Exhibit 4.2
CONCENTRIC NETWORK CORPORATION, AS ISSUER,
AND
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION, AS TRUSTEE
_______
INDENTURE
DATED AS OF DECEMBER 18, 1997
_______
$150,000,000
12 3/4% SENIOR NOTES DUE 2007
Reconciliation and tie between Trust Indenture Act of 1939,
as amended, and Indenture, dated as of December 18, 1997
Trust Indenture Indenture
Act Section Section
------------ ---------
(S) 310 (a)(1)................................609
(a)(2)................................609
(b)...................................607, 610
(S) 311 (a)...................................613
(S) 312 (a)...................................701
(c)...................................702
(S) 313 (a)...................................703
(c)...................................703, 704
(S) 314 (a)...................................704
(a)(4)................................1018
(c)(1)................................103
(c)(2)................................103
(e)...................................103
(S) 315 (a)...................................601(b)
(b)...................................602
(c)...................................601(a)
(d)...................................601(c), 603
(e)...................................514
(S) 316 (a)(last sentence)....................101 ("Outstanding")
(a)(1)(A).............................502, 512
(a)(1)(B).............................513
(b)...................................508
(c)...................................105
(S) 317 (a)(1)................................503
(a)(2)................................504
(b)...................................1003
(S) 318 (a)...................................108
____________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of this Indenture.
TABLE OF CONTENTS
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RECITALS OF THE COMPANY........................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.................................................... 1
Section 102. Other Definitions.............................................. 22
Section 103. Compliance Certificates and Opinions........................... 23
Section 104. Form of Documents Delivered to Trustee......................... 23
Section 105. Acts of Holders................................................ 24
Section 106. Notices, etc., to the Trustee, the Company and any Guarantor... 25
Section 107. Notice to Holders; Waiver...................................... 26
Section 108. Conflict with Trust Indenture Act.............................. 26
Section 109. Effect of Headings and Table of Contents....................... 27
Section 110. Successors and Assigns......................................... 27
Section 111. Separability Clause............................................ 27
Section 112. Benefits of Indenture.......................................... 27
Section 113. Governing Law.................................................. 27
Section 114. Legal Holidays................................................. 27
Section 115. Independence of Covenants...................................... 28
Section 116. Schedules and Exhibits......................................... 28
Section 117. Counterparts................................................... 28
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally................................................ 28
Section 202. Form of Face of Security....................................... 29
Section 203. Form of Reverse of Securities.................................. 41
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms................................................ 47
Section 302. Denominations.................................................. 48
Section 303. Execution, Authentication, Delivery and Dating................. 48
Section 304. Temporary Securities........................................... 50
Section 305. Registration, Registration of Transfer and Exchange............ 50
Section 306. Book Entry Provisions for Global Securities.................... 51
Section 307. Special Transfer and Exchange Provisions....................... 53
Section 308. Mutilated, Destroyed, Lost and Stolen Securities............... 55
Section 309. Payment of Interest; Interest Rights Preserved................. 56
Section 310. CUSIP Numbers.................................................. 57
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Section 311. Persons Deemed Owners.......................................... 57
Section 312. Cancellation................................................... 58
Section 313. Computation of Interest........................................ 58
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect Defeasance or Covenant Defeasance... 58
Section 402. Defeasance and Discharge....................................... 58
Section 403. Covenant Defeasance............................................ 59
Section 404. Conditions to Defeasance or Covenant Defeasance................ 59
Section 405. Deposited Money and U.S. Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions..................... 61
Section 406. Reinstatement.................................................. 62
ARTICLE FIVE
REMEDIES
Section 501. Events of Default............................................. 62
Section 502. Acceleration of Maturity; Rescission and Annulment............ 64
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee..................................................... 65
Section 504. Trustee May File Proofs of Claim.............................. 66
Section 505. Trustee May Enforce Claims without Possession of Securities... 67
Section 506. Application of Money Collected................................ 67
Section 507. Limitation on Suits........................................... 67
Section 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest................................................ 68
Section 509. Restoration of Rights and Remedies............................ 68
Section 510. Rights and Remedies Cumulative................................ 69
Section 511. Delay or Omission Not Waiver.................................. 69
Section 512. Control by Holders............................................ 69
Section 513. Waiver of Past Defaults....................................... 69
Section 514. Undertaking for Costs......................................... 70
Section 515. Waiver of Stay, Extension or Usury Laws....................... 70
Section 516. Remedies Subject to Applicable Law............................ 70
ARTICLE SIX
THE TRUSTEE
Section 601. Duties of Trustee............................................. 71
Section 602. Notice of Defaults............................................ 72
Section 603. Certain Rights of Trustee..................................... 72
Section 604. Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof............... 73
Section 605. Trustee and Agents May Hold Securities; Collections; etc...... 74
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Section 606. Money Held in Trust........................................... 74
Section 607. Compensation and Indemnification of Trustee and Its Prior
Claim...................................................... 74
Section 608. Conflicting Interests......................................... 75
Section 609. Trustee Eligibility........................................... 75
Section 610. Resignation and Removal; Appointment of Successor Trustee..... 75
Section 611. Acceptance of Appointment by Successor........................ 77
Section 612. Merger, Conversion, Consolidation or Succession to Business... 77
Section 613. Preferential Collection of Claims Against Company............. 78
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders..... 78
Section 702. Disclosure of Names and Addresses of Holders.................. 78
Section 703. Reports by Trustee............................................ 79
Section 704. Reports by Company............................................ 79
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OF ASSETS
Section 801. Company and Guarantors May Consolidate, etc., Only on Certain
Terms...................................................... 80
Section 802. Successor Substituted......................................... 81
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements without Consent of
Holders.................................................... 81
Section 902. Supplemental Indentures and Agreements
with Consent of Holders.................................... 82
Section 903. Execution of Supplemental Indentures
and Agreements............................................. 84
Section 904. Effect of Supplemental Indentures............................. 84
Section 905. Conformity with Trust Indenture Act........................... 84
Section 906. Reference in Securities to Supplemental
Indentures................................................. 84
Section 907. Notice of Supplemental Indentures............................. 84
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest................... 85
Section 1002. Maintenance of Office or Agency.............................. 85
Section 1003. Money for Security Payments to Be Held in Trust.............. 85
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Section 1004. Corporate Existence.......................................... 87
Section 1005. Payment of Taxes and Other Claims............................ 87
Section 1006. Maintenance of Properties.................................... 87
Section 1007. Maintenance of Insurance..................................... 88
Section 1008. Limitation on Indebtedness................................... 88
Section 1009. Limitation on Restricted Payments............................ 90
Section 1010. Limitation on Transactions with Affiliates................... 93
Section 1011. Limitation on Liens.......................................... 94
Section 1012. Limitation on Sale of Assets................................. 94
Section 1013. Limitation on Issuances of Guarantees of Indebtedness........ 95
Section 1014. Purchase of Securities upon a Change of Control.............. 96
Section 1015. Limitation on Sale and Leaseback Transactions................ 99
Section 1016. Limitation on Subsidiary Capital Stock....................... 99
Section 1017. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.................................... 100
Section 1018. Limitations on Unrestricted Subsidiaries..................... 100
Section 1019. Provision of Financial Statements............................ 100
Section 1020. Statement by Officers as to Default.......................... 101
Section 1021. Waiver of Certain Covenants.................................. 101
Section 1022. Limitation on Business....................................... 102
Section 1023. Deposit of Funds with Escrow Agent........................... 102
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption......................................... 102
Section 1102. Applicability of Article..................................... 103
Section 1103. Election to Redeem; Notice to Trustee........................ 103
Section 1104. Selection by Trustee of Securities to Be Redeemed............ 103
Section 1105. Notice of Redemption......................................... 103
Section 1106. Deposit of Redemption Price.................................. 104
Section 1107. Securities Payable on Redemption Date........................ 105
Section 1108. Securities Redeemed or Purchased in Part..................... 105
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 1201. Satisfaction and Discharge of Indenture...................... 105
Section 1202. Application of Trust Money................................... 106
ARTICLE THIRTEEN
COLLATERAL AND SECURITY
Section 1301. Escrow Agreement............................................ 107
Section 1302. Recording and Opinions...................................... 107
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Section 1303. Release of Collateral....................................... 108
Section 1304. Authorization of Actions to Be Taken by the Trustee Under
the Escrow Agreement..................................... 108
Section 1305. Authorization of Receipt of Funds by the Trustee Under the
Escrow Agreement......................................... 108
Section 1306. Termination of Security Interest............................... 109
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
EXHIBIT A Regulation S Certificate
EXHIBIT B Restricted Security Certificate
EXHIBIT C Unrestricted Security Certificate
APPENDIX I Form of Transferee Certificate for Series A Securities
APPENDIX II Form of Transferee Certificate for Series B Securities
v
INDENTURE, dated as of December 18, 1997, between CONCENTRIC NETWORK
CORPORATION, a Delaware corporation (the "Company"), and CHASE MANHATTAN BANK
AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, as
trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 12 3/4%
Senior Notes due 2007, Series A (the "Series A Securities"), and an issue of 12
3/4% Senior Notes due 2007, Series B (the "Series B Securities" and, together
with the Series A Securities, the "Securities"), of substantially the tenor and
amount hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Indenture and the Securities;
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act that are required to be part of and to govern
indentures qualified under the Trust Indenture Act;
All acts and things necessary have been done to make the Securities,
when duly issued and executed by the Company and authenticated and delivered
hereunder, the valid obligations of the Company and this Indenture a valid
agreement of the Company and each of the Guarantors in accordance with the terms
of this Indenture;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
1
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) all references to $, US$, dollars or United States dollars shall
refer to the lawful currency of the United States of America; and
(f) all references herein to particular Sections or Articles refer to
this Indenture unless otherwise so indicated.
Certain terms used principally in Article Four are defined in Article
Four.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at
the time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or such acquisition, as the case may be, provided that Indebtedness
of such Person which is redeemed, defeased, retired or otherwise repaid at the
time of or immediately upon consummation of the transactions by which such
Person becomes a Subsidiary or such asset acquisition shall not constitute
Acquired Indebtedness.
"Acquired Person" means, with respect to any specified Person, any
other Person which merges with or into or becomes a Subsidiary of such specified
Person.
"Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Company or any
Subsidiary to any other Person, or any acquisition or purchase of Capital Stock
of any other Person by the Company or any Subsidiary, in either case pursuant to
which such Person shall become a Subsidiary or shall be consolidated, merged
with or into the Company or any Subsidiary or (ii) any acquisition by the
Company or any Subsidiary of the assets of any Person which constitute
substantially all of an operating unit or line of business of such Person or
which is otherwise outside of the ordinary course of business of the Company or
such Subsidiary.
"Additional Interest" has the meaning provided in Section 5 of the
Registration Rights Agreement.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise; and the
2
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security to the extent
applicable to such transaction and as in effect at the time of such transfer or
transaction.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger,
consolidation or sale and leaseback transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, of: (i) any
Capital Stock of any Subsidiary; (ii) all or substantially all of the properties
and assets of any division or line of business of the Company or its
Subsidiaries; or (iii) any other properties or assets of the Company or any
Subsidiary other than in the ordinary course of business. For the purposes of
this definition, the term "Asset Sale" shall not include any transfer of
properties and assets (A) that is governed by the provisions described under
"Consolidation, Merger, Sale of Assets," (B) that is by the Company to any
Subsidiary or by any Subsidiary to the Company or any other Subsidiary in
accordance with the terms of this Indenture, (C) that is of obsolete equipment
in the ordinary course of business, (D) the Fair Market Value of which in the
aggregate does not exceed $200,000 in any transaction or series of related
transactions, (E) that is made in accordance with the provisions described in
Section 1009, (F) which constitutes the granting of any Permitted Lien and (G)
in which assets will be transferred in exchange for one or more like-kind
assets; provided that if the Fair Market Value of the assets to be transferred
by the Company or such Subsidiary under this clause G, plus the Fair Market
Value of any other consideration paid or credited by the Company or such
Subsidiary exceeds $1 million, such transaction shall require approval of the
Board of Directors of the Company.
"Average Life to Stated Maturity" means, as of the date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from the date of
determination to the date or dates of each successive scheduled principal
payment of such Indebtedness multiplied by (b) the amount of each such principal
payment; by (ii) the sum of all such principal payments.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Bankruptcy Code of
1978, as amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Board of Directors" means the board of directors of the Company or
any Guarantor, as the case may be, or any duly authorized committee of such
board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or any Guarantor, as the case
may be, to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.
3
"Book-Entry Security" means any Global Securities bearing the legend
specified in Section 202 evidencing all or part of a series of Securities,
authenticated and delivered to the Depositary for such series or its nominee,
and registered in the name of such Depositary or nominee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions or trust companies in
The City of New York or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law, regulation or executive
order to close.
"Capital Lease Obligation" of any Person means any obligation of such
Person and its subsidiaries on a Consolidated basis under any capital lease of
real or personal property which, in accordance with GAAP, has been recorded as a
capital lease obligation.
"Capital Stock" of (i) with respect to any Person that is a
corporation, and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of common stock and preferred stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"Cash Equivalents" means (i) any evidence of Indebtedness, maturing
not more than one year after the date of acquisition, issued by the United
States of America, or an instrumentality or agency thereof, and guaranteed fully
as to principal, premium, if any, and interest by the United States of America,
(ii) any certificate of deposit, maturing not more than one year after the date
of acquisition, issued by, or time deposit of, a commercial banking institution
that is a member of the Federal Reserve System and that has combined capital and
surplus and undivided profits of not less than $500 million, whose short term
debt has a rating, at the time as of which any investment therein is made, of
"P-1" (or higher) according to Xxxxx'x or any successor rating agency or "A-1"
(or higher) according to S&P or any successor rating agency, (iii) commercial
paper, maturing not more than 270 days after the date of acquisition, issued by
a corporation (other than an Affiliate or Subsidiary of the Company) organized
and existing under the laws of the United States of America with a rating, at
the time as of which any investment therein is made, of "P-1" (or higher)
according to Xxxxx'x or "A-1" (or higher) according to S&P and (iv) any money
market deposit accounts issued or offered by a domestic commercial bank having
capital and surplus in excess of $500 million; provided that the short term debt
of such commercial bank has a rating, at the time of Investment, of "P-1" (or
higher) according to Xxxxx'x or "A-1" (or higher) according to S&P.
"Change of Control" means the occurrence of any of the following events:
(i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to
have beneficial ownership of all shares that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total outstanding
Voting Stock of the Company; (ii) during any period of two consecutive years,
individuals who at the beginning of
4
such period constituted the Board of Directors of the Company (together with any
new directors whose election to such board or whose nomination for election by
the stockholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved), cease for any reason to constitute a majority of such Board of
Directors then in office; (iii) the Company consolidates with or merges with or
into any Person or conveys, transfers or leases all or substantially all of its
assets to any Person, or any corporation consolidates with or merges into or
with the Company in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is changed into or exchanged for cash,
securities or other property, other than any such transaction where the
outstanding Voting Stock of the Company is not changed or exchanged at all
(except to the extent necessary to reflect a change in the jurisdiction of
incorporation of the Company or where no "person" or "group" owns, immediately
after such transaction, directly or indirectly, more than 50% of the total
outstanding Voting Stock of the surviving corporation); or (iv) the Company is
liquidated or dissolved or adopts a plan of liquidation or dissolution other
than in a transaction which complies with the provisions described under Article
Eight.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning provided in Section 6 of the Escrow
Agreement.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act then the
body performing such duties at such time.
"Commodity Price Protection Agreement" means any forward contract,
commodity swap, commodity option or other similar financial agreement or
arrangement relating to, or the value which is dependent upon, fluctuations in
commodity prices.
"Common Stock" means the common stock, par value $0.001 per share, of
the Company.
"Company" means Concentric Network Corporation, a corporation
incorporated under the laws of Delaware, until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
President, its Chief Executive Officer, its Chief Financial Officer or a Vice
President (regardless of Vice Presidential designation), and by any one of its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Consolidated" means, consolidated in accordance with GAAP.
5
"Consolidated Income Tax Expense" of any Person means, for any period,
the provision for federal, state, local and foreign income taxes of such Person
and its Consolidated subsidiaries for such period as determined in accordance
with GAAP.
"Consolidated Interest Expense" of any Person means, without
duplication, for any period, the sum of (a) the interest expense of such Person
and its subsidiaries for such period, on a Consolidated basis, including,
without limitation, (i) amortization of debt discount, (ii) the net costs
associated with Interest Rate Agreements, Currency Hedging Agreements and
Commodity Price Protection Agreements (including amortization of discounts),
(iii) the interest portion of any deferred payment obligation and (iv) accrued
interest, plus (b) (i) the interest component of the Capital Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such Person and its
subsidiaries during such period and (ii) all capitalized interest of such Person
and its subsidiaries plus (c) the interest expense actually paid by such Person
under any Guaranteed Debt of such Person and any subsidiary to the extent not
included under clause (a)(iv) above, plus (d) the aggregate amount for such
period of cash or non-cash dividends on any Redeemable Capital Stock or
Preferred Stock of the Company and its Subsidiaries, in each case as determined
on a Consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any period, the net
income of the Company and any Subsidiary for such period determined on a
consolidated basis in accordance with GAAP, adjusted, to the extent included in
calculating such net income, by excluding, without duplication, (a) other than
for purposes of calculating the Basket, all extraordinary gains or losses for
such period, (b) other than for purposes of calculating the Basket, all gains or
losses from the sales or other dispositions of assets out of the ordinary course
of business (net of taxes, fees and expenses relating to the transaction giving
rise thereto) for such period: (c) that portion of such net income derived from
or in respect of investments in Persons other than Subsidiaries, except to the
extent actually received in cash by the Company or any Subsidiary (subject, in
the case of any Subsidiary, to the provisions of clause (f) of this definition);
(d) the portion of such net income (or loss) allocable to minority interests in
any Person (other than a Subsidiary) for such period, except to the extent the
Company's allocation portion of such Person's net income for such period is
actually received in cash by the Company or any Subsidiary (subject, in the case
of any Subsidiary, to the provisions of clause (f) of this definition); (e) the
net income (or loss) or any other Person combined with the Company or any
Subsidiary on a "pooling of interests" basis attributable to any period prior to
the date of combination; and (f) the net income of any Subsidiary to the extent
that the declaration of dividends or similar distributions by that Subsidiary of
that income is not at the time (regardless of any waiver) permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulations
applicable to that Subsidiary or its Capital Stock holders.
"Consolidated Operating Cash Flow" means, with respect to any period,
Consolidated Net Income for such period increased (without duplication), to the
extent deducted in calculating such Consolidated Net Income, by (a) Consolidated
Income Tax Expense for such period; (b) Consolidated Interest Expense for such
period; and (c) depreciation, amortization and any other non-cash items for such
period (other than any non-cash item which requires the
6
accrual of, or a reserve for, cash charges for any future period) of the Company
and any Subsidiary, including, without limitation, amortization of capitalized
debt issuance costs for such period, all of the foregoing determined on a
consolidated basis in accordance with GAAP minus non-cash items to the extent
they increase Consolidated Net Income (including the partial or entire reversal
of reserves taken in prior periods) for such period.
"Corporate Trust Office" means the office of the Trustee or an
affiliate or agent thereof at which at any particular time the corporate trust
business for the purposes of this Indenture shall be principally administered,
which office at the date of execution of this Indenture is located at 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000.
"Cumulative Operating Cash Flow" means, as at any date of
determination, the positive cumulative Consolidated Operating Cash Flow realized
during the period commencing on the original issue date of the Securities and
ending on the last day of the most recent fiscal quarter immediately preceding
the date of determination for which consolidated financial information of the
Company is available or, if such cumulative Consolidated Operating Cash Flow for
such period is negative, the negative amount by which cumulative Consolidated
Operating Cash Flow is less than zero.
"Currency Hedging Arrangements" means one or more of the following
agreements which shall be entered into by one or more financial institutions:
foreign exchange contracts, currency swap agreements or other similar agreements
or arrangements designed to protect against the fluctuations in currency values.
"Debt to Annualized Operating Cash Flow Ratio" means the ratio of (a)
the Total Consolidated Indebtedness as of the date of calculation (the
"Determination Date") to (b) two times the Consolidated Operating Cash Flow for
the latest two fiscal quarters for which financial information is available
immediately preceding such Determination Date (the "Measurement Period"). For
purposes of calculating Consolidated Operating Cash Flow for the Measurement
Period immediately prior to the relevant Determination Date, (i) any Person that
is a Subsidiary on the Determination Date (or would become a Subsidiary on such
Determination Date in connection with the transaction that requires the
determination of such Consolidated Operating Cash Flow) will be deemed to have
been a Subsidiary at all times during such Measurement Period, (ii) any Person
that is not a Subsidiary on such Determination Date (or would cease to be a
Subsidiary on such Determination Date in connection with the transaction that
requires the determination of such Consolidated Operating Cash Flow) will be
deemed not to have been a Subsidiary at any time during such Measurement Period,
and (iii) if the Company or any Subsidiary shall have in any manner (x) acquired
(through an Acquisition or the commencement of activities constituting such
operating business) or (y) disposed of (by of an Asset Sale or the termination
or discontinuance of activities constituting such operating business) any
operating business during such Measurement Period or after the end of such
period and on or prior to such Determination Date, such calculation will be made
on a pro forma basis in accordance with GAAP as if, in the case of an
Acquisition or the commencement of activities constituting such operating
business, all such transactions had been consummated prior to the first day of
such Measurement Period (it being understood that in calculating Consolidated
Operating Cash Flow
7
the exclusions set forth in clauses (a) through (f) of the definition of
Consolidated Net Income shall apply to an Acquired Person as if it were a
Subsidiary).
"Default" means any event which is, or after notice or passage of any
time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities issued in the form
of one or more Book-Entry Securities, The Depositary Trust Company ("DTC"), its
nominees and successors, or another Person designated as Depositary by the
Company, which must be a clearing agency registered under the Exchange Act.
"Disinterested Director" means, with respect to any transaction or
series of related transactions, a member of the Board of Directors of the
Company who does not have any material direct or indirect financial interest in
or with respect to such transaction or series of related transactions.
"Disqualified Stock" means, with respect to any person, any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or becomes mandatorily redeemable, pursuant to a sinking fund
obligations or otherwise, or becomes exchangeable for Indebtedness at the option
of the holder thereof, or becomes redeemable at the option of the holder
thereof, in whole or in part, on or prior to the final maturity date of the
Securities; provided such Capital Stock shall only constitute Disqualified Stock
to the extent it so matures or becomes so redeemable or exchangeable on or prior
to the final maturity date of the Securities; provided, further, that any
Capital Stock that would not constitute Disqualified Stock but for provisions
thereof giving holders thereof the right to require such person to repurchase or
redeem such Capital Stock upon the occurrence of an "asset sale" or "change of
control" occurring prior to the final maturity date of the Securities shall not
constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions contained in Section 1012 and Section
1014 and such Capital Stock specifically provides that such person will not
repurchase or redeem any such stock pursuant to such provision prior to the
Issuer's repurchase of such Securities as are required to be repurchased
pursuant to Section 1012 and Section 1014.
"Escrow Account" has the meaning set forth in Section 2 of the Escrow
Agreement.
"Escrow Agent" means Chase Manhattan Bank and Trust Company, National
Association, as escrow agent under the Escrow Agreement, until a successor
replaces it in accordance with the provisions of the Escrow Agreement and
thereafter means such successor.
"Escrow Agreement" means the Escrow Agreement dated as of December 18,
1997 among the Company, the Escrow Agent and the Trustee.
"Escrow Funds" has the meaning specified in the Escrow Agreement.
8
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute.
"Exchange Offer" means the exchange offer by the Company of Series B
Securities for Series A Securities to be effected pursuant to Section 3 of the
Registration Rights Agreement.
"Exchange Offer Registration Statement" means the registration
statement under the Securities Act contemplated by Section 3(a) of the
Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be reasonably expected to be obtained in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy. Fair Market Value
shall be determined by the Board of Directors of the Company acting in good
faith and shall be evidenced by a Board Resolution.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date hereof.
"Global Securities" means the Rule 144A Global Securities, the
Regulation S Global Securities and the Series B Global Securities to be issued
as Book-Entry Securities issued to the Depositary in accordance with Section
306.
"Guarantee" means the guarantee by any Guarantor of the Company's
Indenture Obligations.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person guaranteed directly or indirectly in any manner
by such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to
supply funds to, or in any other manner invest in, the debtor (including any
agreement to pay for property or services without requiring that such property
be received or such services be rendered), (iv) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the net worth, solvency
or other financial condition of the debtor or (v) otherwise to assure a creditor
against loss; provided that the term "guarantee" shall not include endorsements
for collection or deposit, in either case in the ordinary course of business.
"Guarantor" means any Subsidiary which is a guarantor of the
Securities, including any Person that is required after the date hereof to
execute a guarantee of the Securities
9
pursuant to Section 1013 until a successor replaces such party pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of a Person existing at the time
such Person becomes a Subsidiary or is merged or consolidated with or into the
Company or any Subsidiary shall be deemed to be Incurred at such time.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, excluding any trade payables and other
accrued current liabilities arising in the ordinary course of business, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (unless the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business, (iv) all obligations under Interest Rate Agreements, Currency
Hedging Agreements or Commodity Price Protection Agreements of such Person, (v)
all Capital Lease Obligations of such Person, (vi) all Indebtedness referred to
in clauses (i) through (v) above of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien, upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, (vii) all
Redeemable Capital Stock issued by such Person valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends, and (viii) any amendment, supplement, modification, deferral,
renewal, extension, refunding or refinancing of any liability of the types
referred to in clauses (i) through (vii) above. For purposes hereof, the
"maximum fixed repurchase price" of any Redeemable Capital Stock which does not
have a fixed repurchase price shall be calculated in accordance with the terms
of such Redeemable Capital Stock as if such Redeemable Capital Stock were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to this Indenture, and if such price is based upon, or measured by, the
Fair Market Value of such Redeemable Capital Stock, such Fair Market Value to be
determined in good faith by the Board of Directors of the issuer of such
Redeemable Capital Stock. In no event shall "Indebtedness" include any trade
payable or other current liabilities arising in the ordinary course of business.
The amount of any item of Indebtedness shall be the amount of such Indebtedness
properly classified as a liability on a balance sheet prepared in accordance
with GAAP.
10
"Indenture" means this instrument as originally executed (including
all exhibits and schedules thereto) and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company and any
other obligor under this Indenture or under the Securities including any
Guarantor, to pay principal of, premium, if any, and interest when due and
payable, and all other amounts due or to become due under or in connection with
this Indenture, the Securities and the performance of all other obligations to
the Trustee and the holders under this Indenture and the Securities, according
to the respective terms thereof.
"Initial Purchasers" means UBS Securities LLC, Bear, Xxxxxxx & Co.
Inc. and Wheat, First Securities, Inc.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Agreements" means one or more of the following
agreements which shall be entered into by one or more financial institutions:
interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements) and/or other types of
interest rate hedging agreements from time to time.
"Investment" means, with respect to any Person, directly or
indirectly, any advance, loan (including guarantees), or other extension of
credit or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase, acquisition or ownership by such Person of any
Capital Stock, bonds, notes, debentures or other securities issued or owned by
any other Person and all other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP.
"Issue Date" means the date on which the Securities are originally
issued under this Indenture.
"Lien" means any mortgage or deed of trust, pledge, lien (statutory or
otherwise), security interest, easement, hypothecation, or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired. A Person shall be deemed to own
subject to a Lien any property which such Person has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement, other than any lease properly
classified as an operating lease under GAAP and intellectual property licensing
arrangements.
"Maturity" means, when used with respect to the Securities, the date
on which the principal of the Securities becomes due and payable as therein
provided or as provided in this Indenture, whether at Stated Maturity, the Offer
Date or the redemption date and whether by declaration of acceleration, Offer in
respect of Excess Proceeds, Change of Control Offer in
11
respect of a Change of Control, call for redemption or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor
rating agency.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any
Person, the proceeds thereof (without duplication in respect of all Asset Sales)
in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of, or stock or other
assets when disposed of for, cash or Cash Equivalents (except to the extent that
such obligations are financed or sold with recourse to the Company or any
Subsidiary) net of (i) brokerage commissions and other reasonable fees and
expenses (including fees and expenses of counsel and investment bankers) related
to such Asset Sale, (ii) provisions for all taxes payable as a result of such
Asset Sale, (iii) payments made to retire Indebtedness where payment of such
Indebtedness is secured by the assets or properties the subject of such Asset
Sale, (iv) amounts required to be paid to any Person (other than the Company or
any Subsidiary) owning a beneficial interest in the assets subject to the Asset
Sale and (v) appropriate amounts to be provided by the Company or any
Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against
any liabilities associated with such Asset Sale and retained by the Company or
any Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as reflected in an officers'
certificate delivered to the Trustee and (b) with respect to any issuance or
sale of Capital Stock or options, warrants or rights to purchase Capital Stock,
or debt securities or Capital Stock that have been converted into or exchanged
for Capital Stock as referred to in Section 1009, the proceeds of such issuance
or sale in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of, or stock or other
assets when disposed of for, cash or Cash Equivalents (except to the extent that
such obligations are financed or sold with recourse to the Company or any
Subsidiary), net of attorney's fees, accountant's fees and brokerage,
consultation, underwriting and other fees and expenses actually incurred in
connection with such issuance or sale (or conversion in the case of debt
securities or Capital Stock that have been converted) and net of taxes paid or
payable as a result thereof.
"Non-U.S. Person" means a Person that is not a "U.S. person" as
defined in Regulation S under the Securities Act.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President, the Chief Executive Officer, the Chief Financial
Officer or a Vice President (regardless of Vice Presidential designation), and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company or any Guarantor, as the case may be, and in form and
substance reasonably satisfactory to, and delivered to, the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, any Guarantor or the Trustee, unless an Opinion of
Independent Counsel is required pursuant to the terms of this Indenture, and who
shall be acceptable to the Trustee, and which opinion shall be in form and
substance reasonably satisfactory to the Trustee.
12
"Opinion of Independent Counsel" means a written opinion of counsel,
who may be regular outside counsel for the Company, but which is issued by a
Person who is not an employee or consultant (other than non-employee legal
counsel) of the Company, or any Guarantor and who shall be reasonably acceptable
to the Trustee, and which opinion shall be in form and substance reasonably
satisfactory to the Trustee.
"Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities; provided that if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor reasonably satisfactory to the Trustee has been
made;
(c) Securities, except to the extent provided in Sections 402 and 403,
with respect to which the Company has effected defeasance or covenant defeasance
as provided in Article Four; and
(d) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee and the Company proof reasonably satisfactory to each of them that such
Securities are held by a bona fide purchaser in whose hands the Securities are
valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company, any Guarantor, or any other obligor upon the Securities or any
Affiliate of the Company, any Guarantor or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the reasonable satisfaction of the Trustee the pledgee's right so
to act with respect to such Securities and that the pledgee is not the Company,
any Guarantor or any other obligor upon the Securities or any Affiliate of the
Company, any Guarantor or such other obligor.
"Pari Passu Indebtedness" means (a) any Indebtedness of the Company
which ranks pari passu in right of payment to the Securities and (b) with
respect to any Guarantee, Indebtedness which ranks pari passu in right of
payment to such Guarantee.
13
"Paying Agent" means any Person (including the Company) authorized by
the Company to pay the principal of, premium, if any, or interest on, any
Securities on behalf of the Company.
"Permitted Investment" means (i) Investments in any Wholly Owned
Subsidiary or any Person which, as a result of such Investment, (a) becomes a
Wholly Owned Subsidiary or (b) is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets to, or is liquidated
into, the Company or any Wholly Owned Subsidiary; (ii) Indebtedness of the
Company or a Subsidiary described under clauses (iv) and (vii) of paragraph (b)
of Section 1008; (iii) Investments in any of the Securities; (iv) Investments in
Cash Equivalents; (v) Investments acquired by the Company or any Subsidiary in
connection with an Asset Sale permitted under Section 1012 to the extent such
Investments are non-cash proceeds as permitted under such covenant; (vi)
Investments in existence on the date of the Indenture; (vii) guarantees of
Indebtedness of a Wholly Owned Subsidiary given by the Company or another Wholly
Owned Subsidiary and guarantees of Indebtedness of the Company given by any
Subsidiary, in each case, in accordance with the terms of the Indenture; (viii)
advances to employees or officers of the Company in the ordinary course of
business so long as the aggregate amount of such advances shall not exceed $1
million outstanding at any one time; (ix) any Investment in the Company by any
Subsidiary of the Company; provided, that any such Investment in the form of
Indebtedness shall be Subordinated Indebtedness; (x) accounts receivable created
or acquired in the ordinary course of business of the Company or any Subsidiary
and Investments arising from transactions by the Company or any Subsidiary with
trade creditors or customers in the ordinary course of business (including any
such Investment received pursuant to any plan of reorganization or similar
arrangement pursuant to the bankruptcy or insolvency of such trade creditors or
customers or otherwise in settlement of a claim); (xi) loans in the ordinary
course of business to employees of the Company or a Subsidiary to purchase
Capital Stock of the Company pursuant to the terms of employee stock benefit
plans; (xii) Investments the consideration of which is Capital Stock of the
Company; (xiii) stock obligations or securities received in satisfaction of
judgments; (xiv) Investments in prepaid expenses, negotiable instruments held
for collection, and lease, utility and workers' compensation, performance and
other similar deposits; and (xv) any other Investments in an aggregate amount
not to exceed $20 million at any one time outstanding. In connection with any
assets or property contributed or transferred to any Person as an Investment,
such property and assets shall be equal to the Fair Market Value (as determined
by the Company's Board of Directors) at the time of such Investment.
"Permitted Lien" means:
(a) any Lien existing as of the date of this Indenture;
(b) any Lien arising by reason of (1) any judgment, decree or order
of any court, so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the review of such
judgment, decree or order shall not have been finally terminated or the period
within which such proceedings may be initiated shall not have expired; (2) taxes
not yet delinquent or which are being contested in good faith; (3) security
14
for payment of workers' compensation or other insurance or arising under
worker's compensation laws or similar legislation; (4) good faith deposits in
connection with bids, tenders, leases, contracts (other than contracts
evidencing Indebtedness); (5) zoning restrictions, easements, licenses,
reservations, title defects, rights of others for rights of way, utilities,
sewers, electric lines, telephone or telegraph lines, and other similar
purposes, provisions, covenants, conditions, waivers, restrictions on the use of
property or minor irregularities of title (and with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or under a
landlord or owner of the leased property, with or without consent of the
lessee), none of which materially impairs the use of any parcel of property
material to the operation of the business of the Company or any Subsidiary or
the value of such property for the purpose of such business; (6) deposits to
secure public or statutory obligations, or in lieu of surety or appeal bonds; or
(7) operation of law in favor of landlords, carriers, warehousemen, bankers,
mechanics, materialmen, laborers, employees or suppliers, incurred in the
ordinary course of business for sums which are not yet delinquent or are being
contested in good faith by negotiations or by appropriate proceedings which
suspend the collection thereof;
(c) any Lien to secure the performance bids, trade contracts, leases
(including, without limitation, statutory and common law landlord's liens),
statutory obligations, surety and appeal bonds, letters of credit and other
obligations of a like nature and incurred in the ordinary course of business of
the Company or any Subsidiary;
(d) any Lien securing obligations in connection with Indebtedness
permitted under clause (i) of paragraph (b) of Section 1008 which are incurred
or assumed in connection with the acquisition, development or construction of
real or personal, moveable or immovable property within 180 days of such
incurrence or assumption; provided that such Liens only extend to such acquired,
developed or constructed property and any accessories, accessions, additions,
replacements and proceeds thereof; and
(e) any Lien arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default;
(f) any Lien securing obligations in connection with Indebtedness
permitted in clauses (ii) or (iii) of paragraph (b) of Section 1008;
(g) any Lien in favor of the Company or any Subsidiary;
(h) any Lien securing obligations in connection with Acquired
Indebtedness; provided that any such Lien does not extend to or cover any
property or assets of the Company or any of its Subsidiaries other than the
property or assets of the Acquired Person covered thereby or the property assets
so acquired;
(i) any Lien in favor of the Trustee for the benefit of the Holders
or the Trustee arising under the provisions in the Indenture or the Escrow
Agreement;
15
(j) any Lien encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual or warranty requirements of the Company
or any Subsidiary if and to the extent arising in the ordinary course of
business, including rights of offset and set-off;
(k) any Lien in favor of customs or revenue authorities to secure
payment of customs duties in connection with the importation of goods in the
ordinary course of business;
(l) leases or subleases granted to third Persons not interfering with
the ordinary course of business of the Company or its Subsidiaries;
(m) any Lien securing any extension, renewal, refinancing or
replacement, in whole or in part, of any obligation or Indebtedness described in
the foregoing clauses (a) through (d) and (f) through (h) so long as no
additional collateral is granted as security thereby.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 308 in exchange for a mutilated
Security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" means, with respect to any Person, any Capital Stock
of any class or classes (however designated) which is preferred as to the
payment of dividends or distributions, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of such Person, over the
Capital Stock of any other class in such Person.
"Prospectus" means the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion
of the Series A Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"Public Equity Offering" means an underwritten offering of Common
Stock of the Company with gross proceeds to the Company of at least $25 million
pursuant to a registration statement that has been declared effective by the
Commission pursuant to the Securities Act (other than a registration statement
on Form S-8 or otherwise relating to equity securities issuable under any
employee benefit plan of the Company).
"Purchase Money Obligation" means any Indebtedness secured by a Lien
on assets related to the business of the Company and any additions and
accessions thereto, which are purchased by the Company at any time after the
Securities are issued; provided that (i) the
16
security agreement or conditional sales or other title retention contract
pursuant to which the Lien on such assets is created (collectively a "Purchase
Money Security Agreement") shall be entered into within 90 days after the
purchase or substantial completion of the construction of such assets and shall
at all times be confined solely to the assets so purchased or acquired, any
additions and accessions thereto and any proceeds therefrom, (ii) at no time
shall the aggregate principal amount of the outstanding Indebtedness secured
thereby be increased, except in connection with the purchase of additions and
accessions thereto and except in respect of fees and other obligations in
respect of such Indebtedness and (iii) (A) the aggregate outstanding principal
amount of Indebtedness secured thereby (determined on a per asset basis in the
case of any additions and accessions) shall not at the time such Purchase Money
Security Agreement is entered into exceed 100% of the purchase price to the
Company of the assets subject thereto or (B) the Indebtedness secured thereby
shall be with recourse solely to the assets so purchased or acquired, any
additions and accessions thereto and any proceeds therefrom.
"QIB" means a "Qualified Institutional Buyer" under Rule 144A under
the Securities Act.
"Qualified Capital Stock" of any Person means any and all Capital
Stock of such Person other than Redeemable Capital Stock.
"Redeemable Capital Stock" means any Capital Stock that, either by its
terms or by the terms of any security into which it is convertible or
exchangeable or otherwise, is or upon the happening of an event or passage of
time would be, required to be redeemed prior to the Stated Maturity of the
principal of the Securities or is redeemable at the option of the holder thereof
at any time prior to any such Stated Maturity, or is convertible into or
exchangeable for debt securities at any time prior to any such Stated Maturity
at the option of the holder thereof.
"Redemption Date" when used with respect to any Security to be
redeemed pursuant to any provision in this Indenture means the date fixed for
such redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be
redeemed pursuant to any provision in this Indenture means the price at which it
is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of December 18, 1997, between the Company and the Initial
Purchasers.
"Registration Statement" means any registration statement of the
Company which covers any of the Series A Securities or Series B Securities
pursuant to the provisions of the Registration Rights Agreement, and all
amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Regular Record Date" for the interest payable on any Interest Payment
Date
17
means the June 1 or December 1 (whether or not a Business Day) next preceding
such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act, as amended
from time to time.
"Regulation S Global Securities" means one or more permanent global
Securities in registered form representing the aggregate principal amount of
Securities sold in reliance on Regulation S under the Securities Act.
"Responsible Officer" when used with respect to the Trustee means any
officer or employee assigned to the Corporate Trust Office or any agent of the
Trustee appointed hereunder, including any vice president, assistant vice
president, secretary, assistant secretary, or any other officer or assistant
officer of the Trustee or any agent of the Trustee appointed hereunder to whom
any corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Rule 144A" means Rule 144A under the Securities Act, as amended from
time to time.
"Rule 144A Global Securities" means one or more permanent global
Securities in registered form representing the aggregate principal amount of
Securities sold in reliance on Rule 144A under the Securities Act.
"Sale and Leaseback Transaction" means any transaction or series of
related transactions pursuant to which the Company or a Subsidiary sells or
transfers any property or asset in connection with the leasing, or the resale
against installment payments, of such property or asset to the seller or
transferor.
"S&P" means Standard & Poor's Rating Group, a division of McGraw Hill,
Inc. or any successor rating agency.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.
"Series B Global Securities" means one or more permanent Global
Securities in registered form representing the aggregate principal amount of
Series B Securities exchanged for Series A Securities pursuant to the Exchange
Offer.
"Shelf Registration Statement" means a "shelf" registration statement
of the Company pursuant to Section 4 of the Registration Rights
Agreement, which covers all of the Registrable Securities (as defined in the
Registration Rights Agreement) on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the Commission, and
all amendments and supplements to such registration statement, including post-
effective amendments, in each case including the Prospectus contained therein,
all exhibits
18
thereto and all material incorporated by reference therein.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 309.
"Stated Maturity" means, when used with respect to any Indebtedness or
any installment of interest thereon, the dates specified in such Indebtedness as
the fixed date on which the principal of such Indebtedness or such installment
of interest, as the case may be, is due and payable.
"Strategic Investor" means any Person which is (or a controlled
Affiliate of any Person which is or a controlled Affiliate of which is) engaged
principally in the Telecommunications Business and which has a Total Market
Capitalization of at least $1.0 billion.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Guarantor subordinated in right of payment to the Securities or the Guarantee of
such Guarantor, as the case may be.
"subsidiary" means, with respect to any Person, an corporation,
association or other business entity (i) of which outstanding Capital Stock
having at least the majority of the votes entitled to be cast in the election of
directors is owned, directly or indirectly, by such Person and/or any one or
more subsidiaries of such Person, or (ii) of which at least a majority of voting
interest is owned, directly or indirectly, by such Person and/or one or more
subsidiaries of such Person.
"Subsidiary" means any subsidiary of the Company other than an
Unrestricted Subsidiary.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 308 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Telecommunications Business" means, when used in reference to any
Person, that such Person is engaged primarily in (i) the business of
transmitting, or providing services relating to the transmission of, voice,
video or data through owned or leased transmission facilities, (ii) the business
of creating, developing or marketing communications related network equipment,
software and other devices for use in a Telecommunications Business or (iii)
businesses reasonably related or incidental thereto.
"Total Consolidated Indebtedness" means, as at any date of
determination, an amount equal to the aggregate amount of all Indebtedness of
the Company and any Subsidiary, on a Consolidated basis, outstanding as of such
date of determination, after giving effect to any
19
Incurrence of Indebtedness and the application of the proceeds therefrom giving
rise to such determination.
"Total Market Capitalization" of any Person means, as of any day of
determination, the sum of (a) the consolidated Indebtedness of such Person and
any Subsidiaries on such day, plus (b) the product of (i) the aggregate number
of outstanding shares of common stock of such Person on such day (which shall
not include any options or warrants on, or securities convertible or
exchangeable into, shares of common stock of such Person) and (ii) the average
closing price of such common stock over the 10 consecutive Trading Days ending
not earlier than 10 Trading Days immediately prior to such date of
determination, plus (c) the liquidation value of any outstanding shares of
preferred stock of such Person on such day. If no such closing price exists
with respect to shares of any such class, the value of such shares for purposes
of clause (b) of the preceding sentence shall be determined by the Board of
Directors in good faith and evidenced by a Board Resolution filed with the
Trustee. Notwithstanding the foregoing, unless the Person's Common Stock is
listed on any national securities exchange or on the Nasdaq National Market, the
"Total Market Capitalization" of the Person shall mean, as of any day of
determination, the enterprise value (without duplication) of the Person and any
subsidiaries (including the fair market value of their debt and equity), as
determined by an independent banking firm of national standing with experience
in such valuations and evidenced by a written opinion in customary form filed
with the Trustee; provided that for purposes of any such determination, the
enterprise value of the Person shall be calculated as if the Person were a
publicly held corporation without a controlling stockholder. For purposes of any
such determination, such banking firm's written opinion may state that such fair
market value is no less than a specified amount and such opinion may be as of a
date no earlier than 90 days prior to the date of such determination.
"Trading Day" with respect to a securities exchange or automated
quotation system means a day on which such exchange or system is open for a full
day of trading.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, until a successor trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, or any successor statute.
"Unrestricted Subsidiary" means (i) any subsidiary of the Company that
at the time of determination shall be an Unrestricted Subsidiary (as designated
by the Board of Directors of the Company, as provided below) and (ii) any
subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company
may designate any subsidiary of the Company (including any newly acquired or
newly formed subsidiary) to be an Unrestricted Subsidiary if all of the
following conditions apply: (a) neither the Company nor any of its Subsidiaries
provides credit support for Indebtedness of such subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness), (b) such
subsidiary is not liable, directly or indirectly, with respect to any
Indebtedness other than Unrestricted Subsidiary
20
Indebtedness, (c) any Investment in such subsidiary made as a result of
designating such subsidiary an Unrestricted Subsidiary shall not violate the
provisions of Section 1018 and such Unrestricted Subsidiary is not party to any
agreement, contract, arrangement or understanding at such time with the Company
or any Subsidiary of the Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Company or
such Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Company; and (v) such Unrestricted Subsidiary does not
own any Capital Stock in any Subsidiary of the Company which is not
simultaneously being designated an Unrestricted Subsidiary. Any such designation
by the Board of Directors of the Company shall be evidenced to the Trustee by
filing with the Trustee a board resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complies with the
foregoing conditions and shall be deemed a Restricted Payment on the date of
designation in an amount equal to the greater of (1) the net book value of such
Investment or (2) the fair market value of such Investment as determined in good
faith by the Company's Board of Directors. The Board of Directors of the Company
may designate any Unrestricted Subsidiary as a Subsidiary; provided that (i)
immediately after giving effect to such designation, the Company could incur
$1.00 of additional Indebtedness pursuant to Section 1008(a) and (ii) all
Indebtedness of such Subsidiary shall be deemed to be incurred on the date such
Subsidiary becomes a Subsidiary.
"Unrestricted Subsidiary Indebtedness" of any Unrestricted Subsidiary
means Indebtedness of such Unrestricted Subsidiary (i) as to which neither the
Company nor any Subsidiary is directly or indirectly liable (by virtue of the
Company or any such Subsidiary being the primary obligor on, guarantor of, or
otherwise liable in any respect to, such Indebtedness), except Guaranteed Debt
of the Company or any Subsidiary to any Affiliate, in which case (unless the
incurrence of such Guaranteed Debt resulted in a Restricted Payment at the time
of incurrence) the Company shall be deemed to have made a Restricted Payment
equal to the principal amount of any such Indebtedness to the extent guaranteed
at the time such Affiliate is designated an Unrestricted Subsidiary and (ii)
which, upon the occurrence of a default with respect thereto, does not result
in, or permit any holder of any Indebtedness of the Company or any Subsidiary to
declare, a default on such Indebtedness of the Company or any Subsidiary or
cause the payment thereof to be accelerated or payable prior to its Stated
Maturity.
"U.S. Government Securities" means securities that are direct
obligations of the United States of America, the payment of which its full faith
and credit is pledged.
"Voting Stock" means Capital Stock of the class or classes pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of a corporation (irrespective of whether or not at the time Capital
Stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock of
which is owned by the Company or another Wholly Owned Subsidiary. For the
purposes of this definition, any director qualifying shares or investments by
foreign nationals mandated by applicable law shall be disregarded in determining
the ownership of a Subsidiary.
21
Section 102. Other Definitions.
-----------------
Term Defined in Section
---- ------------------
"Act" 105
"Agent Members" 306
"Basket" 1009
"Change of Control Offer" 1015
"Change of Control Purchase Date" 1015
"Change of Control Purchase Notice" 1015
"Change of Control Purchase Price" 1015
"covenant defeasance" 403
"Defaulted Interest" 309
"defeasance" 402
"Defeasance Redemption Date" 404
"Defeased Securities" 401
"Excess Proceeds" 1012
"Offer" 1012
"Offer Date" 1012
"Offered Price" 1012
"Pari Passu Debt Xxxxxx" 0000
"Pari Passu Offer" 1012
"Permitted Indebtedness" 1008
"Permitted Payment" 1009
"Physical Securities" 306
"Private Placement Legend" 202
"Purchase Money Security Agreement" 101
"Refinancing" 1009
"Required Filing Date" 1020
"Restricted Payments" 1009
"Securities" Recitals
"Security Xxxxxx" 0000
"Security Register" 305
"Security Registrar" 305
"Series A Securities" Recitals
"Series B Securities" Recitals
"Special Payment Date" 309
"Surviving Entity" 801
"Surviving Guarantor Entity" 801
"U.S. Government Obligations" 404
Section 103. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company and any Guarantor
(if applicable) and any
22
other obligor on the Securities (if applicable) shall furnish to the Trustee an
Officers' Certificate in a form and substance reasonably acceptable to the
Trustee stating that all conditions precedent, if any, provided for in this
Indenture (including any covenant compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with, and an
Opinion of Counsel in a form and substance reasonably acceptable to the Trustee
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with, except that, in the case of any such application
or request as to which the furnishing of such certificates or opinions is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
individual or firm signing such opinion has read and understands such covenant
or condition and the definitions herein relating thereto;
(b) 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;
(c) a statement that, in the opinion of each such individual or such
firm, he or it has made such examination or investigation as is necessary to
enable him or it to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual
or such firm, such condition or covenant has been complied with.
Section 104. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate of an officer of the Company, any Guarantor or other
obligor on the Securities may be based, insofar as it relates to legal matters,
upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon which
his certificate or opinion is based are erroneous. Any such certificate or
opinion may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company, any Guarantor or other obligor on the Securities stating that the
information with respect to such factual matters is in the possession of the
Company, any
23
Guarantor or other obligor on the Securities, unless such officer or counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Opinions of Counsel required to be delivered to the Trustee may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Any certificate or opinion of an officer of the Company, any Guarantor
or other obligor on the Securities may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of, or representations by, an
accountant or firm of accountants in the employ of the Company, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the accounting matters
upon which his certificate or opinion may be based are erroneous. Any
certificate or opinion of any independent firm of public accountants filed with
the Trustee shall contain a statement that such firm is independent with respect
to the Company.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 105. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section 105.
(b) The ownership of Securities shall be proved by the Security
Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act by the Holder of any Security shall bind every future Holder
of the same Security or the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything done,
suffered or omitted to be done by the Trustee, any Paying Agent or the Company,
any Guarantor or any other obligor of the Securities in reliance thereon,
whether or not notation of such action is made upon such Security.
(d) The fact and date of the execution by any Person of any such
instrument or
24
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(e) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of such Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding Trust
Indenture Act Section 316(c), any such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
more than 30 days prior to the first solicitation of Holders generally in
connection therewith and no later than the date such first solicitation is
completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for purposes of determining
whether Holders of the requisite proportion of Securities then Outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for this purpose the
Securities then Outstanding shall be computed as of such record date; provided
that no such request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not later
than six months after such record date.
(f) For purposes of this Indenture, any action by the Holders which
may be taken in writing may be taken by electronic means or as otherwise
reasonably acceptable to the Trustee.
Section 106. Notices, etc., to the Trustee, the Company and any
--------------------------------------------------
Guarantor.
---------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any Guarantor or
any other obligor on the Securities shall be sufficient for every purpose
(except as provided in Section 501(c)) hereunder if in writing and mailed,
first-class postage prepaid, or delivered by recognized overnight courier, to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration, or at any other address previously furnished in writing to the
Holders or the Company, any Guarantor or any other obligor on the Securities by
the Trustee; or
25
(b) the Company or any Guarantor by the Trustee or any Holder shall
be sufficient for every purpose (except as provided in Section 501(c)) hereunder
if in writing and mailed, first-class postage prepaid, or delivered by
recognized overnight courier, to the Company or such Guarantor addressed to it
c/o Concentric Network Corporation, 00000 X. Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Chief Financial Officer or at any other address
previously furnished in writing to the Trustee by the Company or such Guarantor.
Section 107. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, or delivered by
recognized overnight courier, to each Holder affected by such event, at its
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice when mailed to a Holder in the aforesaid manner shall
be conclusively deemed to have been received by such Holder whether or not
actually received by such Holder. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
Section 108. Conflict with Trust Indenture Act.
----------------------------------
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, the provision or requirement of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
Section 109. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 110. Successors and Assigns.
----------------------
26
All covenants and agreements in this Indenture by the Company and the
Guarantors shall bind their respective successors and assigns, whether so
expressed or not.
Section 111. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 112. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person (other than the parties hereto and their successors
hereunder, any Paying Agent and the Holders) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 113. Governing Law.
-------------
THIS INDENTURE, THE SECURITIES AND ANY GUARANTEE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 114. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date, Maturity
or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal or premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on such Interest Payment Date or Redemption Date, or at
the Maturity or Stated Maturity and no interest shall accrue with respect to
such payment for the period from and after such Interest Payment Date,
Redemption Date, Maturity or Stated Maturity, as the case may be, to the next
succeeding Business Day.
Section 115. Independence of Covenants.
-------------------------
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenants, the fact that it would be permitted by an exception to,
or be otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
Section 116. Schedules and Exhibits.
----------------------
All schedules and exhibits attached hereto are by this reference made
a part hereof with the same effect as if herein set forth in full.
27
Section 117. Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of
which shall be deemed an original; but all such counterparts shall together
constitute but one and the same instrument.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
---------------
The Securities and the Trustee's certificate of authentication thereon
shall be in substantially the forms set forth in this Article Two, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted hereby and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange, any organizational
document or governing instrument or applicable law or as may, consistently
herewith, be determined by the officers executing such Securities, as evidenced
by their execution of the Securities. Any portion of the text of any Security
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Securities
may be listed, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
Series A Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more Rule 144A Global Securities,
substantially in the form set forth in Section 202, deposited upon issuance with
the Trustee, as custodian for the Depositary, registered in the name of the
Depositary, or its nominee, in each case for credit to an account of a direct or
indirect participant of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Rule 144A Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
Series A Securities offered and sold in reliance on Regulation S shall
be issued in the form of one or more Regulation S Global Securities,
substantially in the form set forth in Section 202, deposited upon issuance with
the Trustee, as custodian for the Depositary, registered in the name of the
Depositary, or its nominee in each case for credit by the Depositary to an
account of a direct or indirect participant of the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided; provided,
however, that upon such deposit through and including the 40th day after the
later of the commencement of the Offering and the original issue date of the
Securities (such period through and including such 40th day, the
28
"Restricted Period"), all such Securities shall be credited to or through
accounts maintained at the Depositary unless exchanged for interests in the Rule
144A Global Securities in accordance with the transfer and certification
requirements described below. The aggregate principal amount of the Regulation S
Global Securities may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depositary or its
nominee, as hereinafter provided.
Series B Securities exchanged for Series A Securities shall be issued
initially in the form of one or more Series B Global Securities, substantially
in the form set forth in Section 202, deposited upon issuance with the Trustee,
as custodian for the Depositary, registered in the name of the Depositary or its
nominee, in each case for credit to an account of a direct or indirect
participant of the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the
Series B Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
Section 202. Form of Face of Security.
------------------------
(a) The form of the face of any Series A Securities authenticated and
delivered hereunder shall be substantially as follows:
Unless and until (i) an Initial Security is sold under an effective
Registration Statement or (ii) an Initial Security is exchanged for a Series B
Security in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement, then such Initial Security shall
bear the legend set forth below (the "Private Placement Legend") on the face
thereof:
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION AS SET FORTH BELOW.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A")) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
29
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 000X XXXXXX XXX XXXXXX XXXXXX, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) OUTSIDE THE UNITED STATES PURSUANT TO OFFERS AND SALES TO NON-
U.S. PERSONS IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) INSIDE THE UNITED STATES TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPHS (A)(1), (A)(2), (A)(3) OR (A)(7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER (I) PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. AS USED HEREIN, THE
TERMS "UNITED STATES," "OFFSHORE TRANSACTION," AND "U.S. PERSON" HAVE THE
RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
[Legend if Security is a Global Security]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF
CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS
OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS 306 AND 307 OF THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY TRUST COMPANY, A NEW YORK
30
CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT AND ANY SUCH CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
31
CONCENTRIC NETWORK CORPORATION
___________________
12 3/4% SENIOR NOTE DUE 2007, SERIES A
CUSIP NO. ______________
No. __________ $_______________________
Concentric Network Corporation, a Delaware corporation (herein called
the "Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_______________ or registered assigns, the principal sum of _______________
United States dollars on December 15, 2007, at the office or agency of the
Company referred to below, and to pay interest thereon from December 18, 1997,
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semiannually on June 15 and December 15, in each year,
commencing June 15, 1998 at the rate of 12 3/4% per annum, subject to
adjustments as described in the second following paragraph, in United States
dollars, until the principal hereof is paid or duly provided for. Interest
shall be computed on the basis of a 360-day year comprised of twelve 30-day
months.
The Holder of this Series A Security is entitled to the benefits of
the Registration Rights Agreement between the Company and the Initial
Purchasers, dated December 18, 1997, pursuant to which, subject to the terms and
conditions thereof, the Company is obligated to consummate the Exchange Offer
pursuant to which the Holder of this Security shall have the right to exchange
this Security for 12 3/4% Senior Notes due 2007, Series B (herein called the
"Series B Securities") in like principal amount as provided therein. The Series
A Securities and the Series B Securities are together referred to as the
"Securities." The Series A Securities rank pari passu in right of payment with
the Series B Securities.
In the event that (a) the Exchange Offer Registration Statement is not
filed with the Commission on or prior to the date specified in the Registration
Rights Agreement, (b) the Exchange Offer Registration Statement has not been
declared effective on or prior to the date specified in the Registration Rights
Agreement, (c) the Exchange Offer is not consummated or a Shelf Registration
Statement is not declared effective, in either case, on or prior to the date
specified in the Registration Rights Agreement, or (d) the Shelf Registration
Statement or the Exchange Offer Registration Statement is declared effective but
thereafter ceases to be effective or usable in connection with resales of the
Series A Securities during the periods specified in the Registration Rights
Agreement, without being succeeded immediately by a post effective amendment to
such Registration Statement that cures such failure and that is itself declared
effective within a five Business Day period after filing such post effective
amendment (each such event referred to in clauses (a) through (d) above, a
"Registration Default"), then commencing on the day following the date on which
such Registration Default occurs, the interest rate borne by the Series A
Securities shall be increased by one-half of one percent per annum for the 90-
day
32
period following such Registration Default, which rate will increase by one-half
of one percent per annum with respect to each subsequent 90-day period up to a
maximum of one and one half percent (1.50%) per annum until cured ("Additional
Interest"). Following the cure of all Registration Defaults, the accrual of
Additional Interest will cease and the interest rate will revert to the original
rate.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture hereinafter
referred to, be paid to the Person in whose name this Security (or any
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the June 1 or December 1 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid, or duly provided for, and
interest on such defaulted interest at the interest rate borne by the Series A
Securities, to the extent lawful, shall forthwith cease to be payable to the
Holder on such Regular Record Date, and may either be paid to the Person in
whose name this Security (or any Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such defaulted
interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and upon such
notice as may be required by this Indenture not inconsistent with the
requirements of such exchange, all as more fully provided in this Indenture.
Payment of the principal of, premium, if any, and interest on, this
Security, and exchange or transfer of the Security, will be made at the office
or agency of the Company in The City of San Francisco maintained for that
purpose (which initially will be a corporate trust office of the Trustee located
at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 94111), or at
such other office or agency as may be maintained for such purpose, or, at the
option of the Company, payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Security Register, and provided, that payment by wire transfer of immediately
available funds will be required with respect to principal of and interest on
all Gobal Securities and all other Securities the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Security shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
33
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
CONCENTRIC NETWORK CORPORATION
[Seal] By:___________________________
Title:________________________
Attest:
____________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 12 3/4% Senior Notes due 2007, Series A referred to
in the within-mentioned Indenture.
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION,
as Trustee
By: _________________________________
Authorized Signer
Dated:
34
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 1012 or Section 1014, as applicable, of the Indenture, check the Box:
[_].
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 1012 or Section 1014 as applicable, of the
Indenture, state the amount (in original principal amount):
$ _______________.
Date: ___________________ Your Signature: _____________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: __________________________________
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15]
(b) The form of the face of any Series B Securities authenticated and
delivered hereunder shall be substantially as follows:
[Legend if Security is a Global Security]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF
A DEPOSITARY OR A SUCCESSOR DEPOSITARY. TRANSFERS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO
A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 306 AND 307 OF THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND
ANY SUCH
35
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
36
CONCENTRIC NETWORK CORPORATION
__________________
12 3/4% SENIOR NOTE DUE 2007, SERIES B
CUSIP NO. ______________
No. __________ $_______________________
Concentric Network Corporation, a Delaware corporation (herein called
the "Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____________ or registered assigns, the principal sum of _______________ United
States dollars on December 15, 2007, at the office or agency of the Company
referred to below, and to pay interest thereon from December 18, 1997, or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semiannually on June 15 and December 15 in each year, commencing
June 15, 1998 at the rate of 12 3/4% per annum, in United States dollars, until
the principal hereof is paid or duly provided for; provided that to the extent
interest has not been paid or duly provided for with respect to the Series A
Security exchanged for this Series B Security, interest on this Series B
Security shall accrue from the most recent Interest Payment Date to which
interest on the Series A Security which was exchanged for this Series B Security
has been paid or duly provided for. Interest shall be computed on the basis of
a 360-day year comprised of twelve 30-day months.
This Series B Security was issued pursuant to the Exchange Offer
pursuant to which the 12 3/4% Senior Notes due 2007, Series A (herein called the
"Series A Securities") in like principal amount were exchanged for the Series B
Securities. The Series B Securities rank pari passu in right of payment with
the Series A Securities.
In addition, for any period in which the Series A Security exchanged
for this Series B Security was outstanding, in the event that (a) the Exchange
Offer Registration Statement is not filed with the Commission on or prior to the
date specified in the Registration Rights Agreement, (b) the Exchange Offer
Registration Statement has not been declared effective on or prior to the date
specified in the Registration Rights Agreement, (c) the Exchange Offer is not
consummated or a Shelf Registration Statement is not declared effective, in
either case, on or prior to the date specified in the Registration Rights
Agreement the date of original issue of the Series A Security, or (d) the Shelf
Registration Statement or the Exchange Offer Registration Statement is declared
effective but thereafter ceases to be effective or usable in connection with
resales of the Series A Securities during the periods specified above, without
being succeeded immediately by a post effective amendment to such Registration
Statement that cures such failure and that is itself declared effective within a
five Business Day period after filing such post effective amendment (each such
event referred to in clauses (a) through (d) above, a "Registration Default"),
then commencing on the day following the date on which such Registration Default
occurs, the interest rate borne by the Series A Securities shall be increased by
one-half of one percent per annum for the 90-day period following such
Registration Default, which rate will increase by one-half of one percent per
annum with respect to each subsequent
37
90-day period up to a maximum of one and one half percent (1.50%) per annum
until cured ("Additional Interest"). Following the cure of all Registration
Defaults, the accrual of Additional Interest will cease and the interest rate
will revert to the original rate; provided that, to the extent interest at such
increased interest rate has been paid or duly provided for with respect to the
Series A Security, interest at such increased interest rate, if any, on this
Series B Security shall accrue from the most recent Interest Payment Date to
which such interest on the Series A Security has been paid or duly provided for;
provided, however, that, if after any such reduction in interest rate, a
different event specified in clause (a), (b), (c) or (d) above occurs, the
interest rate shall again be increased pursuant to the foregoing provisions.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture hereinafter
referred to, be paid to the Person in whose name this Security (or any
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the June 1 or December 1 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid, or duly provided for, and
interest on such defaulted interest at the interest rate borne by the Series B
Securities, to the extent lawful, shall forthwith cease to be payable to the
Holder on such Regular Record Date, and may either be paid to the Person in
whose name this Security (or any Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such defaulted
interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in this
Indenture.
Payment of the principal of, premium, if any, and interest on, this
Security, and exchange or transfer of the Security, will be made at the office
or agency of the Company in The City of San Francisco maintained for such
purpose (which initially will be a corporate trust office of the Trustee located
at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 94111), or at
such other office or agency as may be maintained for such purpose, or at such
other office or agency as may be maintained for such purpose, or, at the option
of the Company, payment of interest may be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Security
Register, and provided, that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest on all Gobal
Securities and all other Securities the Holders of which shall have provided
wire transfer instructions to the Company or the Paying Agent. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Security shall not be entitled to
38
any benefit under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
CONCENTRIC NETWORK CORPORATION
[Seal] By:__________________________________
Title:_______________________________
Attest:
____________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 12 3/4% Senior Notes due 2007, Series B referred to in
the within-mentioned Indenture.
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION,
as Trustee
By: ________________________________
Authorized Signer
Dated:
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 1012 or Section 1014, as applicable, of the Indenture, check the Box:
[_].
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 1012 or Section 1014 as applicable, of the
Indenture, state the amount (in original principal amount):
$ _______________.
Date: ___________________ Your Signature: _____________________
39
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: __________________________________
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15]
40
Section 203. Form of Reverse of Securities.
-----------------------------
(a) The form of the reverse of the Series A Securities shall be
substantially as follows:
Concentric Network Corporation
12 3/4% Senior Note due 2007, Series A
This Security is one of a duly authorized issue of Securities of the
Company designated as its 12 3/4% Senior Notes due 2007, Series A (herein called
the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $150,000,000, issued under
and subject to the terms of an indenture (herein called the "Indenture") dated
as of December 18, 1997, between the Company and Chase Manhattan Bank and Trust
Company, National Association, as trustee (herein called the "Trustee," which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Guarantors, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Securities and (b) certain restrictive covenants
and related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Securities are subject to redemption at any time on or after
December 15, 2002, at the option of the Company, in whole or in part, on not
less than 30 nor more than 60 days' prior notice, in amounts of $1,000 or an
integral multiple thereof, at the following redemption prices (expressed as
percentages of the principal amount), if redeemed during the 12-month period
beginning December 15 of the years indicated below:
Redemption
Year Price
---- ----------
2002........................... 106.375%
2003........................... 104.250%
2004........................... 102.125%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the Redemption Date (subject to the
rights of Holders of record on relevant record dates to receive interest due on
an Interest Payment Date).
In addition, at any time on or prior to December 15, 2000, the Company
may, at its option, use the net proceeds of one or more Public Equity Offerings
or the sale of Common Stock (other than Disqualified Stock) of the Company to a
Strategic Investor in a single transaction or in a series of related
transactions, to redeem up to an aggregate of 35% of the aggregate principal
amount of Securities originally issued under the Indenture at a redemption price
equal to 112 3/4% of the aggregate principal amount thereof, plus accrued and
unpaid
41
interest thereon, if any, to the Redemption Date; provided that at least 65%
aggregate principal amount of Securities remains outstanding immediately after
the occurrence of such redemption. In order to effect the foregoing redemption,
the Company must mail a notice of redemption no later than 45 days after the
closing of the related Public Equity Offering and must consummate such
redemption within 60 days of the closing of the Public Equity Offering.
If less than all of the Securities are to be redeemed, the Trustee
shall select the Securities or portions thereof to be redeemed pro rata, by lot
or by any other method the Trustee shall deem fair and reasonable.
Upon the occurrence of a Change of Control, each Holder may require
the Company to purchase such Holder's Securities in whole or in part in integral
multiples of $1,000, at a purchase price in cash in an amount equal to 101% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date of purchase, pursuant to a Change of Control Offer in accordance with the
procedures set forth in the Indenture.
Under certain circumstances, in the event the Net Cash Proceeds
received by the Company from any Asset Sale, which proceeds are not used to
repay any Pari Passu Indebtedness of the Company or any Subsidiary or invested
in properties or other assets that replace the properties and assets that were
the subject of the Asset Sale or which will be used in the Telecommunications
Business, exceeds a specified amount the Company will be required to apply such
proceeds to the repayment of the Securities and certain Indebtedness ranking
pari passu in right of payment to the Securities.
In the case of any redemption or repurchase of Securities in
accordance with the Indenture, interest installments whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holders of such
Securities of record as of the close of business on the relevant Regular Record
Date or Special Record Date referred to on the face hereof. Securities (or
portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
In the event of redemption or repurchase of this Security in
accordance with the Indenture in part only, a new Security or Securities for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders and certain amendments
which require the consent of all the Holders) as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the Guarantors and the rights of the Holders under the Indenture and the
Securities and the Guarantees at any time by the Company and the Trustee with
the consent of the Holders of at least a majority in aggregate principal amount
of the Securities at the time Outstanding. The Indenture also contains
provisions permitting the Holders of at least a majority in aggregate principal
amount of the Securities (100% of the
42
Holders in certain circumstances) at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company and the
Guarantors with certain provisions of the Indenture and the Securities and the
Guarantees and certain past Defaults under the Indenture and the Securities and
the Guarantees and their consequences. Any such consent or waiver by or on
behalf of the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Securities (in the event such Guarantor or
such other obligor is obligated to make payments in respect of the Securities),
which is absolute and unconditional, to pay the principal of, premium, if any,
and interest on, this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or its attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
Certificated securities shall be transferred to all beneficial holders
in exchange for their beneficial interests in the Rule 144A Global Securities or
the Regulation S Global Securities if (x) the Depositary notifies the Company
that it is unwilling or unable to continue as depository for such Global
Security and a successor depository is not appointed by the Company within 90
days or (y) there shall have occurred and be continuing an Event of Default and
the Security Registrar has received a request from the Depositary. Upon any
such issuance, the Trustee is required to register such certificated Series A
Securities in the name of, and cause the same to be delivered to, such Person or
Persons (or the nominee of any thereof). All such certificated Series A
Securities would be required to include the Private Placement Legend.
Series A Securities in certificated form are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Series A Securities are exchangeable for a
like aggregate principal amount of Securities of a differing authorized
denomination, as requested by the Holder surrendering the same.
At any time when the Company is not subject to Sections 13 or 15(d) of
the Exchange Act, upon the written request of a Holder of a Series A Security,
the Company will promptly furnish or cause to be furnished such information as
is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto) to such Holder or to a prospective purchaser of
such Series A Security who such Holder informs the Company is
43
reasonably believed to be a "Qualified Institutional Buyer" within the meaning
of Rule 144A under the Securities Act, as the case may be, in order to permit
compliance by such Holder with Rule 144A under the Securities Act.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, any Guarantor, the Trustee and any agent of the Company,
any Guarantor or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security is
overdue, and neither the Company, any Guarantor, the Trustee nor any such agent
shall be affected by notice to the contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
All terms used in this Security which are defined in the Indenture and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
[The Transferee Certificate, in the form of Appendix I hereto, will be
attached to the Series A Security.]
(b) The form of the reverse of the Series B Securities shall be
substantially as follows:
Concentric Network Corporation
12 3/4% Senior Note due 2007, Series B
This Security is one of a duly authorized issue of Securities of the
Company designated as its 12 3/4% Senior Notes due 2007, Series B (herein called
the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $150,000,000, issued under
and subject to the terms of an indenture (herein called the "Indenture") dated
as of December 18, 1997, between the Company and Chase Manhattan Bank and Trust
Company, National Association, as trustee (herein called the "Trustee," which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Guarantors, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Securities and (b) certain restrictive covenants
and related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
44
The Securities are subject to redemption at any time on or after
December 15, 2002, at the option of the Company, in whole or in part, on not
less than 30 nor more than 60 days' prior notice, in amounts of $1,000 or an
integral multiple thereof, at the following redemption prices (expressed as
percentages of the principal amount), if redeemed during the 12-month period
beginning December 15 of the years indicated below:
Redemption
Year Price
---- ----------
2002............................ 106.375%
2003............................ 104.250%
2004............................ 102.125%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the Redemption Date (subject to the
rights of Holders of record on relevant record dates to receive interest due on
an Interest Payment Date).
In addition, at any time on or prior to December 15, 2000, the Company
may, at its option, use the net proceeds of one or more Public Equity Offerings
or the sale of Common Stock (other than Disqualified Stock) of the Company to a
Strategic Investor in a single transaction or in a series of related
transactions, to redeem up to an aggregate of 35% of the aggregate principal
amount of Securities originally issued under the Indenture at a redemption price
equal to 112 3/4% of the aggregate principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the Redemption Date; provided that at least
65% aggregate principal amount of Securities remains outstanding immediately
after the occurrence of such redemption. In order to effect the foregoing
redemption, the Company must mail a notice of redemption no later than 45 days
after the closing of the related Public Equity Offering and must consummate such
redemption within 60 days of the closing of the Public Equity Offering.
If less than all of the Securities are to be redeemed, the Trustee
shall select the Securities or portions thereof to be redeemed pro rata, by lot
or by any other method the Trustee shall deem fair and reasonable.
Upon the occurrence of a Change of Control, each Holder may require
the Company to purchase such Holder's Securities in whole or in part in integral
multiples of $1,000, at a purchase price in cash in an amount equal to 101% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date of purchase, pursuant to Change of Control Offer and in accordance with the
procedures set forth in the Indenture.
Under certain circumstances, in the event the Net Cash Proceeds
received by the Company from any Asset Sale, which proceeds are not used to
repay any Pari Passu Indebtedness of the Company or any Subsidiary or invested
in properties or other assets that replace the properties and assets that were
the subject of the Asset Sale or which will be used in the Telecommunications
Business, exceeds a specified amount, the Company will be required to apply such
proceeds to the repayment of the Securities and certain Indebtedness ranking
pari
45
passu in right of payment to the Securities.
In the case of any redemption or repurchase of Securities in
accordance with the Indenture, interest installments whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holders of such
Securities of record as of the close of business on the relevant Regular Record
Date or Special Record Date referred to on the face hereof. Securities (or
portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
In the event of redemption or repurchase of this Security in
accordance with the Indenture in part only, a new Security or Securities for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders and certain amendments
which required the consent of all of the Holders) as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantors and the rights of the Holders under the Indenture and
the Securities and the Guarantees at any time by the Company and the Trustee
with the consent of the Holders of at least a majority in aggregate principal
amount of the Securities at the time Outstanding. The Indenture also contains
provisions permitting the Holders of at least a majority in aggregate principal
amount of the Securities (100% of the Holders in certain circumstances) at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company and the Guarantors with certain provisions of the
Indenture and the Securities and the Guarantees and certain past Defaults under
the Indenture and the Securities and the Guarantees and their consequences. Any
such consent or waiver by or on behalf of the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Securities (in the event such Guarantor or
such other obligor is obligated to make payments in respect of the Securities),
which is absolute and unconditional, to pay the principal of, and premium, if
any, and interest on, this Security at the times, place, and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
46
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or its attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
Certificated securities shall be transferred to all beneficial holders
in exchange for their beneficial interests in the Rule 144A Global Securities or
the Regulation S Global Securities if (x) the Depositary notifies the Company
that it is unwilling or unable to continue as depository for such Global
Security and a successor depository is not appointed by the Company within 90
days or (y) there shall have occurred and be continuing an Event of Default and
the Security Registrar has received a request from the Depositary. Upon any such
issuance, the Trustee is required to register such certificated Series B
Securities in the name of, and cause the same to be delivered to, such Person or
Persons (or the nominee of any thereof).
Series B Securities in certificated form are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Series B Securities are exchangeable for a
like aggregate principal amount of Securities of a differing authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, any Guarantor, the Trustee and any agent of the Company,
any Guarantor or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security is
overdue, and neither the Company, any Guarantor, the Trustee nor any such agent
shall be affected by notice to the contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
All terms used in this Security which are defined in the Indenture and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
[The Transferee Certificate, in the form of Appendix II hereto, will
be attached to the Series B Security.]
47
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms.
---------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $150,000,000 in
principal amount of Securities, except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities pursuant to Section 303, 304, 305, 306, 307, 308, 906, 1012,
1014 or 1108.
The Securities shall be known and designated as the "12 3/4% Senior
Notes due 2007" of the Company. The Stated Maturity of the Securities shall be
December 15, 2007, and the Securities shall each bear interest at the rate of 12
3/4% per annum, as such interest rate may be adjusted as set forth in the
Securities, from December 18, 1997, or from the most recent Interest Payment
Date to which interest has been paid, payable semiannually on June 15 and
December 15 in each year, commencing June 15, 1998, until the principal thereof
is paid or duly provided for. Interest on any overdue principal, interest (to
the extent lawful) or premium, if any, shall be payable on demand.
The principal of, premium, if any, and interest on, the Securities
shall be payable and the Securities shall be exchangeable and transferable at an
office or agency of the Company in The City of San Francisco maintained for such
purposes (which initially will be a corporate trust office of the Trustee
located at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 94111);
provided, however, that payment of interest may be made at the option of the
Company by check mailed to addresses of the Persons entitled thereto as shown on
the Security Register.
For all purposes hereunder, the Series A Securities and the Series B
Securities will be treated as one class and are together referred to as the
"Securities." The Series A Securities rank pari passu in right of payment with
the Series B Securities.
The Securities shall be subject to repurchase by the Company pursuant
to an Offer as provided in Section 1012.
Holders shall have the right to require the Company to purchase their
Securities, in whole or in part, in the event of a Change of Control pursuant to
Section 1014.
The Securities shall be redeemable as provided in Article Eleven and
in the Securities.
At the election of the Company, the entire Indebtedness on the
Securities or certain of the Company's obligations and covenants and certain
Events of Default thereunder may be defeased as provided in Article Four.
Section 302. Denominations.
-------------
48
The Securities shall be issuable only in fully registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by one of
its Chairman of the Board, its President, its Chief Executive Officer, its Chief
Financial Officer or one of its Vice Presidents under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signatures of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee (with or without Guarantees endorsed thereon) for authentication,
together with a Company Order for the authentication and delivery of such
Securities; and the Trustee in accordance with such Company Order shall
authenticate and make available for delivery such Securities as provided in this
Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security or Guarantee endorsed thereon shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security a certificate of authentication substantially in
the form provided for herein duly executed by the Trustee by manual signature of
an authorized officer, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture.
In case the Company or any Guarantor, pursuant to Article Eight,
shall, in a single transaction or through a series of related transactions, be
consolidated or merged with or into any other Person or shall sell, assign,
convey, transfer, lease or otherwise dispose of all or substantially all of its
properties and assets to any Person, and the successor Person resulting from
such consolidation or surviving such merger, or into which the Company or such
Guarantor shall have been merged, or the successor Person which shall have
participated in the sale, assignment, conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article Eight, any of the Securities authenticated
or delivered prior to such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other Securities executed in the name of
the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Company Request of the successor Person, shall authenticate and deliver
Securities as
49
specified in such request for the purpose of such exchange. If Securities shall
at any time be authenticated and delivered in any new name of a successor Person
pursuant to this Section 303 in exchange or substitution for or upon
registration of transfer of any Securities, such successor Person, at the option
of the Holders but without expense to them, shall provide for the exchange of
all Securities at the time Outstanding for Securities authenticated and
delivered in such new name.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities on behalf of the Trustee. Unless limited by
the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Security Registrar or Paying
Agent to deal with the Company and its Affiliates.
If an officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates such Security such Security shall
be valid nevertheless.
Section 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities which are printed, lithographed,
typewritten or otherwise produced, in any authorized denomination, substantially
of the tenor of the definitive Securities in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine, as conclusively
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 1002,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities, the Company shall execute and the Trustee (in
accordance with a Company Order for the authentication of such Securities) shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Securities of authorized denominations. Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
Section 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause the Trustee to keep, so long as it is the
Security Registrar, at the Corporate Trust Office of the Trustee, or such other
office as the Trustee may designate, a register (the register maintained in such
office or in any other office or agency designated pursuant to Section 1002
being herein sometimes referred to as the "Security Register") in which, subject
to such reasonable regulations as the Security Registrar may prescribe, the
Company shall provide for the registration of Securities and of transfers of
50
Securities. The Trustee shall initially be the "Security Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided. The Company may change the Security Registrar or appoint one or more
co-Security Registrars without notice.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 1002, the Company
shall execute, and the Trustee shall (in accordance with a Company Order for the
authentication of such Securities) authenticate and make available for delivery,
in the name of the designated transferee or transferees, one or more new
Securities of the same series of any authorized denomination or denominations,
of a like aggregate principal amount.
Furthermore, any Holder of the Global Security shall, by acceptance of
such Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained by
the Holder of such Global Security (or its agent), and that ownership of a
beneficial interest in a Security shall be required to be reflected in a book
entry.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall (in accordance with a Company Order
for the authentication of such Securities) authenticate and make available for
delivery, Securities of the same series which the Holder making the exchange is
entitled to receive; provided that no exchange of Series A Securities for Series
B Securities shall occur until an Exchange Offer Registration Statement shall
have been declared effective by the Commission and that the Series A Securities
exchanged for the Series B Securities shall be canceled.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer,
or for exchange, repurchase or redemption, shall (if so required by the Company
or the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer, exchange or redemption of Securities, except for any tax or other
governmental charge that may be imposed in connection therewith, other than
exchanges pursuant to Sections 303, 304, 305, 906, 1012, 1015 or 1108 not
involving any transfer.
Neither the Company nor the Trustee shall be required (a) to issue,
register the transfer of or exchange any Security during a period beginning at
the opening of business 15 days before the mailing of a notice of redemption of
the Securities selected for redemption under
51
Section 1104 and ending at the close of business on the day of such mailing or
(b) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of Securities
being redeemed in part.
Every Security shall be subject to the restrictions on transfer
provided in the legend required to be set forth on the face of each Security
pursuant to Section 202, and the restrictions set forth in this Section 305, and
the Holder of each Security, by such Holder's acceptance thereof (or interest
therein), agrees to be bound by such restrictions on transfer.
Except as provided in the preceding paragraph, any Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any Global Security, whether pursuant to this Section 305,
Section 304, 308, 906 or 1108 or otherwise, shall also be a Global Security and
bear the legend specified in Section 202.
Section 306. Book Entry Provisions for Global Securities.
-------------------------------------------
(a) Each Global Security initially shall (i) be registered in the
name of the nominee of the Depositary, (ii) be deposited with, or on behalf of,
the Depositary and (iii) bear legends as set forth in Section 202.
Members of, or participants in, the Depositary ("Participants") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or shall impair, as between the
Depositary and its Participants, the operation of customary practices governing
the exercise of the rights of a holder of any Security.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary (A) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be a clearing agency registered as such under the Exchange Act,
and in either case the Company fails to appoint a successor Depositary, (ii) the
Company, at its option, executes and delivers to the Trustee a Company Order
stating that it elects to cause the issuance of the Securities in certificated
form and that all Global Securities shall be exchanged in whole for Securities
that are not Global Securities (in which case such exchange shall be effected by
the Trustee) or (iii) there shall have occurred and be continuing an Event of
Default or any event which after notice or lapse of time or both would be an
Event of Default with respect to such Global Security.
(c) If any Global Security is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Trustee,
52
as Security Registrar, for exchange or cancellation as provided in this Article
Three. If any Global Security is to be exchanged for other Securities or
canceled in part, or if another Security is to be exchanged in whole or in part
for a beneficial interest in any Global Security, then either (i) such Global
Security shall be so surrendered for exchange or cancellation as provided in
this Article Three or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Trustee, as Security
Registrar, whereupon the Trustee, in accordance with the Applicable Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security, the Trustee shall, subject to this Section 306(c) and as
otherwise provided in this Article Three, authenticate and deliver any
Securities issuable in exchange for such Global Security (or any portion
thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request
of the Trustee in connection with the occurrence of any of the events specified
in the preceding paragraph, the Company shall promptly make available to the
Trustee a reasonable supply of Securities that are not in the form of Global
Securities. The Trustee shall be entitled to rely upon any order, direction or
request of the Depositary or its authorized representative which is given or
made pursuant to this Article Three if such order, direction or request is given
or made in accordance with the Applicable Procedures.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article Three or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Security,
unless such Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.
(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
Indenture and the Securities, and owners of beneficial interests in a Global
Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Participants.
Section 307. Special Transfer and Exchange Provisions.
----------------------------------------
(a) Certain Transfers and Exchanges. Transfers and exchanges of
-------------------------------
Securities and beneficial interests in a Global Security of the kinds specified
in this Section 307 shall be made only in accordance with this Section 307.
(i) Rule 144A Global Security to Regulation S Global Security.
---------------------------------------------------------
If the owner of a beneficial interest in the Rule 144A Global
Security wishes at any time to transfer such interest to a Person who
wishes to acquire the same in the form of a beneficial interest in the
Regulation S Global Security, such transfer may be effected only in
accordance with the provisions of this paragraph
53
and paragraph (iv) below and subject to the Applicable Procedures.
Upon receipt by the Trustee, as Security Registrar, of (a) an order
given by the Depositary or its authorized representative directing
that a beneficial interest in the Regulation S Global Security in a
specified principal amount be credited to a specified Participant's
account and that a beneficial interest in the Rule 144A Global
Security in an equal principal amount be debited from another
specified Participant's account and (b) a Regulation S Certificate in
the form of Exhibit A hereto, satisfactory to the Trustee and duly
executed by the owner of such beneficial interest in the Rule 144A
Global Security or his attorney duly authorized in writing, then the
Trustee, as Security Registrar but subject to paragraph (iv) below,
shall reduce the principal amount of the Rule 144A Global Security and
increase the principal amount of the Regulation S Global Security by
such specified principal amount as provided in Section 306(c).
(ii) Regulation S Global Security to Rule 144A Global Security.
---------------------------------------------------------
If the owner of a beneficial interest in the Regulation S Global
Security wishes at any time to transfer such interest to a Person who
wishes to acquire the same in the form of a beneficial interest in the
Rule 144A Global Security, such transfer may be effected only in
accordance with this paragraph (ii) and subject to the Applicable
Procedures. Upon receipt by the Trustee, as Security Registrar, of
(a) an order given by the Depositary or its authorized representative
directing that a beneficial interest in the Rule 144A Global
Security in a specified principal amount be credited to a specified
Participant's account and that a beneficial interest in the Regulation
S Global Security in an equal principal amount be debited from another
specified Participant's account and (b) if such transfer is to occur
during the Restricted Period, a Restricted Securities Certificate in
the form of Exhibit B hereto, satisfactory to the Trustee and duly
executed by the owner of such beneficial interest in the Regulation S
Global Security or his attorney duly authorized in writing, then the
Trustee, as Security Registrar, shall reduce the principal amount of
the Regulation S Global Security and increase the principal amount of
the Rule 144A Global Security by such specified principal amount as
provided in Section 306(c).
(iii) Exchanges between Global Security and Non-Global Security.
---------------------------------------------------------
A beneficial interest in a Global Security may be exchanged for
a Security that is not a Global Security as provided in Section
--------
307(b), provided that, if such interest is a beneficial interest in
the Rule 144A Global Security, or if such interest is a beneficial
interest in the Regulation S Global Security and such exchange is to
occur during the Restricted Period, then such interest shall bear the
Private Placement Legend (subject in each case to Section 307(b)).
(b) Private Placement Legends.
-------------------------
Rule 144A Securities and their Successor Securities and Regulation S
Securities
54
and their Successor Securities shall bear a Private Placement Legend, subject to
the following:
(i) subject to the following clauses of this Section 307(b), a
Security or any portion thereof which is exchanged, upon transfer or
otherwise, for a Global Security or any portion thereof shall bear the
Private Placement Legend borne by such Global Security while
represented thereby;
(ii) subject to the following clauses of this Section 307(b), a
new Security which is not a Global Security and is issued in exchange
for another Security (including a Global Security) or any portion
thereof, upon transfer or otherwise, shall bear the Private Placement
Legend borne by such other Security;
(iii) Series B Securities, and all other Securities sold or
otherwise disposed of pursuant to an effective registration statement
under the Securities Act, together with their respective Successor
Securities, shall not bear a Private Placement Legend;
(iv) at any time after the Securities may be freely transferred
without registration under the Securities Act or without being subject
to transfer restrictions pursuant to the Securities Act, a new
Security which does not bear a Private Placement Legend may be issued
in exchange for or in lieu of a Security (other than a Global
Security) or any portion thereof which bears such a legend if the
Trustee has received an Unrestricted Securities Certificate
substantially in the form of Exhibit C hereto, satisfactory to the
Trustee and duly executed by the Holder of such legended Security or
his attorney duly authorized in writing, and after such date and
receipt of such certificate, the Trustee shall authenticate and
deliver such a new Security in exchange for or in lieu of such other
Security as provided in this Article Three;
(v) a new Security which does not bear a Private Placement
Legend may be issued in exchange for or in lieu of a Security (other
than a Global Security) or any portion thereof which bears such a
legend if, in the Company's judgment, placing such a legend upon such
new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the direction of the Company, shall authenticate and deliver such a
new Security as provided in this Article Three; and
(vi) notwithstanding the foregoing provisions of this Section
307(b), a Successor Security of a Security that does not bear a
particular form of Private Placement Legend shall not bear such form
of legend unless the Company has reasonable cause to believe that such
Successor Security is a "restricted security" within the meaning of
Rule 144, in which case the Trustee, at the direction of the Company,
shall authenticate and deliver a new Security bearing a Private
Placement Legend in exchange for such Successor Security as provided
in this Article Three.
55
By its acceptance of any Security bearing the Private Placement
Legend, each Holder of such a Security acknowledges the restrictions on transfer
of such Security set forth in this Indenture and in the Private Placement Legend
and agrees that it will transfer such Security only as provided in this
Indenture.
The Security Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 306 or this Section
307. 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 Security Registrar.
In the event that Regulation S is amended during the term of this
Indenture to alter the applicable holding period, all reference in this
Indenture to a holding period for Non-U.S. Persons will be deemed to include
such amendment.
Section 308. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If (a) any mutilated Security is surrendered to the Trustee, or (b)
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company, any Guarantor or the Trustee, such security or indemnity, in each case,
as may be required by them to save each of them harmless, then, in the absence
of notice to the Company, any Guarantor or the Trustee that such Security has
been acquired by a bona fide purchaser, the Company shall execute and upon a
Company Request the Trustee shall authenticate and make available for delivery,
in exchange for any such mutilated Security or in lieu of any such destroyed,
lost or stolen Security, a replacement Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a replacement Security, pay such Security.
Upon the issuance of any replacement Securities under this Section,
the Company may require the payment of a sum sufficient to pay all documentary,
stamp or similar issue or transfer taxes or other governmental charges that may
be imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every replacement Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company and any Guarantor, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 309. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
56
Interest on any Security which is payable, and is punctually paid or
duly provided for, on the Stated Maturity of such interest shall be paid to the
Person in whose name the Security (or any Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest payment.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on the Stated Maturity of such interest, and interest
on such defaulted interest at the then applicable interest rate borne by the
Securities, to the extent lawful (such defaulted interest and interest thereon
herein collectively called "Defaulted Interest"), shall forthwith cease to be
payable to the Holder on the Regular Record Date; and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in
Subsection (a) or (b) below:
(i) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or any relevant
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Security and the date (not less than 30 days after such
notice) of the proposed payment (the "Special Payment Date"), and at
the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the Special Payment Date, such money
when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this Subsection provided.
Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the Special Payment Date
and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company in writing of such Special Record Date. In the name and at
the expense of the Company, the Trustee shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each
Holder at its address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date and Special Payment Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities are registered on such Special Record Date and shall no
longer be payable pursuant to the following Subsection (b).
(ii) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by this Indenture not inconsistent with
the requirements of such exchange, if, after written notice given by
the Company to the Trustee of the proposed payment pursuant to this
Subsection, such payment shall be deemed practicable by the Trustee.
57
Subject to the foregoing provisions of this Section 309, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 310. CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and the Company, or the Trustee on behalf of the Company,
shall use CUSIP numbers in notices of redemption or exchange as a convenience to
Holders; provided, however, that any such notice shall state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption or exchange and
that reliance may be placed only on the other identification numbers printed on
the Securities; and provided further, however, that failure to use CUSIP numbers
in any notice of redemption or exchange shall not affect the validity or
sufficiency of such notice.
Section 311. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for registration of transfer,
the Company, any Guarantor, the Trustee and any agent of the Company, any
Guarantor or the Trustee may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 309) interest on, such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and neither the Company, any Guarantor, the Trustee nor any agent of
the Company, any Guarantor or the Trustee shall be affected by notice to the
contrary.
Section 312. Cancellation.
------------
All Securities surrendered for payment, purchase, redemption,
registration of transfer or exchange shall be delivered to the Trustee and, if
not already canceled, shall be promptly canceled by it. The Company and any
Guarantor may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company or such
Guarantor may have acquired in any manner whatsoever, and all Securities so
delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section 312, except as expressly permitted by this Indenture. All
canceled Securities held by the Trustee shall be returned to the Company. The
Trustee shall provide the Company a list of all Securities that have been
canceled from time to time as requested by the Company.
Section 313. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
58
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.
----------
The Company may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either Section 402 or Section 403 be
applied to all of the Outstanding Securities (the "Defeased Securities"), upon
compliance with the conditions set forth below in this Article Four.
Section 402. Defeasance and Discharge.
------------------------
Upon the Company's exercise under Section 401 of the option applicable
to this Section 402, the Company, each Guarantor and any other obligor upon the
Securities, if any, shall be deemed to have been discharged from its obligations
with respect to the Defeased Securities on the date the conditions set forth in
Section 404 below are satisfied (hereinafter, "defeasance"). For this purpose,
such defeasance means that the Company, each Guarantor and any other obligor
upon the Securities shall be deemed to have paid and discharged the entire
Indebtedness represented by the Defeased Securities, which shall thereafter be
deemed to be "Outstanding" only for the purposes of Section 405 and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of the
Company and upon Company Request, shall execute proper instruments acknowledging
the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of Defeased
Securities to receive, solely from the trust fund described in Section 404 and
as more fully set forth in such Section, payments in respect of the principal
of, premium, if any, and interest on, such Securities, when such payments are
due, (b) the Company's obligations with respect to such Defeased Securities
under Sections 304, 305, 308, 1002 and 1003, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder, including, without limitation,
the Trustee's rights under Section 607, and (d) this Article Four. Subject to
compliance with this Article Four, the Company may exercise its option under
this Section 402 notwithstanding the prior exercise of its option under Section
403 with respect to the Securities.
Section 403. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 401 of the option applicable
to this Section 403, the Company and each Guarantor shall be released from its
obligations under any covenant or provision contained or referred to in Sections
1005 through 1022, inclusive, and the provisions of clauses (iii) and (v) of
Section 801(a) with respect to the Defeased Securities on and after the date the
conditions set forth in Section 404 below are satisfied (hereinafter, "covenant
defeasance"), and the Defeased Securities shall thereafter be deemed to be not
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be
59
deemed "Outstanding" for all other purposes hereunder. For this purpose, such
covenant defeasance means that, with respect to the Defeased Securities, the
Company and each Guarantor may omit to comply with and shall have no liability
in 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 501(c) but, except as
specified above, the remainder of this Indenture and such Defeased Securities
shall be unaffected thereby.
Section 404. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section
402 or Section 403 to the Defeased Securities:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (1) cash in United States
dollars, (2) U.S. Government Obligations, or (3) a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants or a nationally recognized investment banking
firm expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, and which shall be applied by the Trustee to pay and
discharge, the principal of, premium, if any, and interest on, the Defeased
Securities, on the Stated Maturity of such principal or interest (or on any date
after December 15, 2002 (such date being referred to as the "Defeasance
Redemption Date"), if at or prior to electing to exercise either its option
applicable to Section 402 or its option applicable to Section 403, the Company
has delivered to the Trustee an irrevocable notice to redeem the Defeased
Securities on the Defeasance Redemption Date). For this purpose, "U.S.
Government Obligations" means securities that are (I) direct obligations of the
United States of America for the timely payment of which its full faith and
credit is pledged or (II) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of principal
of or interest on the U.S. Government Obligation evidenced by such depository
receipt;
(b) In the case of an election under Section 402, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States stating that (1) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (2) since the date
hereof, there has been a change in the applicable federal income tax
60
law, in either case to the effect that, and based thereon such Opinion of
Independent Counsel in the United States shall confirm that, the Holders of the
Outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred;
(c) In the case of an election under Section 403, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States to the effect that the Holders of the Outstanding Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred;
(d) No Default or Event of Default (other than a Default or Event of
Default under this Indenture resulting from the borrowing of funds to be applied
to such deposit) shall have occurred and be continuing on the date of such
deposit or insofar as Section 501(h) or (i) is concerned, at any time during the
period ending on the 91st day after the date of deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of such
period);
(e) Such defeasance or covenant defeasance shall not cause the
Trustee for the Securities to have a conflicting interest for purposes of the
Trust Indenture Act with respect to any other securities of the Company or any
Guarantor;
(f) Such 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 to which the Company, any Guarantor or
any Subsidiary is a party or by which it is bound;
(g) Such defeasance or covenant defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder;
(h) The Company shall have delivered to the Trustee an Opinion of
Independent Counsel in the United States to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(i) 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 of the Securities or any Guarantee over the other
creditors of the Company or any Guarantor with the intent of defeating,
hindering, delaying or defrauding creditors of the Company, any Guarantor or
others;
(j) No event or condition shall exist that would prevent the Company
from making payments of the principal of, premium, if any, and interest on the
Securities on the date
61
of such deposit or at any time ending on the 91st day after the date of such
deposit; and
(k) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, each stating that all
conditions precedent provided for relating to either the defeasance under
Section 402 or the covenant defeasance under Section 403 (as the case may be)
have been complied with.
Opinions of Counsel or Opinions of Independent Counsel required to be
delivered under this Section shall be in form and substance reasonably
satisfactory to the Trustee may have qualifications customary for opinions of
the type required and counsel delivering such opinions may rely on certificates
of the Company or government or other officials customary for opinions of the
type required, which certificates shall be limited as to matters of fact,
including that various financial covenants have been complied with.
Section 405. Deposited Money and U.S. Government Obligations to Be
-----------------------------------------------------
Held in Trust; Other Miscellaneous Provisions.
---------------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
United States dollars and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 404 in respect of the
Defeased Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (excluding the Company or
any of its Affiliates acting as Paying Agent), as the Trustee may determine, to
the Holders of such Securities 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.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
imposed, assessed or for the account of the Holders of the Defeased Securities.
Anything in this Article Four to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any United States dollars or U.S. Government Obligations held by it as
provided in Section 404 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect defeasance or covenant defeasance.
Section 406. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 402 or 403, as
the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's obligations under this Indenture and the
62
Securities and any Guarantor's obligations under any Guarantee shall be revived
and reinstated, with present and prospective effect, as though no deposit had
occurred pursuant to Section 402 or 403, as the case may be, until such time as
the Trustee or Paying Agent is permitted to apply all such United States dollars
or U.S. Government Obligations in accordance with Section 402 or 403, as the
case may be; provided, however, that if the Company makes any payment to the
Trustee or Paying Agent of principal of, premium, if any, or interest on any
Security following the reinstatement of its obligations, the Trustee or Paying
Agent shall promptly pay any such amount to the Holders of the Securities and
the Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the United States dollars and U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
-----------------
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) there shall be a default in the payment of any interest on any
Security when it becomes due and payable, and such default shall continue for a
period of 30 days;
(b) there shall be a default in the payment of the principal of (or
premium, if any, on) any Security at its Maturity (upon acceleration, optional
or mandatory redemption, required repurchase or otherwise);
(c) (i) there shall be a default in the performance, or breach, of
any covenant or agreement of the Company or any Guarantor under this Indenture,
the Escrow Agreement, the Registration Rights Agreement or any Guarantee (other
than a default in the performance, or breach, of a covenant or agreement which
is specifically dealt with in clause (a), (b) or in clause (ii), (iii) or (iv)
of this clause (c)) and such default or breach shall continue for a period of 30
days after written notice has been given, by certified mail, (x) to the Company
by the Trustee or (y) to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the outstanding Securities; (ii) there
shall be a default in the performance or breach of the provisions of Article
Eight; (iii) the Company shall have failed to make or consummate an Offer in
accordance with the provisions of Section 1012; or (iv) the Company shall have
failed to make or consummate a Change of Control Offer in accordance with the
provisions of Section 1014;
(d) (i) any default by the Company or any Subsidiary in the payment
of the principal, premium, if any, or interest has occurred with respect to
amounts in excess of $5 million under any agreement, indenture or instrument
evidencing Indebtedness when the same shall become due and payable in full and
such default shall have continued after any applicable
63
grace period and shall not have been cured or waived and, if not already matured
at its final maturity in accordance with its terms, the holder of such
Indebtedness shall have the right to accelerate such Indebtedness or (ii) any
event of default as defined in any agreement, indenture or instrument of the
Company evidencing Indebtedness in excess of $5 million shall have occurred and
the Indebtedness thereunder, if not already matured at its final maturity in
accordance with its terms, shall have been accelerated;
(e) any Guarantee shall for any reason cease to be, or shall for any
reason be asserted in writing by any Guarantor or the Company not to be, in full
force and effect and enforceable in accordance with its terms, except to the
extent contemplated by this Indenture and any such Guarantee;
(f) one or more judgments, orders or decrees for the payment of money
in excess of $5 million, either individually or in the aggregate, shall be
rendered against the Company not paid or covered by financially sound third-
party insurers, or any Subsidiary or any of their respective properties and
there shall not be discharged and there shall have been a period of 60
consecutive days during which a stay of enforcement of such judgment or order,
by reason of an appeal or otherwise, shall not be in effect;
(g) any holder or holders of at least $5 million in aggregate
principal amount of Indebtedness of the Company or any Subsidiary after a
default under such Indebtedness shall notify the Trustee of its commencement of
proceedings to foreclose on any assets of the Company or any Subsidiary that
have been pledged to or for the benefit of such holder or holders to secure such
Indebtedness or shall commence proceedings, or take any action (including by way
of set-off), to retain in satisfaction of such Indebtedness or to collect on,
seize, dispose of or apply in satisfaction of Indebtedness, assets of the
Company or any Subsidiary (including funds on deposit or held pursuant to lock-
box and other similar arrangements);
(h) there shall have been the entry by a court of competent
jurisdiction of (i) a decree or order for relief in respect of the Company or
any Subsidiary in an involuntary case or proceeding under any applicable
Bankruptcy Law or (ii) a decree or order adjudging the Company or any Subsidiary
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Subsidiary under any
applicable federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Company or any Subsidiary or of any substantial part of their respective
properties, or ordering the winding up or liquidation of their respective
affairs, and any such decree or order for relief shall continue to be in effect,
or any such other decree or order shall be unstayed and in effect, for a period
of 60 consecutive days; or
(i) (i) the Company or any Subsidiary commences a voluntary case or
proceeding under any applicable Bankruptcy Law or any other case or proceeding
to be adjudicated bankrupt or insolvent, (ii) the Company or any Subsidiary
consents to the entry of a decree or order for relief in respect of the Company
or such Subsidiary in an involuntary case or proceeding under any applicable
Bankruptcy Law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, (iii) the Company or any Subsidiary files a petition or
answer or consent seeking reorganization or relief under any applicable federal
or state law,
64
(iv) the Company or any Subsidiary (1) consents to the filing of such petition
or the appointment of, or taking possession by, a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the Company
or such Subsidiary or of any substantial part of the Company's Consolidated
properties, (2) makes an assignment for the benefit of creditors or (3) admits
in writing its inability to pay its debts generally as they become due or (v)
the Company, any Guarantor or any Subsidiary takes any corporate action in
furtherance of any such actions in this paragraph (i); or
(j) the Company challenges the Lien on the Collateral under the
Escrow Agreement prior to such time as the Collateral is to be released to the
Company, or the Collateral becomes subject to any Lien other than the Lien under
the Escrow Agreement.
Section 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Sections 501(h) and (i) with respect to the Company) shall occur and be
continuing with respect to this Indenture, the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Securities then Outstanding
may, and the Trustee at the request of such Holders shall, declare all unpaid
principal of, premium, if any, and accrued interest on all Securities to be due
and payable, by a notice in writing to the Company (and to the Trustee if given
by the Holders of the Securities) and upon any such declaration, such principal,
premium, if any, and interest shall become due and payable immediately. If an
Event of Default specified in clause (h) or (i) of Section 501 occurs with
respect to the Company and is continuing, then all the Securities shall ipso
facto become and be due and payable immediately in an amount equal to the
principal amount of the Securities, together with accrued and unpaid interest,
if any, to the date the Securities become due and payable, without any
declaration or other act on the part of the Trustee or any Holder. Thereupon,
the Trustee may, at its discretion, proceed to protect and enforce the rights of
the Holders of the Securities by appropriate judicial proceedings.
After a declaration of acceleration with respect to the Securities,
but before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of a
majority in aggregate principal amount of the Securities Outstanding, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel,
(ii) all overdue interest on all Outstanding Securities,
(iii) the principal of and premium, if any, on any Outstanding
Securities which have become due otherwise than by such declaration of
acceleration and
65
interest thereon at a rate borne by the Securities, and
(iv) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities;
and
(b) all Events of Default, other than the non-payment of principal of
the Securities which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513. No such rescission shall
affect any subsequent Default or impair any right consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
The Company and each Guarantor covenant that if
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(b) default is made in the payment of the principal of or premium, if
any, on any Security at the Stated Maturity thereof,
the Company and such Guarantor will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal and premium, if any, and interest, with
interest upon the overdue principal and premium, if any, and, to the extent that
payment of such interest shall be legally enforceable, upon overdue installments
of interest, at the rate borne by the Securities; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company or any Guarantor, as the case may be, fails to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as trustee
of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid and may prosecute such proceeding to judgment or
final decree, and may enforce the same against the Company or any Guarantor or
any other obligor upon the Securities and collect the moneys adjudged or decreed
to be payable in the manner provided by law out of the property of the Company,
any Guarantor or any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture, the Escrow Agreement or any Guarantee by such
appropriate private or judicial proceedings as the Trustee shall deem most
effectual to protect and enforce such rights, including seeking recourse against
any Guarantor pursuant to the terms of any Guarantee, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein or therein, or to enforce any other proper
remedy, including, without limitation, seeking recourse against any Guarantor
pursuant to the terms of a Guarantee, or to enforce any other proper remedy,
subject however to Section 512. No recovery of any such
66
judgment upon any property of the Company or any Guarantor shall affect or
impair any rights, powers or remedies of the Trustee or the Holders.
Section 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including any
Guarantor, upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(a) to file and prove a claim for the whole amount of principal, and
premium, if any, and interest owing and unpaid in respect of the Securities and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims without Possession of
------------------------------------------------
Securities.
----------
All rights of action and claims under this Indenture, the Securities
or the Guarantees may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name and as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
Section 506. Application of Money Collected.
------------------------------
67
Any money collected by the Trustee pursuant to this Article or the
Escrow Agreement or otherwise on behalf of the Holders or the Trustee pursuant
to this Article or the Escrow Agreement or through any proceeding or any
arrangement or restructuring in anticipation or in lieu of any proceeding
contemplated by this Article or the Escrow Agreement shall be applied, subject
to applicable law, in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal,
premium, if any, or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities for principal, premium, if any, and interest, in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Securities for principal, premium, if any, and interest; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto, including the Company, provided that all sums due and owing to the
Holders and the Trustee have been paid in full as required by this Indenture.
Section 507. Limitation on Suits.
-------------------
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or the
Securities, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities 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;
(c) such Holder or Holders have offered to the Trustee an indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 15 days after its receipt of such notice, request
and offer (and if requested, provision) of indemnity has failed to institute any
such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 15-day period by the Holders of a majority in
principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner
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whatever by virtue of, or by availing of, any provision of this Indenture, any
Security or any Guarantee to affect, disturb or prejudice the rights of any
other Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, any Security or any
Guarantee, except in the manner provided in this Indenture and for the equal and
ratable benefit of all the Holders.
Section 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
--------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right based on the terms stated herein, which is
absolute and unconditional, to receive payment of the principal of, premium, if
any, and (subject to Section 309) interest on such Security on the respective
Stated Maturities expressed in such Security (or, in the case of redemption or
repurchase, on the Redemption Date or the repurchase date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or any Guarantee and such proceeding
has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case the
Company, any Guarantor, any other obligor on the Securities, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
------------------------------
No right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
69
Section 512. Control by Holders.
------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities shall have the right to direct the time, method
and place of conducting any proceeding for exercising any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, provided
that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture (including, without limitation, Section 507), the Escrow
Agreement or any Guarantee, expose the Trustee to personal liability, or be
unduly prejudicial to Holders not joining therein; and
(b) subject to the provisions of Section 315 of the Trust Indenture
Act, the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.
Section 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities may on behalf of the Holders of all Outstanding
Securities waive any past Default hereunder and its consequences, except a
Default
(a) in the payment of the principal of, premium, if any, or interest
on any Security; or
(b) in respect of a covenant or a provision hereof which under this
Indenture cannot be modified or amended without the consent of the Holder of
each Security Outstanding affected by such modification or amendment.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, 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,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant, but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any
70
Holder for the enforcement of the payment of the principal of, premium, if any,
or interest on, any Security on or after the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on or after the
Redemption Date).
Section 515. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company or any Guarantor
from paying all or any portion of the principal of, premium, if any, or interest
on the Securities contemplated herein or in the Securities or which may affect
the covenants or the performance of this Indenture; and each of the Company and
the Guarantors (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 516. Remedies Subject to Applicable Law.
----------------------------------
All rights, remedies and powers provided by this Article Five may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law in the premises, and all the provisions of this
Indenture are intended to be subject to all applicable mandatory provisions of
law which may be controlling in the premises and to be limited to the extent
necessary so that they will not render this Indenture invalid, unenforceable or
not entitled to be recorded, registered or filed under the provisions of any
applicable law.
ARTICLE SIX
THE TRUSTEE
Section 601. Duties of Trustee.
-----------------
Subject to the provisions of Trust Indenture Act Sections 315(a)
through 315(d):
(a) if a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs;
(b) except during the continuance of a Default or an Event of
Default:
(1) the Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture that are adverse to the
Trustee; and
71
(2) in the absence of bad faith or willful misconduct 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 or the Escrow Agreement. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture or
the Escrow Agreement;
(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 Subsection (c) does not limit the effect of Subsection
(b) of this Section 601;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible 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 of the Holders of a majority in principal amount of
Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power confirmed upon the Trustee under this
Indenture;
(d) no provision of this Indenture or the Escrow Agreement shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it;
(e) whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to Subsections
(a), (b), (c) and (d) and (f) of this Section 601; and
(f) the Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
Section 602. Notice of Defaults.
------------------
Within 30 days after a Responsible Officer of the Trustee receives
notice of the occurrence of any Default, the Trustee shall transmit by mail to
all Holders and any other Persons entitled to receive reports pursuant to
Section 313(c) of the Trust Indenture Act, as their names and addresses appear
in the Security Register, notice of such Default hereunder known to the Trustee,
unless such Default shall have been cured or waived; provided, however, that,
except
72
in the case of a Default in the payment of the principal of, premium, if any, or
interest on any Security or a Default in complying with any of the provisions of
the Escrow Agreement, the Trustee shall be protected in withholding such notice
if and so long as a trust committee of Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is in the interest of
the Holders.
Section 603. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 601 hereof and Trust Indenture
Act Sections 315(a) through 315(d):
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon receipt by it of any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of Indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) the Trustee may consult with counsel of its selection and any
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon in accordance with such
advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture or the Escrow Agreement at the
request or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee security or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture other than any
liabilities arising out of the negligence, bad faith or willful misconduct of
the Trustee;
(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, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or document
unless requested in writing to do so by the Holders of not less than a majority
in aggregate principal amount of the Securities then Outstanding; provided that,
if the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
73
proceeding; the reasonable expenses of every such investigation so requested by
the Holders of not less than 25% in aggregate principal amount of the Securities
Outstanding shall be paid by the Company or, if paid by the Trustee or any
predecessor Trustee, shall be repaid by the Company upon demand; provided,
further, the Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may deem 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; provided, further, that no permissive power, right or
remedy conferred upon the Trustee under this Indenture shall be construed to
impose a duty to exercise such power, right or remedy; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 604. Trustee Not Responsible for Recitals, Dispositions of
-----------------------------------------------------
Securities or Application of Proceeds Thereof.
---------------------------------------------
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture, the Escrow Agreement or of the Securities, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture and
the Escrow Agreement, authenticate the Securities and perform its obligations
hereunder and that the statements made by it in any Statement of Eligibility and
Qualification on Form T-1 supplied to the Company are true and accurate subject
to the qualifications set forth therein. The Trustee shall not be accountable
for the use or application by the Company of Securities or the proceeds thereof.
Section 605. Trustee and Agents May Hold Securities; Collections;
----------------------------------------------------
etc.
----
The Trustee, any Paying Agent, Security Registrar or any other agent
of the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent and, subject to
Trust Indenture Act Sections 310 and 311, may otherwise deal with the Company
and receive, collect, hold and retain collections from the Company with the same
rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent.
Section 606. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Except for funds or securities deposited with the
Trustee pursuant to Article Four, the Trustee shall be required to
74
invest all moneys received by the Trustee, until used or applied as herein
provided, in Cash Equivalents in accordance with the directions of the Company;
provided, however, that nothing herein shall be deemed to require the Trustee or
any other Person acting as Paying Agent to invest or pay interest on funds held
for the payment of any Securities after the Maturity thereof.
Section 607. Compensation and Indemnification of Trustee and Its
---------------------------------------------------
Prior Claim.
-----------
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as the parties
shall agree in writing from time to time for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) and the Company
covenants and agrees to pay or reimburse the Trustee and each predecessor
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents and other persons
not regularly in its employ) except any such expense, disbursement or advance as
may arise from its negligence, bad faith or willful misconduct. The Company also
covenants and agrees to indemnify the Trustee and each predecessor Trustee for,
and to hold it harmless against, any claim, loss, liability, tax, assessment or
other governmental charge (other than taxes applicable to the Trustee's
compensation hereunder) or expense incurred without negligence, bad faith or
willful misconduct on its part, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder and its
duties hereunder, including enforcement of this Section 607 and also including
any liability which the Trustee may incur as a result of failure to withhold,
pay or report any tax, assessment or other governmental charge, and the costs
and expenses of defending itself against or investigating any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The
75
obligations of the Company under this Section 607 to compensate and indemnify
the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and
each predecessor Trustee for reasonable expenses, disbursements and advances
shall constitute an additional obligation hereunder and shall survive the
satisfaction and discharge of this Indenture and the resignation or removal of
the Trustee and each predecessor Trustee. As security for the performance of the
obligations of the Company under this Section 607, the Trustee shall have a lien
prior to the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders of
particular Securities.
Section 608. Conflicting Interests.
---------------------
The Trustee shall comply with the provisions of Section 310(b) of the
Trust Indenture Act.
Section 609. Trustee Eligibility.
-------------------
There shall at all times be a Trustee hereunder which shall be
eligible to act as trustee under Trust Indenture Act Section 310(a) and which
shall have a combined capital and surplus of at least $10,000,000, to the extent
there is an institution eligible and willing to serve. If the Trustee does not
have a Corporate Trust Office in The City of New York, the Trustee may appoint
an agent in The City of New York reasonably acceptable to the Company to conduct
any activities which the Trustee may be required under this Indenture to conduct
in The City of New York. If such Trustee publishes reports of condition at least
annually, pursuant to law or to the requirements of federal, state, territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section 609, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
609, the Trustee shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor
-------------------------------------------------
Trustee.
-------
(a) No resignation or removal of the Trustee and no appointment of a
successor trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor trustee under Section 611.
(b) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign by giving written notice thereof to the Company. Upon
receiving such notice or resignation, the Company shall promptly appoint a
successor trustee by written instrument executed by authority of the Board of
Directors of the Company, a copy of which shall be delivered to the resigning
Trustee and a copy to the successor trustee. If an instrument of acceptance by a
successor trustee shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may, or
any Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper,
76
appoint and prescribe a successor trustee.
(c) The Trustee may be removed at any time for any cause or for no
cause by an Act of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
Trust Indenture Act Section 310(b) after written request therefor by
the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months,
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Security for at
least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 514, the Holder of any Security who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor trustee and
shall comply with the applicable requirements of Section 611. If, within 60 days
after such resignation, removal or incapability, or the occurrence of such
vacancy, the Company has not appointed a successor Trustee, a successor trustee
shall be appointed by the Act of the Holders of a majority in principal amount
of the Outstanding Securities delivered to the Company and the retiring Trustee.
Such successor trustee so appointed shall forthwith upon its acceptance of such
appointment become the successor trustee and supersede the successor trustee
appointed by the Company. If no successor trustee shall have been so appointed
by the Company or the Holders of the Securities and accepted appointment in the
manner hereinafter provided, the Trustee or the Holder of any Security who has
been a bona fide Holder for at least six months may, subject to Section 514, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities as their names and addresses
77
appear in the Security Register. Each notice shall include the name of the
successor trustee and the address of its Corporate Trust Office or agent
hereunder.
Section 611. Acceptance of Appointment by Successor.
--------------------------------------
Every successor trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee as if originally named as Trustee hereunder;
but, nevertheless, on the written request of the Company or the successor
trustee, upon payment of its charges pursuant to Section 607 then unpaid, such
retiring Trustee shall pay over to the successor trustee all moneys at the time
held by it hereunder and shall execute and deliver an instrument transferring to
such successor trustee all such rights, powers, duties and obligations. Upon
request of any such successor trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor trustee all such rights and powers.
No successor trustee with respect to the Securities shall accept
appointment as provided in this Section 611 unless at the time of such
acceptance such successor trustee shall be eligible to act as trustee under the
provisions of Trust Indenture Act Section 310(a) and this Article Six and shall
have a combined capital and surplus of at least $10,000,000 and have a Corporate
Trust Office or an agent selected in accordance with Section 609.
Upon acceptance of appointment by any successor trustee as provided in
this Section 611, the Company shall give notice thereof to the Holders of the
Securities, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the appointment, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
610. If the Company fails to give such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Company.
Section 612. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
--------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee (including the trust created by this Indenture) shall be
the successor of the Trustee hereunder, provided that such corporation shall be
eligible under Trust Indenture Act Section 310(a) and this Article Six and shall
have a combined capital and surplus of at least $100,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 609,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created
78
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee and deliver such Securities so
authenticated; and, in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor trustee; and in all such cases such certificate shall have the full
force which it is anywhere in the Securities or in this Indenture provided that
the certificate of the Trustee shall have; provided that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
Section 613. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company
(or other obligor under the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor). A Trustee who has resigned or been
removed shall be subject to Trust Indenture Act Section 311(a) to the extent
indicated therein.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders.
-------
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such request, a list
of similar form and content to that in subsection (a) hereof as of a date not
more than 15 days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished.
Section 702. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Holders may communicate pursuant to Trust Indenture Act Section 312(b)
with other Holders with respect to their rights under this Indenture or the
Securities, and the Trustee shall comply with Trust Indenture Act Section
312(b). The Company, the Trustee, the Security Registrar and any other Person
shall have the protection of Trust Indenture Act Section 312(c).
79
Further, every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Holders in accordance with
Trust Indenture Act Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Trust Indenture
Act Section 312.
Section 703. Reports by Trustee.
------------------
(a) Within 60 days after May 15 of each year commencing with the
first May 15 after the issuance of Securities, the Trustee, if so required under
the Trust Indenture Act, shall transmit by mail to all Holders, in the manner
and to the extent provided in Trust Indenture Act Section 313(c), a brief report
dated as of such May 15 in accordance with and with respect to the matters
required by Trust Indenture Act Section 313(a). The Trustee shall also transmit
by mail to all Holders, in the manner and to the extent provided in Trust
Indenture Act Section 313(c), a brief report in accordance with and with respect
to the matters required by Trust Indenture Act Section 313(b)(2).
(b) A copy of each report transmitted to Holders pursuant to this
Section 703 shall, at the time of such transmission, be mailed to the Company
and filed with each stock exchange, if any, upon which the Securities are listed
and also with the Commission. The Company will notify the Trustee promptly if
the Securities are listed on any stock exchange.
Section 704. Reports by Company.
------------------
The Company and any Guarantor, as the case may be, shall:
(a) file with the Trustee, within 15 days after the Company or any
Guarantor, as the case may be, is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company or any
Guarantor may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company or any Guarantor, as the
case may be, is not required to file information, documents or reports pursuant
to either of said Sections, then it shall (i) deliver to the Trustee annual
audited financial statements of the Company and its Subsidiaries, prepared on a
Consolidated basis in conformity with GAAP, within 120 days after the end of
each fiscal year of the Company, and (ii) file with the Trustee and, to the
extent permitted by law, the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company or any Guarantor, as the case
80
may be, with the conditions and covenants of this Indenture as are required from
time to time by such rules and regulations (including such information,
documents and reports referred to in Trust Indenture Act Section 314(a)); and
(c) within 15 days after the filing thereof with the Trustee,
transmit by mail to all Holders in the manner and to the extent provided in
Trust Indenture Act Section 313(c), such summaries of any information, documents
and reports required to be filed by the Company or any Guarantor, as the case
may be, pursuant to Section 1020 hereunder and subsections (a) and (b) of this
Section as are required by rules and regulations prescribed from time to time by
the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OF ASSETS
Section 801. Company and Guarantors May Consolidate,
--------------------------------------
etc., Only on Certain Terms.
---------------------------
(a) The Company will not, in a single transaction or through a series
of related transactions, consolidate with or merge with or into any other Person
or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any Person or group of
affiliated Persons, or permit any of its Subsidiaries to enter into any such
transaction or series of related transactions if such transaction or series of
related transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Company and its Subsidiaries on a Consolidated
basis to any other Person or group of affiliated Persons, unless at the time and
after giving effect thereto:
(i) either (a) the Company will be the continuing corporation in
the case of a consolidation or merger involving the Company or (b) the
Person (if other than the Company) formed by such consolidation or
into which the Company is merged or the Person which acquires by sale,
assignment, conveyance, transfer, lease or disposition all or
substantially all of the properties and assets of the Company and its
Subsidiaries on a Consolidated basis (the "Surviving Entity") will be
a corporation duly organized and validly existing under the laws of
the United States of America, any state thereof or the District of
Columbia and such Person expressly assumes, by a supplemental
indenture, in a form reasonably satisfactory to the Trustee, all the
obligations of the Company under the Securities, this Indenture, the
Escrow Agreement and the Registration Rights Agreement, as the case
may be, and the Securities, this Indenture, the Escrow Agreement and
the Registration Rights Agreement will remain in full force and effect
as so supplemented;
(ii) immediately before and immediately after giving effect to
such transaction on a pro forma basis (and treating any Indebtedness
not previously an
81
obligation of the Company or any of its Subsidiaries which becomes the
obligation of the Company or any of its Subsidiaries as a result of
such transaction as having been incurred at the time of such
transaction), no Default or Event of Default will have occurred and be
continuing;
(iii) immediately before and immediately after giving effect to
such transaction on a pro forma basis (on the assumption that the
transaction occurred on the first day of the four-quarter period for
which financial statements are available ending immediately prior to
the consummation of such transaction with the appropriate adjustments
with respect to the transaction being included in such pro forma
calculation), the Company (or the Surviving Entity if the Company is
not the continuing obligor hereunder) could incur $1.00 of additional
Indebtedness under Section 1008(a);
(iv) at the time of the transaction, each Guarantor, if any,
unless it is the other party to the transactions described above, will
have by supplemental indenture confirmed that its Guarantee shall
apply to such Person's obligations under this Indenture and under the
Securities;
(v) at the time of the transaction if any of the property or
assets of the Company or any of its Subsidiaries would thereupon
become subject to any Lien, the provisions of Section 1011 are
complied with; and
(vi) at the time of the transaction the Company or the Surviving
Entity will have delivered, or caused to be delivered, to the Trustee,
in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each to the effect
that such consolidation, merger, transfer, sale, assignment,
conveyance, transfer, lease or other transaction and the supplemental
indenture in respect thereof comply with this Indenture and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
(b) Notwithstanding the foregoing, the provisions of Section 801(a)
shall not apply to (i) a merger or consolidation between the Company and any of
its Subsidiaries, and (ii) a merger or consolidation of the Company into any
Person in a transaction designed solely for the purpose of effecting a change in
the jurisdiction of incorporation of the Company within the United States of
America.
Section 802. Successor Substituted.
---------------------
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in Section 801 in which the Company is not
the Surviving Person, such Surviving Person shall succeed to, and be substituted
for, and may exercise every right and power of, the Company and the Company
shall be discharged from all obligations and covenants under this Indenture, the
Securities, the Escrow Agreement and the Registration Rights Agreement.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements without Consent of
---------------------------------------------------------
Holders.
-------
Without the consent of any Holders, the Company, the Guarantors, if
any, and any other obligor under the Securities when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto or agreements or other instruments
with respect to any Guarantee, in form and substance satisfactory to the
Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company or a
Guarantor and the assumption by any such successor of the covenants of the
Company or such Guarantor herein and in the Securities, the Registration Rights
Agreement, the Escrow Agreement and in any Guarantee in accordance with Article
Eight;
(b) to add to the covenants of the Company, any Guarantor or any
other obligor upon the Securities for the benefit of the Holders, or to
surrender any right or power conferred upon the Company or any Guarantor or any
other obligor upon the Securities, as applicable, herein, in the Securities or
in any Guarantee;
(c) to cure any ambiguity, or to correct or supplement any provision
herein or in any supplemental indenture, the Securities or any Guarantee which
may be defective or inconsistent with any other provision herein or in the
Securities or any Guarantee or to make any other provisions with respect to
matters or questions arising under this Indenture, the Securities or any
Guarantee; provided that, in each case, such provisions shall not adversely
affect the interest of the Holders;
(d) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act, as contemplated by Section 905 or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section 1013;
(f) to evidence and provide the acceptance of the appointment of a
successor trustee hereunder; or
(g) to mortgage, pledge, hypothecate or grant a security interest in
favor of the Trustee for the benefit of the Holders as additional security for
the payment and performance of the Company's or any Guarantor's Indenture
Obligations, in any property, or assets, including any of which are required to
be mortgaged, pledged or hypothecated, or in which a security interest is
required to be granted to the Trustee pursuant to this Indenture or otherwise.
Section 902. Supplemental Indentures and Agreements with Consent of
------------------------------------------------------
Holders.
-------
83
Except as permitted by Section 901, with the consent of the Holders of
at least a majority in aggregate principal amount of the Outstanding Securities,
by Act of said Holders delivered to the Company, each Guarantor, if any, and the
Trustee, the Company and each Guarantor (if a party thereto) when authorized by
Board Resolutions, and the Trustee may (i) enter into an indenture or indentures
supplemental hereto or agreements or other instruments with respect to any
Guarantee in form and substance satisfactory to the Trustee, for the purpose of
adding any provisions to or amending, modifying or changing in any manner or
eliminating any of the provisions of this Indenture, the Securities or any
Guarantee (including but not limited to, for the purpose of modifying in any
manner the rights of the Holders under this Indenture, the Securities or any
Guarantee) or (ii) waive compliance with any provision in this Indenture, the
Securities or any Guarantee (other than waivers of past Defaults covered by
Section 513 and waivers of covenants which are covered by Section 1021);
provided, however, that no such supplemental indenture, agreement or instrument
shall, without the consent of the Holder of each Outstanding Security affected
thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, or change to an earlier date any redemption date of,
or waive a default in the payment of the principal or interest on, any such
Security or reduce the principal amount thereof or the rate of interest thereon
or any premium payable upon the redemption thereof, or change the coin or
currency in which the principal of any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date);
(b) amend, change or modify the obligation of the Company to make and
consummate an Offer with respect to any Asset Sale or Asset Sales in accordance
with Section 1012 or the obligation of the Company to make and consummate a
Change of Control Offer in the event of a Change of Control in accordance with
Section 1014, including, in each case, amending, changing or modifying any
definitions relating thereto;
(c) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver or
compliance with certain provisions of this Indenture;
(d) modify any of the provisions of this Section 902 or Section 513
or 1021, except to increase the percentage of such Outstanding Securities
required for any such actions or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the Holder of
each such Security affected thereby;
(e) except as otherwise permitted under Article Eight, consent to the
assignment or transfer by the Company or any Guarantor of any of its rights and
obligations hereunder;
(f) amend or modify any of the provisions of this Indenture in any
manner which subordinates the Securities issued hereunder in right of payment to
any other Indebtedness of the Company or which subordinates any Guarantee in
right of payment to any other Indebtedness of the Guarantor issuing such
Guarantee; or
84
(g) modify the provisions of the Escrow Agreement or this Indenture
relating to the Collateral in any manner adverse to the Holders or release any
of the Collateral from the Lien under the Escrow Agreement or permit any other
obligation to be secured by the Collateral.
Upon the written request of the Company and each Guarantor, if any,
accompanied by a copy of Board Resolutions authorizing the execution of any such
supplemental indenture or Guarantee, and upon the filing with the Trustee of
evidence of the consent of Holders as aforesaid, the Trustee shall join with the
Company and each Guarantor in the execution of such supplemental indenture or
Guarantee.
It shall not be necessary for any Act of Holders under this Section
902 to approve the particular form of any proposed supplemental indenture or
Guarantee or agreement or instrument relating to any Guarantee, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures and Agreements.
---------------------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement, instrument or waiver permitted by this
Article Nine or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Trust
Indenture Act Sections 315(a) through 315(d) and Section 603 hereof) shall be
fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate stating that the execution of such supplemental indenture, agreement
or instrument is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture, agreement
or instrument which affects the Trustee's own rights, duties or immunities under
this Indenture, any Guarantee or otherwise.
Section 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
85
executed by the Company and each Guarantor and authenticated and delivered by
the Trustee in exchange for Outstanding Securities.
Section 907. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company, any Guarantor and the
Trustee of any supplemental indenture pursuant to the provisions of Section 902,
the Company shall give notice thereof to the Holders of each Outstanding
Security affected, in the manner provided for in Section 106, setting forth in
general terms the substance of such supplemental indenture. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
------------------------------------------
The Company shall duly and punctually pay the principal of, premium,
if any, and interest on the Securities in accordance with the terms of the
Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain an office or agency where Securities may be
presented or surrendered for payment. The Company also will maintain in The City
of New York an office or agency where Securities may be surrendered for
registration of transfer, redemption or exchange and where notices and demands
to or upon the Company in respect of the Securities and this Indenture may be
served. The office of the Trustee, at its Corporate Trust Office initially
located at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000, will be
such office or agency of the Company, unless the Company shall designate and
maintain some other office or agency for one or more of such purposes. The
Company will give prompt written notice to the Trustee of the location and any
change in the location of any such offices or agencies. If at any time the
Company shall fail to maintain any such required offices or agencies or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the office of the
Trustee and the Company hereby appoints the Trustee such agent as its agent to
receive all such presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes, and may from time to time
rescind such designation. The Company will give prompt written notice to the
Trustee of any such designation or rescission and any change in the location of
any such office or agency.
The Trustee shall initially act as Paying Agent for the Securities.
86
Section 1003. Money for Security Payments to Be Held in Trust.
-----------------------------------------------
If the Company or any of its Affiliates shall at any time act as
Paying Agent, it will, on or before each due date of the principal of, premium,
if any, or interest on any of the Securities, segregate and hold in trust for
the benefit of the Holders entitled thereto a sum sufficient to pay the
principal, premium, if any, or interest so becoming due until such sums shall be
paid to such Persons or otherwise disposed of as herein provided, and will
promptly notify the Trustee of its action or failure so to act.
If the Company or any of its Affiliates is not acting as Paying Agent,
the Company will, on or before each due date of the principal of, premium, if
any, or interest on any of the Securities, deposit with a Paying Agent a sum in
same day funds sufficient to pay the principal, premium, if any, or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of such action or
any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause
each Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on the Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company or any
Guarantor (or any other obligor upon the Securities) in the making of any
payment of principal, premium, if any, or interest on the Securities;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the
87
Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security and remaining unclaimed for two years after such
principal and premium, if any, or interest has become due and payable shall
promptly be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
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 and The
-------------- ---
Wall Street Journal (national edition), and mail to each such Holder, 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,
publication and mailing, any unclaimed balance of such money then remaining will
promptly be repaid to the Company.
Section 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and related rights and franchises (charter and statutory) of the
Company and each Subsidiary; provided, however, that the Company shall not be
required to preserve any such right or franchise or the corporate existence of
any such Subsidiary if the Board of Directors of the Company shall determine
that the preservation thereof is no longer necessary or desirable in the conduct
of the business of the Company and its Subsidiaries as a whole; and provided,
further, however, that the foregoing shall not prohibit a sale, transfer or
conveyance of a Subsidiary or any of the assets of the Company or any Subsidiary
in compliance with the terms of this Indenture.
Section 1005. Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or discharged,
on or before the date the same shall become due and payable, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
of its Subsidiaries shown to be due on any return of the Company or any of its
Subsidiaries or otherwise assessed or upon the income, profits or property of
the Company or any of its Subsidiaries if failure to pay or discharge the same
could reasonably be expected to have a material adverse effect on the ability of
the Company or any Guarantor to perform its obligations hereunder and (b) all
lawful claims for labor, materials and supplies, which, if unpaid, would by law
become a Lien upon the property of the Company or any of its Subsidiaries,
except for any Lien permitted to be incurred under Section 1011, if failure to
pay or discharge the same could reasonably be expected to have a material
adverse effect on the ability of the Company or any Guarantor to perform its
obligations hereunder; provided, however, that the Company shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings properly instituted and diligently
conducted and in respect of which appropriate reserves (in the good faith
judgment of management of the Company) are being maintained in accordance with
GAAP.
88
Section 1006. Maintenance of Properties.
-------------------------
The Company shall cause all material properties owned by the Company
or any of its Subsidiaries or used or held for use in the conduct of its
business or the business of any of its Subsidiaries to be maintained and kept in
good condition, repair and working order (ordinary wear and tear excepted) and
supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the reasonable judgment of the Company may be consistent with sound business
practice and necessary so that the business carried on in connection therewith
may be properly conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the maintenance of any of
such properties if such discontinuance is, in the reasonable judgment of the
Company, desirable in the conduct of its business or the business of any of its
Subsidiaries; and provided, further, however, that the foregoing shall not
prohibit a sale, transfer or conveyance of a Subsidiary or any of its properties
or assets in compliance with the terms of this Indenture.
Section 1007. Maintenance of Insurance.
------------------------
The Company shall at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Company in good faith to be financially sound and responsible, against loss
or damage to the extent that property of similar character is usually so insured
by corporations similarly situated and owning like properties in the same
general geographic areas in which the Company and its Subsidiaries operate,
except where the failure to do so could not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), earnings,
business affairs or prospects of the Company and its Subsidiaries, taken as a
whole.
Section 1008. Limitation on Indebtedness.
--------------------------
(a) The Company shall not, and shall not cause or permit any
Subsidiary to, directly or indirectly, Incur any Indebtedness (other than the
Securities); provided, however, that the Company may Incur Indebtedness, and the
Company or any Subsidiary may Incur Acquired Indebtedness, if, at the time of
such Incurrence, the Debt to Annualized Operating Cash Flow Ratio would be less
than or equal to 5.5 to 1.0 prior to December 15, 2000, or less than or equal to
5.0 to 1.0 after December 15, 2000.
(b) The foregoing limitations of paragraph (a) of this Section 1008
will not apply to any of the following, each of which shall be given independent
effect:
(i) the Incurrence by the Company or any of its Subsidiaries of
Indebtedness (other than Acquired Indebtedness) consisting of Capital
Lease Obligations, Purchase Money Obligations, mortgage financings or
other obligations incurred for the purpose of financing all or any
part of the purchase price, cost of construction or improvement of
property, plant or equipment used in connection with the
Telecommunications Business or a credit facility or a master lease
arrangement entered into for the purpose of providing such financing,
89
provided that such Indebtedness does not exceed the lesser of Fair
Market Value or the purchase price of such property, plant or
equipment at the time of such Incurrence.
(ii) Indebtedness of the Company or any of its Subsidiaries,
and any renewals, extensions, substitutions, refinancings or
replacements of such Indebtedness, so long as the aggregate principal
amount of such Indebtedness shall not exceed $35 million outstanding
at any one time in the aggregate;
(iii) the Incurrence by the Company of Indebtedness (other than
secured Acquired Indebtedness) in an aggregate principal amount not to
exceed 2.0 times the sum of the Net Cash Proceeds received by the
Company after the date of the Indenture (other than from the issuance
of Disqualified Stock) in connection with any Public Equity Offerings;
provided that such Indebtedness does not mature prior to the Stated
Maturity of the Securities or has an Average Life to Stated Maturity
at least equal to the Securities;
(iv) Indebtedness of the Company or any Subsidiary entered
into in the ordinary course of business (a) pursuant to Interest Rate
Agreements designed to protect the Company or any Subsidiary against
fluctuations in interest rates in respect of Indebtedness of the
Company or any Subsidiary as long as the notional principal amount of
such Interest Rate Agreements do not exceed the aggregate principal
amount of such Indebtedness then outstanding, (b) under any Currency
Hedging Arrangements designed to protect the Company or any Subsidiary
against fluctuations in the value of any currency or (c) under any
Commodity Price Protection Agreements designed to protect the Company
or any Subsidiary against fluctuations in the price of any commodity;
(v) the Incurrence by the Company or any of its Subsidiaries
of Indebtedness in respect of bid, performance or advance payment
bonds and appeal or surety bonds;
(vi) Indebtedness existing on the date of this Indenture;
(vii) the Incurrence of (a) Indebtedness of any Subsidiary owed
to and held by the Company or another Subsidiary and (b) Indebtedness
of the Company owed to and held by any Subsidiary; and
(viii) any renewals, extensions, substitutions, refundings,
refinancings or replacements (collectively, a "refinancing") of any
Indebtedness described in clauses (i), (ii), (iii), (vi) and (vii) of
this definition of "Permitted Indebtedness," including any successive
refinancings so long as the borrower under such refinancing is the
Company or, if not the Company, the same as the borrower of the
Indebtedness being refinanced and the aggregate principal amount of
Indebtedness represented thereby is not increased by such refinancing
plus the lesser of (I) the stated amount of any premium or other
payment required to be
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paid in connection with such a refinancing pursuant to the terms of
the Indebtedness being refinanced or (II) the amount of premium or
other payment actually paid at such time to refinance the
Indebtedness, plus, in either case, the amount of expenses of the
Company incurred in connection with such refinancing and, in the case
of any refinancing of Indebtedness that is Subordinated Indebtedness,
such new Indebtedness is made subordinated to the Securities at least
to the same extent as the Indebtedness being refinanced and such
refinancing does not reduce the Average Life to Stated Maturity or the
Stated Maturity of such Subordinated Indebtedness.
(c) For purposes of determining any particular amount of Indebtedness
under this covenant, Guarantees, Liens or obligations with respect to letters of
credit supporting Indebtedness otherwise included in the determination of such
particular amount shall not be included; provided, however, that the foregoing
shall not in any way be deemed to limit the provisions of Section 1013.
(d) For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness may be Incurred through the first paragraph
of this covenant or by meeting the criteria of one or more of the types of
Indebtedness described in the second paragraph of this covenant (or the
definitions of the terms used therein), the Company, in its sole discretion, (i)
may classify such item of Indebtedness under and comply with either of such
paragraphs (or any of such definitions), as applicable, (ii) may classify and
divide such item of Indebtedness into more than one of such paragraphs (or
definitions), as applicable, and (iii) may elect to comply with such paragraphs
(or definitions), as applicable, in any order.
Section 1009. Limitation on Restricted Payments.
---------------------------------
(a) The Company will not, and will not permit any Subsidiary to,
directly or indirectly:
(i) declare or pay any dividend on, or make any distribution
on any shares of the Company's Capital Stock (other than dividends or
distributions payable solely in shares of its Qualified Capital Stock
or in options, warrants or other rights to acquire shares of such
Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, the Company's Capital Stock or any Capital
Stock of any Affiliate of the Company (other than Capital Stock of any
Wholly Owned Subsidiary of the Company) or options, warrants or other
rights to acquire such Capital Stock;
(iii) make any principal payment on, or repurchase, redeem,
defease, retire or otherwise acquire for value, prior to any scheduled
principal payment, sinking fund payment or maturity, any Subordinated
Indebtedness;
(iv) declare or pay any dividend or distribution on any Capital
Stock of any Subsidiary to any Person (other than (a) to the Company
or any of its Wholly
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Owned Subsidiaries or (b) to all holders of Capital Stock of such
Subsidiary on a pro rata basis); or
(v) make any Investment in any Person (other than any
Permitted Investments)
(any of the foregoing actions described in clauses (i) through (v), other than
any such action that is a Permitted Payment (as defined below), collectively,
"Restricted Payments") (the amount of any such Restricted Payment, if other than
cash, as determined by the board of directors of the Company, whose
determination shall be conclusive and evidenced by a board resolution), unless
(1) immediately before and immediately after giving effect to such proposed
Restricted Payment on a pro forma basis, no Default or Event of Default shall
have occurred and be continuing; (2) immediately before and immediately after
giving effect to such Restricted Payment on a pro forma basis, the Company could
incur $1.00 of additional Indebtedness under the provisions described in Section
1008(a); and (3) after giving effect to the proposed Restricted Payment, the
aggregate amount of all such Restricted Payments declared or made after the date
of the date hereof, does not exceed the sum of the following (the "Basket"):
(A) (i) the Cumulative Operating Cash Flow determined at the
time of such Restricted Payment less (ii) 150% of cumulative
Consolidated Interest Expense determined for the period (treated as
one accounting period) commencing on the date of the original issue of
the Securities and ending on the last day of the most recent fiscal
quarter immediately preceding the date of such Restricted Payment for
which consolidated financial information of the Company is required to
be available;
(B) (i) capital contributions to the Company after the date
of this Indenture or (ii) the aggregate Net Cash Proceeds received
after the date of this Indenture by the Company from the issuance or
sale (other than to any of its Subsidiaries) of Qualified Capital
Stock of the Company or any options, warrants or rights to purchase
such Qualified Capital Stock of the Company (except, in each case, to
the extent such proceeds are used to purchase, redeem or otherwise
retire Capital Stock or Subordinated Indebtedness as set forth below
in clause (ii) or (iii) of paragraph (b) below);
(C) the aggregate Net Cash Proceeds received after the date
of this Indenture by the Company (other than from any of its
Subsidiaries) upon the exercise of any options, warrants or rights to
purchase Qualified Capital Stock of the Company;
(D) the aggregate Net Cash Proceeds received after the date
of this Indenture by the Company from the conversion or exchange, if
any, of debt securities or Redeemable Capital Stock of the Company or
its Subsidiaries into or for Qualified Capital Stock of the Company
plus, to the extent such debt securities or Redeemable Capital Stock
were issued after the date of this Indenture, the aggregate of Net
Cash Proceeds from their original issuance; and
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(E) in the case of the disposition or repayment of any
Investment constituting a Restricted Payment, an amount equal to the
return of capital with respect to such Investment and the initial
amount of such Investment.
(b) Notwithstanding the foregoing, and in the case of clauses (ii)
through (vi) below, so long as there is no Default or Event of Default
continuing, the foregoing provisions shall not prohibit the following actions
(each of clauses (i) through (vi) being referred to as a "Permitted Payment"):
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment was
permitted by the provisions of paragraph (a) of this Section and such
payment shall have been deemed to have been paid on such date of
declaration and shall not have been deemed a Permitted Payment for
purposes of the calculation required by paragraph (a) of this Section
1009;
(ii) the repurchase, redemption, or other acquisition or
retirement for value of any shares of any class of Capital Stock of
the Company in exchange for (including any such exchange pursuant to
the exercise of a conversion right or privilege in connection with
which cash is paid in lieu of the issuance of fractional shares or
scrip), or out of the Net Cash Proceeds of a substantially concurrent
issuance and sale for cash (other than to a Subsidiary) of, other
shares of Qualified Capital Stock of the Company; provided that the
Net Cash Proceeds from the issuance of such shares of Qualified
Capital Stock are excluded from clause (3)(B) of paragraph (a) of this
Section 1009;
(iii) the repurchase, redemption, defeasance, retirement or
acquisition for value or payment of principal of any Subordinated
Indebtedness or Redeemable Capital Stock in exchange for, or in an
amount not in excess of the Net Cash Proceeds of, a substantially
concurrent issuance and sale for cash (other than to any Subsidiary of
the Company) of any Qualified Capital Stock of the Company, provided
that the Net Cash Proceeds from the issuance of such shares of
Qualified Capital Stock are excluded from clause (3)(B) of paragraph
(a) of this Section 1009;
(iv) the repurchase, redemption, defeasance, retirement,
refinancing, acquisition for value or payment of principal of any
Subordinated Indebtedness (other than Redeemable Capital Stock) (a
"refinancing") through the substantially concurrent issuance of new
Subordinated Indebtedness of the Company, provided that any such new
Subordinated Indebtedness (1) shall be in a principal amount that does
not exceed the principal amount so refinanced (or, if such
Subordinated Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, then such lesser amount as of the date of
determination), plus the lesser of (I) the stated amount of any
premium or other payment required to be paid in connection with such a
refinancing pursuant to the terms of the Indebtedness being refinanced
or (II) the
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amount of premium or other payment actually paid at such time to
refinance the Indebtedness, plus, in either case, the amount of
expenses of the Company incurred in connection with such refinancing;
(2) has an Average Life to Stated Maturity greater than the remaining
Average Life to Stated Maturity of the Securities; (3) has a Stated
Maturity for its final scheduled principal payment later than the
Stated Maturity for the final scheduled principal payment of the
Securities; and (4) is expressly subordinated in right of payment to
the Securities at least to the same extent as the Subordinated
Indebtedness to be refinanced;
(v) the repurchase, redemption, defeasance, retirement,
refinancing, acquisition for value or payment of any Redeemable
Capital Stock through the substantially concurrent issuance of new
Redeemable Capital Stock of the Company, provided that any such new
Redeemable Capital Stock (1) shall have an aggregate liquidation
preference that does not exceed the aggregate liquidation preference
of the amount so refinanced; (2) has an Average Life to Stated
Maturity greater than the remaining Average Life to Stated Maturity of
the Securities; and (3) has a Stated Maturity later than the Stated
Maturity for the final scheduled principal payment of the Securities;
and
(vi) the repurchase of shares of, or options to purchase shares
of, common stock of the Company or any of its Subsidiaries from
employees, former employees, directors or former directors of the
Company or any of its Subsidiaries (or permitted transferees of such
employees, former employees, directors or former directors), pursuant
to the terms of the agreements (including employment agreements) or
plans (or amendments thereto) approved by the Board of Directors under
which such individuals purchase or sell or are granted the option to
purchase or sell, shares of such common stock; provided, however, that
the aggregate amount of such repurchases in any calendar year shall
not exceed $1 million and $5 million in the aggregate.
Section 1010. Limitation on Transactions with Affiliates.
------------------------------------------
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into any transaction or series of related
transactions (including, without limitation, the sale, purchase, exchange or
lease of assets, property or services) with or for the benefit of any Affiliate
of the Company (other than the Company or a Wholly Owned Subsidiary) unless such
transaction or series of related transactions is entered into in good faith and
in writing and (a) such transaction or series of related transactions is on
terms that are no less favorable to the Company or such Subsidiary, as the case
may be, than those that would be reasonably expected to be available in a
comparable transaction in arm's-length dealings with an unrelated third party,
(b) with respect to any transaction or series of related transactions involving
aggregate value in excess of $3 million, the Company delivers an Officers'
Certificate to the Trustee certifying that such transaction or series of related
transactions complies with clause (a) above, and (c) with respect to any
transaction or series of related transactions involving aggregate value in
excess of $7 million, either (A) such transaction or series of related
transactions has been approved by a majority of the Disinterested Directors of
the Company, or
94
in the event there is only one Disinterested Director, by such Disinterested
Director, or (B) the Company delivers to the Trustee a written opinion of an
investment banking firm of national standing or other recognized independent
expert with experience appraising the terms and conditions of the type of
transaction or series of related transactions for which an opinion is required
stating that the transactions or series of related transactions is fair to the
Company or such Subsidiary from a financial point of view; provided, however,
that this provision shall not apply to: (a) compensation and employee benefit
arrangements with any officer, director or employee of the Company, including
under any stock option or stock incentive plans, in the ordinary course of
business; (b) any transaction solely between or among the Company and/or any
Subsidiaries, if such transaction is otherwise in compliance with the Indenture
and is on fair and reasonable terms; (c) any transaction otherwise permitted by
the terms of the section of the Indenture described in Section 1009; (d) the
execution and delivery of or payments made under any tax sharing agreement
between or among any of the Company and any Subsidiary; (e) licensing or
sublicensing of use of any intellectual property by the Company or any
Subsidiary to any Subsidiary of the Company; provided that the licensor shall
continue to have access to such intellectual property to the extent necessary
for the conduct of its respective business; (f) arrangements between the Company
and any Subsidiary of the Company for the purpose of providing services or
employees to such Subsidiary; (g) any transaction entered into for the purpose
of granting or altering registration rights with respect to the Capital Stock of
the Company; and (h) any transaction or series of related transactions entered
into prior to the date hereof.
Section 1011. Limitation on Liens.
-------------------
The Company will not, and will not permit any Subsidiary to, directly
or indirectly, create, incur or affirm any Lien of any kind upon any property or
assets (including any intercompany notes) of the Company or any Subsidiary owned
on the date hereof, or acquired after the date hereof, or any income or profits
therefrom, unless the Securities are directly secured equally and ratably with
(or, in the case of Subordinated Indebtedness, prior or senior thereto, with the
same relative priority as the Securities shall have with respect to such
Subordinated Indebtedness) the obligation or liability secured by such Lien
except for any Permitted Liens.
Section 1012. Limitation on Sale of Assets.
----------------------------
(a) The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, consummate an Asset Sale unless (i) at least 75% of
the consideration from such Asset Sale is received in cash or other comparable
consideration (as described below), and (ii) the Company or such Subsidiary
receives consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the shares or assets subject to such Asset Sale (as determined
by the board of directors of the Company and evidenced in a board resolution).
The following types of consideration shall be deemed "comparable consideration"
for the purposes of this covenant: (A) Cash Equivalents, (B) liabilities
(contingent or otherwise) of the Company or a Subsidiary assumed by the
transferee (or its designee) such that the Company or such Subsidiary has no
further liability therefor, and (C) any securities, notes or other obligations
received by the Company or any such Subsidiary from such transferee that are
immediately converted by the
95
Company or such Subsidiary into cash.
(b) The Company or a Subsidiary may, within 365 days of the Asset Sale
invest the Net Cash Proceeds in properties and other assets that will be used in
Telecommunications Businesses or to repay any Pari Passu Indebtedness of the
Company or any Subsidiary (including the repurchase of the Securities). The
amount of such Net Cash Proceeds not used or invested within 365 days of the
Asset Sale as set forth in this paragraph constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $10 million
or more, the Company will apply the Excess Proceeds to the repayment of the
Securities and any other Pari Passu Indebtedness outstanding with similar
provisions requiring the Company to make an offer to purchase such Indebtedness
with the proceeds from any Asset Sale as follows: (A) the Company will make an
offer to purchase (an "Offer") from all holders of the Securities in accordance
with the procedures set forth in the Indenture in the maximum principal amount
(expressed as a multiple of $1,000) of Securities that may be purchased out of
an amount (the "Security Amount") equal to the product of such Excess Proceeds
multiplied by a fraction, the numerator of which is the outstanding principal
amount of the Securities, and the denominator of which is the sum of the
outstanding principal amount of the Securities and such Pari Passu Indebtedness
(subject to proration in the event such amount is less than the aggregate
Offered Price (as defined herein) of all Securities tendered) and (B) to the
extent required by such Pari Passu Indebtedness to permanently reduce the
principal amount of such Pari Passu Indebtedness, the Company will make an offer
to purchase or otherwise repurchase or redeem Pari Passu Indebtedness (a "Pari
Passu Offer") in an amount (the "Pari Passu Debt Amount") equal to the excess of
the Excess Proceeds over the Security Amount; provided that in no event will the
Company be required to make a Pari Passu Offer in a Pari Passu Debt Amount
exceeding the principal amount of such Pari Passu Indebtedness plus the amount
of any premium required to be paid to repurchase such Pari Passu Indebtedness.
The offer price for the Securities will be payable in cash in an amount equal to
100% of the principal amount of the Securities plus accrued and unpaid interest,
if any, to the date (the "Offer Date") such Offer is consummated (the "Offered
Price"), in accordance with the procedures set forth herein. To the extent that
the aggregate Offered Price of the Securities tendered pursuant to the Offer is
less than the Security Amount relating thereto or the aggregate amount of Pari
Passu Indebtedness that is purchased in a Pari Passu Offer is less than the Pari
Passu Debt Amount, the Company will use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Securities and
Pari Passu Indebtedness surrendered by holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Securities to be purchased on a
pro rata basis. Upon the completion of the purchase of all the Securities
tendered pursuant to an Offer and the completion of a Pari Passu Offer, the
amount of Excess Proceeds, if any, shall be reset at zero.
(d) If the Company becomes obligated to make an Offer pursuant to
clause (c) above, the Securities and the Pari Passu Indebtedness shall be
purchased by the Company, at the option of the holders thereof, in whole or in
part in integral multiples of $1,000, on a date that is not earlier than 30 days
and not later than 60 days from the date the notice of the Offer is given to
holders, or such later date as may be necessary for the Company to comply with
the requirements under the Exchange Act.
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(e) The Company will comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with an Offer.
Section 1013. Limitation on Issuances of Guarantees of Indebtedness.
-----------------------------------------------------
(a) The Company will not permit any Subsidiary, directly or
indirectly, to guarantee, assume or in any other manner become liable with
respect to any Pari Passu Indebtedness or Subordinated Indebtedness of the
Company unless such Subsidiary simultaneously executes and delivers a
supplemental indenture to this Indenture providing for a Guarantee of the
Securities on the same terms as the guarantee of such Indebtedness except that
(A) such guarantee need not be secured unless required pursuant to Section 1011
and (B) if such Indebtedness is by its terms expressly subordinated to the
Securities, any such assumption, guarantee or other liability of such Subsidiary
with respect to such Indebtedness shall be subordinated to such Subsidiary's
Guarantee of the Securities at least to the same extent as such Indebtedness is
subordinated to the Securities; provided that this paragraph shall not apply to
any guarantee or assumption of liability of Indebtedness permitted under clauses
(i), (ii), (iv), (v), (vii) and (viii) of paragraph (b) of Section 1008.
(b) Notwithstanding the foregoing, any Guarantee by a Subsidiary of
the Securities shall provide by its terms that it (and all Liens securing the
same) shall be automatically and unconditionally released and discharged upon
any sale, exchange or transfer, to any Person not an Affiliate of the Company,
of all of the Company's Capital Stock in, or all or substantially all the assets
of, such Subsidiary, which transaction is in compliance with the terms of this
Indenture and pursuant to which transaction such Subsidiary is released from all
guarantees, if any, by it of other Indebtedness of the Company or any
Subsidiaries.
Section 1014. Purchase of Securities upon a Change of Control.
-----------------------------------------------
(a) If a Change of Control shall occur at any time, then each Holder
shall have the right to require that the Company purchase such Holder's
Securities in whole or in part in integral multiples of $1,000, at a purchase
price (the "Change of Control Purchase Price") in cash, in an amount equal to
101% of the principal amount of such Securities or portion thereof, plus accrued
and unpaid interest, if any, to the date of purchase (the "Change of Control
Purchase Date"), pursuant to the offer described below in this Section 1014 (the
"Change of Control Offer") and in accordance with the other procedures set forth
in subsections (b), (c), (d) and (e) of this Section 1014.
(b) Within 30 days of any Change of Control, the Company shall notify
the Trustee thereof and give written notice (a "Change of Control Purchase
Notice") of such Change of Control to each Holder by first-class mail, postage
prepaid, at his address appearing in the Security Register, stating among other
things:
(1) that a Change of Control has occurred, the date of such
event, and that such Holder has the right to require the Company to
repurchase such Holder's Securities at the Change of Control Purchase
Price;
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(2) the circumstances and relevant facts regarding such Change of
Control;
(3) that the Change of Control Offer is being made pursuant to
this Section 1014 and that all Securities properly tendered pursuant
to the Change of Control Offer will be accepted for payment at the
Change of Control Purchase Price;
(4) the Change of Control Purchase Date, which shall be a
Business Day no earlier than 30 days and not later than 60 days from
the date such notice is mailed, or such later date as is necessary to
comply with requirements under the Exchange Act;
(5) the Change of Control Purchase Price;
(6) the names and addresses of the Paying Agent and the offices
or agencies referred to in Section 1002;
(7) that Securities must be surrendered on or prior to the Change
of Control Purchase Date to the Paying Agent at the office of the
Paying Agent or to an office or agency referred to in Section 1002 to
collect payment;
(8) that the Change of Control Purchase Price for any Security
which has been properly tendered and not withdrawn will be paid
promptly following the Change of Control Offer Purchase Date;
(9) the procedures that a Holder must follow to accept a Change
of Control Offer or to withdraw such acceptance;
(10) that any Security not tendered will continue to accrue
interest; and
(11) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Securities accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Purchase Date.
(c) Upon receipt by the Company of the proper tender of Securities,
the Holder of the Security in respect of which such proper tender was made shall
(unless the tender of such Security is properly withdrawn) thereafter be
entitled to receive solely the Change of Control Purchase Price with respect to
such Security. Upon surrender of any such Security for purchase in accordance
with the foregoing provisions, such Security shall be paid by the Company at the
Change of Control Purchase Price; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Change of Control Purchase
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Regular Record Dates
according to the terms and the provisions of Section 309. If any Security
tendered for purchase in accordance with the provisions of this Section
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1014 shall not be so paid upon surrender thereof, the principal thereof (and
premium, if any, thereon) shall, until paid, bear interest from the Change of
Control Purchase Date at the rate borne by such Security. Holders electing to
have Securities purchased will be required to surrender such Securities to the
Paying Agent at the address specified in the Change of Control Purchase Notice
prior to 5:00 p.m. (New York time) at least one Business Day prior to the Change
of Control Purchase Date. Any Security that is to be purchased only in part
shall be surrendered to a Paying Agent at the office of such Paying Agent (with,
if the Company, the Security Registrar or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Security Registrar or the Trustee, as the case may be, duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing), and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge to the Holder,
one or more new Securities of any authorized denomination as requested by such
Holder in an aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Security so surrendered that is not
purchased.
(d) The Company shall (i) not later than the Change of Control
Purchase Date, accept for payment Securities or portions thereof tendered
pursuant to the Change of Control Offer, (ii) not later than 12:00 a.m. (New
York time) on the Change of Control Purchase Date, deposit with the Trustee or
with a Paying Agent an amount of money in same day funds (or New York Clearing
House funds if such deposit is made prior to the Change of Control Purchase
Date) sufficient to pay the aggregate Change of Control Purchase Price of all
the Securities or portions thereof which are to be purchased as of the Change of
Control Purchase Date and (iii) not later than 12:00 a.m. (New York time) on the
Change of Control Purchase Date, deliver to the Paying Agent an Officers'
Certificate stating the aggregate principal amount of Securities or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail or
deliver to Holders of Securities so accepted payment in an amount equal to the
Change of Control Purchase Price of the Securities purchased from each such
Holder, and the Company shall execute and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Security equal in
principal amount to any unpurchased portion of the Security surrendered. Any
Securities not so accepted shall be promptly mailed or delivered by the Paying
Agent at the Company's expense to the Holder thereof. The Company will publicly
announce the results of the Change of Control Offer on the Change of Control
Purchase Date. For purposes of this Section 1014, the Company shall choose a
Paying Agent which shall not be the Company.
(e) A tender made in response to a Change of Control Purchase Notice
may be withdrawn if the Company or its agent receives, not later than 5:00 p.m.
(New York time) one Business Day prior to the Change of Control Purchase Date, a
signed letter, delivered to the address specified in the change of Control
Purchase Notice specifying, as applicable:
(1) the name of the Holder;
(2) the certificate number of the Security in respect of which
such notice of withdrawal is being submitted;
(3) the principal amount of the Security (which shall be $1,000
or an
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integral multiple thereof) delivered for purchase by the Holder as to
which such notice of withdrawal is being submitted;
(4) a statement that such Holder is withdrawing his election to
have such principal amount of such Security purchased; and
(5) the principal amount, if any, of such Security (which shall
be $1,000 or an integral multiple thereof) that remains subject to the
original Change of Control Purchase Notice and that has been or will
be delivered for purchase by the Company.
(f) Subject to applicable escheat laws, the Trustee and the Paying
Agent shall return to the Company any cash that remains unclaimed, together with
interest or dividends, if any, thereon, held by them for the payment of the
Change of Control Purchase Price; provided, however, that, (x) to the extent
that the aggregate amount of cash deposited by the Company pursuant to clause
(ii) of paragraph (d) above exceeds the aggregate Change of Control Purchase
Price of the Securities or portions thereof to be purchased, then the Trustee
shall hold such excess for the Company and (y) unless otherwise directed by the
Company in writing, promptly after the Business Day following the Change of
Control Purchase Date the Trustee shall return any such excess to the Company
together with interest, if any, thereon.
(g) The Company shall comply, to the extent applicable, with the
applicable tender offer rules, including Rule 14e-1 under the Exchange Act, and
any other applicable securities laws or regulations in connection with a Change
of Control Offer.
(h) Notwithstanding the foregoing, the Company will not be required
to make a Change of Control Offer 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 Indenture applicable to a Change of Control Offer
made by the Company and purchases all the Securities validly tendered and not
withdrawn under such Change of Control Offer.
Section 1015. Limitation on Sale and Leaseback Transactions.
---------------------------------------------
The Company will not, and will not permit any Subsidiary of the
Company to, directly or indirectly, enter into any Sale and Leaseback
Transaction with respect to any property or assets (whether now owned or
hereafter acquired), unless (i) the sale or transfer of such property or assets
to be leased is treated as an Asset Sale and complies with the provisions of
Section 1012 and (ii) the Company or such Subsidiary would be entitled under
Section 1008 to incur any Indebtedness (with the lease obligations being treated
as Indebtedness for purposes of ascertaining compliance with this covenant
unless such lease is properly classified as an operating lease under GAAP) in
respect of such Sale and Leaseback Transaction.
Section 1016. Limitation on Subsidiary Capital Stock.
---------------------------------------
The Company will not permit (a) any Subsidiary of the Company to issue
any Capital Stock, except for (i) Capital Stock issued or sold to, held by or
transferred to the
100
Company or a Wholly Owned Subsidiary, and (ii) Capital Stock issued by a Person
prior to the time (A) such Person becomes a Subsidiary, (B) such Person merges
with or into a Subsidiary or (C) a Subsidiary merges with or into such Person;
provided that such Capital Stock was not issued or incurred by such Person in
anticipation of the type of transaction contemplated by subclause (A), (B) or
(C) or (b) any Person (other than the Company or a Wholly Owned Subsidiary) to
acquire Capital Stock of any Subsidiary from the Company or any Subsidiary,
except, in the case of clause (a) or (b), (1) upon the acquisition of all the
outstanding Capital Stock of such Subsidiary in accordance with the terms
hereof, (2) if, immediately after giving effect to such issuance or sale, such
Subsidiary would no longer constitute a Subsidiary, and any Investment in such
Person remaining after giving effect to such issuance or sale would have been
permitted to be made under the provisions of Section 1009 if made on the date of
such issuance or sale, (3) issuances of director's qualifying shares, or sales
to foreign nationals of shares of Capital Stock of foreign Subsidiaries, to the
extent required by applicable law, (4) issuances or sales of common stock of a
Subsidiary, provided that the Company or such Subsidiary applies the Net Cash
Proceeds, if any, in accordance with the provisions of this Indenture to the
extent applicable, (5) issuances after which the Company maintains its direct or
indirect percentage of beneficial and economic ownership of such Subsidiary, or
(6) issuances in connection with Acquisitions for the primary purpose of
minimizing tax liability to the Company, any of its Subsidiaries, the Acquired
Person or any shareholders of the Acquired Person.
Section 1017. Limitation on Dividends and Other Payment Restrictions
------------------------------------------------------
Affecting Subsidiaries.
----------------------
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create any consensual encumbrance or restriction on the
ability of any Subsidiary to (i) pay dividends or make any other distribution on
its Capital Stock, (ii) pay any Indebtedness owed to the Company or any other
Subsidiary, (iii) make any Investment in the Company or any other Subsidiary or
(iv) transfer any of its properties or assets to the Company or any other
Subsidiary, except for: (a) any encumbrance or restriction, with respect to a
Subsidiary that is not a Subsidiary of the Company on the date of the Indenture,
in existence at the time such Person becomes a Subsidiary of the Company and not
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary; (b) encumbrances or restrictions (I) by reason of applicable law, or
(II) under this Indenture; (c) customary non-assignment provisions of any
contract or lease of any Subsidiary entered into in the ordinary course of
business; (d) encumbrances or restrictions imposed pursuant to contracts entered
into in connection with Permitted Liens, but solely to the extent such
encumbrances or restrictions affect property or assets subject to such Permitted
Lien; (e) any encumbrance or restriction imposed pursuant to contracts for the
sale of assets with respect to the assets to be sold pursuant to such contract;
and (f) any encumbrance or restriction existing under any agreement that
extends, renews, refinances or replaces the agreements containing the
encumbrances or restrictions in the foregoing clauses (a) through (e), or in
this clause (f), provided that the terms and conditions of any such encumbrances
or restrictions are no more restrictive in any material respect than those under
or pursuant to the agreement evidencing the Indebtedness so extended, renewed,
refinanced or replaced.
101
Section 1018. Limitations on Unrestricted Subsidiaries.
----------------------------------------
The Company will not make, and will not permit its Subsidiaries to
make, any Investment in Unrestricted Subsidiaries if, at the time thereof, the
aggregate amount of such Investments would exceed the amount of Restricted
Payments then permitted to be made pursuant to Section 1009. Any Investments in
Unrestricted Subsidiaries permitted to be made pursuant to this covenant will be
treated as a Restricted Payment in calculating the amount of Restricted Payments
made by the Company.
Section 1019. Provision of Financial Statements.
---------------------------------
After the earlier to occur of the consummation of the Exchange Offer
and the 150th calendar day following the date of original issue of the
Securities, whether or not the Company is subject to Section 13(a) or 15(d) of
the Exchange Act, the Company will, to the extent permitted under the Exchange
Act, file with the Commission the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to Sections 13(a) or 15(d) if the Company were so subject, such
documents to be filed with the Commission on or prior to the date (the "Required
Filing Date") by which the Company would have been required so to file such
documents if the Company were so subject. The Company will also in any event
(x) within 15 days of each Required Filing Date (i) transmit by mail to all
Holders, as their names and addresses appear in the Security Register, without
cost to such Holders and (ii) file with the Trustee copies of the annual
reports, quarterly reports and other documents which the Company would have been
required to file with the Commission pursuant to Sections 13(a) or 15(d) of the
Exchange Act if the Company were subject to either of such Sections and (y) if
filing such documents by the Company with the Commission is not permitted under
the Exchange Act, promptly upon written request and payment of the reasonable
cost of duplication and delivery, supply copies of such documents to any
prospective Holder at the Company's cost. If any Guarantor's financial
statements would be required to be included in the financial statements filed or
delivered pursuant to this Indenture if the Company were subject to Section
13(a) or 15(d) of the Exchange Act, the Company shall include such Guarantor's
financial statements in any filing or delivery pursuant to the Indenture. In
addition, so long as any of the Securities remain outstanding, the Company will
make available to any prospective purchaser of Securities or beneficial owner of
Securities in connection with any sale thereof the information required by Rule
144A(d)(4) under the Securities Act, until such time as the Company has either
exchanged the Securities for securities identical in all material respects which
have been registered under the Securities Act or until such time as the Holders
thereof have disposed of such Securities pursuant to an effective registration
statement under the Securities Act.
Section 1020. Statement by Officers as to Default.
-----------------------------------
(a) The Company will deliver to the Trustee, on or before a date not
more than 120 days after the end of each fiscal year of the Company ending
after the date hereof, and 60 days after the end of each fiscal quarter ending
after the date hereof, a written statement signed by the principal executive
officer, principal financial officer or principal accounting officer of the
Company in his/her capacity as an officer of the Company, as to compliance
102
herewith, including whether or not, after a review of the activities of the
Company during such year and of the Company's and each Guarantor's performance
under this Indenture, to the best knowledge, based on such review, of the
signers thereof, the Company and each Guarantor have fulfilled all of their
respective obligations and are in compliance with all conditions and covenants
under this Indenture throughout such year and, if there has been a Default
specifying each Default and the nature and status thereof and any actions being
taken by the Company with respect thereto.
(b) When any Default or Event of Default has occurred and is
continuing, or if the Trustee or any Holder or the trustee for or the holder of
any other evidence of Indebtedness of the Company or any Subsidiary gives any
notice or takes any other action with respect to a claimed default, the Company
shall deliver to the Trustee by registered or certified mail or facsimile
transmission followed by an originally executed copy of an Officers' Certificate
specifying such Default, Event of Default, notice or other action, the status
thereof and what actions the Company is taking or proposes to take with respect
thereto, within five Business Days after the occurrence of such Default or Event
of Default.
Section 1021. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1006 through 1011, 1012(a), 1013 and
1015 through 1020, if, before or after the time for such compliance, the Holders
of not less than a majority in aggregate principal amount of the Securities at
the time Outstanding shall, by Act of such Holders, waive such compliance in
such instance with such covenant or provision, but no such waiver shall extend
to or affect such covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect.
Section 1022. Limitation on Business.
----------------------
The Company will not, and will not permit any of the Subsidiaries to,
engage in a business which is not substantially a Telecommunications Business.
Section 1023. Deposit of Funds with Escrow Agent.
----------------------------------
(a) On the Issue Date, the Company shall deposit with the Escrow Agent
funds that together with the proceeds from the investment thereof will be
sufficient to pay the first six scheduled interest payments on the Securities
(excluding any Additional Interest). All Collateral shall be held in the Escrow
Account until permitted to be disbursed pursuant to the Escrow Agreement and
then shall be disbursed strictly in accordance with the terms thereof.
(b) Pending release of the Escrow Funds as provided in the Escrow
Agreement, the Escrow Funds will be invested in U.S. Government Securities as
specifically directed in writing by the Company. Any interest or other profit
resulting from such investment will be deposited in the Escrow Account.
103
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption.
--------------------
(a) The Securities are subject to redemption at any time on or after
December 15, 2002, at the option of the Company, in whole or in part, subject to
the conditions, and at the Redemption Prices, specified in the form of Security,
together with accrued and unpaid interest, if any, to the Redemption Date
(subject to the right of Holders of record on relevant Regular Record Dates and
Special Record Dates to receive interest due on relevant Interest Payment Dates
and Special Payment Dates).
(b) In addition, at any time prior to December 15, 2000, the Company
may, at its option, use the net proceeds of one or more Public Equity Offering
or the sale of Common Stock (other than Disqualified Stock) of the Company to a
Strategic Investor in a single transaction or in a series of related
transactions, to redeem up to an aggregate of 35% of the aggregate principal
amount of Securities originally issued under this Indenture at a redemption
price equal to 112 3/4% of the of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the Redemption Date; provided that at least
65% aggregate principal amount of Securities remains outstanding immediately
after the occurrence of such redemption. In order to effect the foregoing
redemption, the Company must mail a notice of redemption no later than 45 days
after the closing of the related Public Equity Offering and must consummate such
redemption within 60 days of the closing of the Public Equity Offering.
Section 1102. Applicability of Article.
------------------------
Redemption of Securities at the election of the Company or otherwise,
as permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article Eleven.
Section 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Company Order and an Officers' Certificate.
In case of any redemption at the election of the Company, the Company shall, not
less than 45 and not more than 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice period shall be satisfactory to the Trustee),
notify the Trustee in writing of such Redemption Date and of the principal
amount of Securities to be redeemed.
Section 1104. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed shall be selected not more than 30
days prior to the Redemption Date. The Trustee shall select the Securities or
portions thereof to be redeemed pro rata, by lot or by any other method the
Trustee shall deem fair and reasonable. The amounts to be redeemed
104
shall be equal to $1,000 or any integral multiple thereof.
The Trustee shall promptly notify the Company and the Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
Section 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at its address
appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed, the
identification of the particular Securities to be redeemed;
(d) in the case of a Security to be redeemed in part, the principal
amount of such Security to be redeemed and that after the Redemption Date upon
surrender of such Security, new Security or Securities in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(e) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security or portion thereof to be redeemed, and that
(unless the Company shall default in payment of the Redemption Price) interest
thereon shall cease to accrue on and after said date;
(g) the names and addresses of the Paying Agent and the offices or
agencies referred to in Section 1002 where such Securities are to be surrendered
for payment of the Redemption Price;
(h) the CUSIP number, if any, relating to such Securities; and
(i) the procedures that a Holder must follow to surrender the
Securities to be
105
redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name and at the expense of the Company. If the Company
elects to give notice of redemption, it shall provide the Trustee with a
certificate stating that such notice has been given in compliance with the
requirements of this Section 1105.
The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security.
Section 1106. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company or any of its Affiliates is
acting as Paying Agent, segregate and hold in trust as provided in Section 1003)
an amount of money in same day funds sufficient to pay the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date or Special
Payment Date) accrued interest on, all the Securities or portions thereof which
are to be redeemed on that date. The Paying Agent shall promptly mail or
deliver to Holders of Securities so redeemed payment in an amount equal to the
Redemption Price of the Securities purchased from each such Holder. All money,
if any, earned on funds held in trust by the Trustee or any Paying Agent prior
to the Redemption Date shall be remitted to the Company. For purposes of this
Section 1106, the Company shall choose a Paying Agent which shall not be the
Company.
Section 1107. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Holders will be required
to surrender the Securities to be redeemed to the Paying Agent at the address
specified in the notice of redemption at least one Business Day prior to the
Redemption Date. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price together with accrued interest to the Redemption Date;
provided, however, that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such on the relevant
Regular Record Dates and Special Record Dates according to the terms and the
provisions of Section 309.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate borne by such
Security.
106
Section 1108. Securities Redeemed or Purchased in Part.
----------------------------------------
Any Security which is to be redeemed or purchased only in part shall
be surrendered to the Paying Agent at the office or agency maintained for such
purpose pursuant to Section 1002 (with, if the Company, the Security Registrar
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company, the Security Registrar or the
Trustee, as the case may be, duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing), and the Company shall execute,
and the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed or purchased.
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 1201. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall be discharged and shall cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
Securities as expressly provided for herein) as to all Outstanding Securities
hereunder, and the Trustee, upon Company Request and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
(1) all the Securities theretofore authenticated and delivered
(other than (i) lost, stolen or destroyed Securities which have been
replaced or paid as provided in Section 308 or (ii) all Securities
whose payment has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(2) all such Securities not theretofore delivered to the Trustee
for cancellation (i) have become due and payable, (ii) will become due
and payable at their Stated Maturity within one year or (iii) are to
be called for redemption within one year under arrangements reasonably
satisfactory to the Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of the Company; and the
Company or any Guarantor has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust an amount in United
States dollars sufficient to pay and discharge the entire Indebtedness
on the Securities not theretofore delivered to the Trustee for
cancellation, including the principal of, premium, if any, and accrued
interest on, such Securities at such Maturity, Stated Maturity or
Redemption Date;
107
(b) the Company or any Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company and any Guarantor; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Independent Counsel, in form and substance reasonably
satisfactory to the Trustee, each stating that (i) all conditions precedent
herein relating to the satisfaction and discharge hereof have been complied with
and (ii) such satisfaction and discharge will not result in a breach or
violation of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Company, any Guarantor or any
Subsidiary is a party or by which the Company, any Guarantor or any Subsidiary
is bound.
Notwithstanding the satisfaction and discharge hereof, the obligations
of the Company to the Trustee under Section 606 and, if United States dollars
shall have been deposited with the Trustee pursuant to subclause (2) of
subsection (a) of this Section 1201, the obligations of the Trustee under
Section 1202 and the last paragraph of Section 1003 shall survive.
Section 1202. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
United States dollars deposited with the Trustee pursuant to Section 1201 shall
be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal of,
premium, if any, and interest on, the Securities for whose payment such United
States dollars have been deposited with the Trustee.
ARTICLE THIRTEEN
COLLATERAL AND SECURITY
Section 1301. Escrow Agreement.
----------------
The due and punctual payment of the first six scheduled interest
payments on the Securities and Additional Interest, if any, when and as the same
shall be due and payable on an Interest Payment Date or by acceleration shall be
secured as provided in the Escrow Agreement which the Company and the Trustee
have entered into simultaneously with the execution of this Indenture. Upon the
acceleration of the Maturity of the Securities prior to the payment in full of
the first six scheduled interest payments, the Trustee shall foreclosure upon
the Collateral. Each Holder of Securities, by its acceptance thereof, consents
and agrees to the terms of the Escrow Agreement (including, without limitation,
the provisions providing for foreclosure and disbursement of Collateral) as the
same may be in effect or may be amended from time to time in accordance with its
terms and the terms hereof and authorizes and directs the Escrow Agent and the
Trustee to enter into the Escrow Agreement and to perform its obligations and
exercise its rights thereunder in accordance therewith. The Company shall
deliver to the Trustee copies of the
108
Escrow Agreement, and shall do or cause to be done all such acts and things as
may be necessary or proper, or as may be required by the provisions of the
Escrow Agreement, to assure and confirm to the Trustee the security interest in
the Collateral contemplated by the Escrow Agreement or any part thereof, as from
time to time constituted, so as to render the same available for the security
and benefit of this Indenture with respect to, and of, the Securities, according
to the intent and purposes expressed in the Escrow Agreement. The Company shall
take any and all actions reasonably required to cause the Escrow Agreement to
create and maintain (to the extent possible under applicable law), as security
for the obligations of the Company hereunder, a first priority and exclusive
security interest in and on all the Collateral, in favor of the Trustee for the
benefit of the Holders of Securities, superior to and prior to the rights of all
third Persons and subject to no other Liens. The Trustee shall have no
responsibility for perfecting or maintaining the perfection of the Trustee's
security interest in the Collateral or for filing any instrument, document or
notice in any public office at any time or times.
Section 1302. Recording and Opinions.
----------------------
(a) The Company shall furnish to the Trustee simultaneously with the
execution and delivery of this Indenture an Opinion of Counsel either (i)
stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, financing
statements or other instruments necessary to make effective the security
interest intended to be created by the Escrow Agreement and reciting the details
of such action, or (ii) stating that in the opinion of such counsel no such
action is necessary to make such security interest effective.
(b) The Company shall furnish to the Trustee on each anniversary of
the Issue Date (upon receipt of written notice from Escrow Agent) until the date
upon which the balance of Escrow Funds shall have been reduced to zero, an
Opinion of Counsel, dated as of such date, complying in all respects with
Section 314(b) of the Trust Indenture Act.
Section 1303. Release of Collateral.
---------------------
(a) Subject to subsections (b), (c) and (d) of this Section 1303, the
Collateral may be released from the security interest created by the Escrow
Agreement only in accordance with the provisions of the Escrow Agreement.
(b) Except to the extent that any security interest on proceeds of
Collateral is automatically released by operation of Section 9-306 of the
Uniform Commercial Code or other similar law, no Collateral shall be released
from the security interest created by the Escrow Agreement pursuant to the
provisions of the Escrow Agreement, other than to the Holders pursuant to the
terms thereof.
(c) At any time when an Event of Default shall have occurred and be
continuing and the Maturity of the Securities shall have been accelerated
(whether by declaration or otherwise), no Collateral shall be released pursuant
to the provisions of the Escrow Agreement, and no release of Collateral in
contravention of this Section 1303(c) shall be effective as against the Holders
of Securities, except for the disbursement of all Escrow Funds
109
(as defined in the Escrow Agreement) and other Collateral to the Trustee
pursuant to Section 6(c) of the Escrow Agreement.
(d) To the extent applicable, the Company shall cause Section 314(d)
of the Trust Indenture Act, relating to the release of property or securities
from the security interest of the Escrow Agreement, to be complied with.
Section 1304. Authorization of Actions to Be Taken by the Trustee
---------------------------------------------------
Under the Escrow Agreement.
--------------------------
Subject to the provisions of Section 601 and Section 603, the Trustee
may, without the consent of the Holders of Securities, on behalf of the Holders
of Securities, take all actions it deems necessary or appropriate in order to
(a) enforce any of the terms of the Escrow Agreement and (b) collect and receive
any and all amounts payable in respect of the obligations of the Company
hereunder. The Trustee shall have power to institute and maintain such suits
and proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts that may be unlawful or in violation of the Escrow
Agreement 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
Holders of Securities 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 enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of the Holders of Securities or of the Trustee).
Section 1305. Authorization of Receipt of Funds by the Trustee Under
------------------------------------------------------
the Escrow Agreement.
--------------------
The Trustee is authorized to receive any funds for the benefit of the
Holders of Securities disbursed under the Escrow Agreement, and to make further
distributions of such funds to the Holders of Securities according to the
provisions of this Indenture.
Section 1306. Termination of Security Interest.
--------------------------------
Upon the earliest to occur of (i) the date upon which the balance of
Escrow Funds and other Collateral shall have been reduced to zero, (ii) the
payment of the first six scheduled interest payments on the Securities, (iii)
legal defeasance of all Outstanding Securities pursuant to Section 402 and (iv)
covenant defeasance of all Outstanding Securities pursuant to Section 403, the
Trustee shall, at the written request of the Company, release the security
interest in the Collateral pursuant to this Indenture and the Escrow Agreement
upon the Company's compliance with the provisions of the Trust Indenture Act
pertaining to release of collateral.
* * *
110
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, all as of the day and year first above written.
CONCENTRIC NETWORK CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
____________________________________
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
Attest:____________________
Name:______________________
Title:_____________________
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
By: /s/ Chase Manhattan Bank and Trust Company,
National Association
____________________________________________
Name:__________________________________________
Title:_________________________________________
111
STATE OF ________________________)
) ss.:
COUNTY OF _____________________)
On the _____ day of _______, 1997, before me personally came ___________, to me
known, who, being by me duly sworn, did depose and say that he resides at
_________________________; that he is ___________________ of __________________,
a corporation described in and which executed the foregoing instrument; and that
he signed his name thereto pursuant to authority of the Board of Directors of
such corporation.
(NOTARIAL
SEAL)
_______________
STATE OF ________________________ )
) ss.:
COUNTY OF _______________________ )
On the _____ day of ______, 1997, before me personally came
___________, to me known, who, being by me duly sworn, did depose and say that
he resides at _________________________; that he is ___________________ of
__________________, a corporation described in and which executed the foregoing
instrument; and that he signed his name thereto pursuant to authority of the
Board of Directors of such corporation.
(NOTARIAL
SEAL)
______________
EXHIBIT A
REGULATION S CERTIFICATE
(For transfers pursuant to (S) 307(a)(i) of the Indenture)
Chase Manhattan Bank and Trust Company,
National Association
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Re: 12 3/4% Senior Notes due 2007 of Concentric Network Corporation
-----------
(the "Securities")
----------------------
Reference is made to the Indenture, dated as of December 18, 1997 (the
"Indenture"), among Concentric Network Corporation (the "Company") and Chase
Manhattan Bank and Trust Company, National Association, as Trustee. Terms used
herein and defined in the Indenture or in Regulation S or Rule 144 under the
U.S. Securities Act of 1933 (the "Securities Act") are used herein as so
defined.
This certificate relates to US$____________ principal amount of Securities,
which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
The Specified Securities are represented by a Global Security and are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner.
The Owner has requested that the Specified Securities be transferred to a
person (the "Transferee") who will take delivery in the form of a Regulation S
Global Security. In connection with such transfer, the Owner hereby certifies
that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 904 or Rule 144 under the Securities Act and with all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:
-1-
(1) Rule 904 Transfers. If the transfer is being effected in
------------------
accordance with Rule 904:
(A) the Owner is not a distributor of the Specified
Securities, an affiliate of the Company or any such distributor
or a person acting on behalf of any of the foregoing;
(B) the offer of the Specified Securities was not made to a
person in the United States;
(C) either:
(i) at the time the buy order was originated, the
Transferee was outside the United States or the Owner and
any person acting on its behalf reasonably believed that the
Transferee was outside the United States, or
(ii) the transaction is being executed in, on or
through the facilities of the Eurobond market, as regulated
by the Association of International Bond Dealers, or another
designated offshore securities market described in Section
902(a) of Regulation S and neither the Owner nor any person
acting on its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the
United States by or on behalf of the Owner or any affiliate
thereof;
(E) if the Owner is a dealer in securities, as defined in
Section 2(12) of the Securities Act, or has received a selling
concession, fee or other remuneration in respect of the Specified
Securities, and the transfer is to occur during the restricted
period, then:
(i) neither the Owner nor any person acting on behalf
of the Owner knows that the Transferee of the Specified
Securities is a U.S. person; and
(ii) if the Owner or any person acting on the Owner's
behalf knows that the Tranferee is a dealer, as defined in
Section 2(12) of the Securities Act, or is a person
receiving a selling concession, fee or other remuneration in
respect of the Specified Securities, the
-2-
Owner or a person acting on the Owner's behalf has sent to
the Transferee a confirmation or other notice stating that
the Specified Securities may be offered and sold during the
Restricted Period only; (x) in accordance with Regulation S;
(y) pursuant to registration of the Specified Securities
under the Securities Act; or (z) pursuant to an available
exemption from the registration requirements of the
Securities Act; and
(F) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected
------------------
pursuant to Rule 144:
(A) the transfer is occurring after a holding period of at
least one year (computed in accordance with paragraph (d) of Rule
144) has elapsed since the Specified Securities were last
acquired from the Company or from an affiliate of the Company,
whichever is later, and is being effected in accordance with the
applicable amount, manner of sale and notice requirements of Rule
144; or
(B) the transfer is occurring after a holding period of at
least two years has elapsed since the Specified Securities were
last acquired from the Company or from an affiliate of the
Company, whichever is later, and the Owner is not, and during the
preceding three months has not been, an affiliate of the Company.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Purchasers.
Dated: __________________
(Print the name of the Undersigned, as such term
is defined in the third paragraph of this
certificate.)
By:_______________________________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership
or fiduciary, the title of the person signing on
behalf of
-3-
the Undersigned must be stated.)
-4-
EXHIBIT B
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to (S) 307(a)(ii) of the Indenture)
Chase Manhattan Bank and Trust Company,
National Association
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Re: 12 3/4% Senior Notes due 2007 of Concentric Network
Corporation (the "Securities")
----------------------------------------------
Reference is made to the Indenture, dated as of December 18, 1997 (the
"Indenture"), among Concentric Network Corporation (the "Company") and Chase
Manhattan Bank and Trust Company, National Association, as Trustee. Terms used
herein and defined in the Indenture or in Rule 144A or Rule 144 under the U.S.
Securities Act of 1933 (the "Securities Act") are used herein as so defined.
This certificate relates to US$_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
ISIN No(s). If any. ____________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so.
Such beneficial owner or owners are referred to herein collectively as the
"Owner". The Specified Securities are represented by a Global Security and are
held through the Depositary or an Agent Member in the name of the Undersigned,
as or on behalf of the Owner.
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
Restricted Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance
-1-
with Rule 144A or Rule 144 under the Securities Act and all applicable
securities laws of the states of the United States and other jurisdictions.
Accordingly, the Owner hereby further certifies as follows:
(1) Rule 144A Transfers. If the transfer is being effected in
-------------------
accordance with Rule 144A:
(A) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably believe
is a "qualified institutional buyer" within the meaning of Rule 144A,
acquiring for its own account or for the account of a qualified
institutional buyer; and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner
may be relying on Rule 144A in connection with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected pursuant to
------------------
Rule 144:
(A) the transfer is occurring after a holding period of at least
one year (computed in accordance with paragraph (d) of Rule 144) has
elapsed since the Specified Securities were last acquired from the
Company or from an affiliate of the Company, whichever is later, and
is being effected in accordance with the applicable amount, manner of
sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at least
two years has elapsed since the Specified Securities were last
acquired from the Company or from an affiliate of the Company,
whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
-2-
Dated: ____________________
(Print the name of the Undersigned, as such term is
defined in the third paragraph of this certificate.)
By:_____________________________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf of
the Undersigned must be stated.)
-3-
EXHIBIT C
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to (S) 307(b))
Chase Manhattan Bank and Trust Company,
National Association
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Re: 12 3/4% Senior Notes due 2007 of Concentric Network
Corporation (the "Securities")
-----------------------------------------------
Reference is made to the Indenture, dated as of December 18, 1997 (the
"Indenture"), among Concentric Network Corporation (the "Company") and Chase
Manhattan Bank and Trust Company, National Association, as Trustee. Terms used
herein and defined in the Indenture or in Rule 144 under the U.S. Securities Act
of 1933 (the "Securities Act") are used herein as so defined.
This certificate relates to US$_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). __________________________
CERTIFICATE No(s). ____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so.
Such beneficial owner or owners are referred to herein collectively as the
"Owner". If the Specified Securities are represented by a Global Security, they
are held through the Depositary or an Agent Member in the name of the
Undersigned, as or on behalf of the Owner. If the Specified Securities are not
represented by a Global Security, they are registered in the name of the
Undersigned, as or on behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged for
Securities bearing no Private Placement Legend pursuant to Section 307(b) of the
Indenture. In connection with such exchange, the Owner hereby certifies that
the exchange is occurring after a holding period of at least two years (computed
in accordance with paragraph (d) of Rule 144) has elapsed
-1-
since the Specified Securities were last acquired from the Company or from an
affiliate of the Company, whichever is later, and the Owner is not, and during
the preceding three months has not been, an affiliate of the Company. The Owner
also acknowledge edges that any future transfers of the Specified Securities
must comply with all applicable securities laws of the states of the United
States and other jurisdictions.
-2-
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated: _________________
(Print the name of the Undersigned, as such term is
defined in the third paragraph of this certificate.)
By:____________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf of
the Undersigned must be stated.)
-3-
APPENDIX I
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
_____________________________
__________________________________________________________________________
__________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
__________________________________________________________________________
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
__________________________________________________________________________
attorney to transfer such Security on the books of the Company with full power
of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES FOR SERIES A SECURITIES
EXCEPT PERMANENT OFFSHORE PHYSICAL
CERTIFICATES]
In connection with any transfer of this Security occurring prior to the
date which is the earlier of the date of an effective Registration Statement or
December 18, 1999, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
[_] (a) this Security is being transferred in compliance with the exemption
from registration
under the Securities Act of 1933, as amended, provided by Rule 144A
thereunder.
or
--
[_] (b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Security
Registrar shall not be obligated to register this Security in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 307 of the Indenture
shall have been satisfied.
Date: _________________
_______________________________________
NOTICE: The signature to this assignment
must correspond with the name as written upon
the face of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
Signature Guarantee: ________________________
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15]
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, 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.
-2-
Dated:________________________________________________________________
NOTICE: To be executed by an authorized signatory
-3-
APPENDIX II
FORM OF TRANSFEREE CERTIFICATE
I or we assign and transfer this Security to:
--------------------------------------------
Please insert social security or other identifying number of assignee
---------------------------------------------------------------------
_____________________________________________________________________________
_____________________________________________________________________________
Print or type name, address and zip code of assignee and irrevocably
appoint________________________________________________________________
[Agent], to transfer this Security on the books of the Company. The Agent may
substitute another to act for him.
Dated ____________________ Signed _________________________
(Sign exactly as name appears on the other side of this Security)
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17 Ad-15]
