EXHIBIT 10.24.2
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ELECTRIC LIGHTWAVE, INC.,
CITIZENS UTILITIES COMPANY,
AND
CITIZENS NEWCO COMPANY
TO
CITIBANK, N.A.
(Trustee)
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FIRST SUPPLEMENTAL INDENTURE
Dated as of April 15, 1999
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Supplemental to the Indenture
Dated as of April 15, 1999
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TABLE OF CONTENTS
Page
Section 1. Definitions....................................................................................2
Section 2. Forms of the Notes.............................................................................3
Section 3. Terms of the Notes.............................................................................3
Section 4. Repurchase at the Option of the Holder.........................................................5
Section 5. Redemption at the Option of the Company........................................................7
Section 6. The Citizens Guarantee.........................................................................8
Section 7. The Citizens Newco Guarantee..................................................................10
Section 8. Adjustment of the Applicable Annual Interest Rate.............................................11
Section 9. Amendment to Indenture for Purposes of Notes due May 2004.....................................13
Section 10. Incorporation of Indenture....................................................................15
Section 11. Acceptance of Trust...........................................................................15
Section 12. Conflict with Trust Indenture Act.............................................................15
Section 13. Governing Law.................................................................................15
Section 14. Recitals......................................................................................15
Section 15. Amendments....................................................................................15
Section 16. Counterparts..................................................................................15
FIRST SUPPLEMENTAL INDENTURE, dated as of April 15, 1999, made by
ELECTRIC LIGHTWAVE, INC., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company"), having its
principal administrative offices at ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
CITIZENS UTILITIES COMPANY (herein called "Citizens" or "Citizens Guarantor")
and CITIZENS NEWCO COMPANY (herein called "Citizens Newco" or "Citizens Newco
Guarantor"), each a corporation duly organized and existing under the laws of
the State of Delaware and each having its principal administrative offices at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, to CITIBANK, N.A., a national banking
association duly organized and existing under the laws of the United States, as
Trustee (herein called the "Trustee"), having its principal corporate trust
office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, Zone 2, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "First
Supplemental Indenture").
RECITALS
WHEREAS, the Company has entered into an Indenture dated as of April
15, 1999 (the "Indenture"), with the Trustee to provide for the issuance from
time to time of the Company's notes or other evidences of indebtedness (herein
called the "Securities"), to be issued in one or more series; and
WHEREAS, Section 901 of the Indenture provides, among other things,
that the Company and any Guarantor and the Trustee may enter into indentures
supplemental to the Indenture for, among other things, the purpose of
establishing the form and terms of the Securities of any series as permitted in
Sections 201 and 301 of the Indenture and adding to the covenants of the Company
for the benefit of the Holders of any series of Securities and providing for a
guarantee of any series of Securities; and
WHEREAS, the Company by corporate action duly taken has authorized the
issuance of a first series of Securities designated as the Notes Due May 15,
2004 (hereinafter sometimes called the "Notes"), which series is limited in
aggregate principal amount to $450,000,000, such Notes to contain such
provisions as have been caused to be determined by or at the direction of, the
Board of Directors of the Company and as are set forth in this First
Supplemental Indenture to the Indenture; and
WHEREAS, Citizens Guarantor by corporate action duly taken has
authorized the guarantee of a first series of Securities designated as the Notes
Due May 15, 2004, which series is limited in aggregate principal amount to
$450,000,000, such Citizens Guarantee to contain such provisions as have been
caused to be determined by or at the direction of, the Board of Directors of the
Company and as are set forth in this First Supplemental Indenture to the
Indenture (the First Supplemental Indenture together with the Indenture,
hereinafter referred to as the Indenture unless the context otherwise requires);
and
WHEREAS, Citizens Newco Guarantor by corporate action duly taken has
authorized the Guarantee of a first series of Securities designated as the Notes
Due May 15, 2004, which series is limited in aggregate principal amount to
$450,000,000, such Citizens Newco Guarantee to contain such provisions as have
been caused to be determined by or at the direction of, the Board of Directors
of the Company and as are set forth in this First Supplemental Indenture to the
Indenture; and
WHEREAS, Citizens Guarantor owns as of the date hereof, and if the
Separation occurs, Citizens Newco will own, beneficially and of record, 100% of
the Class B stock of the Company; the Company, Citizens Guarantor and Citizens
Newco Guarantor are members of the same consolidated group of companies and are
engaged in related businesses, Citizens Guarantor, and if the Separation occurs,
Citizens Newco Guarantor, will derive direct and indirect economic benefit from
the issuance of the Notes, accordingly Citizens Guarantor and NewTelecom
Guarantor have duly authorized the execution and delivery of this Supplemental
Indenture; and
WHEREAS, all conditions have been complied with, all actions have been
taken and all things have been done which are necessary to make the Notes, when
executed by the Company and authenticated by or on behalf of the Trustee and
when delivered as herein and in the Indenture provided, the valid obligations of
the Company, and to make this First Supplemental Indenture a valid and binding
supplemental indenture.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all holders of the Notes, as follows:
Section 1. Definitions. For all purposes of this First Supplemental
Indenture, except as otherwise herein expressly provided or unless the context
otherwise requires:
(a)terms used herein in capitalized form and defined in the Indenture
shall have the meanings specified in the Indenture;
(b)the words "herein", "hereof" and "hereto" and other words of similar
import used in this First Supplemental Indenture refer to this First
Supplemental Indenture as a whole and not to any particular Section
or other subdivision of this First Supplemental Indenture;
(c)the provisions of this First Supplemental Indenture shall be read in
conjunction with the provisions of the Indenture only with respect
to the Notes and the provisions of the Indenture shall not be
modified by this First Supplemental Indenture with respect to any
series of the Securities outstanding or to be outstanding under the
Indenture, other than the Notes; and
(d)terms defined in this First Supplemental Indenture shall apply only
to this First Supplemental Indenture and the Notes hereunder, and
such definitions shall not apply to any supplemental indenture other
than this First Supplemental Indenture or to any Securities
outstanding or to be outstanding under the Indenture other than the
Notes.
(e)"Citizens Guarantor" means Citizens Utilities Company, a Delaware
corporation.
(f)"Citizens Newco Guarantor" means "Citizens Newco Company," a
Delaware corporation.
(g)The "Citizens Guarantee" means the guarantee of Citizens Guarantor
pursuant to Section 6 of this First Supplemental Indenture.
(h)The "Citizens Newco Guarantee" means the guarantee of Citizens Newco
Guarantor pursuant to Section 7 of this First Supplemental
Indenture.
(i)"Guarantor" as of any time means whichever of Citizens Guarantor and
Citizens Newco Guarantor is the then Guarantor of the Company's
obligations hereunder, or, if both the Citizens Guarantee and the
Citizens Newco Guarantee are then in effect, "Guarantor" shall
include Citizens Guarantor and Citizens Newco Guarantor.
(j)"Rating Agencies" means Standard & Poor's Corporation ("S&P") and
▇▇▇▇▇'▇ Investors Services, Inc. ("Moody's") unless one of them has
been replaced by a Substitute Rating Agency in which case Rating
Agencies shall mean the Substitute Rating Agency and whichever of
S&P or Moody's has not been replaced.
(k)"Substitute Rating Agency" means a nationally recognized statistical
rating organization (as the term is used in the rules and
regulations of the Commission under the Securities Exchange Act).
(l)"Separation" means the distribution of the common stock of Citizens
Newco Guarantor to the stockholders of Citizens' Guarantor, Citizens
Guarantor having previously contributed telecommunications assets to
Citizens Newco Guarantor.
(m)"Separation Date" means the date that the distribution of the common
stock of Citizens Newco Guarantor to the stockholders of Citizens
Guarantor is effective.
Except as otherwise expressly provided or unless the context otherwise
requires, "First Supplemental Indenture" means this instrument as originally
executed or, if amended or supplemented pursuant to the applicable provisions of
the Indenture, as amended or supplemented.
Section 2. Forms of the Notes. The Notes shall be in substantially the
form set forth in Exhibit A to this First Supplemental Indenture, as such form
may be completed pursuant to Section 3 hereof, the terms of which Exhibit A are
herein incorporated by reference and made a part of this First Supplemental
Indenture.
Section 3. Terms of the Notes. The terms of the Notes shall be as
follows:
(a)the Securities to be issued under the Indenture and this First
Supplemental Indenture shall be the Notes and shall be designated as
the " Notes Due May 15, 2004";
(b)the Notes shall constitute a single series of the Securities under
the Indenture, which series is limited in aggregate principal amount
to $450,000,000, of which Notes in the aggregate principal amount of
$325,000,000 are being issued pursuant to this First Supplemental
Indenture. Notwithstanding any other provision hereof, this First
Supplemental Indenture may be amended or supplemented without the
consent of the Holders for the purpose of issuing additional
securities up to such maximum aggregate principal amount of
$450,000,000.
(c)interest on each of the Notes shall be payable (i), until the
adjustment (specified in Section 8), if any, at the rate per annum
specified in the Notes and (ii) from and after the date of the
adjustment (specified in Section 8), if any, at the Applicable
Annual Interest Rate. Such interest will be payable from and after
the date of issuance of the Notes, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for,
semi-annually, on May 15 and November 15 in each year, commencing on
November 15, 1999 and as provided for in Section 8 hereof. The
interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will be paid to the Person in whose name
such Note (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest,
which shall be the May 1 or November 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
Any interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record
Date by virtue of having been such a Holder and shall be paid by the
Company as provided in Section 307 of the Indenture;
(d)the Notes shall be subject to an interest rate adjustment as
provided in Section 8 hereof;
(e)principal on the notes shall be payable on May 15, 2004 ("Maturity")
unless earlier redeemed, repurchased or accelerated;
(f)the Notes shall be guaranteed by Citizens Guarantor and/or Citizens
Newco Guarantor, as applicable, as provided in Sections 6 and 7
hereof;
(g)some or all of the Notes shall be repurchased by the Company at the
option of the holder as provided in Section 4 hereof;
(h)some or all of the Notes may be redeemed by the Company as provided
in Section 5 hereof;
(i)as provided in Sections 1301, 1302, 1303 and 1304 of the Indenture,
the Company may terminate its obligations under the Notes, the
Indenture and this First Supplemental Indenture with respect to the
Notes and may omit to comply with any term, provision or condition
or any obligation of the Company contemplated by this First
Supplemental Indenture. Upon the Company's exercise of the option to
effect defeasance under Sections 1302, 1303 and 1304 of the
Indenture and the effectiveness of such defeasance in accordance
with and subject to the applicable terms of Sections 1302, 1303 and
1304 of the Indenture, the Company and the then current Guarantor or
Guarantors shall each be released from all of its obligations with
respect to the Notes, the Indenture and the First Supplemental
Indenture as provided in Section 1302, 1303 or 1304, as the case may
be, except for those provisions identified in Article XIII of the
Indenture as not subject to covenant defeasance and those provisions
which the Company elects to comply with and not to make the subject
of a covenant defeasance in an Officer's Certificate delivered to
the Trustee;
(j)unless otherwise provided with respect to a Book- Entry Security or
pursuant to any successor book-entry security system or similar
system, payments of interest will be made by check mailed to the
Holder of each Note at the address shown in the Security Register
or, at the option of the Holder, to such other place in the United
States of America as the Holder shall designate to the Trustee in
writing. The principal amount of the Notes will be paid at Maturity
by check against presentation of the Notes at the office or agency
of Citibank, N.A., as Trustee, in New York, New York, or such other
address in New York, New York, as the Trustee shall designate by
written notice to the Holders of the Notes;
(k)the Notes shall be issued in registered form only and in
denominations of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000;
(l)principal of (and premium, if any) and interest on the Notes shall
be payable in the coin or currency of the United States of America,
which, at the time of payment, is legal tender for public and
private debts;
(m)so long as any Notes are registered in the name of Cede & Co., or
any other nominee of The Depository Trust Company ("DTC"), and are
intended to be Book-Entry Securities, the provisions of Section 311
of the Indenture shall apply to such Notes. Thereafter the Notes may
be subjected to the requirements of a successor book-entry
securities system that may be adopted by the Company in accordance
with the provisions of the Indenture and this First Supplemental
Indenture;
Section 4. Repurchase at the Option of the Holder.
(a)If, on or before the Separation Date, the long-term unsubordinated
unsecured debt of Citizens Newco, or Citizens Newco if no such debt
exists, has received a below investment grade credit rating from one
of the Rating Agencies, which rating shall be confirmed on the
Separation Date, each Holder shall have the right, at such Holder's
option, exercisable no later than 30 days after the Company has
issued a notice to Holders as specified in Section 4(b) hereof of
such below investment grade credit rating (which notice shall be
given no later than 5 days after the Separation Date) to require the
Company to repurchase, and upon the exercise of such right the
Company shall repurchase (in $1,000 or any integral multiple thereof
in principal amount), all or any part of such Holder's Notes (such
notes elected to be repurchased, the "Put Notes"), on a date to be
established by the Company that shall be no later than 70 days after
the Separation Date (the "Repurchase Date") at a repurchase price in
cash equal to 100% of the principal amount of such Notes (the
"Repurchase Price"), together with accrued and unpaid interest to
the Repurchase Date.
(b)In the event that on or before the Separation Date, the long-term
unsubordinated unsecured debt of Citizens Newco, or Citizens Newco
if no such debt exists, has received a below investment grade credit
rating from one of the Rating Agencies, which rating shall be
confirmed on the Separation Date, the Company shall give notice to
the Holders of the Notes within five days after the Separation Date
(the "Company's Notice") informing them (i) of the Separation Date,
(ii) that the Citizens Newco Guarantee is effective, (iii) that
Citizens Newco has received a below investment grade credit rating,
(iv) that each Holder of the Notes may elect to have some or all of
its Notes repurchased by the Company by giving notice of such
election in writing to the Company as specified in Section 4(c)
hereof no later than 30 days after the date of the Company's Notice,
and (v) of such other information regarding such other procedures to
be followed as the Company may deem appropriate.
(c)To exercise a repurchase right, a Holder of Notes shall deliver (i)
to the Company and to the Trustee, irrevocable written notice of the
Holder's election to exercise such right (the "Holder's Notice"),
which shall set forth the name of the Holder, the amount of Notes to
be repurchased and a statement that an election to exercise the
repurchase right is being made thereby and (ii) to the Trustee, the
Notes with respect to which the repurchase right is being exercised,
duly endorsed for transfer to the Company if required by the Trustee
or the Company. Put Notes held by a securities depositary may be
delivered in such other manner as may be agreed to by such
securities depositary and the Company and the Trustee. The Holder's
Notice shall be irrevocable. So long as the Put Notes are
represented by a global security, only Cede & Co., as the sole
registered holder of the Notes, may give notice of intention to
exercise the election to have such Put Notes repurchased. The Put
Notes surrendered for repurchase shall, on the Repurchase Date,
become due and payable at the Repurchase Price, and from and after
such date (unless the Company shall default in the payment of the
Repurchase Price and accrued interest, if any) such Put Notes shall
cease to bear interest. Upon surrender of any such Put Notes for
repurchase in accordance with the Holder's Notice, such Put Notes
shall be paid by the Company at the Repurchase Price plus accrued
and unpaid interest to the Repurchase Date.
(d)On or before the Repurchase Date, the Company shall deposit with the
Trustee an amount of money sufficient to pay the Repurchase Price
of, and (except if the Repurchase Date shall be an Interest Payment
Date) accrued interest on, all the Put Notes which are to be
repurchased on that date.
(e)If any Put Note surrendered for redemption shall not be so paid on
the Repurchase Date, such Put Note shall, until paid, continue to
bear interest to the extent permitted by applicable law from the
Repurchase Date at the same rate as the rate borne theretofore by
such Put Note. The Company shall pay the Holder of such Put Note the
additional amount of interest arising from this subsection at the
same time that it pays the Repurchase Price.
(f)Any Note which is to be repurchased only in part shall be
surrendered at the Place of Payment (with, if the Company or the
Trustee for such Note so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the
Security Registrar for such Note duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company
shall execute and such Trustee shall authenticate and deliver to the
Holder of such Note without service charge, a new Note, of any
authorized denomination as requested by such Holder, of the same
series and having the same terms and provisions and in an aggregate
principal amount equal to and in exchange for the unrepurchased
portion of the principal of the Note so surrendered.
Upon such payment to the Trustee by the Company, the Company shall have
no further obligation for payment of principal and interest on the Put Notes,
which shall be deemed to be no longer outstanding, and, subject to Section 6(f)
Citizens Guarantor shall be discharged from all of its obligations as guarantor
of any Notes.
Section 5. Redemption at the Option of the Company.
(a)Subject to the provisions of Article XI of the Indenture, in the
event of a Change of Control, other than a Change of Control that
would arise because of the Separation, the Company, at its option,
may redeem all or any portion of the Notes at a redemption price,
plus accrued and unpaid interest to the date of redemption, equal to
the greater of (i) 100% of their principal amount or (ii) the sum of
the present values of the remaining scheduled payments of principal
and interest (exclusive of interest accrued to the date of
redemption) discounted to the Redemption Date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30 day months) at the
applicable Treasury Yield plus 25 basis points. If the Company
elects to exercise its option to redeem all or any portion of the
Notes, it will notify the Trustee within 15 days of the change of
control of its exercise, in full or in part, of such option, which
shall be irrevocable, and of the Redemption Date. The date selected
for the Redemption Date shall be at least 35 days after the date of
the notification of the Trustee in the case of a redemption of all
of the Notes, or at least 40 days after the date of the notification
of the Trustee in the case of a partial redemption (unless shorter
periods shall be satisfactory to the Trustee or unless longer
periods are required by applicable book entry procedures of DTC),
all as otherwise permitted or required by Article XI of the
Indenture and by this First Supplemental Indenture.
(b)For purposes of Section 5 of this First Supplemental Indenture, a
"Change of Control" shall be deemed to have occurred if (a) any
Person or group (within the meaning of Rule 13d-5 of the Securities
and Exchange Commission as in effect on the date hereof) other than
Citizens or Citizens Newco shall own directly or indirectly,
beneficially or of record, shares representing 50% or more of the
aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Company; or (b) a majority of the
seats (other than vacant seats) on the Board of Directors of the
Company shall at any time have been occupied by Persons who were
neither (i) nominated by the management of the Company nor (ii)
appointed by Directors so nominated, or (c) any Person or group
other than Citizens or Citizens Newco shall otherwise directly or
indirectly control the Company. The Separation shall not constitute
a Change of Control.
"Treasury Yield" means, with respect to any Redemption Date applicable
to the Notes, 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
applicable Comparable Treasury price for such Redemption Date.
"Comparable Treasury Issue" means, with respect to the Notes, the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Notes 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 terms of the Notes.
"Independent Investment Banker" means, with respect to the Notes
offered hereby, Bear ▇▇▇▇▇▇▇ & Co. Inc., or, if such firm is unwilling or unable
to select the applicable Comparable Treasury Issue, an independent investment
banking institution of national standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any redemption date
applicable to the Notes, (i) the average of the applicable Reference Treasury
Dealer Quotations for such Redemption Date, after excluding the highest and
lowest such applicable Reference Treasury Dealer Quotations, or (ii) if the
Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such Quotations.
"Reference Treasury Dealer" means, with respect to the Notes offered
hereby, Bear ▇▇▇▇▇▇▇ & Co. Inc.; provided, however, that if the foregoing shall
cease to be a primary United States Government securities dealer in New York
City (a "Primary Treasury Dealer"), the Company shall substitute therefor
another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date for the Notes. On average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury issue for the Notes (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third Business Day preceding
such redemption date.
(c)Holders of the Notes to be redeemed will receive notice thereof by
first-class mail at least 15 and not more than 60 days prior to the
date fixed for redemption.
Section 6. The Citizens Guarantee.
(a)For good and valuable consideration, the receipt of and sufficiency
of which is hereby acknowledged, Citizens Guarantor, a party to the
Indenture and this First Supplemental Indenture, hereby fully and
unconditionally guarantees as a primary obligor not as a surety only
on an unsecured basis to each Holder of a Note authenticated and
delivered by the Trustee, and to the Trustee and its successors and
assigns on behalf of such Holder, the full and punctual payment of
the principal (and premium, if any) and interest on such Note when
and as the same shall become due and payable, whether at Maturity,
by acceleration, call for redemption, offer to purchase or
otherwise, in accordance with the terms of such Note, the Indenture
and of this First Supplemental Indenture. In case of the failure of
the Company punctually to make any such payment, Citizens Guarantor
hereby agrees to cause such payment to be made punctually when and
as the same shall become due and payable, whether at Maturity or by
acceleration, call for redemption, offer to purchase or otherwise,
and as if such payment were made by the Company.
(b)Citizens Guarantor agrees that its obligations hereunder shall be
absolute and unconditional, irrespective of, and shall be unaffected
by, the validity, regularity or enforceability of such Note, the
Indenture or this First Supplemental Indenture, the absence of any
action to enforce the same or any release, amendment, waiver or
indulgence granted to the Company or guarantor or any consent to
departure from any requirement of any other guarantee of all or any
of the Notes or any other circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or
guarantor. Citizens Guarantor hereby waives the benefits of
diligence, presentment, demand for payment, any requirement that the
Trustee or any of the Holders protect, secure, perfect or insure any
security interest in or other Lien on any property subject thereto
or exhaust any right or take any action against the Company or any
other person or any collateral, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest or notice
with respect to such Note or the indebtedness evidenced thereby and
all demands whatsoever, and covenants that Citizens Guarantor will
not be discharged in respect of such Note except by complete
performance of the obligations contained in such Note and in the
Citizens Guarantee.
(c)Citizens Guarantor agrees that if, after the occurrence and during
the continuance of an Event of Default, the Trustee or any of the
Holders are prevented by applicable law from exercising their
respective rights to accelerate the maturity of the Notes, to
collect interest on the Notes, or to enforce or exercise any other
right or remedy with respect to the Notes, Citizens Guarantor agrees
to pay to the Trustee for the account of the Holders, upon demand
therefor, the amount that would otherwise have been due and payable
had such rights and remedies been permitted to be exercised by the
Trustee or any of the Holders.
(d)Citizens Guarantor shall be subrogated to all rights of the Holders
of the Notes in respect of any amounts paid by Citizens Guarantor on
account of such Notes pursuant to the provisions of its Citizens
Guarantee or the Indenture; provided, however, that Citizens
Guarantor shall not be entitled to enforce or to receive any
payments arising out of, or based upon, such right of subrogation
until the principal of (and premium, if any) and interest on all
Notes issued hereunder shall have been paid in full.
(e)If Citizens Guarantor makes or is required to make any payment in
respect of its Citizens Guarantee it shall be entitled to seek
contribution from any other guarantors to the extent permitted by
applicable law, provided, however, that Citizens Guarantor shall not
be entitled to enforce or receive any payments arising out of, or
based upon, such right of contribution until the principal of
(premium, if any) and interest on all Notes issued hereunder shall
have been paid in full.
(f)The Citizens Guarantee shall remain in full force and effect and
continue to be effective until the earliest of the Separation
(provided that the long-term unsubordinated unsecured debt of
Citizens Newco, or Citizens Newco, if no such debt exists, receives
investment grade credit ratings from the Rating Agencies),
repurchase by the Company of all of the Put Notes as set forth in
Section 4 hereof, the payment in full (or provision for payment in
full) of all Notes issued hereunder or the defeasance of all Notes
issued hereunder pursuant to Article XIII of the Indenture. Upon
such receipt by Citizens Newco at the Separation of investment grade
credit ratings from the Rating Agencies, repurchase, payment in full
or defeasance, Citizens Guarantee shall terminate and all of
Citizens Guarantee Obligations hereunder shall cease provided, that,
the Citizens Guarantee shall remain in effect with respect to any
obligation of the Company to the Trustee under Section 607 of the
Indenture until such obligations have been satisfied, and further
provided, that, (i) if the Separation occurs and Citizens Newco has
not received a below investment grade credit rating and any of the
following events ("Company Insolvency Events") occurs prior to the
Separation or (ii) if the Separation occurs and Citizens Newco
receives a below investment grade credit rating and any Company
Insolvency Event occurs prior to the repurchase of all of Put Notes,
(A) any petition should be filed by or against the Company for
liquidation or reorganization, (B) should the Company become
insolvent or make an assignment for the benefit of creditors or (C)
should a receiver or trustee be appointed for all or any part of the
Company's assets, the Citizens Guarantee shall, to the fullest
extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the
Notes, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any Holder of
the Notes, whether as a "voidable preference," "fraudulent
transfer," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Notes
shall, to the fullest extent permitted by law, be reinstated and
deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
Section 7. The Citizens Newco Guarantee.
(a)The Citizens Newco Guarantee set forth immediately below shall
become effective upon the Separation. For good and valuable
consideration, the receipt of and sufficiency of which is hereby
acknowledged, Citizens Newco Guarantor a party to the Indenture and
this First Supplemental Indenture, hereby fully and unconditionally
guarantees as a primary obligor not as a surety only on an unsecured
basis to each Holder of a Note authenticated and delivered by the
Trustee, and to the Trustee and its successors and assigns on behalf
of such Holder, the full and punctual payment of the principal (and
premium, if any) and interest on such Note when and as the same
shall become due and payable, whether at Maturity, by acceleration,
call for redemption, offer to purchase or otherwise, in accordance
with the terms of such Note, the Indenture and of this First
Supplemental Indenture. In case of the failure of the Company
punctually to make any such payment, Citizens Newco Guarantor hereby
agrees to cause such payment to be made punctually when and as the
same shall become due and payable, whether at Maturity or by
acceleration, call for redemption, offer to purchase or otherwise,
and as if such payment were made by the Company.
(b)Citizens Newco Guarantor agrees that its obligations hereunder shall
be absolute and unconditional, irrespective of, and shall be
unaffected by, the validity, regularity or enforceability of such
Note, the Indenture or this First Supplemental Indenture, the
absence of any action to enforce the same or any release, amendment,
waiver or indulgence granted to the Company or guarantor or any
consent to departure from any requirement of any other guarantee of
all or any of the Notes or any other circumstances which might
otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor. Citizens Newco Guarantor hereby waives the
benefits of diligence, presentment, demand for payment, any
requirement that the Trustee or any of the Holders protect, secure,
perfect or insure any security interest in or other Lien on any
property subject thereto or exhaust any right or take any action
against the Company or any other person or any collateral, filing of
claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the
Company, protest or notice with respect to such Note or the
indebtedness evidenced thereby and all demands whatsoever, and
covenants that Citizens Newco Guarantor will not be discharged in
respect of such Note except by complete performance of the
obligations contained in such Note and in the Guarantee.
(c)Citizens Newco Guarantor agrees that if, after the occurrence and
during the continuance of an Event of Default, the Trustee or any of
the Holders are prevented by applicable law from exercising their
respective rights to accelerate the maturity of the Notes, to
collect interest on the Notes, or to enforce or exercise any other
right or remedy with respect to the Notes, Citizens Newco Guarantor
agrees to pay to the Trustee for the account of the Holders, upon
demand therefor, the amount that would otherwise have been due and
payable had such rights and remedies been permitted to be exercised
by the Trustee or any of the Holders.
(d)Citizens Newco Guarantor shall be subrogated to all rights of the
Holders of the Notes in respect of any amounts paid by Citizens
Newco Guarantor on account of such Note pursuant to the provisions
of its Citizens Newco Guarantee or the Indenture; provided, however,
that Citizens Newco Guarantor shall not be entitled to enforce or to
receive any payments arising out of, or based upon, such right of
subrogation until the principal of (and premium, if any) and
interest on all Notes issued hereunder shall have been paid in full.
(e)If Citizens Newco Guarantor makes or is required to make any payment
in respect of its Citizens Newco Guarantee it shall be entitled to
seek contribution from any other guarantors to the extent permitted
by applicable law, provided, however, that Citizens Newco Guarantor
shall not be entitled to enforce or receive any payments arising out
of, or based upon, such right of contribution until the principal of
(premium, if any) and interest on all Notes issued hereunder shall
have been paid in full.
(f)The Citizens Newco Guarantee shall remain in full force and effect
and continue to be effective should any petition be filed by or
against the Company for liquidation or reorganization, should the
Company become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or
any part of the Company's assets, and shall, to the fullest extent
permitted by law, continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Notes,
is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any Holder of the Notes,
whether as a "voidable preference," "fraudulent transfer," or
otherwise, all as though such payment or performance had not been
made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Notes shall, to the
fullest extent permitted by law, be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or
returned. The Citizens Newco Guarantee shall terminate when all the
Notes issued hereunder are paid in full or shall have been
effectively defeased pursuant to Article XIII of The Indenture
provided that it shall remain in effect with respect to any
obligations of the Company to the Trustee under Section 607 of the
Indenture until such obligations have been satisfied.
Section 8. Adjustment of the Applicable Annual Interest Rate.
(a)Effective with the substitution of the Citizens Newco Guarantee for
the Citizens' Guarantee, the interest rate payable on the Notes will
be adjusted in accordance with the following table. The credit
ratings referred to in the table will be the credit ratings
announced on or before the Separation and confirmed by the Rating
Agencies on the Separation Date for the long-term unsubordinated
unsecured debt of Citizens Newco or Citizens Newco, if no such debt
exists, after the Separation.
S&P Rating ▇▇▇▇▇'▇ Rating Applicable Annual Interest Rate
BBB+ or above Baa1 or above 6.05%
BBB Baa2 6.20%
BBB- Baa3 6.45%
(b)If the Applicable Annual Interest Rate indicated in the above table
for the S&P credit rating and for the Moody's credit rating are not
identical, the Applicable Annual Interest Rate payable on the Notes
from and after the effectiveness of the Citizens Newco Guarantee
shall be the arithmetical mean of (i) the Applicable Annual Interest
Rate indicated by the table for the S&P credit rating and (ii) the
Applicable Annual Interest Rate indicated by the table for the
Moody's credit rating.
(c)"Investment grade credit rating" means a rating of the long-term
unsubordinated unsecured debt of Citizens Newco of at least BBB- (or
the equivalent thereof), in the case of a rating by S&P, and a
rating of such debt of at least Baa3 (or the equivalent thereof), in
the case of a rating by Moody's.
(d)If an interest rate adjustment occurs during any interest payment
period, interest will be payable on the Notes for such interest
payment period at the rate equal to the weighted average of the
applicable rates in effect during such period, which shall be
calculated by multiplying each applicable rate by the number of days
such applicable rate is in effect during such interest payment
period, determining the sum of such products and dividing such sum
by the number of days in such interest payment period. Interest on
the Notes shall be computed on the basis of a 360-day year of twelve
30 day months. The applicable rate payable on the Notes will in no
event be higher than the maximum interest rate permitted by the New
York State law as the same may be modified by United States law of
general application.
(e)Unless (i) the Separation has occurred or (ii) the Company certifies
to the Trustee that the Separation has been abandoned and will not
occur, for so long as any of the Notes are outstanding, the Company,
Citizens and Citizens Newco shall provide such information, and take
all other reasonable and customary action as shall be necessary or
appropriate to enable each of S&P and Moody's to provide a credit
rating for Citizens Newco.
(f)If the credit rating of either S&P or ▇▇▇▇▇'▇ is not available at
the time of Separation notwithstanding the providing of the
information by the Company and Citizens Newco to a Rating Agency
which it has requested and the taking of all other reasonable and
customary action as may be necessary or appropriate to secure a
credit rating, a Substitute Rating Agency shall be designated in an
instrument delivered to the Trustee providing for the replacement of
S&P or Moody's, as the case may be, and the Company, Citizens and
Citizens Newco shall provide such information, and take all other
reasonable and customary action as shall be necessary or appropriate
to enable the Substitute Rating Agency to provide a credit rating.
Upon delivery of such instrument, for purposes of the foregoing
table Moody's or S&P will be deemed to have been replaced and the
credit ratings to be used in the foregoing table shall be the
equivalents of the S&P or Moody's credit ratings in the specified
table.
Section 9. Amendment to Indenture for Purposes of Notes due May 2004.
For all purposes of the Notes and for no other purposes, subsection (4)
of Section 501 shall read as follows:
"(4) material default in the performance, or material breach, of any
covenant or obligation of the Company or of the Guarantor in this Indenture
(other than a covenant or obligation a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of a series of
Securities other than that series), and continuance of such default or breach
for a period of 90 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Securities of
that series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;"
For all purposes of the Notes and for no other purposes, subsection (5)
of Section 501 shall read as follows:
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or of the Guarantor in an
involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company or the Guarantor a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or of the Guarantor under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of the Guarantor or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance any
such decree or order for relief or any such other decree or order unstayed and
in effect for a period of 60 consecutive days; or
For all purposes of the Notes and for no other purposes, subsection (6)
of Section 501 shall read as follows:
(6) the commencement by the Company or the Guarantor of a voluntary
case or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
decree or order for relief in respect of the Company or of the Guarantor in an
involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the Company
or of the Guarantor or of any substantial part of its property, or the making by
either of them of an assignment for the benefit of creditors, or the admission
by either of them in writing of its inability to pay its debts generally as they
become due, or the talking of corporate action by the Company or the Guarantor
in furtherance of any such action; or
For all purposes of the Notes and for no other purposes, with respect
to Section 501, the word "or", the last word of subsection (6), shall be
deleted; the existing subsection (7) shall be renumbered as subsection (8); and
a new subsection (7) shall read as follows:
"(7) if at any time prior to the Separation or the repurchase of the
Put Notes, as applicable, the Citizens Guarantee ceases to be in full force and
effect or Citizens denies or disaffirms its obligations under its Guarantee, or,
if at any time after the Separation, the Citizens Newco Guarantee ceases to be
in full force and effect or Citizens Newco denies or disaffirms its obligations
under its Guarantee; or"
For all purposes of the Notes and for no other purposes, the first
paragraph of Section 502 shall read:
"If an Event of Default with respect to the Securities of any series
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of at least 25% in principal amount of the Outstanding Securities of
that series may declare the principal amount (or, if any of the Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified in the terms thereof) of
all of the Securities of that series to be due and payable immediately, by a
notice in writing to the company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) shall
become immediately due and payable."
For all purposes of the Notes and for no other purposes, subsection (2)
of Section 507 shall read as follows:
"(2) the Holders of at least 25% in principal amount of the Outstanding
Securities of that series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;"
For all purposes of the Notes and for no other purposes, subsection (5)
of Section 507 shall read as follows:
"(5) no direction inconsistent with such written request has been given
to the Trustee during such 90-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;"
Section 10. Incorporation of Indenture. From and after the date hereof,
the Indenture, as supplemented by this First Supplemental Indenture, shall be
read, taken and construed as one and the same instrument with respect to the
Notes.
Section 11. Acceptance of Trust. The Trustee accepts the trusts created
by the Indenture, as supplemented by the First Supplemental Indenture, and
agrees to perform the same upon the terms and conditions in the Indenture, as so
supplemented.
Section 12. Conflict with Trust Indenture Act. If any provision of the
Indenture or this First Supplemental indenture limits, qualifies or conflicts
with a provision which would be required to be included in the Indenture and in
the First Supplemental Indenture if the Indenture and the First Supplemental
Indenture were to be qualified under the Trust Indenture Act, such required
provision of the Act shall control. If any provision of the Indenture or the
First Supplemental Indenture purports to modify or exclude any provision of the
Trust Indenture Act that may be so modified or excluded, such provision of the
Act shall be deemed to apply to the Indenture or this First Supplemental
Indenture only as so modified or if not so excluded, as the case may be.
Section 13. Governing Law. This First Supplemental Indenture, and the
Notes, shall be governed by and construed in accordance with the laws of the
State of New York.
Section 14. Recitals. The recitals contained in the Indenture, this
First Supplemental Indenture and the Notes, except the Trustee's certificate of
authentication, shall be taken as statements of the Company, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of the Indenture, as
supplemented by this First Supplemental Indenture.
Section 15. Amendments. Notwithstanding any other provisions hereof,
all amendments to the Indenture made hereby shall have effect only with respect
to the Notes, and not with respect to the Securities of any other series created
subsequent to the date hereof.
Section 16. Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the date first above written.
ELECTRIC LIGHTWAVE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President, Chief Financial Officer
and Treasurer
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
CITIZENS UTILITIES COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President, Chief Financial Officer
and Treasurer
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
CITIZENS NEWCO COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President, Chief Financial Officer
and Treasurer
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
CITIBANK, N.A.,
as Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Senior Trust Officer
Attest:
/s/ ▇▇▇▇▇ ▇▇▇▇▇
63135516.07
County of Fairfield )
) ss.:
State of Connecticut )
On the 27th day of April, 1999, before me personally came ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, to me known, who, being by me duly sworn, did depose and say that he
is Chief Financial Officer, Vice President and Treasurer of ELECTRIC LIGHTWAVE,
INC., one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed his name thereto
by like authority.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public, State of Connecticut
County of Fairfield )
) ss.:
State of Connecticut )
On the 27th day of April, 1999, before me personally came ▇▇▇▇▇▇
▇.▇▇▇▇▇▇▇▇, to me known, who, being by me duly sworn, did depose and say that he
is the Chief Financial Officer, Vice President and Treasurer of CITIZENS
UTILITIES COMPANY, one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public, State of Connecticut
County of Fairfield )
) ss.:
State of Connecticut )
On the 27th day of April, 1999, before me personally came ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, to me known, who, being by me duly sworn, did depose and say that he
is the Chief Financial Officer, Vice President and Treasurer of CITIZENS NEWCO
COMPANY, one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed his name thereto
by like authority.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public, State of Connecticut
County of New York )
) ss.:
State of New York )
On this 27th day of April, in the year of 1999 before me personally
came ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to me personally known, who being by me duly sworn did
depose and say that she is a Senior Trust Officer of Citibank, N.A., one of the
corporations described in and which executed the foregoing indenture; that she
knows the seal of said corporation; that the seal affixed to said instrument
opposite the execution thereof on behalf of said corporation is the corporate
seal of said corporation; that said instrument was signed and said corporate
seal was so affixed on behalf of said corporation by authority and order of its
board of directors; that she signed her name thereto by like authority; and she
acknowledged said instrument to be her free act and deed and the free act and
deed of said Bank.
IN WITNESS WHEREOF I have hereunder set my hand and affixed my official
seal, at New York in said State of New York, the day and year first above
written.
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇ Dominus
Notary Public, State of New York
