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EXHIBIT 4.6
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AMERICAN COMMUNICATIONS SERVICES, INC.
$220,000,000
13-3/4% SENIOR NOTES DUE 2007
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INDENTURE
Dated as of July 23, 1997
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THE CHASE MANHATTAN BANK,
Trustee
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CROSS-REFERENCE TABLE
Reconciliation and tie between the Trust Indenture Act of 1939, as amended, and
the Indenture, dated as of July 23, 1997.
TRUST
INDENTURE
ACT INDENTURE
SECTION SECTION
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Section 310(a)(1) ............................................. 7.10
(a)(2) ............................................ 7.10
(a)(3) ............................................ N.A.
(a)(4) ............................................ N.A.
(a)(5) ............................................ 7.10
(b) ............................................ 7.08; 7.10
(c) ............................................ N.A.
Section 311(a) ............................................. 7.11
(b) ............................................ 7.11
(c) ............................................ N.A.
Section 312(a) ............................................ 7.06(a); 7.06(b)
(b) ............................................ 7.06(c)
(c) ............................................ 7.06(d)
Section 313(a) ............................................ 7.06(e)
(b) ............................................ N.A.
(c) ............................................ 7.06(e); 7.06(f)
(d) ............................................ 7.06
Section 314(a) ............................................ 4.18; 4.19
(b) ............................................ N.A.
(c)(1) ............................................ 10.03
(c)(2) ............................................ 10.03
(c)(3) ............................................ N.A.
(d) ............................................ N.A.
(e) ............................................ 10.04
(f) ............................................ 4.19
Section 315(a) ............................................ 7.01(b)
(b) ............................................ 7.05(a)
(c) ............................................ 7.01(a)
(d) ............................................ 7.01(c)
(e) ............................................ 6.10
Section 316(a) ............................................ 2.08
(a)(1)(A) ............................................ 6.05
(a)(1)(B) ............................................ 6.04
(a)(2) ............................................ N.A.
(b) ............................................ 6.07
(c) ............................................ 9.05
Section 317(a)(1) ............................................ N.A.
(a)(2) ............................................ 6.08
(b) ............................................ 2.04
Section 318(a) ............................................ 10.01
NOTE: THIS RECONCILIATION AND TIE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE
PART OF THE INDENTURE.
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions ........................................... 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act ..... 25
SECTION 1.03. Rules of Construction ................................. 26
SECTION 1.04. Form of Documents Delivered to Trustee ................ 27
SECTION 1.05. Acts of Holders ....................................... 27
SECTION 1.06. Satisfaction and Discharge ............................ 28
ARTICLE II THE NOTES
SECTION 2.01. Form and Dating ....................................... 29
SECTION 2.02. Execution and Authentication .......................... 32
SECTION 2.03. Registrar and Paying Agent ............................ 33
SECTION 2.04. Paying Agent to Hold Money in Trust ................... 34
SECTION 2.05. Global Notes .......................................... 35
SECTION 2.06. Transfer and Exchange ................................. 35
SECTION 2.07. Replacement Notes ..................................... 39
SECTION 2.08. Outstanding Notes ..................................... 39
SECTION 2.09. Temporary Notes ....................................... 40
SECTION 2.10. Cancellation .......................................... 41
SECTION 2.11. Payment of Interest; Interest Rights Preserved ........ 41
SECTION 2.12. Authorized Denominations .............................. 42
SECTION 2.13. Computation of Interest ............................... 42
SECTION 2.14. Persons Deemed Owners ................................. 42
SECTION 2.15. CUSIP Numbers ......................................... 42
SECTION 2.16. Escrow Agreement. ..................................... 43
ARTICLE III REDEMPTION
SECTION 3.01. Notice to Trustee ..................................... 43
SECTION 3.02. Selection of Notes to be Redeemed ..................... 43
SECTION 3.03. Notice of Redemption .................................. 44
SECTION 3.04. Effect of Notice of Redemption ........................ 45
SECTION 3.05. Deposit of Redemption Price ........................... 45
SECTION 3.06. Notes Redeemed in Part ................................ 45
ARTICLE IV COVENANTS
SECTION 4.01. Payment of Notes ...................................... 46
SECTION 4.02. Maintenance of Office or Agency ....................... 46
SECTION 4.03. Money for the Note Payments to be Held in Trust ....... 46
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SECTION 4.04. Corporate Existence ....................................47
SECTION 4.05. Maintenance of Property ................................47
SECTION 4.06. Payment of Taxes and Other Claims ......................47
SECTION 4.07. Repurchase at the Option of Holders upon a Change
of Control .........................................48
SECTION 4.08. Limitation on Asset Sales ..............................50
SECTION 4.09. Limitation on Indebtedness .............................54
SECTION 4.10. Limitation on Issuance of Guarantees by Restricted
Subsidiaries .......................................56
SECTION 4.11. Limitation on Liens ....................................57
SECTION 4.12. Limitation on Sale and Leaseback Transactions ..........57
SECTION 4.13. Restricted Payments ....................................57
SECTION 4.14. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries ................61
SECTION 4.15. Limitation on Issuance and Sale of Capital Stock of
Restricted Subsidiaries ............................62
SECTION 4.16. Transactions with Affiliates ...........................63
SECTION 4.17. Restricted and Unrestricted Subsidiaries ...............64
SECTION 4.18. Reports ................................................65
SECTION 4.19. Compliance Certificate; Notice of Default or Event
of Default .........................................66
SECTION 4.20. Limitation on Construction of Fiber Networks ...........66
ARTICLE V CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.01. Merger, Consolidation or Sale of Assets ................67
SECTION 5.02. Successor Corporation Substituted ......................68
ARTICLE VI DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default ......................................68
SECTION 6.02. Acceleration ...........................................71
SECTION 6.03. Other Remedies .........................................72
SECTION 6.04. Waiver of Past Defaults ................................73
SECTION 6.05. Control by Majority ....................................73
SECTION 6.06. Limitation on Suits ....................................73
SECTION 6.07. Rights of Holders to Receive Payment ...................74
SECTION 6.08. Trustee May File Proofs of Claim .......................74
SECTION 6.09. Priorities .............................................75
SECTION 6.10. Undertaking for Costs ..................................75
SECTION 6.11. Waiver of Stay or Extension Laws .......................76
SECTION 6.12. Trustee May Enforce Claims Without Possession of
the Notes ..........................................76
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SECTION 6.13. Restoration of Rights and Remedies .....................76
SECTION 6.14. Rights and Remedies Cumulative .........................76
SECTION 6.15. Delay or Omission Not Waiver ...........................77
ARTICLE VII TRUSTEE
SECTION 7.01. Duties of Trustee ......................................77
SECTION 7.02. Rights of Trustee ......................................78
SECTION 7.03. Individual Rights of Trustee ...........................79
SECTION 7.04. Trustee's Disclaimer ...................................79
SECTION 7.05. Notice of Defaults .....................................79
SECTION 7.06. Preservation of Information; Reports by Trustee to
Holders ...........................................80
SECTION 7.07. Compensation and Indemnity .............................81
SECTION 7.08. Replacement of Trustee .................................82
SECTION 7.09. Successor Trustee by Merger ............................84
SECTION 7.10. Eligibility; Disqualification ..........................84
SECTION 7.11. Preferential Collection of Claims Against Company ......85
ARTICLE VIII DEFEASANCE
SECTION 8.01. Company's Option to Effect Legal Defeasance or
Covenant Defeasance ...............................86
SECTION 8.02. Legal Defeasance and Discharge .........................86
SECTION 8.03. Covenant Defeasance ....................................87
SECTION 8.04. Conditions to Defeasance or Covenant Defeasance ........87
SECTION 8.05. Deposited Money and U.S. Government Obligations
to be Held in Trust; Miscellaneous Provisions .....89
SECTION 8.06. Reinstatement ..........................................89
ARTICLE IX AMENDMENTS
SECTION 9.01. Without Consent of Holders .............................90
SECTION 9.02. With Consent of Holders ................................90
SECTION 9.03. Effect of Supplemental Indentures ......................91
SECTION 9.04. Compliance with Trust Indenture Act ....................92
SECTION 9.05. Revocation and Effect of Consents and Waivers ..........92
SECTION 9.06. Notation on or Exchange of Notes .......................92
SECTION 9.07. Trustee to Execute Supplemental Indentures .............92
ARTICLE X MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls ..........................94
SECTION 10.02. Notices ...............................................94
SECTION 10.03. Certificate and Opinion as to Conditions Precedent ....94
SECTION 10.04. Statements Required in Certificate or Opinion .........94
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SECTION 10.05. Rules by Trustee, Paying Agent and Registrar ..........95
SECTION 10.06. Payments on Business Days .............................95
SECTION 10.07. Governing Law .........................................95
SECTION 10.08. No Recourse Against Others ............................95
SECTION 10.09. Successors ............................................95
SECTION 10.10. Counterparts ..........................................96
SECTION 10.11. Table of Contents; Headings ...........................96
SECTION 10.12. Severability ..........................................96
SECTION 10.13. Further Instruments and Acts ..........................96
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EXHIBIT A FORM OF INITIAL GLOBAL NOTE
EXHIBIT B FORM OF INITIAL CERTIFICATED NOTE
EXHIBIT C FORM OF EXCHANGE GLOBAL NOTE
EXHIBIT D FORM OF EXCHANGE CERTIFICATED NOTE
EXHIBIT E REGISTRATION RIGHTS AGREEMENT
EXHIBIT F TERMS OF SUBORDINATED INDEBTEDNESS
EXHIBIT G ESCROW AND DISBURSEMENT AGREEMENT
SCHEDULE A EXISTING INDEBTEDNESS
SCHEDULE B REQUIRED INVESTMENTS
SCHEDULE C SECURED CREDIT FACILITY AGREEMENTS
SCHEDULE D CONTRACTS WITH AFFILIATES
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INDENTURE, dated as of July 23, 1997, between AMERICAN
COMMUNICATIONS SERVICES, INC., a Delaware corporation (the "Company"), having
its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and THE CHASE MANHATTAN BANK, a New York banking
corporation, as trustee hereunder (the "Trustee"), having its Corporate Trust
Administration Office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
RECITALS OF THE COMPANY
The Company has duly authorized the creation and issue of its
13-3/4% Senior Notes due 2007 (the "Initial Notes") of substantially the tenor
and amount hereinafter set forth, and to provide therefor and for, if and when
issued in exchange for the Initial Notes pursuant to the Indenture and the
Registration Rights Agreement, the Company's 13-3/4% Senior Notes due 2007 (the
"Exchange Notes," and together with the Initial Notes, the "Notes"), the Company
has duly authorized the execution and delivery of this Indenture.
All things necessary to make the Notes, when executed by the Company
and authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company and to make this Indenture a valid
instrument of the Company, in accordance with their respective terms, have been
done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises and the purchase of the Initial 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 I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular; and
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP (as defined herein).
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidi-
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ary of such specified Person, but excluding Indebtedness which is extinguished,
retired or repaid in connection with such Person merging with or into or
becoming a Subsidiary of such specified Person.
"Act" when used with respect to any Holder, has the meaning set
forth in Section 1.05 hereof.
"Affiliate" means, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person; provided that each Unrestricted Subsidiary shall be deemed to be an
Affiliate of the Company and of each other Subsidiary of the Company; provided,
further, that except for purposes of Section 2.08 hereof, neither the Company
nor any of its Restricted Subsidiaries shall be deemed to be Affiliates of each
other; and provided, further, that any Lender under the Secured Credit Facility
and its Affiliates shall not be deemed to be Affiliates of the Company or any of
its Restricted Subsidiaries solely as a result of the existence of the Secured
Credit Facility or their holdings of Capital Stock of the Company or any of its
Restricted Subsidiaries acquired in connection with the Secured Credit Facility.
For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "under common control with" and "controlled
by"), and as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of Voting
Stock, by agreement or otherwise; provided that beneficial ownership of 10
percent or more of the Voting Stock of a Person shall be deemed to constitute
control.
"Affiliate Transaction" has the meaning set forth in Section 4.16
hereof.
"Agent Member" has the meaning set forth in Section 2.05(a) hereof.
"Asset Sale" means, with respect to any Person, any transfer,
conveyance, sale, lease or other disposition (including, without limitation, by
way of consolidation or merger, but excluding by means of any Sale and Leaseback
Transaction or by the granting of a Lien permitted by Section 4.11) by such
Person or any of its Restricted Subsidiaries to any Person other than the
Company or a Restricted Subsidiary of the Company, in one transaction, or a
series of related transactions (each hereinafter referred to as a
"Disposition"), of Property or assets of such Person or any of its Restricted
Subsidiaries, the Fair Market Value of which exceeds $2,000,000, other than (i)
a Disposition of Property in the ordinary course of business consistent with
industry practice, (ii) a Disposition that constitutes a Restricted Payment
permitted to be made under Section 4.13 hereof and (iii) a Disposition by the
Company in connection with a transaction permitted pursuant to Article V hereof.
For purposes of this definition, any series of related transactions that, if
effected as a single transaction
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would constitute an Asset Sale, shall be deemed to be a single Asset Sale
effected when the last transaction which is a part thereof is effected.
"Asset Sale Offer" has the meaning set forth in Section 4.08(c)
hereof.
"Asset Sale Payment Date" has the meaning set forth in Section
4.08(d)(ii) hereof.
"Attributable Indebtedness" means, with respect to any Sale and
Leaseback Transaction of any Person, as at the time of determination, the
greater of (i) the capitalized amount in respect of such transaction that would
appear on the balance sheet of such Person in accordance with GAAP and (ii) the
present value (discounted at a rate consistent with accounting guidelines, as
determined in good faith by such Person, or the Board of Directors if such
Person is the Company or a Restricted Subsidiary) of the payments during the
remaining term of the lease (including any period for which such lease has been
extended or may, at the option of the lessor, be extended) or until the earliest
date on which the lessee may terminate such lease without penalty or upon
payment of a penalty (in which case the rental payments shall include such
penalty).
"Average Life" means, as of any date, with respect to any debt
security or Disqualified Stock, the quotient obtained by dividing (i) the sum of
the products of (x) the number of years from such date to the dates of each
scheduled principal payment or redemption payment (including any sinking fund or
mandatory redemption payment requirements) of such debt security or Disqualified
Stock multiplied in each case by (y) the amount of such principal or redemption
payment, by (ii) the sum of all such principal or redemption payments.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board of
Directors.
"Board Resolution" means a duly adopted resolution of the Board of
Directors in full force and effect at the time of determination and certified as
such by the Secretary or an Assistant Secretary of the Company.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law, executive order or regulation to close.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Indebtedness
arrangement conveying the right to use) real or personal property of such Person
which is required to be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person
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prepared in accordance with GAAP and the stated maturity thereof shall be the
date of the last payment of rent or any amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without payment
of a penalty.
"Capital Stock" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person (including, without limitation, common stock, preferred stock and
partnership interests) and any rights (other than Indebtedness convertible into
an equity interest), warrants or options to subscribe for or acquire an equity
interest in such Person.
"Cash Proceeds" means, with respect to any Asset Sale or issuance or
sale of Capital Stock by any Person, the aggregate consideration received in
respect of such sale or issuance by such Person in the form of cash and Eligible
Cash Equivalents.
"Certificated Notes" means Initial Certificated Notes and Exchange
Certificated Notes.
"Change of Control" shall be deemed to occur if (i) the sale,
conveyance, transfer or lease of all or substantially all of the assets of the
Company to any "Person" or "group" (within the meaning of Sections 13(d)(3) and
14(d)(2) of the Exchange Act or any successor provision to either of the
foregoing, including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(i) under the
Exchange Act), other than to any Permitted Holder or any Restricted Subsidiary
of the Company, shall have occurred; or (ii) any "Person" or "group" (within the
meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing, including any group acting for the purpose
of acquiring, holding or disposing of securities within the meaning of Rule
13d-5(b)(i) under the Exchange Act), other than any Permitted Holder, becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more
than 35 percent of the total voting power of all classes of the Voting Stock of
the Company (including any warrants, options or rights to acquire such Voting
Stock), calculated on a fully diluted basis, and such voting power percentage is
greater than or equal to the total voting power percentage then beneficially
owned by the Permitted Holders in the aggregate; or (iii) during any period of
two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors (together with any new directors whose
election or appointment by such board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office.
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"Change of Control Offer" has the meaning set forth in Section
4.07(a) hereof.
"Change of Control Payment Date" has the meaning set forth in
Section 4.07(b)(ii) hereof.
"Change of Control Purchase Price" has the meaning set forth in
Section 4.07(a) hereof.
"clearing agency" has the meaning set forth in Section 3(a)(23) of
the Exchange Act.
"Closing Price" means, on any Trading Day with respect to the per
share price of any share of Common Stock, the last reported sale price regular
way or, in case no such reported sale takes place on such day, the average of
the reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if another national securities exchange on which such
shares are listed or admitted to trading is the principal trading market for
such Common Stock, then such national securities exchange or, if such Common
Stock is not listed or admitted to trading on any national securities exchange,
on The Nasdaq Stock Market (or any market for trading of securities administered
by the NASD), or, if such Common Stock is not listed or admitted to trading on
any such national securities exchange or market, the average of the closing bid
and asked prices in the over-the-counter market as furnished by any New York
Stock Exchange member firm that is selected from time to time by the Company for
that purpose.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this Indenture such commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, the body performing such duties at such time.
"Common Stock" means, with respect to any Person, Capital Stock of
such Person that does not rank prior, as to the payment of dividends or as to
the distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"Company" means the party named as such in the preamble to this
Indenture until a successor replaces it pursuant to the applicable provisions
hereof and, thereafter, means such successor.
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"Company Order" means a written order signed in the name of the
Company by (i) its Chairman of the Board, President, a Vice Chairman or a Vice
President, and (ii) its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary.
"Consolidated Interest Expense" means, with respect to any Person
for any period, without duplication (A) the sum of (i) the aggregate amount of
cash and non-cash interest expense (including capitalized interest) of such
Person and its Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP in respect of Indebtedness
(including, without limitation, (v) any amortization of debt discount, (w) net
costs associated with Interest Hedging Obligations (including any amortization
of discounts), (x) the interest portion of any deferred payment obligation, (y)
all accrued interest and (z) all commissions, discounts and other fees and
charges owed with respect to letters of credit, bankers' acceptances or similar
facilities) paid or accrued, or scheduled to be paid or accrued, during such
period; (ii) dividends or distributions with respect to Preferred Stock or
Disqualified Stock of such Person (and of its Restricted Subsidiaries if to be
paid to a Person other than such Person or its Restricted Subsidiaries) declared
and payable in cash; (iii) the portion of any rental obligation of such Person
or its Restricted Subsidiaries in respect of any Capital Lease Obligation
allocable to interest expense in accordance with GAAP; (iv) the portion of any
rental obligation of such Person or its Restricted Subsidiaries in respect of
any Sale and Leaseback Transaction allocable to interest expense (determined as
if such Sale and Leaseback Transaction were treated as a Capital Lease
Obligation); and (v) to the extent any Indebtedness of any other Person is
Guaranteed by such Person or any of its Restricted Subsidiaries, the aggregate
amount of interest paid, accrued or scheduled to be paid or accrued, by such
other Person during such period attributable to any such Indebtedness, less (B)
to the extent included in (A) above, amortization or write-off of deferred
financing costs of such Person and its Restricted Subsidiaries during such
period and any charge related to any premium or penalty paid in connection with
redeeming or retiring any Indebtedness of such Person and its Restricted
Subsidiaries prior to its Stated Maturity; in the case of both (A) and (B)
above, after elimination of intercompany accounts among such Person and its
Restricted Subsidiaries and as determined in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis determined in accordance
with GAAP; provided that there shall be excluded therefrom, without duplication,
(i) all items classified as extraordinary; (ii) any net income of any Person
other than such Person and its Restricted Subsidiaries, except to the extent of
the amount of dividends or other distributions actually paid to such Person or
its Restricted Subsidiaries by such other Person during such period in respect
of such income; (iii) the net income of any Person acquired by such Person or
any of its Restricted Subsidiaries in a pooling-of-interests transaction for any
period prior to the date of the related acquisition; (iv) any gain or loss, net
of taxes, realized on the termination of any employee pension
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benefit plan; (v) net gains (but not net losses) in respect of Asset Sales by
such Person or its Restricted Subsidiaries; (vi) the net income (but not net
loss) of any Restricted Subsidiary of such Person to the extent that the payment
of dividends or other distributions to such Person is restricted by the terms of
its charter or any agreement, instrument, contract, judgment, order, decree,
statute, rule, governmental regulation or otherwise, except for any dividends or
distributions actually paid by such Restricted Subsidiary to such Person; (vii)
with regard to a non-wholly owned Restricted Subsidiary, any aggregate net
income (or loss) in excess of such Person's or such Restricted Subsidiary's pro
rata share of such non-wholly owned Restricted Subsidiary's net income (or
loss); and (viii) the cumulative effect of changes in accounting principles.
"Consolidated Tangible Assets" of any Person means, as of any date,
the sum for such Person and its Restricted Subsidiaries (after eliminating
intercompany items) of the net book value of all Property and assets of such
Person and its Restricted Subsidiaries reflected on a balance sheet of such
Person or such Restricted Subsidiary, as the case may be, prepared in accordance
with GAAP, less the net book value of all items that would be classified as
intangibles under GAAP, including, without limitation, (i) licenses, patents,
patent applications, copyrights, trademarks, trade names, goodwill, noncompete
agreements and organizational expenses, and (ii) unamortized deferred financing
costs, debt discount and expenses, including any appropriate deductions for any
minority interest in such assets of such Restricted Subsidiaries.
"Corporate Trust Administration Office" means the principal office
of the Trustee at which at any particular time its corporate trust business
shall be principally administered, which office is, at the date of execution of
this Indenture, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
"Covenant Defeasance" has the meaning set forth in Section 8.03
hereof.
"Debt to EBITDA Ratio" means, as at any date of determination, the
ratio of (i) the aggregate amount of Indebtedness of the Company and its
Restricted Subsidiaries on a consolidated basis as at the date of determination
to (ii) the aggregate amount of EBITDA of the Company and its Restricted
Subsidiaries for the four preceding fiscal quarters for which financial
information is available immediately prior to the date of determination;
provided that any Indebtedness incurred or retired by the Company or any of its
Restricted Subsidiaries during the fiscal quarter in which the date of
determination occurs shall be calculated as if such Indebtedness was so incurred
or retired on the first day of the fiscal quarter in which the date of
determination occurs; and provided, further, that (x) if the transaction giving
rise to the need to calculate the Debt to EBITDA Ratio would have the effect of
increasing or decreasing Indebtedness or EBITDA in the future, Indebtedness or
EBITDA shall be calculated on a pro forma basis as if such transaction had
occurred on the first day of such four fiscal
15
-8-
quarter period preceding the date of determination, and (y) if during such four
fiscal quarter period, the Company or any of its Restricted Subsidiaries shall
have engaged in any Asset Sale, EBITDA for such period shall be reduced by an
amount equal to the EBITDA (if positive), or increased by an amount equal to the
EBITDA (if negative), directly attributable to the assets which are the subject
of such Asset Sale and any related retirement of Indebtedness as if such Asset
Sale and related retirement of Indebtedness had occurred on the first day of
such period and (z) if during such four fiscal quarter period the Company or any
of its Restricted Subsidiaries shall have acquired any material assets outside
the ordinary course of business, EBITDA shall be calculated on a pro forma basis
as if such asset acquisition and related financing had occurred on the first day
of such period.
"Default" means any event, act or condition, the occurrence of which
is, or after notice or the passage of time or both would be, an Event of
Default.
"Defaulted Interest" has the meaning set forth in Section 2.11
hereof.
"Defeasance" has the meaning set forth in Section 8.02 hereof.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Disposition" has the meaning set forth in the definition of "Asset
Sale" in this Section 1.01.
"Disqualified Stock" means any Capital Stock which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, or otherwise, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, or is exchangeable for
Indebtedness at any time, in whole or in part, on or prior to the Stated
Maturity of the Notes.
"EBIT" means the amount calculated in the same manner as EBITDA, but
not including clauses (iii) and (iv) of the definition thereof.
"EBITDA" means, with respect to any Person for any period, the sum
for such Person for such period of Consolidated Net Income plus, to the extent
reflected in the income statement of such Person for such period from which
Consolidated Net Income is determined, without duplication, (i) Consolidated
Interest Expense; (ii) income tax expense; (iii) depreciation expense; (iv)
amortization expense; (v) any non-cash charge related to the issuance to
employees of such Person of options to purchase Capital Stock of such Person;
and (vi) any charge related to any premium or penalty paid in connection with
redeeming or retiring any Indebtedness prior to its Stated Maturity and minus,
to the extent reflected in
16
-9-
such income statement, any non-cash credits that had the effect of increasing
Consolidated Net Income of such Person for such period, each item to be
determined in accordance with GAAP.
"Eligible Cash Equivalents" means (i) securities issued or directly
and fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof, provided that the full faith and credit of the United
States of America is pledged in support thereof; (ii) time deposits and
certificates of deposit of any commercial bank organized in the United States
having capital and surplus in excess of $500,000,000, with a maturity date not
more than one year from the date of acquisition; (iii) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above; (iv) direct 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, or subject to tender
at the option of the holder thereof within 90 calendar days after the date of
acquisition thereof and, at the time of acquisition, having a rating of A or
better from Standard & Poor's or A-2 or better from Moody's; (v) commercial
paper issued by the parent corporation of any commercial bank organized in the
United States having capital and surplus in excess of $500,000,000 and
commercial paper issued by others having one of the two highest ratings
obtainable from either Standard & Poor's or Moody's and in each case maturing
within ninety days after the date of acquisition; (vi) overnight bank deposits
and bankers' acceptances at any commercial bank organized in the United States
having capital and surplus in excess of $500,000,000; (vii) deposits available
for withdrawal on demand with a commercial bank organized in the United States
having capital and surplus in excess of $500,000,000; and (viii) investments in
money market funds substantially all of whose assets comprise securities of the
types described in clauses (i) through (vi).
"Eligible Institution" means a commercial banking institution that
has combined capital and surplus of not less than $500 million or its equivalent
in foreign currency, whose debt is rate "A" (or higher) according to Standard &
Poor's or Moody's at the time as of which any investment or rollover therein is
made.
"Equity Offering" means an offering of Common Stock of the Company
resulting in net proceeds to the Company in excess of $20 million.
"Escrow Account" means an escrow account for the deposit of
approximately $70 million of the net proceeds from the sale of the Notes under
the Escrow and Disbursement Agreement.
17
-10-
"Escrow Agent" means The Bank of New York, as Escrow Agent under the
Escrow and Disbursement Agreement, or any successor thereto appointed pursuant
to such agreement.
"Escrow and Disbursement Agreement" means the Escrow and
Disbursement Agreement, dated as of the date of the Indenture, by and among the
Escrow Agent, the Trustee and the Company, governing the disbursement of funds
from the Escrow Account and substantially in the form of Exhibit G to this
Indenture.
"Event of Default" has the meaning set forth in Section 6.01 hereof.
"Excess Proceeds" has the meaning set forth in Section 4.08(b)
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Certificated Notes" means Notes issued in definitive,
fully registered form to beneficial owners of interests in the Exchange Global
Note pursuant to Section 2.06(c) hereof.
"Exchange Global Note" has the meaning set forth in Section 2.01(d)
hereof.
"Exchange Notes" has the meaning set forth in the Recitals of the
Company and more particularly means any of the Notes authenticated and delivered
under this Indenture pursuant to the Registered Exchange Offer.
"Exchange Rate Obligation" means, with respect to any Person, any
currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate collar agreements, exchange rate insurance or
other agreements or arrangements, or combination thereof, designed to provide
protection against fluctuations in currency exchange rates.
"Existing Indebtedness" means the Indebtedness of the Company and
its Restricted Subsidiaries outstanding on the date of this Indenture, including
the 2005 Notes and the 2006 Notes, and specified in Schedule A hereto, and the
incurrence by the Company of Indebtedness represented by the 2005 Notes and the
2006 Notes.
"Existing Notes" means the 2005 Notes and the 2006 Notes.
"Fair Market Value" means, with respect to any Property or asset,
the sale value that would be obtained in an arm's-length transaction between an
informed and willing
18
-11-
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.
"Fiber Network" means a digital fiber optic telecommunications
network wholly owned by the Company that serves a Metropolitan Area.
"Final Memorandum" means the final Offering Memorandum, dated July
18, 1997, used in connection with the Initial Placement.
"GAAP" means United States generally accepted accounting principles,
consistently applied, as 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 may be
approved by a significant segment of the accounting profession of the United
States, that are applicable to the circumstances as of the date of
determination; provided that, except as otherwise specifically provided herein,
all calculations made for purposes of determining compliance with Article IV or
Section 5.01 hereof shall utilize GAAP as in effect on the Issue Date.
"Global Notes" means the Initial Global Note and the Exchange Global
Note.
"Guarantee" means any direct or indirect obligation, contingent or
otherwise, of a Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person in any manner. The terms
"Guaranteed," "Guaranteeing" and "Guarantor" shall have correlative meanings.
"Guaranteed Indebtedness" has the meaning set forth in Section
4.10(a) hereof.
"Holder" means (i) in the case of any Certificated Note, the Person
in whose name such Certificated Note is registered in the Security Register and
(ii) in the case of any Global Note, the Depositary.
"incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (by conversion, exchange or otherwise),
extend, assume, Guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or obligation on the balance sheet of
such Person (and "incurrence," "incurred," "incurrable" and "incurring" shall
have meanings correlative to the foregoing); provided that a change in GAAP that
results in an obligation of such Person that exists at such time becoming
Indebtedness shall not be deemed an incurrence of such Indebtedness.
Indebtedness otherwise incurred by a Person before it becomes a Subsidiary of
the Company (whether by merger, con-
19
-12-
solidation, acquisition or otherwise) shall be deemed to have been incurred at
the time at which such Person becomes a Subsidiary of the Company.
"Indebtedness" means at any time (without duplication), with respect
to any Person, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent, (i) any obligation of such Person for
money borrowed; (ii) any obligation of such Person evidenced by bonds,
debentures, notes, Guarantees or other similar instruments, including, without
limitation, any such obligations incurred in connection with the acquisition of
Property, assets or businesses, excluding trade accounts payable made in the
ordinary course of business; (iii) any reimbursement obligation of such Person
with respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person; (iv) any obligation of such Person issued
or assumed as the deferred purchase price of Property, assets or services (but
excluding trade accounts payable or accrued liabilities arising in the ordinary
course of business, which in either case are not more than 60 days overdue or
which are being contested in good faith); (v) any Capital Lease Obligation of
such Person; (vi) the maximum fixed redemption or repurchase price of
Disqualified Stock of such Person and, to the extent held by Persons other than
such Person or its Restricted Subsidiaries, the maximum fixed redemption or
repurchase price of Disqualified Stock of such Person's Restricted Subsidiaries,
at the time of determination; (vii) the notional amount of any Interest Hedging
Obligations or Exchange Rate Obligations of such Person at the time of
determination; (viii) any Attributable Indebtedness with respect to any Sale and
Leaseback Transaction to which such Person is a party; and (ix) any obligation
of the type referred to in clauses (i) through (viii) of this definition of
another Person and all dividends and distributions of another Person the payment
of which, in either case, such Person has Guaranteed or is responsible or
liable, directly or indirectly, as obligor, Guarantor or otherwise. For purposes
of the preceding sentence, the maximum fixed repurchase price of any
Disqualified Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture; provided that if such
Disqualified Stock is not then permitted to be repurchased, the repurchase price
shall be the book value of such Disqualified Stock. 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 of any
Guarantees at such date; provided that for purposes of calculating the amount of
the 2005 Notes or 2006 Notes outstanding at any date, the amount of such 2005
Notes or 2006 Notes shall be the Accreted Value (as defined in the relevant
indenture) thereof as of such date unless cash interest has commenced to accrue
pursuant to the terms of the relevant indenture, in which case the amount of the
2005 Notes or 2006 Notes outstanding will be determined pursuant to the terms of
such notes and will not include any accrued and unpaid cash interest which would
otherwise be included in Accreted Value (as defined in the relevant Indenture)
because of clause (iii) of the definition thereof.
20
-13-
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument, and any such supplemental indenture,
respectively.
"Independent Director" means a director of the Company other than a
director who is (i) a party, or who is an officer, employee, promoter, partner
or Person performing similar functions for a party (including the Company) to
the transaction in question; (ii) a director of a party (other than the Company)
to the transaction; or (iii) related by blood or marriage to any Person
specified in clause (i) or (ii) of this definition.
"Initial Certificated Notes" means Notes issued in definitive, fully
registered form to beneficial owners of interests in the Initial Global Note
pursuant to Section 2.06(c) hereof.
"Initial Global Note" has the meaning set forth in Section 2.01(c)
hereof.
"Initial Notes" has the meaning set forth in the Recitals of the
Company and, more particularly, means any of the Notes authenticated and
delivered under this Indenture other than pursuant to the Registered Exchange
Offer.
"Initial Placement" means the initial sales of the Notes by the
Initial Purchasers.
"Initial Purchasers" means the Initial Purchasers, as such term is
defined in the Purchase Agreement.
"Interest Hedging Obligation" means, with respect to any Person, an
obligation of such Person pursuant to any interest rate swap agreement, interest
rate cap, collar or floor agreement or other similar agreement or arrangement
designed to protect against or manage such Person's or any of its Restricted
Subsidiaries' exposure to fluctuations in interest rates.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Notes.
"Investment" in any Person means any direct, indirect or contingent
(i) advance or loan to, Guarantee of any Indebtedness of, extension of credit or
capital contribution to such Person; (ii) the acquisition of any shares of
Capital Stock, bonds, notes, debentures or other securities of such Person; or
(iii) the acquisition, by purchase or otherwise,
21
-14-
of all or substantially all of the business, assets or stock or other evidence
of beneficial ownership of such Person; provided that Investments shall exclude
commercially reasonable extensions of trade credit. The amount of any Investment
shall be the original cost of such Investment, plus the cost of all additions
thereto and minus the amount of any portion of such Investment repaid to such
Person in cash as a repayment of principal or a return of capital, as the case
may be, but without any other adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment. In
determining the amount of any Investment involving a transfer of any Property or
asset other than cash, such Property or asset shall be valued at its Fair Market
Value at the time of such transfer. For purposes of the definition of
"Restricted Payment" and Section 4.13 only, "Investment" shall include the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the Fair Market Value of the net assets of any Subsidiary at the time that such
Subsidiary is designated an Unrestricted Subsidiary and shall exclude the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the Fair Market Value of the net assets of any Unrestricted Subsidiary at the
time that such Unrestricted Subsidiary is designated a Restricted Subsidiary.
"Issue Date" means the date on which the Notes were first
authenticated and delivered under this Indenture.
"Joint Venture Entity" has the meaning set forth in Section
4.13(b)(vii) hereof.
"Lender" means a lender under the Secured Credit Facility that is a
party to and is bound by an agreement with respect to the Secured Credit
Facility and has extended or is committed to extend financing to the Company or
any of its Subsidiaries under the Secured Credit Facility.
"Lien" means, with respect to any Property or other asset, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien (statutory or other), charge, easement,
encumbrance, preference, priority or other security or similar agreement or
preferential arrangement of any kind or nature whatsoever on or with respect to
such Property or other asset (including, without limitation, any conditional
sale or title retention agreement having substantially the same economic effect
as any of the foregoing).
"Maturity" means, when used with respect to a Note, the date on
which the principal of such Note becomes due and payable as provided therein or
in this Indenture, whether on the date specified in such Note as the fixed date
on which the principal of such Note is due and payable, on the Change of Control
Payment Date or Asset Sale Payment Date, or by declaration of acceleration, call
for redemption or otherwise.
22
-15-
"Metropolitan Area" means the 31 metropolitan areas in which the
Company, as of June 30, 1997, has a Fiber Network and other metropolitan areas
deemed in the reasonable business judgment of the management of the Company to
provide an opportunity for the building and operation of such a Fiber Network
with the reasonable potential to produce financial results for the Company at
least substantially comparable to the metropolitan areas in which the Company
has such operational Fiber Networks.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or, if ▇▇▇▇▇'▇
Investors Service, Inc. shall cease rating the specified debt securities and
such ratings business with respect thereto shall have been transferred to a
successor Person, such successor Person; provided that if ▇▇▇▇▇'▇ Investors
Service, Inc. ceases rating the specified debt securities and its ratings
business with respect thereto shall not have been transferred to any successor
Person or such successor Person is Standard & Poor's, then "Moody's" shall mean
any other nationally recognized rating agency (other than Standard & Poor's)
that rates the specified debt securities and that shall have been designated by
the Company in an Officers' Certificate.
"NASD" means the National Association of Securities Dealers, Inc.
"Net Cash Proceeds" means, with respect to the sale of any Property
or assets by any Person or any of its Restricted Subsidiaries, Cash Proceeds
received net of (i) all reasonable out-of-pocket expenses of such Person or such
Restricted Subsidiary incurred in connection with such a sale, including,
without limitation, all legal, title and recording tax expenses, commissions and
other fees and expenses incurred (but excluding any finder's fee or broker's fee
payable to any Affiliate of such Person or any of its Restricted Subsidiaries)
and all federal, state, foreign and local taxes arising in connection with such
sale that are paid or required to be accrued as a liability under GAAP by such
Person or its Restricted Subsidiaries; (ii) all payments made or required to be
made by such Person or its Restricted Subsidiaries on any Indebtedness which is
secured by such Properties or assets in accordance with the terms of any Lien
upon or with respect to such Properties or assets or which must, by the terms of
such Lien, or in order to obtain a necessary consent to such transaction or by
applicable law, be repaid in connection with such sale; and (iii) all
contractually required distributions and other payments made to minority
interest holders (but excluding distributions and payments to Affiliates of such
Person) in Restricted Subsidiaries of such Person as a result of such
transaction; provided that, in the event that any consideration for a
transaction (which would otherwise constitute Net Cash Proceeds) is required to
be held in escrow pending determination of whether a purchase price adjustment
will be made, such consideration (or any portion thereof) shall become Net Cash
Proceeds only at such time as it is released to such Person or its Restricted
Subsidiaries from escrow; provided, further, that any non-cash consideration
received in connection with any transaction, which is subsequently converted to
23
-16-
cash, shall be deemed to be Net Cash Proceeds at such time, and shall thereafter
be applied in accordance with the applicable provisions of this Indenture.
"Notes" has the meaning set forth in the Recitals of the Company and
more particularly means any of the Notes authenticated and delivered under this
Indenture.
"Offer Purchase Price" has the meaning set forth in Section 4.08(c)
hereof.
"Officer" means the Chairman of the Board of Directors, a Vice
Chairman of the Board of Directors, the President, a Vice President, the Chief
Financial Officer, the Chief Accounting Officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary.
"Officers' Certificate" means a certificate signed by (i) the
Chairman of the Board of Directors, a Vice Chairman of the Board of Directors,
the President, the Chief Executive Officer or a Vice President, and (ii) the
Chief Financial Officer, the Chief Accounting Officer, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee, which certificate shall comply with the provisions of
Section 10.04 hereof; provided that any Officers' Certificate delivered pursuant
to the first paragraph of Section 4.19 hereof shall be signed by the Chief
Executive Officer, the Chief Financial Officer or the Chief Accounting Officer.
"Opinion of Counsel" means a written opinion from legal counsel (who
may be counsel to the Company or the Trustee) who is acceptable to the Trustee,
which opinion shall comply with the provisions of Section 10.04 hereof; provided
that any Opinion of Counsel delivered pursuant to Section 8.04 hereof shall not
be rendered by an employee of the Company or any of its Subsidiaries.
"Paying Agent" means any Person authorized by the Company to make
payments of principal, premium or interest with respect to the Notes on behalf
of the Company.
"Permitted Holders" means The ▇▇▇▇ Alternative Income Fund, L.P.,
ING Equity Partners, L.P.I., Apex Investment Fund I, L.P., Apex Investment Fund
II, L.P., The Productivity Fund II, L.P. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and the
respective Affiliates (other than the Company and the Restricted Subsidiaries)
of each of the foregoing.
"Permitted Investments" means
(i) Eligible Cash Equivalents;
(ii) Investments in Property used in the ordinary course of
business;
24
-17-
(iii) Investments in any Person as a result of which such Person
becomes a Restricted Subsidiary of the Company in compliance with Section
4.17 hereof;
(iv) Investments pursuant to certain agreements or obligations of
the Company or a Restricted Subsidiary of the Company, in effect on the
Issue Date, to make such Investments, which agreements and obligations are
specified in Schedule B hereto;
(v) Investments in prepaid expenses, negotiable instruments held for
collection and lease, utility and workers' compensation, performance and
other similar deposits;
(vi) Interest Hedging Obligations with respect to any floating rate
Indebtedness that is permitted under Section 4.09 hereof to be
outstanding;
(vii) Exchange Rate Obligations, provided that such Exchange Rate
Obligations were entered into in connection with transactions in the
ordinary course of business or the incurrence of Indebtedness that is
permitted under Section 4.09 hereof to be outstanding;
(viii) bonds, notes, debentures or other debt securities received as
a result of Asset Sales permitted under Section 4.08 hereof;
(ix) Investments by the Company or a Restricted Subsidiary in or in
respect of a Person to the extent the consideration for such Investment
consists of shares of Qualified Stock of the Company; and
(x) Investments in existence at the Issue Date.
"Permitted Liens" means
(i) Liens on Property or assets of a Person existing at the time
such Person is merged with or into or consolidated with the Company or any
Subsidiary of the Company, provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not
secure any Property or assets of the Company or any of its Subsidiaries
other than the Property or assets subject to the Liens prior to such
merger or consolidation;
(ii) Liens on Telecommunications Assets existing during the time of
the construction thereof;
25
-18-
(iii) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory or regulatory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business consistent with industry
practice;
(iv) Liens existing on the Issue Date;
(v) Liens to secure Indebtedness permitted to be incurred under
Section 4.09(b)(i) hereof;
(vi) any Lien on Property of the Company in favor of the United
States of America or any state thereof, or any instrumentality of either,
to secure certain required payments pursuant to any contract or statute;
(vii) any Lien for taxes or assessments or other governmental
charges or levies not then due and payable (or which, if due and payable,
are being contested in good faith and for which adequate reserves are
being maintained, to the extent required by GAAP);
(viii) easements, rights-of-way, licenses and other similar
restrictions on the use of Properties or minor imperfections of title
that, in the aggregate, are not material in amount and do not in any case
materially detract from the Properties subject thereto or interfere with
the ordinary conduct of the business of the Company or its Subsidiaries;
(ix) any Lien to secure obligations under workmen's compensation
laws or similar legislation, including any Lien with respect to judgments
which are not currently dischargable;
(x) any statutory warehousemen's, materialmen's or other similar
Liens for sums not then due and payable (or which, if due and payable, are
being contested in good faith and with respect to which adequate reserves
are being maintained, to the extent required by GAAP);
(xi) any interest or title of a lessor in Property subject to a
Capital Lease Obligation;
(xii) Liens to secure any Vendor Financing Indebtedness; provided
that such Liens do not extend to any Property or assets other than the
Property or assets the acquisition of which was financed by such Vendor
Financing Indebtedness;
26
-19-
(xiii) Liens in favor of the Company or any Restricted Subsidiary of
the Company;
(xiv) Liens on Property or assets of a Person existing prior to the
time such Person is acquired by the Company as a result of (a) an
Investment described in clause (ix) of the definition of "Permitted
Investments" herein or (b) an Investment described in clause (vii) of
Section 4.13(b) hereof; provided that such Liens were in existence prior
to the contemplation of such Investment and do not secure any Property or
assets of the Company or any of its Subsidiaries other than the Property
or assets subject to the Liens prior to such Investment;
(xv) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other Property relating to
such letters of credit and the products and proceeds thereof;
(xvi) Liens on the Escrow Account and all funds and securities
therein securing only the Notes equally and ratably; and
(xvii) Liens to secure any permitted extension, renewal, refinancing
or refunding (or successive extensions, renewals, refinancings or
refundings), in whole or in part, of any Indebtedness secured by Liens
referred to in the foregoing clauses (i) through (v) and (xii), provided
that such Liens do not extend to any other Property or assets other than
the Property and assets that secured the original Lien and the principal
amount of the Indebtedness secured by such Liens is not increased.
"Permitted Subordinated Financing" means Indebtedness or Preferred
Stock of the Company issued to a Permitted Holder; provided that (i) in the case
of Permitted Subordinated Financing that constitutes Indebtedness, such
Indebtedness (A) is subordinated in right of payment to the Notes as provided in
Exhibit F hereto and (B) has a maturity of 180 days or less, and (ii) in the
case of Permitted Subordinated Financing that constitutes Preferred Stock, such
Preferred Stock is retired within 180 days of issuance.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Stock" means, as applied to the Capital Stock of any
Person, 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 Person,
over shares of Capital Stock of any other class of such Person.
27
-20-
"Private Placement Legends" means the legends in the form set forth
in Section 2.01(e)(i) hereof.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms hereof, a calculation in accordance with
Article 11 of Regulation S-X promulgated under the Securities Act (to the extent
applicable), as interpreted in good faith by the Board of Directors, or
otherwise, a calculation made in good faith by the Board of Directors.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed,
tangible or intangible, excluding Capital Stock in any other Person.
"Purchase Agreement" means the Purchase Agreement relating to the
Notes, dated July 18, 1997, among the Company and the Initial Purchasers.
"Qualified Stock" of any Person means a class of Capital Stock other
than Disqualified Stock.
"Record Date" means, for the interest payable on any Interest
Payment Date, the date specified in Section 2.11 hereof.
"Redemption Date" means, when used with respect to any Note or part
thereof to be redeemed hereunder, the date fixed for redemption of such Notes
pursuant to the terms of the Notes and this Indenture.
"Redemption Price" means, when used with respect to any Note or part
thereof to be redeemed hereunder, the price fixed for redemption of such Note
pursuant to the terms of the Notes and this Indenture, plus accrued and unpaid
interest thereon, if any, to the Redemption Date.
"Refinance" has the meaning set forth in Section 4.09(b)(x) hereof
(and "Refinanced" and "Refinancing" shall have meanings correlative to the
foregoing).
"Refinancing Indebtedness" means any Indebtedness incurred in
connection with the Refinancing of other Indebtedness.
"Registered Exchange Offer" has the meaning set forth in the
Registration Rights Agreement.
"Registrar" has the meaning set forth in Section 2.03 hereof.
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"Registration Rights Agreement" means the Registration Rights
Agreement relating to the Notes, dated July 23, 1997 among the Company and the
Initial Purchasers, and attached hereto as Exhibit E.
"Required Filing Date" has the meaning set forth in Section 4.18
hereof.
"Restricted Payment" means (i) a dividend or other distribution
declared or paid on the Capital Stock of the Company or to the Company's
stockholders (in their capacity as such), or declared or paid to any Person
other than the Company or a Restricted Subsidiary of the Company on the Capital
Stock of any Restricted Subsidiary of the Company, in each case, other than
dividends, distributions or payments made solely in Qualified Stock of the
Company or such Restricted Subsidiary; (ii) a payment made by the Company or any
of its Restricted Subsidiaries (other than to the Company or any Restricted
Subsidiary of the Company) to purchase, redeem, acquire or retire any Capital
Stock of the Company or of a Restricted Subsidiary of the Company; (iii) a
payment made by the Company or any of its Restricted Subsidiaries (other than a
payment made solely in Qualified Stock of the Company) to redeem, repurchase,
defease (including an in-substance or legal defeasance) or otherwise acquire or
retire for value (including pursuant to mandatory repurchase covenants), prior
to any scheduled maturity, scheduled sinking fund or mandatory redemption
payment, Indebtedness of the Company or such Restricted Subsidiary which is
subordinate (whether pursuant to its terms or by operation of law) in right of
payment to the Notes and which was scheduled to mature on or after the maturity
of the Notes; or (iv) an Investment in any Person, including an Unrestricted
Subsidiary or the designation of a Subsidiary as an Unrestricted Subsidiary,
other than (a) a Permitted Investment, (b) an Investment by the Company in a
Restricted Subsidiary of the Company or (c) an Investment by a Restricted
Subsidiary of the Company in the Company or a Restricted Subsidiary of the
Company.
"Restricted Subsidiary" means (i) with respect to any Person other
than the Company and its Subsidiaries, a Subsidiary of such Person, and (ii)
with respect to the Company, any Subsidiary of the Company that has not been
classified as an Unrestricted Subsidiary pursuant to Section 4.17 hereof.
"Rule 144" means Rule 144 under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"Sale and Leaseback Transaction" means, with respect to any Person,
any direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person
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or a Restricted Subsidiary of such Person and is thereafter leased back from the
purchaser or transferee thereof by such Person or one of its Restricted
Subsidiaries.
"Secured Credit Facility" means the credit agreements among the
Company, certain of its Subsidiaries and AT&T Credit Corporation specified in
Schedule C hereto and additional secured credit agreements to which the Company
is or becomes a party, in an aggregate amount not to exceed $35,000,000, and all
related amendments, notes, collateral documents, guarantees, instruments and
other agreements executed in connection therewith, as the same may be amended,
modified, supplemented, restated, renewed, extended, refinanced, substituted or
replaced from time to time.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Security Register" has the meaning set forth in Section 2.03
hereof.
"Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Significant Restricted Subsidiary" means a Restricted Subsidiary
that is a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X
under the Securities Act and the Exchange Act.
"Special Record Date" means a date fixed by the Trustee pursuant to
Section 2.11 for the payment of Defaulted Interest.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of McGraw Hill Corporation, or, if Standard & Poor's Ratings Group
shall cease rating the specified debt securities and such ratings business with
respect thereto shall have been transferred to a successor Person, such
successor Person; provided that if Standard & Poor's Ratings Services ceases
rating the specified debt securities and its ratings business with respect
thereto shall not have been transferred to any successor Person or such
successor Person is ▇▇▇▇▇'▇, then "Standard & Poor's" shall mean any other
nationally recognized rating agency (other than ▇▇▇▇▇'▇) that rates the
specified debt securities and that shall have been designated by the Company in
an Officers' Certificate.
"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 (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred), and, when used with
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respect to any installment of interest on such security, the fixed date on which
such installment of interest is due and payable.
"Subsidiary" means, with respect to any Person, (i) any corporation
more than 50 percent of the outstanding shares of Voting Stock of which is
owned, directly or indirectly, by such Person, or by one of more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries of such Person; (ii) any general partnership, joint venture or
similar entity, more than 50 percent of the outstanding partnership or similar
interests of which are owned, directly or indirectly, by such Person, or by one
or more other Subsidiaries of such Person, or by such Person and one or more
other Subsidiaries of such Person; and (iii) any limited partnership of which
such Person or any Subsidiary of such Person is a general partner.
"Subsidiary Guarantee" has the meaning set forth in Section 4.10(a)
hereof.
"Surviving Entity" has the meaning set forth in Section 5.01(a)
hereof.
"Telecommunications Assets" means, with respect to any Person,
assets (including, without limitation, rights-of-way, trademarks and licenses to
use copyrighted material) that are utilized by such Person, directly or
indirectly, in a Telecommunications Business. Telecommunications Assets shall
include stock, joint venture or partnership interests in another Person,
provided that substantially all of the assets of such other Person consist of
Telecommunications Assets, and provided, further, that if such stock, joint
venture or partnership interests are held by the Company or a Restricted
Subsidiary, such other Person either is, or immediately following the relevant
transaction shall become, a Restricted Subsidiary of the Company pursuant to
Section 4.17 hereof. The determination of what constitutes Telecommunication
Assets shall be made by the Board of Directors and evidenced by a Board
Resolution delivered to the Trustee.
"Telecommunications Business" means the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through owned or leased transmission facilities; (ii) creating,
developing or marketing communications-related network equipment, software and
other devices for use in (i) above; or (iii) evaluating, participating or
pursuing any other activity or opportunity that is related to those specified in
(i) or (ii) above.
"Telecommunications Company" means any Person substantially all of
the assets of which consist of Telecommunications Assets.
"Temporary Notes" has the meaning set forth in Section 2.09 hereof.
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"Total Market Capitalization" of any Person means, at the time of
determination, the product of (i) the aggregate amount of outstanding shares of
Common Stock of such Person (which shall not include any Common Stock issuable
upon the exercise of options or warrants on, or securities convertible or
exchangeable into, shares of Common Stock of such Person) and (ii) the average
Closing Price of such Common Stock over the preceding twenty consecutive Trading
Days. If no such Closing Price exists with respect to shares of any such class,
the value of such shares shall be determined by the Board of Directors in good
faith and evidenced by a Board Resolution delivered to the Trustee.
"Trading Day" means, with respect to a security traded on a
securities exchange, automated quotation system or market, a day on which such
exchange, system or market is open for a full day of trading.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture except
as required by Section 9.04 hereof or if the Indenture is qualified under such
Act then as in effect on the date of such qualification, provided that in the
event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939, as so amended.
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and,
thereafter, means such successor.
"2005 Indenture" means the indenture, dated as of November 14, 1995,
between the Company and The Chase Manhattan Bank (formerly known as Chemical
Bank), as trustee, as such indenture may from time to time be supplemented or
amended.
"2006 Indenture" means the indenture dated as of March 26, 1996,
between the Company and The Chase Manhattan Bank (formerly known as Chemical
Bank), as trustee, as such indenture may from time to time be supplemented or
amended.
"2005 Notes" means the Company's 13% Senior Discount Notes due 2005
issued under the 2005 Indenture.
"2006 Notes" means the Company's 12 3/4% Senior Discount Notes due
2006 issued under the 2006 Indenture.
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"U.S. Government Obligations" means (i) securities that are (a)
direct obligations of the United States of America for the payment of which the
full faith and credit of the United States of America is pledged or (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, which, in either case, are not callable or redeemable at the
option of the issuer thereof; and (ii) depository receipts issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any U.S. Government Obligation which is specified in clause (i) above and held
by such bank for the account of the holder of such depository receipt, or with
respect to any specific payment of principal or interest on any U.S. Government
Obligation which is so specified and held, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal or interest of the U.S. Government Obligation evidenced by such
depository receipt.
"Unrestricted Subsidiary" means any Subsidiary of the Company that
the Company has classified as an "Unrestricted Subsidiary" and that has not been
reclassified as a Restricted Subsidiary, pursuant to Section 4.17 hereof.
"Vendor Financing Indebtedness" of any Person means an obligation
owed by such Person to a vendor of any Telecommunications Assets solely in
respect of the purchase price of such assets, provided that the amount of such
Indebtedness does not exceed the Fair Market Value of such assets, and provided,
further, that such Indebtedness is incurred within 180 calendar days of the
acquisition of such assets.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or at the times that such class of Capital Stock has
voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms incorporated by reference in
this Indenture have the following meanings:
"indenture securities" means the Notes.
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"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or other
obligor on the Notes, if any.
All other Trust Indenture Act terms used or incorporated by
reference in this Indenture that are defined by the Trust Indenture Act, defined
by Trust Indenture Act reference to another statute or defined by Commission
rule have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(a) the words "herein," "hereof" and "hereunder," and other words of
similar import, refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(b) "or" is not exclusive;
(c) "including" means including without limitation;
(d) the principal amount of any noninterest bearing or other
discount security (other than the 2005 Notes or the 2006 Notes), at any
date shall be the principal amount thereof that would be shown on a
balance sheet of the issuer dated such date prepared in accordance with
GAAP;
(e) when used with respect to the 2005 Notes or the 2006 Notes, the
term "principal amount" shall mean the principal amount thereof at the
Stated Maturity of such principal amount; and
(f) unless otherwise expressly provided herein, the principal amount
of any Preferred Stock shall be the greater of (i) the maximum liquidation
value of such Preferred Stock or (ii) the maximum mandatory redemption or
mandatory repurchase price with respect to such Preferred Stock.
SECTION 1.04. 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
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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 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 stating that the
information with respect to such factual matters is in the possession of the
Company, 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.
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 1.05. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 7.01)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(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 an acknowledgment 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 such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of the signer's authority. The fact and date of the execution
of any such instrument or
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writing, or the authority of the person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
SECTION 1.06. Satisfaction and Discharge. This Indenture shall cease
to be of further effect (except as to the rights of Holders under Sections 2.06,
2.07, 2.09, 4.02, 4.03 and 4.04 hereof) and the Trustee, on receipt of a Company
Order requesting such action, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when (a) either (i) all
outstanding Notes have been delivered to the Trustee for cancellation or (ii)
all such Notes not theretofore delivered to the Trustee for cancellation (A)
have become due and payable, (B) will become due and payable at their Stated
Maturity within one year or (C) are to be called for redemption within one year
under irrevocable 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 (A), (B) or (C) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire indebtedness on
such Notes, for principal (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, as the case may be, together with
irrevocable instructions from the Company in form and substance satisfactory to
the Trustee directing the Trustee to apply such funds to the payment thereof;
(b) the Company has paid or caused to be paid all other sums payable hereunder
by the Company; and (c) 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 have been complied with. Notwithstanding the satisfaction and
discharge of this Indenture pursuant to this Section 1.06, the obligations of
the Company to the Trustee under Section 7.07 hereof, and, if money shall have
been deposited with the Trustee in trust for the Holders pursuant to this
Section 1.06, the obligations of the Trustee under this Section 1.06 and Section
4.03 hereof shall survive.
All money deposited with the Trustee pursuant to this Section 1.06
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, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for the payment of which such money has been deposited with
the Trustee. If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Section 1.06 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 obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to this
Section 1.06 until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with this
Section 1.06; provided, that if the Company has made any payment of inter-
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est on or principal of 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 cash or U.S. Government Obligations
held by the Trustee or Paying Agent.
ARTICLE II
THE NOTES
SECTION 2.01. Form and Dating. (a) The Initial Notes and the
certificate of authentication of the Trustee thereon shall be substantially in
the form of Exhibit A or Exhibit B hereto, as applicable, which are hereby
incorporated in and expressly made a part of this Indenture. The Exchange Notes
and the certificate of authentication of the Trustee thereon shall be
substantially in the form of Exhibit C or Exhibit D hereto, as applicable, which
are hereby incorporated in and expressly made a part of this Indenture.
(b) The Notes may have such letters, numbers or other marks of
identification and such legends and endorsements, stamped, printed, lithographed
or engraved thereon, (i) as the Company may deem appropriate and as are not
inconsistent with the provisions of this Indenture, (ii) such as may be required
to comply with this Indenture, any law or any rule of any securities exchange on
which the Notes may be listed and (iii) such as may be necessary to conform to
customary usage. Each Note shall be dated the date of its authentication by the
Trustee.
(c) Initial Notes shall be issued initially in the form of a
permanent, global note in definitive, fully registered form, without coupons,
substantially in the form of Exhibit A hereto (the "Initial Global Note"). Upon
issuance, such Initial Global Note shall be duly executed by the Company and
authenticated by the Trustee as hereinafter provided and deposited with the
Trustee as custodian for the Depositary. Any Initial Certificated Note that may
be issued pursuant to Section 2.06(c) hereof, shall be issued in the form of a
note in definitive, fully registered form, without coupons, substantially in the
form set forth in Exhibit B hereto. Upon issuance, any such Initial Certificated
Note shall be duly executed by the Company and authenticated by the Trustee as
hereinafter provided.
(d) In the event Exchange Notes are issued pursuant to a Registered
Exchange Offer in exchange for Initial Notes held in the form of the Initial
Global Note, such Exchange Notes shall be issued initially in the form of a
permanent global note in definitive, fully registered form, without coupons,
substantially in the form set forth in Exhibit C hereto (the "Exchange Global
Note"). Upon issuance, such Exchange Global Note shall be duly executed by the
Company and authenticated by the Trustee as hereinafter provided and deposited
with the Trustee as custodian for the Depositary. Any Exchange Certificated Note
that may be issued pursuant to Section 2.06(c) hereof or in exchange for Initial
Certificated Notes pursuant to a Registered Exchange Offer, shall be issued in
the form of a note in definitive, fully
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registered form, without coupons, substantially in the form set forth in Exhibit
D hereto. Upon issuance, any such Exchange Certificated Notes shall be duly
executed by the Company and authenticated by the Trustee as hereinafter
provided.
(e) The following legends shall appear on each Global Note and each
Certificated Note as indicated below:
(i) Except as provided in Section 2.06(a)(iii) hereof, each Initial
Global Note and Initial Certificated Note shall bear the following legend
on the face thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL
OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER THEREOF
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED
ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT
IT WILL GIVE TO EACH
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PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND
THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
(ii) Each Global Note shall bear the following legend on the face
thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO AMERICAN COMMUNICATIONS SERVICES, INC.
OR THE REGISTRAR FOR REGISTRATION OF TRANSFER OR EXCHANGE AND ANY
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
ENTITY AS HAS BEEN REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS HAS BEEN REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
TRANSFER OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
AND NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
INTERESTS IN THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.06 OF THE
INDENTURE, DATED AS OF JULY 23, 1997, BETWEEN AMERICAN
COMMUNICATIONS SERVICES, INC. AND THE TRUSTEE NAMED THEREIN,
PURSUANT TO WHICH THIS NOTE WAS ISSUED.
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(f) Definitive Notes shall be typed, printed, lithographed or
engraved or produced by any combination of such methods or produced in any other
manner permitted by the rules of any securities exchange on which such Notes may
be listed, all as determined by the officers of the Company executing such
Notes, as evidenced by their execution of such Notes.
SECTION 2.02. Execution and Authentication. The Notes may be issued
in two series, a series of Initial Notes and a series of Exchange Notes. The
aggregate principal amount of Notes outstanding at any time shall not exceed
$220,000,000 except as provided in Section 2.07 hereof. The Notes shall be
executed on behalf of the Company by its Chief Executive Officer, its President
or any Executive Vice President by manual or facsimile signature.
The Notes shall be authenticated by manual signature of an
authorized officer of the Trustee and shall not be valid for any purpose unless
so authenticated.
In case any officer of the Company whose signature shall have been
placed upon any of the Notes shall cease to be such officer of the Company
before authentication of such Notes by the Trustee and the issuance and delivery
thereof, such Notes may, nevertheless, be authenticated by the Trustee and
issued and delivered with the same force and effect as though such Person had
not ceased to be such officer of the Company.
Notwithstanding any other provision hereof, the Trustee shall
authenticate and deliver Notes only upon receipt by the Trustee of an Officers'
Certificate and Opinion of Counsel complying with Section 10.04 hereof with
respect to satisfaction of all conditions precedent contained in this Indenture
to authentication and delivery of such Notes.
Upon compliance by the Company with the provisions of the previous
paragraph, the Trustee shall, upon receipt of a Company Order requesting such
action, authenticate (a) Initial Notes for original issuance in an aggregate
principal amount not to exceed $220,000,000 in the form of the Initial Global
Note or (b) Exchange Notes for issuance pursuant to a Registered Exchange Offer
for Initial Notes in a principal amount equal to the principal amount of Initial
Notes exchanged in such Registered Exchange Offer. Such Company Order shall
specify the amount of Notes to be authenticated and the date on which, in the
case of clause (a) above, the Initial Notes or, in the case of clause (b) above,
the Exchange Notes, are to be authenticated and shall further provide
instructions concerning registration, amounts for each Holder and delivery.
Upon the occurrence of any event specified in Section 2.06(c) hereof
and compliance by the Company with the provisions of the paragraph preceding the
immediately preceding paragraph, the Company shall execute and the Trustee shall
authenticate and deliver to
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each beneficial owner identified by the Depositary, in exchange for such
beneficial owner's interest in the Initial Global Note or Exchange Global Note,
as the case may be, Initial Certificated Notes or Exchange Certificated Notes,
as the case may be, representing Notes theretofore represented by the Initial
Global Note or Exchange Global Note, as the case may be.
A Note shall not be valid or entitled to any benefit under this
Indenture or obligatory for any purpose unless executed by the Company and
authenticated by the manual signature of the Trustee as provided herein. The
signature of an authorized officer of the Trustee shall be conclusive evidence,
and the only evidence, that such Note has been authenticated and delivered under
this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Notes. 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. Any authenticating agent of the
Trustee shall have the same rights hereunder as any Registrar or Paying Agent.
SECTION 2.03. Registrar and Paying Agent. The Company shall
maintain, pursuant to Section 4.02 hereof, an office or agency where the Notes
may be presented for registration of transfer or for exchange. The Company shall
cause to be kept at such office a register (the register maintained in such
office being herein sometimes referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Notes and of transfers of Notes entitled to be
registered or transferred as provided herein. The Trustee, at its Corporate
Trust Administration Office, is initially appointed "Registrar" for the purpose
of registering Notes and transfers of Notes as herein provided. The Company may,
upon written notice to the Trustee, change the designation of the Trustee as
Registrar and appoint another Person to act as Registrar for purposes of this
Indenture. If any Person other than the Trustee acts as Registrar, the Trustee
shall have the right at any time, upon reasonable notice, to inspect or examine
the Security Register and to make such inquiries of the Registrar as the Trustee
shall in its discretion deem necessary or desirable in performing its duties
hereunder.
The Company shall enter into an appropriate agency agreement with
any Person designated by the Company as Registrar or Paying Agent that is not a
party to this Indenture, which agreement shall incorporate the provisions of the
Trust Indenture Act and shall implement the provisions of this Indenture that
relate to such Registrar or Paying Agent. Prior to the designation of any such
Person, the Company shall, by written notice (which notice shall include the
name and address of such Person), inform the Trustee of such designation. If the
Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as
such.
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Upon surrender for registration of transfer of any Note at an office
or agency of the Company designated for such purpose, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Initial Notes or Exchange Notes, as
the case may be, of any authorized denomination or denominations, of like tenor
and aggregate principal amount, all as requested by the transferor.
Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company, the Trustee or the Registrar)
be duly endorsed, or be accompanied by a duly executed instrument of transfer in
form satisfactory to the Company, the Trustee and the Registrar, by the Holder
thereof or such Holder's attorney duly authorized in writing.
SECTION 2.04. Paying Agent to Hold Money in Trust. On or prior to
each due date of the principal, premium, or any payment of interest with respect
to any Note, the Company shall deposit with the Paying Agent a sum sufficient to
pay such principal, premium or interest when so becoming due.
The Company shall require each Paying Agent (other than the Trustee)
to agree in writing that such Paying Agent, shall hold in trust for the benefit
of Holders or the Trustee all money held by such Paying Agent for the payment of
principal, premium, or interest with respect to the Notes, shall notify the
Trustee of any default by the Company in making any such payment and at any time
during the continuance of any such default, upon the written request of the
Trustee, shall forthwith pay to the Trustee all sums held in trust by such
Paying Agent.
The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by such Paying
Agent. Upon complying with this Section 2.04, the Paying Agent shall have no
further liability for the money delivered to the Trustee.
SECTION 2.05. Global Notes. (a) So long as a Global Note is
registered in the name of the Depositary or its nominee, members of, or
participants in, the Depositary ("Agent Members") shall have no rights under
this Indenture with respect to the Global Note held on their behalf by the
Depositary or the Trustee as its custodian, 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. Notwithstanding the
foregoing, nothing herein shall (i) 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 (ii)
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of Notes.
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(b) The Holder of a Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests in such Global Note through Agent Members, to take any action which a
Holder of Notes is entitled to take under this Indenture or the Notes.
(c) Whenever, as a result of an optional redemption of Notes by the
Company, a Change of Control Offer, an Asset Sale Offer, a Registered Exchange
Offer or an exchange pursuant to the second sentence of Section 2.06(c) hereof,
a Global Note is redeemed, repurchased or exchanged in part, such Global Note
shall be surrendered by the Holder thereof to the Trustee who shall cause an
adjustment to be made to Schedule A thereof so that the principal amount of such
Global Note will be equal to the portion of such Global Note not redeemed,
repurchased or exchanged and shall thereafter return such Global Note to such
Holder, provided that each such Global Note shall be in a principal amount of
$1,000 or an integral multiple thereof.
SECTION 2.06. Transfer and Exchange. (a) The following provisions of
this paragraph (a) are applicable only to Initial Notes:
(i) By its acceptance of any Initial Note represented by a
certificate bearing the Private Placement Legend, each Holder of, and
beneficial owner of an interest in, such Initial Note acknowledges the
restrictions on transfer of such Initial Note set forth in the Private
Placement Legend and under the heading "Transfer Restrictions" in the
Final Memorandum and agrees that it will transfer such Initial Note only
in accordance with the Private Placement Legend and the restrictions set
forth under the heading "Transfer Restrictions" in the Final Memorandum.
(ii) In connection with any transfer of an Initial Note bearing the
Private Placement Legend other than to a Person whom the Holder reasonably
believes to be a "qualified institutional buyer" under the Securities Act,
such Holder shall deliver to the Company such satisfactory evidence, which
may include an opinion of independent counsel licensed to practice law in
the State of New York, as reasonably may be requested by the Company to
confirm that such transfer is being made in accordance with the
limitations set forth in the Private Placement Legend. In the event the
Company reasonably determines that any such transfer is not in accordance
with the Private Placement Legend, the Company shall so inform the
Registrar who shall not register such transfer; provided that the
Registrar shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any
such evidence.
(iii) Upon the registration of transfer, exchange or replacement of
an Initial Note not bearing the Private Placement Legend, the Trustee
shall deliver an Initial
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Note or Initial Notes that do not bear the Private Placement Legend. Upon
the transfer, exchange or replacement of an Initial Note bearing the
Private Placement Legend, the Trustee shall deliver an Initial Note or
Initial Notes bearing the Private Placement Legend, unless such legend may
be removed from such Note as provided in the next sentence. The Private
Placement Legend may be removed from an Initial Note if there is delivered
to the Company such satisfactory evidence, which may include an opinion of
independent counsel licensed to practice law in the State of New York, as
reasonably may be requested by the Company to confirm that neither such
legend nor the restrictions on transfer set forth therein are required to
ensure that transfers of such Initial Note will not violate the
registration and prospectus delivery requirements of the Securities Act;
provided that the Trustee shall not be required to determine (but may rely
on a determination made by the Company with respect to) the sufficiency of
any such evidence. Upon provision of such evidence, the Trustee shall
authenticate and deliver in exchange for such Initial Note, an Initial
Note or Initial Notes (representing the same aggregate principal amount of
the Initial Note being exchanged) without such legend. If the Private
Placement Legend has been removed from an Initial Note, as provided above,
no other Initial Note issued in exchange for all or any part of such
Initial Note shall bear such legend, unless the Company has reasonable
cause to believe that such other Initial Note represents a "restricted
security" within the meaning of Rule 144 and instructs the Trustee in
writing to cause a legend to appear thereon.
(iv) The Company shall deliver to the Trustee, and the Trustee shall
retain for two years, copies of all documents received pursuant to this
Section 2.06(a). The Company shall have the right to inspect and make
copies of all such documents at any reasonable time upon the giving of
reasonable written notice to the Trustee.
(b) Any Initial Notes which are presented to the Registrar for
exchange pursuant to a Registered Exchange Offer shall be exchanged for Exchange
Notes of equal principal amount upon surrender to the Registrar of the Initial
Notes to be exchanged in accordance with the terms of the Registered Exchange
Offer; provided that the Initial Notes so surrendered for exchange are duly
endorsed and accompanied by a letter of transmittal or written instrument of
transfer in form satisfactory to the Company, the Trustee and the Registrar and
duly executed by the Holder thereof or such Holder's attorney who shall be duly
authorized in writing to execute such document on the behalf of such Holder.
Whenever any Initial Notes are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver to the surrendering
Holder thereof Exchange Notes in the same aggregate principal amount as the
Initial Notes so surrendered.
(c) The Initial Global Note or Exchange Global Note, as the case may
be, shall be exchanged by the Company for one or more Initial Certificated Notes
or Exchange
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Certificated Notes, as the case may be, if (a) the Depositary (i) has notified
the Company that it is unwilling or unable to continue as, or ceases to be, a
clearing agency registered under Section 17A of the Exchange Act and (ii) a
successor to the Depositary registered as a clearing agency under Section 17A of
the Exchange Act is not able to be appointed by the Company within 90 calendar
days or (b) the Depositary is at any time unwilling or unable to continue as
Depositary and a successor to the Depositary is not able to be appointed by the
Company within 90 calendar days. If an Event of Default occurs and is
continuing, the Company shall, at the request of the Holder thereof, exchange
all or part of the Initial Global Note or Exchange Global Note, as the case may
be, for one or more Initial Certificated Notes or Exchange Certificated Notes,
as the case may be; provided that the principal amount of each of such Initial
Certificated Notes or Exchange Certificated Notes, as the case may be, and such
Global Note, after such exchange, shall be $1,000 or an integral multiple
thereof. Whenever a Global Note is exchanged as a whole for one or more Initial
Certificated Notes or Exchange Certificated Notes, as the case may be, it shall
be surrendered by the Holder thereof to the Trustee for cancellation. Whenever a
Global Note is exchanged in part for one or more Initial Certificated Notes or
Exchange Certificated Notes, as the case may be, it shall be surrendered by the
Holder thereof to the Trustee and the Trustee shall make the appropriate
notations thereon pursuant to Section 2.05(c) hereof. All Initial Certificated
Notes or Exchange Certificated Notes, as the case may be, issued in exchange for
a Global Note or any portion thereof shall be registered in such names, and
delivered, as the Depositary shall instruct the Trustee. Any Initial
Certificated Notes issued pursuant to this Section 2.06(c) shall include the
Private Placement Legend, except as set forth in Section 2.06(a)(iii) hereof.
Interests in a Global Note may not be exchanged for Certificated Notes other
than as provided in this Section 2.06(c).
(d) A Holder may transfer a Note only upon the surrender of such
Note for registration of transfer. No such transfer shall be effected until, and
the transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer in the Security Register by the
Registrar. When Notes are presented to the Registrar with a request to register
the transfer of, or to exchange, such Notes, the Registrar shall register the
transfer or make such exchange as requested if its requirements for such
transactions and any applicable requirements hereunder are satisfied. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Certificated Notes at the Registrar's request.
(e) The Company shall not be required to make and the Registrar need
not register transfers or exchanges of Certificated Notes selected for
redemption (except, in the case of Certificated Notes to be redeemed in part,
the portion thereof not to be redeemed) for a period of 15 calendar days before
a selection of Certificated Notes to be redeemed.
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(f) No service charge shall be made for any registration of transfer
or exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer of Notes (other than in respect of a
Registered Exchange Offer, except as provided in the Registration Rights
Agreement).
(g) All Notes issued upon any registration of transfer or exchange
pursuant to the terms of this Indenture will evidence the same debt and will be
entitled to the same benefits under this Indenture as the Notes surrendered for
such registration of transfer or exchange.
(h) Prior to the effectiveness under the Securities Act of a Shelf
Registration Statement, or at any time during the suspension or following the
termination thereof, Holders of Initial Notes (or holders of interests therein)
and prospective purchasers designated by such Holders of Initial Notes (or such
holders of interests therein) shall have the right to obtain from the Company
upon request by such Holders (or such holders of interests) or prospective
purchasers, during any period in which the Company is not subject to Section 13
or Section 15(d) of the Exchange Act, or is exempt from reporting pursuant to
12g3-2(b) under the Exchange Act, the information required by paragraph
(d)(4)(i) of Rule 144A in connection with any transfer or proposed transfer of
such Notes or interests.
(i) 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
Notes represented thereby shall be required to be reflected in book entry form.
Transfers of a Global Note shall be limited to transfers in whole and not in
part, to the Depositary, its successors, and their respective nominees.
Interests of beneficial owners in a Global Note may be transferred in accordance
with the rules and procedures of the Depositary (or its successors).
SECTION 2.07. Replacement Notes. If any mutilated Note is
surrendered to the Trustee, the Company shall execute and upon its written
request the Trustee shall authenticate and deliver, in exchange for any such
mutilated Note, a new Note containing identical provisions and of like principal
amount, bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Note and
(ii) such security or indemnity as may be required by them to save either of
them and any agent of each of them harmless, then, in the absence of notice to
the Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee
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shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Note, a new Note containing identical provisions and of like 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 2.07, the
Company may require the payment by the Holder 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) connected
therewith.
Every new Note issued pursuant to this Section 2.07 in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.08. Outstanding Notes. Notes outstanding at any time are
all Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section 2.08 as not
outstanding. A Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds such Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee and the Company receive proof satisfactory to
them that such replaced Note is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or Maturity date money sufficient to
pay all principal, premium, if any, and interest payable on that date with
respect to the Notes (or portions thereof) to be redeemed or maturing, as the
case may be, then on and after that date such Notes (or such portions thereof)
shall cease to be outstanding and interest on them shall cease to accrue or the
principal of such Notes shall cease to accrete, as the case may be.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent or any amendment,
modification or other
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change to this Indenture, Notes held or beneficially owned by the Company or a
Restricted Subsidiary of the Company or by an Affiliate of the Company or a
Restricted Subsidiary of the Company or by agents of any of the foregoing shall
be disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent or any
amendment, modification or other change to this Indenture, only Notes which a
Trust Officer knows are so owned shall be so disregarded. Notes so owned which
have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee such pledgee's right so to act
with respect to the Notes and that the pledgee is not the Company or an
Affiliate of the Company or any of their agents.
SECTION 2.09. Temporary Notes. Pending the preparation of definitive
Notes, the Company may execute, and the Trustee shall authenticate, temporary
notes ("Temporary Notes") which are printed, lithographed, or otherwise
produced, 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.
If Temporary Notes are issued, the Company shall 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 to the Trustee, without charge to the
Holder. Until so exchanged, Temporary Notes will evidence the same debt and will
be entitled to the same benefits under this Indenture as the definitive Notes in
lieu of which they have been issued.
SECTION 2.10. Cancellation. The Company at any time may deliver
Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange, purchase or payment. The Trustee shall cancel all Notes
surrendered for registration of transfer, exchange, purchase, payment or
cancellation and shall destroy such canceled Notes unless the Company shall by
Company Order otherwise direct. The Company may not issue new Notes to replace
Notes it has redeemed or paid or that have been delivered to the Trustee for
cancellation.
SECTION 2.11. 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 is registered at the close of business on the Record Date for such interest
payment, which shall be the January 1 or July 1 (whether or not a Business Day)
immediately preceding such Interest Payment Date.
Any interest on any Note which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forth-
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with cease to be payable to the registered Holder on the relevant Record Date,
and, except as hereinafter provided, such Defaulted Interest, and any interest
payable on such Defaulted Interest, may be paid by the Company, at its election,
as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest,
and any interest payable on such 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 the
Notes and the date of the proposed payment, 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 provided in this Clause. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 calendar days and not less than 10 calendar days prior
to the date of the proposed payment and not less than 10 calendar 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 therefor to be sent, first class mail, postage prepaid, to each
Holder at such Holder's address as it appears in the Security Register,
not less than 10 calendar days prior to such Special Record Date. Notice
of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in whose names the Notes are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest, and any
interest payable on such Defaulted Interest, on the Notes 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 2.11, 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.
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SECTION 2.12. Authorized Denominations. The Notes shall be issuable
in denominations of $1,000 and any integral multiple thereof.
SECTION 2.13. Computation of Interest. Interest on the Notes shall
be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.14. Persons Deemed Owners. Prior to the due presentation
for registration of transfer of any Note, the Company, the Trustee, the Paying
Agent, the Registrar or any co-registrar may deem and treat the person in whose
name Note is registered as the absolute owner of such Note for the purpose of
receiving payment of principal of, premium, if any, and interest on such Note
and for all other purposes whatsoever, whether or not such Note is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-Registrar shall be affected by notice to the contrary.
SECTION 2.15. CUSIP Numbers. The Company, in issuing the Notes, may
use a "CUSIP" number for each series of Notes and, if so, the Trustee shall use
the relevant CUSIP number in any notices to Holders as a convenience to such
Holders; provided that any such notice may state that no representation is made
as to the correctness or accuracy of the CUSIP number printed in the notice or
on the Notes and that reliance may be placed only on the other identification
numbers printed on the Notes. The Company shall promptly notify the Trustee of
any change in any CUSIP number used.
SECTION 2.16. Escrow Agreement. On the Issue Date, the Company, the
Trustee and the Escrow Agent shall enter into the Escrow Agreement. The Trustee
is hereby authorized and directed to perform its obligations under the Escrow
Agreement in accordance with the terms thereof.
ARTICLE III
REDEMPTION
SECTION 3.01. Notice to Trustee. If the Company elects to redeem
Notes pursuant to paragraph six of the Initial Notes, and/or paragraph five of
the Exchange Notes, as the case may be, it shall notify the Trustee in writing
of the Redemption Date and the principal amount of Notes to be redeemed. The
Company shall give each such notice to the Trustee at least 60 calendar days
prior to the Redemption Date unless the Trustee consents to a shorter period.
Such notice shall be accompanied by an Officers' Certificate and an Opinion of
Counsel from the Company to the effect that such redemption will comply with any
conditions to such redemption set forth herein and in the Notes.
SECTION 3.02. Selection of Notes to be Redeemed. If less than all
the Notes are to be redeemed at any time, the Trustee shall select the Notes to
be redeemed on a
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pro rata basis, provided that the Trustee may select for redemption in part only
Notes in denominations larger than $1,000. In selecting Notes to be redeemed
pursuant to this Section 3.02, the Trustee shall make such adjustments,
reallocations and eliminations as it shall deem proper so that the principal
amount of each Note to be redeemed shall be $1,000 or an integral multiple
thereof, by increasing, decreasing or eliminating any amount less than $1,000
which would be allocable to any Holder. If the Notes to be redeemed are
Certificated Notes, the Certificated Notes to be redeemed shall be selected by
the Trustee by prorating, as nearly as may be, the principal amount of
Certificated Notes to be redeemed among the Holders of Certificated Notes
registered in their respective names. The Trustee in its discretion may
determine the particular Notes (if there are more than one) registered in the
name of any Holder which are to be redeemed, in whole or in part. Provisions of
this Indenture that apply to Notes called for redemption also apply to portions
of Notes called for redemption. The Trustee shall notify the Company promptly of
the Notes or portions of Notes to be redeemed. Each redemption of Notes shall be
pro rata as between Initial Notes and Exchange Notes.
SECTION 3.03. Notice of Redemption. At least 30 calendar days but
not more than 60 calendar days before a Redemption Date, the Company shall send
a notice of redemption, first class mail, postage prepaid, to Holders of Notes
to be redeemed at the addresses of such Holders as they appear in the Security
Register.
The notice shall identify the Notes to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price (and shall specify the portion of such
Redemption Price that constitutes the amount of accrued and unpaid
interest to be paid, if any);
(c) the name and address of the Paying Agent;
(d) that the Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(e) if any Global Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date, the Global Note, with a notation on Schedule A thereof
adjusting the principal amount thereof to be equal to the unredeemed
portion, will be returned to the Holder thereof;
(f) if any Certificated Note is being redeemed in part, the portion
of the principal amount of such Note to be redeemed and that, after the
Redemption Date, a new Certificated Note or Certificated Notes in
principal amount equal to the unredeemed portion will be issued;
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(g) if fewer than all the outstanding Notes are to be redeemed, the
identification and principal amounts of the particular Notes to be
redeemed;
(h) that, unless the Company defaults in making the redemption
payment, interest on the Notes (or portions thereof) called for redemption
shall cease and such Notes (or portions thereof) shall cease to accrue
interest on and after the Redemption Date;
(i) the paragraph of the Notes pursuant to which the Notes are being
called for redemption; and
(j) any other information necessary to enable Holders to comply with
the notice of redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 3.03 in a timely manner.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption shall become due and payable
on the Redemption Date and at the Redemption Price stated in such notice. Upon
surrender to the Paying Agent, such Notes shall be paid at the Redemption Price
stated in such notice. Failure to give notice or any defect in the notice to any
Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. On or prior to 10:00
a.m., New York City time, on each Redemption Date, the Company shall deposit
with the Paying Agent (or, if the Company, one of its Subsidiaries or any of
their Affiliates is the Paying Agent, the Paying Agent shall segregate and hold
in trust for the benefit of the Holders) money, in federal or other immediately
available funds, sufficient to pay the Redemption Price on all Notes to be
redeemed on that date other than Notes or portions of Notes called for
redemption on such date which have been delivered by the Company to the Trustee
for cancellation.
So long as the Company complies with the preceding paragraph and the
other provisions of this Article III, interest on the Notes to be redeemed on
the applicable Redemption Date shall cease to accrue or such Notes shall cease
to accrete in value, as the case may be, from and after such date and such Notes
or portions thereof shall be deemed not to be entitled to any benefit under this
Indenture except to receive payment of the Redemption Price on the Redemption
Date. If any Note called for redemption shall not be so paid upon surrender for
redemption, then, from the Redemption Date until such principal is paid, inter-
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est shall be paid on the unpaid principal and, to the extent permitted by law,
on any accrued but unpaid interest thereon, in each case at the rate prescribed
therefor by such Notes.
SECTION 3.06. Notes Redeemed in Part. Upon surrender and
cancellation of a Certificated Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate and deliver to the surrendering Holder
(at the Company's expense) a new Certificated Note equal in principal amount to
the unredeemed portion of the Certificated Note surrendered and canceled,
provided that each such Certificated Note shall be in a principal amount of
$1,000 or an integral multiple thereof.
Upon surrender of a Global Note that is redeemed in part, the Paying
Agent shall forward such Global Note to the Trustee who shall make a notation on
Schedule A thereof to reduce the principal amount of such Global Note to an
amount equal to the unredeemed portion of such Global Note, as provided in
Section 2.05(c) hereof.
ARTICLE IV
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall promptly pay the
principal of, premium, if any, and interest on, the Notes on the dates and in
the manner provided in the Notes and in this Indenture. Principal, premium and
interest shall be considered paid on the date due if, on such date, the Trustee
or the Paying Agent holds in accordance with this Indenture money sufficient to
pay all principal, premium and interest then due.
SECTION 4.02. Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be presented or surrendered for payment, where 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 Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Administration Office of the Trustee, and the Company hereby appoints the
Trustee its agent to receive all 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 of such purposes, and may from time
to time rescind such designations; provided that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in The City of New York, for such
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purposes. The Company shall give prompt written notice to the Trustee of any
such designation and any change in the location of any such other office or
agency.
SECTION 4.03. Money for the Note Payments to be Held in Trust. If
the Company, any Subsidiary of the Company or any of their respective Affiliates
shall at any time act as Paying Agent with respect to the Notes, such Paying
Agent shall, on or before each due date of the principal of (and premium, if
any) or interest on any of the Notes, segregate and hold in trust for the
benefit of the Persons entitled thereto money sufficient to pay the principal
(and premium, if any) or interest so becoming due until such money shall be paid
to such Persons or otherwise disposed of as herein provided, and shall promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents with
respect to the Notes, it shall, prior to or on each due date of the principal of
(and premium, if any) or interest on any of the Notes, deposit with a Paying
Agent a sum 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 Paying Agent shall promptly notify the Trustee of the
Company's action or failure so to act.
SECTION 4.04. Corporate Existence. Subject to the provisions of
Article V hereof, the Company shall do or cause to be done all things necessary
to preserve and keep in full force and effect the corporate existence, rights
(charter and statutory) and franchises of the Company and each of its Restricted
Subsidiaries; provided that the Company and any such Restricted Subsidiary shall
not be required to preserve the corporate existence of any such Restricted
Subsidiary or any such right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not disadvantageous in
any material respect to the Holders of Notes.
SECTION 4.05. Maintenance of Property. The Company shall cause all
Property used or useful in the conduct of its business or the business of any of
its Restricted Subsidiaries to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the Company, may be necessary
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided that nothing in this Section
4.05 shall prevent the Company from discontinuing the operation or maintenance
of any of such Property if such discontinuance is, in the judgment of the
Company, desirable in the conduct of its business or the business of any of its
Restricted Subsidiaries and not disadvantageous in any material respect to the
Holders of Notes.
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SECTION 4.06. Payment of Taxes and Other Claims. The Company shall
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any of its Restricted Subsidiaries or upon the
income, profits or Property of the Company or any of its Restricted Subsidiaries
and (b) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a Lien upon the Property of the Company or any of its
Restricted Subsidiaries; provided 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 upon stay of execution or the enforcement
thereof and for which adequate reserves in accordance with GAAP or other
appropriate provision has been made.
SECTION 4.07. Repurchase at the Option of Holders upon a Change of
Control. (a) Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Company to purchase such Holder's Notes, in
whole, or in part in a principal amount that is an integral multiple of $1,000,
pursuant to the offer described in Section 4.07(b) hereof (the "Change of
Control Offer"), at a purchase price (the "Change of Control Purchase Price") in
cash equal to 101 percent of the aggregate principal amount thereof, plus
accrued and unpaid interest, if any, to the Change of Control Payment Date.
(b) Within 30 calendar days of the date of any Change of Control,
the Company, or the Trustee at the request and expense of the Company, shall
send to each Holder by first class mail, postage prepaid, a notice prepared by
the Company stating:
(i) that a Change of Control has occurred and a Change of Control
Offer is being made pursuant to this Section 4.07, and that all Notes that
are timely tendered will be accepted for payment;
(ii) the Change of Control Purchase Price, and the date Notes are to
be purchased pursuant to the Change of Control Offer (the "Change of
Control Payment Date"), which date shall be a date occurring no earlier
than 30 calendar days nor later than 40 calendar days subsequent to the
date such notice is mailed;
(iii) that any Notes or portions thereof not tendered or accepted
for payment will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the Change
of Control Purchase Price with respect thereto, all Notes or portions
thereof accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest from and after the Change of Control Payment
Date;
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(v) that any Holder electing to have any Notes or portions thereof
purchased pursuant to a Change of Control Offer will be required to
surrender such Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of such Notes completed, to the Paying Agent at
the address specified in the notice, prior to the close of business on the
third Business Day preceding the Change of Control Payment Date;
(vi) that any Holder shall be entitled to withdraw such election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter, setting forth the name
of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing such Holder's election to have
such Notes or portions thereof purchased pursuant to the Change of Control
Offer;
(vii) that any Holder electing to have Notes purchased pursuant to
the Change of Control Offer must specify the principal amount that is
being tendered for purchase, which principal amount must be $1,000 or an
integral multiple thereof;
(viii) if Certificated Notes have been issued pursuant to Section
2.06(c), that any Holder of Certificated Notes whose Certificated Notes
are being purchased only in part will be issued new Certificated Notes
equal in principal amount to the unpurchased portion of the Certificated
Note or Notes surrendered, which unpurchased portion will be equal in
principal amount to $1,000 or an integral multiple thereof;
(ix) that the Trustee will return to the Holder of a Global Note
that is being purchased in part, such Global Note with a notation on
Schedule A thereof adjusting the principal amount thereof to be equal to
the unpurchased portion of such Global Note; and
(x) any other information necessary to enable any Holder to tender
Notes and to have such Notes purchased pursuant to this Section 4.07.
(c) On the Change of Control Payment Date, the Company shall (i)
accept for payment any Notes or portions thereof properly tendered pursuant to
the Change of Control Offer; (ii) irrevocably deposit with the Paying Agent, by
10:00 a.m., New York City time, on such date, in immediately available funds, an
amount equal to the Change of Control Purchase Price in respect of all Notes or
portions thereof so accepted; and (iii) deliver, or cause to be delivered, to
the Trustee the Notes so accepted together with an Officers' Certificate listing
the Notes or portions thereof tendered to the Company and accepted for payment.
The Paying Agent shall promptly send by first class mail, postage prepaid, to
each Holder
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of Notes or portions thereof so accepted for payment, payment in an amount equal
to the Change of Control Purchase Price for such Notes or portions 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. For purposes of
this Section 4.07, the Trustee shall act as the Paying Agent.
(d) Upon surrender and cancellation of a Certificated Note that is
purchased in part pursuant to the Change of Control Offer, the Company shall
promptly issue and the Trustee shall authenticate and deliver to the
surrendering Holder of such Certificated Note, a new Certificated Note equal in
principal amount to the unpurchased portion of such surrendered Certificated
Note; provided that each such new Certificated Note shall be in a principal
amount of $1,000 or an integral multiple thereof.
Upon surrender of a Global Note that is purchased in part pursuant
to a Change of Control Offer, the Paying Agent shall forward such Global Note to
the Trustee who shall make a notation on Schedule A thereof to reduce the
principal amount of such Global Note to an amount equal to the unpurchased
portion of such Global Note, as provided in Section 2.05(c) hereof.
(e) The Company shall comply with the requirements of Section 14(e)
under the Exchange Act and any other securities laws or regulations, to the
extent such laws and regulations are applicable, in connection with the purchase
of Notes pursuant to a Change of Control Offer.
SECTION 4.08. Limitation on Asset Sales. (a) The Company shall not,
and shall not permit any of its Restricted Subsidiaries, directly or indirectly,
to, consummate any Asset Sale, unless:
(i) no Event of Default shall have occurred and be continuing or
shall occur as a consequence thereof;
(ii) the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to
the Fair Market Value (as evidenced by a Board Resolution delivered to the
Trustee) of the Property or assets sold or otherwise disposed of;
(iii) at least 75 percent of the consideration received in respect
of such Asset Sale by the Company or such Restricted Subsidiary, as the
case may be, for such Property or assets consists of Cash Proceeds and/or
Telecommunications Assets; and
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(iv) the Company or such Restricted Subsidiary, as the case may be,
uses the Net Cash Proceeds from such Asset Sale in the manner set forth in
Section 4.08(b) hereof.
(b) Within 270 calendar days after the closing of any Asset Sale,
the Company or such Restricted Subsidiary, as the case may be, may, at its
option:
(i) reinvest (or enter a binding agreement to reinvest, provided
that such reinvestment is completed within 180 calendar days of the date
of such agreement) an amount equal to the Net Cash Proceeds, or any
portion thereof, from such Asset Sale in Telecommunications Assets; and/or
(ii) apply an amount equal to such Net Cash Proceeds, or remaining
Net Cash Proceeds, to the permanent reduction of Indebtedness of the
Company (other than Indebtedness to a Restricted Subsidiary of the
Company) that is pari passu with the Notes or to the permanent reduction
of Indebtedness or Preferred Stock of any Restricted Subsidiary of the
Company (other than Indebtedness to, or Preferred Stock owned by, the
Company or another Restricted Subsidiary of the Company); provided,
however, that any Net Cash Proceeds applied to the permanent reduction of
Indebtedness represented by the 2005 Notes and the 2006 Notes shall be
applied in accordance with Section 4.08(c) hereof.
Net Cash Proceeds from any Asset Sale that are not applied pursuant to clause
(i) or (ii) above within 270 calendar days of the closing of such Asset Sale
shall constitute "Excess Proceeds."
(c) If at any time the aggregate amount of Excess Proceeds
(including any Net Cash Proceeds to be applied to the permanent reduction of
Indebtedness represented by the 2005 Notes and the 2006 Notes) calculated as of
such date exceeds $10 million, the Company shall, within 30 days of the date the
amount of Excess Proceeds exceeds $10 million, use such Excess Proceeds to make
an offer to purchase (an "Asset Sale Offer") on a pro rata basis, from all
holders, outstanding Notes, 2005 Notes and 2006 Notes in an aggregate principal
amount equal to the maximum principal amount that may be purchased out of Excess
Proceeds, at a purchase price (the "Offer Purchase Price") in cash equal to (a)
with respect to the Existing Notes, 100% of the Accreted Value thereof (as
defined in the relevant indenture) and (b) with respect to the Notes, 100% of
the principal amount thereof, plus, in each case, accrued and unpaid interest,
if any, to the purchase date, in accordance with the procedures set forth in the
relevant indenture. Upon completion of an Asset Sale Offer (including payment of
the Offer Purchase Price), any surplus Excess Proceeds that were the subject of
such offer shall cease to be Excess Proceeds, and the Company may then use such
amounts for general corporate purposes.
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(d) Within 30 calendar days of the date the amount of Excess
Proceeds exceeds $10,000,000, the Company, or the Trustee at the request and
expense of the Company, shall send to each Holder by first class mail, postage
prepaid, a notice prepared by the Company stating:
(i) that an Asset Sale Offer is being made pursuant to this Section
4.08, and that all Notes that are timely tendered will be accepted for
payment, subject to proration in the event the amount of Excess Proceeds
is less than the aggregate Offer Purchase Price of all Notes, 2005 Notes
and 2006 Notes timely tendered pursuant to the Asset Sale Offer;
(ii) the Offer Purchase Price, the amount of Excess Proceeds that
are available to be applied to purchase tendered Notes, 2005 Notes and
2006 Notes, and the date Notes, 2005 Notes and 2006 Notes are to be
purchased pursuant to the Asset Sale Offer (the "Asset Sale Payment
Date"), which date shall be a date no earlier than 30 calendar days nor
later than 40 calendar days subsequent to the date such notice is mailed;
(iii) that any Notes, 2005 Notes and 2006 Notes or portions thereof
not tendered or accepted for payment will continue to accrete in value or
accrue interest, as the case may be;
(iv) that, unless the Company defaults in the payment of the Offer
Purchase Price with respect thereto, all Notes, 2005 Notes and 2006 Notes
or portions thereof accepted for payment pursuant to the Asset Sale Offer
shall cease to accrete in value or accrue interest, as the case may be,
from and after the Asset Sale Payment Date;
(v) that any Holder electing to have any Notes or portions thereof
purchased pursuant to the Asset Sale Offer will be required to surrender
such Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of such Notes completed, to the Paying Agent at the address
specified in the notice, prior to the close of business on the third
Business Day preceding the Asset Sale Payment Date;
(vi) that any Holder shall be entitled to withdraw such election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Asset Sale 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 such Holder's election to have
such Notes or portions thereof purchased pursuant to the Asset Sale Offer;
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(vii) that any Holder electing to have Notes purchased pursuant to
the Asset Sale Offer must specify the principal amount that is being
tendered for purchase, which principal amount must be $1,000 or an
integral multiple thereof;
(viii) if Certificated Notes have been issued pursuant to Section
2.06(c), that any Holder of Certificated Notes whose Certificated Notes
are being purchased only in part will be issued new Certificated Notes
equal in principal amount to the unpurchased portion of the Certificated
Note or Notes surrendered, which unpurchased portion will be equal in
principal amount to $1,000 or an integral multiple thereof;
(ix) that the Trustee will return to the Holder of a Global Note
that is being purchased in part, such Global Note with a notation on
Schedule A thereof adjusting the principal amount thereof to be equal to
the unpurchased portion of such Global Note; and
(x) any other information necessary to enable any Holder to tender
Notes and to have such Notes purchased pursuant to this Section 4.08.
(e) If the aggregate Offer Purchase Price of the Notes, 2005 Notes
and 2006 Notes surrendered by Holders exceeds the amount of Excess Proceeds as
indicated in the notice required by Section 4.08(d) hereof, the Trustee shall
select the Notes, 2005 Notes and 2006 Notes to be purchased on a pro rata basis
based on the aggregate principal amount or the Accreted Value (as defined in the
relevant indenture), as the case may be, as of the Asset Sale Payment Date, with
such adjustments as may be deemed appropriate by the Trustee, so that only Notes
in denominations of $1,000 or integral multiples thereof shall be purchased.
(f) On the Asset Sale Payment Date, the Company shall (i) accept for
payment any Notes or portions thereof properly tendered and selected for
purchase pursuant to the Asset Sale Offer and Section 4.08(e) hereof; (ii)
irrevocably deposit with the Paying Agent, by 10:00 a.m., New York City time, on
such date, in immediately available funds, an amount equal to the Offer Purchase
Price in respect of all Notes or portions thereof so accepted; and (iii)
deliver, or cause to be delivered, to the Trustee the Notes so accepted together
with an Officers' Certificate listing the Notes or portions thereof tendered to
the Company and accepted for payment. The Paying Agent shall promptly send by
first class mail, postage prepaid, to each Holder of Notes or portions thereof
so accepted for payment, payment in an amount equal to the Offer Purchase Price
for such Notes or portions thereof. The Company shall publicly announce the
results of the Asset Sale Offer on or as soon as practicable after the Asset
Sale Payment Date. For purposes of this Section 4.08, the Trustee shall act as
the Paying Agent.
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(g) Upon surrender and cancellation of a Certificated Note that is
purchased in part, the Company shall promptly issue and the Trustee shall
authenticate and deliver to the surrendering Holder of such Certificated Note a
new Certificated Note equal in principal amount to the unpurchased portion of
such surrendered Certificated Note; provided that each such new Certificated
Note shall be in a principal amount of $1,000 or an integral multiple thereof.
Upon surrender of a Global Note that is purchased in part pursuant
to an Asset Sale Offer, the Paying Agent shall forward such Global Note to the
Trustee who shall make a notation on Schedule A thereof to reduce the principal
amount of such Global Note to an amount equal to the unpurchased portion of such
Global Note, as provided in Section 2.05(c) hereof.
(h) Upon completion of an Asset Sale Offer (including payment of the
Offer Purchase Price for accepted Notes), any surplus Excess Proceeds that were
the subject of such offer shall cease to be Excess Proceeds, and the Company may
then use such amounts for general corporate purposes.
(i) The Company shall comply with the requirements of Section 14(e)
under the Exchange Act and any other securities laws or regulations, to the
extent such laws and regulations are applicable, in connection with the purchase
of Notes pursuant to an Asset Sale Offer.
SECTION 4.09. Limitation on Indebtedness. (a) The Company shall not,
and shall not permit its Restricted Subsidiaries to, directly or indirectly,
incur any Indebtedness (including Acquired Indebtedness), and the Company shall
not issue any Disqualified Stock or permit any of its Restricted Subsidiaries to
issue any Disqualified Stock or Preferred Stock; provided that the Company may
incur Indebtedness or issue Disqualified Stock if, after giving effect to such
issuance or incurrence on a pro forma basis, the Debt to EBITDA Ratio of the
Company does not exceed 5.5x in the case of any issuance or incurrence on or
before November 1, 1998, or 5.0x in the case of any issuance or incurrence
thereafter.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(i) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness under the Secured Credit Facility; provided
that the aggregate principal amount of Indebtedness incurred under the
Secured Credit Facility by the Company and its Restricted Subsidiaries
does not exceed $35,000,000 at any one time outstanding;
(ii) the incurrence of the Existing Indebtedness;
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(iii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Interest Hedging Obligations with respect to any floating
rate Indebtedness that is permitted to be outstanding under this Section
4.09;
(v) the incurrence by the Company of any Exchange Rate Obligations,
provided that such Exchange Rate Obligations were entered into in
connection with transactions in the ordinary course of business or the
incurrence of Indebtedness that is permitted under this Section 4.09;
(vi) the incurrence by the Company of Indebtedness represented by
the Existing Notes;
(vii) the incurrence by the Company of Indebtedness in connection
with one or more standby letters of credit issued in the ordinary cause of
business;
(viii) the incurrence by the Company of Indebtedness in respect of
performance, surety or appeal bonds provided by the Company in the
ordinary course of business;
(ix) the incurrence by the Company of Indebtedness not to exceed, at
any one time outstanding, one and a half times the amount of the Net Cash
Proceeds received by the Company from the issuance and sale of its
Qualified Stock (other than Preferred Stock) subsequent to the Issue Date;
provided that such Indebtedness shall have a Stated Maturity no earlier
than the Stated Maturity of the Notes and is subordinated to the Notes as
provided in Exhibit F hereto;
(x) the incurrence by the Company or any of its Restricted
Subsidiaries of Refinancing Indebtedness issued in exchange for, or the
proceeds of which are used to refinance, repurchase, replace, refund or
defease ("Refinance") Indebtedness permitted pursuant to clauses (ii) or
(vi) of this Section 4.09(b); provided that (1) the amount of such
Refinancing Indebtedness shall not exceed the principal amount of,
premium, if any, and accrued interest on the Indebtedness so Refinanced
(or if such Indebtedness was issued with original issue discount, the
original issue price plus amortization of the original issue discount at
the time of the repayment of such Indebtedness) plus the fees, expenses
and costs of such Refinancing and reasonable prepayment premiums, if any,
in connection therewith; (2) such Refinancing Indebtedness shall have a
Stated Maturity no earlier than the Stated Maturity of the Indebtedness
being Refi-
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nanced; (3) such Refinancing Indebtedness shall have an Average Life equal
to or greater than the Average Life of the Indebtedness being Refinanced;
(4) if the Indebtedness being Refinanced is subordinated in right of
payment to the Notes, such Refinancing Indebtedness shall be subordinate
in right of payment to the Notes on terms at least as favorable to the
holders of Notes as those contained in the documentation governing the
Indebtedness being so Refinanced; and (5) no Restricted Subsidiary shall
incur Refinancing Indebtedness to Refinance Indebtedness of the Company or
another Subsidiary;
(xi) The incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness of any Person which incurrence resulted
directly from an Investment described in clause (ix) of the definition of
"Permitted Investments" in Section 1.01 hereof; provided that, (x)
immediately after giving effect to such Investment on a pro forma basis
(and treating any Indebtedness which becomes, or is anticipated to become,
an obligation of the Company or any Restricted Subsidiary as a result of
such Investment as having been incurred by the Company or such Restricted
Subsidiary at the time of such Investment), the Company would (A) be
permitted to incur $1.00 of additional Indebtedness under Section 4.09(a)
hereof or (B) have a Debt to EBITDA Ratio which is equal to or not worse
than the Debt to EBITDA Ratio of the Company immediately prior to such
Investment or (y) such incurrence is otherwise permitted; provided,
further that Indebtedness incurred by the Company and its Restricted
Subsidiaries under this clause (xi) as a result of any such Investment
does not exceed 50 percent of the Fair Market Value of the Qualified Stock
used as consideration in such Investment; provided, further that the
aggregate principal amount of Indebtedness incurred under this clause (xi)
does not exceed $50,000,000;
(xii) the incurrence by the Company of Permitted Subordinated
Financing; and;
(xiii) Indebtedness not otherwise permitted to be incurred pursuant
to this Section 4.09 in an aggregate amount not to exceed $428,634.
SECTION 4.10. Limitation on Issuance of Guarantees by Restricted
Subsidiaries. (a) The Company shall not permit any of its Restricted
Subsidiaries, directly or indirectly, to Guarantee any Indebtedness of the
Company ("Guaranteed Indebtedness") other than the Notes, unless (i) such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a Guarantee (a "Subsidiary Guarantee")
of payment of the Notes by such Restricted Subsidiary and (ii) such Restricted
Subsidiary waives and will not in any manner whatsoever claim or take the
benefit or advantage of, any rights of reimbursement, indemnity or subrogation
or any other rights against the Company or any other Restricted Subsidiary of
the Company as a result of any payment by such
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Restricted Subsidiary under its Subsidiary Guarantee. If the Guaranteed
Indebtedness is (i) pari passu with the Notes then the Guarantee of such
Guaranteed Indebtedness shall be pari passu with, or subordinated to, the
Subsidiary Guarantee or (ii) subordinated to the Notes, then the Guarantee of
such Guaranteed Indebtedness shall be subordinated to the Subsidiary Guarantee
at least to the extent that the Guaranteed Indebtedness is subordinated to the
Notes.
(b) Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Subsidiary shall provide by its terms that it shall be automatically
and unconditionally released and discharged upon the release or discharge of the
Guarantee which resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by, or as a result of, payment under such Guarantee.
SECTION 4.11. Limitation on Liens. The Company shall not, and shall
not permit any of its Restricted Subsidiaries to, directly or indirectly, enter
into, create, incur, assume or suffer to exist any Liens of any kind, other than
Permitted Liens, on or with respect to any of its Property or assets now owned
or hereafter acquired, or any interest therein or any income or profits
therefrom, without effectively providing that the Notes shall be secured equally
and ratably with or prior to (and provided the Notes shall be secured prior to
any secured obligation that is subordinated in right of payment to the Notes)
the obligations so secured for so long as such obligations are so secured.
SECTION 4.12. Limitation on Sale and Leaseback Transactions. The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into, assume, Guarantee or otherwise become liable
with respect to, any Sale and Leaseback Transaction, unless (i) the Company or
such Restricted Subsidiary, as the case may be, receives consideration at the
time of such Sale and Leaseback Transaction at least equal to the Fair Market
Value (as evidenced by a Board Resolution delivered to the Trustee) of the
Property or assets subject to such transaction; (ii) the Attributable
Indebtedness of the Company or such Restricted Subsidiary with respect thereto
is included as Indebtedness and would be permitted to be incurred under Section
4.09 hereof; (iii) the Company or such Restricted Subsidiary would be permitted
to create a Lien on such Property or assets without securing the Notes under
Section 4.11 hereof; and (iv) the Net Cash Proceeds from such transaction are
applied in accordance with Section 4.08 hereof as if such proceeds resulted from
an Asset Sale.
SECTION 4.13. Restricted Payments. (a) The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
make any Restricted Payment unless, at the time thereof and after giving effect
thereto (the amount of any such payment to be made if other than in cash to be
determined by the Board of Directors and evidenced by a Board Resolution):
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(i) no Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(ii) after giving effect, on a pro forma basis, to such Restricted
Payment and the incurrence of any Indebtedness the net proceeds of which
are used to finance such Restricted Payment, the Company could incur at
least $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof;
and
(iii) after giving effect to such Restricted Payment on a pro forma
basis, the aggregate amount expended or declared for all Restricted
Payments after the Issue Date does not exceed the sum of (without
duplication) (A) 50 percent of the Consolidated Net Income of the Company
(or, if Consolidated Net Income shall be a deficit, minus 100 percent of
such deficit) for the period (taken as one accounting period) beginning on
the last day of the fiscal quarter immediately preceding the Issue Date
and ending on the last day of the fiscal quarter immediately preceding the
date of such Restricted Payment, plus (B) 100 percent of the aggregate Net
Cash Proceeds received by the Company subsequent to the Issue Date from
the issuance or sale (other than to a Restricted Subsidiary) of shares of
its Qualified Stock, including Qualified Stock issued upon the exercise of
options, warrants or rights to purchase Qualified Stock, plus (C) 100
percent of the amount of any Indebtedness of the Company or any of its
Restricted Subsidiaries (as expressed on the face of a balance sheet in
accordance with GAAP), or the carrying value of any Disqualified Stock,
which has been converted into, exchanged for or satisfied by the issuance
of shares of Qualified Stock of the Company subsequent to the Issue Date,
less the amount of any cash, or the value of any other Property
distributed by the Company or its Restricted Subsidiaries upon such
conversion, exchange or satisfaction, plus (D) 100 percent of the net
reduction in Investments, subsequent to the Issue Date, in any Person,
resulting from payments of interest on Indebtedness, dividends, repayments
of loans or advances, or other transfers of Property or assets (but only
to the extent such interest, dividends, repayments or other transfers of
Property or assets are not included in the calculation of Consolidated Net
Income), in each case to the Company or any Restricted Subsidiary of the
Company from any Person (including without limitation, from Unrestricted
Subsidiaries) or from redesignations of Unrestricted Subsidiaries as
Restricted Subsidiaries of the Company (valued in each case as provided in
the definition of "Investments"), not to exceed in the case of any Person
the amount of Investments previously made by the Company or any Restricted
Subsidiary in such Person and which was treated as a Restricted Payment,
minus (E) 100% of the amount of Investments made pursuant to Section
4.13(b)(vii) hereof subsequent to the Issue Date.
(b) The provisions of Section 4.13(a) hereof shall not prevent the
Company from:
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(i) paying a dividend on its Capital Stock at any time within 60
calendar days after the declaration thereof if, on the date of declaration
thereof, the Company could have paid such dividend in compliance with this
Section 4.13 and the other provisions of this Indenture;
(ii) retiring, purchasing, redeeming or otherwise acquiring for
value, (A) any Capital Stock of the Company or any Restricted Subsidiary
of the Company, or (B) Indebtedness of the Company that is subordinated in
right of payment to the Notes or (C) Indebtedness of a Restricted
Subsidiary of the Company, solely in exchange for, or out of the proceeds
of the substantially concurrent sale of Qualified Stock of the Company;
(iii) retiring, purchasing, redeeming or otherwise acquiring for
value, any Indebtedness of the Company subordinated in right of payment to
the Notes in exchange for, or out of the proceeds of, the substantially
concurrent incurrence of Indebtedness of the Company (other than
Indebtedness to a Subsidiary of the Company), provided that such new
Indebtedness (A) is subordinated in right of payment to the Notes at least
to the same extent as, (B) has an Average Life at least as long as, and
(C) has no scheduled principal payments due in any amount earlier than,
any equivalent amount of principal under the Indebtedness so retired;
(iv) retiring, purchasing, redeeming or otherwise acquiring for
value, any Indebtedness of a Restricted Subsidiary of the Company in
exchange for, or out of the proceeds of, the substantially concurrent
incurrence of Indebtedness of the Company or any Restricted Subsidiary of
the Company that is permitted under Section 4.09 hereof and that (A) is
not secured by any assets of the Company or any Restricted Subsidiary of
the Company to a greater extent than the retired, purchased, redeemed or
acquired Indebtedness was so secured, (B) has an Average Life at least as
long as the retired, purchased, redeemed or acquired Indebtedness and (C)
is subordinated in right of payment to the Notes at least to the same
extent as the retired, purchased, redeemed or acquired Indebtedness;
(v) retiring, purchasing, redeeming or otherwise acquiring for
value, any Capital Stock of the Company or any Restricted Subsidiary of
the Company held by any member of the Company's (or any of its
Subsidiaries') management pursuant to any management equity subscription
agreement or stock option plan in effect on the Issue Date or upon the
death or termination of such member, provided that the aggregate price
paid subsequent to the Issue Date for all such retired, purchased,
redeemed or acquired Capital Stock shall not exceed, in the aggregate, the
sum of $2,000,000 plus the aggregate Net Cash Proceeds received by the
Company subsequent to the Is-
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▇▇▇ Date from any reissuance of such Capital Stock by the Company to members of
management of the Company or its Subsidiaries;
(vi) making loans to members of management of the Company as
required pursuant to employment agreements with such members, provided
that the aggregate amount of all such loans (whether such loans are
outstanding or have been repaid) shall not exceed $2,200,000;
(vii) making Investments in an aggregate amount not to exceed
$20,000,000 in joint ventures or other risk sharing arrangements (which
may include partnerships, limited liability companies, corporations or
other arrangements) (each a "Joint Venture Entity") the purpose of which
is to engage in the same or complementary lines of business as the Company
or a Restricted Subsidiary or in businesses consistent with the
fundamental nature of the operating business of the Company or a
Restricted Subsidiary; provided the management and operations of any such
Joint Venture Entity are controlled by the Company pursuant to (i) the
charter documents of such Joint Venture Entity, or (ii) an agreement
between or among the holders of the Voting Stock of such Joint Venture
Entity, or (iii) a management agreement of a minimum duration of three or
more years between the Company and such Joint Venture Entity;
(viii) permitting a Restricted Subsidiary which became a Restricted
Subsidiary as a result of an Investment by the Company or a Restricted
Subsidiary described in clause (vii) of this Section 4.13(b) to declare or
pay any dividend or distribution on any Capital Stock of such Subsidiary
to all holders of Capital Stock of such Subsidiary on a pro rata basis;
and
(ix) permitting a Restricted Subsidiary to pay a dividend with
respect to any shares of Capital Stock of such Subsidiary held by a
Lender, which shares of Capital Stock were acquired by such Lender in
connection with the Secured Credit Facility.
(c) Not later than the date of making any Restricted Payment
(including any Restricted Payment permitted to be made pursuant to Section
4.13(b) hereof), 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 required calculations were computed, which calculations
may be based upon the Company's latest available financial statements.
SECTION 4.14. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries. The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, cause or suffer to exist or
become effective, or enter into, any encumbrance or restriction (other than
pursuant to law or regulation) on the ability of any of its Restricted
Subsidiaries (i) to pay dividends or make any other distributions in
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respect of its Capital Stock or pay any Indebtedness or other obligation owed to
the Company or any Restricted Subsidiary of the Company; (ii) to make loans or
advances to the Company or any Restricted Subsidiary of the Company; or (iii) to
transfer any of its Property or assets to the Company or any Restricted
Subsidiary of the Company, except:
(a) any encumbrance or restriction pursuant to an agreement relating
to the Secured Credit Facility or the Existing Indebtedness as of the
Issue Date;
(b) any encumbrance or restriction pursuant to an agreement relating
to an acquisition of assets or Property, so long as the encumbrances or
restrictions in any such agreement relate solely to the assets or Property
so acquired;
(c) any encumbrance or restriction relating to any Indebtedness of
any Restricted Subsidiary of the Company existing on the date on which
such Restricted Subsidiary is acquired by the Company or any Restricted
Subsidiary of the Company (other than Indebtedness incurred by such
Restricted Subsidiary in connection with or in anticipation of its
acquisition), provided that the EBITDA of such Restricted Subsidiary is
not taken into account in determining whether such acquisition is
permitted hereunder;
(d) any encumbrance or restriction pursuant to an agreement
effecting a permitted Refinancing of Indebtedness issued pursuant to an
agreement referred to in the foregoing clauses (a) through (c) of this
Section 4.14; provided that the encumbrances and restrictions contained in
any such Refinancing agreement are not materially more restrictive than
the encumbrances and restrictions contained in such original agreement;
(e) customary provisions restricting subletting or assignment of any
lease governing a leasehold interest of the Company or any Restricted
Subsidiary of the Company or customary provisions in supply, license or
other agreements entered into in the ordinary course of business that
restrict the assignment of any such agreement or any rights thereunder;
(f) any temporary encumbrance or restriction with respect to a
Restricted Subsidiary of the Company pursuant to an agreement that has
been entered into for the sale or disposition of all or substantially all
of the Capital Stock of, or Property and assets of, such Restricted
Subsidiary; and
(g) any restriction on the sale or other disposition of Property or
assets securing Indebtedness as a result of a Permitted Lien on such
Property or assets permitted pursuant to Section 4.11 hereof.
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SECTION 4.15. Limitation on Issuance and Sale of Capital Stock of
Restricted Subsidiaries. The Company (i) shall not permit any of its Restricted
Subsidiaries to issue any Capital Stock other than to the Company or a
Restricted Subsidiary of the Company and (ii) shall not permit any Person other
than the Company or a Restricted Subsidiary of the Company to own any Capital
Stock of any of its Restricted Subsidiaries (other than directors' qualifying
shares), except for:
(a) a sale of 100 percent of the Capital Stock of a Restricted
Subsidiary sold in a transaction permitted under Section 4.08 hereof;
(b) Capital Stock of a Restricted Subsidiary issued and outstanding
on the Issue Date and held by Persons other than the Company or any
Restricted Subsidiary;
(c) Capital Stock of a Restricted Subsidiary issued and outstanding
prior to the time that such Person becomes a Restricted Subsidiary so long
as such Capital Stock was not issued in contemplation of such Person's
becoming a Restricted Subsidiary or otherwise being acquired by the
Company;
(d) any Disqualified Stock permitted to be issued under Section 4.09
hereof;
(e) Capital Stock of a Subsidiary issued to a Lender or Lenders
under the Secured Credit Facility in an aggregate amount not to exceed
7.25 percent of the outstanding Capital Stock of such Subsidiary; and
(f) Capital Stock of a Person which became or will become a
Restricted Subsidiary as a result of an Investment by the Company or a
Restricted Subsidiary described in clause (vii) of Section 4.13(b) hereof,
provided that (A) the Company or such Restricted Subsidiary, as the case
may be, receives net consideration at the time of such issuance at least
equal to the Fair Market Value (as evidenced by a Board Resolution
delivered to the Trustee) of the Capital Stock issued, (B) any
consideration received by the Company or such Restricted Subsidiary in
respect of such issuance consist of Cash Proceeds and/or
Telecommunications Assets, (C) the Company or such Restricted Subsidiary,
as the case may be, within 270 calendar days of such issuance, uses the
Net Cash Proceeds from such issuance to (1) reinvest (or enters a binding
agreement to reinvest, provided that such reinvestment is completed within
180 calendar days of the date of such agreement) an amount equal to the
Net Cash Proceeds (or any portion thereof) from such issuance in
Telecommunications Assets and/or (2) apply an amount equal to such Net
Cash Proceeds (or remaining Net Cash Proceeds) from such issuance to
repurchase or redeem Notes or to permanently reduce Indebtedness of the
Company (other than Indebtedness to a Restricted Subsidiary) that is pari
passu with the Notes or to permanently reduce Indebtedness or Pre-
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ferred Stock of any Restricted Subsidiary (other than Indebtedness to, or
Preferred Stock owned by, the Company or another Restricted Subsidiary)
and (D) after giving effect to such issuance, the total amount of
consideration that will have been received as a result of all issuances of
Capital Stock of Restricted Subsidiaries made pursuant to this clause (f)
is less than the greater of (x) $5,000,000 and (y) 5 percent of the
Consolidated Tangible Assets of the Company determined as of the date of
such issuance;
provided that any issuance or sale specified in clause (c), (d), (e) or (f) of
this Section 4.15 shall not cause such Restricted Subsidiary to fail to qualify
as a Restricted Subsidiary under the terms of this Indenture.
SECTION 4.16. Transactions with Affiliates. The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, sell, lease, transfer, or otherwise dispose of, any of its
Properties or assets to, or purchase any Property or assets from, or enter into
any contract, agreement, transaction, understanding, loan, advance or Guarantee
with, or for the benefit of, any Affiliate of the Company or any such Restricted
Subsidiary (each of the foregoing, an "Affiliate Transaction"), unless (a) such
Affiliate Transaction is on terms that are no less favorable to the Company or
such Restricted Subsidiary than those that would have been obtained in a
comparable arm's-length transaction by the Company or such Restricted Subsidiary
with a Person that is not an Affiliate and (b) the Company delivers to the
Trustee (i) with respect to any Affiliate Transaction involving aggregate
payments in excess of $1,000,000, a Board Resolution certifying that such
Affiliate Transaction complies with clause (a) above and that such Affiliate
Transaction has been approved by a majority of the Independent Directors on the
Board of Directors, who have determined that such Affiliate Transaction is in
the best interests of the Company or such Restricted Subsidiary and (ii) with
respect to any Affiliate Transaction (other than Permitted Subordinated
Financing) involving aggregate payments in excess of $5,000,000, an opinion as
to the fairness from a financial point of view to the Company or such Restricted
Subsidiary issued by an investment banking firm of national standing together
with an Officers' Certificate to the effect that such opinion complies with this
clause (ii); provided that the following shall not be deemed Affiliate
Transactions:
(i) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business and
consistent with industry practice for services rendered by a Person in
such Person's capacity as an officer or employee of the Company or such
Restricted Subsidiary;
(ii) any agreement or arrangement with respect to the compensation
of a director of the Company or any Restricted Subsidiary of the Company
for services ren-
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dered by a Person in such Person's capacity as a director approved by the
Board of Directors and consistent with industry practice;
(iii) transactions between or among the Company and its Restricted
Subsidiaries;
(iv) the making of any payment permitted to be made under Section
4.13 hereof;
(v) transactions pursuant to contracts existing on the Issue Date
and listed in Schedule D hereto; and
(vi) loans and advances to employees and officers of the Company or
a Restricted Subsidiary of the Company in the ordinary course of business
and consistent with the past practice of the Company or such Restricted
Subsidiary, provided that the aggregate principal amount of all such loans
and advances shall not exceed $3,000,000 at any one time outstanding, and
provided, further, that in the event the aggregate principal amount of all
such loans or advances exceeds $1,000,000 at any one time outstanding, the
Company shall, within 180 calendar days of the date such amount first
exceeds $1,000,000, reduce such amount to an amount less than $1,000,000.
SECTION 4.17. Restricted and Unrestricted Subsidiaries. (a) The
Company may designate a Subsidiary (including a newly formed or newly acquired
Subsidiary) of the Company or any of its Restricted Subsidiaries as an
Unrestricted Subsidiary if such Subsidiary does not have any obligations which,
if in Default, would result in a cross default on Indebtedness of the Company or
a Restricted Subsidiary (other than Indebtedness to the Company or a Restricted
Subsidiary), and (i) such Subsidiary has total assets of $1,000 or less or (ii)
such designation is effective immediately upon such Person becoming a
Subsidiary. Unless so designated as an Unrestricted Subsidiary, any Person that
becomes a Subsidiary of the Company or any of its Restricted Subsidiaries shall
be classified as a Restricted Subsidiary of the Company. Except as provided in
clause (a)(i) hereof, no Restricted Subsidiary may be redesignated as an
Unrestricted Subsidiary.
(b) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, take any action or enter into any transaction or
series of transactions that would result in a Person (other than a newly formed
Subsidiary having no outstanding Indebtedness (other than Indebtedness to the
Company or a Restricted Subsidiary) at the date of determination) becoming a
Restricted Subsidiary of the Company (whether through an acquisition, the
redesignation of an Unrestricted Subsidiary or otherwise) unless, after giving
effect to such action, transaction or series of transactions, on a pro forma
basis, (i) the Company could in-
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cur at least $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof
and (ii) no Default or Event of Default would occur or be continuing; provided,
however, that the foregoing restriction shall not apply to a Person which
becomes a Restricted Subsidiary as a result of (a) an Investment described in
clause (ix) of the definition of "Permitted Investments" in Section 1.01 hereof
or (b) an Investment described in clause (vii) of Section 4.13(b) hereof.
Subject to this Section 4.17(b), an Unrestricted Subsidiary may be redesignated
as a Restricted Subsidiary.
(c) The designation of a Subsidiary of the Company as an
Unrestricted Subsidiary or the designation of an Unrestricted Subsidiary of the
Company as a Restricted Subsidiary shall be made by the Board of Directors as
evidenced by a Board Resolution delivered to the Trustee and shall be effective
as of the date specified in such Board Resolution, which shall not be prior to
the date such Board Resolution is delivered to the Trustee.
SECTION 4.18. Reports. Whether or not the Company is subject to
Section 13(a) or Section 15(d) of the Exchange Act, or any successor provision
thereto, the Company shall file with the Commission the annual reports,
quarterly reports and other documents which the Company would have been required
to file with the Commission pursuant to Section 13(a) or Section 15(d) of the
Exchange Act or any successor provision thereto if the Company were subject
thereto, such documents to be filed with the Commission on or prior to the
respective dates (the "Required Filing Dates") by which the Company would have
been required to file them. The Company shall also (whether or not it is
required to file reports with the Commission), within 30 calendar days of each
Required Filing Date, (i) transmit by mail to all holders of Notes, as their
names and addresses appear in the Security Register and to any Persons that
request such reports in writing, without cost to such holders or Persons and
(ii) file with the Trustee, copies of the annual reports, quarterly reports and
other documents (without exhibits) which the Company has filed or would have
filed with the Commission pursuant to Section 13(a) or Section 15(d) of the
Exchange Act, any successor provisions thereto or this Section 4.18. The Company
shall not be required to file any report with the Commission if the Commission
does not permit such filing. In addition to the foregoing, commencing with the
unaudited information for the fiscal quarter ended September 30, 1997, the
Company will file with the Commission and will thereafter transmit by mail to
the Holders and file with the Trustee within the same time periods as set forth
in the second next preceding sentence, unaudited information, on an aggregate
Fiber Network basis (before headquarter allocations) segmented by the calendar
year in which each such Fiber Network became operational, setting forth the
investment in plant, property and equipment to date, revenue, EBITDA, EBIT,
access lines, fiber miles, route miles, buildings connected and voice grade
equivalents; provided, however, that the Company will provide such unaudited
information with respect to (i) all Fiber Networks that were initially
operational at any time prior to December 31, 1995 (all such Fiber Networks
shall be deemed to have become operational in calendar year 1995) and (ii) all
Fiber Networks that were initially opera-
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tional in each succeeding calendar year (including all or any portion of the
then current year); and provided, further, that the Company need no longer
comply with the information requirements of this sentence after four consecutive
fiscal quarters for which the ratio of EBITDA of the Company to Consolidated
Interest Expense (other than dividends or distributions with respect to
Preferred Stock or Disqualified Stock of the Company) of the Company is greater
than 1.0 or after the occurrence of a Change of Control.
SECTION 4.19. Compliance Certificate; Notice of Default or Event of
Default. The Company shall deliver to the Trustee within 120 calendar days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate stating whether or not, to the best knowledge of such
officer, the Company has complied with all conditions and covenants under this
Indenture, and, if the Company shall be in Default, specifying all such Defaults
and the nature thereof of which such officer may have knowledge.
For the purposes of this Section 4.19, compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
The Company shall deliver written notice to the Trustee within 30
calendar days after any executive officer of the Company becomes aware of the
occurrence of any event which constitutes, or with the giving of notice or the
lapse of time or both would constitute, a Default or Event of Default,
describing such Default or Event of Default, its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 4.20. Limitation on Construction of Fiber Networks. The
Company may construct Fiber Networks in no more than 45 Metropolitan Areas until
the earlier of such time as (i) the ratio of EBITDA of the Company to
Consolidated Interest Expense (other than dividends or distributions with
respect to Preferred Stock or Disqualified Stock of the Company) of the Company
is greater than 1.0 for four consecutive fiscal quarters and (ii) the occurrence
of a Change of Control.
ARTICLE V
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.01. Merger, Consolidation or Sale of Assets. The Company
shall not in any transaction or series of related transactions, consolidate
with, or merge with or into, any other Person or permit any other Person to
merge with or into the Company (other than a merger of a Restricted Subsidiary
of the Company into the Company in which the Company is the continuing
corporation), or sell, convey, assign, transfer, lease or otherwise dispose of
all or substantially all of the Property and assets of the Company and its
Restricted Subsidiaries taken as a whole to any other Person, unless:
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(a) either (i) the Company shall be the continuing corporation or
(ii) the corporation (if other than the Company) formed by such
consolidation or into which the Company is merged, or the Person which
acquires, by sale, assignment, conveyance, transfer, lease or disposition,
all or substantially all of the Property and assets of the Company and its
Restricted Subsidiaries taken as a whole (any such corporation or Person
being the "Surviving Entity") shall be a corporation organized and validly
existing under the laws of the United States of America, any political
subdivision thereof, any state thereof or the District of Columbia, and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the Trustee,
the due and punctual payment of the principal of (and premium, if any) and
interest on all the Notes and the performance of every covenant and
obligation in this Indenture on the part of the Company to be performed or
observed;
(b) immediately after giving effect to such transaction or series of
related transactions on a pro forma basis (including, without limitation,
any Indebtedness incurred or anticipated to be incurred in connection with
or in respect of such transaction or series of related transactions), no
Default or Event of Default shall have occurred and be continuing or would
result therefrom; and
(c) immediately after giving effect to such transaction or series of
related transactions on a pro forma basis (including, without limitation,
any Indebtedness incurred or anticipated to be incurred in connection with
or in respect of such transaction or series of transactions), the Company
(or the Surviving Entity, if the Company is not continuing) would (A) be
permitted to incur $1.00 of additional Indebtedness under Section 4.09(a)
hereof or (B) have a Total Market Capitalization of at least
$1,000,000,000 and total Indebtedness in an amount less than 40 percent of
its Total Market Capitalization.
In connection with any consolidation, merger, conveyance, lease or
other disposition contemplated by this Section 5.01, the Company shall deliver,
or cause to be delivered, to the Trustee, in form reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, lease or disposition and any
supplemental indenture in respect thereto comply with this Article V and that
all conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 5.02. Successor Corporation Substituted. Upon any
consolidation with, or merger by the Company with or into, any other
corporation, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the Property and assets of the
Company and its Restricted Subsidiaries taken as a whole in accor-
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dance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into which the Company is merged, or the Person to which such
sale, conveyance, assignment, transfer, lease, conveyance or other disposition
is made, shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
successor Person has been named as the Company herein; and thereafter the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Notes, except for the obligation to pay the principal of
(and premium, if any) and interest on the Notes.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default. "Event of Default," wherever used
herein with respect to the Notes, means any one of the following events
(whatever the reason for such event, and whether it shall be voluntary or
involuntary, or be effected by operation of law, pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of interest on any Note when the same
becomes due and payable, and the continuance of such Default for a period
of 30 calendar days; or
(b) default in the payment of the principal of (or premium, if any,
on) any Note when the same becomes due and payable whether upon Maturity,
optional redemption, required repurchase (including pursuant to a Change
of Control Offer or an Asset Sale Offer) or otherwise, or the failure to
make an offer to purchase any Note as herein required; or
(c) default in the performance, or breach, of any covenant or
agreement contained in Section 4.07, Section 4.08, Section 4.09, Section
4.12, Section 4.13 or Article V hereof; or
(d) default in the performance, or breach, of any covenant or
warranty of the Company contained in this Indenture or the Notes (other
than a covenant or warranty addressed in Section 6.01(a), Section 6.01(b)
or Section 6.01(c) hereof), and the continuance of such Default or breach
for a period of 30 calendar days after written notice thereof has been
given to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25 percent of the aggregate principal amount of
the outstanding Notes specifying such Default and stating that such notice
is a "Notice of Default" delivered in connection with this Indenture; or
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(e) a default or defaults under any bond, debenture, note or other
evidence of Indebtedness by the Company or any Restricted Subsidiary of
the Company (or under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness by the Company or any such Restricted Subsidiary) having,
individually or in the aggregate, a principal or similar amount
outstanding of at least $10,000,000, whether such indebtedness now exists
or shall hereafter be created, which default or defaults shall have
resulted in the acceleration of the maturity of such Indebtedness prior to
its express maturity or shall constitute a failure to pay such
Indebtedness when due and payable after the expiration of any applicable
grace period with respect thereto or shall have resulted in such
Indebtedness becoming or being declared due and payable; or
(f) a final judgment or final judgments for the payment of money
(other than to the extent covered by insurance as to which the insurance
company has acknowledged coverage and other than to the extent covered by
an indemnity given by an insurance company) is entered against the Company
or any Restricted Subsidiary of the Company in an aggregate amount in
excess of $10,000,000 by a court or courts of competent jurisdiction,
which judgment is not discharged, waived, stayed, bonded or satisfied for
a period of 60 consecutive calendar days; or
(g) the entry by a court having jurisdiction in the premises of (i)
a decree or order for relief in respect of the Company or any Significant
Restricted Subsidiary of the Company in an involuntary case or proceeding
under United States bankruptcy laws, as now or hereafter constituted, or
any other applicable Federal, state, or foreign bankruptcy, insolvency, or
other similar law or (ii) a decree or order adjudging the Company or any
Significant Restricted Subsidiary of the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of, or in respect of, the Company
or any Significant Restricted Subsidiary of the Company under United
States bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency, or similar
law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Significant
Restricted Subsidiary of the Company or of any substantial part of the
Property or assets of the Company or any Significant Restricted Subsidiary
of the Company, or ordering the winding-up or liquidation of the affairs
of the Company or any Significant Restricted Subsidiary of the Company,
and the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 60
consecutive calendar days; or
(h) (i) commencement by the Company or any Significant Restricted
Subsidiary of the Company of a voluntary case or proceeding under United
States bankruptcy
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laws, as now or hereafter constituted, or any other applicable Federal,
state, or foreign bankruptcy, insolvency or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Restricted Subsidiary
of the Company to the entry of a decree or order for relief in respect of
the Company or any Significant Restricted Subsidiary of the Company in an
involuntary case or proceeding under United States bankruptcy laws, as now
or hereafter constituted, or any other applicable Federal, state, or
foreign bankruptcy, insolvency, or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
the Company or any Significant Restricted Subsidiary of the Company; or
(iii) the filing by the Company or any Significant Restricted Subsidiary
of the Company of a petition or answer or consent seeking reorganization
or relief under United States bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign bankruptcy,
insolvency or other similar law; or (iv) the consent by the Company or any
Significant Restricted Subsidiary of the Company to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company or any Significant Restricted Subsidiary of the Company or
of any substantial part of the Property or assets of the Company or any
Significant Restricted Subsidiary of the Company, or the making by the
Company or any Significant Restricted Subsidiary of the Company of an
assignment for the benefit of creditors; or (v) the admission by the
Company or any Significant Restricted Subsidiary of the Company in writing
of its inability to pay its debts generally as they become due; or (vi)
the taking of corporate action by the Company or any Significant
Restricted Subsidiary of the Company in furtherance of any such action.
SECTION 6.02. Acceleration. If any Event of Default (other than an
Event of Default specified in Section 6.01(g) or Section 6.01(h) hereof) occurs
and is continuing, then and in every such case, the Trustee by a notice in
writing to the Company, or the Holders of not less than 25 percent of the
outstanding aggregate principal amount of Notes by a notice in writing to the
Company and the Trustee, may declare all unpaid principal and any accrued and
unpaid interest on all Notes then outstanding to be immediately due and payable.
Upon any such declaration, all unpaid principal and any accrued and unpaid
interest on all Notes then outstanding will become and be immediately due and
payable.
If an Event of Default specified in Section 6.01(g) or Section
6.01(h) hereof occurs, all unpaid principal and any accrued and unpaid interest
on all Notes then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder of Notes.
In the event of a declaration of acceleration because an Event of
Default set forth in Section 6.01(e) hereof has occurred and is continuing, such
declaration of accelera-
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tion shall be automatically rescinded and annulled if the event of default
triggering such Event of Default pursuant to Section 6.01(e) hereof shall be
remedied, or cured, or waived by the holders of the relevant Indebtedness,
within 60 calendar days after such event of default; provided no judgment or
decree for the payment of the money due on the Notes has been obtained by the
Trustee as hereinafter in this Article VI provided.
At any time after a declaration of acceleration with respect to
Notes has been made and before a judgment or decree for payment of the money due
has been obtained by the Trustee as hereinafter in this Article VI provided, the
Holders of a majority in principal amount of the outstanding Notes, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if,
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue installments of interest on all Notes,
(ii) the principal of (and premium, if any, on) any Notes which have
become due otherwise than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in such Notes,
(iii) to the extent that payment of such interest is lawful,
interest on the Defaulted Interest at the rate prescribed therefor in the
Notes and this Indenture, and
(iv) all moneys paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due to the Trustee
pursuant to Section 7.07 hereof; and
(b) all Events of Default with respect to the Notes, other than the
non-payment of the principal of Notes which have become due solely by such
declaration of acceleration, have been cured or waived by the Holders as
provided herein.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
SECTION 6.03. Other Remedies. The Company covenants that if an Event
of Default specified in Section 6.01(a) or Section 6.01(b) occurs the Company
shall, upon demand of the Trustee, pay to the Trustee, for the benefit of the
Holders, the whole amount then due and payable on the Notes for principal (and
premium, if any) and interest and, to the extent that payment of such interest
shall be legally enforceable, interest upon the overdue principal (and premium,
if any) and upon Defaulted Interest, at the rate or rates prescribed
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therefor in such Notes; and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts due to the Trustee pursuant to
Section 7.07 hereof.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
Property and assets of the Company or any other obligor upon such Notes,
wherever situated.
If an Event of Default with respect to the Notes occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
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.
SECTION 6.04. Waiver of Past Defaults. The Holders of not less than
a majority in principal amount of the outstanding Notes may, on behalf of the
Holders of all the Notes, waive any past Default and its consequences under this
Article VI, except Default (a) in the payment of the principal of (or premium,
if any) or interest on, any Note, or (b) in respect of a covenant or provision
hereof which under Section 9.02 hereof cannot be modified or amended without the
consent of the Holders of not less than 75 percent in principal amount of the
outstanding Notes, or (c) in respect of a covenant or provision hereof which
under Section 9.02 hereof cannot be modified or amended without the consent of
the Holder of each outstanding Note affected; provided that with respect to any
past Default referred to in clause (b) of this paragraph, the Holders of not
less than 75 percent in principal amount of the outstanding Notes may waive such
Default.
SECTION 6.05. Control by Majority. The Holders of not less than a
majority in principal amount of the outstanding Notes shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee; provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or unduly prejudicial to the rights of other Holders
and would not subject the Trustee to personal liability, and
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(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.06. Limitation on Suits. No Holder of Notes shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Notes;
(b) the Holders of not less than 25 percent in principal amount of
the outstanding Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee security or
indemnity satisfactory to the Trustee in its reasonable discretion against
the costs, expenses and liabilities to be incurred in compliance with such
request;
(d) the Trustee for 30 calendar days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 30-day period by the Holders of a
majority in principal amount of the outstanding Notes;
in any event, it being understood and intended that no one or more Holders of
Notes shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Holders of Notes, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all Holders of Notes.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of (premium, if any) and interest on the Notes held by such
Holder, on or after the respective due dates expressed in the Notes or the
redemption dates or purchase dates provided for therein, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall be
absolute and unconditional and shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, ad-
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justment, composition or other judicial proceedings, or any voluntary or
involuntary case under United States bankruptcy laws, as now or hereafter
constituted, relative to the Company or any other obligor upon the Notes or the
Property and assets of the Company or of such other obligor or their creditors,
the Trustee (irrespective of whether the principal of such Notes shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise, (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 file such other papers or
documents and to take such other actions, including participating as a member or
otherwise in any official committee of creditors appointed in the matter, 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 all other amounts due to the Trustee
pursuant to Section 7.07 hereof) 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 receiver,
assignee, trustee, custodian, liquidator, sequestrator (or other similar
official) in any such 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 to 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 7.07 hereof. Nothing contained herein 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.
SECTION 6.09. Priorities. Any money collected by the Trustee
pursuant to this Article VI shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of such money on
account of principal (premium, if any) or interest, upon presentation of the
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
7.07 hereof;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Notes, 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
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THIRD: To the Company.
The Trustee may fix a record date and payment date for any payment
to Holders pursuant to this Section 6.09. At least 15 calendar days before such
record date, the Company shall mail to each Holder and the Trustee a notice that
states such record date, the payment date and amount to be paid. The Trustee may
mail such notice in the name and at the expense of the Company.
SECTION 6.10. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10 percent in principal amount of
the outstanding Notes, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Note on or after its Stated Maturity.
SECTION 6.11. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall 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 may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 6.12. Trustee May Enforce Claims Without Possession of the
Notes. All rights of action and claims under this Indenture or 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, 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.
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SECTION 6.13. Restoration of Rights and Remedies. If the Trustee or
any Holder of Notes has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case the Company, the Trustee and the Holders shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 6.14. Rights and Remedies Cumulative. Except as otherwise
provided in Section 2.07 hereof, 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 6.15. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder of any Note 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 VI 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.
ARTICLE VII
TRUSTEE
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and shall use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default: (i) the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and (ii) in the absence
of bad faith on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; provided that in the case of any such
certificates or opinions that by any provision of this Indenture are
specifically required to be furnished to the Trustee, the Trustee shall ex-
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amine such certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, provided that: (i) this paragraph (c) shall not limit the effect of
paragraph (b) of this Section 7.01; (ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and (iii) the
Trustee shall not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section
6.05 hereof.
(d) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(f) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk of liability is
not reasonably assured to it.
(g) 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 Article VII and to the provisions of the Trust
Indenture Act.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper Person. Except as provided in Section 7.01(b) hereof, the Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on any
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any such agent; provided that such agent was
appointed with due care by the Trustee.
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(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided that the Trustee's conduct does not constitute willful
misconduct or negligence.
(e) The Trustee shall not be charged with knowledge of any Default
or Event of Default under Sections 6.01(c), 6.01(d), 6.01(e) or 6.01(f) hereof,
of the identity of any Restricted Subsidiary or of the existence of any Change
of Control or Asset Sale unless either (i) a Trust Officer shall have actual
knowledge thereof, or (ii) the Trustee shall have received notice thereof in
accordance with Section 10.02 hereof from the Company or any Holder of Notes.
(f) The Trustee may consult with counsel and the written 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.
(g) 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 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.
SECTION 7.03. Individual Rights of Trustee. The Trustee, any Paying
Agent or Registrar, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee, Paying
Agent or Registrar hereunder, as the case may be; provided that the Trustee must
in any event comply with Section 7.10 and Section 7.11 hereof.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible (a) for any
statement of the Company in this Indenture, including the recitals contained
herein, or in any document issued in connection with the sale of the Notes or in
the Notes other than the Trustee's certificate of authentication or (b) for
compliance by the Company with the Registration Rights Agreement.
SECTION 7.05. Notice of Defaults. Within 90 calendar days after the
occurrence of any Default hereunder with respect to the Notes, the Trustee shall
transmit by
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mail to all Holders, as their names and addresses appear in the Security
Register, notice of such Default hereunder known to the Trustee, unless such
Default shall have been cured or waived; provided that, except in the case of a
Default in the payment of the principal of (or premium, if any) or interest on
any Note, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors and/or Trust Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders.
SECTION 7.06. Preservation of Information; Reports by Trustee to
Holders.
(a) The Company shall furnish or cause to be furnished to the
Trustee:
(i) semiannually, not less than 10 calendar days prior to each
Interest Payment Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of the Record Date
immediately preceding such Interest Payment Date, and
(ii) at such other times as the Trustee may request in writing,
within 30 calendar days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15
calendar days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Registrar for
the Notes, no such list need be furnished with respect to the Notes.
(b) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 7.06(a) hereof and
the names and addresses of Holders received by the Trustee in its capacity as
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 7.06(a) hereof upon receipt of a new list so furnished.
(c) Holders may communicate as provided in Section 312(b) of the
Trust Indenture Act with other Holders with respect to their rights under this
Indenture or under the Notes.
(d) Each Holder of Notes, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee 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 this Section 7.06,
regardless of the source from which such in-
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formation was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under this Section
7.06.
(e) Within 60 calendar days after April 15 of each year commencing
with the year 1998, the Trustee shall transmit by mail to all Holders of Notes,
a brief report dated as of such April 15 if and to the extent required under
Section 313(a) of the Trust Indenture Act.
(f) The Trustee shall comply with Sections 313(b) and 313(c) of the
Trust Indenture Act.
(g) A copy of each report described in Section 7.06(e) hereof shall,
at the time of its transmission to Holders, be filed by the Trustee with each
stock exchange, if any, upon which the Notes are then listed, with the
Commission and also with the Company. The Company shall promptly notify the
Trustee of any stock exchange upon which the Notes are listed.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents and counsel. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust.
The Company shall indemnify the Trustee for, and hold it harmless
against, any and all loss, liability or expense (including reasonable attorneys'
fees) arising out of or incurred by it in connection with the acceptance or
administration of the trust created by this Indenture and the performance of its
duties hereunder, except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend any such claim and the
Trustee shall cooperate in the defense of such claim. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
willful misconduct, negligence or bad faith.
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To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a Lien prior to the Notes on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of, premium, if any, and interest on, particular Notes.
The Company's payment obligations pursuant to this Section
7.07 shall survive the resignation or removal of the Trustee and discharge of
this Indenture. Subject to any other rights available to the Trustee under
applicable bankruptcy law, when the Trustee incurs expenses after the occurrence
of a Default specified in Section 6.01(g) or Section 6.01(h) hereof, the
expenses are intended to constitute expenses of administration under bankruptcy
law.
SECTION 7.08. Replacement of Trustee. (a) No resignation or
removal of the Trustee and no appointment of a successor Trustee pursuant to
this Article VII shall become effective until the acceptance of appointment by
the successor Trustee under this Section 7.08.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 calendar days
after the giving of such notice of resignation, the resigning Trustee may
petition 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 a majority in principal amount of the outstanding Notes, delivered to
the Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 310(b) of
the Trust Indenture Act 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, unless the Trustee's duty to resign is stayed in accordance
with the provisions of Section 310(b) of the Trust Indenture Act; or
(ii) the Trustee shall cease to be eligible under Section 7.10
hereof and shall fail to resign after written request therefor by the
Company or by any such Holder; or
(iii) the Trustee shall become incapable of acting or a decree
or order for relief by a court having jurisdiction in the premises
shall have been entered in respect of the Trustee in an involuntary
case under the United States bankruptcy laws, as now
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or hereafter constituted, or any other applicable Federal or state
bankruptcy, insolvency or similar law; or a decree or order by a court
having jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trustee or of its
Property and assets or affairs, or any public officer shall take charge
or control of the Trustee or of its Property and assets or affairs for
the purpose of rehabilitation, conservation, winding up or liquidation;
or
(iv) the Trustee shall commence a voluntary case under the
United States bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or state bankruptcy, insolvency or similar law
or shall consent to the appointment of or taking possession by a
receiver, custodian, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Trustee or its Property and assets or
affairs, or shall make an assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts generally as they
become due, or shall take corporate action in furtherance of any such
action,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Notes, or (ii) subject to Section 6.10 hereof, any
Holder who has been a bona fide Holder of a Note for at least six months may, on
behalf of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee for the Notes.
(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 or pursuant to a Board Resolution, shall promptly
appoint a successor Trustee. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by 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 in
accordance with this Section 7.08, become the successor Trustee and to that
extent replace any successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and shall
have accepted appointment in the manner hereinafter provided, any Holder that
has been a bona fide Holder of a Note for at least six months may, subject to
Section 6.10 hereof, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such resignation, removal and appointment by first class mail,
postage prepaid, to the Holders as their names and addresses appear in the
Security Register. Each notice shall include the name of
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the successor Trustee with respect to the Notes and the address of its Corporate
Trust Administration Office.
(g) In the event of an appointment hereunder of a successor
Trustee, each such successor Trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee 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 former
Trustee hereunder, subject to its Lien, if any, provided for in Section 7.07
hereof.
(h) 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
referred to in Section 7.08(g) hereof.
(i) 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 VII and under the Trust Indenture Act.
SECTION 7.09. Successor Trustee by Merger. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder; provided that such
corporation shall be otherwise qualified and eligible under this Article VII and
under the Trust Indenture Act, 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 the event that any Notes shall not have been authenticated by such
predecessor Trustee, any such successor Trustee may authenticate and deliver
such Notes, in either its own name or that of its predecessor Trustee, with the
full force and effect which this Indenture provides for the certificate of
authentication of the Trustee.
SECTION 7.10. Eligibility; Disqualification. There shall at
all times be a Trustee hereunder which shall be
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(i) a corporation organized and doing business under the laws
of the United States of America, any State or Territory thereof or the
District of Columbia, authorized under such laws to exercise corporate
trust powers, and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority, or
(ii) a corporation or other Person organized and doing
business under the laws of a foreign government that is permitted to
act as Trustee pursuant to a rule, regulation or order of the
Commission, authorized under such laws to exercise corporate trust
powers, and subject to supervision or examination by authority of such
foreign government or a political subdivision thereof substantially
equivalent to supervision or examination applicable to United States
institutional trustees,
in either case having a combined capital and surplus of at least $50,000,000.
If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 7.10, 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. Neither the Company nor any Affiliate of the Company shall serve as
Trustee hereunder. If at any time the Trustee shall cease to be eligible to
serve as Trustee hereunder pursuant to the provisions of this Section 7.10, it
shall resign immediately in the manner and with the effect specified in this
Article VII.
If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and
the Company shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act. Nothing herein shall prevent the Trustee from filing
with the Commission the application referred to in the penultimate paragraph of
Section 310(b) of the Trust Indenture Act.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.
ARTICLE VIII
DEFEASANCE
SECTION 8.01. Company's Option to Effect Legal Defeasance or
Covenant Defeasance. The Company may elect, at its option, at any time, to have
Section 8.02 or
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Section 8.03 hereof applied to the outstanding Notes (in whole and not in part)
upon compliance with the conditions set forth below in this Article VIII, such
election shall be evidenced by a Board Resolution delivered to the Trustee.
SECTION 8.02. Legal Defeasance and Discharge. Upon the
Company's exercise of its option to have this Section 8.02 applied to the
outstanding Notes (in whole and not in part), the Company shall be deemed to
have been discharged from its obligations with respect to such Notes as provided
in this Section 8.02 on and after the date the conditions set forth in Section
8.04 hereof are satisfied (hereinafter called "Defeasance"). For this purpose,
such Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by such Notes 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), subject to the
following which shall survive until otherwise terminated or discharged
hereunder:
(a) the rights of Holders of such Notes to receive, solely
from the trust fund described in Section 8.04 hereof and as more fully
set forth in such Section 8.04 payments in respect of the principal of
and any premium and interest on such Notes when payments are due,
(b) the Company's obligations with respect to such Notes under
Sections 2.06, 2.07, 2.09, 4.02, 4.03 and 4.04 hereof,
(c) the rights, powers, trusts, duties and immunities of the
Trustee under this Indenture,
(d) Article III hereof, and
(e) this Article VIII.
Subject to compliance with this Article VIII, the Company may
exercise its option to have this Section 8.02 applied to the outstanding Notes
(in whole and not in part) notwithstanding the prior exercise of its option to
have Section 8.03 hereof applied to such Notes.
SECTION 8.03. Covenant Defeasance. Upon the Company's exercise
of its option to have this Section 8.03 applied to the outstanding Notes (in
whole and not in part), (i) the Company shall be released from its obligations
under Section 5.01(c), Sections 4.05 through 4.18, inclusive, and any covenant
added to this Indenture subsequent to the Issue Date pursuant to Section 9.01
hereof, (ii) the occurrence of any event specified in Section 6.01(c) or Section
6.01(d) hereof, with respect to any of Section 5.01(c), Sections 4.05
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through 4.18, inclusive, and any covenant added to this Indenture subsequent to
the Issue Date pursuant to Section 9.01 hereof, shall be deemed not to be or
result in an Event of Default, in each case with respect to such Notes as
provided in this Section 8.03 on and after the date the conditions set forth in
Section 8.04 hereof are satisfied (hereinafter called "Covenant Defeasance").
For this purpose, such Covenant Defeasance means that, with respect to such
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 specified
Section (to the extent so specified in the case of Sections 6.01(c) and 6.01(d)
hereof), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document; but the remainder of this
Indenture and such Notes shall be unaffected thereby.
SECTION 8.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 8.02 or
Section 8.03 hereof to the outstanding Notes:
(a) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for,
and dedicated solely to the benefits of the Holders of such Notes, (i)
money in an amount, or (ii) U.S. Government Obligations which through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before
the due date of any payment, money in an amount, or (iii) a combination
thereof, in each case sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any
installment of interest on such Notes on the respective Stated
Maturities thereof, in accordance with the terms of this Indenture and
such Notes.
(b) In the event of an election to have Section 8.02 hereof
apply to the outstanding Notes, the Company shall have delivered to the
Trustee an Opinion of Counsel stating that (i) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture, there has been a
change in the applicable Federal income tax law, in either case (i) or
(ii) to the effect that, and based thereon such opinion shall confirm
that, the Holders of such Notes will not recognize gain or loss for
Federal income tax purposes as a result of the deposit, Defeasance and
discharge to be effected with respect to such Notes and will be subject
to Federal income tax on the same amount, in the same manner and at the
same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
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(c) In the event of an election to have Section 8.03 hereof
apply to the outstanding Notes, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of such
Notes will not recognize gain or loss for Federal income tax purposes
as a result of the deposit and Covenant Defeasance to be effected with
respect to such Notes and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would be the
case if such deposit and Covenant Defeasance were not to occur.
(d) No Default or Event of Default with respect to the
outstanding Notes shall have occurred and be continuing at the time of
such deposit after giving effect thereto or at any time on or prior to
the 91st calendar day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until
after such 91st calendar day).
(e) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming for the purpose of this clause (e) that all
Notes are in default within the meaning of such Act).
(f) Such Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it
is bound.
(g) Such Defeasance or Covenant Defeasance shall not result in
the trust arising from such deposit constituting an investment company
within the meaning of the Investment Company Act of 1940, as amended,
unless such trust shall be registered under such Act or exempt from
registration thereunder.
(h) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
SECTION 8.05. Deposited Money and U.S. Government Obligations to be
Held in Trust; Miscellaneous Provisions. All money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee pursuant
to Section 8.04 hereof 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 such
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 any premium and
interest, but money so held in trust 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
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or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 8.04 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon Company
Order any money or U.S. Government Obligations held by it as provided in Section
8.04 hereof 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 that would then be required to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be,
with respect to the outstanding Notes.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money in accordance with this Article VIII with respect to
any Notes by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application then
the obligations under this Indenture and such Notes from which the Company has
been discharged or released pursuant to Section 8.02 or 8.03 hereof shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article VIII with respect to such Notes, until such time as the Trustee or
Paying Agent is permitted to apply all money held in trust pursuant to Section
8.05 hereof with respect to such Notes in accordance with this Article VIII;
provided that if the Company makes any payment of principal of or any premium or
interest on any such Note following such reinstatement of its obligations, the
Company shall be subrogated to the rights (if any) of the Holders of such Notes
to receive such payment from the money so held in trust.
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Holders. The Company and the
Trustee may, at any time, and from time to time, without notice to or consent of
any Holder of Notes, enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by such successor of the covenants of the
Company herein and contained in the Notes; or
(b) to add to the covenants of the Company, for the benefit of
the Holders of all of the Notes, or to surrender any right or power
herein conferred upon the Company; or
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(c) to add any additional Events of Default; or
(d) to provide for uncertificated Notes in addition to or in
place of Certificated Notes; or
(e) to evidence and provide for the acceptance of appointment
hereunder of a successor Trustee; or
(f) to secure the Notes; or
(g) to cure any ambiguity herein, or to correct or supplement
any provision hereof which may be inconsistent with any other provision
hereof or to add any other provisions with respect to matters or
questions arising under this Indenture; provided that such actions
shall not adversely affect the interests of the Holders of Notes in any
material respect; or
(h) to comply with the requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the
Trust Indenture Act.
SECTION 9.02. With Consent of Holders. With the consent of the
Holders of not less than a majority in principal amount of the outstanding
Notes, by Act of said Holders delivered to the Company and the Trustee, the
Company and the Trustee may enter into one or more 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; provided that no such supplemental indenture
shall, without the consent of the Holders of not less than 75 percent in
principal amount of the outstanding Notes, modify in any manner the obligations
of the Company to make offers to purchase Notes and purchase Notes pursuant to
Section 4.07 or Section 4.08 hereof; and provided, further, that no such
supplemental indenture shall, without the consent of the Holder of each
outstanding Note,
(a) change the Stated Maturity of the principal of, or any
installment of Interest on, any Note, or reduce the principal amount
thereof (or any premium, if any), or the interest thereon, that would
be due and payable upon Maturity thereof, or change the place of
payment where, or the coin or currency in which, any Note or any
premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Maturity thereof; or
(b) reduce the percentage in principal amount of the
outstanding Notes, the consent of whose Holders is required for any
such supplemental indenture; or
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(c) modify any of the provisions of Section 6.04 hereof,
except to increase any percentage set forth therein or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each outstanding Note affected
thereby; or
(d) subordinate in right of payment, or otherwise subordinate,
the Notes to any other Indebtedness; or
(e) modify any of the provisions of this Section 9.02, except
to increase any percentage set forth herein or to provide that certain
other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each outstanding Note affected thereby.
It shall not be necessary for any Act of Holders under this
Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 9.03. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article IX, 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.
SECTION 9.04. Compliance with Trust Indenture Act. Every
amendment or supplement to this Indenture or the Notes shall comply with the
Trust Indenture Act as then in effect.
SECTION 9.05. Revocation and Effect of Consents and Waivers. A
consent to an amendment, supplement or a waiver by a Holder of a Note shall bind
the Holder and every subsequent Holder of such Note or portion of such Note that
evidences the same debt as the consenting Holder's Note, even if notation of the
consent or waiver is not made on such Note; provided that any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Note or
portion of such Note if the Trustee receives the notice of revocation before the
date the amendment, supplement or waiver becomes effective. After an amendment,
supplement or waiver becomes effective pursuant to this Article IX, it shall
bind every Holder.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to give their consent
or take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who
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were Holders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 calendar days after such record date.
SECTION 9.06. Notation on or Exchange of Notes. If a
supplemental indenture changes the terms of a Note, the Trustee may require the
Holder thereof to deliver such Note to the Trustee. The Trustee may place an
appropriate notation on such Note regarding the changed terms and return it to
the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for such Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Note shall not affect the validity of such amendment
or supplement.
SECTION 9.07. Trustee to Execute Supplemental Indentures. The
Trustee shall execute any supplemental indenture authorized pursuant to this
Article IX if such supplemental indenture does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may,
but shall not be required to, execute such supplemental indenture. In executing
any supplemental indenture, the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.01
hereof) shall be fully protected in relying upon, an Officers' Certificate
(which need only cover the matters set forth in clause (a) below) and an Opinion
of Counsel provided by the Company stating that:
(a) such supplemental indenture is authorized or permitted by
this Indenture and that all conditions precedent to the execution,
delivery and performance of such supplemental indenture have been
satisfied;
(b) the Company has all necessary corporate power and
authority to execute and deliver the supplemental indenture and that
the execution, delivery and performance of such supplemental indenture
has been duly authorized by all necessary corporate action of the
Company;
(c) the execution, delivery and performance of the
supplemental indenture do not conflict with, or result in the breach of
or constitute a default under any of the terms, conditions or
provisions of (i) the Indenture, (ii) the charter documents and by-laws
of the Company, or (iii) any material agreement or instrument to which
the Company is subject;
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(d) to the best knowledge and belief of legal counsel writing
such Opinion of Counsel, the execution, delivery and performance of the
supplemental indenture do not conflict with, or result in the breach of
any of the terms, conditions or provisions of (i) any law or regulation
applicable to the Company, or (ii) any material order, writ, injunction
or decree of any court or governmental instrumentality applicable to
the Company;
(e) such supplemental indenture has been duly and validly
executed and delivered by the Company, and the Indenture together with
such supplemental indenture constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and general equitable
principles; and
(f) the Indenture together with such amendment or supplement
complies with the Trust Indenture Act.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls. If and to the
extent that any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by, or with another provision (an "incorporated provision")
included in this Indenture by operation of, Sections 310 to 318, inclusive, of
the Trust Indenture Act, such imposed duties or incorporated provision shall
control.
SECTION 10.02. Notices. Any notice or communication shall be
in writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows: if to the Company: American Communications
Services, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Secretary; if to the Trustee: The Chase Manhattan
Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Corporate Trustee Administration Department.
The Company or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications. Any notice or communication mailed to a Holder shall be sent to
the Holder by first class mail, postage prepaid, at the Holder's address as it
appears in the Security Register and shall be duly given if so sent within the
time prescribed. Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed to the Company, the Trustee or a Holder in
the manner provided above, it is duly given, whether or not the addressee
receives it. In case by reason of the suspension
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of regular mail service or by reason of any other cause it shall be
impracticable to give notice by mail to Holders, then such notification as shall
be made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.
SECTION 10.03. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee: (a) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and (b) an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 10.04. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture (other than pursuant to Section 4.19
hereof) shall include: (a) a statement that the individual making such
certificate or opinion has read such covenant or condition; (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (c) a statement that, in the opinion of such individual, such person has
made such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (d) a statement as to whether or not, in the opinion of
such individual, such covenant or condition has been complied with.
SECTION 10.05. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of Holders, and
any Registrar and Paying Agent may make reasonable rules for their functions;
provided that no such rule shall conflict with terms of this Indenture or the
Trust Indenture Act.
SECTION 10.06. Payments on Business Days. If a payment
hereunder is scheduled to be made on a date that is not a Business Day, payment
shall be made on the next succeeding day that is a Business Day, and no interest
shall accrue with respect to that payment during the intervening period. If a
regular record date is a date that is not a Business Day, such record date shall
not be affected.
SECTION 10.07. Governing Law. THIS INDENTURE AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
SECTION 10.08. No Recourse Against Others. No director,
officer, employee, incorporator or stockholder of the Company, as such, shall
have any liability for any
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obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation,
solely by reason of its status as a director, officer, employee, incorporator or
stockholder of the Company. By accepting a Note, each Holder waives and releases
all such liability (but only such liability) as part of the consideration for
issuance of such Note to such Holder.
SECTION 10.09. Successors. All agreements of the Company in
this Indenture and the Notes shall bind its successors and assigns whether so
expressed or not. All agreements of the Trustee in this Indenture shall bind its
successors and assigns whether so expressed or not.
SECTION 10.10. Counterparts. This Indenture may be executed in
any number of counterparts and by the parties thereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
SECTION 10.11. Table of Contents; Headings. The table of
contents, cross-reference table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
SECTION 10.12. Severability. 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 10.13. Further Instruments and Acts. Upon request of
the Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
AMERICAN COMMUNICATIONS SERVICES, INC.
By:
------------------------------------
Name:
Title:
[Corporate Seal]
Attest:
-------------------------
THE CHASE MANHATTAN BANK, as Trustee
By:
------------------------------------
Name:
Title:
[Corporate Seal]
Attest:
-------------------------
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STATE OF )
) SS.:
COUNTY OF )
On the day of , 1997, before me personally came
, to me known, who, being by me duly sworn, did depose and say that
he is of American Communications Services, Inc., one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
-----------------------------------
Notary Public
State of
My commission expires / /
[SEAL]
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS.:
COUNTY OF NEW YORK )
On the day of , 1997, before me personally came
, to me known, who, being by me duly sworn, did depose and say that
he is of The Chase Manhattan Bank, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
------------------------------------
Notary Public
State of
My commission expires / /
[SEAL]
104
EXHIBIT A
FORM OF INITIAL GLOBAL NOTE
AMERICAN COMMUNICATIONS SERVICES, INC.
No._______ CUSIP No.
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER THEREOF OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR
TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3)
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY, IF
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THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF
THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO AMERICAN COMMUNICATIONS SERVICES,
INC. OR THE REGISTRAR FOR REGISTRATION OF TRANSFER OR EXCHANGE AND ANY
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
ENTITY AS HAS BEEN REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS HAS BEEN REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFER OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, AND NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
INTERESTS IN THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.06 OF THE
INDENTURE, DATED AS OF JULY 23, 1997, BETWEEN AMERICAN COMMUNICATIONS
SERVICES, INC. AND THE TRUSTEE NAMED THEREIN, PURSUANT TO WHICH THIS
NOTE WAS ISSUED.
GLOBAL NOTE
REPRESENTING 13-3/4% SENIOR NOTES DUE 2007
American Communications Services, Inc., a Delaware corporation, for
value received, hereby promises to pay to CEDE & CO., or its registered assigns,
the principal sum indicated on Schedule A hereof, on July 15, 2007.
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Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purposes.
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IN WITNESS WHEREOF, the Company has caused this Note to be
duly executed.
Dated:
AMERICAN COMMUNICATIONS
SERVICES, INC.
By:
-------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE CHASE MANHATTAN BANK,
as Trustee, certifies that this is one of
the Notes referred to in the Indenture.
By:
----------------------------
Authorized Officer
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REVERSE SIDE OF FORM OF INITIAL GLOBAL NOTE
AMERICAN COMMUNICATIONS SERVICES, INC.
GLOBAL NOTE
REPRESENTING 13-3/4% SENIOR NOTES DUE 2007
1. Indenture.
This Note is one of a duly authorized issue of debt securities
of the Company (as defined below) designated as its "13-3/4% Senior Notes due
2007" (herein called the "Notes") limited in aggregate principal amount at
Stated Maturity to $220,000,000, issued under an indenture dated as of July 23,
1997 (as amended or supplemented from time to time, the "Indenture") between the
Company and The Chase Manhattan Bank, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and each
Holder of Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The summary of the terms of this Note contained
herein does not purport to be complete and is qualified by reference to the
Indenture. All terms used in this Note which are not defined herein shall have
the meanings assigned to them in the Indenture.
The Indenture imposes certain limitations on the ability of
the Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
enter into or permit certain transactions with Affiliates, create or incur
Liens, enter into or permit certain Sale and Leaseback Transactions and make
Asset Sales. The Indenture also imposes limitations on the ability of the
Company to consolidate or merge with or into any other Person or permit any
other Person to merge with or into the Company, or sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all of the Property
of the Company to any other Person and on the ability of the Company's
Restricted Subsidiaries to issue Capital Stock.
2. Principal and Interest.
American Communications Services, Inc., a Delaware corporation
(such corporation, and its successors and assigns under the Indenture, being
herein called the "Company"), promises to pay the principal amount set forth on
Schedule A of this Note to the Holder hereof on July 15, 2007.
The Company shall pay interest at a rate of 13-3/4%, per
annum, from July 23, 1997, or from the most recent Interest Payment Date
thereafter to which interest has been paid or duly provided for, semiannually on
January 15 and July 15 of each year,
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commencing on January 15, 1998, in cash, to the Holder hereof until the
principal amount hereof is paid or made available for payment. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, subject to certain exceptions provided in the Indenture, be paid to the
Person in whose name this Note (or the Note in exchange or substitution for
which this Note was issued) is registered at the close of business on the Record
Date for interest payable on such Interest Payment Date. The Record Date for any
interest payment is the close of business on January 1 or July 1, as the case
may be, whether or not a Business Day, immediately preceding the Interest
Payment Date on which such interest is payable. Any such interest not so
punctually paid or duly provided for ("Defaulted Interest") shall forthwith
cease to be payable to the Holder on such Record Date and shall be paid as
provided in Section 2.11 of the Indenture. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
Each payment of interest in respect of an Interest Payment
Date will include interest accrued through the day before such Interest Payment
Date. If an Interest Payment Date falls on a day that is not a Business Day, the
interest payment to be made on such Interest Payment Date will be made on the
next succeeding Business Day with the same force and effect as if made on such
Interest Payment Date, and no additional interest will accrue as a result of
such delayed payment.
If this Note is exchanged in an Exchange Offer (as such term
is defined in the Registration Rights Agreement (as defined herein)) prior to
the Record Date for the first Interest Payment Date following such exchange,
accrued and unpaid interest, if any, on this Note, up to but not including the
date of issuance of the Exchange Note or Exchange Notes issued in exchange for
this Note, shall be paid on the first Interest Payment Date for such Exchange
Note or Exchange Notes to the Holder or Holders of such Exchange Note or
Exchange Notes on the first Record Date with respect to such Exchange Note or
Exchange Notes. If this Note is exchanged in an Exchange Offer subsequent to the
Record Date for the first Interest Payment Date following such exchange but on
or prior to such Interest Payment Date, then any such accrued and unpaid
interest with respect to this Note and any accrued and unpaid interest on the
Exchange Note or Exchange Notes issued in exchange for this Note, through the
day before such Interest Payment Date, shall be paid on such Interest Payment
Date to the Holder of this Note on such Record Date.
3. Additional Interest.
The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated July 23, 1997, among the Company and the
Initial Purchasers (the "Registration Rights Agreement"), which agreement is
attached to the Indenture as Exhibit E thereto.
If the Company fails to file a Registration Statement within
the time periods specified in the Registration Rights Agreement or if the
Exchange Offer Registration State-
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ment or the Shelf Registration Statement fails to become effective, then, as
liquidated damages, additional interest (the "Additional Interest") shall become
payable in respect of the Notes as follows:
(a) if (A) neither the Exchange Offer Registration Statement
nor the Shelf Registration Statement is filed with the Commission within 60 days
following the Issue Date or (B) notwithstanding that the Company has consummated
or will consummate a Exchange Offer, the Company is required to file a Shelf
Registration Statement and such Shelf Registration Statement is not filed on or
prior to the date required by the Registration Rights Agreement, then commencing
on the day after either such required filing date, Additional Interest shall be
paid on the principal amount of the Notes at a rate per annum equal to 0.5% of
the principal amount of the Notes; or
(b) if (A) neither the Exchange Offer Registration Statement
nor a Shelf Registration Statement is declared effective by the Commission
within 120 days following the Closing Date or (B) notwithstanding that the
Company has consummated or will consummate a Exchange Offer, the Company is
required to file a Shelf Registration Statement and such Shelf Registration
Statement is not declared effective by the Commission on or prior to the 120th
day following the Closing Date, then, commencing on the day after either such
required effective date, Additional Interest shall be paid on the principal
amount of the Notes at a rate per annum equal to 0.5% of the principal amount of
the Notes; or
(c) if applicable, the Shelf Registration Statement has been
declared effective and such Shelf Registration Statement ceases to be effective
at any time prior to the third anniversary of the Issue Date (other than after
such time as all Notes have been disposed of thereunder and other than during
any Suspension Period (as defined in the Registration Right Agreement)), then
Additional Interest shall be paid on the principal amount of the Notes at a rate
per annum equal to 0.5% of the principal amount of the Notes commencing on the
day such Shelf Registration Statement ceases to be effective;
provided, however that the Additional Interest rate on the
Notes may not exceed in the aggregate 1.5% per annum of the principal amount;
provided, further, however, that (1) upon the filing of the Exchange Offer
Registration Statement or a Shelf Registration Statement (in the case of clause
(a) above), (2) upon the effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (b) above),
or (3) upon the effectiveness of the Shelf Registration Statement which had
ceased to remain effective (in the case of clause (c) above), Additional
Interest on the Notes as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue and the terms of the Notes
shall revert to their original terms.
Any amounts of Additional Interest due pursuant to clause (a),
(b) or (c) above will be payable in cash on January 15 and July 15 of each year.
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Except as expressly provided in this paragraph 3, Additional
Interest shall be treated as interest and any date on which Additional Interest
is due and payable shall be treated as an Interest Payment Date, for all
purposes under this Note and the Indenture.
4. Method of Payment.
The Company, through the Paying Agent, shall pay interest on
this Note to the registered Holder of this Note, as provided above. The Holder
must surrender this Note to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States of America
that at the time of payment is legal tender for payment of all debts public and
private. Principal and interest will be payable at the office of the Paying
Agent but, at the option of the Company, interest may be paid by check mailed to
the registered Holders at their registered addresses.
5. Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar
under the Indenture. The Company may, upon written notice to the Trustee,
appoint and change any Paying Agent or Registrar. The Company or any of its
subsidiaries may act as Paying Agent or Registrar.
6. Optional Redemption.
The Notes may not be redeemed prior to July 15, 2002.
Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 calendar days, nor more than
60 calendar days' notice, at the prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest thereon (if any) at
the applicable Redemption Date, if redeemed during the twelve-month period
beginning July 15 of the years indicated below:
Year Percentage
---- ----------
2002 106.875%
2003 105.156%
2004 103.438%
2005 101.719%
2006 and thereafter 100.000%
Notwithstanding the foregoing, at any time prior to July 15,
2000, the Company may redeem up to 35% of the aggregate principal amount of
Notes with the net proceeds of one or more Equity Offerings of the Company at a
redemption price equal to 113.750% of the aggregate principal amount thereof, on
the date of redemption; provided, however, that, after giving effect to any such
redemption, at least $143 million aggregate principal amount of the Notes remain
outstanding.
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7. Notice of Redemption.
At least 30 calendar days but not more than 60 calendar days
before a Redemption Date, the Company will send a notice of redemption,
first-class mail, postage prepaid, to Holders of Notes to be redeemed at the
addresses of such Holders as they appear in the Security Register.
If less than all of the Notes are to be redeemed at any time,
the Notes to be redeemed will be chosen by the Trustee in accordance with the
Indenture. If any Note is redeemed subsequent to a Record Date with respect to
any Interest Payment Date specified above and on or prior to such Interest
Payment Date, then any accrued interest will be paid on such Interest Payment
Date to the Holder of the Note on such Record Date. If money in an amount
sufficient to pay the Redemption Price of all Notes (or portions thereof) to be
redeemed on the Redemption Date is deposited with the Paying Agent on or before
the applicable Redemption Date and certain other conditions are satisfied,
interest on the Notes to be redeemed on the applicable Redemption Date will
cease to accrue.
The Notes are not subject to any sinking fund.
8. Repurchase at the Option of Holders upon Change of Control.
Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to purchase such Holder's
Notes, in whole, or in part in a principal amount that is an integral multiple
of $1,000, pursuant to a Change of Control Offer, at a purchase price in cash
equal to 101% of the aggregate principal amount thereof on any Change of Control
Payment Date, plus accrued and unpaid interest, if any, to the Change of Control
Payment Date.
Within 30 calendar days following any Change of Control, the
Company shall send, or cause to be sent, by first-class mail, postage prepaid, a
notice regarding the Change of Control Offer to each Holder of Notes. The Holder
of this Note may elect to have this Note or a portion hereof in an authorized
denomination purchased by completing the form entitled "Option of Holder to
Require Purchase" appearing below and tendering this Note pursuant to the Change
of Control Offer. Unless the Company defaults in the payment of the Change of
Control Purchase Price with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Change of Control Offer will cease to
accrue interest from and after the Change of Control Payment Date.
9. Repurchase at the Option of Holders upon Asset Sale.
If at any time the aggregate amount of Excess Proceeds
(including any Net Cash Proceeds to be applied to the permanent reduction of
Indebtedness represented by the 2005 Notes and the 2006 Notes) calculated as of
such date exceeds $10 million, the Company shall, within 30 days of the date the
amount of Excess Proceeds exceeds $10 million,
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use such Excess Proceeds to make an offer to purchase (an "Asset Sale Offer") on
a pro rata basis, from all holders, outstanding Notes, 2005 Notes and 2006 Notes
in an aggregate principal amount equal to the maximum principal amount that may
be purchased out of Excess Proceeds, at a purchase price (the "Offer Purchase
Price") in cash equal to (a) with respect to the Existing Notes, 100% of the
Accreted Value thereof (as defined in the relevant indenture) and (b) with
respect to the Notes, 100% of the principal amount thereof, plus, in each case,
accrued and unpaid interest, if any, to the purchase date, in accordance with
the procedures set forth in the relevant indenture. Upon completion of an Asset
Sale Offer (including payment of the Offer Purchase Price), any surplus Excess
Proceeds that were the subject of such offer shall cease to be Excess Proceeds,
and the Company may then use such amounts for general corporate purposes.
Within 30 calendar days of the date the amount of Excess
Proceeds exceeds $10,000,000, the Company shall send, or cause to be sent, by
first-class mail, postage prepaid, a notice regarding the Asset Sale Offer to
each Holder of Notes. The Holder of this Note may elect to have this Note or a
portion hereof in an authorized denomination purchased by completing the form
entitled "Option of Holder to Require Purchase" appearing below and tendering
this Note pursuant to the Asset Sale Offer. Unless the Company defaults in the
payment of the Offer Purchase Price with respect thereto, all Notes or portions
thereof selected for payment pursuant to the Asset Sale Offer will cease accrue
interest from and after the Asset Sale Payment Date.
10. The Global Note.
So long as this Global Note is registered in the name of the
Depositary or its nominee, members of, or participants in, the Depositary
("Agent Members") shall have no rights under the Indenture with respect to this
Global Note held on their behalf by the Depositary or the Trustee as its
custodian, 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 this Global Note
for all purposes. Notwithstanding the foregoing, nothing herein shall (i)
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 (ii) impair, as between the Depositary and its
Agent Members, the operation of customary practices governing the exercise of
the rights of a Holder of Notes.
The Holder of this Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests in this Global Note through Agent Members, to take any action which a
Holder of Notes is entitled to take under the Indenture or the Notes.
Whenever, as a result of optional redemption by the Company, a
Change of Control Offer, an Asset Sale Offer, a Registered Exchange Offer or an
exchange for Certificated Notes, this Global Note is redeemed, repurchased or
exchanged in part, this Global
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Note shall be surrendered by the Holder thereof to the Trustee who shall cause
an adjustment to be made to Schedule A hereof so that the principal amount of
this Global Note will be equal to the portion not redeemed, repurchased or
exchanged and shall thereafter return this Global Note to such Holder; provided
that this Global Note shall be in a principal amount of $1,000 or an integral
multiple of $1,000.
11. The Registered Exchange Offer.
Any Initial Notes represented by this Global Note which are
presented to the Registrar for exchange pursuant to the Registered Exchange
Offer shall be exchanged for a Global Note representing Exchange Notes of equal
principal amount upon surrender of this Global Note to the Registrar in
accordance with the terms of the Registered Exchange Offer and the Indenture.
12. Transfer and Exchange.
By its acceptance of any Note represented by a certificate
bearing the Private Placement Legend, each Holder of, and beneficial owner of an
interest in, such a Note acknowledges the restrictions on transfer of such a
Note set forth in the Private Placement Legend and under the heading "Transfer
Restrictions" in the Final Memorandum, and agrees that it will transfer such a
Note only in accordance with the Private Placement Legend and the restrictions
set forth under the heading "Transfer Restrictions" in the Final Memorandum.
In connection with any registration of transfer of a Note
bearing the Private Placement Legend other than to a Person whom the Holder
reasonably believes to be a "qualified institutional buyer" under the Securities
Act, such Holder shall deliver to the Company such satisfactory evidence, which
may include an opinion of independent counsel licensed to practice law in the
State of New York, as reasonably may be requested by the Company to confirm that
such transfer is being made in accordance with the limitations set forth in the
Private Placement Legend. In the event the Company reasonably determines that
any such transfer is not in accordance with the Private Placement Legend, the
Company shall so inform the Registrar who shall not register such transfer;
provided that the Registrar shall not be required to determine (but may rely on
a determination made by the Company with respect to) the sufficiency of any such
evidence.
Upon the registration of transfer, exchange or replacement of
a Note not bearing the Private Placement Legend, the Trustee shall deliver a
Note that does not bear the Private Placement Legend. Upon the registration of
transfer, exchange or replacement of a Note bearing the Private Placement
Legend, the Trustee shall deliver a Note bearing the Private Placement Legend,
unless such legend may be removed from such Note as provided in the next
sentence. The Private Placement Legend may be removed from a Note if there is
delivered to the Company such satisfactory evidence, which may include an
opinion of independent counsel licensed to practice law in the State of New
York, as reasonably
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may be requested by the Company to confirm that neither such legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
of such Note will not violate the registration and prospectus delivery
requirements of the Securities Act; provided that the Trustee shall not be
required to determine (but may rely on a determination made by the Company with
respect to) the sufficiency of any such evidence. Upon provision of such
evidence, the Trustee shall authenticate and deliver in exchange for such Note,
a Note or Notes (representing the same aggregate principal amount of the Note
being exchanged) without such legend. If the Private Placement Legend has been
removed from a Note, as provided above, no other Note issued in exchange for all
or any part of such Note shall bear such legend, unless the Company has
reasonable cause to believe that such other Note represents a "restricted
security" within the meaning of Rule 144 and instructs the Trustee to cause a
legend to appear thereon.
The Holder of this Global Note shall, by acceptance of this
Global Note, agree that transfers of beneficial interests in this Global Note
may be effected only through a book entry system maintained by such Holder (or
its agent), and that ownership of a beneficial interest in the Notes represented
thereby shall be required to be reflected in book entry form.
Transfers of this Global Note shall be limited to transfers in
whole, and not in part, to the Depositary, its successors and their respective
nominees. Interests of beneficial owners in this Global Note may be transferred
in accordance with the rules and procedures of the Depositary (or its
successors).
This Global Note will be exchanged by the Company for one or
more Certificated Notes if (a) the Depositary (i) has notified the Company that
it is unwilling or unable to continue as, or ceases to be, a clearing agency
registered under Section 17A of the Exchange Act and (ii) a successor to the
Depositary registered as a clearing agency under Section 17A of the Exchange Act
is not able to be appointed by the Company within 90 calendar days or (b) the
Depositary is at any time unwilling or unable to continue as Depositary and a
successor to the Depositary is not able to be appointed by the Company within 90
calendar days. If an Event of Default occurs and is continuing, the Company
shall, at the request of the Holder hereof, exchange all or part of this Global
Note for one or more Certificated Notes; provided that the principal amount of
each of such Certificated Notes and this Global Note, after such exchange, shall
be $1,000 or an integral multiple thereof. Whenever this Global Note is
exchanged as a whole for one or more Certificated Notes, it shall be surrendered
by the Holder to the Trustee for cancellation. Whenever this Global Note is
exchanged in part for one or more Certificated Notes, it shall be surrendered by
the Holder to the Trustee and the Trustee shall make the appropriate notations
thereon pursuant to Section 2.05(c) of the Indenture. All Certificated Notes
issued in exchange for this Global Note or any portion hereof shall be
registered in such names as the Depositary shall instruct the Trustee. Any
Certificated Notes issued in exchange for this Global Note shall include the
Private Placement Legend except as set forth in Section 2.06(a)(iii) of the In-
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denture. Interests in this Global Note may not be exchanged for Certificated
Notes other than as provided in this paragraph.
Prior to the effectiveness of a Shelf Registration Statement
or following the suspension or termination thereof, the Holder of this Note (or
holders of interests therein) and prospective purchasers designated by such
Holder (or such holders of interests therein) shall have the right to obtain
from the Company upon request by such Holder (or such holders of interests) or
prospective purchasers, during any period in which the Company is not subject to
Section 13 or 15(d) of the Exchange Act, or exempt from reporting pursuant to
12g3-2(b) under the Exchange Act, the information required by paragraph
(d)(4)(i) of Rule 144A in connection with any transfer or proposed transfer of
such Note or interest.
13. Denominations.
The Notes are issuable only in registered form without coupons
in denominations of $1,000 and integral multiples thereof of principal amount.
14. 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, Holders entitled to the money must look only to
the Company and not to the Trustee for payment unless such abandoned property
law designates another Person.
15. Discharge and Defeasance.
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Notes and the Indenture if
the Company irrevocably deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Notes to redemption
or maturity, as the case may be.
16. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Notes may be amended with the written consent of the
Holders of at least a majority in principal amount of the outstanding Notes and
(ii) any past Default and its consequences may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Notes. Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder of Notes, the Company and the Trustee may
amend the Indenture or the Notes (i) to evidence the succession of another
Person to the Company and the assumption by such successor of the covenants of
the company under the Indenture and contained in the Notes; (ii) to add
additional covenants or to surrender rights and powers conferred on the Company;
(iii) to add any additional Events of Default; (iv) to provide for
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uncertificated Notes in addition to or in place of Certificated Notes; (v) to
evidence and provide for the acceptance of appointment under the Indenture of a
successor Trustee; (vi) to secure the Notes; (vii) to cure any ambiguity in the
Indenture, to correct or supplement any provision in the Indenture which may be
inconsistent with any other provision therein or to add any other provisions
with respect to matters or questions arising under the Indenture, provided that
such actions shall not adversely affect the interests of the Holders in any
material respect; or (viii) to comply with the requirements of the Commission in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act.
17. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the Notes, subject to
certain limitations, may declare all the Notes to be immediately due and
payable. Certain events of bankruptcy or insolvency are Events of Default and
shall result in the Notes being immediately due and payable upon the occurrence
of such Events of Default without any further act of the Trustee or any Holder.
Holders of Notes 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 security.
Subject to certain limitations, Holders of a majority in principal amount of the
Notes may direct the Trustee in its exercise of any trust or power under the
Indenture. The Holders of a majority in principal amount of the outstanding
Notes, by written notice to the Company and the Trustee, may rescind any
declaration of acceleration and its consequences if the rescission would not
conflict with any judgment or decree, and if all Events of Default have been
cured or waived except nonpayment of principal and interest that has become due
solely because of the acceleration.
18. Individual Rights of Trustee.
Subject to certain limitations imposed by the Trust Indenture
Act, the Trustee or any Paying Agent or Registrar, in its individual or any
other capacity, may become the owner or pledgee of Notes and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee, Paying Agent or Registrar, as the case may be, under the Indenture.
19. No Recourse Against Certain Others.
No director, officer, employee, incorporator or stockholder of
the Company, as such, shall 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, solely by reason of its
status as a director, officer, employee, incorporator or stockholder of the
Company. By accepting a Note, each Holder waives and releases all
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such liability (but only such liability) as part of the consideration for
issuance of such Note to such Holder.
20. Governing Law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN SAID STATE.
The Company will furnish to any Holder of Notes upon written
request and without charge to the Holder a copy of the Indenture which has in it
the text of this Note. Requests may be made to:
American Communications Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
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SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount of this Note shall be $ .
The following decreases/increase in the principal amount of this Note have
been made:
Total Principal Notation
Amount Made by
Date of Decrease in Increase in Following such or on
Decrease/ Principal Principal Decrease/ Behalf of
Increase Amount Amount Increase Trustee
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ASSIGNMENT
(To be executed by the registered Holder
if such Holder desires to transfer this Note)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto
---------------
PLEASE INSERT SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER OF TRANSFEREE
----------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
this Note, together with all right, title and interest herein, and does hereby
irrevocably constitute and appoint Attorney to transfer this Note
------------
on the Security Register, with full power of substitution.
--------------------------------------------------------------------------------
Dated:
----------------------------
---------------------------------- --------------------------------
Signature of Holder Signature Guaranteed:
Commercial Bank or Trust Company
or Member Firm of the New York
Stock Exchange, Inc.
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
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OPTION OF HOLDER TO ELECT PURCHASE
(check as appropriate)
/ / In connection with the Change of Control Offer made pursuant to Section
4.07 of the Indenture, the undersigned hereby elects to have
/ / $ ($1,000 in principal amount or an integral multiple
thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or an amount in cash equal to
101% with respect to the principal amount indicated in the preceding
sentence or the principal amount indicated in the preceding sentences,
as the case may be, plus accrued and unpaid interest thereon, if any,
to the Change of Control Payment Date.
/ / In connection with the Asset Sale Offer made pursuant to Section 4.08
of the Indenture, the undersigned hereby elects to have
/ / $ ($1,000 in principal amount or an integral multiple
thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or an amount in cash equal to 100% with
respect to the principal amount indicated in the preceding sentence, plus
accrued and unpaid interest thereon, if any, to the Asset Sale Payment Date.
Dated:
-------------------
-------------------------- ------------------------------------
Signature of Holder Signature Guaranteed:
Commercial Bank or Trust Company
or Member Firm of the New York
Stock Exchange, Inc.
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
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EXHIBIT B
FORM OF INITIAL CERTIFICATED NOTE
AMERICAN COMMUNICATIONS SERVICES, INC.
No._______ CUSIP No.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER THEREOF OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR
TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3)
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY, IF
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THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
13-3/4% SENIOR NOTES DUE 2007
American Communications Services, Inc., a Delaware
corporation, for value received, hereby promises to pay to CEDE & CO., or its
registered assigns, $ , on July 15, 2007.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purposes.
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IN WITNESS WHEREOF, the Company has caused this Note to be
duly executed.
Dated:
AMERICAN COMMUNICATIONS SERVICES, INC.
By:
----------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE CHASE MANHATTAN BANK,
as Trustee, certifies that this is one of
the Notes referred to in the Indenture.
By:
------------------------------------
Authorized Officer
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REVERSE SIDE OF FORM OF INITIAL CERTIFICATED NOTE
AMERICAN COMMUNICATIONS SERVICES, INC.
CERTIFICATED NOTE
13-3/4% SENIOR NOTES DUE 2007
1. Indenture.
This Note is one of a duly authorized issue of debt securities
of the Company (as defined below) designated as its "13-3/4% Senior Notes due
2007" (herein called the "Notes") limited in aggregate principal amount at
Stated Maturity to $220,000,000, issued under an indenture dated as of July 23,
1997 (as amended or supplemented from time to time, the "Indenture") between the
Company and The Chase Manhattan Bank, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and each
Holder of Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The summary of the terms of this Note contained
herein does not purport to be complete and is qualified by reference to the
Indenture. All terms used in this Note which are not defined herein shall have
the meanings assigned to them in the Indenture.
The Indenture imposes certain limitations on the ability of
the Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
enter into or permit certain transactions with Affiliates, create or incur
Liens, enter into or permit certain Sale and Leaseback Transactions and make
Asset Sales. The Indenture also imposes limitations on the ability of the
Company to consolidate or merge with or into any other Person or permit any
other Person to merge with or into the Company, or sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all of the Property
of the Company to any other Person and on the ability of the Company's
Restricted Subsidiaries to issue Capital Stock.
2. Principal and Interest.
American Communications Services, Inc., a Delaware corporation
(such corporation, and its successors and assigns under the Indenture, being
herein called the "Company"), promises to pay $ to the Holder hereof on
July 15, 2007.
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The Company shall pay interest at a rate of 13-3/4%, per
annum, from July 23, 1997, or from the most recent Interest Payment Date
thereafter to which interest has been paid or duly provided for, semiannually on
January 15 and July 15 of each year, commencing on January 15, 1998, in cash, to
the Holder hereof until the principal amount hereof is paid or made available
for payment. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, subject to certain exceptions provided in the
Indenture, be paid to the Person in whose name this Note (or the Note in
exchange or substitution for which this Note was issued) is registered at the
close of business on the Record Date for interest payable on such Interest
Payment Date. The Record Date for any interest payment is the close of business
on January 1 or July 1, as the case may be, whether or not a Business Day,
immediately preceding the Interest Payment Date on which such interest is
payable. Any such interest not so punctually paid or duly provided for
("Defaulted Interest") shall forthwith cease to be payable to the Holder on such
Record Date and shall be paid as provided in Section 2.11 of the Indenture.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
Each payment of interest in respect of an Interest Payment
Date will include interest accrued through the day before such Interest Payment
Date. If an Interest Payment Date falls on a day that is not a Business Day, the
interest payment to be made on such Interest Payment Date will be made on the
next succeeding Business Day with the same force and effect as if made on such
Interest Payment Date, and no additional interest will accrue as a result of
such delayed payment.
If this Note is exchanged in an Exchange Offer (as such term
is defined in the Registration Rights Agreement (as defined herein)) prior to
the Record Date for the first Interest Payment Date following such exchange,
accrued and unpaid interest, if any, on this Note, up to but not including the
date of issuance of the Exchange Note or Exchange Notes issued in exchange for
this Note, shall be paid on the first Interest Payment Date for such Exchange
Note or Exchange Notes to the Holder or Holders of such Exchange Note or
Exchange Notes on the first Record Date with respect to such Exchange Note or
Exchange Notes. If this Note is exchanged in an Exchange Offer subsequent to the
Record Date for the first Interest Payment Date following such exchange but on
or prior to such Interest Payment Date, then any such accrued and unpaid
interest with respect to this Note and any accrued and unpaid interest on the
Exchange Note or Exchange Notes issued in exchange for this Note, through the
day before such Interest Payment Date, shall be paid on such Interest Payment
Date to the Holder of this Note on such Record Date.
3. Additional Interest.
The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated July 23, 1997, among the Company and the
Initial Purchasers (the
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"Registration Rights Agreement"), which agreement is attached to the Indenture
as Exhibit E thereto.
If the Company fails to file a Registration Statement within
the time periods specified in the Registration Rights Agreement or if the
Exchange Offer Registration Statement or the Shelf Registration Statement fails
to become effective, then, as liquidated damages, additional interest (the
"Additional Interest") shall become payable in respect of the Notes as follows:
(a) if (A) neither the Exchange Offer Registration Statement
nor the Shelf Registration Statement is filed with the Commission within 60 days
following the Issue Date or (B) notwithstanding that the Company has consummated
or will consummate a Exchange Offer, the Company is required to file a Shelf
Registration Statement and such Shelf Registration Statement is not filed on or
prior to the date required by the Registration Rights Agreement, then commencing
on the day after either such required filing date, Additional Interest shall be
paid on the principal amount of the Notes at a rate per annum equal to 0.5% of
the principal amount of the Notes; or
(b) if (A) neither the Exchange Offer Registration Statement
nor a Shelf Registration Statement is declared effective by the Commission
within 120 days following the Closing Date or (B) notwithstanding that the
Company has consummated or will consummate a Exchange Offer, the Company is
required to file a Shelf Registration Statement and such Shelf Registration
Statement is not declared effective by the Commission on or prior to the 120th
day following the Closing Date, then, commencing on the day after either such
required effective date, Additional Interest shall be paid on the principal
amount of the Notes at a rate per annum equal to 0.5% of the principal amount of
the Notes; or
(c) if applicable, the Shelf Registration Statement has been
declared effective and such Shelf Registration Statement ceases to be effective
at any time prior to the third anniversary of the Issue Date (other than after
such time as all Notes have been disposed of thereunder and other than during
any Suspension Period (as defined in the Registration Right Agreement)), then
Additional Interest shall be paid on the principal amount of the Notes at a rate
per annum equal to 0.5% of the principal amount of the Notes commencing on the
day such Shelf Registration Statement ceases to be effective;
provided, however that the Additional Interest rate on the
Notes may not exceed in the aggregate 1.5% per annum of the principal amount;
provided, further, however, that (1) upon the filing of the Exchange Offer
Registration Statement or a Shelf Registration Statement (in the case of clause
(a) above), (2) upon the effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (b) above),
or (3) upon the effectiveness of the Shelf Registration Statement which had
ceased to remain
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effective (in the case of clause (c) above), Additional Interest on the Notes as
a result of such clause (or the relevant subclause thereof), as the case may be,
shall cease to accrue and the terms of the Notes shall revert to their original
terms.
Any amounts of Additional Interest due pursuant to clause (a),
(b) or (c) above will be payable in cash on January 15 and July 15 of each year.
Except as expressly provided in this paragraph 3, Additional
Interest shall be treated as interest and any date on which Additional Interest
is due and payable shall be treated as an Interest Payment Date, for all
purposes under this Note and the Indenture.
4. Method of Payment.
The Company, through the Paying Agent, shall pay interest on
this Note to the registered Holder of this Note, as provided above. The Holder
must surrender this Note to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States of America
that at the time of payment is legal tender for payment of all debts public and
private. Principal and interest will be payable at the office of the Paying
Agent but, at the option of the Company, interest may be paid by check mailed to
the registered Holders at their registered addresses.
5. Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar
under the Indenture. The Company may, upon written notice to the Trustee,
appoint and change any Paying Agent or Registrar. The Company or any of its
subsidiaries may act as Paying Agent or Registrar.
6. Optional Redemption.
The Notes may not be redeemed prior to July 15, 2002.
Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 calendar days, nor more than
60 calendar days' notice, at the prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest thereon (if any) at
the applicable Redemption Date, if redeemed during the twelve-month period
beginning July 15 of the years indicated below:
Year Percentage
---- ----------
2002 106.875%
2003 105.156%
2004 103.438%
2005 101.719%
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2006 and thereafter 100.000%
Notwithstanding the foregoing, at any time prior to July 15,
2000, the Company may redeem up to 35% of the aggregate principal amount of
Notes with the net proceeds of one or more Equity Offerings of the Company at a
redemption price equal to 13.750% of the aggregate principal amount thereof on
the date of redemption; provided, however, that, after giving effect to any such
redemption, at least $143 million aggregate principal amount of the Notes remain
outstanding.
7. Notice of Redemption.
At least 30 calendar days but not more than 60 calendar days
before a Redemption Date, the Company will send a notice of redemption,
first-class mail, postage prepaid, to Holders of Notes to be redeemed at the
addresses of such Holders as they appear in the Security Register.
If less than all of the Notes are to be redeemed at any time,
the Notes to be redeemed will be chosen by the Trustee in accordance with the
Indenture. If any Note is redeemed subsequent to a Record Date with respect to
any Interest Payment Date specified above and on or prior to such Interest
Payment Date, then any accrued interest will be paid on such Interest Payment
Date to the Holder of the Note on such Record Date. If money in an amount
sufficient to pay the Redemption Price of all Notes (or portions thereof) to be
redeemed on the Redemption Date is deposited with the Paying Agent on or before
the applicable Redemption Date and certain other conditions are satisfied,
interest on the Notes to be redeemed on the applicable Redemption Date will
cease to accrue.
The Notes are not subject to any sinking fund.
8. Repurchase at the Option of Holders upon Change of Control.
Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to purchase such Holder's
Notes, in whole, or in part in a principal amount that is an integral multiple
of $1,000, pursuant to a Change of Control Offer, at a purchase price in cash
equal to 101% of the aggregate principal amount thereof on any Change of Control
Payment Date, plus accrued and unpaid interest, if any, to the Change of Control
Payment Date.
Within 30 calendar days following any Change of Control, the
Company shall send, or cause to be sent, by first-class mail, postage prepaid, a
notice regarding the Change of Control Offer to each Holder of Notes. The Holder
of this Note may elect to have this Note or a portion hereof in an authorized
denomination purchased by completing
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the form entitled "Option of Holder to Require Purchase" appearing below and
tendering this Note pursuant to the Change of Control Offer. Unless the Company
defaults in the payment of the Change of Control Purchase Price with respect
thereto, all Notes or portions thereof accepted for payment pursuant to the
Change of Control Offer will cease to accrue interest from and after the Change
of Control Payment Date.
9. Repurchase at the Option of Holders upon Asset Sale.
If at any time the aggregate amount of Excess Proceeds
(including any Net Cash Proceeds to be applied to the permanent reduction of
Indebtedness represented by the 2005 Notes and the 2006 Notes) calculated as of
such date exceeds $10 million, the Company shall, within 30 days of the date the
amount of Excess Proceeds exceeds $10 million, use such Excess Proceeds to make
an offer to purchase (an "Asset Sale Offer") on a pro rata basis, from all
holders, outstanding Notes, 2005 Notes and 2006 Notes in an aggregate principal
amount equal to the maximum principal amount that may be purchased out of Excess
Proceeds, at a purchase price (the "Offer Purchase Price") in cash equal to (a)
with respect to the Existing Notes, 100% of the Accreted Value thereof (as
defined in the relevant indenture) and (b) with respect to the Notes, 100% of
the principal amount thereof, plus, in each case, accrued and unpaid interest,
if any, to the purchase date, in accordance with the procedures set forth in the
relevant indenture. Upon completion of an Asset Sale Offer (including payment of
the Offer Purchase Price), any surplus Excess Proceeds that were the subject of
such offer shall cease to be Excess Proceeds, and the Company may then use such
amounts for general corporate purposes.
Within 30 calendar days of the date the amount of Excess
Proceeds exceeds $10,000,000, the Company shall send, or cause to be sent, by
first-class mail, postage prepaid, a notice regarding the Asset Sale Offer to
each Holder of Notes. The Holder of this Note may elect to have this Note or a
portion hereof in an authorized denomination purchased by completing the form
entitled "Option of Holder to Require Purchase" appearing below and tendering
this Note pursuant to the Asset Sale Offer. Unless the Company defaults in the
payment of the Offer Purchase Price with respect thereto, all Notes or portions
thereof selected for payment pursuant to the Asset Sale Offer will cease to
accrue interest from and after the Asset Sale Payment Date.
10. The Registered Exchange Offer.
Any Initial Notes represented by this Certificated Note which
are presented to the Registrar for exchange pursuant to the Registered Exchange
Offer shall be exchanged for a Certificated Note representing Exchange Notes of
equal principal amount upon surrender of this Certificated Note to the Registrar
in accordance with the terms of the Registered Exchange Offer and the Indenture.
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11. Transfer and Exchange.
By its acceptance of any Note represented by a certificate
bearing the Private Placement Legend, each Holder of, and beneficial owner of an
interest in, such a Note acknowledges the restrictions on transfer of such a
Note set forth in the Private Placement Legend and under the heading "Transfer
Restrictions" in the Final Memorandum, and agrees that it will transfer such a
Note only in accordance with the Private Placement Legend and the restrictions
set forth under the heading "Transfer Restrictions" in the Final Memorandum.
In connection with any registration of transfer of a Note
bearing the Private Placement Legend other than to a Person whom the Holder
reasonably believes to be a "qualified institutional buyer" under the Securities
Act, such Holder shall deliver to the Company such satisfactory evidence, which
may include an opinion of independent counsel licensed to practice law in the
State of New York, as reasonably may be requested by the Company to confirm that
such transfer is being made in accordance with the limitations set forth in the
Private Placement Legend. In the event the Company reasonably determines that
any such transfer is not in accordance with the Private Placement Legend, the
Company shall so inform the Registrar who shall not register such transfer;
provided that the Registrar shall not be required to determine (but may rely on
a determination made by the Company with respect to) the sufficiency of any such
evidence.
Upon the registration of transfer, exchange or replacement of
a Note not bearing the Private Placement Legend, the Trustee shall deliver a
Note that does not bear the Private Placement Legend. Upon the registration of
transfer, exchange or replacement of a Note bearing the Private Placement
Legend, the Trustee shall deliver a Note bearing the Private Placement Legend,
unless such legend may be removed from such Note as provided in the next
sentence. The Private Placement Legend may be removed from a Note if there is
delivered to the Company such satisfactory evidence, which may include an
opinion of independent counsel licensed to practice law in the State of New
York, as reasonably may be requested by the Company to confirm that neither such
legend nor the restrictions on transfer set forth therein are required to ensure
that transfers of such Note will not violate the registration and prospectus
delivery requirements of the Securities Act; provided that the Trustee shall not
be required to determine (but may rely on a determination made by the Company
with respect to) the sufficiency of any such evidence. Upon provision of such
evidence, the Trustee shall authenticate and deliver in exchange for such Note,
a Note or Notes (representing the same aggregate principal amount of the Note
being exchanged) without such legend. If the Private Placement Legend has been
removed from a Note, as provided above, no other Note issued in exchange for all
or any part of such Note shall bear such legend, unless the Company has
reasonable cause to believe that such other Note
B-10
132
represents a "restricted security" within the meaning of Rule 144 and instructs
the Trustee to cause a legend to appear thereon.
Prior to the effectiveness of a Shelf Registration Statement
or following the suspension or termination thereof, the Holder of this Note (or
holders of interests therein) and prospective purchasers designated by such
Holder (or such holders of interests therein) shall have the right to obtain
from the Company upon request by such Holder (or such holders of interests) or
prospective purchasers, during any period in which the Company is not subject to
Section 13 or 15(d) of the Exchange Act, or exempt from reporting pursuant to
12g3-2(b) under the Exchange Act, the information required by paragraph
(d)(4)(i) of Rule 144A in connection with any transfer or proposed transfer of
such Note or interest.
12. Denominations.
The Notes are issuable only in registered form without coupons
in denominations of $1,000 and integral multiples thereof of principal amount.
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, Holders entitled to the money must look only to
the Company and not to the Trustee for payment unless such abandoned property
law designates another Person. 14. Discharge and Defeasance. Subject to certain
conditions, the Company at any time may terminate some or all of its obligations
under the Notes and the Indenture if the Company irrevocably deposits with the
Trustee money or U.S. Government Obligations for the payment of principal and
interest on the Notes to redemption or maturity, as the case may be.
15. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Notes may be amended with the written consent of the
Holders of at least a majority in principal amount of the outstanding Notes and
(ii) any past Default and its consequences may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Notes. Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder of Notes, the Company and the Trustee may
amend the Indenture or the Notes (i) to evidence the succession of another
Person to the Company and the assumption by such successor of the covenants of
the company under the Indenture and
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contained in the Notes; (ii) to add additional covenants or to surrender rights
and powers conferred on the Company; (iii) to add any additional Events of
Default; (iv) to provide for uncertificated Notes in addition to or in place of
Certificated Notes; (v) to evidence and provide for the acceptance of
appointment under the Indenture of a successor Trustee; (vi) to secure the
Notes; (vii) to cure any ambiguity in the Indenture, to correct or supplement
any provision in the Indenture which may be inconsistent with any other
provision therein or to add any other provisions with respect to matters or
questions arising under the Indenture, provided that such actions shall not
adversely affect the interests of the Holders in any material respect; or (viii)
to comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the Notes, subject to
certain limitations, may declare all the Notes to be immediately due and
payable. Certain events of bankruptcy or insolvency are Events of Default and
shall result in the Notes being immediately due and payable upon the occurrence
of such Events of Default without any further act of the Trustee or any Holder.
Holders of Notes 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 security.
Subject to certain limitations, Holders of a majority in principal amount of the
Notes may direct the Trustee in its exercise of any trust or power under the
Indenture. The Holders of a majority in principal amount of the outstanding
Notes, by written notice to the Company and the Trustee, may rescind any
declaration of acceleration and its consequences if the rescission would not
conflict with any judgment or decree, and if all Events of Default have been
cured or waived except nonpayment of principal and interest that has become due
solely because of the acceleration.
17. Individual Rights of Trustee.
Subject to certain limitations imposed by the Trust Indenture
Act, the Trustee or any Paying Agent or Registrar, in its individual or any
other capacity, may become the owner or pledgee of Notes and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee, Paying Agent or Registrar, as the case may be, under the Indenture.
▇-▇▇
▇▇▇
▇▇. No Recourse Against Certain Others.
No director, officer, employee, incorporator or stockholder of
the Company, as such, shall 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, solely by reason of its
status as a director, officer, employee, incorporator or stockholder of the
Company. By accepting a Note, each Holder waives and releases all such liability
(but only such liability) as part of the consideration for issuance of such Note
to such Holder.
19. Governing Law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN SAID STATE.
The Company will furnish to any Holder of Notes upon written
request and without charge to the Holder a copy of the Indenture which has in it
the text of this Note. Requests may be made to:
American Communications Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
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ASSIGNMENT
(To be executed by the registered Holder
if such Holder desires to transfer this Note)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto
---------------
PLEASE INSERT SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER OF TRANSFEREE
--------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
this Note, together with all right, title and interest herein, and does hereby
irrevocably constitute and appoint Attorney to transfer this Note
------------
on the Security Register, with full power of substitution.
--------------------------------------------------------------------------------
Dated:
------------------
------------------------------- -------------------------------------
Signature of Holder Signature Guaranteed:
Commercial Bank or Trust Company
or Member Firm of the New York
Stock Exchange, Inc.
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
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OPTION OF HOLDER TO ELECT PURCHASE
(check as appropriate)
/ / In connection with the Change of Control Offer made pursuant to Section
4.07 of the Indenture, the undersigned hereby elects to have
/ / $ ($1,000 in principal amount or an integral multiple thereof)
of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or an amount in cash equal to
101% with respect to the principal amount indicated in the preceding
sentence or the principal amount indicated in the preceding sentences,
as the case may be, plus accrued and unpaid interest thereon, if any,
to the Change of Control Payment Date.
/ / In connection with the Asset Sale Offer made pursuant to Section 4.08
of the Indenture, the undersigned hereby elects to have
/ / $ ($1,000 in principal amount or an integral multiple thereof)
of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or an amount in cash equal to
100% with respect to the principal amount indicated in the preceding
sentence plus accrued and unpaid interest thereon, if any, to the Asset
Sale Payment Date.
Dated:
---------------
---------------------------- -------------------------------------
Signature of Holder Signature Guaranteed:
Commercial Bank or Trust Company
or Member Firm of the New York
Stock Exchange, Inc.
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
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EXHIBIT C
FORM OF EXCHANGE GLOBAL NOTE
AMERICAN COMMUNICATIONS SERVICES, INC.
No. CUSIP No.
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO AMERICAN COMMUNICATIONS SERVICES, INC. OR THE
REGISTRAR FOR REGISTRATION OF TRANSFER OR EXCHANGE AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER ENTITY AS HAS BEEN REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS HAS BEEN REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFER OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, AND NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF INTERESTS IN THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.06 OF THE INDENTURE, DATED AS OF JULY 23,
1997, BETWEEN AMERICAN COMMUNICATIONS SERVICES, INC. AND THE TRUSTEE NAMED
THEREIN, PURSUANT TO WHICH THIS NOTE WAS ISSUED.
C-1
138
GLOBAL NOTE
REPRESENTING 13-3/4% SENIOR NOTES DUE 2007
American Communications Services, Inc., a Delaware
corporation, for value received, hereby promises to pay to CEDE & CO., or its
registered assigns, the principal sum indicated on Schedule A hereof, on July
15, 2007.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purposes.
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IN WITNESS WHEREOF, the Company has caused this Note to be
duly executed.
Dated:
AMERICAN COMMUNICATIONS SERVICES, INC.
By:
-------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE CHASE MANHATTAN BANK,
as Trustee, certifies that this is one of
the Notes referred to in the Indenture.
By:
------------------------------
Authorized Officer
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REVERSE SIDE OF FORM OF EXCHANGE GLOBAL NOTE
AMERICAN COMMUNICATIONS SERVICES, INC.
GLOBAL NOTE
REPRESENTING 13-3/4% SENIOR NOTES DUE 2007
1. Indenture.
This Note is one of a duly authorized issue of debt securities of
the Company (as defined below) designated as its "13-3/4% Senior Notes due 2007"
(herein called the "Notes") limited in aggregate principal amount at Stated
Maturity to $220,000,000, issued under an indenture dated as of July 15, 1997
(as amended or supplemented from time to time, the "Indenture") between the
Company and The Chase Manhattan Bank, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and each
Holder of Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The summary of the terms of this Note contained
herein does not purport to be complete and is qualified by reference to the
Indenture. All terms used in this Note which are not defined herein shall have
the meanings assigned to them in the Indenture.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
enter into or permit certain transactions with Affiliates, create or incur
Liens, enter into or permit certain Sale and Leaseback Transactions and make
Asset Sales. The Indenture also imposes limitations on the ability of the
Company to consolidate or merge with or into any other Person or permit any
other Person to merge with or into the Company, or sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all of the Property
of the Company to any other Person and on the ability of the Company's
Restricted Subsidiaries to issue Capital Stock.
2. Principal and Interest.
American Communications Services, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture, being herein
called the "Company"), promises to pay the principal amount set forth on
Schedule A of this Note to the Holder hereof on July 15, 2007.
C-4
141
The Company shall pay interest at a rate of 13-3/4%, per annum, from
July 23, 1997, or from the most recent Interest Payment Date thereafter to which
interest has been paid or duly provided for, semiannually on January 15 and July
15 of each year, commencing on January 15, 1998, in cash, to the Holder hereof
until the principal amount hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions provided in the Indenture, be
paid to the Person in whose name this Note (or the Note in exchange or
substitution for which this Note was issued) is registered at the close of
business on the Record Date for interest payable on such Interest Payment Date.
The Record Date for any interest payment is the close of business on January 1
or July 1, as the case may be, whether or not a Business Day, immediately
preceding the Interest Payment Date on which such interest is payable. Any such
interest not so punctually paid or duly provided for ("Defaulted Interest")
shall forthwith cease to be payable to the Holder on such Record Date and shall
be paid as provided in Section 2.11 of the Indenture. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
Each payment of interest in respect of an Interest Payment Date will
include interest accrued through the day before such Interest Payment Date. If
an Interest Payment Date falls on a day that is not a Business Day, the interest
payment to be made on such Interest Payment Date will be made on the next
succeeding Business Day with the same force and effect as if made on such
Interest Payment Date, and no additional interest will accrue as a result of
such delayed payment.
3. Method of Payment.
The Company, through the Paying Agent, shall pay interest on this
Note to the registered Holder of this Note, as provided above. The Holder must
surrender this Note to a Paying Agent to collect principal payments. The Company
will pay principal and interest in money of the United States of America that at
the time of payment is legal tender for payment of all debts public and private.
Principal and interest will be payable at the office of the Paying Agent but, at
the option of the Company, interest may be paid by check mailed to the
registered Holders at their registered addresses.
4. Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar under
the Indenture. The Company may, upon written notice to the Trustee, appoint and
change any Paying Agent or Registrar. The Company or any of its subsidiaries may
act as Paying Agent or Registrar.
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5. Optional Redemption.
The Notes may not be redeemed prior to July 15, 2002. Thereafter,
the Notes will be subject to redemption at the option of the Company, in whole
or in part, upon not less than 30 calendar days, nor more than 60 calendar days'
notice, at the prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest thereon (if any) at the applicable
Redemption Date, if redeemed during the twelve-month period beginning July 15 of
the years indicated below:
Year Percentage
---- ----------
2002 106.875%
2003 105.156%
2004 103.438%
2005 101.719%
2006 and thereafter 100.000%
Notwithstanding the foregoing, at any time prior to July 15, 2000,
the Company may redeem up to 35% of the aggregate principal amount of Notes with
the net proceeds of one or more Equity Offerings of the Company at a redemption
price equal to 113.750% of the aggregate principal amount thereof on the date of
redemption; provided, however, that, after giving effect to any such redemption,
at least $143 million aggregate principal amount of the Notes remain
outstanding.
6. Notice of Redemption.
At least 30 calendar days but not more than 60 calendar days before
a Redemption Date, the Company will send a notice of redemption, first-class
mail, postage prepaid, to Holders of Notes to be redeemed at the addresses of
such Holders as they appear in the Security Register.
If less than all of the Notes are to be redeemed at any time, the
Notes to be redeemed will be chosen by the Trustee in accordance with the
Indenture. If any Note is redeemed subsequent to a Record Date with respect to
any Interest Payment Date specified above and on or prior to such Interest
Payment Date, then any accrued interest will be paid on such Interest Payment
Date to the Holder of the Note on such Record Date. If money in an amount
sufficient to pay the Redemption Price of all Notes (or portions thereof) to be
redeemed on the Redemption Date is deposited with the Paying Agent on or before
the applicable Redemption Date and certain other conditions are satisfied,
interest on the Notes to be redeemed on the applicable Redemption Date will
cease to accrue.
The Notes are not subject to any sinking fund.
▇-▇
▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇ at the Option of Holders upon Change of Control.
Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Company to purchase such Holder's Notes, in
whole, or in part in a principal amount that is an integral multiple of $1,000,
pursuant to a Change of Control Offer, at a purchase price in cash equal to 101%
of the aggregate principal amount thereof on any Change of Control Payment Date,
plus accrued and unpaid interest, if any, to the Change of Control Payment Date.
Within 30 calendar days following any Change of Control, the Company
shall send, or cause to be sent, by first-class mail, postage prepaid, a notice
regarding the Change of Control Offer to each Holder of Notes. The Holder of
this Note may elect to have this Note or a portion hereof in an authorized
denomination purchased by completing the form entitled "Option of Holder to
Require Purchase" appearing below and tendering this Note pursuant to the Change
of Control Offer. Unless the Company defaults in the payment of the Change of
Control Purchase Price with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Change of Control Offer will cease accrue
interest from and after the Change of Control Payment Date.
8. Repurchase at the Option of Holders upon Asset Sale.
If at any time the aggregate amount of Excess Proceeds (including
any Net Cash Proceeds to be applied to the permanent reduction of Indebtedness
represented by the 2005 Notes and the 2006 Notes) calculated as of such date
exceeds $10 million, the Company shall, within 30 days of the date the amount of
Excess Proceeds exceeds $10 million, use such Excess Proceeds to make an offer
to purchase (an "Asset Sale Offer") on a pro rata basis, from all holders,
outstanding Notes, 2005 Notes and 2006 Notes in an aggregate principal amount
equal to the maximum principal amount that may be purchased out of Excess
Proceeds, at a purchase price (the "Offer Purchase Price") in cash equal to (a)
with respect to the Existing Notes, 100% of the Accreted Value thereof (as
defined in the relevant indenture) and (b) with respect to the Notes, 100% of
the principal amount thereof, plus, in each case, accrued and unpaid interest,
if any, to the purchase date, in accordance with the procedures set forth in the
relevant indenture. Upon completion of an Asset Sale Offer (including payment of
the Offer Purchase Price), any surplus Excess Proceeds that were the subject of
such offer shall cease to be Excess Proceeds, and the Company may then use such
amounts for general corporate purposes.
Within 30 calendar days of the date the amount of Excess Proceeds
exceeds $10,000,000, the Company shall send, or cause to be sent, by first-class
mail, postage prepaid, a notice regarding the Asset Sale Offer to each Holder of
Notes. The Holder of this Note may elect to have this Note or a portion hereof
in an authorized denomination pur-
C-7
144
chased by completing the form entitled "Option of Holder to Require Purchase"
appearing below and tendering this Note pursuant to the Asset Sale Offer. Unless
the Company defaults in the payment of the Offer Purchase Price with respect
thereto, all Notes or portions thereof selected for payment pursuant to the
Asset Sale Offer will cease to accrue interest from and after the Asset Sale
Payment Date.
9. The Global Note.
So long as this Global Note is registered in the name of the
Depositary or its nominee, members of, or participants in, the Depositary
("Agent Members") shall have no rights under the Indenture with respect to this
Global Note held on their behalf by the Depositary or the Trustee as its
custodian, 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 this Global Note
for all purposes. Notwithstanding the foregoing, nothing herein shall (i)
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 (ii) impair, as between the Depositary and its
Agent Members, the operation of customary practices governing the exercise of
the rights of a Holder of Notes.
The Holder of this Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests in this Global Note through Agent Members, to take any action which a
Holder of Notes is entitled to take under the Indenture or the Notes.
Whenever, as a result of optional redemption by the Company, a
Change of Control Offer, an Asset Sale Offer or an exchange for Certificated
Notes, this Global Note is redeemed, repurchased or exchanged in part, this
Global Note shall be surrendered by the Holder thereof to the Trustee who shall
cause an adjustment to be made to Schedule A hereof so that the principal amount
of this Global Note will be equal to the portion not redeemed, repurchased or
exchanged and shall thereafter return this Global Note to such Holder; provided
that this Global Note shall be in a principal amount of $1,000 or an integral
multiple of $1,000.
10. Transfer and Exchange.
The Holder of this Global Note shall, by acceptance of this Global
Note, agree that transfers of beneficial interests in this Global Note may be
effected only through a book entry system maintained by such Holder (or its
agent), and that ownership of a beneficial interest in the Notes represented
thereby shall be required to be reflected in book entry form.
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145
Transfers of this Global Note shall be limited to transfers in
whole, and not in part, to the Depositary, its successors and their respective
nominees. Interests of beneficial owners in this Global Note may be transferred
in accordance with the rules and procedures of the Depositary (or its
successors).
This Global Note will be exchanged by the Company for one or more
Certificated Notes if (a) the Depositary (i) has notified the Company that it is
unwilling or unable to continue as, or ceases to be, a clearing agency
registered under Section 17A of the Exchange Act and (ii) a successor to the
Depositary registered as a clearing agency under Section 17A of the Exchange Act
is not able to be appointed by the Company within 90 calendar days or (b) the
Depositary is at any time unwilling or unable to continue as Depositary and a
successor to the Depositary is not able to be appointed by the Company within 90
calendar days. If an Event of Default occurs and is continuing, the Company
shall, at the request of the Holder hereof, exchange all or part of this Global
Note for one or more Certificated Notes; provided that the principal amount of
each of such Certificated Notes and this Global Note, after such exchange, shall
be $1,000 or an integral multiple thereof. Whenever this Global Note is
exchanged as a whole for one or more Certificated Notes, it shall be surrendered
by the Holder to the Trustee for cancellation. Whenever this Global Note is
exchanged in part for one or more Certificated Notes, it shall be surrendered by
the Holder to the Trustee and the Trustee shall make the appropriate notations
thereon pursuant to Section 2.05(c) of the Indenture. All Certificated Notes
issued in exchange for this Global Note or any portion hereof shall be
registered in such names as the Depositary shall instruct the Trustee. Interests
in this Global Note may not be exchanged for Certificated Notes other than as
provided in this paragraph.
11. Denominations.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and integral multiples thereof of principal amount.
12. 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, Holders entitled to the money must look only to
the Company and not to the Trustee for payment unless such abandoned property
law designates another Person.
▇-▇
▇▇▇
▇▇. Discharge and Defeasance.
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Notes and the Indenture if the Company
irrevocably deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Notes to redemption or maturity, as
the case may be.
14. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the outstanding Notes and (ii) any
past Default and its consequences may be waived with the written consent of the
Holders of at least a majority in principal amount of the outstanding Notes.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Holder of Notes, the Company and the Trustee may amend the Indenture or the
Notes (i) to evidence the succession of another Person to the Company and the
assumption by such successor of the covenants of the company under the Indenture
and contained in the Notes; (ii) to add additional covenants or to surrender
rights and powers conferred on the Company; (iii) to add any additional Events
of Default; (iv) to provide for uncertificated Notes in addition to or in place
of Certificated Notes; (v) to evidence and provide for the acceptance of
appointment under the Indenture of a successor Trustee; (vi) to secure the
Notes; (vii) to cure any ambiguity in the Indenture, to correct or supplement
any provision in the Indenture which may be inconsistent with any other
provision therein or to add any other provisions with respect to matters or
questions arising under the Indenture, provided that such actions shall not
adversely affect the interests of the Holders in any material respect; or (viii)
to comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Notes, subject to certain
limitations, may declare all the Notes to be immediately due and payable.
Certain events of bankruptcy or insolvency are Events of Default and shall
result in the Notes being immediately due and payable upon the occurrence of
such Events of Default without any further act of the Trustee or any Holder.
Holders of Notes 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 security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any
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147
trust or power under the Indenture. The Holders of a majority in principal
amount of the outstanding Notes, by written notice to the Company and the
Trustee, may rescind any declaration of acceleration and its consequences if the
rescission would not conflict with any judgment or decree, and if all Events of
Default have been cured or waived except nonpayment of principal and interest
that has become due solely because of the acceleration.
16. Individual Rights of Trustee.
Subject to certain limitations imposed by the Trust Indenture Act,
the Trustee or any Paying Agent or Registrar, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Company or its Affiliates with the same rights it would have if it were not
Trustee, Paying Agent or Registrar, as the case may be, under the Indenture.
17. No Recourse Against Certain Others.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall 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, solely by reason of its status as
a director, officer, employee, incorporator or stockholder of the Company. By
accepting a Note, each Holder waives and releases all such liability (but only
such liability) as part of the consideration for issuance of such Note to such
Holder.
18. Governing Law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN SAID STATE.
The Company will furnish to any Holder of Notes upon written request
and without charge to the Holder a copy of the Indenture which has in it the
text of this Note. Requests may be made to:
American Communications Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
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SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount of this Note shall be $ . The following
decreases/increase in the principal amount of this Note have been made:
Total Principal Notation
Amount Made by
Date of Decrease in Increase in Following such or on
Decrease/ Principal Principal Decrease/ Behalf of
Increase Amount Amount Increase Trustee
-------- -------- -------
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
_______________ _______________ ______________ _________________ ________________
C-12
149
ASSIGNMENT
(To be executed by the registered Holder
if such Holder desires to transfer this Note)
FOR VALUE RECEIVED _______________ hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX IDENTIFYING NUMBER OF TRANSFEREE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
this Note, together with all right, title and interest herein, and does hereby
irrevocably constitute and appoint ____________ Attorney to transfer this Note
on the Security Register, with full power of substitution.
--------------------------------------------------------------------------------
Dated:_______________
------------------------------- ----------------------------------------
Signature of Holder Signature Guaranteed:
Commercial Bank or Trust Company
or Member Firm of the New York
Stock Exchange, Inc.
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
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OPTION OF HOLDER TO ELECT PURCHASE
(check as appropriate)
/ / In connection with the Change of Control Offer made pursuant to
Section 4.07 of the Indenture, the undersigned hereby elects to
have
/ / $ ($1,000 in principal amount or an integral multiple
thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or an amount in cash equal
to 101% with respect to the principal amount indicated in the
preceding sentence or the principal amount indicated in the
preceding sentences, as the case may be, plus accrued and unpaid
interest thereon, if any, to the Change of Control Payment Date.
/ / In connection with the Asset Sale Offer made pursuant to Section
4.08 of the Indenture, the undersigned hereby elects to have
/ / $ ($1,000 in principal amount or an integral multiple
thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or an amount in cash equal
to 100% with respect to the principal amount indicated in the
preceding sentence, plus accrued and unpaid interest thereon, if
any, to the Asset Sale Payment Date.
Dated:_________________________
_______________________________ ________________________________________
Signature of Holder Signature Guaranteed:
Commercial Bank or Trust Company
or Member Firm of the New York
Stock Exchange, Inc.
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
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EXHIBIT D
FORM OF EXCHANGE CERTIFICATED NOTE
AMERICAN COMMUNICATIONS SERVICES, INC.
No.________ CUSIP No.____
13-3/4% SENIOR NOTE DUE 2007
American Communications Services, Inc., a Delaware corporation, for
value received, hereby promises to pay to CEDE & CO., or its registered assigns,
$ , on July 15, 2007.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purposes.
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IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed.
Dated:
AMERICAN COMMUNICATIONS SERVICES, INC.
By:___________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE CHASE MANHATTAN BANK,
as Trustee, certifies that this is one of
the Notes referred to in the Indenture.
By:______________________
Authorized Officer
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REVERSE SIDE OF FORM OF EXCHANGE CERTIFICATED NOTE
AMERICAN COMMUNICATIONS SERVICES, INC.
CERTIFICATED NOTE
13-3/4% SENIOR NOTES DUE 2007
1. Indenture.
This Note is one of a duly authorized issue of debt securities of the Company
(as defined below) designated as its "13-3/4% Senior Notes due 2007" (herein
called the "Notes") limited in aggregate principal amount at Stated Maturity to
$220,000,000, issued under an indenture dated as of July 23, 1997 (as amended or
supplemented from time to time, the "Indenture") between the Company and The
Chase Manhattan Bank, as trustee (the "Trustee," which term includes any
successor Trustee under the Indenture), to which Indenture reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and each Holder of Notes and
of the terms upon which the Notes are, and are to be, authenticated and
delivered. The summary of the terms of this Note contained herein does not
purport to be complete and is qualified by reference to the Indenture. All terms
used in this Note which are not defined herein shall have the meanings assigned
to them in the Indenture.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
enter into or permit certain transactions with Affiliates, create or incur
Liens, enter into or permit certain Sale and Leaseback Transactions and make
Asset Sales. The Indenture also imposes limitations on the ability of the
Company to consolidate or merge with or into any other Person or permit any
other Person to merge with or into the Company, or sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all of the Property
of the Company to any other Person and on the ability of the Company's
Restricted Subsidiaries to issue Capital Stock.
2. Principal and Interest.
American Communications Services, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture, being herein
called the "Company"), promises to pay $ to the Holder hereof on
July 15, 2007.
D-3
154
The Company shall pay interest at a rate of 13-3/4%, per annum, from
July 23, 1997, or from the most recent Interest Payment Date thereafter to which
interest has been paid or duly provided for, semiannually on January 15 and July
15 of each year, commencing on January 15, 1998, in cash, to the Holder hereof
until the principal amount hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions provided in the Indenture, be
paid to the Person in whose name this Note (or the Note in exchange or
substitution for which this Note was issued) is registered at the close of
business on the Record Date for interest payable on such Interest Payment Date.
The Record Date for any interest payment is the close of business on January 1
or July 1, as the case may be, whether or not a Business Day, immediately
preceding the Interest Payment Date on which such interest is payable. Any such
interest not so punctually paid or duly provided for ("Defaulted Interest")
shall forthwith cease to be payable to the Holder on such Record Date and shall
be paid as provided in Section 2.11 of the Indenture. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
Each payment of interest in respect of an Interest Payment Date will
include interest accrued through the day before such Interest Payment Date. If
an Interest Payment Date falls on a day that is not a Business Day, the interest
payment to be made on such Interest Payment Date will be made on the next
succeeding Business Day with the same force and effect as if made on such
Interest Payment Date, and no additional interest will accrue as a result of
such delayed payment.
3. Method of Payment.
The Company, through the Paying Agent, shall pay interest on this
Note to the registered Holder of this Note, as provided above. The Holder must
surrender this Note to a Paying Agent to collect principal payments. The Company
will pay principal and interest in money of the United States of America that at
the time of payment is legal tender for payment of all debts public and private.
Principal and interest will be payable at the office of the Paying Agent but, at
the option of the Company, interest may be paid by check mailed to the
registered Holders at their registered addresses.
4. Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar under
the Indenture. The Company may, upon written notice to the Trustee, appoint and
change any Paying Agent or Registrar. The Company or any of its subsidiaries may
act as Paying Agent or Registrar.
D-4
155
5. Optional Redemption.
The Notes may not be redeemed prior to July 15, 2002. Thereafter,
the Notes will be subject to redemption at the option of the Company, in whole
or in part, upon not less than 30 calendar days, nor more than 60 calendar days'
notice, at the prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest thereon (if any) at the applicable
Redemption Date, if redeemed during the twelve-month period beginning July 15 of
the years indicated below:
Year Percentage
---- ----------
2002 106.875%
2003 105.156%
2004 103.438%
2005 101.719%
2006 and thereafter 100.000%
Notwithstanding the foregoing, at any time prior to July 15, 2000,
the Company may redeem up to 35% of the aggregate principal amount of Notes with
the net proceeds of one or more Equity Offerings of the Company at a redemption
price equal to 113.750% of the aggregate principal amount thereof on the date of
redemption; provided, however, that, after giving effect to any such redemption,
at least $143 million aggregate principal amount of the Notes remain
outstanding.
6. Notice of Redemption.
At least 30 calendar days but not more than 60 calendar days before
a Redemption Date, the Company will send a notice of redemption, first-class
mail, postage prepaid, to Holders of Notes to be redeemed at the addresses of
such Holders as they appear in the Security Register.
If less than all of the Notes are to be redeemed at any time, the
Notes to be redeemed will be chosen by the Trustee in accordance with the
Indenture. If any Note is redeemed subsequent to a Record Date with respect to
any Interest Payment Date specified above and on or prior to such Interest
Payment Date, then any accrued interest will be paid on such Interest Payment
Date to the Holder of the Note on such Record Date. If money in an amount
sufficient to pay the Redemption Price of all Notes (or portions thereof) to be
redeemed on the Redemption Date is deposited with the Paying Agent on or before
the applicable Redemption Date and certain other conditions are satisfied,
interest on the Notes to be redeemed on the applicable Redemption Date will
cease to accrue.
The Notes are not subject to any sinking fund.
▇-▇
▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇ at the Option of Holders upon Change of Control.
Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Company to purchase such Holder's Notes, in
whole, or in part in a principal amount that is an integral multiple of $1,000,
pursuant to a Change of Control Offer, at a purchase price in cash equal to 101%
of the aggregate principal amount thereof on any Change of Control Payment Date,
plus accrued and unpaid interest, if any, to the Change of Control Payment Date.
Within 30 calendar days following any Change of Control, the Company
shall send, or cause to be sent, by first-class mail, postage prepaid, a notice
regarding the Change of Control Offer to each Holder of Notes. The Holder of
this Note may elect to have this Note or a portion hereof in an authorized
denomination purchased by completing the form entitled "Option of Holder to
Require Purchase" appearing below and tendering this Note pursuant to the Change
of Control Offer. Unless the Company defaults in the payment of the Change of
Control Purchase Price with respect thereto, all Notes or portions thereof
accepted for payment pursuant to the Change of Control Offer will cease to
accrue interest from and after the Change of Control Payment Date.
8. Repurchase at the Option of Holders upon Asset Sale.
If at any time the aggregate amount of Excess Proceeds (including
any Net Cash Proceeds to be applied to the permanent reduction of Indebtedness
represented by the 2005 Notes and the 2006 Notes) calculated as of such date
exceeds $10 million, the Company shall, within 30 days of the date the amount of
Excess Proceeds exceeds $10 million, use such Excess Proceeds to make an offer
to purchase (an "Asset Sale Offer") on a pro rata basis, from all holders,
outstanding Notes, 2005 Notes and 2006 Notes in an aggregate principal amount
equal to the maximum principal amount that may be purchased out of Excess
Proceeds, at a purchase price (the "Offer Purchase Price") in cash equal to (a)
with respect to the Existing Notes, 100% of the Accreted Value thereof (as
defined in the relevant indenture) and (b) with respect to the Notes, 100% of
the principal amount thereof, plus, in each case, accrued and unpaid interest,
if any, to the purchase date, in accordance with the procedures set forth in the
relevant indenture. Upon completion of an Asset Sale Offer (including payment of
the Offer Purchase Price), any surplus Excess Proceeds that were the subject of
such offer shall cease to be Excess Proceeds, and the Company may then use such
amounts for general corporate purposes.
Within 30 calendar days of the date the amount of Excess Proceeds
exceeds $10,000,000, the Company shall send, or cause to be sent, by first-class
mail, postage prepaid, a notice regarding the Asset Sale Offer to each Holder of
Notes. The Holder of this Note may elect to have this Note or a portion hereof
in an authorized denomination pur-
D-6
157
chased by completing the form entitled "Option of Holder to Require Purchase"
appearing below and tendering this Note pursuant to the Asset Sale Offer. Unless
the Company defaults in the payment of the Offer Purchase Price with respect
thereto, all Notes or portions thereof selected for payment pursuant to the
Asset Sale Offer will cease to accrue interest from and after the Asset Sale
Payment Date.
9. Transfer and Exchange.
A Holder may transfer a Note only upon the surrender of such Note
for registration of transfer. No such transfer shall be effected until, and such
transferee shall succeed to the rights of a Holder only upon, final acceptance
and registration of the transfer in the Security Register by the Registrar. When
Notes are presented to the Registrar with a request to register the transfer of,
or to exchange, such Notes, the Registrar shall register the transfer or make
such exchange as requested if its requirements for such transactions and any
applicable requirements hereunder are satisfied.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer of Notes.
10. Denominations.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and integral multiples thereof of principal amount.
11. 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, Holders entitled to the money must look only to
the Company and not to the Trustee for payment unless such abandoned property
law designates another Person.
12. Discharge and Defeasance.
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Notes and the Indenture if the Company
irrevocably deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Notes to redemption or maturity, as
the case may be.
▇-▇
▇▇▇
▇▇. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the outstanding Notes and (ii) any
past Default and its consequences may be waived with the written consent of the
Holders of at least a majority in principal amount of the outstanding Notes.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Holder of Notes, the Company and the Trustee may amend the Indenture or the
Notes (i) to evidence the succession of another Person to the Company and the
assumption by such successor of the covenants of the company under the Indenture
and contained in the Notes; (ii) to add additional covenants or to surrender
rights and powers conferred on the Company; (iii) to add any additional Events
of Default; (iv) to provide for uncertificated Notes in addition to or in place
of Certificated Notes; (v) to evidence and provide for the acceptance of
appointment under the Indenture of a successor Trustee; (vi) to secure the
Notes; (vii) to cure any ambiguity in the Indenture, to correct or supplement
any provision in the Indenture which may be inconsistent with any other
provision therein or to add any other provisions with respect to matters or
questions arising under the Indenture, provided that such actions shall not
adversely affect the interests of the Holders in any material respect; or (viii)
to comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
14. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Notes, subject to certain
limitations, may declare all the Notes to be immediately due and payable.
Certain events of bankruptcy or insolvency are Events of Default and shall
result in the Notes being immediately due and payable upon the occurrence of
such Events of Default without any further act of the Trustee or any Holder.
Holders of Notes 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 security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power under the Indenture.
The Holders of a majority in principal amount of the outstanding Notes, by
written notice to the Company and the Trustee, may rescind any declaration of
acceleration and its consequences if the rescission would not conflict with any
judgment or decree, and if all Events of Default have been cured or waived
except nonpayment of principal and interest that has become due solely because
of the acceleration.
D-8
159
15. Individual Rights of Trustee.
Subject to certain limitations imposed by the Trust Indenture Act,
the Trustee or any Paying Agent or Registrar, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Company or its Affiliates with the same rights it would have if it were not
Trustee, Paying Agent or Registrar, as the case may be, under the Indenture.
16. No Recourse Against Certain Others.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall 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, solely by reason of its status as
a director, officer, employee, incorporator or stockholder of the Company. By
accepting a Note, each Holder waives and releases all such liability (but only
such liability) as part of the consideration for issuance of such Note to such
Holder.
17. Governing Law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN SAID STATE.
The Company will furnish to any Holder of Notes upon written request
and without charge to the Holder a copy of the Indenture which has in it the
text of this Note. Requests may be made to:
American Communications Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
D-9
160
ASSIGNMENT
(To be executed by the registered Holder
if such Holder desires to transfer this Note)
FOR VALUE RECEIVED _______________ hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER OF TRANSFEREE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
this Note, together with all right, title and interest herein, and does hereby
irrevocably constitute and appoint ____________ Attorney to transfer this Note
on the Security Register, with full power of substitution.
--------------------------------------------------------------------------------
Dated:_______________
----------------------------- -------------------------------------
Signature of Holder Signature Guaranteed:
Commercial Bank or Trust Company
or Member Firm of the New York
Stock Exchange, Inc.
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
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161
OPTION OF HOLDER TO ELECT PURCHASE
(check as appropriate)
/ / In connection with the Change of Control Offer made pursuant to
Section 4.07 of the Indenture, the undersigned hereby elects to
have
/ / $ ($1,000 in principal amount or an integral multiple
thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or an amount in cash equal
to 101% with respect to the principal amount indicated in the
preceding sentence or the principal amount indicated in the
preceding sentences, as the case may be, plus accrued and unpaid
interest thereon, if any, to the Change of Control Payment Date.
/ / In connection with the Asset Sale Offer made pursuant to Section
4.08 of the Indenture, the undersigned hereby elects to have
/ / $ ($1,000 in principal amount or an integral multiple
thereof) of this Note
repurchased by the Company. The undersigned hereby directs the
Trustee or Paying Agent to pay it or an amount in cash equal
to 100% with respect to the principal amount indicated in the
preceding sentence plus accrued and unpaid interest thereon, if any,
to the Asset Sale Payment Date.
Dated:______________________
____________________________ ________________________________________
Signature of Holder Signature Guaranteed:
Commercial Bank or Trust Company
or Member Firm of the New York
Stock Exchange, Inc.
NOTICE: The signature to the foregoing Assignment must correspond to the Name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
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EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
E-1
163
EXHIBIT F
TERMS OF SUBORDINATED INDEBTEDNESS
The provisions set forth in Sections 2 through 9 of this Exhibit F
set shall be the terms on which the Subordinated Indebtedness (as defined below)
is subordinated to the Notes and shall be set forth in any agreement or evidence
of Indebtedness relating to the Subordinated Indebtedness.
1. Definitions. Terms used but not defined in this Exhibit F shall
have the meanings assigned such terms in the Indenture. The
following terms shall have the meanings indicated:
"Subordinated Indebtedness" means the Indebtedness required to be
subordinated to the Notes on the terms set forth in this Exhibit F pursuant to
the Indenture.
"Subordination Provisions" means the provisions set forth in
Sections 2 through 9 of this Exhibit F.
2. Agreement to Subordinate. The Company agrees and each holder of
the Subordinated Indebtedness, by such holder's acceptance of any note or other
evidence of such Subordinated Indebtedness, likewise agrees, that the payment of
the principal of, premium, if any, and interest on the Subordinated Indebtedness
is subordinated in right of payment, to the extent and in the manner provided
herein, to the prior payment in full, in cash or cash equivalents, of all Notes,
that such subordination is for the benefit of, and shall be enforceable directly
by, any Holder of Notes or the Trustee, and that each Holder of Notes shall be
deemed to have acquired Notes in reliance upon the covenants and provisions
contained herein.
All of the provisions of any agreement, note or other evidence of
indebtedness relating to the Subordinated Indebtedness shall be subject to the
Subordination Provisions.
The Subordination Provisions as they apply to the Subordinated
Indebtedness may not be amended without the consent of the Holders of two-thirds
in principal amount of the outstanding Notes obtained in the manner set forth in
the Indenture.
The Subordination Provisions shall remain in full force and effect
so long as there are any Notes outstanding.
3. Liquidation; Dissolution; Bankruptcy. (a) Upon any payment or
distribution of assets of the Company to creditors upon a liquidation or a total
or partial dissolution of the Company, or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding
F-1
164
relating to the Company or its Property or assets, all Notes shall first be paid
in full (including interest after the commencement of any such proceeding at the
rate specified in the Notes), in cash or cash equivalents, before holders of the
Subordinated Indebtedness shall be entitled to receive any payment of principal
of, premium, if any, or interest on, or any other distribution with respect to,
the Subordinated Indebtedness. Until all Notes are paid in full, in cash or cash
equivalents, any distribution to which holders of the Subordinated Indebtedness
would be entitled but for the Subordination Provisions shall be made by the
Company or by any receiver, trustee in bankruptcy, custodian, liquidating
trustee, agent or other Person making such payment or distribution directly to
the Trustee for the benefit of the Holders of Notes. For purposes of the
Subordination Provisions `paid in full," as used with respect to the Notes,
means the receipt of cash or cash equivalents of the principal amount of the
Notes and premium, if any, interest and fees thereon to the date of such
payment.
(b) If a holder of the Subordinated Indebtedness does not FILE a
proper claim or proof of debt in the form required in any proceeding
contemplated by this Section 3 prior to 20 calendar days before the expiration
of the time to file such claims or proofs, then, so long as any Notes are
outstanding, the Trustee or any Holder of Notes is hereby authorized, and shall
have the right, to file an appropriate claim or proof of debt on behalf of such
holder of the Subordinated Indebtedness.
4. Default on Notes. (a) The Company may not, directly or
indirectly, make any payment of principal of, premium, if any, or interest on
the Subordinated Indebtedness in cash, Property or other assets and may not
acquire any note or other evidence of the Subordinated Indebtedness for cash,
Property or other assets (other then Indebtedness subordinated to the Notes to
at least the same extent as the Subordinated Indebtedness or Common Stock of the
Company) until all Notes have been paid in full, in cash or cash equivalents,
if:
(i) a Default in the payment of any principal of, premium, if
any, or interest on any Note occurs and is continuing, whether at
Stated Maturity or at a date fixed for payment or by acceleration or
otherwise; or
(ii) a Default on the Notes (other than described in clause
(a)(i) of this Section 4) occurs and is continuing that permits
Holders of Notes to accelerate such Notes and notice of such Default
is given to the Company by any Holder of Notes or the Trustee.
(b) The Company may resume payments on the Subordinated Indebtedness
when:
F-2
165
(i) the Default is cured or waived in accordance with the
terms of the Notes and the Indenture, or
(ii) 180 days pass after the notice is given pursuant to
Section 4(a)(ii) and judicial proceedings relating to such Default
have not been commenced or the Notes have not been accelerated,
if the other Subordination Provisions permit the payment or acquisition of the
Subordinated Indebtedness at that time.
5. Acceleration of the Loans. (a) If payment of the Subordinated
Indebtedness is accelerated, the Company shall promptly notify the Holders of
Notes and the Trustee of such acceleration.
(b) Upon the occurrence of an event of default with respect to the
Subordinated Indebtedness, if any Notes shall then be outstanding, holders of
the Subordinated Indebtedness shall not be permitted to accelerate the maturity
of the Subordinated Indebtedness or take any other action to collect the
repayment of the Subordinated Indebtedness prior to maturity or to marshal
assets, to exercise any right of set off or to take any other remedy with
respect to the Subordinated Indebtedness, until the earlier of (i) 180 days
after each Holder of Notes and the Trustee have received from the Company notice
of such event of default or (ii) the date on which the Notes shall have been
paid in full. Nothing in this Section 5 shall affect or impair the ability of
holders of the Subordinated Indebtedness to accelerate the maturity of the
Subordinated Indebtedness upon the occurrence of an event of default with
respect to the Subordinated Indebtedness caused by any event described in
Section 6.01(g) or 6.01(h) of the Indenture.
6. When Distribution Must Be Paid Over. In the event that,
notwithstanding the foregoing provisions prohibiting such payment or
distribution, holders of the Subordinated Indebtedness or any agent of such
holders shall have received any payment on account of the principal, premium, if
any, or interest on the Subordinated Indebtedness at a time when such payment is
prohibited by the Subordination Provisions, such payment shall be received and
held in trust for the benefit of, and shall be paid forthwith over and delivered
to, the Trustee, for application to the payment of all Notes then remaining
unpaid to the extent necessary to pay all Notes in full, in cash or cash
equivalents, in accordance with their terms and the Indenture, after giving
effect to any concurrent payment or distribution to or for the Holders of Notes.
7. Notice by Company. The Company shall promptly notify holders of
the Subordinated Indebtedness of any facts known to the Company that would cause
a pay-
F-3
166
ment of principal of, premium, if any, or interest on the Subordinated
Indebtedness to violate the Subordination Provisions.
8. Subrogation. After all Notes are paid in full in cash or cash
equivalents, and until the Subordinated Indebtedness is paid in full, the
holders of the Subordinated Indebtedness shall be subrogated to the rights of
Holders of Notes to receive distributions applicable to Notes to the extent that
distributions otherwise payable to holders of the Subordinated Indebtedness have
been applied to payment of Notes. A distribution made under the Subordination
Provisions to Holders of Notes that otherwise would have been made to holders of
the Subordinated Indebtedness is not, as between the Company and the holders of
the Subordinated Indebtedness, a payment by the Company on the Subordinated
Indebtedness.
9. Subordination May Not Be Impaired by Company. No right of any
current or future Holder of Notes or the Trustee to enforce the Subordination
Provisions shall be impaired by any act or failure to act by the Company or by
its failure to comply with the Subordination Provisions or any agreement or
evidence of indebtedness relating to the Subordinated Indebtedness.
F-4
167
EXHIBIT G
ESCROW AND DISBURSEMENT AGREEMENT
F-1
168
SCHEDULE A
TO
INDENTURE
DATED AS OF JULY 23, 1997
BY AND BETWEEN
AMERICAN COMMUNICATIONS SERVICES, INC.
AND
THE CHASE MANHATTAN BANK, AS TRUSTEE
(EXISTING INDEBTEDNESS)
The Company and certain of its subsidiaries have letters of
credit for the benefit of several cities, rights-of-way providers and others
which guarantee franchise terms compliance. To, date the Company and such
subsidiaries have pledged $2,000,000 in cash to secure approximately $5,000,000
of these potential liabilities.
Pursuant to an agreement (the "LG&E Agreement") between
American Communication Services Louisville, Inc. ("ACSL") and Louisville Gas &
Electric Company, effective as of June 28, 1994, the first 12 strands of all
installed fiber optic cable in the Extended System (as defined in the LG&E
Agreement) are subject to a security interest as collateral security for
performance of the obligations of the Company and ACSL under the LG&E Agreement.
Pursuant to a Stock Purchase Agreement, dated as of November
28, 1994, by and among the Company, City Link Corp., and the former directors
and shareholders of City Link Corp., as amended August 3, 1995, the Company has
an obligation to repurchase 10,636 shares of its common stock for a purchase
price of $7.00 per share.
Pursuant to a Stock Purchase Agreement, dated as of May 12,
1995, by and among the Company, Piedmont Teleport, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as amended, the Company has an obligation to repurchase 62,000
shares of its common stock for a purchase price of $2.50 per share.
Pursuant to the terms of an Agreement with Louisville Gas &
Electric Company (LG&E"), if LG&E exercises its option to purchase up to 500,000
shares of the Pledgor's common stock after a transaction in which 50% or more of
the Pledgor's stock is purchased by a combination of existing shareholders
and/or management in a transaction which results in the Pledgor no longer being
listed on a national securities market, then LG&E shall have the option,
exercisable at any time by written notice to the Pledgor
169
2
prior to the first anniversary of the exercise of the option, to put its shares
to the Pledgor for a cash purchase equal to that tendered in the "going private"
transaction.
Pursuant to a Third Amended and Restated Employment Agreement
(the "▇▇▇▇▇▇▇▇▇ Agreement"), dated June 30, 1995, with ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇. ▇▇▇▇▇▇▇▇▇ shall have the right for a period of 90 days after the termination
of his employment with the Company (unless such employment is terminated by the
Company "for cause" (as defined in the ▇▇▇▇▇▇▇▇▇ Agreement) or ▇▇. ▇▇▇▇▇▇▇▇▇
voluntarily resigns), to sell to the Company and the Company is required to
purchase, the shares of Common Stock issued or issuable pursuant to options
granted to ▇▇. ▇▇▇▇▇▇▇▇▇ under the ▇▇▇▇▇▇▇▇▇ Agreement, at a price equal to the
publicly traded price of the Common Stock (as defined in the ▇▇▇▇▇▇▇▇▇
Agreement), less the exercise price of the options with respect to unexercised
options. The aggregate purchase price paid by the Company for such shares shall
not exceed $1 million (which amount shall be reduced by the net proceeds
received by ▇▇. ▇▇▇▇▇▇▇▇▇ from his sales of shares of Common Stock in the market
or otherwise). This right may be exercised by ▇▇. ▇▇▇▇▇▇▇▇▇ only if at the time
of exercise the aggregate value (based on the publicly traded price) of the
Company's outstanding shares of Common Stock and the shares of Common stock
issuable pursuant to options, warrants and other convertible securities which
have an exercise or conversion price which is equal to or less than the then
publicly traded price of the Common Stock is greater than $200 million and at
least 5,000,000 outstanding shares of Common Stock are neither held by
"affiliates" (as defined in Rule 405 under the Securities Act of 1933, as
amended (the "Securities Act")) of the Company nor "restricted securities" (as
defined in Rule 144 under the Securities Act).
Pursuant to a Third Amended and Restated Employment Agreement
(the "▇▇▇▇▇ Agreement"), dated June 30, 1995, with ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇▇ shall have the right for a period of 90 days after the termination of his
employment with the Company (unless such employment is terminated by the Company
"for cause" (as defined in the ▇▇▇▇▇ Agreement) or ▇▇. ▇▇▇▇▇ voluntarily
resigns), to sell to the Company and the Company is required to purchase, the
shares of Common Stock issued or issuable pursuant to options granted to ▇▇.
▇▇▇▇▇ under the ▇▇▇▇▇ Agreement, at a price equal to the publicly traded price
of the Common Stock (as defined in the ▇▇▇▇▇ Agreement), less the exercise price
of the options with respect to unexercised options. The aggregate purchase price
paid by the Company for such shares shall not exceed $1 million (which amount
shall be reduced
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3
by the net proceeds received by ▇▇. ▇▇▇▇▇ from his sales of shares of Common
Stock in the market or otherwise). This right may be exercised by ▇▇. ▇▇▇▇▇ only
if at the time of exercise the aggregate value (based on the publicly traded
price) of the Company's outstanding shares of Common Stock and the shares of
Common Stock issuable pursuant to options, warrants and other convertible
securities which have an exercise or conversion price which is equal to or less
than the then publicly traded price of the Common Stock is greater than $200
million and at least 5,000,000 outstanding shares of Common Stock are neither
held by "affiliates" (as defined in Rule 405 under the Securities Act) of the
Company nor "restricted securities" (as defined in Rule 144 under the Securities
Act).
Pursuant to an indenture dated as of November 14, 1995,
between the Company and Chemical Bank, as trustee, as amended or supplemented
(the "2005 Indenture"), the Company issued 13% senior discount notes due 2005
(the "2005 Notes"). The 2005 Notes accrete at a rate of 13%, compounded
semi-annually to an aggregate principal amount of $190 million by November 1,
2000. Cash interest does not accrue on the 2005 Notes prior to November 1, 2000.
Commencing May 1, 2001, cash interest will be payable semi-annually on the 2005
Notes at the rate of 13% per annum (approximately $24.7 million per year). The
full accreted value of the 2005 Notes of an aggregate of $190 million will
become due on November 1, 2005. The 2005 Indenture also provides, under certain
circumstances, for repurchase of the 2005 Notes by the Company and special
interest provisions.
Pursuant to an indenture dated as of March 26, 1996, between
the Company and Chemical Bank, as trustee, as amended or supplemented (the "2006
Indenture"), the Company issued 12-3/4% senior discount notes due 2006 (the
"2006 Notes"). The 2006 Notes accrete at a rate of 12-3/4%, compounded
semi-annually to an aggregate principal amount of $120 million by April 1, 2001.
Cash interest does not accrue on the 2006 Notes prior to April 1, 2001.
Commencing October 1, 2001, cash interest will be payable semi-annually on the
2006 Notes at the rate of 12-3/4% per annum (approximately $15.3 million per
year). The full accreted value of the 2006 Notes of an aggregate of $120 million
will become due on April 1, 2006. The 2006 Indenture also provides, under
certain circumstances, for repurchase of the 2006 Notes by the Company and
special interest provisions.
171
4
SCHEDULE B
TO
INDENTURE
DATED AS OF JULY 23, 1997
BY AND BETWEEN
AMERICAN COMMUNICATIONS SERVICES, INC.
AND
THE CHASE MANHATTAN BANK, AS TRUSTEE
(REQUIRED INVESTMENTS)
All Investments required pursuant to the Secured Credit
Facility as such Secured Credit Facility is set forth on Schedule C. For
purposes of the definition of "Permitted Investments", all such Investments are
considered to be in effect on the Issue Date.
172
5
SCHEDULE C
TO
INDENTURE
DATED AS OF JULY 23, 1997
BY AND BETWEEN
AMERICAN COMMUNICATIONS SERVICES, INC.
AND
THE CHASE MANHATTAN BANK, AS TRUSTEE
(SECURED CREDIT FACILITY AGREEMENTS)
AT&T Credit Facility
In October 1994, the Company entered into the AT&T Credit
Facility pursuant to which AT&T Credit Corporation ("AT&T") has agreed to
provide up to $31,324,454 in financing for the development and construction of
fiber optic networks by the Company's subsidiaries. In connection with each loan
under the AT&T Credit Facility, each funded subsidiary enters into a Loan and
Security Agreement, and AT&T purchases 7.25% of the capital stock of the funded
subsidiary pursuant to a Common Stock Purchase Agreement. In connection with
each such financing, the Company is required to have made a capital contribution
to the funded subsidiary. Additionally, pursuant to a Parent Pledge and Support
Agreement, as amended, the Company (i) is required to pledge to AT&T all of the
shares of capital stock of the funded subsidiary of which it is the beneficial
owner, (ii) is bound by certain restrictive covenants and (iii) may be required
to execute a guarantee in favor of AT&T in the future in certain circumstances.
The Company and the funded subsidiary are also required to enter into a Co-Sale
agreement with AT&T. In the event there is a change in control of any funded
subsidiary, AT&T can require that funded subsidiary to prepay the loan and all
other amounts due under the loan agreement along with a change in control
premium.
As of July 23, 1997, the following subsidiaries of the Company
had entered into financing arrangements with AT&T Credit Corporation as of the
dates and for the maximum credit facilities listed:
1. Loan and Security Agreement, dated as of October 17, 1994, between AT&T
Credit Corporation and American Communication Services of Louisville,
Inc., as amended, credit facility up to $5,795,824.
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6
2. Loan and Security Agreement, dated as of February 28, 1995, between
AT&T Credit Corporation and American Communication Services of Fort
Worth, Inc., as amended, credit facility up to $7,405,582.
3. Loan and Security Agreement, dated as of June 30, 1995, between AT&T
Credit Corporation and American Communication Services of Greenville,
Inc. and American Communication Services of Columbia, Inc., as amended,
credit facility up to an aggregate of $11,979,285.
4. Loan and Security Agreement, dated as of September 8, 1995, between
AT&T Credit Corporation and American Communication Services of El Paso,
Inc., as amended, credit facility up to $6,143,763.
The Company and the subsidiaries have also entered into
various amendments of the foregoing documents and certain additional amendments
are currently being negotiated.
174
7
SCHEDULE D
TO
INDENTURE
DATED AS OF JULY 23, 1997
BY AND BETWEEN
AMERICAN COMMUNICATIONS SERVICES, INC.
AND
THE CHASE MANHATTAN BANK, AS TRUSTEE
(CONTRACTS WITH AFFILIATES)
As of July 1, 1992 American Lightwave, Inc. entered into a
Registration Rights Agreement among American Lightwave, Inc. and persons named
therein (including the persons referenced below in the following three
paragraphs).
On July 1, 1992, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the stockholders of Alabama Lightwave, Inc., North Carolina
Lightwave, Inc., Chicago Lightwave, Inc., Delaware Lightwave, Inc., and Virginia
Lightwave, Inc. (collectively referred to as the "ALI subsidiaries") entered
into stock exchange agreements with ALI. Under these agreements, the
stockholders of the ALI subsidiaries received 650 shares of ALI mandatorily
redeemable, non-voting, cumulative Series A preferred stock (the "ALI Preferred
Stock") and 103,920 shares of ALI common stock (the "ALI Common Stock").
Additionally, ALI issued 363,720 shares of ALI Common Stock to existing
stockholders for $.0042 per share.
At the time of the exchange agreements, ALI also entered into
a share subscription agreement under which an aggregate 500 shares of ALI
Preferred Stock and an aggregate 181,860 shares of ALI Common Stock were issued
to Apex Investment Fund I, L.P. ("Apex"), The Productivity Fund II, L.P.
("Productivity") and ▇▇▇▇▇ ▇▇▇▇▇ for a total of $500,875.
On December 15, 1992, 100 additional shares of ALI Preferred
Stock and 36,372 shares of ALI Common Stock were issued to Apex, Productivity
and ▇▇▇▇▇ ▇▇▇▇▇ for a total of $100,175, under the stock subscription agreement
noted above.
On September 15, 1993, the Company's former subsidiary, ALI,
issued promissory notes to Apex, Productivity, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. and ▇▇▇▇▇
▇▇▇▇▇ for $68,825, $68,825, $7,083 and $1,350, respectively (the "ALI
175
8
Notes"). These ALI Notes were originally due September 15, 1994, but ALI had the
option to extend the maturity date to September 15, 1995. Interest was payable
on the notes at ten percent (10%) per annum. The noteholders had warrants to
purchase, at any time up to September 14, 1996, shares of ALI Common Stock at a
price of $181.86 per share, subject to antidilution adjustments. ALI elected to
extend the maturity date to September 14, 1995, and the number of ALI shares
that the noteholder could purchase pursuant to the warrant increased as provided
therein. The holders of ALI Notes converted the ALI Notes and warrants into
notes and warrants substantially similar to notes and warrants issued by the
Company on or about September 14, 1993. These notes together with accrued
interest were repaid on the maturity date. The converted warrants along with the
additional warrants issued upon the extension of the ALI Notes gave the four
holders listed above the right to purchase an aggregate of 36,500 shares of the
Company's Common Stock at a price of $0.875 per share. The unexpired term of the
three-year warrants carried over to the converted warrants. In connection with
the October 1994 Private Placement (as defined below), Apex and Productivity
agreed to reduce the number of warrants held by each of them by 50% in exchange
for the exercise price of 50% of such remaining warrants being reduced to $0.44
and 50% of such remaining warrants being reduced to $0.01. Apex and Productivity
each exercised warrants for 8,353 shares of Common Stock at $0.44 per share
during November 1994 and each exercised warrants for 8,353 shares of Common
Stock at $0.01 per share during December 1994.
In November 1993, the Company executed a financial consulting
and advisory agreement with The ▇▇▇▇▇▇▇▇ Group, Inc. for a period of six months.
The Company believes that ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., who, as of December 31, 1995,
owned in excess of 5% of the Company's outstanding voting stock and was a
director of the Company at the time the consulting agreement was executed, and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, who at the time the consulting agreement was executed was an
executive officer of the Company and owned in excess of 5% of the Company's
outstanding voting stock, had controlling interests in The ▇▇▇▇▇▇▇▇ Group, Inc.
In consideration, The ▇▇▇▇▇▇▇▇ Group, Inc. or its transferees received warrants
to purchase 300,000 shares of ACSI Common Stock, exercisable at $.875 per share.
The holders of these warrants had the right to resell the shares to ACSI for
$2.25 per share through October 25, 1995. Pursuant to an Assignment and
Assumption Agreement dated June 21, 1995 (as described below), Apex Investment
Fund II, L.P. ("Apex II") assumed the Company's obligation to purchase such
shares for a purchase price of $2.25 per share.
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9
On June 1, 1994, the Company entered into a Stock Exchange
Agreement, with the following holders of 1,700 shares of its preferred stock,
some of whom were affiliates of the Company: Apex--247.5 shares;
Productivity--247.5 shares; ▇▇▇▇▇ ▇▇▇▇▇--5 shares; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.--550
shares and The ▇▇▇▇▇▇▇▇ Group, Inc.--650 shares. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, who is a
director of the Company, is a general partner of a partnership which is the
general partner of Apex. Productivity, until the closing of the October 1994
Private Placement owned in excess of 5% of the Company's outstanding voting
stock. ▇▇▇▇▇ ▇▇▇▇▇ is a former officer and director of the Company. ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇. owned in excess of 5% of the Company's outstanding voting stock as of
December 31, 1995, and was a director of the Company at the time such exchange
was effective. The Company believes that ▇▇. ▇▇▇▇▇ is also a principal
stockholder of The ▇▇▇▇▇▇▇▇ Group, Inc. The preferred stock had a face value of
$1,000 per share, and represented all of the then issued and outstanding shares
of the Company's preferred stock. As of June 30, 1994, none of the preferred
stock remained outstanding. The Company exchanged each share of such preferred
stock for the number of shares of Common Stock determined by dividing the face
amount of such shares of preferred stock by $3.10 (which equals the average of
the high bid and low ask prices for the Company's Common Stock during the five
trading days immediately preceding June 1, 1994). The preferred stockholders
were granted piggy-back registration rights for the Common Stock received in the
exchange, and demand registration rights on two occasions for the two-year
period, June 1, 1995, to June 1, 1997, upon written request of 60% of the
holders of such Common Stock received in the exchange. The preferred
stockholders also each executed a general release in favor of the Company.
On June 9, 1994, the Company issued Secured Convertible Notes
to, and executed Security Agreements with, Apex, Productivity and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇. The notes, which were repaid immediately following the October 1994
Private Placement, had principal amounts of $264,680, $264,680 and $77,281,
respectively, with an interest rate of 15% per annum. The notes were secured
pari passu by the tangible assets of the Company's subsidiaries in the first two
cities to complete construction of networks, American Communication Services of
Louisville, Inc. and American Communication Services of Little Rock, Inc. The
Company paid the principal and accrued interest on ▇▇. ▇▇▇▇▇'▇ note in cash and
paid Apex and Productivity in shares of its 9% Series A Convertible Preferred
Stock (the "Series A Preferred Stock"). Under the terms of the notes, because
the notes held by Apex and Productivity were paid in shares
177
10
of Series A Preferred Stock valued at $90 per share, the Company was obligated
to pay an additional $77,250 each to Apex and Productivity, payable also in
shares of Series A Preferred Stock valued at $90 per share.
Also in June 1994, Apex, Productivity and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
then a director of the Company, purchased notes with the aggregate principal
amount of $1,300,720. These notes paid interest at a rate of 15% per annum and
were originally due December 31, 1994. The principal of these notes was
converted into 14,453 shares of Series A Preferred Stock as part of the October
1994 Private Placement and the holders thereof received warrants to purchase
173,428 shares of Common Stock, which warrants were exercised. The accrued
interest of $62,736 on these notes as of October 21, 1994, was paid by the
Company in cash.
On June 16, 1994, the Company entered into a financial
consulting agreement with ▇▇▇▇▇▇▇▇ Partners, Inc. and Global Capital, Inc., both
of which the Company believes to be affiliates of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a former
executive officer of the Company and a principal shareholder at that time and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. The Company agreed to pay $153,750 for consulting services
rendered through the date of the agreement, and a monthly payment of $7,500
continuing for a period of two years following the closing of the October 1994
Private Placement.
Effective June 1, 1994, the Company engaged SGC Advisory
Services, Inc. ("SGC") as a financial and business consultant for three years.
SGC is an affiliate of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a former director of the Company.
Pursuant to the agreement, the Company will compensate SGC as follows: (1) a
monthly fee of $5,000; (2) options to purchase up to 50,000 shares of the
Company's Common Stock which vest on July 1, 1997, and are exercisable on or
before July 1, 1999; and (3) a fee equal to 4% of the total aggregate
consideration received by the Company or its shareholders, in any transaction
which the Company completes with a strategic partner, merger partner or buyer if
SGC is the finder of such entity; or in the case where SGC is not the finder but
proves instrumental in completing the transaction then a fee of 2% will be
payable to SGC. In either case, 50% of the fee will be payable in cash at the
time of closing and 50% will be payable in warrants to purchase securities or
instruments similar to those received by the Company or its shareholders, unless
the entire purchase price is paid in cash. In the latter case, the entire fee
will be payable in cash at closing. Any warrants will have an exercise life of
five years from the date of issuance or vesting, whichever is later, and be
exercisable
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11
at the same price as established by the transaction which generates the warrant
fee. At the end of each month of the term of the agreement, SGC earns a credit
against the exercise price of the options referred to in (2) above equal to
1/36th of the exercise price. The shares issued upon exercise of the options
were priced at the average of the high bid and low asked price on the closing
date of the October 1994 Private Placement and have piggy-back registration
rights.
In August, 1994, Apex II loaned the Company $250,000. The
terms of this loan were 15% per annum interest on a note due December 31, 1994,
the grant of a security interest in the tangible assets of the Company's
operating subsidiary which was then constructing a CAP network, and the issuance
of the Company's warrants in the amount of $250,000 to purchase shares of Series
A Preferred Stock at $90 per share. Apex II converted the principal of this loan
into 2,778 shares of Series A Preferred Stock at $90 per share as part of the
October 1994 Private Placement. In addition, Apex II received warrants to
purchase 3,333 shares of Common Stock at $1.125 per share and warrants to
purchase 3,333 shares of Common Stock at $0.01 per share in connection with this
conversion. All of these warrants were exercised.
In October 1994, the Company completed a private placement
(the "October 1994 Private Placement") in which it sold an aggregate of 186,664
shares of its Series A Preferred Stock and issued warrants to purchase an
aggregate of 2,674,506 shares of Common Stock for an aggregate consideration of
$16.8 million, including the conversion of $4.3 million of outstanding debt.
Each share of the Series A Preferred Stock is convertible into 40 shares of
Common Stock, subject to anti-dilution adjustments, generally at the option of
the holder. The ▇▇▇▇ Alternative Income Fund, L.P. ("▇▇▇▇") acquired control of
the Company through its purchase of 138,889 shares of the Series A Preferred
Stock for an aggregate purchase price of $12.5 million and its receipt of
warrants to purchase 77,000 and 1,414,222 shares of Common Stock at prices of
$1.125 and $0.01 per share, respectively, all of which were exercised in
November 1994. ▇▇▇▇ is an investment limited partnership and the consideration
for the Series A Preferred Stock was obtained from its general and limited
partners through capital calls for investments by the fund. Upon completion of
these transactions, ▇▇▇▇ owned approximately 55.1% of the Company's outstanding
voting stock.
On June 21, 1995 the Company entered into an Assignment and
Assumption Agreement between the Company and
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12
Apex II wherein Apex II assumed the Company's obligation to purchase from
certain stockholders an aggregate of 300,000 shares of Common Stock at a
purchase price of $2.25 per share.
On June 26, 1995 the Company completed a private placement
(the "June 1995 Private Placement") of its 9% Series B-1 Convertible Preferred
Stock ("Series B-1 Preferred Stock"), 9% Series B-2 Convertible Preferred Stock
("Series B-2 Preferred Stock") and 9% Series B-3 Convertible Preferred Stock
("Series B-3 Preferred Stock") (collectively, the "Series B Preferred Stock").
In the June 1995 Private Placement ING Equity Partners, L.P. I (ING") purchased
an aggregate of 100,000 shares of Company's Series B-1 Preferred Stock, warrants
to purchase 428,571 shares of Common Stock at an exercise price of $0.01 per
share and a warrant to purchase 100,000 shares Common Stock at an exercise price
of $2.50 per share. In connection with the June 1995 Private Placement, the
Company's Series A Preferred Stock was exchanged for an identical number of 9%
Series A-1 Convertible Preferred Stock (the "Series A-1 Preferred Stock," and
the Series A-1 Preferred Stock together with the Series B Preferred Stock, the
"Preferred Stock") and subsequently retired. ▇▇▇▇ and certain of its affiliates
purchased and aggregate of 100,975 shares of Series B-2 Preferred Stock,
warrants to purchase 432,749 shares of Common Stock at an exercise price of
$0.01 per share, a warrant to purchase 100,000 shares of Common Stock at an
exercise price of $1.79 per share and a warrant to purchase 100,000 shares of
Common Stock at an exercise price of $2.50 per share. Apex II and certain of its
affiliates purchased an aggregate of 21,000 shares of Series B-3 Preferred Stock
and warrants to purchase an aggregate of 90,000 shares of Common Stock at an
exercise price of $.01 per share. Each warrant to purchase Common Stock at an
exercise price of $.01 per share that was issued pursuant to the June 1995
Private Placement was exercised. The price per unit in the June 1995 Private
Placement was $100. On November 14, 1995, pursuant to the Purchase Agreement
(the "Series B Purchase Agreement") dated as of June 26, 1995 among the Company,
▇▇▇▇, ING, Apex, Apex II and other purchasers, ING purchased 50,000 shares of
the Company's 9% Series B-4 Convertible Preferred Stock and a warrant (exercised
on that date) entitling ING to purchase 214,286 shares of Common Stock at an
exercise price of $0.01 per share. In connection with the June 1995 Private
Placement, the Company entered into the Registration Rights Agreement dated June
26, 1995, among the holders of the Preferred Stock, certain holders of Common
Stock and certain holders of options or warrants convertible into Common Stock
(the "Registration Rights Agreement") wherein the parties were
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granted piggy-back registration rights with respect to any registration
statements (other than Registration Statements filed on Forms S-4 or S-8) filed
by the Company with the Commission at any time prior to the sixth anniversary of
the Registration Rights Agreement, and certain demand registration rights
following the occurrence of, among other things, a fully distributed, firm
commitment underwritten public offering of the Company's Common Stock registered
under the Securities Act of 1933, as amended, in which the gross proceeds to the
Company is at least $15,000,000 and the initial price to the public per share of
Common Stock is at least $5.00 and the result of which is the inclusion of the
Common Stock in the NASDAQ National Market System or listing on the New York
Stock Exchange.
The Company also has entered into the Stockholder's Agreement
(the "Stockholder's Agreement"), dated as of June 26, 1995, with the holders of
the Preferred Stock, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇. The Stockholders
Agreement, among other things, generally restricts the transfer of Common and
Preferred Stock owned by the parties to the Stockholders Agreement with the
exception of stock sold: (i) in a public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or (ii) in the public market pursuant to Rule 144 under the
Securities Act. The Stockholders Agreement further provides the stockholders
with rights of first refusal in the case of sales initiated by stockholders that
are parties to the Stockholders Agreement and certain "tag-along" rights, which
allow the stockholders to sell a proportionate amount of their stock in the
event a stockholder proposes to sell such stock to an unrelated purchaser.
As of June 30, 1995, the Company entered into an Amended and
Restated Management Registration Rights Agreement, as amended, wherein the
Company's executive officers ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ were granted piggy-back
registration rights with respect to registration statements (other than
Registration Statements filed on Form S-4) filed by the Company with the
Commission at any time prior to the sixth anniversary of the Registration Rights
Agreement, and certain demand registration rights, with respect to shares of
Common Stock underlying options granted to them under their respective
employment agreements with the Company.
The Company entered into Indemnity Agreements with the
following Directors and Executive Officers providing for the Company's
indemnification of such Directors and
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Executive Officers (each dated as of the date specified following such
Director's or Executive Officer's name):
▇▇▇▇▇ ▇. ▇▇▇▇▇▇: March 24, 1997
▇▇▇▇▇ ▇. ▇▇▇▇▇: June 26, 1995
▇▇▇▇▇ ▇. ▇▇▇▇▇: June 26, 1995
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇: June 26, 1995
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇: June 26, 1995
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇: June 26, 1995
▇▇▇▇ ▇. ▇▇▇▇▇: November 24, 1996
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇: June 26, 1995
▇▇▇▇▇ ▇. ▇▇▇▇▇▇: June 26, 1995
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇: June 26, 1995
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇: June 26, 1995
On November 8, 1995, the Company entered into a Governance
Agreement (the "Governance Agreement") with ▇▇▇▇, ING, Apex, Apex II and other
holders of the Preferred Stock. Pursuant to the Governance Agreement, until June
26, 1996, the Board was to consist of eleven members, four of whom were elected
by holders of the Common Stock and seven of whom were elected by holders of the
Preferred Stock. On February 26, 1996, the Company and the same parties to the
Governance Agreement signed a Supplemental Governance Agreement pursuant to
which the Board was reduced to seven members, four of whom were elected by
holders of the Common Stock and three of whom were elected by holders of the
Preferred Stock.
On April 10, 1997, the Company entered into a Purchase
Agreement with ▇▇▇▇, ING, Apex and Apex II (the "Direct Purchasers") to sell an
aggregate of 3,600,000 shares of the Company's Common Stock directly to the
Direct Purchasers at a price of $4.70 per share.
On April 28, 1997, the Company extended a loan in the
principal amount of $195,000 to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III, the Company's President
and Chief Operating Officer--Strategy and Technology Development. The loan bears
interest at 8% per annum and is due and payable no later than April 28, 1999.
▇▇. ▇▇▇▇▇▇▇▇ must prepay all amounts outstanding if his employment terminates
earlier than April 28, 1999, and he must use the net proceeds from the sale of
any of his shares of Common Stock prior to April 28, 1999 to prepay any
principal and interest then outstanding.
On July 10, 1997, the Company entered into a Purchase
Agreement with The ▇▇▇▇ Alternative Income Fund, L.P. ("▇▇▇▇"), General Motors
Domestic Group Pension Trust ("G.M."), Societe Generale Securities Corporation
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("SOCGEN"), ING Baring (U.S.) Securities, Inc. ("ING Baring") and ▇▇▇▇▇▇▇▇▇ Inc.
Master Trust ("McDermott")(the "Company Purchasers"), relating to the sale by
the Company to certain initial purchasers and the Company Purchasers of 75,000
Units (the "Units"), consisting of $75,000,000 of 14-3/4% Redeemable Preferred
Stock due 2008 (the "Preferred Stock") and 75,000 Warrants (the "Warrants"),
each Warrant initially to purchase 80.318 shares of common stock, par value $.01
per share (the "Common Stock"), of the Company (the "Initial Warrant Shares"),
subject to an increase of 22.645 additional shares of Common Stock (the
"Additional Warrant Shares" and, together with the Initial Warrant Shares, the
"Warrant Shares") in the event the Company fails to raise net proceeds of at
least $50,000,000 through the issue and sale of its qualified capital stock
(other than preferred stock) on or before December 31, 1998. In connection with
the offering of the Units, the Company also entered into a Supplemental
Registration Rights Agreement dated as of July 10, 1997, with ▇▇▇▇, ▇.▇. and
▇▇▇▇▇▇▇▇▇ to provide for certain demand registration rights with respect to the
Units. Additionally, the Company entered into a fee letter agreement dated July
10, 1997, with ING Baring and SOCGEN to provide for the payment to each such
entity of a fee in the amount of $337,500 in connection with the sale to each
such entity of 7,500 Units.
On July 23, 1997, in connection with the sale of the Notes,
the Company entered into a fee letter agreement with ▇▇▇▇ Asset Management Co.,
L.L.C. ("▇.▇. ▇▇▇▇") to pay ▇.▇. ▇▇▇▇, on behalf of investment management
accounts for which ▇.▇. ▇▇▇▇ acts as investment advisor, a fee of $750,000 with
respect to the $50,000,000 of Notes purchased by ▇.▇. ▇▇▇▇, on behalf of
investment management accounts for which ▇.▇. ▇▇▇▇ acts as investment advisor,
from the Initial Purchasers. In addition, on July 23, 1997, the Company entered
into a Supplemental Registration Rights Agreement with ▇.▇. ▇▇▇▇, on behalf of
investment management accounts for which ▇.▇. ▇▇▇▇ acts as investment advisor,
to provide for certain demand registration rights with respect to the Notes.