the Company may redeem all or a part of
the 2007 Notes upon not less than 30 nor more than 60 days' notice, at
a redemption price equal to the greater of (1) 100% of the principal
amount thereof or (2) the present value, as determined by an
Independent Financial Advisor, of (A) the applicable percentage set
forth above of the principal amount of the 2007 Notes being redeemed as
of December 15 of the first period set forth above ending on or after
the date of such redemption (assuming a 360-day year consisting of
twelve 30-day months), plus (B) all required interest payments due on
such 2007 Notes through December 15 of such period (excluding accrued
interest), discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus 50 basis points, plus in each case accrued interest
to the redemption date.]
[2010 Notes. (i) Except as set forth below, the 2010 Notes may not be
redeemed prior to December 15, 2006. At any time on or prior to December 15,
2006, the 2010 Notes will be subject to redemption at the option of the Company,
in whole or in part, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest and
Additional Interest, if any, thereon, to the applicable redemption date (subject
to the right of Holders on the relevant record date to receive interest due on
the relevant interest payment date), if redeemed during the twelve-month period
beginning on December 15 of the years indicated below:
Year Price
---- -----
2006 106.750%
2007 104.500%
2008 102.250%
2009 and thereafter 100.000%
A-5
(ii) In addition, at any time prior to December 15, 2009,
the Company may redeem all or a part of the 2010 Notes upon not less
than 30 nor more than 60 days' notice, at a redemption price equal to
the greater of (1) 100% of the principal amount thereof or (2) the
present value, as determined by an Independent Financial Advisor, of
(A) the applicable percentage set forth above of the principal amount
of the 2010 Notes being redeemed as of December 15 of the first period
set forth above ending on or after the date of such redemption
(assuming a 360-day year consisting of twelve 30-day months) plus (B)
all required interest payments due on such 2010 Notes through December
15 of such period (excluding accrued interest), discounted to the
redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 50 basis
points, plus in each case accrued interest to the redemption date.]
[2014 Notes. (i) Except as set forth below, the 2014 Notes may not be
redeemed prior to December 15, 2007. At any time on or prior to December 15,
2007, the 2014 Notes will be subject to redemption at the option of the Company,
in whole or in part, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest and
Additional Interest, if any, thereon, to the applicable redemption date (subject
to the right of Holders on the relevant record date to receive interest due on
the relevant interest payment date), if redeemed during the twelve-month period
beginning on December 15 of the years indicated below:
Year Price
---- -----
2007 107.000%
2008 104.667%
2009 102.333%
2010 and thereafter 100.000%
(ii) In addition, at any time prior to December 15, 2010,
the Company may redeem all or a part of the 2014 Notes upon not less
than 30 nor more than 60 days' notice, at a redemption price equal to
the greater of (1) 100% of the principal amount thereof or (2) the
present value, as determined by an Independent Financial Advisor, of
(A) the applicable percentage set forth above of the principal amount
of the 2014 Notes being redeemed as of December 15 of the first period
set forth above ending on or after the date of such redemption
(assuming a 360-day year consisting of twelve 30-day months) plus (B)
all required interest payments due on such 2014 Notes through December
15 of that period (excluding accrued interest), discounted to the
redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 50 basis
points, plus in each case accrued interest to the redemption date.]
6. Notices of Redemption
---------------------
Except as otherwise provided in the Indenture or herein, notices of
redemption shall be mailed by first-class mail at least 30 days but not more
than 60 days before the redemption date to each Holder of Notes to be redeemed
at its registered address all in accordance with the Indenture. If less than all
of the Notes are to be redeemed at any time, selection of Notes for redemption
will be made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed, or, if the
Notes are not so listed, on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate; provided that no Notes of $1,000 or
less shall be redeemed in part. If any Note is to be redeemed in part only, the
notice of redemption that relates to such Note shall state the portion of the
principal amount thereof to be redeemed. On and after the redemption date,
interest ceases to accrue on Notes or portions of them called for redemption.
X-0
0. Xxxxxxxxxx at the Option of the Holder
--------------------------------------
(a) Upon a Change of Control, any Holder of Notes will have the right,
subject to certain conditions set forth in the Indenture, to require the Company
to repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of the Notes of such Holder at a purchase price equal to 101% of the aggregate
principal amount of the Notes to be repurchased plus accrued and unpaid interest
and Additional Interest, if any, thereon, 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
repurchase) as provided in, and subject to the terms of, the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales, within
ten Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $50.0 million, the Company will commence an offer to all Holders of
Notes and all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in the Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets (an "Asset
Sale Offer") pursuant to Section 4.09 of the Indenture to purchase the maximum
principal amount of Notes (including any Additional Notes) that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and Additional
Interest thereon, if any, to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Indenture. To the extent that
the aggregate amount of Notes (including any Additional Notes) and other pari
passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company (or such Subsidiary) may use such deficiency for
any purpose not otherwise prohibited by the Indenture. If the aggregate
principal amount of Notes and other pari passu Indebtedness surrendered by the
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes and other pari passu Indebtedness to be purchased on a pro rata basis.
Holders of Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date and may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.
8. Collateral Documents
--------------------
In order to secure the due and punctual payment of the principal of and
interest on the Notes and all other amounts payable by the Company and QCII
under the Indenture and the Notes when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Notes and the Indenture the Company and QCII have granted Liens on the
Collateral to the Collateral Agents for the benefit of the Trustee and the
Holders of Notes.
Each Holder, by accepting a Note, agrees to all of the terms and
provisions of the Security Documents as the same may be amended from time to
time pursuant to the respective provisions thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
any of the Security Documents and the terms and provisions of the Indenture will
not be deemed for any purpose to be an impairment of the security under the
Indenture.
9. Denominations; Transfer; Exchange
---------------------------------
The Notes are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange Notes 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 Notes selected for redemption (except, in the case of a Note to be
A-7
redeemed in part, the portion of the Note not to be redeemed) or transfer or
exchange any Notes for a period of 15 days prior to a selection of Notes to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
---------------------
The registered Holder of this Note may be treated as the owner of it
for all purposes.
11. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed for
two years, the Paying Agent shall pay the money back to the Company at its
request, or if then held by the Company, shall be discharged from such trust
(unless an abandoned property law designates another Person for payment
thereof). After any such payment, Holders entitled to the money must look only
to the Company for payment thereof, and all liability of the Paying Agent with
respect to such money, and all liability of the Company as trustee thereof,
shall thereupon cease.
12. Discharge and Defeasance
------------------------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Indenture,
the Notes Guarantees, the Registration Rights Agreement and the Notes if the
Company deposits with the Trustee, cash in U.S. legal tender or U.S. Government
Obligations for the payment of principal and interest on the Notes to redemption
or maturity, as the case may be.
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Notes, the Notes Guarantees or the Security Documents may be
amended or supplemented with the written consent of the Holders of at least a
majority in principal amount of the then outstanding Notes and (ii) any existing
default or noncompliance with any provision of the Indenture, the Notes, Notes
Guarantees or the Security Documents (other than payment of principal, premium,
if any, Additional Interest, if any, and interest) may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Notes. Subject to certain exceptions set forth in the Indenture, without the
consent of any Noteholder, the Company, the Guarantors and the Trustee may amend
or supplement the Indenture, the Notes, the Note Guarantees or the Security
Documents, or to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes (provided
that the uncertificated Notes are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the uncertificated Notes
are described in Section 163(f)(2)(B) of the Code), to provide for the
assumption of the Company's obligations to Holders of Notes in the case of a
merger, consolidation or sale of assets, to release any Guarantor from any of
its obligations under its applicable Note Guarantee or the Indenture (to the
extent permitted by the Indenture) to make any change that would provide any
additional rights or benefits to the Holders of Notes or that, as determined by
the Board of Directors of the Company in good faith, does not materially
adversely affect the legal rights of any such Holder under the Indenture, the
Notes, the Notes Guarantees or the Security Documents, and to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA.
14. Defaults and Remedies
---------------------
Under the Indenture, an Event of Default occurs if there is: (i)
default for 30 days in the payment when due of interest on, or Additional
Interest with respect to, the Notes; (ii) default in payment when due of the
principal of or premium, if any, on the Notes (including the failure to make a
payment to purchase Notes tendered pursuant to a Change of Control Offer or an
Asset Sale Offer); (iii) failure by the Company (A) for 45 days after receipt of
A-8
notice from the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes to comply with Section 4.06, 4.07, 4.09, and 4.15 of
the Indenture or (B) to comply with the provisions of Sections 4.11 and 5.01 of
the Indenture; (iv) default under any Debt Instrument under which there may be
issued or by which there may be secured or evidenced Indebtedness of QCII, the
Company or any Restricted Subsidiary of QCII (other than QCC to the extent that
none of QCII, the Company or QCF have outstanding a Debt Instrument governing
Debt Securities under which there is a similar default as this clause (iv) with
respect to QCC that applies to such default) whether such Indebtedness now
exists or is incurred after the Issue Date, which default: (A) is caused by a
failure to pay when due principal on such Indebtedness at the final maturity
thereof; (B) results in the acceleration of such Indebtedness prior to its
express final maturity or (C) results in the commencement of judicial
proceedings to foreclose upon, or to exercise remedies under applicable law or
applicable security documents to take ownership of or to cause the sale of, the
assets securing such Indebtedness (other than the consensual provision of assets
securing non-recourse Indebtedness), and in each case, the principal amount of
such Indebtedness, together with any other Indebtedness with respect to which an
event described in clause (A), (B) or (C) has occurred and is continuing,
aggregates more than $100.0 million; (v) one or more final and non-appealable
judgments or orders that exceed $100.0 million in the aggregate (net of amounts
covered by insurance or bonded) for the payment of money have been entered by a
court or courts of competent jurisdiction against QCII, the Company or any
Restricted Subsidiary of QCII and such judgment or judgments have not been
satisfied, stayed, annulled or rescinded within 60 days of being entered; (vi)
QCII, 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 all or substantially all of its
assets, or (D) makes a general assignment for the benefit of its creditors;
(vii) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that: (A) is for relief against QCII, the Company or any
Significant Subsidiary as debtor in an involuntary case, (B) appoints a
Custodian of QCII, the Company or any Significant Subsidiary or a Custodian for
all or substantially all of the assets of the Company or any Significant
Subsidiary, or (C) orders the liquidation of QCII, the Company or any
Significant Subsidiary, and the order or decree remains unstayed and in effect
for 60 days; (vii) (A) any Note Guarantee shall be held in a judicial proceeding
before a court of competent jurisdiction not to be in full force and effect
(other than in accordance with the terms of such Note Guarantee and the
Indenture) or is declared in such a proceeding null and void and unenforceable
or found to be invalid or (B) any Guarantor denies its liability under its Note
Guarantee (other than by reason of release of a Guarantor from its Note
Guarantee in accordance with the terms of the Indenture and the Note Guarantee);
or (ix) default by the Company or any Guarantor in the performance of the
Security Documents which adversely affects the enforceability or the validity of
either Collateral Agent's Lien on the Collateral or which adversely affects the
condition or value of the Collateral, taken as a whole, in any material respect,
repudiation or disaffirmation by the Company or any Guarantor of its obligations
under the Security Documents or the determination in a judicial proceeding
before a court of competent jurisdiction that the Security Documents are
unenforceable or invalid against the Company or any Guarantor for any reason.
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives indemnity or security reasonably satisfactory to
it. Subject to certain limitations, Holders of a majority in principal amount of
the Notes may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Noteholders notice of any continuing Default (except a
Default in payment of principal, premium, if any, or interest) if and so long as
a committee of its Trust Officers in good faith determines that withholding
notice is in the interest of the Holders.
15. Subordination
-------------
Payment of principal, interest and premium and Additional Interest, if
any, on the Notes is subordinated to the prior payment of Senior Debt on the
terms provided in the Indenture.
A-9
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 Notes 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 Personal Liability of Directors, Officers, Employees and
-----------------------------------------------------------
Stockholders
------------
No past, present or future director, officer, employee, incorporator,
or stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes, the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. No past,
present or future director, officer, employee, incorporator, or stockholder of
any of the Guarantors, as such, shall have any liability for any obligations of
the Guarantors under the Notes Guarantees, the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
holder of Notes and Notes Guarantees by accepting a Note and a Note Guarantee
waives and releases all such liabilities. The waiver and release are part of the
consideration for issuance of the Notes and the Notes Guarantees. Such waiver
may not be effective to waive liabilities under the federal Notes laws and it is
the view of the SEC that such a waiver is against public policy.
18. Governing Law
-------------
THE NOTES 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.
19. Authentication
--------------
This Note 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 Note.
20. Abbreviations
-------------
Customary abbreviations may be used in the name of a Noteholder 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).
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 Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is made
as to the accuracy of such numbers either as printed on the Notes 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 Noteholder upon written request and
without charge to the Noteholder a copy of the Indenture which has in it the
text of this Note in larger type. Requests may be made to:
A-10
QWEST SERVICES CORPORATION
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention of Secretary
A-11
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note 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 Note on the
books of the Company. The agent may substitute another to act for him.
Date: ________________ Your Signature: ______________________________
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed by a participant in a
recognized signature guarantee medallion program)
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.
A-12
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER RESTRICTED NOTES
Reference is hereby made to that certain Indenture dated December 26, 2002 (the
"Indenture") among Qwest Services Corporation, as Company (the "Company"), the
Guarantors (as defined therein) and Bank One Trust Company, N.A., as trustee
(the "Trustee"). Capitalized terms used but not defined herein shall have the
meanings set forth in the Indenture.
This certificate relates to $_________ principal amount of Notes held in (check
applicable space) ____ book-entry or _____ definitive form by the undersigned.
The undersigned (check one box below):
[ ] has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Note held by the Depository a
Note or Notes in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Note (or the portion thereof indicated above);
[ ] has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the expiration of the periods referred to in Rule
144(k) under the Securities Act of 1933, as amended, the undersigned confirms
that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW:
(1) [ ] to the Company or any of its subsidiaries; or
(2) [ ] pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(3) [ ] inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as amended)
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 under the Securities Act of 1933, as
amended, in each case pursuant to and in compliance with Rule 144A
thereunder; or
(4) [ ] outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act of 1933, as
amended, in compliance with Rule 904 thereunder; or
(5) [ ] inside the United States to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933, as amended) that has furnished to the Trustee a
signed letter containing certain representations and agreements (the
form of which letter is attached to the Indenture as Exhibit C and
which may be obtained from the Trustee); or
(6) [ ] pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933, as amended; or
(7) [ ] in accordance with another exemption from the registration
requirements of the Securities Act of 1933, as amended.
A-13
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered holder thereof; provided, however, that if box (4), (5) or (6) is
checked, the Trustee may require, prior to registering any such transfer of the
Notes, such legal opinions, certifications and other information as the Company
has reasonably requested to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended, such as the exemption
provided by Rule 144 thereunder.
-----------------------------------------
Signature
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed by a participant in a
recognized signature guarantee medallion program)
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended ("Rule 144A"), 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
A-14
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTES
The following increases or decreases in this Global Note have been
made:
Amount of increase Principal amount of Signature of author-
Amount of decrease in in Principal this Global Note ized signatory of
Principal Amount of Amount of this following such de- Trustee or Notes
Date of Exchange this Global Note Global Note crease or increase Custodian
---------------- --------------------- ------------------ ------------------- --------------------
A-15
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.09, or 4.11 of the Indenture, check the box:
[ ] 4.09 Asset Sale [ ] 4.11 Change of Control Offering
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.11, 4.09 of the Indenture, state the amount:
$______.
Date: ________________ Your Signature: ______________________________
(Sign exactly as your name
appears on the other side of
the Note)
____________________
Tax I.D. number
Signature Guarantee: ___________________________________________________________
(Signature must be guaranteed by a participant in a
recognized signature guarantee medallion program)
A-16
EXHIBIT B
[FORM OF FACE OF EXCHANGE OR PERMANENT REGULATION S NOTE]
[Global Notes Legend]
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.1
QWEST SERVICES CORPORATION
______% SENIOR SUBORDINATED SECURED NOTE DUE 20__
No. __ CUSIP No. _________
$_________
QWEST SERVICES CORPORATION, a Colorado corporation (the "Company"),
promises to pay to _____________, or its registered assigns, the principal sum
of $__________ in U.S. Dollars on December 15, 20__.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
------------------------------
1 This paragraph should only be added if the Security is issued in global
form.
B-1
Additional provisions of this Note are set forth on the other side of
this Note.
QWEST SERVICES CORPORATION
By:
-------------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
BANK ONE TRUST COMPANY, N.A. as Trustee,
certifies that this is
one of the Notes [Seal]
referred to in the
Indenture,
by
-------------------------------------
Authorized Signatory
B-2
[FORM OF REVERSE SIDE OF EXCHANGE NOTE]
_____% Senior Subordinated Secured Note due 20__
1. Interest
--------
QWEST SERVICES CORPORATION, a Colorado corporation (the "Company"),
promises to pay interest on the principal amount of this Note at the rate per
annum shown above and shall pay Additional Interest, if any, payable pursuant to
the Registration Rights Agreement.
The Company will pay interest semi-annually in arrears on June 15 and
December 15 of each year commencing on June 15, 2003. Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the Issue Date with respect to this Note. Interest
will be computed on the basis of a 360-day year comprised of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne by
the Notes, and it shall pay interest on overdue installments of interest at the
same rate to the extent lawful.
2. Method of Payment
-----------------
The Company will pay interest (except defaulted interest) in respect of
the Notes to the Persons who are registered holders of Notes at the close of
business on the 1st of June or the 1st of December immediately preceding the
interest payment date even if Notes are canceled after the record date and on or
before the interest payment date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay principal and
interest by check payable in such money or by wire transfer of federal funds.
3. Paying Agent and Registrar
--------------------------
Initially, Bank One Trust Company, N.A. (the "Trustee") will act as
Paying Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice to the Holders. The Company may act as
Paying Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Notes under an Indenture dated as of December
26, 2002 (the "Indenture"), among the Company, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the TIA. Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The Notes
are subject to all such terms, and Noteholders are referred to the Indenture and
the TIA for a statement of those terms.
The Notes are the senior subordinated secured obligations of the
Company and are limited to $4,000,000,000 in aggregate principal amount
outstanding, of which $[ ] in aggregate principal amount will be initially
issued on the Issue Date. This Note is one of the Exchange Notes of the Company
designated as its _____% Senior Subordinated Secured Notes due 20__, issued in
exchange for the corresponding Initial Notes pursuant to the Indenture. The
Initial Notes and the Exchange Notes of this maturity are treated as a single
class of Notes under the Indenture. The Indenture imposes certain limitations on
the incurrence of Indebtedness by the Company and its Restricted Subsidiaries;
the payment of dividends and other payments by the Company and its Restricted
Subsidiaries; Investments; sales of assets of the Company and Restricted
Subsidiaries; certain transactions with Affiliates; Liens; and consolidations,
mergers and transfers of all or substantially all of the Company's or a
Guarantor's assets. In addition, the Indenture prohibits certain restrictions on
distributions from Restricted Subsidiaries.
B-3
5. Optional Redemption
-------------------
[The applicable redemption provisions for a particular series of
Exchange Notes shall include only one of the following and will be set forth in
the Note; applicable redemption provisions for Additional Notes shall be set
forth herein as applicable. This paragraph applies only to this Indenture
Exhibit B form of Note, and shall not appear in a definitive Note.]
[2007 Notes. (i) Except as set forth below, the 2007 Notes may not be
redeemed prior to December 15, 2005. Thereafter, the 2007 Notes will be subject
to redemption at any time at the option of the Company, in whole or in part, at
the redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest thereon to the applicable redemption date
(subject to the right of Holders on the relevant record date to receive interest
due on the relevant interest payment date) if redeemed during the twelve-month
period beginning on December 15 of the years indicated below.
Year Price
---- -----
2005 106.500%
2006 103.250%
(ii) In addition, the Company may redeem all or a part of
the 2007 Notes upon not less than 30 nor more than 60 days' notice, at
a redemption price equal to the greater of (1) 100% of the principal
amount thereof or (2) the present value, as determined by an
Independent Financial Advisor, of (A) the applicable percentage set
forth above of the principal amount of the 2007 Notes being redeemed as
of December 15 of the first period set forth above ending on or after
the date of such redemption (assuming a 360-day year consisting of
twelve 30-day months), plus (B) all required interest payments due on
such 2007 Notes through December 15 of such period (excluding accrued
interest), discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus 50 basis points, plus in each case accrued interest
to the redemption date.]
[2010 Notes. (i) Except as set forth below, the 2010 Notes may not be
redeemed prior to December 15, 2006. At any time on or prior to December 15,
2006, the 2010 Notes will be subject to redemption at the option of the Company,
in whole or in part, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest if any,
thereon, to the applicable redemption date (subject to the right of Holders on
the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the twelve-month period beginning on December
15 of the years indicated below:
Year Price
---- -----
2006 106.750%
2007 104.500%
2008 102.250%
2009 and thereafter 100.000%
(ii) In addition, at any time prior to December 15, 2009,
the Company may redeem all or a part of the 2010 Notes upon not less
than 30 nor more than 60 days' notice, at a redemption price equal to
the greater of (1) 100% of the principal amount thereof or (2) the
present value, as determined by an Independent Financial Advisor, of
(A) the applicable percentage set forth above of the principal amount
of the 2010 Notes being redeemed as of December 15 of the first period
set forth above ending on or after the date of such redemption
B-4
(assuming a 360-day year consisting of twelve 30-day months) plus (B)
all required interest payments due on such 2010 Notes through December
15 of such period (excluding accrued interest), discounted to the
redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 50 basis
points, plus in each case accrued interest to the redemption date.]
[2014 Notes. (i) Except as set forth below, the 2014 Notes may not be
redeemed prior to December 15, 2007. At any time on or prior to December 15,
2007, the 2014 Notes will be subject to redemption at the option of the Company,
in whole or in part, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest thereon, to
the applicable redemption date (subject to the right of Holders on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the twelve-month period beginning on December 15 of the years
indicated below:
Year Price
---- -----
2007 107.000%
2008 104.667%
2009 102.333%
2010 and thereafter 100.000%
(ii) In addition, at any time prior to December 15, 2010,
the Company may redeem all or a part of the 2014 Notes upon not less
than 30 nor more than 60 days' notice, at a redemption price equal to
the greater of (1) 100% of the principal amount thereof or (2) the
present value, as determined by an Independent Financial Advisor, of
(A) the applicable percentage set forth above of the principal amount
of the 2014 Notes being redeemed as of December 15 of the first period
set forth above ending on or after the date of such redemption
(assuming a 360-day year consisting of twelve 30-day months) plus (B)
all required interest payments due on such 2014 Notes through December
15 of that period (excluding accrued interest), discounted to the
redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 50 basis
points, plus in each case accrued interest to the redemption date.]
6. Notices of Redemption
---------------------
Except as otherwise provided in the Indenture or herein, notices of
redemption shall be mailed by first-class mail at least 30 days but not more
than 60 days before the redemption date to each Holder of Notes to be redeemed
at its registered address all in accordance with the Indenture. If less than all
of the Notes are to be redeemed at any time, selection of Notes for redemption
will be made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed, or, if the
Notes are not so listed, on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate; provided that no Notes of $1,000 or
less shall be redeemed in part. If any Note is to be redeemed in part only, the
notice of redemption that relates to such Note shall state the portion of the
principal amount thereof to be redeemed. On and after the redemption date,
interest ceases to accrue on Notes or portions of them called for redemption.
7. Repurchase at the Option of the Holder
--------------------------------------
(a) Upon a Change of Control, any Holder of Notes will have the right,
subject to certain conditions set forth in the Indenture, to require the Company
to repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of the Notes of such Holder at a purchase price equal to 101% of the aggregate
principal amount of the Notes to be repurchased plus accrued and unpaid interest
thereon, to the date of repurchase (subject to the right of Holders of record on
B-5
the relevant record date to receive interest due on the relevant interest
payment date that is on or prior to the date of repurchase) as provided in, and
subject to the terms of, the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales, within
ten Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $50.0 million, the Company will commence an offer to all Holders of
Notes and all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in the Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets (an "Asset
Sale Offer") pursuant to Section 4.09 of the Indenture to purchase the maximum
principal amount of Notes (including any Additional Notes) that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest thereon, if
any, to the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate amount
of Notes (including any Additional Notes) and other pari passu Indebtedness
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company (or such Subsidiary) may use such deficiency for any purpose not
otherwise prohibited by the Indenture. If the aggregate principal amount of
Notes and other pari passu Indebtedness surrendered by the Holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and
other pari passu Indebtedness to be purchased on a pro rata basis. Holders of
Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
8. Collateral Documents
--------------------
In order to secure the due and punctual payment of the principal of and
interest on the Notes and all other amounts payable by the Company and QCII
under the Indenture and the Notes when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Notes and the Indenture the Company and QCII have granted Liens on the
Collateral to the Collateral Agents for the benefit of the Trustee and the
Holders of Notes.
Each Holder, by accepting a Note, agrees to all of the terms and
provisions of the Security Documents as the same may be amended from time to
time pursuant to the respective provisions thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
any of the Security Documents and the terms and provisions of the Indenture will
not be deemed for any purpose to be an impairment of the security under the
Indenture.
9. Denominations; Transfer; Exchange
---------------------------------
The Notes are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange Notes 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 Notes selected for redemption (except, in the case of a Note to be
redeemed in part, the portion of the Note not to be redeemed) or transfer or
exchange any Notes for a period of 15 days prior to a selection of Notes to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
---------------------
The registered Holder of this Note may be treated as the owner of it
for all purposes.
B-6
11. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed for
two years, the Paying Agent shall pay the money back to the Company at its
request, or if then held by the Company, shall be discharged from such trust
(unless an abandoned property law designates another Person for payment
thereof). After any such payment, Holders entitled to the money must look only
to the Company for payment thereof, and all liability of the Paying Agent with
respect to such money, and all liability of the Company as trustee thereof,
shall thereupon cease.
12. Discharge and Defeasance
------------------------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Indenture,
the Notes Guarantees, the Registration Rights Agreement and the Notes if the
Company deposits with the Trustee, cash in U.S. legal tender or U.S. Government
Obligations for the payment of principal and interest on the Notes to redemption
or maturity, as the case may be.
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Notes, the Notes Guarantees or the Security Documents may be
amended or supplemented with the written consent of the Holders of at least a
majority in principal amount of the then outstanding Notes and (ii) any existing
default or noncompliance with any provision of the Indenture, the Notes, Notes
Guarantees or the Security Documents (other than payment of principal, premium,
if any, and interest) may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Subject to certain
exceptions set forth in the Indenture, without the consent of any Noteholder,
the Company, the Guarantors and the Trustee may amend or supplement the
Indenture, the Notes, the Note Guarantees or the Security Documents, or to cure
any ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes (provided that the uncertificated
Notes are issued in registered form for purposes of Section 163(f) of the Code,
or in a manner such that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code), to provide for the assumption of the Company's
obligations to Holders of Notes in the case of a merger, consolidation or sale
of assets, to release any Guarantor from any of its obligations under its
applicable Note Guarantee or the Indenture (to the extent permitted by the
Indenture) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that, as determined by the Board of
Directors of the Company in good faith, does not materially adversely affect the
legal rights of any such Holder under the Indenture, the Notes, the Notes
Guarantees or the Security Documents, and to comply with the requirements of the
SEC in order to effect or maintain the qualification of the Indenture under the
TIA.
14. Defaults and Remedies
---------------------
Under the Indenture, an Event of Default occurs if there is: (i)
default for 30 days in the payment when due of interest with respect to, the
Notes; (ii) default in payment when due of the principal of or premium, if any,
on the Notes (including the failure to make a payment to purchase Notes tendered
pursuant to a Change of Control Offer or an Asset Sale Offer); (iii) failure by
the Company (A) for 45 days after receipt of notice from the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes to
comply with Section 4.06, 4.07, 4.09, and 4.15 of the Indenture or (B) to comply
with the provisions of Sections 4.11 and 5.01 of the Indenture; (iv) default
under any Debt Instrument under which there may be issued or by which there may
be secured or evidenced Indebtedness of QCII, the Company or any Restricted
Subsidiary of QCII (other than QCC to the extent that none of QCII, the Company
or QCF have outstanding a Debt Instrument governing Debt Securities under which
there is a similar default as this clause (iv) with respect to QCC that applies
to such default) whether such Indebtedness now exists or is incurred after the
Issue Date, which default: (A) is caused by a failure to pay when due principal
B-7
on such Indebtedness at the final maturity thereof; (B) results in the
acceleration of such Indebtedness prior to its express final maturity or (C)
results in the commencement of judicial proceedings to foreclose upon, or to
exercise remedies under applicable law or applicable security documents to take
ownership of or to cause the sale of, the assets securing such Indebtedness
(other than the consensual provision of assets securing non-recourse
Indebtedness), and in each case, the principal amount of such Indebtedness,
together with any other Indebtedness with respect to which an event described in
clause (A), (B) or (C) has occurred and is continuing, aggregates more than
$100.0 million; (v) one or more final and non-appealable judgments or orders
that exceed $100.0 million in the aggregate (net of amounts covered by insurance
or bonded) for the payment of money have been entered by a court or courts of
competent jurisdiction against QCII, the Company or any Restricted Subsidiary of
QCII and such judgment or judgments have not been satisfied, stayed, annulled or
rescinded within 60 days of being entered; (vi) QCII, 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 all or substantially all of its assets, or (D) makes a
general assignment for the benefit of its creditors; (vii) a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for
relief against QCII, the Company or any Significant Subsidiary as debtor in an
involuntary case, (B) appoints a Custodian of QCII, the Company or any
Significant Subsidiary or a Custodian for all or substantially all of the assets
of the Company or any Significant Subsidiary, or (C) orders the liquidation of
QCII, the Company or any Significant Subsidiary, and the order or decree remains
unstayed and in effect for 60 days; (vii) (A) any Note Guarantee shall be held
in a judicial proceeding before a court of competent jurisdiction not to be in
full force and effect (other than in accordance with the terms of such Note
Guarantee and the Indenture) or is declared in such a proceeding null and void
and unenforceable or found to be invalid or (B) any Guarantor denies its
liability under its Note Guarantee (other than by reason of release of a
Guarantor from its Note Guarantee in accordance with the terms of the Indenture
and the Note Guarantee); or (ix) default by the Company or any Guarantor in the
performance of the Security Documents which adversely affects the enforceability
or the validity of either Collateral Agent's Lien on the Collateral or which
adversely affects the condition or value of the Collateral, taken as a whole, in
any material respect, repudiation or disaffirmation by the Company or any
Guarantor of its obligations under the Security Documents or the determination
in a judicial proceeding before a court of competent jurisdiction that the
Security Documents are unenforceable or invalid against the Company or any
Guarantor for any reason.
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives indemnity or security reasonably satisfactory to
it. Subject to certain limitations, Holders of a majority in principal amount of
the Notes may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Noteholders notice of any continuing Default (except a
Default in payment of principal, premium, if any, or interest) if and so long as
a committee of its Trust Officers in good faith determines that withholding
notice is in the interest of the Holders.
15. Subordination
-------------
Payment of principal, interest and premium on the Notes is subordinated
to the prior payment of Senior Debt on the terms provided in the Indenture.
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 Notes 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.
B-8
17. No Personal Liability of Directors, Officers, Employees and
-----------------------------------------------------------
Stockholders
------------
No past, present or future director, officer, employee, incorporator,
or stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes, the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. No past,
present or future director, officer, employee, incorporator, or stockholder of
any of the Guarantors, as such, shall have any liability for any obligations of
the Guarantors under the Notes Guarantees, the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
holder of Notes and Notes Guarantees by accepting a Note and a Note Guarantee
waives and releases all such liabilities. The waiver and release are part of the
consideration for issuance of the Notes and the Notes Guarantees. Such waiver
may not be effective to waive liabilities under the federal Notes laws and it is
the view of the SEC that such a waiver is against public policy.
18. Governing Law
-------------
THE NOTES 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.
19. Authentication
--------------
This Note 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 Note.
20. Abbreviations
-------------
Customary abbreviations may be used in the name of a Noteholder 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).
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 Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is made
as to the accuracy of such numbers either as printed on the Notes 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 Noteholder upon written request and
without charge to the Noteholder a copy of the Indenture which has in it the
text of this Note in larger type. Requests may be made to:
QWEST SERVICES CORPORATION
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention of Secretary
B-9
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note 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 Note on the
books of the Company. The agent may substitute another to act for him.
Date: ________________ Your Signature: ______________________________
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed by a participant in a
recognized signature guarantee medallion program)
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.
B-10
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER RESTRICTED NOTES
Reference is hereby made to that certain Indenture dated December 26, 2002 (the
"Indenture") among Qwest Services Corporation, as Company (the "Company"), the
Guarantors (as defined therein) and Bank One Trust Company, N.A., as trustee
(the "Trustee"). Capitalized terms used but not defined herein shall have the
meanings set forth in the Indenture.
This certificate relates to $_________ principal amount of Notes held in (check
applicable space) ____ book-entry or _____ definitive form by the undersigned.
The undersigned (check one box below):
[ ] has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Note held by the Depository a
Note or Notes in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Note (or the portion thereof indicated above);
[ ] has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the expiration of the periods referred to in Rule
144(k) under the Securities Act of 1933, as amended, the undersigned confirms
that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW:
(1) [ ] to the Company or any of its subsidiaries; or
(2) [ ] pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(3) [ ] inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as amended)
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 under the Securities Act of 1933, as
amended, in each case pursuant to and in compliance with Rule 144A
thereunder; or
(4) [ ] outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act of 1933, as
amended, in compliance with Rule 904 thereunder; or
(5) [ ] inside the United States to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933, as amended) that has furnished to the Trustee a
signed letter containing certain representations and agreements (the
form of which letter is attached to the Indenture as Exhibit C and
which may be obtained from the Trustee); or
(6) [ ] pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933, as amended; or
(7) [ ] in accordance with another exemption from the registration
requirements of the Securities Act of 1933, as amended.
B-11
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered holder thereof; provided, however, that if box (4), (5) or (6) is
checked, the Trustee may require, prior to registering any such transfer of the
Notes, such legal opinions, certifications and other information as the Company
has reasonably requested to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended, such as the exemption
provided by Rule 144 thereunder.
-----------------------------------------
Signature
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed by a participant in a
recognized signature guarantee medallion program)
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended ("Rule 144A"), 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
B-12
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTES
The following increases or decreases in this Global Note have been
made:
Amount of increase Principal amount of Signature of author-
Amount of decrease in in Principal this Global Note ized signatory of
Principal Amount of Amount of this following such de- Trustee or Notes
Date of Exchange this Global Note Global Note crease or increase Custodian
---------------- --------------------- ------------------ ------------------- --------------------
B-13
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.09, or 4.11 of the Indenture, check the box:
[ ] 4.09 Asset Sale [ ] 4.11 Change of Control Offering
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.11, 4.09 of the Indenture, state the amount: $ .
Date: ________________ Your Signature: ______________________________
(Sign exactly as your name
appears on the other side of
the Note)
____________________
Tax I.D. number
Signature Guarantee: ___________________________________________________________
(Signature must be guaranteed by a participant in a
recognized signature guarantee medallion program)
B-14
EXHIBIT C
[FORM OF GUARANTEE]
Each undersigned Guarantor (as defined in the Indenture referred to in
the Note upon which this notation is endorsed and each referred to as the
"Guarantor," which term includes any successor person under the Indenture)
hereby unconditionally and irrevocably, jointly and severally, guarantees as a
primary obligor and not merely as a surety (such guarantee to be referred to
herein as the "Guarantee"), to each of the Holders and to the Trustee and their
respective successors and assigns that (i) the principal of and interest on the
Notes will be promptly paid in full when due, subject to any applicable grace
period, whether at maturity, by acceleration or otherwise, and interest on the
overdue principal, if any, and interest on any interest, if any, to the extent
lawful, of the Notes and all other obligations of the Company to the Holders or
the Trustee under the Indenture or thereunder will be promptly paid in full or
performed, all in accordance with the terms under the Indenture and thereof; and
(ii) in case of any extension of time of payment or renewal of any of the Notes
or of any such other obligations, the same will be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
subject to any applicable grace period, whether at maturity, by acceleration or
otherwise, subject, however, in the case of clauses (i) and (ii) above, to the
limitations set forth in Section 12.02 of the Indenture. The obligations of the
Guarantors to the Holders of Notes and to the Trustee pursuant to the Guarantee
and the Indenture are expressly set forth in Article XII of the Indenture and
reference is hereby made to the Indenture for the precise terms of the
Guarantee. Each Holder of a Note, by accepting the same, (a) agrees to and shall
be bound by such provisions and (b) appoints the Trustee attorney-in-fact of
such Holder for such purpose.
No stockholder, officer, director or incorporator, as such, past,
present or future, of the Guarantor shall have any liability under the Guarantee
by reason of his or its status as such stockholder, officer, director or
incorporator.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
C-1
IN WITNESS WHEREOF, each of the undersigned Guarantors has caused this
Guarantee to be signed by its duly authorized officer.
[NAME OF GUARANTOR]
By:
-------------------------------------
Name:
Title:
C-2
EXHIBIT D
[FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFER TO INSTITUTIONAL ACCREDITED INVESTORS]
Qwest Services Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Dear Ladies and Gentlemen:
This certificate is delivered to request a transfer of $ principal
amount of the _____% Senior Subordinated Secured Notes due 20__ (the "Notes") of
Qwest Services Corporation (the "Company").
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
Name: _______________________________________________
Address: ____________________________________________
Taxpayer ID Number: _________________________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act")), and we are acquiring the Notes not with a view to, or
for offer or sale in connection with, any distribution in violation of the
Securities Act. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risk of our investment in
the Notes and invest in or purchase Notes similar to the Notes in the normal
course of our business. We and any accounts for which we are acting are each
able to bear the economic risk of our or its investment.
2. We understand that the Notes have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Notes to offer, sell or
otherwise transfer such Notes prior to the later of the date which is two years
after (X) the later of (A) the date of original issue or (B) the date on which
this Note was acquired from an affiliate of the Company or (Y) the date that is
three months after the last date on which the Company or any affiliate of the
Company was the owner of such Notes (or any predecessor thereto) only (a) to
Qwest Services Corporation or any subsidiary thereof, (b) inside the United
States to a Qualified Institutional Buyer in compliance with Rule 144A under the
Securities Act, (c) inside the United States to an Accredited Investor that,
prior to such transfer, furnishes (or has furnished on its behalf by a U.S.
Broker-Dealer) to the Trustee a signed letter containing certain representations
and agreements relating to the restrictions on transfer of this security (the
form of which letter can be obtained from the Trustee for this Note), (d)
outside the United States in an offshore transactions in compliance with Rule
904 under the Securities Act (if available), (e) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available), (f)
in accordance with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel if Qwest Services
Corporation so requests), or (g) pursuant to an effective registration statement
under 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
D-1
compliance with any applicable state Notes laws. In connection with any transfer
of this security prior to the later of the date which is two years after (X) the
later of (A) the date of original issue or (B) the date on which this Note was
acquired from an affiliate of the Company or (Y) the date that is three months
after the last date on which the Company or any affiliate of the Company was the
owner of such Notes (or any predecessor thereto), pursuant to clause (c), (d) or
(f) above if the holder must, prior to such transfer, furnish to the Trustee and
Qwest Services Corporation such certifications, legal opinions or other
information as either of them 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. As used herein,
the terms "offshore transaction, " "United States" and "U.S. person" have the
meaning given to them by Regulation S under the Securities Act.
TRANSFEREE: _____________________________
BY ______________________________________
D-2
EXHIBIT E
[FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS PURSUANT TO RULE 144A]
Qwest Services Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Re: Qwest Services Corporation (the "Company")
______% Senior Subordinated Secured Notes due 20__
(the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount at maturity of the Notes, we hereby certify that such transfer is being
effected pursuant to and in accordance with Rule 144A ("Rule 144A") under the
United States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, we hereby further certify that the Notes are being transferred to a
person that we reasonably believe is purchasing the Notes for its own account,
or for one or more accounts with respect to which such person exercises sole
investment discretion, and such person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A and such Notes are being transferred in compliance
with any applicable blue sky Notes laws of any state of the United States.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
_________________________________________
[Name of Transferor]
By: _____________________________________
Authorized Signature
E-1
EXHIBIT F
[FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS
PURSUANT TO REGULATION S]
Qwest Services Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Re: Qwest Services Corporation (the "Company")
______% Senior Subordinated Secured Notes due 20__
(the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the United States Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in
the United States;
(2) either (a) at the time the buy order was originated,
the transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee was
outside the United States or (b) the transaction was executed in, on or
through the facilities of a designated off-shore Notes market and
neither we nor any person acting on our behalf knows that the
transaction has been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
F-1
The Company and you are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
_________________________________________
[Name of Transferor]
by: _____________________________________
Authorized Signature
F-2
EXHIBIT G
[FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S]
Qwest Services Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Re: Qwest Services Corporation (the "Company")
______% Senior Subordinated Secured Notes due 20__
(the "Notes")
Dear Ladies and Gentlemen:
This letter relates to U.S. $_______________ principal amount of Notes
represented by a Note (the "Legended Note") which bears a legend outlining
restrictions upon transfer of such Legended Note. Pursuant to Section 2.01 of
the Indenture dated as of December 26, 2002 (the "Indenture") relating to the
Notes, we hereby certify that we are (or we will hold such Notes on behalf of) a
person outside the United States to whom the Notes could be transferred in
accordance with Rule 904 of Regulation S promulgated under the U.S. Securities
Act of 1933. Accordingly, you are hereby requested to exchange the legended
certificate for an unlegended certificate representing an identical principal
amount at maturity of Notes, all in the manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
_________________________________________
[Name of Holder]
By: _____________________________________
Authorized Signature
G-1
EXHIBIT H
FORM OF QSC SECURITY AND PLEDGE AGREEMENT
H-1
EXHIBIT I
FORM OF QCII PLEDGE AGREEMENT
I-1
