EXECUTION COPY
================================================================================
FLAG LIMITED,
as Issuer
and
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY,
as Trustee
------------------------------------
INDENTURE
Dated as of January 30, 1998
------------------------------------
8 1/4% Senior Notes due 2008
================================================================================
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT
OF 1939 AND INDENTURE, DATED AS OF JANUARY 30, 1998*/
TRUST INDENTURE INDENTURE SECTION
ACT SECTION
ss.310(a)(1) ................................................ 608
(a)(2) ................................................ 608
(b) ................................................ 609
ss.312(a) ................................................ 701
(c) ................................................ 702
ss.313(a) ................................................ 703
(c) ................................................ 703
ss.314(a)(4) ................................................ 1010(a)
(c)(1) ................................................ 102
(c)(2) ................................................ 102
(e) ................................................ 102
ss.315(a) ................................................ 601(a)
(b) ................................................ 602
(c) ................................................ 601(b)
(d) ................................................ 601(c), 603
ss.316(a)(1)(A) ................................................ 502, 512
(a)(1)(B) ................................................ 513
(b) ................................................ 508
(c) ................................................ 104(d)
ss.317(a)(1) ................................................ 503
(a)(2) ................................................ 504
(b) ................................................ 1003
ss.318(a) ................................................ 111
----------
*/ Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
TABLE OF CONTENTS**/
Page
----
{{ Table of Contents will generate here }}
EXHIBITS
Exhibit Form of Supplemental Indenture To Be Delivered by Guarantors
----------
**/ Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
i
INDENTURE, dated as of January 30,1998, between FLAG LIMITED,
a Bermuda company (the "Company"), having its principal office at ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, 12 Par-la-Ville Road, ▇▇▇▇▇▇▇▇ HMO8 Bermuda, and IBJ ▇▇▇▇▇▇▇▇
BANK & TRUST COMPANY, a New York banking corporation, as trustee (the
"Trustee"), having its corporate trust office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇.
RECITALS OF THE COMPANY
The Company has duly authorized the creation of and issuance
of (i) the Company's 8 1/4% Senior Notes due 2008 (the "Senior Notes" or the
"Initial Notes") and (ii) if and when issued in exchange for Senior Notes as
provided in the Registration Agreement, the Company's 8 1/4% Senior Notes due
2008 (the "Exchange Notes") (collectively, the Senior Notes and the Exchange
Notes are referred to herein as the "Notes"), 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.
Upon the issuance of the Exchange Notes, if any, or the
effectiveness of the Shelf Registration Statement (as defined herein), this
Indenture will be subject to, and shall be governed by, the provisions of the
TIA, that are required or deemed to be part of and to govern indentures
qualified thereunder.
All things necessary have been done to make the Notes, when
executed and duly issued by the Company and authenticated and delivered
hereunder by the Trustee, the valid obligations of the Company and to make this
Indenture a valid agreement of the Company in accordance with their and its
terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Notes by the Holders (as defined herein) thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the Notes,
as follows:
ARTICLE 1. 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 words in the singular include the plural
as well as the singular, and words in the plural include the singular as well as
the plural;
(b) all other terms used herein which are defined in the TIA,
either directly or by reference therein, or defined by Commission rule and not
otherwise defined herein have the meanings assigned to them therein, and the
terms "cash transaction" and "self-liquidating paper", as used in TIA Section
311, have the meanings assigned to them in the rules of the Commission adopted
under the TIA;
(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 to this Indenture as a whole and not to any particular
Article, Section or other subdivisions
(e) the word "or" is not exclusive; and
(f) provisions of this Indenture apply to successive events
and transactions.
Certain terms, used principally in Articles Two, Ten, Eleven
and Twelve are defined those Articles.
"ACT", when used with respect to any Holder, shall have the
meaning assigned thereto Section 104.
"ADDITIONAL AMOUNTS" shall have the meaning assigned thereto
in Section 1022.
"ADDITIONAL ASSETS" means (i) any property or assets (other
than Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or a Restricted Subsidiary of the Company; or (iii) Capital
Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary of the Company; PROVIDED, HOWEVER, that in the case of
clauses (ii) and (iii), such Restricted Subsidiary is primarily engaged in a
Related Business.
"AFFILIATE"of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AGENT MEMBERS" shall have the meaning assigned thereto in
Section 306.
"ASSET DISPOSITION" means any sale, lease, transfer, issuance
or other disposition (or series of related sales, leases, transfers, issuances
or dispositions that are part of a common plan) of shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares), property or
other assets (each referred to for the purposes of this definition as a
"disposition") by the Company or any of its Restricted Subsidiaries (including
any Sale/Leaseback Transaction and any sale of receivables and any disposition
by means of a merger, consolidation or similar transaction) other than (i) a
disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly-Owned Subsidiary, (ii) the sale of Cash
Equivalents or Temporary Cash Investments in the ordinary course of business,
(iii) a disposition of inventory (including the disposition of capacity) in the
ordinary course of business, (iv) a disposition of obsolete or worn out
equipment or equipment that is no longer useful in the conduct of the business
of the Company and its Restricted Subsidiaries and that is disposed of in each
case in the ordinary course of business, (v) transactions permitted under
Section 801, (vi) for purposes of Section 1016 only, a disposition subject to
Section 1009, (vii) a disposition of capacity that is traded on a reciprocal
basis pursuant to reciprocal restoration agreements entered into by the Company
in the ordinary course of
2
business and (viii) dispositions to landing parties pursuant to and in
accordance with the provisions of the C&MA.
"ATTRIBUTABLE INDEBTEDNESS" in respect of a Sale/Leaseback
Transaction by a Person means, as at the time of determination, the present
value (discounted at a rate consistent with accounting guidelines, as determined
in good faith by the responsible accounting officer of such Person) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"AVERAGE LIFE" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (i) the sum of
the products of the numbers of years from the date of determination to the date
of each successive scheduled principal payment of such Indebtedness or
redemption multiplied by the amount of such payment by (ii) the sum of all such
payments.
"BANK INDEBTEDNESS" means any and all amounts, whether
outstanding on the Issue Date or thereafter incurred, payable by the Company
under or in respect of the New Credit Facility and any related notes, collateral
documents, letters of credit and guarantees, including principal, premium, if
any, interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not a claim for post filing interest is allowed in such proceedings), fees,
charges, expenses, reimbursement obligations, guarantees and all other amounts
payable thereunder or in respect thereof.
"BOARD OF DIRECTORS" means, as to any Person, the board of
directors of such Person or any duly authorized committee thereof.
"BOARD RESOLUTION" means, as to any Person, a resolution
adopted by the Board of Directors of such Person or by any duly authorized
committee thereof.
"BUSINESS DAY" means a day other than a Saturday, Sunday or
other day on which commercial banking institutions are authorized or required by
law to close in The City of New York.
"C&MA" means the Construction and Maintenance Agreement, dated
December 14, 1994 between the Company, the landing parties and the other
licensed international carriers purchasing capacity on the Company's fiberoptic
cable system, as the same has been and may be amended, supplemented or otherwise
modified from time to time.
"CAPITAL EXPENDITURES" means, with respect to any Person, for
any period, on a consolidated basis for such Person and its Restricted
Subsidiaries, the aggregate of all expenditures during such period which, as
determined in accordance with GAAP, are required to be included in capacity
available for sale or a fixed asset account.
"CAPITAL STOCK" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
"CAPITALIZED LEASE OBLIGATIONS" means an obligation that is
required to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the
3
amount of Indebtedness represented by such obligation shall be the capitalized
amount of such obligation determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date such lease may be terminated
without penalty.
"CASH EQUIVALENTS" means (i) securities issued or directly and
fully guaranteed or insured by the United States Government, or any agency or
instrumentality thereof, having maturities of not more than one year from the
date of acquisition; (ii) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, having a credit
rating of "A" or better from either Standard & Poor's Ratings or ▇▇▇▇▇'▇
Investors Service, Inc.; (iii) certificates of deposit, time deposits,
eurodollar time deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition thereof issued
by any commercial bank the long-term debt of which is rated at the time of
acquisition thereof at least "A" or the equivalent thereof by Standard & Poor's
Ratings, or "A" or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service. Inc.,
and having capital and surplus in excess of $500 million; (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (i), (ii) and (iii) entered into with any bank
meeting the qualifications specified in clause (iii) above; (v) commercial paper
rated at the time of acquisition thereof at least "A-2" or the equivalent
thereof by Standard & Poor's Ratings or "P-2" or the equivalent thereof by
▇▇▇▇▇'▇ Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments, and in either case maturing within 270
days after the date of acquisition thereof; and (vi) interests in any investment
company which invests solely in instruments of the type specified in clauses (i)
through (v) above.
"CHANGE OF CONTROL" means the occurrence of any of the
following events:
(i) prior to the first public offering of Voting
Stock of the Company (or its successor by merger, consolidation or
purchase of all or substantially all of its assets), the Permitted
Holders cease to be the "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of at least
a majority of the voting power of the Voting Stock of the Company (or
its successor by merger consolidation or purchase of all or
substantially all of its assets), whether as a result of issuance of
securities of the Company (or its successor by merger, consolidation or
purchase of all or substantially all of its assets), any merger,
consolidation, liquidation or dissolution of the Company (or its
successor by merger, consolidation or purchase of all or substantially
all of its assets), any direct or indirect transfer of securities by
any Permitted Holder or otherwise (for the purposes of this clause, a
Permitted Holder will be deemed to beneficially own any Voting Stock of
a specified corporation held by a parent corporation so long as such
Permitted Holder beneficially owns (as so defined), directly or
indirectly, at least a majority of the voting power of the Voting Stock
of the parent corporation);
(ii) following the first public offering of Voting
Stock of the Company, (A) any "Person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than one or more
Permitted Holders, is or becomes the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that such person
shall be deemed to have "beneficial ownership" of all shares that any
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly,
of more than 35% of the total
4
voting power of the Voting Stock of the Company (or its successor by
merger, consolidation or purchase of all or substantially all of its
assets); and (B) the Permitted Holders "beneficially own" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, in the aggregate a lesser percentage of the total voting
power of the Voting Stock of the Company (or its successor by merger,
consolidation or purchase of all or substantially all of its assets)
than such other person and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a
majority of the Board of Directors of the Company or such successor
(for the Purposes of this clause, such other person shall be deemed to
beneficially own any Voting Stock of a specified corporation held by a
parent corporation, if such other person "beneficially owns" (as
defined in clause (A) above), directly or indirectly, more than 35% of
the voting power of the Voting Stock of such parent corporation and the
Permitted Holders "beneficially own" (as defined in this clause (B)),
directly or indirectly, in the aggregate a lesser percentage of the
voting power of the Voting Stock of such parent corporation and do not
have the right or ability by voting power, contract or otherwise to
elect or designate for election a majority of the board of directors of
such parent corporation); or
(iii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board
of Directors of the Company (together with any new directors whose
election by such Board of Directors or whose nomination for election by
the shareholders of the Company was approved by a vote of at least a
majority of the directors of the Company then still in office who were
either directors at the beginning of such period or whose election or
nomination for election was previously so approved or is a designee of
any one of the Permitted Holders or any combination thereof or was
nominated or elected by any such Permitted Holder or Permitted Holders
or any of their designees) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; or
(iv) the adoption of a plan relating to the
liquidation or dissolution of the Company; or
(v) ▇▇▇▇ Atlantic Corporation or any one or more
wholly-owned subsidiaries of ▇▇▇▇ Atlantic Corporation shall cease, for
any reason, to "beneficially own" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, such number of shares
as constitute in the aggregate at least 20% of the fully diluted total
voting power of the Voting Stock of the Company (or its successor by
merger, consolidation or purchase of all or substantially all of its
assets) as of the Issue Date.
"CODE" means the United States Internal Revenue Code of 1986,
as amended.
"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" means FLAG Limited, a Bermuda company and any and
all successors thereto.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Chief Executive Officer or its Chief Financial Officer (or any other officer
identified by any one of the foregoing officers in a certificate to be an
executive
5
officer of the Company) and by its Controller, its Treasurer or its Financial
Manager, and delivered to the Trustee.
"CONSOLIDATED CAPITAL RATIO" of any Person as of any date
means the ratio of (i) the aggregate consolidated principal amount of
Indebtedness of such Person then outstanding to (ii) the greater of (x) the
aggregate consolidated paid-in capital of such Person as of such date and (y)
the Consolidated Net Worth of such Person as of such date, in each case, as
shown on the consolidated balance sheet of such Person in accordance with GAAP.
"CONSOLIDATED CASH FLOW AVAILABLE FOR FIXED CHARGES" for any
period means the Consolidated Net Income for such period, plus the following to
the extent deducted in calculating such Consolidated Net Income: (i) income tax
expense, (ii) Consolidated Interest Expense and (iii) Consolidated Non-cash
Charges. Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the interest, depreciation and amortization of, a
Restricted Subsidiary of a Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow Available for Fixed Charges of such Person only
to the extent (and in the same proportion) that the net income of such
Subsidiary was included in Calculating the Consolidated Net Income of such
Person.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the
total interest expense of the Company and its consolidated Subsidiaries, plus,
to the extent not included in such interest expense, (i) interest expense
attributable to Capitalized Lease Obligations and the interest component of rent
expense associated with Attributable Indebtedness in respect of the relevant
lease giving rise thereto, determined as if such lease were a capitalized lease
in accordance with GAAP, (ii) amortization of debt discount and debt issuance
cost, (iii) capitalized interest, (iv) non-cash interest expense, (v)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (vi) interest actually paid by the
Company or any such Subsidiary under any Guarantee of Indebtedness or other
obligation of any other Person, (vii) net costs associated with Hedging
Obligations, if any (including amortization of fees), (viii) Preferred Stock
dividends in respect of all Preferred Stock of Subsidiaries and Disqualified
Stock of the Company, in each case, held by Persons other than the Company or a
Wholly-Owned Subsidiary and (ix) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness incurred by such plan or trust;
PROVIDED, HOWEVER, that there shall be excluded therefrom any such interest
expense of any Unrestricted Subsidiary to the extent the related Indebtedness is
not Guaranteed or paid by the Company or any Restricted Subsidiary. For purposes
of the foregoing, total interest expense shall be determined after giving effect
to any net payments made or received by the Company and its Subsidiaries with
respect to Interest Rate Agreements. Notwithstanding the foregoing, the
Consolidated Interest Expense with respect to any Restricted Subsidiary of the
Company that was not a Wholly-Owned Subsidiary shall be included only to the
extent (and in the same proportion) that the net income of such Restricted
Subsidiary was included in calculating Consolidated Net Income.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (loss) of the Company and its consolidated Subsidiaries; PROVIDED,
HOWEVER, that there shall not be included in such Consolidated Net Income: (i)
any net income (loss) of any Person if such Person is not a Restricted
Subsidiary, except that (A) subject to the limitations contained in (iv) below,
the Company's equity in the net income of any such Person for such period shall
be included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution to the Restricted
6
Subsidiary, to the limitations contained in clause (iii) below) and (B) the
Company's equity in a net loss of any such Person (other than an Unrestricted
Subsidiary) for such period shall be included in determining such Consolidated
Net Income to the extent such loss has been funded with cash from the Company or
a Restricted Subsidiary; (ii) any net income (loss) of any Person acquired by
the Company or a Subsidiary in a pooling of interests transaction for any period
prior to the date of such acquisition; (iii) any net income of any Restricted
Subsidiary if such Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, except that (A)
subject to the limitations contained in (iv) below the Company's equity in the
net income of any such Restricted Subsidiary for such period shall be included
in such Consolidated Net Income up to the aggregate amount of cash that could
have been distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend (subject, in the case of
a dividend to another Restricted Subsidiary, to the limitation contained in this
clause) and (B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income; (iv) any gain (loss) realized upon the sale or other disposition of
any property, plant or equipment of the Company or its consolidated Subsidiaries
(including pursuant to any Sale/Leaseback Transaction) which is not sold or
otherwise disposed of in the ordinary course of business and any gain realized
upon the sale or other disposition of any Capital Stock of any Person; (v) any
extraordinary gain or loss; and (vi) the cumulative effect of a change in
accounting principles.
"CONSOLIDATED NET WORTH" means the total of the amounts shown
on the balance sheet of the Company and its Restricted Subsidiaries, determined
on a consolidated basis in accordance with GAAP, as of the end of the most
recent fiscal quarter of the Company ending prior to the taking of any action
for the purpose of which the determination is being made, as (i) the aggregate
paid-in capital relating to such Capital Stock plus (ii) any retained earnings
or earned surplus less (A) any accumulated deficit (B) any amounts attributable
to Disqualified Stock.
"CONSOLIDATED NON-CASH CHARGES" means, with respect to the
Company for any period, the aggregate depreciation, amortization and other
non-cash expenses of the Company and the Restricted Subsidiaries (including any
non-cash charges related to any employee stock ownership plan) reducing
Consolidated Net Income of the Company and the Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP (excluding
any such charges constituting an extraordinary gain or loss, or any such charge
which requires an accrual of or a reserve for cash charges for any future
period).
"CORPORATE TRUST OFFICE" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"CT" shall have the meaning assigned thereto in Section 116.
"CURRENCY AGREEMENT" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or a beneficiary.
"DEFAULT" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"DEFAULTED INTEREST" shall have the meaning assigned thereto
in Section 311.
7
"DEPOSITARY" means The Depository Trust Company, its nominees
and their respective successors and assigns, or such other depository
institution hereinafter appointed by the Company.
"DISQUALIFIED STOCK" means, with respect to any Person, any
Capital Stock of such Person 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 (i) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (ii) is convertible or exchangeable for
Indebtedness or Disqualified Stock (excluding capital stock which is convertible
or exchangeable solely at the option of the Company or a Restricted Subsidiary)
or (iii) is redeemable at the option of the holder thereof, in whole or in part,
in each case on or prior to the Stated Maturity of the Notes, PROVIDED, that
only the portion of Capital Stock which so matures or is mandatorily redeemable,
is so convertible or exchangeable or is so redeemable at the option of the
Holder thereof prior to such Stated Maturity shall be deemed to be Disqualified
Stock.
"EQUITY OFFERING" means an offering for cash by the Company of
its common stock, or options, warrants or rights with respect to its common
stock.
"EVENT OF DEFAULT" shall have the meaning assigned thereto in
Section 501.
"EXCESS CASH FLOW" means, with respect to the Company for any
fiscal year, the amount by which the sum of Consolidated Net Income, other
Consolidated Non-cash Charges reducing Consolidated Net Income, non-cash
accruals or reserves for charges to be paid in a future period, and cash
collections on items which increased Consolidated Net Income in prior periods
and were excluded from the calculation of Excess Cash Flow in prior periods
pursuant to clause (i) herein exceeds the sum of (i) consolidated non-cash items
increasing Consolidated Net Income, plus (ii) Capital Expenditures, plus (iii)
principal payments required to be made or funds required or elected by the
Company to be deposited in a reserve account or accounts by the Company and its
Restricted Subsidiaries pursuant to the New Credit Facility, plus (iv) scheduled
maturities of any Indebtedness of the Company and its Restricted Subsidiaries in
effect as of the Issue Date, plus (v) cash payments made in connection with
accruals or reserves which decreased Consolidated Net Income in prior periods
and were excluded from the calculation of Excess Cash Flow for such prior
periods and plus/minus (vi) the increase/decrease in Working Capital in such
period.
"EXCESS CASH FLOW OFFER" shall have the meaning assigned
thereto in Section 1023.
"EXCESS CASH FLOW PAYMENT DATE" shall have the meaning
assigned thereto in Section 1023.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXISTING AFFILIATE TRANSACTIONS" means the Program Management
Services Agreement dated April 19, 1994, between the Company and NYNEX Network
Systems (or any of NYNEX Network Systems's successors or assignees thereto), the
Marketing Services Agreement dated April 19, 1994, between the Company and ▇▇▇▇
Atlantic Network Systems (Bermuda) Limited and any other agreements with
Affiliates of the Company, existing on the Issue Date and listed on a schedule
to this Indenture.
"FAIR MARKET VALUE" means, with respect to any asset or
property, the sale value that would 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, as determined in good
faith by the Board of Directors.
8
"FLAG SYSTEM" means the Company's digital fiberoptic cable
system connecting (as of the date hereof) the United Kingdom, Spain, Italy,
Egypt, the United Arab Emirates, India, Malaysia, Thailand, Hong Kong, China,
Korea and Japan, as it may subsequently be reconfigured.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of this Indenture,
including those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations based on GAAP
contained in this Indenture shall be computed in conformity with GAAP.
"GLOBAL NOTES" shall have the meaning assigned thereto in
Section 201.
"GOVERNMENT OBLIGATIONS" means securities that are (a) direct
obligations (or certificates representing an ownership interest in such
obligations) of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of
the United States of America is pledged, (b) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America or (c) obligations of a
Person the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in each case, are not
callable or redeemable at the issuer's option.
"GUARANTEE" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any other
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"GUARANTOR" means any Subsidiary of the Company which executes
a Note Guarantee in accordance with the covenant described in Section 1019, and
their respective successors and assigns.
"HEDGING OBLIGATIONS" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"HOLDER" or "NOTEHOLDER" means the Person in whose name a Note
is registered in the Register.
"INCUR" means issue, assume, Guarantee, incur or otherwise
become liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of
a Person existing at the time such person becomes a Restricted Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary; PROVIDED FURTHER, that a change in GAAP that results in an
obligation of such Person that exists at such time becoming Indebtedness
9
shall not be deemed an Incurrence of such Indebtedness and that neither the
accrual of interest nor the accretion of original issue discount shall be deemed
an Incurrence of Indebtedness.
"INDEBTEDNESS" means, with respect to any Person on any date
of determination (without duplication), (i) the principal of and premium (if
any) in respect of indebtedness of such Person for borrowed money; (ii) the
principal of and premium (if any) in respect of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (iii) all
obligations of such Person in respect of letters of credit or other similar
instruments (including reimbursement obligations with respect thereto); (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property (other than property received or owed prior to or on the Issue Date) or
services (except trade payables), which purchase price is due more than six
months after the date of placing such property in service or taking delivery and
title thereto or the completion of such services; (v) all Capitalized Lease
Obligations and all Attributable Indebtedness of such Person; (vi) the amount of
all obligations of such Person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or, with respect to any Subsidiary,
any Preferred Stock (but excluding, in each case, any accrued dividends); (vii)
all Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person; PROVIDED, HOWEVER,
that the amount of such Indebtedness shall be the lesser of (A) the Fair Market
Value of such asset at such date of determination and (B) the amount of such
Indebtedness of such other Persons; (viii) all Indebtedness of other Persons to
the extent Guaranteed by such Person; and (ix) to the extent not otherwise
included in this definition, net obligations of such Person under Currency
Agreements and Interest Rate Agreements (the amount of any such obligations to
be equal at any time to the termination value of such agreement or arrangement
giving rise to such obligation that would be payable by such Person at such
time). The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date; PROVIDED,
that the amount outstanding at any time of any Indebtedness issued with original
issue discount is the face amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP.
"INDENTURE" means this Indenture as amended or supplemented
from time to time.
"INITIAL PURCHASERS" means Salomon Brothers Inc, Barclays de
Zoete Wedd Limited and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.
"INTEREST PAYMENT DATE" means the date specified in the Notes
as the fixed date on which any specified scheduled installment of interest on
the Notes is due and payable.
"INTEREST RATE AGREEMENT" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"INVESTMENT" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as accounts payable on the balance sheet of such
Person) or other extension of credit (including by way of Guarantee or similar
arrangement, but excluding any debt or extension of credit represented by a bank
deposit other than a time deposit) or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
10
services for the account or use of others), or any purchase or acquisition of
Capital Stock, Indebtedness or other similar instruments issued by, such Person.
For purposes of Section 1009, (i) "Investment" shall include the portion
(proportionate to the Company's equity interest in a Restricted Subsidiary to be
designated as an Unrestricted Subsidiary) of the Fair Market Value of the net
assets of such Restricted Subsidiary of the Company at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary; PROVIDED,
HOWEVER, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the Fair Market Value of the net assets of such
Subsidiary at the time that such Subsidiary is so re-designated a Restricted
Subsidiary; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its Fair Market Value at the time of such
transfer, in each case as determined in good faith by the Board of Directors of
the Company.
"ISSUE DATE" means the date on which the Initial Notes are
originally issued.
"LIEN" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).
"NET AVAILABLE CASH" from an Asset Disposition means cash
payments received (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring person of Indebtedness or other
obligations relating to the properties or assets that are the subject of such
Asset Disposition or received in any other noncash form) therefrom, in each case
net of (i) all legal, accounting, investment banking, title and recording tax
expenses, commissions and other fees and expenses incurred, and all Federal or
state, if any, provincial, foreign and local taxes required to be paid or
accrued as a liability under GAAP, as a consequence of such Asset, Disposition,
(ii) all payments made on any Indebtedness which is secured by any assets
subject to such Asset Disposition, in accordance with the terms of any Lien upon
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law be repaid out the
proceeds from such Asset Disposition, (iii) all distributions and other payments
required to be made minority interest Holders in Subsidiaries or joint ventures
as a result of such Asset Disposition and (iv) the deduction of appropriate
amounts to be provided by the seller as a reserve, in accordance with GAAP,
against any liabilities associated with the assets disposed of in such Asset
Disposition and retained by the Company or any Restricted Subsidiary after such
Asset Disposition.
"NET CASH PROCEEDS", with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result of such issuance or sale.
"NEW CREDIT FACILITY" means (i) the Credit Agreement to be
entered into among the Company, Barclays Bank PLC, as Administrative Agent,
International Trust Company of Bermuda Limited, as Collateral Trustee, and the
lenders parties thereto from time to time, as the same may be amended,
supplemented or otherwise modified from time to time and (ii) any renewal,
extension, refunding, restructuring, replacement or refinancing thereof (whether
with the original Administrative Agent and
11
lenders or another administrative agent or agents or other lenders and whether
provided under the original Credit Agreement or any other credit or other
agreement or indenture).
"NOTE GUARANTEE" means any guarantee which may from time to
time be executed and delivered by a Subsidiary of the Company pursuant to the
provisions of the covenant described under Section 1019. Each such Note
Guarantee shall be a senior obligation (unless as otherwise allowed pursuant to
the provisions of the covenant described under Section 1019) of such Subsidiary.
"NOTE REGISTER" shall have the meaning ascribed thereto in
Section 305.
"NOTE REGISTRAR" or "REGISTRAR" shall have the meaning
ascribed to either term in Section 305.
"NOTEHOLDERS' PRO RATA SHARE" means a fraction, (i) the
numerator of which is the aggregate principal amount of Notes outstanding on the
date that is two Business Days prior to the date that the applicable Excess Cash
Flow Offer is made, and (ii) the denominator of which is the sum of (x) the
aggregate principal amount of Notes outstanding on such date and (y) the
aggregate principal amount of other Indebtedness (other than Bank Indebtedness)
which requires the Company to apply the applicable Excess Cash Flow to repay or
repurchase such Indebtedness that is outstanding on such applicable date.
"O&M PAYMENTS" means operations and maintenance payments made
to the Company consisting of standby maintenance payments and repair maintenance
payments.
"OFFICER" means the Chairman of the Board, the President, the
Chief Executive Officer, the Chief Operating Officer, the Chief Financial
Officer, any Vice President, the Treasurer or the Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Officers.
"OPINION OF COUNSEL" means a written opinion from legal
counsel who is acceptable to the Trustee (which opinion may be subject to
customary assumptions and exclusions). The counsel may be an employee of or
counsel to the Company or the Trustee.
"PAYING AGENT" means any Person authorized by the Company to
pay the principal of (and premium, if any) or interest on any Notes on behalf of
the Company. The Company hereby initially appoints the Trustee as Paying Agent
for the Notes.
"PERMITTED HOLDERS" means ▇▇▇▇ Atlantic Corporation, ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, Telecom Asia Corporation Public Co. Ltd., Marubeni Corporation, The
Asian Infrastructure Fund, Gulf Associates, AT&T Capital Corporation and GE
Capital Corporation and their respective Affiliates.
"PERMITTED INVESTMENT" means an Investment by the Company or
any Restricted Subsidiary in (i) a Restricted Subsidiary or a Person which will,
upon the making of such Investment, become a Restricted Subsidiary; PROVIDED,
HOWEVER, that the primary business of such Restricted Subsidiary is a Related
Business; (ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Restricted Subsidiary;
PROVIDED, HOWEVER, that such Person's primary business is a Related Business;
(iii)
12
Cash Equivalents and Temporary Cash Investments; (iv) receivables owing to the
Company or any Restricted Subsidiary, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; PROVIDED, HOWEVER, that such trade terms may include such
concessionary trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances; (v) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary
course of business; (vi) loans or advances to employees made in the ordinary
course of business consistent with past practices of the Company or such
Restricted Subsidiary; (vii) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments; (viii) a
Permitted Joint Venture in an aggregate amount not to exceed $25 million; (ix)
obligations under Interest Rate or Currency Agreements; PROVIDED, HOWEVER, that
such Currency Agreements and Interest Rate Agreements are entered into for bona
fide hedging purposes of the Company or its Restricted Subsidiaries (as
determined in good faith by the Board of Directors or senior management of the
Company) and correspond in terms of notional amount, duration, currencies and
interest rates, as applicable, to Indebtedness of the Company or its Restricted
Subsidiaries on customary terms entered into in the ordinary course of business;
and (x) any Investment by the Company or a Wholly Owned Subsidiary of the
Company in a Receivables Entity or any Investment by a Receivables Entity in any
other Person, in connection with a Qualified Receivables Transaction; PROVIDED
that any Investment in a Receivables Entity is in the form of a Purchase Money
Note or an equity interest.
"PERMITTED JOINT VENTURE" means a corporation, partnership or
other entity engaged in one or more Related Businesses over which the Company
has, directly or indirectly, the power to direct the Policies, management and
affairs.
"PERMITTED LIENS" means:
(i) any Lien on assets of the Company or any
Subsidiary thereof securing only the Notes equally and ratably;
(ii) any Lien arising under this Indenture in favor
of the Trustee or any prior Trustee;
(iii) any Lien existing as of the date of this
Indenture and listed on a schedule hereto;
(iv) 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 ha 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, assessments, governmental
charges or levies not yet delinquent or which are being contested in
good faith; (3) security for payment of workers' compensation or other
insurance; (4) good faith deposits in connection with tenders, leases
and contracts (other than contracts for the payment of money) in the
ordinary course of business; (5) zoning restrictions, easements,
licenses reservations, 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
13
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; (7) certain surveys,
exceptions, title defects, encumbrances, easements, reservations of, or
rights of others, for, rights of way, sewers, electric lines, telegraph
or telephone lines and other similar purposes or zoning or other
restrictions as to the use of real property not interfering with the
ordinary conduct of the business of the Company or any of its
Subsidiaries; or (8) operation of law in favor of 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;
(v) any Lien securing Indebtedness under the New
Credit Facility incurred by the Company or any Restricted Subsidiary in
compliance with Section 1010;
(vi) Liens securing purchase money Indebtedness,
incurred in compliance with this, Indenture; PROVIDED that such Liens
do not extend to any assets other than the assets so acquired and the
principal amount of such Indebtedness shall at no time exceed the
original purchase price of the property or assets purchased;
(vii) any Lien securing Indebtedness created prior to
(and not created in connection with, or in contemplation of) the
incurrence of such Indebtedness by the Company or any Restricted
Subsidiary, in each case which Indebtedness is permitted under the
provisions of Section 1010; PROVIDED that any such Lien extends only to
the assets that were subject to such Lien securing such Indebtedness
prior to the related transaction by the Company or its Restricted
Subsidiaries;
(viii) any Lien securing Indebtedness incurred
pursuant to clause (vii) of the second paragraph in Section 1010;
(ix) Liens on assets transferred to a Receivables
Entity or on assets of a Receivables Entity, in either case incurred in
connection with a Qualified Receivables Transaction;
(x) Liens incurred on property which is the subject
of a Sale/Leaseback Transaction incurred in compliance with this
Indenture; and
(xi) any extension, renewal, refinancing or
replacement, in whole or in part, of any Lien described in the
foregoing clauses (i) through (x) so long as the amount of security is
not increased thereby.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"PREFERRED STOCK", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
14
A "PUBLIC MARKER" exists at any time with respect to the
common stock of the Company, if (i) the common stock of the Company is then
registered with the Commission pursuant to Section 12(b) or 12(g) of Exchange
Act and traded either on a national securities exchange or in the National
Association of Securities Dealers Automated Quotation System and (ii) at least
15% of the total issued and outstanding common stock of the Company has been
distributed prior to such time by means of an effective registration statement
under the Securities Act.
"PURCHASE MONEY NOTE" means a promissory note of a Receivables
Entity evidencing a line of credit, which may be irrevocable, from the Company
or any Subsidiary of the Company in connection with a Qualified Receivables
Transaction to a Receivables Entity, which note shall be repaid from cash
available to the Receivables Entity, other than amounts required to be
established as reserves pursuant to agreements, amounts paid to investors in
respect of interest, principal and other amounts owing to such Investors and
amounts owing to such investors and amounts paid in connection with the purchase
of receivables.
"QUALIFIED RECEIVABLES TRANSACTION" means any transaction or
series of transactions that may be entered into by the Company or any of its
Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell,
convey or otherwise transfer to (a) a Receivables Entity (in the case of a
transfer by the Company or any of its Subsidiaries) and (b) any other Person (in
the case of a transfer by a Receivables Entity), or may grant a security
interest in, any receivables (whether now existing or arising in the future) of
the Company or any of its Subsidiaries, and any assets related thereto
including, without limitation, all collateral securing such receivables, all
contracts and all guarantees or other obligations in respect of such
receivables, and the proceeds of such receivables.
"RECEIVABLES ENTITY" means a Wholly Owned Subsidiary of the
Company (or another Person in which the Company or any Subsidiary of the Company
may make an Investment and to which the Company or any Subsidiary of the Company
transfers receivables and related assets) which engages in no activities other
than in connection with the financing of receivables and which is designated by
the Board of Directors of the Company (as provided below) as a Receivables
Entity, (a) no portion of the Indebtedness or any other obligations (contingent
or otherwise) of which (i) is guaranteed by the Company or any Subsidiary of the
Company (excluding guarantees of obligations (other than the principal of, and
interest on, Indebtedness) pursuant to Standard Securitization Undertakings),
(ii) is recourse to or obligates the Company or any Subsidiary of the Company in
any way other than pursuant to Standard Securitization Undertakings or (iii)
subjects any property or asset of the Company or any Subsidiary of the Company,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to Standard Securitization Undertakings, (b) with which
neither the Company nor any Subsidiary of the Company has any material contract,
agreement, arrangement or understanding other than on terms no less favorable to
the Company or such Subsidiary than those that might be obtained at the time
from Persons that are not Affiliates of the Company, other than fees payable in
the ordinary course of business in connection with servicing receivables, and
(c) to which neither the Company nor any Subsidiary of the Company has any
obligation to maintain or preserve such entity's financial condition or cause
such entity to achieve certain levels of operating results. Any such designation
by the Board of Directors of the Company shall be evidenced to the Trustee by
filing with the Trustee a certified copy of the resolution of the Board of
Directors of the Company giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
15
"REDEMPTION DATE" means, when used with respect to any Note to
be redeemed, the date fixed for such redemption by or pursuant to this
Indenture.
"REFINANCING" means the collective reference to the issuance
by the Company of the Notes and the entrance into the New Credit Facility and
borrowings thereunder.
"REFINANCING INDEBTEDNESS" means Indebtedness that is Incurred
to refund, refinance replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinance" and "refinances"
and "refinanced" shall have a correlative meaning) any Indebtedness existing on
the date of this Indenture or Incurred in compliance with this Indenture
(including Indebtedness of the Company that refinances Indebtedness of any
Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that
refinances Indebtedness of another Restricted Subsidiary) including Indebtedness
that refinances Refinancing Indebtedness, PROVIDED, HOWEVER, that (i) the
Refinancing Indebtedness has a stated maturity no earlier than the earlier of
(A) the first anniversary of the Stated Maturity of the Notes and (B) the stated
maturity of the Indebtedness being refinanced, (ii) the Refinancing Indebtedness
has an Average Life at the time such Refinancing Indebtedness is incurred that
is equal to or greater than the lesser of (A) the Average Life of the Notes and
(B) the Average Life of the Indebtedness being refinanced, (iii) such
Refinancing Indebtedness is Incurred in an aggregate principal amount (or if
issued with original issue discount, an aggregate issue price) that is equal to
(or 101% of, in the case of a refinancing of Notes in connection with a Change
of Control) or less than the sum of the aggregate principal amount (or if issued
with original issue discount, the aggregate accreted value) then outstanding
(plus fees and expenses, including any premium and defeasance costs) of the
Indebtedness being refinanced and (iv) if such Refinancing Indebtedness is
Incurred to refinance any Subordinated Obligations, unless such Refinancing
Indebtedness shall be subordinated to the Notes to at least the same extent as
such Subordinated Obligations.
"REGISTRATION AGREEMENT" means the Registration Agreement
dated as of January 30,1998 between the Company and the Initial Purchasers.
"REGULAR RECORD DATE" means, with respect to any Interest
Payment Date, the January 15 or July 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"RELATED BUSINESS" means any business which is the same as or
related, ancillary or complementary to any of the businesses of the Company on
the date of this Indenture.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"SALE/LEASEBACK TRANSACTION" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Subsidiary
leases it from such Person.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHELF REGISTRATION STATEMENT" shall have the meaning assigned
thereto in the Registration Agreement.
16
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Commission.
"SPECIAL RECORD DATE" shall have the meaning assigned thereto
in Section 311.
"SPECIAL INTEREST PAYMENT DATE" shall have the meaning
assigned thereto in Section 311.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company which are reasonably customary in securitization of
receivables transactions.
"STATED MATURITY" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision.
"SUBORDINATED OBLIGATION" means any Indebtedness of the
Company (whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Notes pursuant to a written
agreement.
"SUBSIDIARY" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or Indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person. Unless otherwise specified herein, each reference
to a Subsidiary shall refer to a Subsidiary of the Company.
"SUCCESSOR COMPANY" shall have the meaning assigned thereto in
Section 801.
"TEMPORARY CASH INVESTMENTS" means any of the following: (i)
any Investment in direct obligations of the United States of America or any
agency thereof or obligations Guaranteed by the United States of America or any
agency thereof, (ii) Investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America, any state thereof or any foreign
country recognized by the United States of America having capital, surplus and
undivided profits aggregating in excess of $250 million (or the foreign currency
equivalent thereof) and whose long-term debt, or whose parent holding company's
long-term debt, is rated "A" (or such similar equivalent rating) or higher by at
least one nationally recognized statistical rating organization (as defined in
Rule 436 under the Securities Act), (iii) repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in clause
(i) above entered into with a bank meeting the qualifications described in
clause (ii) above, (iv) Investments in commercial paper, maturing not more than
180 days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United States
of America with a rating at the time as of which any investment therein is made
of "P-1" (or higher) according to ▇▇▇▇▇'▇ Investors Service, Inc. or "A-1" (or
higher) according to Standard and Poor's Ratings, (v) Investments in securities
with maturities of six months or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United States of
America, or by any political
17
subdivision or taxing authority thereof, and rated at least "A" by Standard &
Poor's Ratings or "A" by ▇▇▇▇▇'▇ Investors Service, Inc. and (vi) Investments in
mutual funds whose investment guidelines restrict such funds' investments to
those satisfying the provisions of clauses (i) through (v) above.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb) as in effect the date of this Indenture.
"TRUSTEE" means the party named as such in this Indenture
until a successor replaces and, thereafter, means the successor.
"TRUST OFFICER" means an officer of the Trustee assigned by
the Trustee to administer corporate trust matters or to any other officer of the
Trustee to whom such matter is referred because his knowledge of and familiarity
with the particular subject.
"UNIFORM COMMERCIAL CODE" means the New York Uniform
Commercial Code as in effect from time to time.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of the
Company that at the time determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of,
or owns or holds any Lien on any property of, the Company or any Restrict
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; PROVIDED, HOWEVER, that either (A) the Subsidiary to be so
designated has total consolidated assets of $10,000 or 1ess or (B) if such
Subsidiary has consolidated assets greater than $10,000, then such designation
would be permitted under Section 1009. The Board of Directors may designate any
Unrestricted Subsidiary to be Restricted Subsidiary; PROVIDED, HOWEVER, that
immediately after giving effect to such designation (x) the Company could incur
$1.00 of additional Indebtedness under clause (a) of Section 1010 and (y) no
Default shall have occurred and be continuing. Any such designation by the Board
of Directors shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"VOTING STOCK" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled to vote in the
election of directors.
"WHOLLY-OWNED SUBSIDIARY" means a Restricted Subsidiary of the
Company, all of the Capital Stock of which (other than directors'qualifying
shares) is owned by the Company or another Wholly-Owned Subsidiary.
"WORKING CAPITAL" means, at any date of designation, the
consolidated assets of the Company and its Restricted Subsidiaries which are
classified as current assets in accordance with GAAP LESS the consolidated
liabilities of the Company and the Restricted Subsidiaries which are classified
as current liabilities in accordance with GAAP; PROVIDED that current assets
shall exclude cash and Equivalents and current liabilities shall exclude any
indebtedness classified as current.
18
SECTION 102. 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 other obligor the Notes (if applicable) shall
furnish to the Trustee an Officers' Certificate in 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 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 documents is specifically required by any provision of this Indenture to
such particular application or request, no additional certificate or opinion
need be furnished.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1021(a)) shall include:
(1) a statement that each individual or firm signing
such certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of 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
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 103. 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 or opinion of an officer of the Company, any
Guarantor (if applicable) or other obligor on the Notes 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 of Counsel 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 Notes stating that the information with respect to such
factual matters is in the possession of the Company, any Guarantor or other
obligor on the Notes unless such 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.
19
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 104. 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 agents 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 104.
(b) The fact and date of the execution by any Person of any
such instrument or 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 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 that the Trustee, deems sufficient.
(c) The principal amount and serial numbers of Notes held by
any Person, and date of holding the same, shall be proved by the Note Register.
(d) 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 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 TIA Section 316(c),
such record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior the
first solicitation of Holders generally in connection therewith and not later
than the date such 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 the purposes of determining whether Holders of the requisite
proportion of outstanding Notes have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other Act,
and for that purpose the outstanding Notes shall be computed as of such record
date; PROVIDED that no such authorization, agreement or consent 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 eight months after
the record date.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note
20
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof (including in accordance with Section 310) in respect of anything
done, omitted or suffered to be done by the Trustee, any Paying Agent or the
Company or any Guarantor in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 105. NOTICES, ETC., TO 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,
(1) the Trustee by any Holder or by the Company or
any Guarantor or any other obligor on the Notes shall be sufficient for
every purpose hereunder if in writing and mailed, first-class postage
prepaid, or delivered by hand (including recognized overnight courier),
to or with the Trustee and received at its Corporate Trust Office,
Attention: Corporate Trust Administration.
(2) the Company or any Guarantor by the Trustee or by
any Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, or delivered by hand (including recognized
overnight courier) to the Company or such Guarantor addressed to it and
received at the address of its principal office specified in the first
paragraph of this Indenture, or at any other address previously
furnished in writing to the Trustee by the Company or such Guarantor.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice of any event to
Holders by the Company or the Trustee, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice.
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 mailed to a Holder in the manner herein
prescribed shall be conclusively deemed to have been received by such Holder,
whether or not such Holder actually receives such notice. 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 or irregularities in
regular mail service or by reason of any other cause, it shall be impracticable
to mail notice of any event to Holders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice for every purpose hereunder.
If the Company mails any notice or communication to any
Holder, it shall mail a copy to the Trustee at the same time.
21
SECTION 107. 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 108. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 109. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 110. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person (other than the parties hereto, any agent and their
successors hereunder and each of the Holders) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 111. GOVERNING LAW.
THIS INDENTURE AND THE NOTES WILL BE GOVERNED BY, AND
CONSTRUED ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK EXCLUDING (TO THE
GREATEST EXTENT PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE
APPLICATION THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK. UPON
THE ISSUANCE OF THE EXCHANGE NOTES OR THE EFFECTIVENESS OF THE SHELF
REGISTRATION STATEMENT, THIS INDENTURE SHALL BE SUBJECT TO THE PROVISIONS OF THE
TRUST INDENTURE ACT THAT ARE REQUIRED TO BE PART OF THIS INDENTURE AND SHALL, TO
THE EXTENT APPLICABLE, BE GOVERNED BY SUCH PROVISIONS.
SECTION 112. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, any date
established for payment of Defaulted Interest pursuant to Section 311 or any
redemption date or Stated Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of principal (or premium, if any) or interest 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 the Interest Payment Date or date established for payment of
Defaulted Interest pursuant to Section 311, Redemption Date, or at the Stated
Maturity of the Notes; PROVIDED that no interest shall accrue for the period
from and after such Interest Payment Date, redemption date or date established
for payment of Defaulted Interest pursuant to Section 311, Stated Maturity of
the Notes, as the case may be, to the next succeeding Business Day.
22
SECTION 113. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES, STOCKHOLDERS OR INCORPORATORS.
No director, officer, employee, incorporator or stockholders
of the Company, as such, any Guarantor of the Notes shall have any liability for
any obligations of the Company or such Guarantor under the Notes, this Indenture
or any Guarantee of the Notes or for any claim based on, in respect of, or by
reason of, such obligations or their creations. Each Holder by accepting a Note
waives and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
SECTION 114. COUNTERPARTS.
This Indenture may be signed in any number of counterparts
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Indenture.
SECTION 115. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Note Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 116. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
To the fullest extent permitted by applicable law, the Company
irrevocably submits to the jurisdiction of any U.S. federal or New York state
court in the Borough of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of
America, in any suit or proceeding based on or arising under the Notes or this
Indenture (solely in connection with any such suit or proceeding), and
irrevocably agrees that all claims in respect of such suit or proceeding may be
determined in any such court. The Company irrevocably and fully waives the
defense of an inconvenient forum to the maintenance of such suit or proceeding.
The Company hereby irrevocably designates and appoints CT Corporation System,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. ("CT"), as the authorized agent
of the Company upon whom process may be served in any such suit or proceeding,
it being understood that the designation and appointment of CT as such
authorized agent shall become effective immediately without any further action
on the part of the Company. The Company represents that it has notified CT of
such designation and appointment and that CT has accepted the same in writing.
The Company hereby irrevocably authorizes and directs CT to accept such service.
The Company further agrees that service of process upon CT and written notice of
said service to the Company mailed by prepaid registered first class mail or
delivered to CT at its principal office, shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
Nothing herein shall affect the right of the Holders, the Trustee or any Person
representing the Holders or the Trustee to serve process in any other manner
permitted by law. The Company further agrees to take any and all action,
including the execution and filing of any and all such documents and Instruments
as may be necessary to continue such designation and appointment of CT in full
force and effect so long as the Company has any outstanding obligations under
the Notes or this Indenture. To the extent that the Company has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service of note, attachment prior to judgment, attachment in
aid of execution, executor or otherwise) with respect to itself or its property,
the Company hereby irrevocably waives such immunity in respect of its
obligations under the Notes and this Indenture, to the extent permitted by law.
23
SECTION 117. CURRENCY INDEMNITY.
U.S. dollars are the sole currency of account and payment for
all sums payable by the Company under or in connection with the Notes, including
damages. Any amount received or recovered in a currency other than dollars
(whether as a result of, or the enforcement of, a judgment or order of a Court
of any jurisdiction, in the winding-up or dissolution of the Company or
otherwise) by any Holder of a Note in respect of any sum expressed to be due to
it from the Company shall only constitute a discharge to the Company to the
extent of the dollar amount which the recipient is able to purchase with the
amount so received or recovered in that other currency on the date of that
receipt or recovery (or, if it is not practicable to make that purchase on that
date, on the first date on which it is practicable to do so). If that dollar
amount is less than the dollar amount expressed to be due to the recipient under
any Note, the Company shall indemnify it against any loss sustained by it as a
result. In any event, the Company shall indemnify the recipient against the cost
of making any such purchase. For the purposes of this Section 117, it will be
sufficient for the Holder of a Note to certify in a satisfactory manner
(indicating the sources of information used) that it would have suffered a loss
had an actual purchase of dollars been made with the amount so received in that
other currency on the date of receipt or recovery (or, if a purchase of dollars
or such date had not been practicable, on the first date on which it would have
been practicable, it being required that the need for a change of date be
certified in the manner mentioned above). These indemnities constitute a
separate and independent obligation from the Company's other obligations, shall
give rise to a separate and independent cause of action, shall apply
irrespective of any indulgence granted by any Holder of a Note and shall
continue in full force and effect despite any other judgment, order, class or
proof for a liquidated amount in respect of any sum due under any Note.
ARTICLE 2. NOTE FORMS
SECTION 201. FORMS GENERALLY.
The Notes and the Trustee's certificate of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of certification and such legends or endorsements placed thereon as
may be required to comply with applicable laws or the rules of any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Notes, as evidenced by their execution of the Notes. Any portion
of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note. Each Note shall be dated
the date of its authentication.
Initial Notes offered and sold to qualified institutional
buyers (as defined in Rule 144A under the Securities Act) ("QIBs") in the United
States of America ("Rule 144A Note") will be issued on the Issue Date in the
form of a permanent global Note, without interest coupons, substantially in the
form set forth in Section 203 (a "Rule 144A Global Note") deposited with the
Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The Rule 144A Global Note
may be represented by more than one certificate, if so required by the
Depositary's rules regarding the maximum principal amount to be represented by a
single certificate. The aggregate principal amount of the Rule 144A Global Note
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.
24
Initial Notes offered and sold outside the United States of
America ("Regulation S Note" in reliance on Regulation S shall be issued in the
form of a permanent global Note, without interest coupons, substantially in the
form set forth in Section 203 (a "Regulation S Global Note"). The Regulation S
Global Note will be deposited with the Trustee, as custodian for the Depositary,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The Regulation S Global Note may be represented by more than one
certificate, if so required by the Depositary's rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal amount of the Regulation S Global Note 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.
Initial Notes offered and sold to institutional "accredited
investors" (as defined in Rule 501 (a)(1), (2), (3) and (7) under the Securities
Act) ("Institutional Accredited Investors") in the United States of America
("Institutional Accredited Investor Note") will be issued in the form of a
permanent global Note substantially in the form set forth in Section 203 (an
"Institutional Accredited Investor Global Note"). The institutional Accredited
Investor Global Note will be deposited with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Institutional Accredited Investor Global Note may be
represented by more than one certificate, if so required by the Depositary's
rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Institutional Accredited
Investor Global Note 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.
Exchange Notes exchanged for interests in the Rule 144A Note,
the Regulation S Note and the Institutional Accredited Investor Note will be
issued in the form of a permanent Global Note, without interest coupons,
substantially in the form set forth in Section 203 (an "Exchange Global Note").
The Exchange Global Note will be deposited with the Trustee, as custodian for
the Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Exchange Global Note may be represented by more than
one certificate, if so required by the Depositary's rules regarding the maximum
principal amount to be represented by a single certificate.
The Rule 144A Global Note, the Regulation S Global Note, the
Institutional Accredited Investor Global Note and the Exchange Global Note are
sometimes collectively herein referred to as the "Global Notes."
The definitive Notes shall be printed, lithographed or
engraved on steel-engraved borders or may be produced in any other manner, all
as determined by the officers of the Company executing such Notes, as evidenced
by their execution of such Notes.
SECTION 202. RESTRICTIVE LEGENDS.
Unless and until (i) an Initial Note is sold under an
effective Registration Statement or (ii) an Initial Note is exchanged for an
Exchange Note in connection with an effective Registration Statement, in each
case pursuant to the Registration Agreement, such Initial Note shall bear the
following legend (the "Private Placement Legend") on the face thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF
ANY
25
STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE RE-OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT THAT IS AN INSTITUTIONAL INVESTOR ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE ISSUER'S, THE INITIAL PURCHASERS' AND
THE TRUSTEE'S RIGHT, PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.
The Global Notes, whether or not an Initial Note, shall also
bear the following legend on the face thereof:
UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC") TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
GLOBAL NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER REPRESENTATIVE OF DTC AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON 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
26
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE 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 NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 306 AND 307 OF THE INDENTURE.
27
SECTION 203. FORM OF NOTE.
No.____ Principal Amount $_______________
CUSIP NO. ______________
8 1/4% Senior Note due 2008
FLAG Limited, a Bermuda company, promises to pay to
________________ or registered assigns, the principal sum of __________________
Dollars on January 30, 2008.
Interest Payment Dates: January 30 and July 30.
Record Dates: January 15 and July 15.
Additional provisions of this Note are set forth on the other
side of this Note.
Dated:
FLAG LIMITED
By:_______________
[Title]
By:_______________
[Title]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY
as Trustee, certifies
that this is one of the
Notes referred to
in the Indenture.
By______________________________
Authorized Signatory
Dated:
28
[FORM OF REVERSE SIDE OF NOTE]
8 1/4% Senior Note due 2008
1. INTEREST
FLAG Limited, a Bermuda company (such company, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount hereof
at the rate per annum shown above.
The Company will pay interest semiannually in cash and in
arrears on January 30 and July 30 of each year, commencing July 30, 1998 to
Holders of record at the close of business on the January 15 and July 15
immediately preceding the Interest Payment Date. Interest on the Notes will
accrue from the most recent date to which interest has been paid on the Notes
or, if no interest has been paid, from January 30, 1998. The Company shall pay
interest on overdue principal and premium, if any, and interest on overdue
installments of interest, to the extent lawful, at a rate per annum equal to the
rate of interest applicable to the Notes. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT
By at least 1 1:00 a.m. Eastern Standard Time on the date on
which any principal, premium, if any, or interest on the Notes is due and
payable, the Company shall irrevocably deposit with the Trustee or the Paying
Agent money sufficient to pay such principal, premium, if any, and/or interest.
The Company will pay interest (except Defaulted Interest) to the Persons who are
registered Holders of Notes at the close of business on the January 15 or JULY
15 next preceding the Interest Payment Date even if the Notes are cancelled,
repurchased or redeemed after the record date and on or before the Interest
Payment Date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay interest by check payable in
such money. It may mail an interest check to a Holder's registered address.
3. TRUSTEE, PAYING AGENT AND REGISTRAR
Initially, IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, a New York
banking corporation (the "Trustee"), will act as Trustee, Paying Agent and
Registrar. The Company may appoint and change any Paying Agent, Registrar or
co-registrar without notice to any Noteholder. The Company or any of its
Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Notes under an Indenture dated as of
January 30, 1998 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. ▇▇.▇▇. 77aaa77bbbb) as in effect on the date of the Indenture (the
"Act"). Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture. The Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the Act for a statement of those
terms.
29
The Notes are general unsecured senior obligations of the
Company limited to $430 million aggregate principal amount (subject to Section
310 of the Indenture). This Note is one of the [Initial]1/ Notes referred to in
the Indenture. The Notes include the Initial Notes and any Exchange Notes issued
in exchange for the Initial Notes pursuant to the Indenture and the Registration
Agreement. The Initial Notes and the Exchange Notes are treated as a single
class of securities under the Indenture. The Indenture imposes certain
limitations on the Incurrence of Indebtedness by the Company and its Restricted
Subsidiaries, the payment of dividends on, and the purchase or redemption of,
Capital Stock of the Company and its Restricted Subsidiaries, certain purchases
or redemptions of Subordinated Indebtedness, the sale or transfer of assets and
Capital Stock of Restricted Subsidiaries, investments of the Company and its
Restricted Subsidiaries and transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and its Subsidiaries to restrict
distributions and dividends from Restricted Subsidiaries.
5. OPTIONAL TAX REDEMPTION
The Notes will be subject to redemption at the option of the
Company at any time on and after January 30, 2003 and prior to maturity, in
whole or in part at the following redemption prices (expressed as percentages of
principal amount), plus accrued interest to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant Interest Payment Date):
If redeemed during the 12-month period commencing on January
30 of the years set forth below:
Period Redemption Price
------ ----------------
2003.................................................. 104.125%
2004.................................................. 102.750%
2005.................................................. 101.375%
2006 and thereafter................................... 100.00%
In addition, at any time and from time to time prior to
January 30, 2001, the Company may redeem in the aggregate up to 33 1/3% of the
original principal amount of the Notes with the proceeds of one or more Equity
Offerings received by the Company so long as there is a Public Market at the
time of such redemption, at a redemption price (expressed as a percentage of
principal amount) of 108.25% plus accrued and unpaid interest, if any, to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant Interest Payment Date);
PROVIDED, HOWEVER, that at least 66 2/3% of the original principal amount of the
Notes must remain outstanding after each such redemption.
6. OPTIONAL TAX REDEMPTION
The Notes will be subject to redemption at the option of the
Company or a successor corporation at any time, in whole but not in part, at a
redemption price equal to the principal amount thereof plus accrued and unpaid
interest, if any, to the redemption date if, as a result of any change in or
amendment to the laws or any regulations or ruling promulgated thereunder of (x)
Bermuda or any political subdivision or governmental authority thereof or
therein having power to tax, (y) any jurisdiction, other than the United
----------
1/ Include only for the Initial Notes.
30
States, from or through which payment on the Notes is made by the Company or a
successor corporation, or its paying agent in its capacity as such or any
political subdivision or governmental authority thereof or therein having the
power to tax or (z) any other jurisdiction, other than the United States, in
which the Company or a successor corporation is organized, or any political
subdivision or governmental authority thereof or therein having the power to tax
or any change in the official application or interpretation of such laws,
regulations or rulings, or any change in the official application or
interpretation of, or any execution of or amendment to, any treaty or treaties
affecting taxation to which such jurisdiction (or such political subdivision or
taxing authority) is a party (a "Change in Tax Law"), which becomes effective on
or after the date of the Indenture, the Company or a successor corporation is or
would be required on the next succeeding Interest Payment Date to pay Additional
Amounts with respect to the Notes, and the payment of such Additional Amounts
cannot be avoided by the use of any reasonable measures available to the Company
or a successor corporation.
In addition, the Notes will be subject to redemption at the
option of the Company at any time, in whole, but not in part, at a redemption
price equal to the principal amount thereof plus accrued and unpaid interest, if
any, to the redemption date if the Person formed by a consolidation or
amalgamation of the Company or into which the Company is merged or to which the
Company conveys, transfers or lease its properties and assets substantially as
an entirety is required pursuant to the Indenture, as a consequence of such
consolidation, amalgamation, merger, conveyance, transfer or lease and as a
consequence of a Change in Tax Law occurring after the date of such
consolidation, amalgamation merger, conveyance, transfer or lease, to pay
Additional Amounts in respect of any tax, assessment or governmental charge
imposed on any Holder.
7. SELECTION
In the case of any partial redemption, selection of the Notes
for redemption will be made by the Trustee on a pro rata basis, by lot or by
such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate. If any Note is to be redeemed in part only, the notice of
redemption relating to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note.
8. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Notes to be
redeemed at his registered address. Notes in denominations of principal amount
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued and
unpaid interest on all Notes (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Notes (or such portions thereof) called for redemption.
9. EXCESS CASH FLOW OFFER
If the Company has Excess Cash Flow for any fiscal year
(commencing with fiscal 2001), the Company shall make an offer to purchase on a
Business Day not later than 150 days following the end of such fiscal year, from
all Holders of Notes, up to a maximum principal amount (expressed as a multiple
31
of $1,000) of Notes equal to (A) the Noteholders' Pro Rata Share of 50% of such
Excess Cash Flow in such fiscal year, minus (B) the principal amount of Notes
theretofore purchased by the Company in the open market and the principal amount
of Notes theretofore redeemed by the Company pursuant to the Indenture and not
theretofore credited against the Company's obligation to make an Excess Cash
Flow Offer for a prior fiscal year. The purchase price of Notes to be purchased
pursuant to an Excess Cash Flow Offer shall be equal to 100% of the principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the Excess
Cash Flow Payment Date. Notwithstanding the foregoing, the Company will not be
required to make an Excess Cash Flow Offer for any fiscal year if the amount of
such Excess Cash Flow Offer would be less than $5.0 million (which amount shall
be carried forward for purposes of determining whether an Excess Cash Flow Offer
is required with respect to subsequent fiscal years). To the extent an Excess
Cash Flow Offer is not fully subscribed to by Holders of the Notes, the
unsubscribed portion of such Excess Cash Flow may be retained by the Company
and/or used for any purpose, subject to the covenants contained in the
Indenture, and shall be excluded from the calculation of Excess Cash Flow for
any subsequent period.
10. PUT PROVISIONS
(a) Upon the occurrence of a Change of Control, each Holder
will have the right to require the Company to repurchase all or any part of such
Holder's Notes at a purchase price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on a record date to receive interest
on the relevant Interest payment Date) and (b) upon an Asset Disposition, the
Company may be obligated to make an offer to purchase Notes at par plus accrued
and unpaid interest, if any, thereon, to the date of purchase with a portion of
the Net Available Cash.
11. DENOMINATIONS; TRANSFER; EXCHANGE
The Notes are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange of (i) any Note selected for redemption (except, in the case of a
Note to be redeemed in part, the portion of the Note not to be redeemed) for a
period beginning 15 days before a selection of Notes to be redeemed and ending
on the date of such selection or (ii) any Notes for a period beginning 15 days
before an Interest Payment Date and ending on such Interest Payment Date.
12. PERSONS DEEMED OWNERS
The registered Holder of this Note may be treated as the owner
of it for all purposes.
13. UNCLAIMED MONEY
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment back to the Company, Holders entitled to the
money must look only to the Company and not to the Trustee for payment.
32
14. DEFEASANCE
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the Notes
and the Indenture if the Company deposits with the Trustee money or Government
Obligations for the payment of principal and interest on the Notes to redemption
or maturity, as the case may be. The Company in its sole discretion can defease
the Notes.
15. AMENDMENT, WAIVER
Subject to certain exceptions, the Indenture may be amended
with the consent of the Holders of a majority in aggregate principal amount of
the Notes then outstanding and any past default or compliance with any
provisions may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Notes then outstanding. Without the consent of
any Holder, the Company and the Trustee may amend the Indenture to cure any
ambiguity, omission, defect or inconsistency, to provide for the assumption by a
successor corporation, partnership, trust or limited liability company of the
obligations of the Company under the Indenture, or to provide for uncertificated
Notes in addition to or in place of certificated Notes, to add Guarantees with
respect to the Notes, to secure the Notes, to add to the covenants of the
Company for the benefit of the Holders or to surrender any right or power
conferred upon the Company, to make any change that does not adversely affect
the rights of any Holder or to comply with any requirement of the Commission in
connection with the qualification of the Indenture under the Trust Indenture
Act, or to confirm and evidence the release and discharge of any Guarantee or
Lien with respect to or securing the Notes when such release and discharge is
permitted by and provided for under the Indenture.
16. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) a default
in any payment of interest on any Note when due, continued for 30 days, (ii) a
default in the payment of principal of any Note when due at its Stated Maturity,
upon optional redemption, upon required purchase, upon declaration or otherwise,
(iii) the failure by the Company to comply with its obligations under Article 8
of the Indenture, (iv) the failure by the Company to comply for 30 days after
written notice with any of its obligations under Sections 1009 through 1020 and
1023 of the Indenture (in each case other than a failure to purchase Notes when
required under Section 1015, 1016 or 1023 of the Indenture which shall
constitute an Event of Default under clause (ii) above), (v) the failure by the
Company to comply for 60 days after written notice with its other agreements
contained in the Indenture, (vi) Indebtedness of the Company or any Restricted
Subsidiary is not paid within any applicable grace period after final maturity
or is accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $5 million, (vii)
certain events of bankruptcy, insolvency or reorganization of the Company or a
Significant Subsidiary, (viii) any judgment or decree for the payment of money
(not fully covered by insurance) in excess of $5 million is rendered against the
Company or a Significant Subsidiary and such judgment or decree shall not have
been paid, vacated, discharged, stayed or bonded pending appeal for a period of
60 days after such judgment becomes final and non-appealable. However, a default
under clause (iv) or (v) will not constitute an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding Notes notify the Company of the default in writing and the Company
does not cure such default within the time specified in clause (iv) or (v), as
applicable, after receipt of such written notice.
Noteholders may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or
33
security. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the outstanding Notes may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Noteholders notice of any
continuing Default or Event of Default (except a Default or Event of Default in
payment of principal or interest) if it determines that withholding notice is in
their interest.
17. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with and collect
obligations owed to it by the Company or its affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
18. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. By accepting a Note, each Noteholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
19. AUTHENTICATION
This Note shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Note.
[20. REGISTRATION RIGHTS
The Holder of this Note is entitled to the benefits of the
Registration Agreement, dated as of January __, 1998 (the "Registration
Agreement"), between the Company and the Initial Purchasers named therein. If
(i) within 60 days after the Issue Date, the Exchange Offer Registration
Statement (as defined in the Registration Agreement) or a Shelf Registration
Statement, as the case may be, has not been filed with the Commission (or in the
case of a Shelf Registration Statement required to be filed pursuant to any
change in law or applicable interpretations thereof by the Commission's staff,
within 60 days after publication of the change in law or interpretation); (ii)
within 150 days after the Issue Date, either the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may be, has not been
declared effective (or in the case of a Shelf Registration Statement required to
be filed pursuant to any change in law or applicable interpretations thereof by
the Commission's staff, if later, within 60 days after publication of the change
in law or interpretation); (iii) within 180 days after the Issue Date, the
Registered Exchange Offer (as defined in the Registration Agreement) has not
been consummated; or (iv) after the Shelf Registration Statement has been
declared effective, such Shelf Registration Statement thereafter ceases to be
effective or usable in connection with resales of Notes or Exchange Notes in
accordance with and during the periods specified in the Registration Agreement
(because either (A) any event occurs as a result of which the related Prospectus
forming part of such Shelf Registration Statement would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under which they
were made not misleading or (B) it shall be necessary to amend such Shelf
Registration Statement or supplement the related prospectus, to comply with the
Securities Act or the Exchange Act or the respective rules thereunder) without,
in the case of (A) or (B), being succeeded within 60 days by an amended or an
additional Shelf Registration Statement filed and declared effective (each such
34
event referred to in clauses (i) through (iv) a "Registration Default"), Special
Interest (as defined in the Registration Agreement) will accrue and be payable
semi-annually on the Notes and the Exchange Notes (in addition to the stated
interest on the Notes and the Exchange Notes) from and including the date such
Registration Default occurs to but excluding the date, as applicable, on which
the applicable Registration Statement is filed or is declared effective, the
Registered Exchange Offer is consummated or the Shelf Registration Statement
again becomes effective, as the case may be. During the time that Special
Interest is accruing continuously the rate of such Special Interest shall be
0.25% per annum during the first 30-day period and shall increase by 0.25% per
annum for each subsequent 30-day period, but in no event shall such rate exceed
1.50% per annum in the aggregate regardless of the number of Registration
Defaults. If, after the cure of a Registration Default, there is a subsequent
Registration Default, the Special Interest rate for such subsequent Registration
Default shall initially be 0.25%, regardless of the Special Interest rate in
effect with respect to any prior Registration Default at the time of the cure of
each Registration Default.]2/
21. ABBREVIATIONS
Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entirety), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to
Minors Act).
22. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholder. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
23. GOVERNING LAW
THIS NOTE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK EXCLUDING (TO THE GREATEST EXTENT
PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
The Company will furnish to any Noteholder upon written
request and without charge to the Noteholder a copy of the Indenture. Requests
may be made to:
FLAG Limited
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Attention of Secretary
----------
2/ Include only for the Initial Notes.
35
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint __________________________, as agent to
transfer this Note on the books of the Company. The agent may
substitute another to act for him.
--------------------------------------------------------------------------------
Date:__________________ Signature:__________________
Signature Guarantee:________________________________
(Signature must be guaranteed)
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.
The signature(s) should be guaranteed by an eligible guarantor institution
(bank, stockbroker, savings and loan association and credit union) with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for, STAMP, pursuant to S.E.C. Rule
17Ad-15.
(In connection with any transfer or exchange of any of the Notes evidenced by
this certificate occurring prior to the date that is two years after the later
of the date of original issuance of such Notes and the last date, if any, on
which such Notes were owned by the Company or any Affiliate of the Company, the
undersigned confirms that such Notes are being:
CHECK ONE BOX BELOW:
1 |_| acquired for the undersigned's own account, without transfer;
or
2 |_| transferred to the Company; or
3 |_| transferred pursuant to an effective registration statement
under the Securities Act of 1933, as amended; or
4 |_| transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended; or
36
5 |_| transferred pursuant to and in compliance with
Regulation S under the Securities Act of 1933, as amended; or
6 |_| transferred to an institutional "accredited
investor" (as defined in Rule 501(a)(1) (2), (3) or
(7) under the Securities Act of 1933, as amended),
that has furnished to the Company and the Initial
Purchasers a signed letter containing certain
representations and agreements (the form of which
letter appears in Section 308 of the Indenture); or
7 |_| transferred pursuant to another available exemption
from the registration requirements of the Securities
Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee may refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; PROVIDED, HOWEVER, that if box (5), (6) or (7) is
checked, the Trustee or the Company may require, prior to registering any such
transfer of the Notes, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended, such as the exemption
provided by Rule 144 under such Act.
-----------------------
Signature
Signature Guarantee:
--------------------------------------------------
(Signature must be guaranteed)
--------------------------------------------------
Signature
The signature(s) should be guaranteed by an eligible guarantor institution
(bank, stockbroker, savings and loan association and credit union) with
membership in STAMP or such other signature guarantee medallion program as may
be approved by the Note Registrar in addition to or substitution for STAMP
pursuant to S.E.C. Rule 17Ad-15].3/
----------
3/ Include only for the Initial Notes.
37
[TO BE ATTACHED TO GLOBAL NOTES)
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have
been made:
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global Note authorized
Date of Principal Amount Principal Amount following such signatory of Trustee
Exchange of this Global Note of this Global Note decrease or increase or Notes Custodian
38
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 1015, 1016, or 1023 of the Indenture, check the box:
|_|
If you want to elect to have only part of this Note purchased
by the Company pursuant to Section 1015, 1016 or 1023 of the Indenture, state
the amount in principal amount (must be integral multiple of $1,000): $
Date:_______________________ Signature_______________________________________
(Sign exactly as your name appears on
the other side of the Note)
Signature Guarantee:___________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(bank, stockbroker, savings and loan association and credit union) with
membership in STAMP or such other signature guarantee medallion program as may
be approved by the Note Registrar in addition to or substitution for STAMP,
pursuant to S.E.C. Rule 17Ad-15.
39
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL 144A CERTIFICATES]
In connection with any transfer of this Note occurring prior
to the date that is the earlier of the date of an effective Registration
Statement (as defined in the Registration Agreement dated as of January 30,
1998) and January 30, 2000, the undersigned confirms that without utilizing any
general solicitation or general advertising:
[CHECK ONE]
[ ] (a) this Note 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 Note is being transferred other than in accordance with
(a) above and documents are being furnished that comply with the
conditions of transfer set forth in this Note and the Indenture.
If neither of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Note 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:________________________ _____________________________________________
SIGNATURE: The signature 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:_____________________________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, 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.
Date:________________________ _____________________________________________
SIGNATURE: To be executed by an executive
officer.
40
SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in
substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-mentioned
Indenture.
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company,
as Trustee
By__________________________________
Authorized Signatory
Dated:_________________
ARTICLE 3. THE NOTES
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Notes which may be
authenticated and delivered under this Indenture is limited to $430 million,
except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Notes pursuant to Section 304, 305,
306, 307, 310, 906, 1015, 1016 or 1108 or pursuant to the Registration
Agreement.
The Initial Notes shall be known and designated as the "8 1/4%
Senior Notes due 2008" and the Exchange Notes shall be known as the "8 1/4%
Senior Exchange Notes due 2008" of the Company. The Stated Maturity of the Notes
shall be January 30, 2008, and they shall bear interest at the rate of 8 1/4%
per annum from January 30, 1998, or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, payable semiannually in
cash and in arrears on January 30 and July 30 of each year, commencing July 30,
1998, to the Person in whose name the Note (or any predecessor Note) is
registered at the close of business on the January 15 and July 15 immediately
preceding the Interest Payment Date. Interest will be computed 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 Notes
shall be payable at the office or agency of the Company maintained for such
purpose in the Borough of Manhattan, The City of New York (which initially shall
be the corporate trust office of the Trustee in New York, New York) except that,
at the option of the Company, payment of interest may be made by check mailed to
the address of each Holder as such address appears in the Note Register.
41
Holders shall have the right to require the Company to
purchase their Notes, in whole or in part, in the event of (i) a Change of
Control, pursuant to Section 1015 and (ii) the existence of Excess Cash Flow
pursuant to Section 1023.
The Notes shall be subject to repurchase by the Company
pursuant to an Asset Disposition as provided in Section 1016.
The Notes shall be redeemable as provided in Article Eleven
and in the Notes.
At the election of the Company, the Company's obligations
under the Notes or certain of the Company's liabilities and covenants and
certain Events of Default thereunder may be defeased as provided in Article
Twelve.
The Notes will be senior unsecured obligations of the Company,
ranking PARI PASSU in right of payment with all other existing and future senior
unsecured obligations of the Company and will rank senior in right of payment to
all existing and future subordinated indebtedness of the Company, if any.
SECTION 302. DENOMINATIONS.
The Notes shall be issuable only in fully registered form,
without coupons, in denominations of $1,000 and any integral multiple of $1,000.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Notes shall be executed on behalf of the Company by two
Officers, of which at least one Officer shall be the President or the Chief
Financial Officer of the Company. The signature of any Officer on the Notes may
be manual or facsimile signatures of the present or any future such authorized
officer and may be imprinted or otherwise reproduced on the Notes.
Notes 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 Notes or did
not hold such offices at the date of such Notes.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Initial Notes executed by
the Company to the Trustee for authentication, together with a Company Order
directing the Trustee to authenticate the Notes, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Initial Notes. On
Company Order, the Trustee shall authenticate for original issue Exchange Notes
in an aggregate principal amount not to exceed $430 million; provided that such
Exchange Notes shall be issuable only upon the valid surrender for cancellation
of Initial Notes of a like aggregate principal amount in accordance with the
Registration Agreement. The Trustee shall be entitled to receive an Officers'
Certificate and an Opinion of Counsel of the Company that it may reasonably
request in connection with such authentication of Notes. Such order shall
specify the Amount of Notes to be authenticated and the date on which the
original issue of Initial Notes or Exchange Notes is to be authenticated.
Each Note shall be dated the date of its authentication.
42
No Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture.
In case the Company pursuant to Article Eight, shall be
consolidated or merged with or into any other Person or shall convey, transfer,
lease or otherwise dispose of its properties and assets substantially as an
entirety to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Company shall have
been merged, or the Person which shall have received a 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 Notes
authenticated or delivered prior to such consolidation, merger, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other Notes 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 Notes surrendered
for such exchange and of like principal amount; and the Trustee, upon Company
Request of the successor Person, shall authenticate and deliver Notes as
specified in such request for the purpose of such exchange. If Notes 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 Notes, such successor Person, at the option of
the Holders but without expense to them, shall provide for the exchange of all
Notes at the time outstanding for Notes authenticated and delivered in such new
name.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes on behalf of the Trustee. Unless limited by
the terms of such appointment, an authenticating agent may authenticate Notes
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 Note Registrar or Paying Agent
to deal with the Company and its Affiliates.
SECTION 304. TEMPORARY NOTES.
Pending the preparation of definitive Notes, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Notes which are printed, lithographed typewritten, mimeographed or
otherwise produced, in any authorized denomination. Temporary Notes shall be
substantially of the tenor of the definitive Notes in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as conclusively
evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause
definitive Notes to be prepared without unreasonable delay. After the
preparation of definitive Notes, the temporary Notes shall be exchangeable for
definitive Notes upon surrender of the temporary Notes at the office or agency
of the Company designated for such purpose pursuant to Section 1002, without
charge to the Holders. Upon, surrender for cancellation of any one or more
temporary Notes, the Company shall execute and the Trustee shall authenticate
and deliver in exchange therefor a like principal amount of definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Notes.
43
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency designated pursuant to Section 1002 being herein
sometimes referred to as the "Note Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers and exchanges of Notes. The Note Register
shall be in written form or any other form capable of being converted into
written form within a reasonable time. At all reasonable times, the Note
Register shall be open to inspection by the Trustee. The Trustee is hereby
initially appointed as security registrar (the Trustee in such capacity,
together with any successor of the Trustee in such capacity, the "Note
Registrar" or "Registrar") for the purpose of registering Notes and transfers
and exchanges of Notes as herein provided.
Upon surrender for registration of transfer of any Note at the
office or agency of the Company designated pursuant to Section 1002, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Notes of any
authorized denomination or denominations of a like aggregate principal amount.
Furthermore, any Holder of a Global Note shall, by acceptance
of such Global Note, agree that transfers of beneficial interests in such Global
Note may be effected only through a book-entry system maintained by the Holder
of such Global Note (or its agent), and that ownership of a beneficial interest
in the Note shall be required to be reflected in a book entry.
At the option of the Holder, Notes may be exchanged for other
Notes of any authorized denomination and of a like aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange (including an exchange of Initial
Notes for Exchange Notes), the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes which the Holder making the exchange is
entitled to receive; PROVIDED that no exchange of Initial Notes for Exchange
Notes shall occur until an Exchange Offer Registration Statement shall have been
declared effective by the Commission, the Trustee shall have received an
Officers' Certificate confirming that the Exchange Offer Registration Statement
has been declared effective by the Commission and the Initial Notes to be
exchanged for the Exchange Notes shall be cancelled by the Trustee.
All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Note
Registrar) be duty endorsed, or be accompanied by a written Instrument of
transfer, in form satisfactory to the Company and the Note Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge will be made for any registration of
transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any transfer tax or other similar governmental charge
payable in connection therewith, other than exchanges pursuant to Section 304,
906, 1015, 1016 or 1108, not involving any transfer.
44
The Company shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the selection of Notes to be redeemed under Section 1104
and ending at the close of business on the day of such mailing of the relevant
notice of redemption or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
The Register shall be in written form in the English language
or in any other form including computerized records, capable of being converted
into written form within a reasonable time.
SECTION 306. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES.
(a) Each Global Note initially shall (i) be registered in the
name of the Depositary for such Global Note or the nominee of such Depositary,
(ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear
legends as set forth in Section 202.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Depositary, or the Trustee as its custodian, or
under the Global Note, 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 Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or shall impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of beneficial interest in any Note.
(b) Transfers of a Global Note shall be limited to transfers
of such Global Note in whole, but not in part, to the Depositary, its successors
or their respective nominees. Interests of beneficial owners in a Global Note
may be transferred in accordance with the rules and procedures of the Depositary
and the provisions of Section 307. If required to do so pursuant to any
applicable law or regulation, beneficial owners may obtain Notes in definitive
form ("Physical Notes") in exchange for their beneficial interests in a Global
Note upon written request in accordance with the Depositary's and the
Registrar's procedures. If (i) (x) the Depositary notifies the Company and the
Company notifies the Trustee in writing that the Depositary is no longer willing
or able to act as Depositary or (y) the Depositary ceases to be registered as a
clearing agency under the Exchange Act, and a successor depositary is not
appointed within 90 days of such notice or cessation or, (ii) the Company, at
its option, notifies the Trustee in writing that it elects to cause the issuance
of Physical Notes hereunder or (iii) an Event of Default has occurred and is
continuing and the Note Registrar has received a request from the Depositary,
then, upon surrender by the Depositary of the Global Notes, certificated Notes
will be issued to each person that the Depositary identifies as the beneficial
owner of the Notes represented by the Global Notes. Neither the Company, any
Guarantor, nor the Trustee shall be liable for any delay by the Depositary or
any participant or indirect participant in identifying the beneficial owners of
the related Notes and each such person may conclusively rely on, and shall be
protected in relying on, instructions from the Depositary for all purposes
(including with respect to the registration and delivery, and the respective
principal amounts, of the Notes to be issued).
(c) Any beneficial interest in one of the Global Notes that is
transferred to a person who takes delivery in the form of an interest in another
Global Note will, upon transfer, cease to be an interest in the first Global
Note and, accordingly, will be subject to all transfer restrictions, if any, and
other
45
procedures applicable to beneficial interests in such other Global Note for as
long as it remains such an interest.
(d) In connection with any transfer of a portion of the
beneficial interest in a Global Note pursuant to subsection (b) of this Section
to beneficial owners who are required to hold Physical Notes, the Note Registrar
shall reflect on its books and records the date and a decrease in the principal
amount of such Global Note in an amount equal to the principal amount of the
beneficial interest in the Global Note to be transferred, and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more Physical
Notes of like tenor and amount.
(e) In connection with the transfer of an entire Global Note
to be beneficial owners pursuant to subsection (b) of this Section, such Global
Note shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depositary in exchange for its beneficial
interest in such Global Note, an equal aggregate principal amount of Physical
Notes of authorized denominations.
(f) Any Physical Note delivered in exchange for an interest in
a Global Note pursuant to subsection (d) or subsection (e) of this Section
shall, unless such exchange is made on or after the Resale Restriction
Termination Date and except as otherwise provided in Section 307, bear the
applicable legend regarding transfer restrictions applicable to the Physical
Note set forth in Section 202.
(g) The registered Holder of a Global Note may grant proxies
and otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take an, action which a Holder is
entitled to take under this Indenture or the Notes.
SECTION 307. SPECIAL TRANSFER PROVISIONS.
(a) The following provisions shall apply with respect to any
proposed transfer of a Rule 144A Note or an Institutional Accredited Investor
Note prior to the expiration of the Resale Restriction Termination Date (as
defined in Section 202 hereof):
(i) a transfer of a Rule 144A Note or an
Institutional Accredited Investor Note or a beneficial interest therein
to a QlB shall be made upon the representation of the transferee that
it is purchasing the Note for its own account or an account with
respect to which it exercises sole investment discretion and that it
and any such account is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act 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 its foregoing representations in order to claim the
exemption from registration provided by Rule 144A;
(ii) a transfer of a Rule 144A Note or an
Institutional Accredited Investor Note or a beneficial interest therein
to an Institutional Accredited Investor shall be made upon receipt by
the Company and the Initial Purchasers of a certificate substantially
in the form set forth in Section 308 hereof from the proposed
transferee and, if requested by the Company, the Initial Purchasers or
the Trustee, the delivery of an opinion of counsel, certification
and/or other information satisfactory to each of them; and
46
(iii) a transfer of a Rule 144A Note or an
Institutional Accredited Investor Note or a beneficial interest therein
to a Non-U.S. Person shall be made upon receipt by the Trustee or its
agent of a certificate substantially in the form set forth in Section
309 hereof from the proposed transferee and, if requested by the
Company or the Trustee, the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them.
(b) The following provisions shall apply with respect to any
proposed transfer of a Regulation S Note prior to the expiration of the
Restricted Period (as defined in Regulation S of the Securities Act):
(i) a transfer of a Regulation S Note or a beneficial
interest therein to a QIB shall be made upon the representation of the
transferee that it is purchasing the Note for its own account or an
account with respect to which it exercises sole investment discretion
and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act, and is aware
that the sale to it is being made in reliance on Rule 144A and
acknowledges that has received such information regarding the Company
as it 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 its foregoing representations in order to claim the
exemption from registration provided Rule 144A;
(ii) a transfer of a Regulation S Note or a
beneficial interest therein to an Institutional Accredited Investor
shall be made upon receipt by the Company and the Initial Purchasers of
a certificate substantially in the form set forth in Section 308 hereof
from the proposed transferee and, if requested by the Company, the
Initial Purchasers or the Trustee, the delivery of an opinion of
counsel, certification and/or other information satisfactory to each of
them; and
(iii) a transfer of a Regulation S Note or a
beneficial interest therein to a Non-U.S. Person shall be made upon, if
requested by the Company or the Trustee, receipt by the Trustee or its
agent of an opinion of counsel, certification and/or other information
satisfactory to each of them.
After the expiration of the Restricted Period, interests in
the Regulation S Note may be transferred without requiring certification set
forth in Section 308 or any additional certification.
(c) Upon the transfer, exchange or replacement of Notes not
bearing the Private Placement Legend, the Note Registrar shall deliver Notes
that do not bear the Private Placement Legend. Upon the transfer, exchange or
replacement of Notes bearing the Private Placement Legend, the Note Registrar
shall deliver only Notes that bear the Private Placement Legend unless there is
delivered to the Note Registrar an Opinion of Counsel reasonably satisfactory to
the Company and the Trustee to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.
(d) By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
47
The Note 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 Note Registrar.
(e) (i) The Trustee shall have no responsibility or obligation
to any beneficial owner of a Global Note, a member of, or a participant in the
Depositary or other Person with respect to any ownership interest in the Notes,
with respect to the accuracy of the records of the Depositary or its nominee or
of any participant or member thereof or with respect to the delivery to any
participant, member, beneficial owner or other Person (other than the
Depositary) of any notice (including any notice of redemption) or the payment of
any amount, under or with respect to such Notes. All notices and communications
to be given to the Holders and all payments to be made to Holders under the
Notes shall be given or made only to the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Note). The rights of
beneficial owners in any Global Note in global form shall be exercised only
through the Depositary subject to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully protected and indemnified
pursuant to Section 607 in relying upon information furnished by the Depositary
with respect to any beneficial owners, its members and participants.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Note (including without limitation any transfers between or
among Depositary participants, members or beneficial owners in any Global Note)
other than to require delivery of such certificates and other documentation of
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
SECTION 308. FORM OF LETTER TO BE DELIVERED IN CONNECTION WITH
TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS.
FLAG Limited
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
12 Par-La-Ville Road
▇▇▇▇▇▇▇▇, ▇▇ 08
Bermuda
and
Salomon Brothers Inc
Barclays de Zoete Wedd Limited
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
c/o Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
48
Dear Sirs:
In connection with our proposed purchase of $ aggregate principal
amount of the 8 1/4% SeniOR Notes due 2008 (the "Notes") of FLAG Limited, a
Bermuda company (the "Company"), we confirm that:
1. We understand that the Notes have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and, unless so
registered, may not be sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Notes to offer, sell or otherwise transfer such Notes prior to the
date which is two years after the later of the date of original issue and the
last date on which the Company or any affiliate of the Company was the owner of
such Notes (or any predecessor thereto) (the "Resale Restriction Termination
Date") only (A) to the Company, (B) pursuant to a registration statement that
has been declared effective under the Securities Act, (C) for so long as the
Notes are eligible for resale pursuant to Rule 144A under the Securities Act
("Rule 144A"), to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (D) pursuant to offers and sales that occur outside the
United States within the meaning of Regulation S under the Securities Act, (E)
to an institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act that is purchasing for its own account
or for the account of such an institutional "accredited investor," in each case,
in a minimum principal amount of $250,000, or (F) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control. The foregoing restrictions on
resale will not apply subsequent to the Resale Restriction Termination Date. If
any resale or other transfer of the Notes is proposed to be made pursuant to
clause (E) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in the form
of this letter to the Company and the Initial Purchased (as defined in the
Indenture relating to the Notes), which shall provide, among other things, that
the transferee is an institutional "accredited investor" within the meaning of
Rule 501 (a)(1), (2), (3) or (7) under the Securities Act and that it is
acquiring such Notes for investment purposes and not for distribution in
violation of the Securities Act. Each purchaser acknowledges that the Company,
the Initial Purchasers and the Trustee (as defined in the Indenture relating to
the Notes) reserve the right prior to the offer, sale or other transfer prior to
the Resale Termination Date of the Notes pursuant to clause (D), (E) or (F)
above to require the delivery of an opinion of counsel, certifications or other
information satisfactory to Company, the Initial Purchasers and the Trustee.
2. We are an institutional investor and are an "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) and we have such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
3. We are acquiring the Notes in a minimum principal amount of
$250,000 purchased by us for our own account or for one or more investor
accounts as to each of which we exercise sole investment discretion and we are
acquiring such Notes for investment purposes and not for distribution in
violation of the Securities Act.
49
4. You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
---------------------------------
(Name of Purchaser)
By:
------------------------------
Date:
----------------------------
50
SECTION 309. FORM OF LETTER TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATIONS.
[date]
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: FLAG Limited (the "Company")
8 1/4% Senior Notes due 2008 (the "Notes")
------------------------------------------
Ladies and Gentlemen:
In connection with our sale of $________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the United States Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, we represent that:
(a) the offer of the Notes was not made to a person in the
United States;
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States or (ii) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(c) no directed selling efforts were made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(d) the transaction was not part of a plan or scheme to evade
the registration requirements of the Securities Act.
In addition, if the sale was made during a restricted period
and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale was made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1).
51
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:__________________________ ________________________
Authorized Signature Signature Medallion Guaranteed
SECTION 310. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If (i) any mutilated Note is surrendered to the Trustee, or
(ii) the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, and there is delivered by the Company,
any Guarantor (if applicable) and 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
Note has been acquired by a bona fide purchaser, the Company shall execute, and
upon Company Order the Trustee shall authenticate and deliver, in exchange for
any such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a
new Note of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, any Guarantor and other
obligor upon the Notes, whether or not the mutilated, destroyed, lost or stolen
Note 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
Notes 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 Notes.
SECTION 311. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Note which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name such Note (or one or more predecessor Notes) is registered at the
close of business on the Regular Record Date for such interest at the office or
agency of the Company maintained for such purpose pursuant to Section 1002;
PROVIDED, HOWEVER, that each
52
installment of interest may at the Company's option be paid by (i) mailing a
check for such interest, payable to or upon the written order of the Person
entitled thereto pursuant to Section 312, to the address of such Person as it
appears in the Note Register or (ii) wire transfer to an account located in the
United States maintained by such Person.
Any interest on any Note which is payable, but is not paid
when the same becomes due and payable and such nonpayment continues for a period
of 30 days shall forthwith cease to be payable to the Holder on the Regular
Record Date by virtue of having been such Holder, and such defaulted interest
and (to the extent lawful) interest on such defaulted interest at the rate borne
by the Notes (such defaulted interest and interest thereon herein collectively
called "Defaulted Interest") shall be paid by the Company, at its election in
each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes 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 Note and the date of the proposed payment (the "Special Interest 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 date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a
record date (the "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 Special Interest 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 of such Special Record Date, and in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date and Special Interest Payment Date
therefor to be given in the manner provided for in Section 106, 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 Interest Payment Date
therefor having been so given, such Defaulted Interest shall be paid on the
Special Interest Payment Date to the Persons in whose names the Notes are
registered at the close of business on such Special Record Date and may no
longer be payable pursuant to the following clause (b).
(b) 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 Notes may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 312. PERSONS DEEMED OWNERS.
Prior to the due presentment of a Note for registration of
transfer, the Company, the Trustee and any agent of the Company, any Guarantor
or the Trustee may treat the Person in whose name such Note is registered as the
owner of such Note for the purpose of receiving payment of principal of (and
premium,
53
if any) and (subject to Sections 305 and 311) interest on such Note and for all
other purposes whatsoever, whether or not such Note be overdue, and none of 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 313. CANCELLATION.
All Notes surrendered for payment, redemption, registration of
transfer or exchange shall if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. If the
Company shall acquire any of the Notes other than as set forth in the preceding
sentence, the acquisition shall not operate as a redemption or satisfaction of
the Indebtedness represented by such Notes unless and until the same are
surrendered to the Trustee for cancellation pursuant to the Section 313. No
Notes shall be authenticated in lieu of or in exchange for any Notes cancelled
as provided in this Section, except as expressly permitted by this Indenture.
All cancelled Notes held by the Trustee shall be destroyed by the Trustee and
the Trustee shall send a certificate of such destruction to the Company.
SECTION 314. COMPUTATION OF INTEREST.
Interest on the Notes shall be computed on the basis of a
360-day year of twelve 30-day months.
SECTION 315. CUSIP NUMBERS.
The Company in issuing Notes may use "CUSIP" numbers (if then
generally in use) in addition to serial numbers; if so, the Trustee shall use
such "CUSIP" numbers in addition to serial numbers in notices of redemption and
repurchase as a convenience to Holders; PROVIDED that any such notice may state
that no representation is made as to the correctness of such CUSIP numbers,
either as printed on the Notes or as contained in any notice of a redemption or
repurchase and that reliance may be placed only on the serial or other
identification numbers printed on the Notes, and any such redemption or
repurchase shall not be affected by any defect in or omission of such CUSIP
numbers. The Company will promptly notify the Trustee of any change in the CUSIP
numbers.
ARTICLE 4. SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of
further effect (except as to surviving rights of registration of transfer or
exchange of Notes expressly provided for herein or pursuant hereto) and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture when
(i) either
(A) all Notes theretofore authenticated and
delivered (other than (1) Notes which have been lost, stolen
or destroyed and which have been replaced or paid as provided
in Section 310 and (2) Notes for whose payment money has
theretofore been deposited in trust with the Trustee or any
Paying Agent or segregated and held in trust by
54
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
(B) all Notes not theretofore delivered to the
Trustee for cancellation
(1) have become due and payable by reason of
the making of a notice of redemption or otherwise; or
(2) will become due and payable at their
Stated Maturity within one year; or
(3) are to be called for redemption within
one year under arrangements 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 in the case of (1), (2) or (3) above, has
irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for such purpose an amount in
cash or Government Obligations sufficient to pay and discharge
the entire indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation, for principal of
(and premium, if any) and interest to the date of such deposit
(in the case of Notes which have become due and payable) or to
the Stated Maturity or Redemption Date thereof, as the case
may be;
(ii) no Default or Event of Default with respect to
this Indenture or the Notes shall have occurred and be continuing on
the date of such deposit or shall occur as a result of such deposit and
such deposit will not result in a breach or violation of, or constitute
a default under, any other instrument or agreement to which the Company
or any Guarantor of the Notes is a party or by which it is bound;
(iii) the Company or any Guarantor has paid or caused
to be paid all sums payable hereunder by the Company or any Guarantor
in connection with all the Notes including all fees and expenses of the
Trustee;
(iv) the Company has delivered irrevocable
instructions to the Trustee to apply the deposited money toward the
payment of such Notes at maturity or the Redemption Date, as the case
may be; and
(v) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture and the termination of the Company's
obligation hereunder have been satisfied.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 607 and,
if money shall have been deposited with the Trustee Pursuant to subclause (B) of
clause (i) of this Section, the obligations of the Trustee under Section 402 and
the last paragraph of Section 1003 shall survive any such satisfaction and
discharge.
55
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee Pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Notes 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 (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Obligations in accordance with this Section by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 401; PROVIDED that if the Company has made any payment of principal of,
premium, if any, or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Obligations held
by the Trustee or Paying Agent.
ARTICLE 5. 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):
(i) a default in any payment of interest on any Note
when due, continued for 30 days;
(ii) a default in the payment of principal of any
Note when due at its Stated Maturity upon optional redemption, upon
required purchase, upon declaration or otherwise;
(iii) the failure by the Company to comply with its
obligations under Article Eight;
(iv) the failure by the Company to comply for 30 days
after the notice specified below with any of its obligations under
Sections 1009 through 1020 and 1023 (in each case other than a failure
to purchase Notes when required under Sections 1015, 1016 and 1023
which shall constitute an Event of Default under clause (ii) above);
(v) the failure by the Company to comply for 60 days
after the notice specified below with any of its other agreements
contained in this Indenture;
56
(vi) Indebtedness of the Company or any Restricted
Subsidiary is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default
and the total amount of such Indebtedness unpaid or accelerated exceeds
$5 million;
(vii) (1) the Company or any Significant Subsidiary
pursuant to or within the meaning of any bankruptcy law:
(A) commences a voluntary case;
(B) consents to the entry of an order for
relief against it in an involuntary case:
(C) consents to the appointment of a
custodian of it or for any substantial part of its property;
(D) makes a general assignment for the
benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(2) a court of competent jurisdiction enters an order
or decree under any bankruptcy law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
(B) appoints a custodian of the Company or
any Significant Subsidiary or for any substantial part of its property;
or
(C) orders the winding up or liquidation of
the Company or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or decree
remains unstayed and in effect for 90 days; or
(viii) any judgment or decree for the payment of
money (not fully covered by insurance) in excess of $5 million is
rendered against the Company or a Significant Subsidiary and such
judgment or decree shall not have been paid, vacated, discharged,
stayed or bonded pending appeal for a period of 60 days after such
judgment becomes final and non-appealable.
A Default under clause (iv) or (v) will not constitute an
Event of Default until the Trustee of the Holders of at least 25% in aggregate
principal amount of the outstanding Notes notify the Company of the Default in
writing and the Company does not cure such Default within the time specified in
clause (iv) or (v), as applicable, after receipt of such notice. Such notice
must specify the Default, demand that is to be remedied and state that such
notice is a "Notice of Default."
57
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND
ANNULMENT.
If an Event of Default (other than by reason of an Event of
Default specified in Section 501 (vii) occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of the outstanding
Notes by written notice to the Company and the Trustee may declare the principal
of, and accrued interest on, all the Notes to be due and payable. Upon such a
declaration, such principal and accrued and unpaid interest shall be due and
payable immediately. Notwithstanding the foregoing, in the case an Event of
Default specified in Section 501 (vii) occurs and is continuing, then the
principal of and accrued and unpaid interest on all the Notes will become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders.
The Holders of a majority in aggregate principal amount of the
outstanding Notes by notice to the Trustee may rescind any such acceleration
with respect to the Notes and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. The Trustee may rely upon such notice of
rescission without any independent investigation as to the satisfaction of the
conditions in the preceding sentence. No such rescission shall affect subsequent
any Default or Event of Default or impair any right consequent thereto.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE.
If an Event of Default specified in Section 501(i) or 501(ii)
occurs and is continuing, the Trustee, in its own name as trustee of an express
trust, may institute a judicial proceeding for the collection of the sums so due
and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any Guarantor (in accordance with the
applicable Guarantee of the Notes) or any other obligor upon the Notes 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 Notes, 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 or any Guarantee of the Notes by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, including seeking recourse against any
Guarantor pursuant to the terms of any Guarantee of the Notes, 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 to enforce any other proper remedy
including, without limitation, seeking recourse against any Guarantor pursuant
to the terms of a Guarantee of the Notes, or to enforce any other proper remedy,
subject however to Section 513. No recovery of any such 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 Notes or the property of the Company or of
such other obligor, the Trustee (irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made
58
any demand on the Company for the payment of overdue principal, premium, if any,
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(i) 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 Notes, to take such other actions (including
participating as a member, voting or otherwise, of any official
committee of creditors appointed in such matter) 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
(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute
the same;
and any custodian 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
Notes 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; PROVIDED, HOWEVER,
that the Trustee may, on behalf of such Holders, vote for the election of a
trustee in bankruptcy or other similar official.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
NOTES.
All rights of action and claims under this Indenture, the
Notes or the Guarantees of the Notes may be prosecuted and enforced by the
Trustee without the possession of any of the Notes 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 Notes
in respect of which such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, on the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Notes 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 for
principal of (and premium, if any) and interest on the Notes in respect
of which or for the benefit of which such
59
money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Notes for
principal (and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto, including the Company, any Guarantor or any other obligor on
the Notes, as their interests may appear or as a court of competent
jurisdiction may direct, 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.
Except to enforce the right to receive payment of principal,
premium, if any, or interest when due, no Holder may pursue any remedy with
respect to this Indenture or the Notes unless:
(i) such Holder has previously given the Trustee
notice that an Event of Default is continuing;
(ii) Holders of at least 25% in principal amount of
the outstanding Notes have requested the Trustee to pursue the
remedy;
(iii) such Holders have offered the Trustee
reasonable security or indemnity against any loss, liability
or expense;
(iv) the Trustee has not complied with such request
within 60 days after the receipt the request and the offer of
security or indemnity; and
(v) the Holders of a majority in principal amount of
the outstanding Notes have not given the Trustee a direction
that, in the opinion of the Trustee, is inconsistent with such
request with such 60-day period;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture, any Note or any Guarantee of the Notes 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 Note or any Guarantee of the Notes, except in the manner herein
provided 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 Note shall have the right, which is absolute and unconditional, to
receive payment, as provided herein (including, applicable, Article Eleven) and
in such Note of the principal of (and premium, if any) and (subject to Section
311) interest on such Note on the respective Stated Maturities expressed in such
Note (or, in the case of redemption or purchase, on the Redemption Date or
purchase) and to institute suit for the enforcement of any such payment, and
such rights shall not be impaired without the consent of such Holder.
60
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 of the Notes
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, subject to any determination in such proceeding, the Company, any
Guarantor, any other obligor on the Notes, the Trustee and the Holders shall 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.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes in the last paragraph
of Section 310, 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 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.
SECTION 512. CONTROL BY HOLDERS.
Subject to certain restrictions, the Holders of a majority in
principal amount of the outstanding Notes are given the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee,
PROVIDED that
(i) such direction shall not be in conflict with any
rule of law or this Indenture;
(ii) the Trustee need not take any action which might
be unduly prejudicial to the rights of any other Holder or
would involve the Trustee in personal liability; and
(iii) subject to the provisions of TIA Section 3l5,
the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Prior to taking any action under this Indenture, the Trustee
shall be entitled to indemnification satisfactory to it in its sole discretion
against all losses and expenses caused by taking or not taking such action.
61
SECTION 513. WAIVER OF PAST DEFAULTS.
Subject to Sections 508 and 902, the Holders of a majority in
aggregate principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for the Notes) may
on behalf of the Holders of all the Notes, by written notice to the Trustee,
waive any existing Default or Event of Default and its consequences under this
Indenture or any Guarantee of the Notes except a continuing Default or Event of
Default in the payment of interest on, premium, if any, of the principal of, any
such Note held by a non-consenting Holder, or in respect of a covenant or a
provision which cannot be amended or modified without the consent of all
Holders.
In the event that any Event of Default specified in Section
501 (vi) shall have occurred and be continuing, such Event of Default and all
consequences thereof (including without limitation any acceleration or resulting
payment default) shall be annulled, waived and rescinded, automatically and
without any action by the Trustee or the Holders of the Notes, if within 30 days
after such Event of Default arose (i) the Indebtedness that is the basis for
such Event of Default has been discharged, or (ii) the holders thereof have
rescinded or waived the acceleration, notice or action (as the case may be)
giving rise to such Event of Default, or (iii) if the default that is the basis
for such Event of Default has been cured.
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 extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
SECTION 514. WAIVER OF STAY OR EXTENSION LAWS.
The Company, the Guarantors and any other obligors upon the
Notes, 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 wherever enacted, now or at
any time hereafter in force, which would prohibit or forgive the Company, any
Guarantor or any such obligor from paying all or any portion of the principal
of, premium, if any, or interest on the Notes contemplated herein or in the
Notes or which may affect the covenants or the performance of this indenture;
and each of the Company, any Guarantor and any such obligor (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 515. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any
Note 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 and expenses, 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 Notes, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal, premium, if any, or interest on any Note on or
62
after the respective Stated Maturities expressed in such Note (or, in the case
of redemption or purchase, on or after the Redemption Date or purchase).
ARTICLE 6. THE TRUSTEE
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and
the Trustee should not be liable except for the performance of such
duties as specifically set forth in this Indenture and no others; and
no implied covenants or obligations shall be read into this Indenture
against the Trustee, and
(ii) 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; but in the case of
any such certificates or opinions, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture, but not to verify the contents thereof.
(b) In case an Event of Default has occurred and is continuing
of which a Trust Officer of the Trustee has actual knowledge or of which written
notice of such Event of Default shall have been given to the Trustee by the
Company, any other obligor of the Notes or by any Holder, 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 their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct or bad faith, except
that
(i) this paragraph (c) shall not be construed to
limit the effect of paragraph (a) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in aggregate
principal amount of the outstanding Notes relating to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
63
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section and to the TIA.
SECTION 602. NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any Default hereunder,
the Trustee shall transmit in the manner and to the extent provided in TIA
Section 313(c), notice of such Default hereunder actually known to a Trust
Officer of the Trustee, unless such Default shall have been cured or waived;
PROVIDED, HOWEVER, that, except in the case of a Default in the payment of
principal of, premium, if any, or interest on any Note, the Trustee may withhold
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding notice is in the interests of the Holders.
Notwithstanding anything to the contrary expressed in this Indenture, the
Trustee shall not be deemed to have knowledge of any Default or Event of Default
hereunder unless and until the Trustee shall have received written notice
thereof from the Company at its principal Corporate Trust Office as specified in
Section 105, except in the case of an Event of Default under Section 501(i) or
501(ii) (provided that the Trustee is the Paying Agent).
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
(a) Subject to the provisions of TIA Sections 315(a) through
315(d):
(i) the Trustee may conclusively rely and shall be
protected in acting or refraining from acting upon (whether in its
original or facsimile form) 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 and the Trustee need not
investigate any fact or matter stated in the documents;
(ii) 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;
(iii) whenever in the administration of this
lndenture the Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith or willful misconduct on
its part, request and rely upon an Officers' Certificate and/or an
Opinion of Counsel and shall not liable for any action it takes or
omits to take in good faith reliance on such Officer's Certificate
and/or Opinion of Counsel;
(iv) 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;
(v) the Trustee will be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at
the request or direction of any of the Holders pursuant to the
Indenture, unless such Holders shall have offered to the Trustee
reasonable indemnity or security
64
satisfactory to the Trustee against any loss, liability or expense
which might be incurred by it in compliance with such request or
direction;
(vi) 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, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or
by agent or attorney (the Trustee being required to maintain
confidentiality upon such inquiry but only to the extent not
inconsistent with the Trustee's duties hereunder);
(vii) 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; and
(viii) the Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith and reasonably believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture; PROVIDED, HOWEVER, that the
Trustee's conduct does not constitute willful misconduct, bad faith or
negligence.
(b) The Trustee shall not be required 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 lights 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.
SECTION 604. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE
OF NOTES.
The recitals contained herein and in the Notes, except for the
Trustee's certificates of authentication, shall be taken as the. statements of
the Company, and the Trustee assumes no responsibility for their correctness and
it shall not be responsible for the Company's use of the proceeds from the
Notes. The Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Notes, except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the Notes
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility 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 the proceeds of the
Notes.
SECTION 605. MAY HOLD NOTES.
The Trustee, any Paying Agent, any Note Registrar or any other
agent of the Company or of the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Notes and, subject to TIA Sections 310(b) and
311, may otherwise deal with the Company with the same rights it would have if
it were not Trustee, Paying Agent, Note Registrar or such other agent.
65
SECTION 606. MONEY HELD IN TRUST.
All moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust hereunder for the purposes for
which they were received, but need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed in writing with
the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(i) to pay to the Trustee from time to time such
compensation as shall be agreed to in writing between the Company and
the Trustee 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);
(ii) except as otherwise expressly provided herein,
to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents, consultants and counsel and costs and expenses of collection),
except any such expense, disbursement or advance as may be attributable
to its willful misconduct, bad faith or negligence; and
(iii) to indemnify each of the Trustee or any
predecessor Trustee (and their respective directors, officers,
stockholders, employees and agents) for, and to hold them harmless
against, any and all loss, damage, claim, liability or expense,
including taxes (other than taxes based on the income of the Trustee)
incurred without negligence, willful misconduct or bad faith on their
part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending themselves against any claim or liability in connection with
the exercise or performance of any of the Trustee's powers or duties
hereunder.
The obligations of the Company under this Section to
compensate the Trustee, to pay or reimburse the Trustee for expenses,
disbursements and advances and to indemnify and hold harmless the Trustee shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. As security for the performance of such
obligations of the Company, the Trustee shall have a lien prior to the Holders
of the Notes upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of principal of (and premium,
if any) or interest on particular Notes.
66
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(vii), the expenses
(including the reasonable charges and expenses of its counsel) of and the
compensation for such services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination
of this Indenture.
SECTION 608. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall be at all times a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1), and which shall have an
office in the Borough of Manhattan, in The City of New York and shall have a
combined capital and surplus of at least $50,000,000. If the Trustee does not
have an office in the Borough of Manhattan, in The City of New York, the Trustee
may appoint an agent in the Borough of Manhattan, 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 Borough of Manhattan, in
The City of New York. If such corporation 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, 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, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 609. RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR.
(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 in
accordance with the applicable requirements of Section 610.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. Upon receiving such notice of 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 required by this Section shall not have been
delivered to the resigning Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of not less than a majority in principal amount of the outstanding
Notes, delivered to the Trustee and to the Company. The Trustee so removed may,
at the expense of the Company, petition any court of competent jurisdiction for
the appointment of a successor Trustee if no successor Trustee is appointed
within 30 days of such removal.
67
(d) If at any time:
(i) the Trustee shall fail to comply with the
provisions of TIA Section 310(b) after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Note for
at least six months, or
(ii) the Trustee shall cease to be eligible under
Section 608 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 Note
for at least six months, or
(iii) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a custodian 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 such case, (A) the Company, by a Board Resolution, may remove the
Trustee, or (B) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Note 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.
(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. If, within one year after such resignation, removal or
incapability, of the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
outstanding Notes delivered to the Company and the retiring Trustee, the
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 and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Note for at least six
months may, at the expense of the Company 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 to the
Holders of Notes in the manner provided for in Section 106. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 610. 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
68
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; but, on request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
Notwithstanding the replacement of the Trustee pursuant to this Section, the
Company's obligations under Section 607 shall continue for the benefit of the
retiring Trustee with regard to expenses and liabilities incurred by it and
compensation earned by it prior to such replacement or otherwise under this
Indenture. 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, powers and trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 611. 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 success of the Trustee, shall be the successor of the Trustee
hereunder, PROVIDED such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes. In case at
that time any of the Notes shall not have been authenticated, any successor
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee. In all such cases such
certificates shall have the full force and effect which this Indenture provides
for the certificate of authentication of the Trustee; PROVIDED, HOWEVER, that
the right to adopt the certificate of authentication of any predecessor Trustee
or to authenticate Notes in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
SECTION 612. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE
COMPANY.
Any application by the Trustee for written instructions from
the Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under the Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective Subject to Section 610, the Trustee shall not be liable for any action
taken by, or omission of the Trustee in accordance with a proposal included in
such application on or after the date specified in such application (which date
shall not be less than three Business Days after the
69
date any officer of the Company actually receives such application, unless any
such officer shall have consented in writing to any earlier date) unless prior
to taking any such action (or the effective date in the case of an omission),
the Trustee shall have received written instructions in response to such
application specifying the action to be taken or omitted.
ARTICLE 7. HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES.
The Company will furnish or cause to be furnished to the
Trustee
(a) semiannually, not more than 10 days after each Regular
Record Date, a list, 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 Note Registrar, no such
list need be furnished.
SECTION 702. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.
Every Holder of Notes, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company or the Trustee
or any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with TIA 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 TIA Section
312(b).
SECTION 703. REPORTS BY TRUSTEE.
Within 60 days after May 15 of each year commencing with the
first May 15 after the first issuance of Notes, the Trustee shall transmit to
the Holders, in the manner and to the extent provided in TIA Section 313(c), a
brief report dated as of such May 15 if required by TIA Section 313(a).
The Trustee also shall comply with TIA Section 313(b). A copy
of each report at the time of its mailing to Holders shall be filed by the
Trustee with the Commission and each stock exchange (if any) on which the Notes
are listed. The Company agrees to notify promptly the Trustee whenever the Notes
become listed on any stock exchange and of any delisting thereof.
70
ARTICLE 8. MERGER, CONSOLIDATION, OR SALE OF ASSETS
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS.
The Company shall not in a single transaction or series of
related transactions consolidate with or merge with or into, or convey, transfer
or lease all or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person
(the "Successor Company") shall be a corporation, partnership, trust or
limited liability company organized and existing under the laws of
Bermuda, the United Kingdom or the United States of America, any State
or political subdivision thereof or the District of Columbia and the
Successor Company (if not the Company) shall expressly assume, by
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under
the Notes and this Indenture;
(ii) immediately after giving effect to such
transaction (and treating any Indebtedness that becomes an obligation
of the Successor Company or any Subsidiary of the Successor Company as
a result of such transaction as having been incurred by the Successor
Company or such Subsidiary at the time of such transaction), no Default
or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such
transaction, the Consolidated Net Worth of the Company or the Successor
Company, as the case may be, is not less than that of the Company
immediately prior to the transaction;
(iv) immediately after giving effect to such
transaction, the Successor Company would at the time of such
transaction or series of transactions, after giving pro forma effect to
such transaction be able to Incur at least $1.00 of Indebtedness
pursuant to paragraph (a) of Section 1010.
(v) the Company shall have delivered to the Trustee
(A) an Officers' Certificate, stating that (1) such Officers are not
aware of any Default or Event of Default that shall have happened and
be continuing and (2) such consolidation, merger or transfer and such
supplemental indenture comply with this Indenture; PROVIDED that no
Officers' Certificate will be required as to matters described in
clause (A)(1) of this clause (v) for a consolidation, merger or
transfer described in the last paragraph of this Section 801, and (B)
an Opinion of Counsel, stating that such consolidation, merger or
transfer and such supplemental indenture comply with this Indenture,
both in the form required by this Indenture; PROVIDED that (1) in
giving such opinion such counsel may rely on such officer's certificate
as to any matters of fact (including without limitation as to
compliance with the foregoing clauses (ii) and (iii)), and (2) no such
Opinion of Counsel will be required for a consolidation, merger or
transfer described in the last paragraph of this Section 801; and
71
(vi) Each Guarantor, if any, unless it is the other
party to the transactions described above, shall have confirmed by
supplemental Indenture that its Note Guarantee shall apply to such
Person's obligations under this Indenture and the Notes.
Notwithstanding the foregoing, (x) any Restricted Subsidiary of the Company may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company and (y) the Company may merge with an Affiliate
incorporated solely for the purpose of reincorporating the Company in another
jurisdiction to realize tax or other benefits. This Section 801 does not
prohibit the formation of a holding company which would hold stock of the
Company.
SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with or merger of the
Company with or into any other corporation or any conveyance, transfer, lease or
other disposition of all or substantially all of the assets of the Company to
any Person in accordance with Section 801, the Successor Company will succeed
to, and be substituted for, and may exercise every right and power of, the
Company hereunder and thereafter the predecessor Company shall be released from
all obligations and covenants hereunder, but, in the case of a lease of all or
substantially all its assets, the predecessor Company will not be released from
the obligation to pay the principal of and interest on the Notes.
ARTICLE 9. SUPPLEMENTS AND AMENDMENTS TO INDENTURE
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS.
Without the consent of any Holders, the Company, the
Guarantors, if any (with respect to a Guarantee of the Notes to which it is a
party), and the Trustee, at any time and from time to time, may enter into one
or more indentures supplemental hereto, in form satisfactory to the Trustee, for
any of the following purposes:
(i) to cure any ambiguity, omission, defect or
inconsistency; or
(ii) to provide for the assumption by a successor
corporation, partnership, trust or limited liability company
of the obligations of the Company hereunder; or
(iii) to provide for uncertificated Notes in addition
to or in place of certificated Notes (PROVIDED that the
uncertificated Notes are issued in registered form for
purposes of Section 163(f) of the Code, or in a manner such
that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code); or
(iv) to add Guarantees with respect to the Notes; or
72
(v) to secure the Notes; or
(vi) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power
conferred upon the Company; or
(vii) to make any other change that does not
adversely affect the rights of any Holder; or
(viii) to comply with any requirement of the
Commission in connection with the qualification of this
Indenture under the TIA; or
(ix) to confirm and evidence the release and
discharge of any Guarantee or Lien with respect to or securing
the Notes when such release and discharge is permitted by and
provided for hereunder.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for the Notes), the
Company and the Trustee may enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders under this Indenture; PROVIDED, HOWEVER, that
no such supplemental indenture shall, without the consent of each Holder
affected thereby (with respect to any Notes held by such Holder):
(i) reduce the amount of Notes whose Holders must
consent to an amendment; or
(ii) reduce the stated rate of or extend the stated
time for payment of interest on any Note; or
(iii) reduce the principal of or extend the Stated
Maturity (other than the extension or elimination of the
Excess Cash Flow Payment Date) of any Note; or
(iv) reduce the premium payable upon the redemption
or purchase of any Note or change the time at which any Note
may be redeemed as described in Section 1101; or
(v) make any Note payable in money other than that
stated in the Note; or
73
(vi) impair the right of any Holder to receive
payment of principal of and interest on such Holder's Notes on
or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder's
Notes; or
(vii) make any change in the amendment provisions
which require each Holder's consent or in the waiver
provisions.
The consent of the Holders is not necessary under this
Indenture to approve the particular form of any proposed supplemental indenture.
It is sufficient if such consent approves the substance of the proposed
supplemental indenture.
SECTION 903. SUPPLEMENTAL INDENTURES AFFECTING THE TRUSTEE;
EXECUTION OF SUPPLEMENTAL INDENTURES.
The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities, as determined by the Trustee in its sole discretion under this
Indenture or otherwise. In signing or refusing to sign any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Officers' Certificate and the Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture.
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 Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby (except as provided in Section 902).
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the TIA as then in effect.
SECTION 906. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 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 or the Trustees
shall so determine, new Notes so modified as to conform to any such supplemental
indenture may be prepared and executed by the Company, and the Company shall
issue and the Trustee shall authenticate a new Note that reflects the changed
terms, the cost and expense of which will be borne by the Company, in exchange
for outstanding Notes.
74
SECTION 907. NOTICE OF SUPPLEMENTAL INDENTURES.
Promptly after the execution by the Company 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 affected Note then
outstanding, in the manner provided for in Section 106, setting forth in general
terms the substance of such supplemental indenture. The failure to give such
notice to all the Holders, of any defect therein, will not impair or affect the
validity of the supplemental indenture.
ARTICLE 10. COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND
INTEREST.
The Company covenants and agrees for the benefit of the
Holders that it will duly and punctually pay the principal of (and premium, if
any) and interest on the Notes in accordance with the terms of the Notes and
this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The
City of New York, an office or agency where the Notes may be presented or
surrendered for payment, where, if applicable, the Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Notes and this Indenture may be served. The
Corporate Trust Office of the Trustee shall 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 any change in the location of any such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies (in or outside of The City of New York) where the
Notes may be presented or surrendered for any or all such purposes and may from
time to time rescind any such designation; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and any change in the location
of any such other office or agency.
75
SECTION 1003. MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent,
it will, on or before each due date of the principal of (or premium, if any) or
interest on any of the Notes, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal of (or 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 to so act.
Whenever the Company shall have one or more Paying Agents for
the Notes, it will, on or before each due date of the principal of (or premium,
if any) or interest on any Notes, deposit with a Paying Agent a sum in same day
funds that shall be available to the Trustee by 11:00 a.m. Eastern Standard Time
an such due date sufficient to pay the principal (and 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 to so act.
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:
(i) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest on Notes 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;
(ii) give the Trustee notice of any default by the
Company (or any other obligor upon the Notes) in the making of any
payment of principal (and premium, if any) or interest; and
(iii) 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.
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 sums.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company in trust for the payment of the principal of (or
premium, if any) or interest on any Note and remaining unclaimed for two years
after such principal, premium or interest has become due and
76
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharge from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER that the Trustee or such
Paying Agent, before being required to make any such repayment to the Company,
may at the expense of the Company cause to be published once, in a leading daily
newspaper (if practicable, THE WALL STREET JOURNAL (Eastern Edition)) printed in
the English language and of general circulation in The City of New York, 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 publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 1004. CORPORATE EXISTENCE.
Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect the
corporate existence of the Company and that of each Restricted Subsidiary and
the corporate rights (charter and statutory), licenses and franchises of the
Company and each Restricted Subsidiary; PROVIDED, HOWEVER, that the Company
shall not be required to preserve any such right, license or franchise, or the
existence of any Restricted Subsidiary, if the Board of Directors of the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and each of its Restricted Subsidiaries,
taken as a whole, and that the loss thereof is not, and will not be,
disadvantageous in any material respect to the Holders.
SECTION 1005. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary or upon the income, profits or property of the Company or any
Subsidiary and (ii) all lawful claims for labor, materials and supplies, which,
if unpaid, might by law become a material liability or lien upon the property of
the Company or any Restricted Subsidiary; 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 and for which
appropriate reserves, if necessary (in the good faith judgment of management of
the Company) are being maintained in accordance with GAAP.
SECTION 1006. MAINTENANCE OF PROPERTIES.
The Company will cause all material properties owned by the
Company or any Restricted Subsidiary or used or held for use in the conduct of
its business or the business of any Restricted Subsidiary to be maintained and
kept in normal condition, repair and working order and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
77
thereof, all as in the judgment of the Company may be 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
or any of its Restricted Subsidiaries from discontinuing the maintenance of any
of such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Restricted
Subsidiary and not adverse in any material respect to the Holders.
SECTION 1007. INSURANCE.
To the extent available at commercially reasonable rates, the
Company will maintain, and will cause its Restricted Subsidiaries to maintain,
insurance with insurers of recognized financial responsibility, against such
risks and in such amounts, and with such deductibles, retentions, self-insured
amounts and co-insurance provisions, as are prudent, including professional and
general liability, property and casualty loss, and workers' compensation
insurance. In the event the Company determines that insurance satisfying the
first sentence of this Section 1007 is not available at commercially available
rates, it shall provide an Officers' Certificate to such effect to the Trustee
and the Trustee may conclusively rely on the determinations set forth therein.
SECTION 1008. COMPLIANCE WITH LAWS.
The Company shall comply, and shall cause each of its
Restricted Subsidiaries to comply, with all applicable statutes, rules,
regulations, orders and restrictions of all governmental bodies, domestic or
foreign, in respect of the conduct of their respective businesses and the
ownership of their respective properties, except for such noncompliances as
could not in the aggregate reasonably be expected to have a material adverse
effect on the financial condition or results of operations of the Company and
its Restricted Subsidiaries, taken as a whole.
SECTION 1009. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries, directly or indirectly, to (i) declare or pay any
dividend or make any distribution on or in respect of its Capital Stock
(including any payment in connection with any merger or consolidation involving
the Company or any of its Restricted Subsidiaries) except (A) dividends or
distributions payable in its Capital Stock (other than Disqualified Stock) or in
options, warrants or other rights to purchase such Capital Stock, and (B)
dividends or distributions payable to the Company or a Restricted Subsidiary of
the Company (and if such Restricted Subsidiary is not a Wholly-Owned Subsidiary,
to its other Holders of Capital Stock on a pro rata basis), (ii) purchase,
redeem, retire or otherwise acquire for value any Capital Stock of the Company
(other than the redemption of the 13% Series A Preferred Stock of the Company in
connection with the Refinancing) held by Persons other than a Restricted
Subsidiary of the Company or any Capital Stock of a Restricted Subsidiary of the
Company held by any Affiliate of the Company, other than another Restricted
Subsidiary (in either case, other than in exchange for its Capital Stock (other
than Disqualified Stock)), (iii) purchase, repurchase, redeem, defease or
otherwise acquire or retire for value, prior to scheduled maturity,
78
scheduled repayment or scheduled sinking fund payment, any Subordinated
Obligations (other than the purchase, repurchase or other acquisition of
Subordinated Obligations purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within one
year of the date of purchase, repurchase or acquisition) or (iv) make any
Investment (other than a Permitted Investment) in any Person (any such dividend,
distribution, purchase, redemption, repurchase, defeasance, other acquisition,
retirement or Investment being herein referred to in clauses (i) through (iv) as
a "Restricted Payment"), if at the time the Company or such Restricted
Subsidiary makes such Restricted Payment: (1) a Default shall have occurred and
be continuing (or would result therefrom); or (2) the Company is not able to
incur an additional $1.00 of Indebtedness pursuant to paragraph (a) under
Section 1010; or (3) the aggregate amount of such Restricted Payment and all
other Restricted Payments declared or made subsequent to the Issue Date would
exceed the sum of: (A) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from April 1, 1998 to the end of the
most recent fiscal quarter ending prior to the date of such Restricted Payment
as to which financial results are publicly available (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such deficit); (B) the
aggregate Net Cash Proceeds received by the Company from the issue or sale of
its Capital Stock (other than Disqualified Stock) or other capital contributions
subsequent to the Issue Date (other than net proceeds received from an issuance
or sale of such Capital Stock to a Subsidiary of the Company or an employee
stock ownership plan or similar trust); (C) the amount by which Indebtedness of
the Company is reduced on the Company's balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Company) subsequent to the Issue
Date of any Indebtedness of the Company convertible or exchangeable for Capital
Stock of the Company (less the amount of any cash, or other property,
distributed by the Company upon such conversion or exchange); (D) the amount
equal to the net reduction in Investments made by the Company or any of its
Restricted Subsidiaries in any Person resulting from the purchases or
redemptions of such Investments by such Person, proceeds realized upon the sale
of such Investment to an unaffiliated purchaser, repayments of loans or advances
or other transfers of assets by such Person to the Company or any Restricted
Subsidiary of the Company or (ii) the redesignation of Unrestricted Subsidiaries
as Restricted Subsidiaries (valued in each case as provided in the definition of
"Investment") not to exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made by the Company or any Restricted
Subsidiary in such Unrestricted Subsidiary, which amount was included in the
calculation of the amount of Restricted Payments; PROVIDED, HOWEVER, that no
amount shall be included under this clause (D) to the extent it is already
included in Consolidated Net Income; and (E) $5 million.
(b) The provisions of paragraph (a) shall not prohibit: (i)
any purchase or redemption of Capital Stock or Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary or an employee stock
ownership plan or similar trust); PROVIDED, HOWEVER, that (A) such purchase or
redemption shall be excluded in subsequent calculations of the amount of
Restricted Payments and (B) the Net Cash Proceeds from such sale shall be
excluded from clause (3) (B) of paragraph (a); (ii) any purchase or redemption
of Subordinated Obligations of the Company made by exchange for, or out of the
79
proceeds of the substantially concurrent sale of, Subordinated Obligations of
the Company; PROVIDED, HOWEVER, that such purchase or redemption shall be
excluded in subsequent calculations of the amount of Restricted Payments; (iii)
dividends paid within 60 days after the date of declaration if at such date of
declaration such dividend would have complied with this provision; PROVIDED,
HOWEVER, that such dividend shall be included in subsequent calculations of the
amount of Restricted Payments; (iv) the purchase of the 13% Series A Preferred
Stock of the Company with the proceeds from the Refinancing, provided that such
purchase takes place no later than 30 days after the Issue Date (v) loans to
employees of the Company for the purpose of the purchase of Capital Stock of the
Company in an aggregate outstanding amount not to exceed $1 million in any
twelve-month period and (vi) the retirement of any Capital Stock or options to
acquire Capital Stock of the Company or any Restricted Subsidiary of the Company
held by any directors, officers or employees of the Company or any Restricted
Subsidiary, provided that the aggregate price paid for all such retirements
shall not exceed, in the aggregate, the sum of $5.0 million plus the aggregate
cash proceeds received by the Company subsequent to the Issue Date from
issuances of Capital Stock or options to acquire Capital Stock by the Company to
directors, officers, or employees of the Company and its Subsidiaries.
(c) Not later than the date of making any Restricted Payment,
the Company shall deliver to the Trustee an Officers' Certificate stating that
such Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 1009 were computed, which calculations may
be based upon the Company's latest available financial statements. The Trustee
shall have no duty to recompute or recalculate or verify the accuracy of the
information set forth in such Officers' Certificate.
SECTION 1010. LIMITATION ON INDEBTEDNESS.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, Incur any Indebtedness except that the Company and
any of its Restricted Subsidiaries may Incur Indebtedness if after giving effect
to the application of the proceeds thereof, no Default or Event of Default would
occur as a consequence of such Incurrence or be continuing following such
Incurrence and either (i) the ratio of (x) the aggregate consolidated principal
amount of Indebtedness of the Company outstanding as of the most recent publicly
available quarterly or annual balance sheet, after giving PRO FORMA effect to
the incurrence of such Indebtedness and any other Indebtedness Incurred or
repaid since such balance sheet date and the receipt and application of the
proceeds thereof, to (y) Consolidated Cash Flow Available for Fixed Charges for
the four full fiscal quarters immediately preceding the Incurrence of such
Indebtedness for which consolidated financial statements of the Company are
publicly available, determined on a PRO FORMA basis as if any such Indebtedness
had been Incurred and the proceeds thereof had been applied at the beginning of
such four fiscal quarters, would be less than 5.5 to 1.0 for such four-quarter
periods ending on or prior to December 31, 2001 and 5.0 to 1.0 for such periods
ending thereafter or (ii) the Company's Consolidated Capital Ratio as of the
most recent publicly available quarterly or annual balance sheet, after giving
PRO FORMA effect to the Incurrence of such Indebtedness and any other
Indebtedness Incurred or repaid since
80
such balance sheet date and the receipt and application of the proceeds thereof,
is less than 2.5 to 1.0.
(b) Notwithstanding the foregoing paragraph (a), the Company
and its Restricted Subsidiaries may Incur the following Indebtedness: (i)
Indebtedness Incurred pursuant to the New Credit Facility of (a) up to $50
million in revolving credit borrowings less the amount of any reductions in the
commitments thereunder and (b) up to $320 million in term loan borrowings less
the amount of any payments thereunder, minus (in the case of both (a) and (b))
the amount then outstanding under Qualified Receivables Transactions pursuant to
which O&M Payments receivables have been sold, conveyed or otherwise
transferred, and (ii) Indebtedness of the Company owing to and held by any
Wholly-Owned Subsidiary or Indebtedness of a Restricted Subsidiary owing to and
held by the Company or any Wholly Owned Subsidiary; PROVIDED, HOWEVER, that any
subsequent issuance or transfer of any Capital Stock or any other event which
results in any such Wholly-Owned Subsidiary ceasing to be a Wholly-Owned
Subsidiary or any subsequent transfer of any such Indebtedness (except to the
Company or a Wholly Owned Subsidiary) shall be deemed, in each case, to
constitute the Incurrence of such Indebtedness by the Issuer thereof; (iii)
Indebtedness represented by (x) the Notes and any Guarantee thereof, (y) any
Indebtedness (other than the Indebtedness described in clauses (i) and (ii))
outstanding on the Issue Date and (z) any Refinancing Indebtedness Incurred in
respect of any Indebtedness described in this clause (iii) or Incurred pursuant
to paragraph (a) of this Section 1010; (iv) (1) Indebtedness of a Restricted
Subsidiary Incurred and outstanding on the date on which such Restricted
Subsidiary was acquired by the Company (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Subsidiary or
was otherwise acquired by the Company); PROVIDED, HOWEVER, that at the time such
Restricted Subsidiary is acquired by the Company, the Company would have been
able to Incur $1.00 of additional Indebtedness pursuant to the foregoing
paragraph (a) above after giving effect to the Incurrence of such Indebtedness
pursuant to this clause (iv) and (2) any Refinancing Indebtedness incurred in
respect of any Indebtedness described in this clause (iv); (v) Indebtedness
under Currency Agreements and Interest Rate Agreements; PROVIDED, HOWEVER, that
such Currency Agreements and Interest Rate Agreements are entered into for bona
fide hedging purposes of the Company or its Restricted Subsidiaries (as
determined in good faith by the Board of Directors or senior management of the
Company) and correspond in terms of notional amount, duration, currencies and
interest rates, as applicable, to Indebtedness of the Company or its Restricted
Subsidiaries Incurred without violation of this Indenture or to business
transactions of the Company or its Restricted Subsidiaries on customary terms
entered into in the ordinary course of business; (vi) obligations in respect of
performance and surety bonds and completion guarantees provided by the Company
or any Restricted Subsidiary of the Company in the ordinary course of business;
(vii) Indebtedness arising from Guarantees to suppliers, lessors, licensee,
contractors, franchisees or customers of obligations (other than Indebtedness)
incurred in the ordinary course of business; (viii) Indebtedness of a
Receivables Entity in a Qualified Receivables Transaction and any renewal,
extension, refinancing or refunding thereof in an amount which, together with
any principal amount of all such Indebtedness remaining outstanding or
available, does not exceed the aggregate principal amount of such Indebtedness
81
immediately prior to such renewal, extension, refinancing or refunding; and (ix)
Indebtedness (other than Indebtedness described in clauses (i) - (viii)) in a
principal amount which, when taken together with the principal amount of all
other Indebtedness Incurred pursuant to this clause (ix) and then outstanding,
will not exceed $25 million.
SECTION 1011. LIMITATION ON SALE/LEASEBACK TRANSACTIONS.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, direct or indirectly, enter into, assume, Guarantee
or otherwise become liable with respect to any Sale/Leaseback Transaction (other
than a Sale/Leaseback Transaction between the Company or a Restricted Subsidiary
on the one hand and a Restricted Subsidiary or the Company on the other hand),
unless (i) the only property subject to such Sale/Leaseback Transaction is
capacity which is or will be held for restoration on, on the FLAG System and the
amount of such capacity, when combined with the amount of all other capacity
subject to a Sale/Leaseback Transaction, is no greater than 25% of the FLAG
System's capacity, (ii) the Company or such Restricted Subsidiary, as the case
may be, receives consideration at the time of such Sale/Leaseback Transaction at
least equal to the Fair Market Value (as evidenced by a Board Resolution
delivered to the Trustee) of the property subject to such transaction; (iii) the
Attributable Indebtedness of the Company or such Restricted Subsidiary with
respect thereto is included as Indebtedness and would be permitted under Section
1010; and (iv) the Sale/Leaseback Transaction is treated as an Asset Disposition
and all of the conditions of this Indenture described under Section 1016
(including the provisions concerning the application of the Net Available Cash)
are satisfied with respect to such Sale/Leaseback Transaction, treating all of
the consideration received in such Sale/Leaseback Transaction as Net Available
Cash for purposes of such covenant.
SECTION 1012. LIMITATION ON AFFILIATE TRANSACTIONS.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to directly or indirectly, enter into or conduct any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") unless: (i) the terms of such Affiliate Transaction are no less
favorable to the Company or such Restricted Subsidiary, as the case may be, than
those that could be obtained at the time of such transaction in arm's length
dealings with a Person who is not such an Affiliate; (ii) in the event such
Affiliate Transaction involves an aggregate amount in excess of $5 million, the
terms of such transaction have been approved by a majority of the members of the
Board of Directors of the Company and by a majority of the members of such Board
having no personal stake in such transaction, if any (and such majority or
majorities, as the case may be, determines that such Affiliate Transaction
satisfies the criteria in (i) above); and (iii) in the event such Affiliate
Transaction involves an aggregate amount in excess of $25 million the Company
has received a written opinion from an independent accounting, appraisal or
investment banking firm of nationally recognized standing that such Affiliate
Transaction is fair to the Company or such Restricted Subsidiary, as the case
may be, from a financial point of view.
82
(b) The foregoing paragraph (a) shall not apply to (i) any
Restricted Payment permitted to be made pursuant to Section 1009, (ii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors of the
Company, (iii) loans or advances to employees in the ordinary course of business
of the Company or any of its Restricted Subsidiaries, (iv) any transaction
between the Company and a Wholly-Owned Subsidiary or between Wholly-Owned
Subsidiaries, (v) a transaction pursuant to an Existing Affiliate Transaction,
including any amendments or extensions thereto entered into after the Issue
Date, provided that the terms of any such amendment or extension are not taken
as whole, less favorable to the Company than the terms of the relevant agreement
prior to such amendment, (vi) transactions with respect to capacity (including
sales, leases, or the other provision thereof) between the Company or any
Restricted Subsidiary and any Affiliate; provided, in any case, that such
transaction is on terms that are no less favorable, taken as a whole, to the
Company or the relevant Restricted Subsidiary than those that could have been
obtained at the time of such transaction in arm's length dealings with a Person
who was not such an Affiliate, or (vii) any agreement or arrangement with
respect to the compensation of a director or officer of the Company or any
Restricted Subsidiary approved by a majority of the disinterested members of the
Board of Directors of the Company or such Restricted Subsidiary, as applicable
and consistent with industry practice.
SECTION 1013. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES.
The Company will not, and will not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become effective
any consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to the Company, (ii)
make any loans or advances to the Company or (iii) transfer any of its property
or assets to the Company, except (a) any encumbrance or restriction pursuant to
an agreement in effect at or entered into on the date of this Indenture
(including, without limitation, the New Credit Facility but only with respect to
restrictions set forth in such facility that are of the type set forth in
clauses (ii) and (iii)); (b) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any Indebtedness
Incurred by a Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary was acquired by the Company (other than Indebtedness
Incurred as consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company) and outstanding on such date; (c) any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement effecting a refinancing of Indebtedness Incurred pursuant to an
agreement referred to in clause (a) or (b) of this covenant or this clause (c)
or contained in any amendment to an agreement referred to in clause (a) or (b)
of this covenant or this clause (c); PROVIDED, HOWEVER, that the encumbrances
and restrictions with respect to such Restricted Subsidiary contained in any
such agreement or amendment are no less favorable to the Holders of the Notes
than encumbrances and restrictions contained in such agreements; (d) in the case
of clause (iii) above, any encumbrance or
83
restriction (A) that restricts in a customary manner the subletting, assignment
or transfer of any property or asset that is subject to a lease, license or
similar contract, or the assignment or transfer of any such lease, license or
other contract, (B) by virtue of any transfer of, agreement to transfer, option
or right with respect to, or Lien on, any property or assets of the Company or
any Restricted Subsidiary not otherwise prohibited by this Indenture, (C)
contained in mortgages, pledges or other security agreements securing
Indebtedness of a Restricted Subsidiary to the extent such encumbrance or
restrictions restrict the transfer of the property subject to such mortgages,
pledges or other security agreements or (D) pursuant to customary provisions
restricting dispositions of real property interests set forth in any reciprocal
easement agreements of the Company or any Restricted Subsidiary; and (e) with
respect to a Restricted Subsidiary (or any of its property or assets) imposed
pursuant to an agreement entered into for the direct or indirect sale or
disposition of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary (or the property or assets that are subject to such
restriction) pending the closing of such sale or disposition.
SECTION 1014. LIMITATION ON LIENS.
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly create, incur, affirm or suffer to exist
any Lien of any kind (other than Permitted Liens) against or upon any of its
property or assets (including any intercompany notes), owned as of the date
hereof or later acquired or any income or profits therefrom, except if the Notes
are effectively secured equally and ratably with or prior to in the case of
Liens with respect to Subordinated Obligations) the obligation or liability
secured by such Lien for so long as such obligations or liabilities are so
secured.
SECTION 1015. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder
will have the right to require the Company to purchase all or any part of such
Holder's Notes (the "Change of Control Offer") at a purchase price in cash equal
to 101 % of the principal amount thereof plus accrued and unpaid interest, if
any, to the date of purchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant Interest Payment
Date) (the "Change of Control Payment").
(b) Within 30 days following any Change of Control, unless the
Company has mailed a redemption notice with respect to all the outstanding Notes
as described in Section 1105, the Company shall mail a notice to each Holder
with a copy to the Trustee stating:
(i) that a Change of Control has occurred and that
such Holder has the right to require the Company to purchase such
Holder's Notes at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to
the date of purchase (subject to the right of Holders of record on a
record date to receive interest on the relevant Interest Payment Date);
84
(ii) the purchase date (which shall be no earlier
than 30 days nor later than 60 days from the date such notice is
mailed) (the "Change of Control Payment Date");
(iii) the procedures determined by the Company,
consistent with this Indenture, that a Holder must follow in order to
have its Notes purchased;
(iv) that any Note not tendered shall continue to
accrue interest, if any;
(v) that, unless the Company defaults in the payment
of the Change of Control Payment, all Notes accepted for payment
pursuant to any Change of Control Offer shall cease to accrue interest,
if any, after the Change of Control Payment Date;
(vi) that Holders electing to have any Notes
purchased pursuant to a Change of Control Offer shall be required to
surrender the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes completed, or transfer by
book-entry transfer to the Company, a Depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day preceding the Change
of Control Payment Date;
(vii) that Holders shall be entitled to withdraw
their election if the Company, the Depositary or the Paying Agent as
the case may be, receives, not later than the close of business on the
second Business Day preceding the Change of Control Payment Date, a
telegram, telex facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Notes delivered for purchase,
and a statement that such Holder is withdrawing his election to have
the Notes purchased; and
(viii) that Holders whose Notes are being purchased
only in part shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple
thereof.
(c) The Company will comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other applicable
laws or regulations in connection with the purchase of Notes pursuant to this
covenant. To the extent that the provisions of any applicable laws or
regulations conflict with provisions of this Indenture, the Company will comply
with the applicable laws and regulations and shall not be deemed to have
breached its obligations described in this Indenture by virtue thereof.
(d) On a Business Day that is no earlier than 30 days nor
later than 60 days from the date that the Company mails or causes to be mailed
notice of the Change of Control to the Holders, the Company shall, to the extent
lawful, (i) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all the Notes or
portions thereof so
85
tendered and (iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate principal
amount of such Notes or portions thereof being purchased by the Company. The
Paying Agent shall promptly mail to each Holder of the Notes so tendered the
Change of Control Payment for such Notes, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such new Note shall be in a principal
amount of $1,000 or an integral multiple thereof. The Company shall publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
SECTION 1016. LIMITATION ON ASSET DISPOSITIONS.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any Asset Disposition unless (i) the Company or
such Restricted Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the Fair Market Value, as determined in good faith
by the Board of Directors (including as to the value of all non-cash
consideration), of the shares and assets subject to such Asset Disposition, (ii)
at least 75% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or Cash Equivalents and (iii) an
amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by the Company (or such Restricted Subsidiary, as the case may be) (A)
FIRST, to the extent the Company or any Restricted Subsidiary, as the case may
be, elects (or is required by the terms thereof, to prepay, repay, purchase or
cash collateralize, Bank Indebtedness to the extent that the Net Available Cash
may be or is required to be applied to cash collateralize or repay such Bank
Indebtedness as required by the terms of the New Credit Facility (unless such
requirement has been waived by the lenders parties thereto) or Indebtedness
(other than any Preferred Stock) of a Wholly Owned Subsidiary (in each case
other than Indebtedness owed to the Company or an Affiliate of the Company)
within 360 days from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash (such period, the "application period"); (B)
SECOND, to the extent of the balance of such Net Available Cash after
application in accordance with clause (A), at the Company's election to invest
in Additional Assets within the application period; (C) THIRD, to the extent of
the balance of such Net Available Cash after application in accordance with
clauses (A) and (B), not later than 30 days after the end of the application
period, to make an offer to purchase (an "Offer") Notes and other PARI PASSU
debt obligations subject to a similar covenant (such other PARI PASSU debt
obligations, the "PARI PASSU Notes") at par plus accrued and unpaid interest, if
any, thereon; and (D) FOURTH, to the of the extent balance of such Net Available
Cash after application in accordance with clauses (A), (B) and (C) for other
general corporate purposes not prohibited by this Indenture; PROVIDED, HOWEVER,
that, in connection with any prepayment, repayment or purchase of Indebtedness
pursuant to clause (A) above, the Company or such Restricted Subsidiary shall
retire such Indebtedness and shall cause the related loan commitment (if any) to
be permanently reduced extent of the required by such Indebtedness in an amount
equal to the principal amount so prepaid, repaid or purchased. Notwithstanding
the foregoing provisions, the Company and its Restricted Subsidiaries shall not
be required to apply any Net Available Cash in accordance herewith except to the
extent that the aggregate Net Available Cash from all Asset Dispositions which
is not applied
86
in accordance with this covenant exceeds $10 million. The Company shall not be
required to make an Offer for Notes and PARI PASSU Notes pursuant to this
covenant if the Net Available Cash available therefor (after application of the
proceeds as provided in clauses (A) and (B)) is less than $10 million for any
particular Asset Disposition (which lesser amount shall be carried forward for
purposes of determining whether an Offer is required with respect to the Net
Available Cash from any subsequent Asset Disposition).
If the aggregate principal amount of Notes and PARI PASSU
Notes validly tendered and not withdrawn in connection with an Offer pursuant to
clause (C) above exceeds the funds available therefor ("Offer Proceeds"), the
Offer Proceeds will be apportioned between the Notes and such PARI PASSU Notes,
with the portion of the Offer Proceeds payable in respect of the Notes equal to
the lesser of (i) the Offer Proceeds amount multiplied by a fraction, the
numerator of which is the outstanding principal amount of the Notes and the
denominator of which is the sum of the outstanding principal amount of the Notes
and the outstanding principal amount (or accreted value, as applicable) of the
relevant PARI PASSU Notes, (ii) the aggregate principal amount of Notes validly
tendered and not withdrawn.
For the purposes of this covenant, the following will be
deemed to be cash: (x) the assumption by the transferee of Indebtedness of any
Restricted Subsidiary of the Company and the release of such Restricted
Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition (in which case the Company shall, without further action, be deemed
to have applied such assumed Indebtedness in accordance with clause (A) of the
second preceding paragraph) and (y) securities received by the Company or any
Restricted Subsidiary of the Company from the transferee that are promptly
converted by the Company or such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the
purchase of Notes pursuant to clause (a)(iii)(C), the Company will be required
to purchase Notes tendered pursuant to an offer by the Company for the Notes at
a purchase price of 100% of their principal amount plus accrued and unpaid
interest, if any, to the purchase date in accordance with the procedures
(including prorating in the event of oversubscription) set forth in this
Indenture. If the aggregate purchase price of the PARI PASSU Notes tendered
pursuant to the offer is less than the Net Available Cash allotted to the
purchase of the PARI PASSU Notes, the Company will apply the remaining Net
Available Cash in accordance with clause (a)(iii)(D) above.
(c) The Company will comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other applicable
laws or regulations in connection with the purchase of Notes pursuant to this
Indenture. To the extent that the provisions of any applicable laws or
regulations conflict with provisions of this covenant, the Company will comply
with the applicable laws and regulations and will not be deemed to have breached
its obligations under this Indenture by virtue thereof.
87
SECTION 1017. LIMITATION ON ISSUANCE AND SALE OF CAPITAL STOCK
OF RESTRICTED SUBSIDIARIES.
The Company will not, and will not permit any Restricted
Subsidiary of the Company to, issue, transfer, convey, sell or otherwise dispose
of any Capital Stock of any Restricted Subsidiary to any Person (other than the
Company or a Wholly Owned Subsidiary), unless (i) such transfer, conveyance,
sale or other disposition is of either all or not more than 20% of the Capital
Stock of such Restricted Subsidiary and (ii) the Net Cash Proceeds from any such
issuance transfer, conveyance, sale or other disposition are applied in
accordance with Section 1016.
SECTION 1018. COMMISSION REPORTS.
Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall file with the Commission, and within 15 days after such reports are filed,
provide the Trustee and the Holders (at their addresses as set forth in the
register of Notes) with the annual reports and the information, documents and
other reports which are otherwise required pursuant to Section 13 and 15(d) of
the Exchange Act.
SECTION 1019. FUTURE NOTE GUARANTORS.
The Company will cause each Restricted Subsidiary which Incurs
Indebtedness pursuant to clause (a) of Section 1010 or which is a guarantor of
Indebtedness Incurred pursuant to clause (b)(i) of Section 1010 to execute and
deliver to the Trustee a Note Guarantee, substantially in the form of the
supplemental Indenture in Exhibit A hereto, pursuant to which such Restricted
Subsidiary will Guarantee, jointly and severally, to the Holders and the
Trustee, the full and prompt payment of the Notes in accordance with the terms
of this Indenture. Each Note Guarantee will be limited in amount to an amount
not to exceed the maximum amount that can be Guaranteed by that Restricted
Subsidiary without rendering the Note Guarantee, as it relates to such
Restricted Subsidiary, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
SECTION 1020. LIMITATION ON LINES OF BUSINESS.
The Company will not, and will not permit any Restricted
Subsidiary to, engage in any business other than a Related Business.
SECTION 1021. STATEMENT BY OFFICERS AS TO DEFAULT.
(a) The Company will deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Restricted Subsidiaries during
the preceding fiscal year has been made under the supervision of the signing
officers with a view to determining whether it has kept, observed, performed and
fulfilled, and has caused each of its Restricted Subsidiaries to keep, observe,
perform and fulfill its
88
obligations under this Indenture and further stating, as to each such officer
signing such certificate, that, to the best of his or her knowledge, the Company
during such preceding fiscal year has kept, observed, performed and fulfilled,
and has caused each of its Restricted Subsidiaries to keep, observe, perform and
fulfill each and every such covenant contained in this Indenture and no Default
or Event of Default occurred during such year and at the date of such
certificate there is no Default or Event of Default which has occurred and is
continuing or, if such signers do know of such Default or Event of Default, the
certificate shall describe its status, with particularity and that, to the best
of his or her knowledge, no event has occurred and remains by reason of which
payments on the account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action each is taking or proposes to take with respect thereto. The Officers'
Certificate shall also notify the Trustee should the Company elect to change the
manner in which it fixes its fiscal year end. For purposes of this Section 1021
(a), such compliance shall be determined without regard to any period of grace
or requirement of notice under this Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the Holder of any other evidence of
Indebtedness of the Company or any Significant Subsidiary gives any notice or
takes any other action with respect to a claimed default (other than with
respect to Indebtedness in the principal amount of less than $5 million), the
Company shall deliver to the Trustee by registered or certified mail or
facsimile transmission an Officers' Certificate specifying such event, notice or
other action within ten Business Days of its occurrence. The Company also is
required to deliver to the Trustee, within 30 days after the occurrence thereof,
written notice of any events that would constitute an Event of Default under
clause (iii), (iv) or (vii) of Section 501, their status and what action the
Company is taking or proposes to take in respect thereof.
SECTION 1022. PAYMENT OF ADDITIONAL AMOUNTS.
(a) If any deduction or withholding for any present or future
taxes, assessments or other governmental charges of (x) Bermuda or any political
subdivision or governmental authority thereof or therein having power to tax,
(y) any jurisdiction, other than the United States, from or through which
payment on the Notes is made by the Company or a successor corporation, or its
paying agent in its capacity as such or any political subdivision or
governmental authority thereof or therein having the power to tax or (z) any
other jurisdiction, other than the United States, in which the Company or a
successor corporation is organized, or any political subdivision or governmental
authority thereof or therein having the power to tax shall at any time be
required by such jurisdiction (or any such political subdivision or taxing
authority) in respect of any amounts to be paid by the Company or a successor
corporation under the Notes, the Company or a successor corporation will pay to
each Holder of a Note as additional interest such additional amounts
("Additional Amounts") as may be necessary in order that the net amounts paid to
such Holder of such Note who, with respect to any such tax, assessment or other
governmental charge, is not resident in, or a citizen of, such jurisdiction,
after such deduction or withholding, shall be not less than the amount specified
89
in such Note to which such Holder is entitled; PROVIDED, HOWEVER, the Company or
a successor corporation shall not be required to make any payment of Additional
Amounts for or on account of:
(i) Any tax, assessment or other governmental charge
which would not have been imposed but for (a) the existence of any
present or former connection between such Holder (or between a
fiduciary, settlor, beneficiary, member or shareholder of, or possessor
of a power over such Holder, if such Holder is an estate, trust
partnership, limited liability company or corporation) and the taxing
jurisdiction or any political subdivision or territory or possession
thereof or are subject to its jurisdiction, including, without
limitation, such Holder (or such fiduciary, settlor, beneficiary,
member, shareholder or possessor) being or having been a citizen or
resident thereof or being or having been present or engaged in trade or
business therein or having or having had a permanent establishment
therein, (b) the presentation of a Note (where presentation is
required) for payment on a date more than 30 days after (x) the date on
which such payment became due and payable or (y) the date on which
payment thereof is duly provided for, whichever occurs later or (c) the
presentation of a Note for payment in Bermuda or any political
subdivision thereof or therein, unless such Note could not have been
presented for payment elsewhere;
(ii) Any estate, inheritance, gift, sales, transfer,
personal property or similar tax, assessment or other governmental
charge;
(iii) Any tax, assessment or other governmental
charge which is payable otherwise than by withholding from payment of
principal of, premium, if any, or any interest on, the Notes;
(iv) Any tax, assessment or other governmental charge
that is imposed or withheld by reason of the failure by the Holder or
the beneficial owner of the Note to comply with a request of the
Company addressed to the Holder (a) to provide information, documents
or other evidence concerning the nationality, residence or identity of
the Holder or such beneficial owner or (b) to make and deliver any
declaration or other similar claim (other than a claim for refund of a
tax, assessment or other governmental charge withheld by the Company)
or satisfy any information or reporting requirements, which, in the
case of (a) or (b), is required or imposed by a statute, treaty,
regulation or administrative practice of the taxing jurisdiction as a
precondition to exemption from all or part of such tax, assessment or
other governmental charge; or
(v) Any combination of items. (i), (ii), (iii) and
(iv) above;
nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any premium or interest on, any Note to any Holder who is a
fiduciary or partnership or limited liability company or other than the sole
beneficial owner of such payment to the extent such payment would be required by
the laws of (x) Bermuda or any political subdivision or governmental authority
thereof or therein having power to tax, (y) any jurisdiction, other than the
United States, from or
90
through which payment on the Notes is made by the Company or a successor
corporation, or its paying agent in its capacity as such or any political
subdivision or governmental authority thereof or therein having the power to tax
or (z) any other jurisdiction, other than the United States, in which the
Company or a successor corporation is organized, or any political subdivision or
governmental authority thereof or therein having the power to tax to be included
in the income for tax purposes of a beneficiary or settlor with respect to such
fiduciary or a member of such partnership, limited liability company or
beneficial owner who would not have been entitled to such Additional Amounts had
it been the Holder of such Note.
(b) The Company shall provide the Trustee with the official
acknowledgment of the relevant taxing authority (or, if such acknowledgment is
not available, a certified copy thereof) evidencing the payment of the
withholding taxes, if any, by the Company. Copies of such documentation shall be
made available to the Holders of the Notes or the Paying Agents, as applicable,
upon request therefor.
(c) The Company shall pay any present or future stamp, court
or documentary taxes or any other excise or property taxes, charges or similar
levies that arise in any jurisdiction from the execution, delivery or
registration of the Notes or any other document or instrument referred to herein
or in the Notes, excluding any such taxes, charges or similar levies imposed by
any jurisdiction outside of Bermuda.
SECTION 1023. EXCESS CASH FLOW OFFER.
(a) If the Company has Excess Cash Flow for any fiscal year
(commencing with fiscal 2001), the Company shall make an offer to purchase (the
"Excess Cash Flow Offer"), on a Business Day (the "Excess Cash Flow Payment
Date") not later than 150 days following the end of such fiscal year, from all
Holders of Notes, up to a maximum principal amount (expressed as a multiple of
$1,000) of Notes equal to (A) the Noteholders' Pro Rata Share of 50% of such
Excess Cash Flow in such fiscal year, minus (B) the principal amount of Notes
theretofore purchased by the Company in the open market and the principal amount
of Notes theretofore redeemed by the Company pursuant to clause (a) of Section
1101 and not theretofore credited against the Company's obligation to make an
Excess Cash Flow Offer for a prior fiscal year. The purchase price of Notes to
be purchased pursuant to an Excess Cash Flow Offer shall be equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Excess Cash Flow Payment Date. The Excess Cash Flow Offer is required to
remain open for 20 Business Days and payment pursuant to the Excess Cash Flow
Offer will be made on the Excess Cash Flow Payment Date.
(b) Notwithstanding the foregoing, the Company will not be
required to make an Excess Cash Flow Offer for any fiscal year if the amount of
such Excess Cash Flow Offer would be less than $5.0 million (which amount shall
be carried forward for purposes of determining whether an Excess Cash Flow Offer
is required with respect to subsequent fiscal years). To the extent an Excess
Cash Flow Offer is not fully subscribed to by Holders of the Notes, the
unsubscribed portion of such Excess Cash Flow may be retained by the Company
and/or used for
91
any purpose, subject to the covenants herein, and shall be excluded from the
calculation of Excess Cash Flow for any subsequent period.
(c) Notice of each Excess Cash Flow Offer shall be mailed or
caused to be mailed by first class mail, not less than 20 Business Days before
the Excess Cash Flow Payment Date to all Holders of Notes at their last
registered address, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holder to tender Notes
pursuant to the Excess Cash Flow Offer and shall state the following terms:
(i) that the Excess Cash Flow Offer is being made
pursuant to this Section 1023 and that all Notes tendered and not
withdrawn will be accepted for payment; PROVIDED, HOWEVER, that if the
aggregate principal amount of Notes tendered in an Excess Cash Flow
Offer plus accrued interest at the expiration of such offer exceeds the
aggregate amount as contemplated by the first paragraph of this Section
1023, the Company shall select the Notes to be purchased on a PRO RATA
basis;
(ii) the purchase price (including the amount of
accrued interest, if any) and the excess Cash Flow Payment Date and
that the Excess Cash Flow Offer is required to remain open for at least
20 Business Days and until the close of business on the Excess Cash
Flow Payment Date;
(iii) that any Note not tendered will continue to
accrue interest;
(iv) that unless the Company defaults in making
payments therefor, any Note accepted for payment pursuant to the Excess
Cash Flow Offer shall cease to accrue interest on and after the Excess
Cash Flow Payment Date;
(v) that Holders electing to have a Note purchased
pursuant to an Excess Cash Flow Offer will be required to surrender
such Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Note completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the
Excess Cash Flow Payment Date;
(vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the 10th Business
Day prior to the Excess Cash Flow Payment Date, a facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Notes the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such
Notes purchased; and
(vii) that Holders whose Notes are purchased only in
part will be issued new Notes in a principal amount equal to the
unpurchased portion of the Notes surrendered.
92
(d) On or before the Excess Cash Flow Payment Date, the
Company shall (1) accept for payment Notes or portions thereof tendered pursuant
to the Excess Cash Flow Offer which are to be purchased in accordance with item
(i) above, (2) deposit with the Paying Agent an amount sufficient to pay the
purchase price plus accrued interest, if any, of such Notes or the relevant
portions thereof and (3) deliver to the Trustee such Notes together with an
Officers' Certificate stating the Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail to the Holders of such Notes
payment in an amount equal to the purchase price plus accrued and unpaid
interest, if any, and the Trustee shall promptly authenticate and mail to such
Holders new Notes equal in principal amount to any unpurchased portion of the
Notes surrendered. For purposes of this Section 1023, the Trustee shall act as
the Paying Agent.
(e) Any amounts remaining after the purchase of Notes pursuant
to an Excess Cash Flow offer shall be returned by the Trustee to the Company.
(f) The Company will comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other applicable
laws or regulations in connection with the purchase of Notes pursuant to this
covenant. To the extent that the provisions of any applicable laws or
regulations conflict with the provisions herein, the Company will comply with
the applicable laws and regulations and shall not be deemed to have breached its
obligations described under this Section 1023 by virtue thereof.
SECTION 1024. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in Sections 1007 through 1023,
inclusive, if before or after the time for such compliance the Holders of a
majority in principal amount of the outstanding Notes, by Act of such Holders,
waive such compliance in such instance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision 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 term, provision or condition shall remain in full force and
effect.
ARTICLE 11. REDEMPTION OF NOTES
SECTION 1101. OPTIONAL REDEMPTION; OPTIONAL TAX REDEMPTION.
(a) The Notes will be subject to redemption at the option of
the Company at any time on and after January 30, 2003 and prior to maturity, in
whole or in part, at the following redemption prices (expressed as percentages
of principal amount), plus accrued interest to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant Interest Payment Date):
93
If redeemed during the 12-month period commencing on January
30 of the years set forth below:
Period Redemption Price
------ ----------------
2003............................................... 104.125%
2004............................................... 102.750%
2005............................................... 101.375%
2006 and thereafter................................ 100.00%
In addition, at any time and from time to time prior to
January 30, 2001, the Company may redeem in the aggregate up to 331/3% of the
original principal amount of the Notes with the proceed of one or more Equity
Offerings received by the Company so long as there is a Public Market at the
time of such redemption, at a redemption price (expressed as a percentage of
principal amount) of 108.25% plus accrued and unpaid interest, if any, to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant Interest Payment Date);
PROVIDED, HOWEVER, that at least 662/3% of the original principal amount of the
Notes must remain outstanding after each such redemption.
(b) The Notes will be subject to redemption at the option of
the Company or a successor corporation at any time, in whole but not in part, at
a redemption price equal to the principal amount thereof plus accrued and unpaid
interest, if any, to the redemption date if, as a result of any change in an
amendment to the laws or any regulations or ruling promulgated thereunder of (x)
Bermuda or any political subdivision or governmental authority thereof or
therein having power to tax, (y) any jurisdiction, other than the United States,
from or through which payment on the Notes is made by the Company or a successor
corporation, or its paying agent in its capacity as such or any political
subdivision or governmental authority thereof or therein having the power to tax
or (z) any other jurisdiction, other than the United States, in which the
Company or a successor corporation is organized, or any political subdivision or
governmental authority thereof or therein having the power to tax or any change
in the official application or interpretation of such laws, regulations or
rulings, or any change in the official application or interpretation of, or any
execution of or amendment to, any treaty or treaties affecting taxation to which
such jurisdiction (or such political subdivision or taxing authority) is a party
(a "Change in Tax Law"), which becomes effective on or after the date of this
Indenture, the Company or a successor corporation is or would be required on the
next succeeding Interest Payment Date to pay Additional Amounts with respect to
the Notes, and the payment of such Additional Amounts cannot be avoided by the
use of any reasonable measures available to the Company or a successor
corporation.
(c) The Notes will be subject to redemption at the option of
the Company at any time, in whole, but not in part, at a redemption price equal
to the principal amount thereof plus accrued interest to the redemption date if
the Person formed by a consolidation or amalgamation of the Company or into
which the Company is merged or to which the Company conveys, transfers or leases
its properties and assets, substantially as an entirety is required (pursuant to
Section 1022 of
94
this Indenture), as a consequence of such consolidation, amalgamation, merger,
conveyance, transfer or lease and as a consequence of a Change in Tax Law
occurring after the date of such consolidation, amalgamation, merger,
conveyance, transfer or lease, to pay Additional Amounts in respect of any tax,
assessment or governmental charge, imposed on any Holder. Prior to the giving of
notice of redemption of such Notes pursuant to this Indenture, such Successor
Company will deliver to the Trustee an Officers' Certificate, stating that such
Person is entitled to effect such redemption and setting forth in reasonable
detail a statement of circumstances showing that the conditions precedent to the
right of such Person to redeem such Notes pursuant to this Section 1101 have
been satisfied.
SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Notes 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.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company, the Company shall, at least 90 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Notes to be redeemed and shall deliver to the Trustee
such documentation and records as shall enable the Trustee to select the Notes
to be redeemed pursuant to Section 1104.
SECTION 1104. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all the Notes are to be redeemed at any time
pursuant to an optional redemption, the particular Notes to be redeemed shall be
selected not more than 90 days prior to the Redemption Date by the Trustee, from
the outstanding Notes not previously called for redemption, in compliance with
the requirements of the principal securities exchange, if any, on which such
Notes are listed, or, if such Notes are not so listed, on a pro rata basis, by
lot or by such other method as the Trustee in its sole discretion shall deem
fair and appropriate (and in such manner as complies with applicable legal
requirements) and which may provide for the selection for redemption of portions
of the principal of the Notes; PROVIDED, HOWEVER, that no such partial
redemption shall reduce the portion of the principal amount of a Note not
redeemed to less than $1,000.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Notes 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 Notes shall relate,
in the case of any Note redeemed or to be redeemed only in part, to the portion
of the principal amount of such Note which has been or is to be redeemed.
95
SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided for
in Section 106 not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Notes to be redeemed. The Trustee shall give notice of
redemption in the Company's name and at the Company's expense; PROVIDED,
HOWEVER, that the Company shall deliver to the Trustee, at least 45 days prior
to the Redemption Date, an Officers' Certificate requesting that the Trustee
give such notice and setting forth the information to be stated in such notice
as provided in the following items.
All notices of redemption shall state:
(i) the Redemption Date,
(ii) the redemption price and the amount of accrued
interest to the Redemption Date payable as provided in Section 1107, if
any,
(iii) if less than all outstanding Notes are to be
redeemed, the identification of the particular Notes (or portion
thereof) to be redeemed, as well as the aggregate principal amount of
Notes to be redeemed and the aggregate principal amount of Notes to be
outstanding after such partial redemption,
(iv) in case any Note is to be redeemed in part only,
the notice which relates to such Note shall state that on and after the
Redemption Date, upon surrender of such Note, the Holder will receive,
without charge, a new Note or Notes of authorized denominations for the
principal amount thereof remaining unredeemed,
(v) that on the Redemption Date the redemption price
(and accrued and unpaid interest, if any, to the Redemption Date
payable as provided in Section 1107) will become due and payable and,
unless the Company defaults in making the redemption payment, that
interest of Notes called for redemption (or the portion thereof) will
cease to accrue on and after said date.
(vi) the place or places where such Notes are to be
surrendered for payment of the redemption price and accrued interest,
if any,
(vii) the name and address of the Paying Agent,
(viii) that Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price,
(ix) the CUSIP number, and that no representation is
made as to the accuracy or correctness of the CUSIP number, if any,
listed in such notice or printed on the Notes, and
96
(x) the paragraph of the Notes or Section of this
Indenture pursuant to which the Notes are to be redeemed.
SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the redemption price of, and accrued and unpaid
interest on, all the Notes which are to be redeemed on that date.
SECTION 1107. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Notes
so to be redeemed shall on the Redemption Date, become due and payable at the
redemption price therein specified (together with accrued and unpaid interest,
if any, to the Redemption Date), and from and after such date (unless the
Company shall default in the payment of the redemption price and accrued
interest) such Notes shall cease to bear interest. Upon surrender of any such
Note for redemption in accordance with said notice, such Note shall be paid by
the Company at the redemption price, together with accrued and unpaid interest,
if any, 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 Notes registered as such at close of business on the
relevant Regular Record Date or Special Record Date, as the case may be,
according to their terms and the provisions of Section 311.
If any Note 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 the
Notes.
SECTION 1108. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part (pursuant to the
provisions of this Article) shall be surrendered at the office or agency of the
Company maintained for such purpose pursuant to Section 1002 (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee 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 Note at the expense of the Company, a new Note or Notes, of
any authorized denomination as requested by such Holder, in an aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Note so surrendered, PROVIDED, that, each such new Note will be
in a principal amount of $1,000 or integral multiple thereof.
97
SECTION 1109. OFFER TO PURCHASE BY APPLICATION OF EXCESS
PROCEEDS.
In the event that, pursuant to Section 1016 hereof, the
Company shall be required to commence an offer to all Holders of Notes and, to
the extent required by the terms thereof, to all holders or lenders of other
PARI PASSU Notes, to purchase Notes and any such PARI PASSU Notes (an "Asset
Disposition Offer"), it shall follow the procedures specified below.
The Asset Disposition Offer shall remain open for a period of
20 Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Asset Disposition Offer
Period"). No later than five Business Days after the termination of the Offer
Period (the "Asset Disposition Offer Purchase Date"), the Company shall purchase
the principal amount of Notes required to be purchased pursuant to Section 1016
hereof, giving effect to any related offer for PARI PASSU Notes pursuant to
Section 1016 (the "Asset Disposition Offer Amount") or, if less than the Asset
Disposition Offer Amount has been tendered, all Notes tendered in response to
the Asset Disposition Offer. Payment for any Notes so purchased shall be made in
the same manner as interest payments are made.
If the Asset Disposition Offer Purchase Date is on or after an
interest record date and on or before the related Interest Payment Date, any
accrued and unpaid interest shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the Asset
Disposition Offer.
Upon the commencement of an Asset Disposition Offer, the
Company shall send, by first class mail, a notice to the Trustee and each of the
Holders. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Asset Disposition Offer. The
Asset Disposition Offer shall be made to all Holders. The notice, which shall
govern the terms of the Asset Disposition Offer, shall state:
(i) that the Asset Disposition Offer is being made
pursuant to this Section and Section 1016 hereof and the length of time
the Asset Disposition Offer shall remain open;
(ii) the Asset Disposition Offer Amount, the purchase
price and the Asset Disposition Offer Purchase Date;
(iii) that any Note not tendered or accepted for
payment shall continue to accrue interest;
(iv) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Asset
Disposition Offer shall cease to accrue interest after the Asset Offer
Purchase Date;
98
(v) that Holders electing to have a Note purchased
pursuant to an Asset Disposition Offer may only elect to have all of
such Note purchased and may not elect to have only a portion of such
Note purchased;
(vi) that Holders electing to have a Note purchased
pursuant to any Asset Disposition Offer shall be required to surrender
the Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Note completed, or transfer by book-entry
transfer, to the Company, a Depositary, if appointed by the Company, or
a Paying Agent at the address specified in the notice at least three
Business Days before the Asset Disposition Offer Purchase Date;
(vii) that Holders shall be entitled to withdraw
their election if the Company, the Depositary or the Paying Agent, as
the case may be, receives, not later than the expiration of the Asset
Disposition Offer Period, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(viii) that, if the aggregate principal amount of
Notes surrendered by Holders exceeds the Asset Disposition Offer
Amount, the Company shall select the Notes to be purchased on a PRO
RATA basis (with such adjustments as may be deemed appropriate by the
Company so that only Notes in denominations of $1,000, or integral
multiples thereof, shall be purchased) in the manner provided in
Section 1016; and
(ix) that Holders whose Notes were purchased only in
part shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).
If any of the Notes subject to an Asset Disposition Offer is
in the form of a Global Note, then such notice may be modified in form but not
substance to the extent appropriate to accord with the procedures of the
Depositary applicable to repurchases.
On or before the Asset Disposition Offer Purchase Date, the
Company shall, to the extent lawful, accept for payment, on a pro rata basis to
the extent necessary, the Asset Disposition Offer Amount of Notes or portions
thereof tendered pursuant to the Asset Disposition Offer, or if less than the
Asset Disposition Offer Amount has been tendered, all Notes tendered, and shall
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section. The Company, the Depositary or the Paying Agent, as the
case may be, shall promptly (but in any case not later than five days after the
Asset Disposition Offer Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Note, and the Trustee, upon receipt of a Company Order directing the Trustee to
authenticate the new Note, shall authenticate
99
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Asset Disposition Offer on
the Asset Sale Offer Purchase Date.
Other than as specifically provided in this Section, any
purchase pursuant to this Section shall be made pursuant to the applicable
provisions of this Article Eleven.
ARTICLE 12. LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. COMPANY'S OPTION TO EFFECT LEGAL DEFEASANCE OR
COVENANT DEFEASANCE.
The Company and the Guarantors, if any, may, at their option,
at any time, with respect to the Notes, elect to have either Section 1202 or
Section 1203 be applied to all outstanding Notes upon compliance with the
conditions set forth in this Article Twelve. The Company in its sole discretion
can defease the Notes.
SECTION 1202. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 1201 of the option
applicable to this Section 1202, the Company and any Guarantor shall be deemed
to have been discharged from its obligations with respect to all outstanding
Notes on the date the conditions set forth in Section 1204 are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means
that the Company and any such Guarantor shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes, which
shall thereafter be deemed to be "outstanding" only for the purposes of Section
1205 and the other Sections of this Indenture referred to in (i) and (ii) below,
and to have satisfied all its other obligations under such Notes and this
Indenture insofar as such Notes are concerned (and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Notes to receive, solely
from the trust fund described in Section 1204 and as more fully set forth in
such Section, payments in respect of the principal of (and premium, if any, on)
and interest on such Notes when such payments are due, (ii) the Company's
obligations with respect to such Notes under Sections 304, 305, 310, 1002 and
1003, (iii) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, and the Company's obligations in connection therewith and (iv) this
Article Twelve.
If the Company or any Guarantor exercises its Legal Defeasance
Option, payment of the Notes may not be accelerated because of an Event of
Default.
100
Subject to compliance with this Article Twelve, the Company or
any Guarantor may exercise its option under this Section 1202 notwithstanding
the prior exercise of its option under Section 1203 with respect to the Notes.
SECTION 1203. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 1201 of the option
applicable to this Section 1203 the Company may terminate (i) its obligations
under any covenant contained in Sections 1004 through 1023, (ii) the operation
of Section 501(vi), Section 501(vii) (with respect only to Significant
Subsidiaries), and Section 501 (viii) and (iii) the limitations contained in
Section 801 (iii) and (iv) with respect to the outstanding Notes on and after
the date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not to be "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 deemed "outstanding" for all other purposes hereunder
(it being understood that such Notes will not be outstanding for accounting
purposes). If the Company exercises its covenant defeasance option, payment of
the Notes may not be accelerated because of an Event of Default specified under
Section 501 (iii) (but only with respect to the Company's failure to comply with
clause (iii) or (iv) of Section 801), (iv), (v) (but only with respect to
defaults relating to failure to comply with its obligations under Sections 1004
through 1008, 1021 and 1022), (vi), (vii) (with respect only to Significant
Subsidiaries), or (viii). For this purpose, such Covenant Defeasance means that,
with respect to the outstanding Notes, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document. Except
as specified above, the remainder of this Indenture and such Notes shall be
unaffected by the provisions of this Section.
SECTION 1204. CONDITIONS TO LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
The following shall be the conditions to application of either
Section 1202 or Section 1203 to the outstanding Notes:
(i) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying
the requirements of this Indenture who shall agree to comply with the
provisions of this Article Twelve applicable to it) as trust funds in
trust money or Government Obligations, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of
independent public accountants selected by the Company, to pay the
principal of, premium, if any, and interest due on the outstanding
Notes on the Stated Maturity or on the applicable Redemption Date or
purchase date as the case may be, of such principal, premium, if any,
or interest on the outstanding Notes;
(ii) in the case of Legal Defeasance, the Company
shall have delivered to the Trustee (A) an Opinion of Counsel in the
United States reasonably acceptable to the
101
Trustee confirming that (1) the Company has received from, or there has
been published by, the United States Internal Revenue Service a ruling
or (2) since the Issue Date, there has been a change in the applicable
U.S. federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel in the United States shall
confirm that the Holders of the outstanding Notes will not recognize
income, gain or loss for U.S. federal income tax purposes as a result
of such Legal Defeasance and will be subject to U.S. federal income tax
on the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance had not occurred and (B) an
Opinion of Counsel in the Company's jurisdiction of incorporation (if
other than the United States) reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Notes will not recognize
income, gain or loss for tax purposes in the Company's jurisdiction of
incorporation as a result of such Legal Defeasance and discharge and
will be subject to such taxes, if any, on the same amounts, in the same
manner and at the same times as would have been the case if such Legal
Defeasance had not occurred.
(iii) in the case of Covenant Defeasance, the Company
shall have delivered to the Trustee (A) an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of such Covenant
Defeasance and will be subject to such tax on the same amounts, in the
same manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred and (B) an Opinion of Counsel in
the Company's jurisdiction of incorporation (if other than the United
States) reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income gain or loss
for tax purposes in the Company's jurisdiction of incorporation as a
result of such Covenant Defeasance and will be subject to such taxes,
if any, 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.
(iv) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or insofar as
Events of Default from bankruptcy or insolvency events are concerned,
at any time in the period ending on the 123rd day after the date of
deposit;
(v) such Legal Defeasance or Covenant Defeasance
shall not result in a breach or violation of, or constitute a default
under, any material agreement or instrument (other than this Indenture)
to which the Company or any Guarantor is a party or by which the
Company or any Guarantor is bound;
(vi) the Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that, as of the date of such
opinion 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 under any applicable
U.S. federal or state
102
law, and that the Trustee has a perfected security interest in such
trust funds for the ratable benefit of the Holders;
(vii) 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 defeating, hindering, delaying or defrauding
any creditors of the Company or any Guarantor or others;
(viii) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for or relating to the
Legal Defeasance or the Covenant Defeasance, as the case may be, have
been complied with; and
(ix) the Company shall have delivered to the Trustee
the opinion of a nationally recognized firm of independent public
accountants stating the matters set forth in paragraph (i) above.
SECTION 1205. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section
1003, all money and Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 1205, the "Trustee") pursuant to Section 1204 in
respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Notes of all sums due and to become due thereon in respect of principal
(and 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 Government
Obligations deposited pursuant to Section 1204 or the principal and interest
received in respect thereof.
Anything in this Article Twelve to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or Government Obligations held by it as
provided in Section 1204 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 an equivalent legal defeasance or covenant
defeasance, as applicable, in accordance with this Article.
103
SECTION 1206. REINSTATEMENT.
If the Trustee or any Paying Agent is unable to apply any
money or Government Obligations in accordance with Section 1205 by reason of any
legal proceeding or by any 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 Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1202 or 1203, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1205; PROVIDED, HOWEVER, that if the Company makes any payment of principal of
(or premium, if any) or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money and Government Obligations
held by the Trustee or Paying Agent.
104
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the day and year first above written.
FLAG LIMITED
By /s/ NAME OF SIGNATORY
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY,
as Trustee
By
----------------------------------
Name:
Title:
105
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the day and year first above written.
FLAG LIMITED
By
----------------------------------
Name:
Title:
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY,
as Trustee
By /s/ NAME OF SIGNATORY
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
106