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INDENTURE
DATED AS OF [ ], 1998
BETWEEN
GLOBAL TELESYSTEMS GROUP, INC., AS ISSUER,
AND
THE BANK OF NEW YORK, AS TRUSTEE
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$100,000,000
[ ]% SENIOR NOTES DUE 2005
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CROSS-REFERENCE TABLE
TRUST INDENTURE INDENTURE
ACT 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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08, 7.10.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10; 10.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06; 10.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07; 4.09; 10.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.02
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 10.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
Section 316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.04
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01
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N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 1.03. Rules of Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.02. Execution and Authentication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.03. Registrar and Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.04. Paying Agent to Hold Assets in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.05. Securityholder Lists. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.06. Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.07. Replacement Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.08. Outstanding Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.09. Treasury Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.10. Temporary Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.11. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.12. Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.13. CUSIP Number. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.14. Deposit of Moneys. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.15. Book-Entry Provisions for Global Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.16. Registration of Transfers and Exchanges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.02. Selection of Securities to Be Redeemed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.03. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.04. Effect of Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.05. Deposit of Redemption Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.06. Securities Redeemed in Part. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.02. Maintenance of Office or Agency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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SECTION 4.03. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.04. Payment of Taxes and Other Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.06. Maintenance of Properties and Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.07. Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.08. Waiver of Stay, Extension or Usury Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.09. Provision of Financial Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.10. Change of Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.11. Limitation on Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.12. Limitation on Incurrence of Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 4.13. Limitations on Restrictions Affecting Restricted Group Members. . . . . . . . . . . . . . . . . . 38
SECTION 4.14. Designation of Unrestricted Group Members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.15. Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.16. Limitation on Asset Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.17. Limitation on Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.18. Limitation on Issuances of Guarantees by Restricted Group Members. . . . . . . . . . . . . . . . . 43
SECTION 4.19. Limitation on the Issuance and Sale of Equity Interests of Restricted Group
Members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.20. Limitations on Lines of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.21. Additional Amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.22. Deposit of Funds with Escrow Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.02. Successor Corporation Substituted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.04. Waiver of Past Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.05. Control by Majority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.06. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.07. Rights of Holders to Receive Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.08. Collection Suit by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.09. Trustee May File Proofs of Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.11. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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SECTION 7.02. Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 7.03. Individual Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.06. Reports by Trustee to Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.07. Compensation and Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.08. Replacement of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.09. Successor Trustee by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.10. Eligibility; Disqualification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.11. Preferential Collection of Claims Against Company. . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.12. Trustee's Application for Instructions from the Company. . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 8.02. Application of Trust Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.03. Repayment to Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.04. Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.02. With Consent of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.03. Compliance with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.04. Revocation and Effect of Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 9.05. Notation on or Exchange of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 9.06. Trustee to Sign Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.02. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.03. Communications by Holders with Other Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 10.04. Certificate and Opinion as to Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 10.05. Statements Required in Certificate or Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 10.06. Rules by Trustee, Paying Agent, Registrar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.07. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.08. No Recourse Against Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.09. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.10. Counterpart Originals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.11. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.12. No Adverse Interpretation of Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.13. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.14. Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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ARTICLE ELEVEN
COLLATERAL AND SECURITY
SECTION 11.01. Escrow Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.02. Recording and Opinions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 11.03. Release of Escrow Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 11.04. Authorization of Actions to Be Taken by the Trustee Under the Escrow Agreement . . . . . . . . . 67
SECTION 11.05. Authorization of Receipt of Funds by the Trustee Under the Escrow Agreement. . . . . . . . . . . . 67
SECTION 11.06. Termination of Security Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
EXHIBIT A Form of Series A Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Form of Legend for Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
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INDENTURE dated as of [ ], 1998, between
GLOBAL TELESYSTEMS GROUP, INC. (the "Company"), and THE BANK OF NEW YORK, a New
York banking corporation, as Trustee.
Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the
Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person (a)
assumed in connection with an Acquisition from such Person or (b) existing at
the time such Person succeeds to the obligations of the Company pursuant to
Section 5.01 or existing at the time such Person becomes a Restricted Group
Member or is merged or consolidated with or into the Company or any Restricted
Group Member; provided, however, that the amount of any Indebtedness of such
Person which is redeemed, defeased, retired or otherwise repaid at the time of
or immediately upon consummation of the transactions by which such Person
becomes a Restricted Group Member or is merged or consolidated with or into the
Company or any Restricted Group Member, or such Acquisition shall not be
Acquired Indebtedness.
"Acquired Person" means, with respect to any specified Person,
any other Person which merges with or into or becomes a Subsidiary of such
specified Person.
"Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Company or any
Restricted Group Member to any other Person, or any acquisition or purchase of
Equity Interests of any other Person by the Company or any Restricted Group
Member, in either case pursuant to which such Person shall become a Restricted
Group Member or shall be consolidated, merged with or into the Company or any
Restricted Group Member or (ii) any acquisition by the Company or any
Restricted Group Member of the assets of any Person which constitute
substantially all of an operating unit or line of business of such Person or
which is otherwise outside of the ordinary course of business.
"Additional Amount" has the meaning set forth in Section 4.21.
"Adjusted Income Tax Expense" means, with respect to any
period, (without duplication) the provision for federal, state, local and
foreign income taxes payable by the Company and the Restricted Group Members
for such period as determined in accordance with GAAP, excluding, however, with
respect to any Restricted Group Member, that proportion thereof that
corresponds to the percentage ownership interest in the outstanding Equity
Interests of such Restricted Group Member not owned on the last day of such
period, directly or indirectly, by the Company.
"Adjusted Interest Expense" means, with respect to any period,
without duplication, the sum of (i) the interest expense of the Company and the
Restricted Group Members for such period as determined in accordance with GAAP,
including, without limitation, (a) any amortization of debt discount, (b) the
net cost
8
-2-
under Interest Rate Protection Obligations (including any amortization of
discounts), (c) the interest portion of any deferred payment obligation, (d)
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and (e) all capitalized
interest and all accrued interest, (ii) the interest component of Capital Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by the Company
and the Restricted Group Members during such period as determined in accordance
with GAAP and (iii) dividends and distributions in respect of Disqualified
Equity Interests actually paid in cash by the Company or any Restricted Group
Member (other than to the Company or another Restricted Group Member) during
such period as determined in accordance with GAAP, excluding, however, with
respect to any Restricted Group Member, that proportion thereof that
corresponds to the percentage ownership interest in the outstanding Equity
Interests of such Restricted Group Member not owned on the last day of such
period, directly or indirectly, by the Company.
"Adjusted Net Income" means, with respect to any period, the
net income of the Company and the Restricted Group Members for such period
determined in accordance with GAAP, adjusted, to the extent included in
calculating such net income, by excluding, without duplication, (a) all
extraordinary gains or losses for such period, (b) all gains or losses from the
sales or other dispositions of assets out of the ordinary course of business
(net of taxes, fees and expenses relating to the transaction giving rise
thereto) for such period; (c) that portion of such net income derived from or
in respect of investments in Persons other than Restricted Group Members,
except to the extent actually received in cash by the Company or any Restricted
Group Member (subject, in the case of any Restricted Group Member, to the
provisions of clause (f) of this definition); (d) the portion of such net
income (or loss) allocable to minority interests in any Person (other than a
Restricted Group Member) for such period, except to the extent the Company's
allocable portion of such Person's net income for such period is actually
received in cash by the Company or any Restricted Group Member (subject, in the
case of any Restricted Group Member, to the provisions of clause (f) of this
definition); (e) for purposes of calculating the Basket, the net income (or
loss) of any other Person combined with the Company or any Restricted Group
Member on a "pooling of interests" basis attributable to any period prior to
the date of combination; (f) the net income of any Restricted Group Member to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Group Member of that income is not at the time
(regardless of any waiver) permitted, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulations applicable to that Restricted Group
Member or its Equity Interest holders; provided, however, that with respect to
any restriction on the declaration or payment of dividends or similar
distribution in place on the Issue Date pursuant to any agreement in effect on
the Issue Date (or any amendment or modification thereto no more restrictive
than that in effect on the Issue Date), so long as such restriction on the
declaration or payment of dividends or similar distributions is no less
favorable to the Holders than the restrictions contained in the Hermes Europe
Senior Notes Indenture as in effect on the Issue Date, this clause (f) shall
apply solely for purposes of determining Cumulative Operating Cash Flow in
connection with a Restricted Payment described in clauses (i), (ii) and (iii)
of the first paragraph of Section 4.11; and (g) to the extent not otherwise
excluded in accordance with GAAP, the net income (or loss) of any Restricted
Group Member in an amount that corresponds to the percentage ownership interest
in the income of such Restricted Group Member not owned on the last day of such
period, directly or indirectly, by the Company.
"Adjusted Operating Cash Flow" means, with respect to any
period, Adjusted Net Income for such period increased (without duplication), to
the extent deducted in calculating such Adjusted Net Income, by (a) Adjusted
Income Tax Expense for such period; (b) Adjusted Interest Expense for such
period; and (c) depreciation, amortization and any other non-cash items for
such period (other than any non-cash item which requires the accrual of, or a
reserve for, cash charges for any future period) of the Company and the
Restricted Group Members, including, without limitation, amortization of
capitalized debt issuance costs for
9
-3-
such period, all of the foregoing determined in accordance with GAAP minus
non-cash items to the extent they increase Adjusted Net Income (including the
partial or entire reversal of reserves taken in prior periods) for such period.
In calculating Adjusted Operating Cash Flow, for each Restricted Group Member,
the addition to Adjusted Net Income for such Restricted Group Member of the
items set forth in clause (c) of the previous sentence shall exclude that
proportion thereof that corresponds to the percentage ownership interest in the
Outstanding Equity Interests of such Restricted Group Member not owned on the
last day of such period, directly or indirectly, by the Company.
"Adjusted Total Assets" means the total amount of assets of
the Company and its Restricted Group Members, except to the extent resulting
from write-ups of assets (other than write-ups in connection with accounting
for acquisitions in conformity with GAAP), after deducting therefrom (i) all
current liabilities of the Company and its Restricted Group Members; and (ii)
all goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, all as calculated in conformity with GAAP;
provided that Adjusted Total Assets shall be reduced (to the extent not
otherwise reduced in accordance with GAAP) by an amount equal to the amount of
restricted cash of the Company and its Restricted Group Members, including cash
or Cash Equivalents held in the Escrow Account or the escrow account for the
Indebtedness of Hermes Europe issued under the Hermes Europe Senior Notes
Indenture. For purposes of this Adjusted Total Assets definition, (a) assets
shall be calculated less applicable accumulated depreciation, accumulated
amortization and other valuation reserves, and (b) all calculations shall
exclude all intercompany items.
"Adjusted Total Controlled Assets" means the total amount of
assets of the Company and the Restricted Group Members of which the Company,
directly or indirectly, owns greater than 51% of the outstanding Equity
Interests, except to the extent resulting from write-ups of assets (other than
write-ups in connection with accounting for acquisitions in conformity with
GAAP), after deducting therefrom (i) all current liabilities of the Company and
such Restricted Group Members; and (ii) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangibles of
the Company and such Restricted Group Members, all as calculated in conformity
with GAAP; provided that Adjusted Total Controlled Assets shall be reduced (to
the extent not otherwise reduced in accordance with GAAP) by an amount (1)
equal to the amount of restricted cash of the Company and such Restricted Group
Members, including cash or Cash Equivalents held in the Escrow Account or the
escrow account for the Indebtedness of Hermes Europe issued under the Hermes
Europe Senior Notes Indenture and (2) equal to the aggregate amount of all
Investments of the Company or any such Restricted Group Members in any Person
(other than any loans or advances that are evidenced by a validly executed and
enforceable promissory note). For purposes of this Adjusted Total Controlled
Assets definition, (a) assets shall be calculated less applicable accumulated
depreciation, accumulated amortization and other valuation reserves, and (b)
all calculations (other than with respect to the parenthetical clause in clause
(2) above) shall exclude all intercompany items.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control"(including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), 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 securities, by agreement or otherwise.
"Affiliate Transaction" has the meaning set forth in Section
4.17.
"Agent" means any Registrar, Paying Agent or co-Registrar.
▇▇
-▇-
"▇▇▇▇▇ ▇▇▇▇" means any direct or indirect sale, conveyance,
transfer, lease (that has the effect of a disposition), or other disposition
(including, without limitation, any merger, consolidation or sale-leaseback
transaction) to any Person other than the Company or a Restricted Group Member,
in one transaction or a series of related transactions, of (i) any Equity
Interest of any Restricted Group Member; (ii) any material license, franchise
or other authorization of the Company or any Restricted Group Member; (iii) any
assets of the Company or any Restricted Group Member which constitute
substantially all of an operating unit or line of business of the Company or
any Restricted Group Member; or (iv) any other property or asset of the Company
or any Restricted Group Member outside of the ordinary course of business
(including the receipt of proceeds paid on account of the loss of or damage to
any property or asset and awards of compensation for any asset taken by
condemnation, eminent domain or similar proceedings). For the purposes of this
definition, the term "Asset Sale" shall not include (a) any transaction
consummated in compliance with Section 5.01 and the creation of any Lien not
prohibited by Section 4.15; (b) sales of property or equipment that has become
worn out, obsolete or damaged or otherwise unsuitable for use in connection
with the business of the Company or any Restricted Group Member, as the case
may be; (c) the making of any Permitted Investment; and (d) any transaction
consummated in compliance with Section 4.11 or Section 4.14. In addition,
solely for purposes of Section 4.16, any sale, conveyance, transfer, lease or
other disposition of any property or asset, whether in one transaction or a
series of related transactions, with a Fair Market Value not in excess of $1.0
million shall be deemed not to be an Asset Sale.
"Bankruptcy Law" has the meaning set forth in Section 6.01.
"Basket" has the meaning set forth in Section 4.11.
"Board of Directors" means, with respect to any Person, the
Board of Directors of such Person (or comparable governing body), or any
authorized committee of that Board (it being understood that the Board of
Directors of the Company shall be its Board of Supervisory Directors).
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
"Business Day" means a day (other than a Saturday or Sunday)
on which the Depository and banks in New York are open for business.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of
a capital lease that would at such time be so required to be capitalized on the
balance sheet in accordance with GAAP.
"Cash Equivalents" means: (a) U.S. dollars; (b) securities
issued or directly and fully guaranteed or insured by the U.S. government or
any agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition; provided, however, that securities
deposited in the Escrow Account may have longer maturities; (c) certificates of
deposit and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any commercial bank
having capital and surplus in excess of $500 million; provided, however, that
securities deposited in the Escrow Account may have longer maturities; (d)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (b) and (c) entered into with any
financial institution meeting the qualifications specified in clause (c) above;
and (e) commercial paper rated P-1, A-1 or the equivalent thereof by Moody's
Investors
11
-5-
Service, Inc. or Standard & Poor's Ratings Group, respectively, and in each
case maturing within six months after the date of acquisition.
"Change of Control" means the occurrence of any of the
following events (whether or not approved by the Board of Directors of the
Company): (a) any Person or group, other than the Permitted Holders, is or
becomes the beneficial owner, directly or indirectly, of Voting Equity
Interests representing 50% or more of the total voting power of the Voting
Equity Interests of the Company or has the power, directly or indirectly, to
elect a majority of the members of the Board of Directors of the Company; (b)
the Company consolidates with, or merges with or into, another Person or the
Company or one or more Restricted Group Members sell, assign, convey, transfer,
lease or otherwise dispose of all or substantially all of the assets of the
Company and the Restricted Group Members, taken as a whole, to any Person
(other than a Restricted Group Member), or any Person consolidates with, or
merges with or into, the Company, in any such event other than pursuant to a
transaction in which the Person or Persons that "beneficially owned," directly
or indirectly, a majority of the total voting power of the Voting Equity
Interests of the Company immediately prior to such transaction, "beneficially
own," directly or indirectly, Voting Equity Interests representing a majority
of the total voting power of the Voting Equity Interests of the surviving or
transferee Person; (c) during any consecutive two year period, individuals who
at the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by the Board of
Directors of the Company or whose nomination for election by the stockholders
of the Company was approved by a vote of a majority of the directors then still
in office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason (other than by action of the Permitted Holders) to constitute a majority
of the Board of Directors of the Company, then in office; or (d) there shall
occur the liquidation or dissolution of the Company. For purposes of this
definition, (i) "group" has the meaning under Section 13(d) and 14(d) 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)(1) under the Exchange Act, and
(ii) "beneficial ownership" has the meaning set forth in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time, upon the happening of an event or otherwise.
"Change of Control Date" has the meaning set forth in Section
4.10.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by two Officers or by an Officer and
an Assistant Treasurer or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 10.02 or such other address as the
Trustee may give notice to the Company.
"Cumulative Operating Cash Flow" means, as at any date of
determination, the positive cumulative Adjusted Operating Cash Flow realized
during the period commencing on the Issue Date and ending on the last day of the
most recent fiscal quarter immediately preceding the date of determination for
which consolidated
12
-6-
financial information of the Company is available or, if such cumulative
Adjusted Operating Cash Flow for such period is negative, the negative amount by
which cumulative Adjusted Operating Cash Flow is less than zero.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement, which may
include the use of derivatives, designed to protect the Company or any
Restricted Group Member against fluctuations in currency values.
"Custodian" has the meaning set forth in Section 6.01.
"Debt to Annualized Operating Cash Flow Ratio" means the ratio
of (a) the Total Indebtedness as of the date of calculation (the "Determination
Date") to (b) two times the Adjusted Operating Cash Flow for the latest two
fiscal quarters for which financial information is available immediately
preceding such Determination Date (the "Measurement Period"). For purposes of
calculating Adjusted Operating Cash Flow for the Measurement Period
immediately prior to the relevant Determination Date, (I) any Person that is a
Restricted Group Member on the Determination Date (or would become a Restricted
Group Member on such Determination Date in connection with the transaction that
requires the determination of such Adjusted Operating Cash Flow) will be
deemed to have been a Restricted Group Member at all times during such
Measurement Period, (II) any Person that is not a Restricted Group Member on
such Determination Date (or would cease to be a Restricted Group Member on such
Determination Date in connection with the transaction that requires the
determination of such Adjusted Operating Cash Flow) will be deemed not to
have been a Restricted Group Member at any time during such Measurement Period,
and (III) if the Company or any Restricted Group Member shall have in any
manner (x) acquired (through an Acquisition or the commencement of activities
constituting such operating business) or (y) disposed of (by way of an Asset
Sale or the termination or discontinuance of activities constituting such
operating business) any operating business during such Measurement Period or
after the end of such period and on or prior to such Determination Date, such
calculation will be made on a pro forma basis in accordance with GAAP as if, in
the case of an Acquisition or the commencement of activities constituting such
operating business, all such transactions had been consummated on the first day
of such Measurement Period and, in the case of an Asset Sale or termination or
discontinuance of activities constituting such operating business, all such
transactions had been consummated prior to the first day of such Measurement
Period (it being understood that in calculating Adjusted Operating Cash Flow
the exclusions set forth in clauses (a) through (f) of the definition of
Adjusted Net Income shall apply to an Acquired Person as if it were a
Restricted Group Member).
"Default" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.
"Depository" means, with respect to the Securities issued in
the form of one or more Global Securities, The Depository Trust Company or
another Person designated as Depository by the Company, which must be a
clearing agency registered under the Exchange Act.
"Designation" has the meaning set forth in Section 4.14.
"Designation Amount" has the meaning set forth in Section 4.14.
"Designation Basket" has the meaning set forth in Section 4.14.
13
-7-
"Disinterested Director" means a member of the Board of
Directors of the Company who does not have any material direct or indirect
financial interest in or with respect to the transaction being considered.
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Equity Interest" means any Equity Interest
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable,
at the option of the holder thereof, in whole or in part, on or prior to the
Maturity Date; provided, however, that any Equity Interests that would not
constitute Disqualified Equity Interests but for provisions thereof giving
holders thereof the right to require the Company to repurchase or redeem such
Equity Interests upon the occurrence of a change in control occurring prior to
the Maturity Date shall not constitute Disqualified Equity Interests if the
change in control provisions applicable to such Equity Interests are no more
favorable to the holders of such Equity Interests than the provisions described
under Section 4.10 and such Equity Interests specifically provide that the
Company will not repurchase or redeem any such Equity Interests pursuant to
such provisions prior to the Company's repurchase of Securities as are required
to be repurchased pursuant to the provisions described under Section 4.10.
"Equity Interest" in any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate stock or other
equity participations, including partnership interests, whether general or
limited, in such Person, including any Preferred Equity Interests.
"Escrow Account" has the meaning set forth in Section 2 of the
Escrow Agreement.
"Escrow Agent" means The Bank of New York, as escrow agent
under the Escrow Agreement, until a successor replaces it in accordance with
the provisions of the Escrow Agreement and thereafter means such successor.
"Escrow Agreement" means the Escrow Agreement dated as of
February [ ], 1998 among the Company, the Escrow Agent, and the Trustee.
"Escrow Collateral" has the meaning set forth in Section 6 of
the Escrow Agreement.
"Escrow Funds" has the meaning set forth in Section 11.03.
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Existing Joint Venture" means each of PrymTelefon,
Bancomsvyaz, TeleCommunications of Moscow, GTS Monaco Access ▇.▇.▇., Sovam
Teleport Kiev Division L.L.C., EDN Sovintel, all the entities in which
SFMT-Rusnet, Inc. currently has an interest, all the entities in which Vostok
Mobile B.V. currently has an interest and their respective successors.
14
-8-
"Expiration Date" has the meaning set forth in the definition
of "Offer to Purchase" below.
"Fair Market Value" means, with respect to any asset, the
price (after taking into account any liabilities relating to such assets) which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of which is
under any compulsion to complete the transaction; provided, however, that the
Fair Market Value of any such asset or assets shall be determined conclusively
by the Board of Directors of the Company acting in good faith, which
determination shall be evidenced by a resolution of such Board delivered to the
Trustee.
"GAAP" means, at any date of determination, generally accepted
accounting principles in effect in the United States which are applicable at
the date of determination and which are consistently applied for all applicable
periods.
"Global Security" means a security evidencing all or a portion
of the Securities issued to the Depository or its nominee in accordance with
Section 2.01.
"guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection
in the ordinary course of business), direct or indirect, in any manner, of any
part or all of such obligation and (ii) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to assure in any way
the payment or performance (or payment of damages in the event of
non-performance) of all or any part of such obligation, including, without
limiting the foregoing, the payment of amounts drawn down by letters of credit.
A guarantee shall include, without limitation, any agreement to maintain or
preserve any other person's financial condition or to cause any other Person to
achieve certain levels of operating results.
"Guarantee" has the meaning set forth in Section 4.18.
"Guaranteed Indebtedness" has the meaning set forth in Section
4.18.
"Hermes Europe" means Hermes Europe Railtel B.V., a company
organized in the Netherlands.
"Hermes Europe Senior Notes Indenture" means the indenture
governing the 11 1/2% Senior Securities due 2007 of Hermes Europe.
"Holder," "holder of Securities," "Securityholders" or other
similar terms mean the registered holder of any Security.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (including by conversion,
exchange or otherwise), assume, guarantee or otherwise become liable in respect
of such Indebtedness or other obligation or the recording, as required pursuant
to GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "Incurrence," "Incurred" and "Incurring"
shall have meanings correlative to the foregoing). Indebtedness of a Person
existing at the time such Person becomes a Restricted Group Member or is merged
or consolidated with or into the Company or any Restricted Group Member shall
be deemed to be Incurred at such time.
"Indebtedness" means (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, (a) every obligation of such Person
15
-9-
for money borrowed; (b) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations incurred
in connection with the acquisition of property, assets or businesses; (c) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person; (d) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable
incurred in the ordinary course of business and payable in accordance with
industry practices, or other accrued liabilities arising in the ordinary course
of business which are not overdue or which are being contested in good faith);
(e) every Capital Lease Obligation of such Person; (f) every net obligation
under interest rate swap or similar agreements or foreign currency hedge,
exchange or similar agreements of such Person; and (g) every obligation of the
type referred to in clauses (a) through (f) of another Person and all dividends
of another Person the payment of which, in either case, such Person has
guaranteed or is responsible or liable for, directly or indirectly, as obligor,
guarantor or otherwise. Indebtedness (i) shall never be calculated taking into
account any cash and Cash Equivalents held by such Person; (ii) shall not
include obligations of any Person (x) arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course of
business, provided that such obligations are extinguished within 20 Business
Days of their incurrence unless covered by an overdraft line, (y) resulting from
the endorsement of negotiable instruments for collection in the ordinary course
of business and consistent with past business practices and (z) under stand-by
letters of credit to the extent collateralized by cash or Cash Equivalents;
(iii) which provides that an amount less than the principal amount thereof shall
be due upon any declaration of acceleration thereof shall be deemed to be
Incurred or outstanding in an amount equal to the accreted value thereof at the
date of determination determined in accordance with GAAP; and (iv) shall include
the liquidation preference and any mandatory redemption payment obligations in
respect of any Disqualified Equity Interests of the Company or any Preferred
Equity Interests of any Restricted Group Member not held by the Company or any
Restricted Group Member.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Independent Financial Advisor" means a recognized accounting,
appraisal, investment banking firm or consultant with experience in a
Telecommunications Business (i) which does not, and whose directors, officers
and employees or Affiliates do not, have a material direct or indirect financial
interest in the Company and (ii) which, in the judgment of the Board of
Directors of the Company, is otherwise independent and qualified to perform the
task for which it is to be engaged.
"interest" means, with respect to the Securities, the sum of
any cash interest on the Securities.
"Interest Payment Date" means each semiannual interest payment
date on [ ] and [ ] of each year, commencing [ ], 1998.
"Interest Rate Protection Obligations" means, with respect to
any Person, the Obligations of such Person under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements,
and (ii) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.
16
-10-
"Interest Record Date" for the interest payable on any
Interest Payment Date (except a date for payment of defaulted interest) means
the [ ] or [ ] (whether or not a Business Day), as the case may
be, immediately preceding such Interest Payment Date.
"Investment" means, with respect to any Person, any direct or
indirect loan, advance, guarantee or other extension of credit or capital
contribution to (by means of transfers of cash or other property or assets to
others or payments for property or services for the account or use of others,
or otherwise), or purchase or acquisition (whether from the issuer thereof or
any existing holder thereof) of Equity Interests, bonds, securities, debentures
or other securities or evidences of Indebtedness issued by, any other Person.
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
shall be valued at its Fair Market Value at the time of such transfer.
"Investments" shall exclude (A) extensions of trade credit in the ordinary
course of business in accordance with normal trade practices and (B) the
Designation of any Restricted Group Member as an Unrestricted Group Member in
accordance with Section 4.14.
"Involuntary Event" has the meaning specified in the
definition of "Permitted Investments" below.
"Issue Date" means the original issue date of the Securities.
"Judgment Currency" has the meaning set forth in Section
10.14.
"Latest Balance Sheet" means, of any Person, the latest
consolidated balance sheet of such Person reported on by a recognized firm of
independent accountants without qualification as to scope.
"Lien" means any lien, mortgage, charge, security interest,
hypothecation, assignment for security or encumbrance of any kind (including
any conditional sale or capital lease or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security interest).
"Maturity Date" means the date, which is set forth on the face
of the Securities, on which the Securities will mature.
"Measurement Period" has the meaning set forth in the
definition of "Debt to Annualized Operating Cash Flow Ratio" above.
"Monetization Sale" has the meaning set forth in Section 4.16.
"Net Cash Proceeds" means the aggregate proceeds in the form
of cash or Cash Equivalents received by the Company or any Restricted Group
Member in respect of any Asset Sale, including all cash or Cash Equivalents
received upon any sale, liquidation or other exchange of proceeds of Asset
Sales received in a form other than cash or Cash Equivalents, net of (a) the
direct costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof; (b) taxes paid or payable as
a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements); (c) amounts required to be
applied to the repayment of Indebtedness secured by a Lien on the asset or
assets that were the subject of such Asset Sale;
17
-11-
(d) amounts deemed, in good faith, appropriate by the Board of Directors of the
Company to be provided as a reserve, in accordance with GAAP, against any
liabilities associated with such assets which are the subject of such Asset
Sale (provided that the amount of any such reserves shall be deemed to
constitute Net Cash Proceeds at the time such reserves shall have been released
or are not otherwise required to be retained as a reserve); and (e) with
respect to Asset Sales by any Restricted Group Member, the portion of such cash
payments attributable to Persons holding a minority interest in such Restricted
Group Member.
"Net Proceeds" means the aggregate net proceeds (including the
Fair Market Value of non-cash proceeds constituting equipment or other assets
of a type generally used in a Telecommunications Business in an amount
reasonably determined by the Board of Directors of the Company) received by the
Company from the sale of Qualified Equity Interests (other than to a Restricted
Group Member) after payment of out-of-pocket expenses, commissions and
discounts incurred in connection therewith.
"Non-Subsidiary Affiliate" of any specified Person, means any
other Person in which an Investment in the Equity Interests of such Person has
been made by such specified Person other than a direct or indirect Subsidiary
of such specified Person.
"Obligations" means any principal, interest (including,
without limitation, post-petition interest), penalties, fees, indemnifications,
reimbursement obligations, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Offer" has the meaning set forth in the definition of "Offer
to Purchase" below.
"Offer to Purchase" means a written offer (the "Offer") sent
by or on behalf of the Company by first- class mail, postage prepaid, to each
Holder at his address appearing in the register for the Securities on the date
of the Offer offering to purchase up to the principal amount of Securities
specified in such Offer at the purchase price specified in such Offer (as
determined pursuant to this Indenture). Unless otherwise required by applicable
law, the Offer shall specify an expiration date (the "Expiration Date") of the
Offer to Purchase, which shall be not less than 20 Business Days nor more than
90 days after the date of such Offer, and a settlement date (the "Purchase
Date") for purchase of Securities to occur no later than five Business Days
after the Expiration Date. The Company shall notify the Trustee at least 15
Business Days (or such shorter period as is acceptable to the Trustee) prior to
the mailing of the Offer of the Company's obligation to make an Offer to
Purchase, and the Offer shall be mailed by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company. The
Offer shall contain all the information required by applicable law to be
included therein. The Offer shall contain all instructions and materials
necessary to enable such Holders to tender Securities pursuant to the Offer to
Purchase. The Offer shall also state:
(1) the Section of this Indenture pursuant to which the Offer
to Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding
Securities offered to be purchased by the Company pursuant to the
Offer to Purchase (including, if less than 100%, the manner by which
such amount has been determined pursuant to the Section of this
Indenture requiring the Offer to Purchase) (the "Purchase Amount");
18
-12-
(4) the purchase price to be paid by the Company for each
$1,000 aggregate principal amount of Securities accepted for payment
(as specified pursuant to this Indenture) (the "Purchase Price");
(5) that the Holder may tender all or any portion of the
Securities registered in the name of such Holder and that any portion
of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount;
(6) the place or places where Securities are to be
surrendered for tender pursuant to the Offer to Purchase;
(7) that interest on any Security not tendered or tendered
but not purchased by the Company pursuant to the Offer to Purchase
will continue to accrue;
(8) that on the Purchase Date the Purchase Price will become
due and payable upon each Security being accepted for payment pursuant
to the Offer to Purchase and that interest thereon shall cease to
accrue on and after the Purchase Date;
(9) that each Holder electing to tender all or any portion of
a Security pursuant to the Offer to Purchase will be required to
surrender such Security at the place or places specified in the Offer
to Purchase prior to the close of business on the Expiration Date
(such Security being, if the Company or the Trustee so requires, duly
endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing);
(10) that Holders will be entitled to withdraw all or any
portion of Securities tendered if the Company (or Paying Agent)
receives, not later than the close of business on the fifth Business
Day next preceding the Expiration Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Security the Holder tendered, the certificate
number of the Security the Holder tendered and a statement that such
Holder is withdrawing all or a portion of his or her tender;
(11) that (a) if Securities in an aggregate principal amount
less than or equal to the Purchase Amount are duly tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall
purchase all such Securities and (b) if Securities in an aggregate
principal amount in excess of the Purchase Amount are tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall
purchase Securities having an aggregate principal amount equal to the
Purchase Amount on a pro rata basis (with such adjustments as may be
deemed appropriate so that only Securities in denominations of $1,000
principal amount or integral multiples thereof shall be purchased);
and
(12) that in the case of any Holder whose Security is
purchased only in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, in an aggregate principal
amount equal to and in exchange for the unpurchased portion of the
Security so tendered.
An Offer to Purchase shall be governed by and effected in
accordance with the provisions above pertaining to any Offer.
19
-13-
"Officer" means the Chairman, any Vice Chairman, the
President, any Vice President, the Chief Financial Officer, the Treasurer, or
the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of
the Company complying with Sections 10.04 and 10.05.
"Opinion of Counsel" means a written opinion from legal
counsel. The counsel may be an employee of or counsel to the Company.
"Other Debt" has the meaning set forth in Section 4.16.
"Participant" has the meaning set forth in Section 2.15.
"Permitted Holders" means (a) ▇▇▇▇ ▇. ▇▇▇▇▇▇ and any entity
controlled by him, (b) one or more of ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Fund Management LLC,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or Chatterjee Management Company or Affiliates of any of
the foregoing, and any person or entity for which any such person or entity
acts as investment advisor or investment manager, (c) charitable organizations
controlled by or affiliated with any of the Persons named in the foregoing
clauses (a) and (b), and (d) any Person that acquires the capital stock of the
Company in a Strategic Equity Investment.
"Permitted Investments" means (a) Cash Equivalents; (b)
Investments in prepaid expenses, negotiable instruments held for collection
and lease, utility and workers' compensation, performance and other similar
deposits; (c) loans and advances to employees made in the ordinary course of
business not to exceed $7.5 million in the aggregate at any one time
outstanding; (d) Interest Rate Protection Obligations and Currency Agreements
permitted under Section 4.12; (e) bonds, notes, debentures or other securities
received as a result of Asset Sales permitted under Section 4.16; (f)
transactions with officers, directors and employees of the Company or any
Restricted Group Member entered into in the ordinary course of business
(including compensation or employee benefit arrangements with any such director
or employee) and consistent with past business practices; (g) Investments made
in the ordinary course of business and on ordinary business terms as partial
payment for constructing a network relating principally to a Telecommunications
Business; (h) intercompany Indebtedness to the extent permitted under paragraph
(b)(vii) of Section 4.12; (i) Investments in evidences of Indebtedness,
securities or other property received from another Person by the Company or any
Restricted Group Member in connection with any bankruptcy proceeding or by
reason of a composition or readjustment of debt or a reorganization of such
Person or as a result of foreclosure, perfection or enforcement of any Lien in
exchange for evidences of Indebtedness, securities or other property of such
Person held by the Company or any Restricted Group Member, or for other
liabilities or obligations of such other Person to the Company or any Restricted
Group Member that were created in accordance with the terms of this Indenture;
and (j) any Investment (other than the acquisition or purchase of any Equity
Interests held by any Affiliate of the Company other than a Restricted Group
Member) in any Restricted Group Member or a Person which will, upon the making
of such Investment, become a Restricted Group Member or be merged or
consolidated with or into or transfer or convey all or substantially all its
assets to, a Restricted Group Member; provided, however, that (I) with respect
to any such Investment in a Person that will become a Restricted Group Member as
a result thereof (or be merged or consolidated with or into or transfer or
convey all or substantially all of its assets to a Restricted Group Member),
such Person's primary business is related, ancillary or complementary to the
businesses of the Company and its Restricted Group Members on the date of such
Investment, and (II) with respect to any Investment in a Restricted Affiliate,
any such Investment shall cease to be a Permitted Investment in the event that
such Restricted Affiliate shall cease to observe any of the provisions of the
covenants that are applicable to such Restricted Affiliate; provided, however,
that in the event that such Restricted
20
-14-
Affiliate ceases to observe any of the provisions of the covenants applicable
to it solely as a result of circumstances, developments or conditions beyond
the control of the Company (each such failure to observe a covenant as a result
of any such circumstance, development or condition, being an "Involuntary
Event") any such Investment previously made in such Restricted Affiliate will
not cease to be a Permitted Investment unless such Involuntary Event continues
for 90 days.
"Permitted Liens" means (a) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the
Company or any Restricted Group Member and Liens securing Acquired
Indebtedness; provided, however, that such Liens were in existence prior to the
contemplation of such merger or consolidation or Incurrence of such Acquired
Indebtedness and were not incurred in connection therewith and do not secure
any property or assets of the Company or any Restricted Group Member other than
the property or assets subject to the Liens prior to such merger or
consolidation or Incurrence of such Acquired Indebtedness; (b) Liens existing
on the Issue Date; (c) Liens securing Indebtedness consisting of Capitalized
Lease Obligations, mortgage financings, industrial revenue bonds or other
monetary obligations, in each case incurred solely for the purpose of financing
all or any part of the purchase price or cost of construction or installation
of assets used in the business of the Company or any Restricted Group Member,
or repairs, additions or improvements to such assets; provided, however, that
(I) such Liens secure Indebtedness in an amount not in excess of the original
purchase price or the original cost of any such assets or repair, addition or
improvement thereto (plus an amount equal to the reasonable fees and expenses
in connection with the Incurrence of such Indebtedness), (II) such Liens do not
extend to any other assets of the Company or any Restricted Group Member (and,
in the case of repair, addition or improvements to any such assets, such Lien
extends only to the assets (and improvements thereto or thereon) repaired,
added to or improved), (III) the Incurrence of such Indebtedness is permitted
by Section 4.12 and (IV) such Liens attach within 90 days of such purchase,
construction, installation, repair, addition or improvement; (d) Liens to
secure the Senior Credit Facility; (e) Liens securing letters of credit entered
into in the ordinary course of business and consistent with past business
practice; (f) Liens on and pledges of the Equity Interests of any Unrestricted
Group Member securing any Indebtedness of such Unrestricted Group Member; (g)
Liens on any property or assets of a Restricted Group Member granted in favor
of and held by the Company or any Restricted Group Member; (h) Liens on any
property or assets of the Company or any Restricted Group Member securing on a
pari passu basis all of the Securities; (i) statutory Liens of landlords and
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other
like Liens arising in the ordinary course of business of the Company or any
Restricted Group Member and with respect to amounts not yet delinquent or being
contested in good faith by appropriate proceedings; (j) Liens for taxes,
assessments, government charges or claims that are being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted;
provided, however, that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor; (k) Liens
incurred or deposits made to secure the performance of tenders, bids, leases,
statutory obligations, surety and appeal bonds, government contracts,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business (other than contracts for the payment of money);
(1) easements, rights-of-way, restrictions and other similar charges or
encumbrances not interfering in any material respect with the business of the
Company or any Restricted Group Member and incurred in the ordinary course of
business; (m) Liens arising by reason of judgment, decree or order of any court
so long as such Lien is adequately bonded and any appropriate legal proceedings
that may have been duly initiated for the review of such judgment, decree or
order shall not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired; (n) Liens on the Equity
Interests or properties or assets of any Restricted Group Member securing
Indebtedness of such Restricted Group Member (other than any guarantee of
Indebtedness other than Indebtedness under the Senior Credit Facility) of the
Company or any other Restricted Group Member to the extent permitted to be
Incurred under Section 4.12, (o) Liens securing Indebtedness under Interest
Rate Protection Obligations or Indebtedness under Currency Agreements to the
extent
21
-15-
permitted to be Incurred under Section 4.12; (p) Liens incurred or deposits
made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security; (q)
Liens to secure any Refinancings, in whole or in part, of any Indebtedness
secured by Liens referred to in the clauses above so long as such Lien does not
extend to any other property (other than improvements thereto); and (r) Liens
arising under the Escrow Agreement.
"Permitted Refinancing" means, with respect to any
Indebtedness, Indebtedness to the extent representing a Refinancing of such
Indebtedness; provided, however, that (1) the Refinancing Indebtedness shall
not exceed the sum of the amount of the Indebtedness being Refinanced, plus the
amount of accrued interest or dividends thereon, the amount of any reasonably
determined prepayment premium necessary to accomplish such Refinancing and
reasonable fees and expenses incurred in connection therewith; (2) the
Refinancing Indebtedness shall have a Weighted Average Life to Maturity equal
to or greater than the Weighted Average Life to Maturity of the Indebtedness
being Refinanced and shall not have a final stated maturity prior to the final
stated maturity of the Indebtedness being Refinanced; and (3) Indebtedness that
ranks pari passu with the Securities may be Refinanced only with Indebtedness
that is made pari passu with or subordinate in right of payment to the
Securities, and Indebtedness that is subordinate in right of payment to the
Securities may be Refinanced only with Indebtedness that is subordinate in
right of payment to the Securities on terms no less favorable to the Holders
than those contained in the Indebtedness being Refinanced.
"Permitted Repurchase" means any purchase, redemption or other
acquisition of any Equity Interests of the Company issued as consideration for
the purchase of the Equity Interests in GTS-Vox Limited held by the Company in
the event that such Equity Interests are required to be repurchased by the
Company pursuant to the terms of the purchase of such Equity Interests.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, limited
liability partnership, limited partnership, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Physical Securities" means certificated securities in
registered form evidencing all or a portion of the Securities issued to the
Holders in accordance with Section 2.15.
"Preferred Equity Interest," in any Person, means an Equity
Interest of any class or classes (however designated) which is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over Equity Interests of any other class in such Person.
"principal" of a debt security means the principal of the
security, plus, when appropriate, the premium, if any, on the security.
"Public Equity Offering" means an underwritten public offering
of common Equity Interests of the Company pursuant to an effective registration
statement filed under the Securities Act (excluding registration statements
filed on Form S-8).
"Purchase Amount" has the meaning set forth in the definition
of "Offer to Purchase" above.
"Purchase Date" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Purchase Price" has the meaning set forth in the definition
of "Offer to Purchase" above.
22
-16-
"Qualified Equity Interest" means any Equity Interest of the
Company other than any Disqualified Equity Interest.
"Redemption Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to
be redeemed, means the price fixed for such redemption pursuant to this
Indenture as set forth in the form of Security annexed hereto as Exhibit A
hereto.
"Refinance" means refinance, renew, extend, replace, defease
or refund; and "Refinancing" and "Refinanced" have correlative meanings.
"Registrar" has the meaning set forth in Section 2.03.
"Related Business" means any business in which the Company or
its Restricted Group Members are engaged, directly or indirectly, that consists
primarily of, or is related to, operating, acquiring, developing and
constructing any telecommunications services and related businesses.
"Replacement Assets" means (x) properties and assets (other
than cash or any Equity Interests or other security) that will be used in a
Telecommunications Business of the Company and the Restricted Group Members or
(y) Equity Interests of any Person engaged primarily in a Telecommunications
Business, which Person will become on the date of acquisition thereof a
Restricted Group Member as a result of the Company's acquiring such Equity
Interests.
"Required Filing Dates" has the meaning set forth in Section
4.09.
"Restricted Affiliate" means any direct or indirect
Non-Subsidiary Affiliate of the Company or a Restricted Subsidiary of the
Company that has been designated by the Board of Directors of the Company as a
Restricted Affiliate based on a determination by the Board of Directors that
the Company has, directly or indirectly, the requisite control over such
Non-Subsidiary Affiliate to prevent it from Incurring Indebtedness, or taking
any other action at any time, in contravention of any of the provisions of this
Indenture that are applicable to Restricted Affiliates; provided, however, that
immediately after giving effect to such designation (i) the Liens and
Indebtedness of such Non- Subsidiary Affiliate outstanding immediately after
such designation would, if Incurred at such time, have been permitted to be
Incurred for all purposes of this Indenture; and (ii) no Default or Event of
Default shall have occurred and be continuing. The Company shall deliver an
Officers' Certificate to the Trustee upon designating any Non-Subsidiary
Affiliate as a Restricted Affiliate. As of the Issue Date, every Existing Joint
Venture is a Restricted Affiliate.
"Restricted Group Members" means collectively, each Restricted
Subsidiary of the Company, each Restricted Affiliate and each Restricted
Subsidiary of a Restricted Affiliate.
"Restricted Subsidiary" means any Subsidiary of the Company
that has not been designated by the Board of Directors of the Company, by a
resolution of the Board of Directors of the Company delivered to the Trustee,
as an Unrestricted Subsidiary pursuant to Section 4.14. Any such designation
may be revoked by a resolution of the Board of Directors of the Company
delivered to the Trustee, subject to the provisions of such covenant.
23
-17-
"Revocation" has the meaning set forth in Section 4.14.
"SEC" means the Securities and Exchange Commission.
"Securities" means any securities authenticated and delivered
under this Indenture.
"Security Amount" has the meaning set forth in Section 4.16.
"Security Portion of Excess Proceeds" has the meaning set
forth in Section 4.16.
"Senior Credit Facility" means any senior credit facility
among the Company, Restricted Group Members (if any), and the lenders and
agents named therein, including any deferrals, renewals, extensions,
replacements, refinancings or refundings thereof, or amendments, modifications
or supplements thereto and any agreement providing therefor, whether by or with
the same or any other lender, creditor, group of lenders or group of creditors,
and including related notes, guarantees and other instruments and agreements
executed in connection therewith.
"Share Capital" means, at any time of determination, the
stated capital of the Equity Interests (other than Disqualified Equity
Interests) and additional paid-in capital of the Company at such time, all as
determined in accordance with GAAP.
"Significant Restricted Group Member" means, at any date of
determination, (a) any Restricted Group Member that, together with its
Subsidiaries that constitute Restricted Group Members (i) for the most recent
fiscal year of the Company accounted for more than 10.0% of the revenues of the
Company and the Restricted Group Members or (ii) as of the end of such fiscal
year, owned more than 10.0% of the assets of the Company and the Restricted
Group Members, all as set forth on the financial statements of the Company and
the Restricted Group Members for such year prepared in conformity with GAAP,
and (b) any Restricted Group Member which, when aggregated with all other
Restricted Group Members that are not otherwise Significant Restricted Group
Members and as to which any event described in clauses (f), (g), (h) or (i) of
Section 6.01 has occurred and is continuing, would constitute a Significant
Restricted Group Member under clause (a) of this definition.
"Stated Maturity" when used with respect to any Security or
any installment of interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment
of interest is due and payable.
"Strategic Equity Investments" means the issuance and sale of
Qualified Equity Interests to a Person that has an equity market
capitalization, a net asset value or annual revenues of at least $1.5 billion
and owns and operates business primarily in a Telecommunications Business
provided that such Telecommunications Business may be located anywhere in the
world.
"Subordinated Indebtedness" means any Indebtedness of the
Company which is expressly subordinated in right of payment to the Securities.
"Subsidiary" means, with respect to any Person, (a) any
corporation of which the outstanding Voting Equity Interests having at least a
majority of the votes entitled to be cast in the election of directors shall at
the time be owned, directly or indirectly, by such Person, or (b) any other
Person of which at least a majority of Voting Equity Interests are at the time,
directly or indirectly, owned by such first named Person.
24
-18-
"Surviving Person" means, with respect to any Person involved
in or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.
"Tax" shall mean any tax, duty, levy, impost, assessment or
other governmental charge (including penalties, interest and any other
liabilities related thereto).
"Taxing Authority" shall mean any government or political
subdivision or territory or possession of any government or any authority or
agency therein or thereof having power to tax.
"Telecommunications Acquisition" means an Acquisition of
properties or assets to be used in a Telecommunications Business or the Equity
Interests of any Person that becomes a Restricted Group Member; provided,
however, that such Person's properties and assets shall consist principally of
properties or assets that will be used in a Telecommunications Business.
"Telecommunications Business" means any business owning,
constructing, financing and operating a telephone and/or communications system
located principally in countries located in Europe and/or Asia (including
Russia and the CIS), or any business reasonably related thereto, including,
without limitation, any business conducted by the Company or any Restricted
Group Member on the Issue Date and the provision of ancillary services related
thereto and other services provided through the facilities of such telephone
and telecommunications system.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb), as amended, as in effect on the date of this Indenture
until such time as this Indenture is qualified under the TIA, and thereafter as
in effect on the date on which this Indenture is qualified under the TIA,
except in each case as provided in Section 9.03.
"Total Indebtedness" means, as at any date of determination,
an amount equal to the aggregate amount of all Indebtedness of the Company and
the Restricted Group Members, outstanding as of such date of determination,
after giving effect to any Incurrence of Indebtedness and the application of
the proceeds therefrom giving rise to such determination. Total Indebtedness
shall be calculated by excluding at such date that percentage of the
Indebtedness of any Restricted Group Member that corresponds to the percentage
ownership interest in the outstanding Equity Interests of such Restricted Group
Member not owned, directly or indirectly, by the Company on such date.
"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.
"Trust Officer" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice
president, assistant vice president, assistant secretary or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at that time shall be such officers, and
also means, with respect to a particular corporate trust matter, any other
officer to whom such trust matter is referred because of his knowledge of and
familiarity with the particular subject.
"Unrestricted Affiliate" means any Non-Subsidiary Affiliate of
the Company designated as such pursuant to Section 4.14. Any such designation
may be revoked by a resolution of the Board of Directors of the Company
delivered to the Trustee, subject to the provisions of such covenant.
25
-19-
"Unrestricted Group Member" means, collectively, each
Unrestricted Subsidiary of the Company and each Unrestricted Affiliate.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to Section 4.14. Any such designation may be
revoked by a resolution of the Board of Directors of the Company delivered to
the Trustee, subject to the provisions of such covenant.
"U.S. Government Obligations" means direct non-callable
obligations of, or obligations guaranteed by, the United States of America for
the payment of which guarantee or obligations the full faith and credit of the
United States is pledged.
"Voting Equity Interests" means Equity Interests in a
corporation or other Person with voting power under ordinary circumstances
entitling the holders thereof to elect the Board of Directors or other
governing body of such corporation or Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment of final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the outstanding Voting Equity Interests (other than
directors' qualifying shares) of which are owned, directly or indirectly, by
the Company.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them therein.
26
-20-
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles in effect from time to time, and any other
reference in this Indenture to "generally accepted accounting
principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words
in the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities and the Trustee's certificate of authentication
thereof shall be substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities
may have notations, legends or endorsements required by law, stock exchange
rule or usage. The Company and the Trustee shall approve the form of the
Securities and any notation, legend or endorsement on them. Each Security
shall be dated the date of its issuance and shall show the date of its
authentication.
Securities initially offered and sold by the Initial Purchasers
shall be issued in the form of one or more permanent Global Securities in
registered form, substantially in the form set forth in Exhibit A hereto,
deposited with the Trustee, as custodian for the Depository, and shall bear the
legend set forth in Exhibit B hereto.
The aggregate principal amount of any Global Security may from
time to time be increased or decreased by adjustments made on the records of
the Trustee, as custodian for the Depository, as hereinafter provided.
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SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall
sign, or one Officer shall sign and one Officer or an Assistant Secretary (each
of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to, the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security was an Officer
at the time of such execution but no longer holds that office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue
in the aggregate principal amount not to exceed $100,000,000 upon a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of Securities to be authenticated, the
series of Securities and the date on which the Securities are to be
authenticated. The aggregate principal amount of Securities outstanding at any
time may not exceed $100,000,000, except as provided in Section 2.07. Upon
receipt of a written order of the Company in the form of an Officers'
Certificate, the Trustee shall authenticate Securities in substitution for
Securities originally issued to reflect any name change of the Company.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise
provided in the appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
and Affiliates of the Company.
The Securities shall be issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough
of Manhattan, The City of New York where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
Securities may be presented or surrendered for payment ("Paying Agent") and (c)
notices and demands in respect of the Securities and this Indenture may be
served. The Registrar shall keep a register or registers of the Securities and
of their transfer and exchange. The Company, upon notice to the Trustee, may
appoint one or more co-Registrars and one or more additional Paying Agents.
The term "Paying Agent" includes any additional Paying Agent. Except as
provided herein, the Company or any Subsidiary may act as Paying Agent,
Registrar or co-Registrar.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture, which shall incorporate the
provisions of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of
the name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such and shall be entitled to appropriate compensation in
accordance with Section 7.07.
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The Company initially appoints the Trustee as Registrar and
Paying Agent until such time as the Trustee has resigned or a successor has
been appointed.
SECTION 2.04. Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that each Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, or interest on, the Securities, and shall notify the
Trustee of any Default by the Company in making any such payment. The Company
at any time may require a Paying Agent to distribute all assets held by it to
the Trustee and account for any assets disbursed and the Trustee may at any
time during the continuance of any payment Default, upon written request to a
Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed. Upon distribution to
the Trustee of all assets that shall have been delivered by the Company to the
Paying Agent (if other than the Company), the Paying Agent shall have no
further liability for such assets. If the Company or any Subsidiary acts as
Paying Agent, it shall, on or before each due date of the principal of or
interest on the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee as soon as possible after each Interest Record Date and
at such other times as the Trustee may request in writing a list as of such date
and in such form as the Trustee may reasonably require of the names and
addresses of Holders, which list may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when
Securities are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Securities or to exchange such Securities for an
equal principal amount of Securities of other authorized denominations of the
same series, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's or co-Registrar's
written request. No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other governmental charge
payable upon exchanges or transfers pursuant to Section 2.02, 2.10, 3.06, 4.10,
4.16 or 9.05). The Registrar or co-Registrar shall not be required to register
the transfer or exchange of any Security (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article Three
hereof, except the unredeemed portion of any Security being redeemed in part.
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Prior to the registration of any transfer by a Holder as
provided herein, the Company, the Trustee, and any Agent of the Company shall
treat the person in whose name the Security is registered as the owner thereof
for all purposes whether or not the Security shall be overdue, and neither the
Company, the Trustee, nor any such Agent shall be affected by notice to the
contrary. Any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected only through a book-entry system maintained by the Depository
(or its agent), and that ownership of a beneficial interest in a Global
Security shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements for replacement of
Securities are met. Such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and the Trustee, to
protect the Company, the Trustee and any Agent from any loss which any of them
may suffer if a Security is replaced and evidence to their satisfaction of the
apparent loss, destruction or theft of such Security. The Company may charge
such Holder for its reasonable out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel. In case any such mutilated,
lost, destroyed or wrongfully taken Security has become or is about to become
due and payable, the Company in its discretion may pay such Security in its
discretion may pay such Security instead of issuing a new Security in
replacement thereof.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that
have been authenticated by the Trustee except those cancelled by it, those
delivered to it for cancellation and those described in this Section 2.08 as
not outstanding. Subject to Section 2.09, a Security does not cease to be
outstanding because the Company or any of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than
a mutilated Security surrendered for replacement), it ceases to be outstanding
unless a Trust Officer of the Trustee receives proof satisfactory to him it that
the replaced Security is held by a bona fide purchaser. A mutilated Security
ceases to be outstanding upon surrender of such Security and replacement thereof
pursuant to Section 2.07.
If on a Redemption Date, Purchase Date or the Maturity Date
the Paying Agent holds money sufficient to pay all of the principal and
interest due on the Securities payable on that date, then on and after that
date such Securities cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or any of its Affiliates 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, only Securities
that a Trust Officer of the Trustee actually knows are so owned shall be
disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
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SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate upon receipt of a written order of the
Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent, and no one else, shall cancel all Securities surrendered for transfer,
exchange, payment or cancellation and deliver to the Company such cancelled
Securities for disposal. Subject to Section 2.07, the Company may not issue
new Securities to replace Securities that it has paid or delivered to the
Trustee for cancellation. If the Company shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.11. The
Trustee shall cancel all Securities surrendered for transfer, exchange, payment
or cancellation and shall dispose of them in accordance with its normal
procedure.
SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of principal or interest
on the Securities, it shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the rate per annum borne by the Securities, to the
extent lawful.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use one or more
"CUSIP" numbers and the Trustee shall use the appropriate CUSIP number in
notices of redemption or exchange as a convenience to Holders; provided,
however, 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
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the
Trustee of any changes in CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest
Payment Date, Redemption Date, Purchase Date and the Maturity Date, the Company
shall deposit with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such Interest Payment Date,
Redemption Date, Purchase Date or Maturity Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date, Redemption Date, Purchase Date or Maturity Date, as
the case may be.
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SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered
in the name of the Depository or the nominee of such Depository, (ii) be
delivered to the Trustee as custodian for such Depository and (iii) bear
legends as set forth in Exhibit B hereto.
Members of, or participants in, the Depository
("Participants") shall have no rights under this Indenture with respect to any
Global Security held on their behalf by the Depository, or the Trustee as its
custodian, or under such Global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and Participants, the operation of
customary practices governing the exercise of the rights of a beneficial owner
of any Security.
(b) Transfers of Global Securities shall be limited to
transfers in whole, but not in part, to the Depository, its successors or their
respective nominees. Physical Securities shall be transferred to all beneficial
owners in exchange for their beneficial interests in Global Securities if (i)
the Depository notifies the Company that it is unwilling or unable to continue
as Depository for any Global Security and a successor Depository is not
appointed by the Company within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Registrar has received a request
from the Depository to issue Physical Securities.
(c) In connection with the transfer of Global Securities as
an entirety to beneficial owners pursuant to paragraph (b) of this Section
2.15, the Global Securities shall be deemed to be surrendered to the Trustee
for cancellation, and the Company shall execute, and the Trustee shall upon
written instructions from the Company authenticate and make available for
delivery, to each beneficial owner identified by the Depository in exchange for
its beneficial interest in the Global Securities, an equal aggregate principal
amount of Physical Securities of authorized denominations.
(d) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may
hold interests through Participants, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When
Physical Securities are presented to the Registrar or co-Registrar with a
request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal
principal amount of Physical Securities of other authorized
denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the
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Physical Securities presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar or co-Registrar, duly executed
by the Holder thereof or his attorney duly authorized in writing.
(b) Transfer and Exchange of Global Securities. The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depository in accordance with this Indenture and the
procedures of the Depository therefor.
(c) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provisions of this Indenture, a Global
Security may not be transferred as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such nominee
to a successor Depository or a nominee of such successor Depository.
(d) General. The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers between
or among Participants or beneficial owners of interest in any Global Security)
other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.15 or this Section
2.16. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to
paragraph 5 of the Securities at the applicable redemption price set forth
thereon, it shall notify the Trustee in writing of the Redemption Date and the
principal amount of Securities to be redeemed. The Company shall give such
notice to the Trustee at least 45 days before the Redemption Date (unless a
shorter notice shall be agreed to by the Trustee in writing), together with an
Officers' Certificate stating that such redemption will comply with the
conditions contained herein.
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed pursuant
to paragraph 5(a) or (b) of the Securities, the Trustee shall select the
Securities to be redeemed in compliance with the requirements of the principal
national securities exchange, if any, on which the Securities are listed or, if
the Securities are not then listed on a national securities exchange, on a pro
rata basis, by lot or by such other manner as the Trustee shall deem fair and
appropriate; provided, however, that (1) no Securities of a principal amount of
$1,000 or less shall be redeemed in part and (2) if a partial redemption is
made pursuant to the provisions of paragraph 5 of the Securities, selection of
the Securities or portions thereof for redemption shall be made by the Trustee
only on a pro rata basis or on as nearly a pro rata basis as is practicable
(subject to the procedures of the Depository), unless such method is otherwise
prohibited The Trustee shall make the selection from the Securities then
outstanding, subject to redemption and not previously called for redemption.
The Trustee may select for redemption pursuant to paragraph
5(a) or (b) of the Securities portions of the principal amount of Securities
that have denominations equal to or larger than $1,000 principal amount.
Securities and portions of them the Trustee so selects shall be in amounts of
$1,000 principal amount or integral multiples thereof. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first-class mail to each
Holder whose Securities are to be redeemed at such Holder's registered address;
provided, however, that notice of a redemption pursuant to paragraph 5(b) of
the
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Securities shall be mailed to each Holder whose Securities are to be redeemed
no later than 60 days following the consummation of the last Public Equity
Offering or Strategic Equity Investment resulting in gross cash proceeds to the
Company, when aggregated with all prior Public Equity Offerings and Strategic
Equity Investments, of at least $75.0 million.
Each notice of redemption shall identify the Securities to be
redeemed (including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) that, unless the Company defaults in making the
redemption payment, interest on Securities called for redemption
ceases to accrue on and after the Redemption Date and the only
remaining right of the Holders is to receive payment of the redemption
price upon surrender to the Paying Agent; and
(6) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be redeemed and
that, after the Redemption Date, upon surrender of such Security, a
new Security or Securities in principal amount equal to the unredeemed
portion thereof will be issued.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price, plus accrued interest thereon, if any, to the Redemption
Date, but interest installments whose maturity is on or prior to such
Redemption Date shall be payable to the Holders of record at the close of
business on the relevant Interest Record Date.
SECTION 3.05. Deposit of Redemption Price.
Prior to 10:00 a.m. New York City time on the Redemption Date,
the Company shall deposit with the Paying Agent (or if the Company is its own
Paying Agent, shall, on or before the Redemption Date, segregate and hold in
trust) money sufficient to pay the redemption price of and accrued interest, if
any, on all Securities to be redeemed on that date other than Securities or
portions thereof called for redemption on that date which have been delivered
by the Company to the Trustee for cancellation.
If any Security surrendered for redemption in the manner
provided in the Securities shall not be so paid on the Redemption Date due to
the failure of the Company to deposit with the Paying Agent money
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sufficient to pay the redemption price thereof, the principal and accrued and
unpaid interest, if any, thereon shall, until paid or duly provided for, bear
interest as provided in Sections 2.12 and 4.01 with respect to any payment
default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities in the manner provided in the Securities. An installment of
principal or interest shall be considered paid on the date due if the Trustee
or Paying Agent (other than the Company, a Subsidiary or an Affiliate of the
Company) holds on that date money designated for and sufficient to pay the
installment in full and is not prohibited from paying such money to the Holders
of the Securities pursuant to the terms of this Indenture.
The Company shall pay cash interest on overdue principal at
the same rate per annum borne by the Securities. The Company shall pay cash
interest on overdue installments of interest at the same rate per annum borne
by the Securities, to the extent lawful, as provided in Section 2.12.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The
City of New York, the office or agency required under Section 2.03. The
Company shall give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 10.02 hereof. The Company hereby initially
designates the Trustee at its address set forth in Section 10.02 hereof as its
office or agency in The Borough of Manhattan, The City of New York, for such
purposes.
SECTION 4.03. Corporate Existence.
Subject to Article Five, the Company shall do or shall cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence and the corporate, partnership or other existence of
each Restricted Subsidiary in accordance with the respective organizational
documents of each such Restricted Subsidiary and the rights (charter and
statutory) and material franchises of the Company and the Restricted
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right or franchise, or the corporate existence of any
Restricted Subsidiary, if the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and the Restricted Subsidiaries, taken as a whole, and
that the loss thereof is not, and will not
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be, adverse in any material respect to the Holders; provided, further, however,
that a determination of the Board of Directors of the Company shall not be
required in the event of a merger of one or more Wholly Owned Restricted
Subsidiaries of the Company with or into another Wholly Owned Restricted
Subsidiary of the Company or another Person, if the surviving Person is a
Wholly Owned Restricted Subsidiary of the Company organized under the laws of
the United States or a State thereof or of the District of Columbia.
SECTION 4.04. 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, (1) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
Restricted Subsidiary or upon the income, profits or property of the Company or
any Restricted Subsidiary and (2) all lawful claims for labor, materials and
supplies which, in each case, if unpaid, might by law become a material
liability, or Lien upon the property, of the Company or any Restricted
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which appropriate provision has been made.
SECTION 4.05. Notice of Defaults.
(a) In the event that any Indebtedness of the Company or any
of its Subsidiaries is declared due and payable before its maturity because of
the occurrence of any default (or any event which, with notice or lapse of
time, or both, would constitute such a default) under such Indebtedness, the
Company shall promptly give written notice to a Trust Officer of the Trustee
of such declaration, the status of such default or event and what action the
Company is taking or proposes to take with respect thereto.
(b) Upon becoming aware of any Default, the Company shall
promptly deliver an Officers' Certificate to a Trust Officer of the Trustee
specifying the Default.
SECTION 4.06. Maintenance of Properties and Insurance.
(a) The Company shall cause all material properties owned by
or leased to it or any Restricted Subsidiary and used or useful in the conduct
of its business or the business of any Restricted Subsidiary to be maintained
and kept in normal condition, repair and working order and 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,
however, that nothing in this Section 4.06 shall prevent the Company or any
Restricted Subsidiary from discontinuing the use, operation or maintenance of
any of such properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors or of the board of
directors of the Restricted Subsidiary concerned, or of an officer (or other
agent employed by the Company or of any Restricted Subsidiary) of the Company
or such Restricted Subsidiary having managerial responsibility for any such
property, desirable in the conduct of the business of the Company or any
Restricted Subsidiary, and if such discontinuance or disposal is not adverse in
any material respect to the Holders.
(b) The Company shall maintain, and shall cause the
Restricted Subsidiaries to maintain, insurance with responsible carriers
against such risks and in such amounts, and with such deductibles, retentions,
self-insured amounts and co-insurance provisions, as are customarily carried by
similar businesses of similar size, including property and casualty loss, and
workers' compensation insurance.
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SECTION 4.07. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after
the close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of the Company has been made under the
supervision of the signing officers with a view to determining whether a
Default has occurred and whether or not the signers know of any Default by the
Company that occurred during such fiscal year. If they do know of such a
Default, the certificate shall describe all such Defaults, their status and the
action the Company is taking or proposes to take with respect thereto. The
first certificate to be delivered by the Company pursuant to this Section 4.07
shall be for the fiscal year ending December 31, 1998.
SECTION 4.08. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law, which would prohibit or forgive the Company from
paying all or any portion of the principal of and/or interest, if any, on the
Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that it may lawfully do so) the Company
hereby expressly waives all benefit or advantage of any such law, and covenants
that it 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 4.09. Provision of Financial Information.
Whether or not the Company is subject to Section 13(a) or 15(d)
of the Exchange Act, or any successor provision thereto, the Company shall file
with the SEC (if permitted by SEC practice and applicable law and regulations)
the annual reports, quarterly reports and other documents which the Company
would have been required to file with the SEC pursuant to such Section 13(a) or
15(d) or any successor provision thereto if the Company were so required, such
documents to be filed with the SEC on or prior to the respective dates (the
"Required Filing Dates") by which the Company would have been required so to
file such documents if the Company were so required. The Company shall also in
any event (a) within 15 days of each Required Filing Date (whether or not
permitted or required to be filed with the SEC) (i) transmit (or cause to be
transmitted) by mail to all Holders, as their names and addresses appear in the
Securities register, without cost to such Holders, and (ii) file with the
Trustee, copies of the annual reports, quarterly reports and other documents
which the Company is required to file with the SEC pursuant to the preceding
sentence, or, if such filing is not so permitted, information and data of a
similar nature, and (b) if, notwithstanding the preceding sentence, filing such
documents by the Company with the SEC is not permitted by SEC practice or
applicable law or regulations, promptly upon written request supply copies of
such documents to any Holder. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on officers certificate).
SECTION 4.10. Change of Control.
(a) Following the occurrence of a Change of Control (the date
of such occurrence being the "Change of Control Date"), the Company shall
notify the Holders of such occurrence in the manner prescribed by this
Indenture and shall, within 30 days after the Change of Control Date, make an
Offer to Purchase all Securities then outstanding at a purchase price in cash
equal to 101% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the date of purchase. The Company's obligations may be
satisfied if a third party makes the Offer to Purchase in the manner, at the
times and otherwise in compliance with
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the requirements of this Indenture applicable to an Offer to Purchase made by
the Company and purchases all Securities validly tendered and not withdrawn
under such Offer to Purchase. Each Holder shall be entitled to tender all or
any portion of the Securities owned by such Holder pursuant to the Offer to
Purchase, subject to the requirement that any portion of a Security tendered
must be tendered in an integral multiple of $1,000 principal amount.
(b) On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment all Securities or portions
thereof validly tendered pursuant to the Offer, (ii) deposit with the Paying
Agent or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 2.04, money sufficient to pay the Purchase Price
of all Securities or portions thereof so accepted and (iii) deliver or cause to
be delivered to the Trustee for cancellation all Securities so accepted together
with an Officers' Certificate stating the Securities or portions thereof
accepted for payment by the Company. The Paying Agent (or the Company, if so
acting) shall promptly mail or make available for delivery to Holders of
Securities so accepted, payment in an amount equal to the Purchase Price for
such Securities, and the Trustee shall promptly authenticate and mail or make
available for delivery to each Holder of Securities a new Security or Securities
equal in principal amount to any unpurchased portion of the Security surrendered
as requested by the Holder. Any Security not accepted for payment shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Offer on or as soon as practicable
after the Purchase Date.
(c) If the Company makes an Offer to Purchase, the Company
will comply with all applicable tender offer laws and regulations, including,
to the extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act,
and any other applicable Federal or state securities laws and regulations and
any applicable requirements of any securities exchange on which the Securities
are listed, and any violation of the provisions of this Indenture relating to
such Offer to Purchase occurring as a result of such compliance shall not be
deemed a Default.
SECTION 4.11. Limitation on Restricted Payments.
The Company shall not, and shall not cause or permit any
Restricted Group Member to, directly or indirectly:
(i) declare or pay any dividend or any other distribution on
any Equity Interests of the Company or any Restricted Group Member or
make any payment or distribution to the direct or indirect holders of
Equity Interests of the Company or any Restricted Group Member in
their capacities as such, other than (a) dividends, distributions and
payments made to the Company or any Restricted Group Member, (b)
dividends or distributions payable to any Person solely in Qualified
Equity Interests or in options, warrants or other rights to purchase
Qualified Equity Interests and (c) pro rata dividends or distributions
on Equity Interests of any Restricted Group Member held by Persons
other than the Company or any other Restricted Group Member; provided,
however, that the Company and any other Restricted Group Member
holding Equity Interests of such dividend or distribution-paying
Restricted Group Member shall receive such pro rata or greater
dividends or distributions as may be due to such other Restricted
Group Members at or prior to the payment of such pro rata dividends or
distributions to such Persons other than the Company or any other
Restricted Group Member;
(ii) purchase, redeem or otherwise acquire or retire for
value any Equity Interests of the Company or any Equity Interests of
any Restricted Group Member owned by any Affiliate of the Company,
other than (a) any such Equity Interests owned by the Company or any
Restricted Group Member; and (b) any Permitted Repurchase;
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(iii) purchase, redeem, defease or retire for value, or make
any principal payment on, prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Subordinated
Indebtedness, other than any (a) Subordinated Indebtedness held by any
Restricted Group Member, (b) purchase, repurchase or acquisition of
Indebtedness in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in any case due within one
year of the date of acquisition and (c) prepayment of interest on the
Company's outstanding Senior Subordinated Convertible Bonds due 2000;
or
(iv) make any Investment (other than any Permitted
Investment)
(any of the foregoing (other than any exception to any of the foregoing), a
"Restricted Payment"), unless
(a) no Default or Event of Default shall have occurred and be
continuing at the time of, or after giving effect to, such Restricted
Payment;
(b) immediately after giving effect to such Restricted
Payment, the Company would be able to Incur $1.00 of additional
Indebtedness under paragraph (a) of Section 4.12; and
(c) immediately after giving effect to such Restricted
Payment, the aggregate amount of all Restricted Payments (including
the Fair Market Value of any non-cash Restricted Payment) declared or
made on or after the Issue Date (excluding any Restricted Payment
described in clause (ii), (iii), (iv) or (vii) of the next paragraph)
does not exceed an amount equal to the sum of the following (the
"Basket"):
(1) (x) the Cumulative Operating Cash Flow
determined at the time of such Restricted Payment less (y)
150% of cumulative Adjusted Interest Expense determined for
the period (treated as one accounting period) commencing on
the first day of the first fiscal quarter following the Issue
Date and ending on the last day of the most recent fiscal
quarter immediately preceding the date of such Restricted
Payment for which consolidated financial information of the
Company is required to be available, plus
(2) the aggregate Net Proceeds received by the
Company either (x) as capital contributions to the Company
after the Issue Date or (y) from the issue and sale (other
than to any Restricted Group Member) of Qualified Equity
Interests after the Issue Date, other than any issuance and
sale of Qualified Equity Interests (A) financed, directly or
indirectly, using funds (I) borrowed from the Company or any
Restricted Group Member until and to the extent such borrowing
is repaid or (II) contributed, extended, guaranteed or
advanced by the Company or any Restricted Group Member
(including, without limitation, in respect of any employee
stock ownership or benefit plan), (B) to the extent the Net
Proceeds were used to Incur Indebtedness pursuant to clause
(xii) of paragraph (b) of Section 4.12 or (C) the proceeds of
which are used to effect any transaction permitted by clauses
(ii), (iii), (iv) or (vii) of the next paragraph, plus
(3) the aggregate amount by which Indebtedness
(other than the Company's outstanding Senior Subordinated
Convertible Bonds due 2000 (or any Permitted Refinancing
thereof)) of the Company or any Restricted Subsidiary is
reduced on the Company's balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date into Qualified Equity Interests
(less the amount of any cash, or the
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fair value of property, distributed by the Company or any
Restricted Subsidiary upon such conversion or exchange), plus
(4) in the case of the disposition or repayment of
any Investment that was treated as a Restricted Payment made
after the Issue Date, an amount (to the extent not included in
the computation of Cumulative Operating Cash Flow) equal to
the lesser of: (x) the return of capital with respect to such
Investment and (y) the amount of such Investment that was
treated as a Restricted Payment, in either case, less the cost
of the disposition of such Investment and net of taxes, plus
(5) with respect to any Unrestricted Group Member
that has been redesignated as a Restricted Group Member after
the Issue Date in accordance with Section 4.14, the Company's
proportionate interest in an amount equal to the excess of (x)
the total assets of such Restricted Group Member, valued on an
aggregate basis at the lesser of book value and Fair Market
Value, over (y) the total liabilities (other than liabilities
to the Company or any Restricted Group Member) of such
Restricted Group Member, determined in accordance with GAAP
(and provided that such amount shall not in any case exceed in
the case of any Restricted Group Member designated pursuant to
clause (A)(ii) of paragraph (a) of Section 4.14, the
Designation Amount with respect to such Restricted Group
Member when it was originally designated as an Unrestricted
Group Member), minus
(6) with respect to each Restricted Group Member
which has been designated as an Unrestricted Group Member
after the Issue Date in accordance with clause (A)(ii) of
paragraph (a) of Section 4.14, the greater of (x) $0 and (y)
the Designation Amount thereof (measured as of the date of
Designation), minus
(7) at any date, the outstanding amount of the
Designation Basket.
The foregoing provisions will not prevent (i) the payment of
any dividend or distribution on, or redemption of, Equity Interests within 60
days after the date of declaration of such dividend or distribution or the
giving of formal notice of such redemption, if at the date of such declaration
or giving of formal notice such payment or redemption would comply with the
provisions of this Indenture; (ii) the purchase, redemption, retirement or
other acquisition of any Equity Interests of the Company or any Restricted
Group Member in exchange for, or out of the net cash proceeds of the
substantially concurrent (A) common equity capital contribution to the Company
from any Person (other than a Restricted Group Member) or (B) issue and sale by
the Company (other than to a Restricted Group Member) of Qualified Equity
Interests of the Company; (iii) any Investment to the extent that the
consideration therefor consists of the net proceeds of the substantially
concurrent issue and sale (other than to a Restricted Group Member) of
Qualified Equity Interests; (iv) the purchase, redemption, retirement,
defeasance or other acquisition of Subordinated Indebtedness made in exchange
for, or out of the net cash proceeds of, a substantially concurrent issue and
sale (other than to a Restricted Group Member) of (x) Qualified Equity
Interests or (y) other Subordinated Indebtedness issued in a Permitted
Refinancing; (v) any Investment in a Person principally engaged in a
Telecommunications Business so long as after giving effect to each such
Investment thereto (A) Adjusted Total Controlled Assets is greater than 51% of
the Adjusted Total Assets and (B) any such Investment is not directly or
indirectly made with the proceeds of any Indebtedness Incurred under paragraph
(b)(v) or (b)(xii) of Section 4.12; (vi) other Restricted Payments in an amount
not to exceed $50.0 million so long as not more than $25.0 million of which is
Restricted Payments of the type described in clauses (i) or (ii) of the first
paragraph of this covenant; or (vii) Investments in a Person which has ceased
to be a Restricted Affiliate or ceases to observe any of the provisions
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of the covenants applicable to it as a result of an Involuntary Event if (a)
such Investment is made with the proceeds of a substantially concurrent capital
contribution to the Company from any Person (other than a Restricted Group
Member), or sale (other than to any Restricted Group Member) of Qualified
Equity Interests of the Company, and (b) after such Investment such Involuntary
Event shall no longer continue and such Person shall be a Restricted Affiliate;
provided, however, that in the case of each of clauses (ii), (iii), (iv), (v)
(vi), and (vii), no Default or Event of Default shall have occurred and be
continuing or would arise therefrom (except, with respect to clause (vii), a
Default or Event of Default that will cease to exist substantially
contemporaneously with such Investment).
For purposes of clause (iv) of the first paragraph of this
covenant, the Company shall be deemed to have made an Investment not
constituting a Permitted Investment:
(i) at the date that any Restricted Group Member ceases to
be a Restricted Group Member for any reason (other than by virtue of a
Designation), including without limitation, by virtue of any
transaction permitted by clause (iii) of Section 4.19, in an amount
equal to the greater of (I) $0 and (II) the lesser of (A) the Fair
Market Value of the Equity Interests (or any other Investment) held by
the Company or any Restricted Group Member in any such Restricted
Group Member and (B) the excess of the Fair Market Value of the
aggregate amount of Investments made prior to such date in such
Restricted Group Member by the Company or any Restricted Group Member
(valued in each case at the time such Investment was made) over the
net reduction of such Investments; and
(ii) at the time that any Investment has ceased to be a
Permitted Investment pursuant to clause (j)(II) of the definition of
Permitted Investments, in an amount equal to the Fair Market Value of
such Investment at the time it was made.
SECTION 4.12. Limitation on Incurrence of Indebtedness.
(a) The Company shall not, and shall not cause or permit any
Restricted Group Member to, directly or indirectly, Incur any Indebtedness
(including Acquired Indebtedness); provided, however, that the Company and any
Restricted Group Member may Incur Indebtedness if, at the time of and after
giving effect to such Incurrence, the Company's Debt to Annualized Operating
Cash Flow Ratio would be less than or equal to 6.0 to 1.0.
(b) The foregoing limitations of paragraph (a) of this
covenant will not apply to any of the following, each of which shall be given
independent effect:
(i) the Securities and Permitted Refinancings thereof;
(ii) indebtedness of the Company or any Restricted Group
Member to the extent outstanding on the date of this Indenture, and
Permitted Refinancings thereof;
(iii) indebtedness of the Company pursuant to the Senior
Credit Facility in an aggregate amount at any time outstanding not to
exceed $100.0 million;
(iv) Indebtedness of the Company or any Restricted Group
Member, in each case, to the extent that the proceeds of or credit
support provided by such Indebtedness is used to finance the cost
(including the cost of design, development, construction, installation
or integration) of network assets, equipment or inventory acquired by
the Company or any Restricted Group Member after the Issue
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Date or to finance or support working capital or capital expenditures
for a Telecommunications Business, and Permitted Refinancings thereof;
(v) Indebtedness (including Acquired Indebtedness) of the
Company or any Restricted Group Member to the extent that the proceeds
of or credit support provided by such Indebtedness is used in
connection with the development, expansion or operation of a
Telecommunications Business or is used to finance (or is Incurred as
Acquired Indebtedness in connection with the consummation of) a
Telecommunications Acquisition (or is used to provide working capital
for, or to finance the construction of, the business or network
acquired), and, in each case, Permitted Refinancings thereof, but in
each case only to the extent that the aggregate amount of outstanding
Indebtedness of the Company and the Restricted Group Members
immediately after giving effect to the Incurrence of such Indebtedness
and the application of the proceeds therefrom does not exceed the
product of 2.0 and the Share Capital of the Company at the date of
Incurrence of such Indebtedness;
(vi) Acquired Indebtedness of the Company or any Restricted
Group Member Incurred in connection with the consummation of a
Telecommunications Acquisition, and, in each case, Permitted
Refinancings thereof, but in each case only to the extent that the
aggregate amount of such Acquired Indebtedness does not exceed the net
sum of the plant, property and equipment acquired by the Company or a
Restricted Group Member in such Telecommunications Acquisition as set
forth on the Latest Balance Sheet of the Person which is the other
party to such Telecommunications Acquisition;
(vii) (1) Indebtedness of any Restricted Group Member owed to
and held by the Company or any Restricted Group Member and (2)
Indebtedness of the Company owed to and held by any Restricted Group
Member, in each case which is unsecured and subordinated in right of
payment to the payment and performance of the Company's obligations
under the Securities; provided, however, that an Incurrence of
Indebtedness that is not permitted by this clause (vii) shall be
deemed to have occurred upon (x) any sale or other disposition of any
Indebtedness of the Company or any Restricted Group Member referred to
in this clause (vii) to any Person other than the Company or any
Restricted Group Member or (y) any Restricted Group Member that holds
Indebtedness of the Company or another Restricted Group Member ceasing
to be a Restricted Group Member;
(viii) Interest Rate Protection Obligations of the Company or
any Restricted Group Member relating to Indebtedness of the Company or
such Restricted Group Member, as the case may be (which Indebtedness
is otherwise permitted to be Incurred under this covenant); provided,
however, that the notional principal amount of such Interest Rate
Protection Obligations does not exceed the principal amount of the
Indebtedness to which such Interest Rate Protection Obligations
relate;
(ix) Indebtedness of the Company or any Restricted Group
Member under Currency Agreements to the extent relating to (x)
Indebtedness of the Company or such Restricted Group Member, as the
case may be, and/or (y) obligations to purchase assets, properties or
services incurred in the ordinary course of business of the Company or
such Restricted Group Member, as the case may be; provided, however,
that such Currency Agreements do not increase the Indebtedness or
other obligations of the Company and the Restricted Group Members
outstanding other than as a result of fluctuations in foreign currency
exchange rates or by reason of fees, indemnities or compensation
payable thereunder;
(x) Indebtedness of the Company and/or any Restricted Group
Member in respect of performance bonds of the Company or any
Restricted Group Member or surety bonds provided by the
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Company or any Restricted Group Member incurred in the ordinary course
of business and on ordinary business terms in connection with the
construction or operation of a Telecommunications Business;
(xi) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations,
or from guarantees or letters of credit, surety bonds or performance
bonds securing any obligations of the Company or any Restricted Group
Member pursuant to such agreements, in any case Incurred in connection
with the disposition of any business, assets or Restricted Group
Member (other than guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or Restricted
Group Member for the purpose of financing such acquisition), in a
principal amount not to exceed the gross proceeds actually received by
the Company or any Restricted Group Member in connection with such
disposition;
(xii) Indebtedness of the Company or any Restricted Group
Member so long as the sum of (1) the aggregate amount of Indebtedness
Incurred and outstanding by the Company pursuant to this clause (xii)
and (2) the product of 2.0 and the aggregate amount of Indebtedness
Incurred and outstanding by the Restricted Group Members
(collectively) pursuant to this clause (xii) does not exceed the
product of 2.0 and (A) 100% of the Net Proceeds received by the
Company after the Issue Date from contributions of capital or the
issuance and sale of its Qualified Equity Interests to any Person
(other than any Restricted Group Member) and (B) 80% of the Net
Proceeds of property other than cash received by the Company after the
Issue Date from contributions of capital or the issuance and sale of
its Qualified Equity Interests to any Person (other than any
Restricted Group Member), in each case (A) and (B) only to the extent
that such Net Proceeds have not been used pursuant to clause (c)(2) of
the first paragraph of Section 4.11 to make a Restricted Payment;
provided, however, that no such Indebtedness may be Incurred pursuant
to this clause (xii) to the extent that such contributions to capital
or issuance and sale of Qualified Equity Interests were previously
included in the determination of Share Capital for purposes of
Incurring Indebtedness under clause (v) above of this paragraph (b) of
this covenant;
(xiii) in addition to the items referred to in clauses (i)
through (xii) above, Indebtedness of the Company or any Restricted
Group Member in an aggregate amount not to exceed $20.0 million at any
time outstanding; and
(xiv) guarantees by the Company of any Indebtedness of any
Restricted Group Member permitted to be Incurred by such Restricted
Group Member under this paragraph (b).
(c) For purposes of determining any particular amount of
Indebtedness under this covenant, guarantees, Liens or obligations with respect
to letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included; provided,
however, that the foregoing shall not in any way be deemed to limit the
provisions of Section 4.18.
(d) For purposes of determining compliance with this
covenant, in the event that an item of Indebtedness may be Incurred through the
first paragraph of this covenant or by meeting the criteria of one or more of
the types of Indebtedness described in the second paragraph of this covenant
(or the definitions of the terms used therein), the Company, in its sole
discretion, may, at the time of such Incurrence, (i) classify such item of
Indebtedness under and comply with either of such paragraphs (or any of such
definitions), as applicable, (ii) classify and divide such item of Indebtedness
into more than one of such paragraphs (or definitions), as applicable, and
(iii) elect to comply with such paragraphs (or definitions), as applicable, in
any order.
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(e) Notwithstanding any other provision of this covenant, the
maximum amount of Indebtedness that the Company or a Restricted Group Member
may Incur pursuant to this covenant shall not be deemed to be exceeded, with
respect to any outstanding Indebtedness, due solely to the result of
fluctuations in the exchange rates of currencies.
SECTION 4.13. Limitations on Restrictions Affecting Restricted Group Members.
The Company shall not, and shall not cause or permit any
Restricted Group Member to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Group Member to (x) pay dividends or make any other
distributions to the Company or any other Restricted Group Member on its Equity
Interests or with respect to any other interest or participation in, or
measured by, its profits, or pay any Indebtedness owed to the Company or any
other Restricted Group Member, (y) make loans or advances to, or guarantee any
Indebtedness or other obligations of, the Company or any other Restricted Group
Member, or (z) transfer any of its properties or assets to the Company or any
other Restricted Group Member.
The foregoing shall not prohibit (a) any encumbrance or
restriction existing under or by reason of any agreement in effect on the Issue
Date, as any such agreement is in effect on such date or as thereafter amended
or supplemented but only if such encumbrance or restriction is no more
restrictive than that in the agreement being amended; (b) customary provisions
contained in an agreement that has been entered into for the sale or
disposition of all or substantially all of the Equity Interests or assets of a
Restricted Group Member; provided, however, that (x) such encumbrance or
restriction is applicable only to such Restricted Group Member (or the
applicable assets to be sold) and (y) such sale or disposition is made in
accordance with Section 4.16; (c) any encumbrance or restriction existing under
or by reason of applicable law; (d) customary provisions restricting subletting
or assignment of any lease governing any leasehold interest of any Restricted
Group Member; (e) covenants in purchase money obligations for property acquired
in the ordinary course of business restricting transfer of such property; (f)
covenants in security agreements securing Indebtedness of the Company or any
Restricted Group Member (to the extent that such Liens were otherwise incurred
in accordance with Section 4.15) that restrict the transfer of property subject
to such agreements; (g) any agreement or other instrument of a Person acquired
by the Company or any Restricted Group Member in existence at the time of such
acquisition, which encumbrance or restriction (x) is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or
the properties or assets of the Person so acquired, and (y) is not incurred in
connection with or in contemplation of such acquisition; (h) any encumbrance or
restriction contained in any agreement entered into after the Issue Date, so
long as such encumbrance or restriction is not materially more disadvantageous
to the Holders than the encumbrances and restrictions of the Company or any
Restricted Group Member in existence at the Issue Date; (i) any encumbrance or
restriction contained in any stockholders, joint venture or similar agreement,
so long as such encumbrance or restriction is not materially more
disadvantageous to the Holders than the encumbrances and restrictions contained
in comparable agreements entered into prior to the Issue Date by the Company or
a Restricted Group Member; (j) any encumbrance or restriction contained in any
Senior Credit Facility; or (k) any encumbrance or restriction contained in any
agreement entered into after the Issue Date for Indebtedness so long as (A)
such encumbrance or restriction is not more restrictive than that which is
customary in comparable financing agreements and (B) management of the Company
determines that such encumbrance or restriction will not materially impair the
Company's ability to make payments when due on the Securities.
Nothing contained in this covenant shall prevent the Company
or any Restricted Group Member from (i) creating, Incurring, assuming or
suffering to exist any Liens not prohibited by Section 4.15;
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or (ii) restricting the sale or other disposition of property or assets of the
Company or any Restricted Group Member that secure Indebtedness of the Company
or any Restricted Group Member.
SECTION 4.14. Designation of Unrestricted Group Members.
(a) The Company may designate any Restricted Group Member as
an "Unrestricted Group Member" under this Indenture (a "Designation") only if:
Either (A):
(i) no Default or Event of Default shall have occurred and
be continuing after giving effect to such Designation;
(ii) the Company would be permitted to make an Investment
(other than a Permitted Investment) at the time of such Designation
(assuming the effectiveness of such Designation) pursuant to Section
4.11 in an amount (the "Designation Amount") equal to the Fair Market
Value of the Equity Interests of such Restricted Group Member owned
directly or indirectly by the Company on such date; and
(iii) if such Restricted Group Member is a Subsidiary of
Hermes Europe, simultaneously with such Designation, Hermes Europe
shall make a similar designation of such Subsidiary in accordance with
the terms of the Hermes Europe Senior Notes Indenture; or
(B):
(i) such Restricted Group Member is not in compliance with
one or more covenants under this Indenture that it is required to
comply with;
(ii) the Company has used its diligent best efforts to
procure compliance by such Restricted Group Member with the covenants
of this Indenture that such Restricted Group Member is required to
comply with;
(iii) the Company has used its diligent best efforts to cure
such noncompliance; and
(iv) the aggregate sum of (x) the Fair Market Value of all
Equity Interests owned directly or indirectly by the Company of all
Restricted Group Members which have been the subject of a Designation
pursuant to this clause (B) since the Issue Date and which Designation
has not been the subject of a Revocation (each such Fair Market Value
of the Equity Interests of any such Restricted Group Member to be the
Fair Market Value thereof at the date of each such Designation) plus
(y) the greater of (1) $0 and (2) the excess of the Fair Market Value
at the date of Designation pursuant to this clause (B) of the Equity
Interests of such Restricted Group Member owned directly or indirectly
by the Company over the Fair Market Value at the date of Revocation of
the status of such Restricted Group Member as an Unrestricted Group
Member does not exceed $25.0 million (such sum, at any date, the
"Designation Basket").
All Subsidiaries of Unrestricted Subsidiaries shall be
Unrestricted Group Members. On the Issue Date, the Company shall effect
Designations of each Subsidiary of Hermes Europe that Hermes Europe
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has previously designated as an Unrestricted Subsidiary in accordance with
terms of the Hermes Europe Senior Notes Indenture.
The Company shall not, and shall not cause or permit any
Restricted Group Member to, directly or indirectly, at any time be liable for
any Indebtedness (other than any Senior Credit Facility) which provides that
the holder thereof may (upon notice, lapse of time or both) declare a default
thereon or cause the payment thereof to be accelerated or payable prior to its
final scheduled maturity upon the occurrence of a default with respect to any
Indebtedness of any Unrestricted Group Member.
(b) The Company may revoke any Designation of a Subsidiary or
Affiliate as an Unrestricted Group Member (a "Revocation") only if:
(i) no Default or Event of Default shall have occurred and
be continuing at the time of and after giving effect to such
Revocation;
(ii) all Liens and Indebtedness of such Unrestricted Group
Member outstanding immediately following such Revocation would, if
Incurred at such time, have been permitted to be Incurred for all
purposes of this Indenture; and
(iii) if such Subsidiary is a Subsidiary of Hermes Europe,
simultaneously with such Revocation, Hermes Europe shall make a
similar revocation with respect to such Subsidiary in accordance with
the terms of the Hermes Europe Senior Notes Indenture.
All Designations and Revocations must be evidenced by
resolutions of the Board of Directors of the Company, delivered to the Trustee
certifying compliance with the foregoing provisions.
SECTION 4.15. Limitation on Liens.
The Company shall not, and shall not cause or permit any
Restricted Group Member to, directly or indirectly, Incur or suffer to exist
any Lien (other than any Permitted Lien) of any kind against or upon any of
their respective properties or assets now owned or hereafter acquired, or any
proceeds, income or profits therefrom, unless contemporaneously therewith or
prior thereto, (i) in the case of any Lien securing an obligation that ranks
pari passu with the Securities, effective provision is made to secure the
Securities equally and ratably with or prior to such obligation with a Lien on
the same collateral and (ii) in the case of any Lien securing an obligation
that is subordinated in right of payment to the Securities, effective provision
is made to secure the Securities with a Lien on the same collateral that is
prior to the Lien securing such subordinated obligation, in each case, for so
long as such obligation is secured by such Lien.
SECTION 4.16. Limitation on Asset Sales.
The Company shall not, and shall not cause or permit any
Restricted Group Member to, directly or indirectly, make any Asset Sale, unless
(x) the Company or such Restricted Group Member, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets sold or otherwise disposed of and (y) at least 75% of such
consideration consists of (i) cash or Cash Equivalents, (ii) Replacement
Assets, (iii) publicly traded Equity Interests of a Person; provided, however,
that the Company or such Restricted Group Member shall sell (a "Monetization
Sale"), for cash or Cash Equivalents, such Equity Interests to a third Person
(other than to the Company or a Restricted Group Member) at a price not less
than the Fair Market Value thereof within 425 days of the consummation of such
Asset Sale, or
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(iv) any combination of the foregoing clauses (i) through (iii). The amount of
any (x) Indebtedness (other than any Subordinated Indebtedness) of the Company
or any Restricted Group Member that is actually assumed by the transferee in
such Asset Sale and from which the Company and the Restricted Group Members are
fully released shall be deemed to be cash for purposes of determining the
percentage of cash consideration received by the Company or such Restricted
Group Member and (y) notes or other similar obligations received by the
Company or any Restricted Group Member from such transferee that are converted,
sold or exchanged within 365 days of the related Asset Sale by the Company or
any Restricted Group Member into cash shall be deemed to be cash, in an amount
equal to the net cash proceeds realized upon such conversion, sale or exchange
for purposes of determining the percentage of cash consideration received by
the Company or such Restricted Group Member. Any Net Cash Proceeds from any
Asset Sale or any Monetization Sale that are not, within 425 days of the
consummation of such Asset Sale or Monetization Sale, (A) invested in
Replacement Assets or (B) used to repay and permanently reduce the commitments
under Indebtedness of the Company or any Restricted Group Member other than
Subordinated Indebtedness or Indebtedness of the Company (other than under the
Senior Credit Facility) with a Weighted Average Life to Maturity or stated
final maturity longer than that of the Securities shall constitute "Excess
Proceeds" subject to disposition as provided below.
Within 40 days after the aggregate amount of Excess Proceeds
equals or exceeds $10.0 million, the Company shall make an Offer to Purchase,
from all Holders, that aggregate principal amount of Securities as can be
purchased with the Security Portion of Excess Proceeds (as defined below) at a
price in cash equal to 100% of the outstanding principal amount thereof, plus
accrued and unpaid interest, if any, to any purchase date. To the extent that
the aggregate of the principal and accrued interest of Securities validly
tendered and not withdrawn pursuant to an Offer to Purchase is less than the
Excess Proceeds, the Company may use such surplus for general corporate
purposes. If the aggregate of the principal and accrued interest of Securities
validly tendered and not withdrawn by Holders thereof exceeds the amount of
Securities that can be purchased with the Security Portion of Excess Proceeds,
Securities to be purchased will be selected pro rata based on the aggregate
principal amount of Securities tendered by each Holder. Upon completion of an
Offer to Purchase, the amount of Excess Proceeds shall be reset to zero.
In the event that any other Indebtedness of the Company that
ranks pari passu with the Securities (the "Other Debt") requires an offer to
purchase to be made to repurchase such Other Debt upon the consummation of an
Asset Sale, the Company may apply the Excess Proceeds otherwise required to be
applied to an Offer to Purchase to offer to purchase such Other Debt and to an
Offer to Purchase so long as the amount of such Excess Proceeds applied to
purchase the Securities is not less than the Security Portion of Excess
Proceeds. With respect to any Excess Proceeds, the Company shall make the Offer
to Purchase in respect thereof at the same time as the analogous offer to
purchase is made pursuant to any Other Debt and the Purchase Date in respect
thereof shall be the same as the purchase date in respect thereof pursuant to
any Other Debt.
For purposes of this covenant, "Security Portion of Excess
Proceeds" means (1) if no Other Debt is being offered to be purchased, the
amount of the Excess Proceeds and (2) if Other Debt is being offered to be
purchased, the amount of the Excess Proceeds equal to the product of (x) the
Excess Proceeds and (y) a fraction the numerator of which is the aggregate
amount of all Securities tendered pursuant to the Offer to Purchase related to
such Excess Proceeds (the "Security Amount") and the denominator of which is
the sum of the Security Amount and the aggregate amount as of the relevant
purchase date of all Other Debt tendered and purchased pursuant to a concurrent
offer to purchase such Other Debt made at the time of such Offer to Purchase.
If and to the extent that the Excess Proceeds from any Asset
Sale of any Restricted Group Member cannot at such time be paid as a dividend
to the Company by virtue of the Hermes Europe Senior
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Note Indenture as in effect on the issue date, such Excess Proceeds shall not
be deemed to constitute Excess Proceeds until such time as and to the extent
that such Excess Proceeds are permitted to be paid as a dividend thereunder.
Notwithstanding the foregoing, to the extent that any or all
of the Net Cash Proceeds of any Asset Sale of assets based outside the United
States are prohibited or delayed by applicable local law from being repatriated
to the United States and such Net Cash Proceeds are not actually applied in
accordance with the foregoing paragraphs, the Company shall not be required to
apply the portion of such Net Cash Proceeds so affected but may permit the
applicable Restricted Group Members to retain such portion of the Net Cash
Proceeds so long as the applicable local law will not permit repatriation to
the United States (the Company hereby agreeing to cause the applicable
Restricted Group Member to promptly take all actions required by the applicable
local law to permit such repatriation) and once such repatriation of any such
affected Net Cash Proceeds is permitted under the applicable local law, such
repatriation will be immediately effected and such repatriated Net Cash
Proceeds will be applied in the manner set forth in this covenant as if the
Asset Sale had occurred on such date; provided, however, that to the extent
that the Company has determined in good faith that repatriation of any or all
of the Net Cash Proceeds of such Asset Sale would have a material adverse tax
cost consequence, the Net Cash Proceeds so affected may be retained by the
applicable Restricted Group Member for so long as such material adverse tax
cost event would continue.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and
Rule 14e-1 under, the Exchange Act, and any violation of the provisions of this
Indenture relating to such Offer to Purchase occurring as a result of such
compliance shall not be deemed a Default or an Event of Default.
SECTION 4.17. Limitation on Transactions with Affiliates.
The Company shall not, and shall not cause or permit any
Restricted Group Member to, directly or indirectly, conduct any business or
enter into any transaction or series of related transactions with or for the
benefit of any Affiliate, any holder of 5% or more of any class of Equity
Interests of the Company or any Restricted Group Member or any officer,
director or employee of the Company or any Restricted Group Member (each, an
"Affiliate Transaction"), unless such Affiliate Transaction is on terms that
are no less favorable to the Company or such Restricted Group Member, as the
case may be, than could reasonably be obtained at such time in a comparable
transaction with an unaffiliated third party. For any such transaction that
involves value in excess of $5.0 million, the Company shall deliver to the
Trustee an officers' certificate stating that a majority of the Disinterested
Directors has determined that the transaction satisfies the above criteria and
shall evidence such a determination by a Board Resolution delivered to the
Trustee. For any such transaction that involves value in excess of $20.0
million, the Company shall also obtain a written opinion from an Independent
Financial Advisor to the effect that such transaction is fair, from a financial
point of view, to the Company or such Restricted Group Member, as the case may
be.
Notwithstanding the foregoing, the restrictions set forth in
this covenant shall not apply to (i) transactions between or among the Company
and one or more Restricted Group Members or between or among Restricted Group
Members; (ii) customary directors' fees, indemnification and similar
arrangements, employee salaries, bonuses or employment agreements, compensation
or employee benefit arrangements and incentive arrangements with any officer,
director or employee of the Company or any Restricted Group Member entered into
in the ordinary course of business (including customary benefits thereunder);
(iii) transactions pursuant to agreements in effect on the Issue Date, as such
agreements are in effect on the Issue Date or as
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thereafter amended or supplemented in a manner not adverse to the Holders; (iv)
loans and advances to officers, directors and employees of the Company or any
Restricted Group Member for travel, entertainment, housing, moving and other
relocation expenses, in each case made in the ordinary course of business and
consistent with past business practices; (v) any transaction between the
Company or any Restricted Group Member, on the one hand, and any Affiliate of
the Company or any Restricted Group Member engaged primarily in a
Telecommunications Business, on the other hand, (x) in the ordinary course of
business and consistent with commercially reasonable practices or (y) approved
by a majority of the Disinterested Directors; and (vi) payment of dividends in
respect of Equity Interests of the Company or any Restricted Group Member
permitted under Section 4.11 above; and (vii) any transaction or series of
related transactions involving consideration or payments of less than $25,000.
SECTION 4.18. Limitation on Issuances of Guarantees by Restricted Group
Members.
The Company shall not cause or permit any Restricted Group
Member, directly or indirectly, to guarantee any Indebtedness of the Company
("Guaranteed Indebtedness") (other than any guarantee of the Senior Credit
Facility), unless (i) such Restricted Group Member simultaneously executes and
delivers a supplemental indenture to this Indenture pursuant to which such
Restricted Group Member guarantees (a "Guarantee") all of the Company's
obligations under the Securities and this Indenture and (ii) such Restricted
Group Member 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 Group Member as
a result of any payment by such Restricted Group Member under its Guarantee. If
the Guaranteed Indebtedness is (A) pari passu with the Securities, then the
guarantee of such Guaranteed Indebtedness shall be pari passu with, or
subordinated to, the Guarantee or (B) subordinated to the Securities, then the
guarantee of such Guaranteed Indebtedness shall be subordinated to the
Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated to the Securities.
Any Guarantee by a Restricted Group Member shall provide by
its terms that it shall be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all of the Equity Interests of the Company or any
Restricted Group Member in, or all or substantially all the assets of, such
Restricted Group Member (which sale, exchange or transfer is made in accordance
with this Indenture) or (ii) the release or discharge of the guarantee which
resulted in the creation of such Guarantee, except a discharge or release by or
as a result of payment under such guarantee.
SECTION 4.19. Limitation on the Issuance and Sale of Equity Interests of
Restricted Group Members.
The Company shall not sell, and shall not cause or permit any
Restricted Group Member, directly or indirectly, to issue or sell, any Equity
Interests of any Restricted Group Member, except (i) to the Company or a
Restricted Group Member; (ii) issuances of director's qualifying shares or
sales to foreign nationals of shares of Equity Interests of a foreign
Restricted Group Member, to the extent required by applicable law; (iii) if,
immediately after giving effect to such issuance or sale, such Restricted Group
Member would no longer constitute a Restricted Group Member; provided, however,
any investment in such Person remaining after giving effect to such issuance or
sale would have been permitted to be made under Section 4.11 above, if made on
the date of such issuance or sale; (iv) issuances or other sales of common
stock (including options, warrants or other rights to purchase common stock) of
a Restricted
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Group Member; provided, however, the Net Cash Proceeds, if any, of such sale
are applied in accordance with Section 4.16 above; (v) issuances of common
stock for cash (including options, warrants or other rights to purchase common
stock) of a Restricted Group Member; provided, however, that the per share
price to the investor of each share of common stock sold in such issuance shall
not be less than the book value per share of such Restricted Group Member's
common stock prior to such issuance (after adjusting for the effect of such
issuance);(vi) issuances of Equity Interests pursuant to employee stock option
plans created in the ordinary course of business on ordinary business terms;
and (vii) issuances of Equity Interests by any Restricted Group Member in a
transaction in which the Company acquires at the same time sufficient Equity
Interests of such Restricted Group Member to at least maintain the same
percentage ownership interest it had prior to such transaction.
SECTION 4.20. Limitations on Lines of Business.
The Company shall not, and shall not cause or permit any
Restricted Group Members to, directly or indirectly engage to any substantial
extent in any line or lines of business other than a Related Business.
SECTION 4.21. Additional Amounts.
All payments made by the Company under or with respect to the
Securities will be made free and clear of and without withholding or deduction
for or on account of any present of future Taxes imposed or levied by or on
behalf of any Taxing Authority within any jurisdiction in which the Company is
organized or engaged in business for tax purposes, unless the Company is
required to withhold or deduct Taxes by law or by the interpretation or
administration thereof. If the Company is required to withhold or deduct any
amount for or on account of Taxes imposed by a Taxing Authority within any
jurisdiction in which the Company is organized or engaged in business for tax
purposes, from any payment made under or with respect to the Securities, the
Company will pay such additional amounts ("Additional Amounts") as may be
necessary so that the net amount received by each holder of Securities
(including Additional Amounts) after such withholding or deduction will equal
the amount the holder would have received if such Taxes had not been withheld
or deducted; provided, however, that no Additional Amounts will be payable with
respect to any Tax that would not have been imposed, payable or due (i) but for
the existence of any present or former connection between the holder (or the
beneficial owner of, or person ultimately entitled to obtain an interest in,
such Securities) and the jurisdiction in which the Company is organized or
engaged in business for tax purposes other than the mere holding of the
Securities; (ii) but for the failure to satisfy any certification,
identification or other reporting requirements whether imposed by statute,
treaty, regulation or administrative practice, provided that the Company has
delivered a request to the holder to comply with such requirements at least 30
days prior to the date by which such compliance is required; (iii) if the
presentation of Securities (where presentation is required) for payment has
occurred within 30 days after the date such payment was due and payable or was
duly provided for, whichever is later; or (iv) if the beneficial owner of, or
person ultimately entitled to obtain an interest in, such Securities had been
the holder of the Securities and would not be entitled to the payment of
Additional Amounts (excluding the impact of the book-entry procedures described
in Section 2.15). In addition, Additional Amounts will not be payable with
respect to any Tax which is payable otherwise than by withholding from payments
of, or in respect of principal of, or any interest on, the Securities.
SECTION 4.22. Deposit of Funds with Escrow Agent.
(a) On the Issue Date, the Company shall deposit with the
Escrow Agent funds that together with the proceeds from the investment thereof
will be sufficient to pay the first four scheduled interest payments on the
Securities (excluding any Additional Amounts or Additional Interest). All
Escrow Collateral shall be held in the Escrow Account until permitted to be
disbursed pursuant to the Escrow Agreement and then shall be disbursed strictly
in accordance with the terms thereof.
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(b) Pending release of the Escrow Funds as provided in the
Escrow Agreement, the Escrow Funds will be invested in Cash Equivalents as
specifically directed in writing by the Company. Any interest or other profit
resulting from such investment will be deposited in the Escrow Account.
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc.
The Company shall not consolidate with or merge with or into
(whether or not the Company is the Surviving Person) any other Person and the
Company shall not, and shall not cause or permit any Restricted Group Member
to, sell, convey, assign, transfer, lease or otherwise dispose of all or
substantially all of the property and assets of the Company and the Restricted
Group Members, taken as a whole, to any Person or Persons (other than any
Wholly Owned Restricted Subsidiary), in each case, in a single transaction or
series of related transactions, unless: (i) either (x) the Company shall be the
Surviving Person or (y) the Surviving Person (if other than the Company) shall
be a corporation organized and validly existing under the laws of Bermuda, the
British Virgin Islands, Netherlands Antilles, Canada, any country which is a
member of the European Union or the United States of America or any State
thereof or the District of Columbia, and shall, in any such case, expressly
assume by a supplemental indenture, the due and punctual payment of the
principal of and interest on the Securities and the performance and observance
of every covenant of this Indenture and the Escrow Agreement to be performed or
observed on the part of the Company; (ii) immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; and (iii) other than in the case of sale, conveyance, assignment,
transfer, lease or other disposition of all or substantially all of the
property and assets of the Company and the Restricted Group Members to any
Restricted Subsidiary, immediately after giving effect to such transaction, the
Debt to Annualized Operating Cash Flow Ratio of the Surviving Person (as the
Company) would be less than the Debt to Annualized Operating Cash Flow Ratio of
the Company immediately prior to such transaction.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all the properties and assets of one or
more Restricted Group Members the Equity Interests of which constitutes all or
substantially all the properties and assets of the Company shall be deemed to
be the transfer of all or substantially all the properties and assets of the
Company.
SECTION 5.02. Successor Corporation Substituted.
In the event of any transaction (other than a lease) described
in and complying with the conditions listed in Section 5.01 in which the
Company is not the Surviving Person and the Surviving Person is to assume all
the Obligations of the Company under the Securities, this Indenture and the
Escrow Agreement pursuant to a supplemental indenture, such Surviving Person
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company, and the Company shall be discharged from its Obligations
under the Securities, this Indenture and the Escrow Agreement.
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ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
The occurrence of any of the following will be an "Event of
Default" under this Indenture:
(a) failure to pay principal of any Security when due;
(b) failure to pay any interest on any Security when due,
continued for 30 days or more;
(c) failure to pay on the Purchase Date the Purchase Price
for any Security validly tendered pursuant to any Offer to Purchase;
(d) failure to perform or comply with any of the provisions
described under Section 5.01;
(e) failure to perform any other covenant, warranty or
agreement of the Company under this Indenture or the Escrow Agreement
or in the Securities continued for 30 days or more after written
notice to the Company by the Trustee or Holders of at least 25% in
aggregate principal amount of the outstanding Securities; provided,
however, that a default or breach of a covenant or agreement arising
from a Restricted Affiliate ceasing to observe any covenant applicable
to it resulting from an Involuntary Event shall not constitute an
Event of Default unless such Involuntary Event continues for 90 days;
(f) there shall be, with respect to any issue or issues of
Indebtedness of the Company or any Significant Restricted Group Member
having an outstanding principal amount of $10.0 million or more in the
aggregate for all such issues of all such Persons, whether such
Indebtedness now exists or shall hereafter be created, (x) an event of
default that has caused the holders thereof (or their representative)
(I) to declare such Indebtedness to be due and payable prior to its
scheduled maturity and such Indebtedness has not been discharged in
full or such acceleration has not been rescinded or annulled within 45
days following such acceleration and/or (II) to commence judicial
proceedings to foreclose upon, or to exercise remedies under
applicable law or applicable security documents to take ownership of,
the property or assets securing such Indebtedness and/or (y) the
failure to make a principal payment at the final fixed maturity and
such defaulted payment shall not have been made, waived or extended
within 45 days of such payment default;
(g) the rendering of a final judgment or judgments (not
covered by insurance) against the Company or any Significant
Restricted Group Member in an amount of $10.0 million or more which
remains undischarged or unstayed for a period of 60 consecutive days;
(h) the Company or any Significant Restricted Group Member
pursuant to or within the meaning of any bankruptcy Law:
(1) admits in writing its inability to pay its debts
generally as they become due,
(2) commences a voluntary case or proceeding,
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(3) consents to the entry of an order for relief against
it in an involuntary case or proceeding,
(4) consents or acquiesces in the institution of a
bankruptcy or insolvency proceeding against it,
(5) consents to the appointment of a Custodian of it or
for all or substantially all of its property, or
(6) makes a general assignment for the benefit of its
creditors, or any of them takes any action to
authorize or effect any of the foregoing;
(i) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(1) is for relief against the Company or any Significant
Restricted Group Member in an involuntary case or proceeding,
(2) appoints a Custodian of the Company or any
Significant Restricted Group Member or for all or substantially all of
its property, or
(3) orders the liquidation of the Company or any
Significant Restricted Group Member, and in each case the order or
decree remains unstayed and in effect for 60 days; provided, however,
that if the entry of such order or decree is appealed and dismissed on
appeal, then the Event of Default hereunder by reason of the entry of
such order or decree shall be deemed to have been cured; or
(j) the Company shall challenge the Lien on the Escrow
Collateral under the Escrow Agreement prior to such time as the Escrow
Collateral is to be released to the Company, or the Trustee (on behalf
of the Holders) shall fail to have a first priority perfected security
interest in Escrow Collateral.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law.
The Trustee shall, within 30 days after receiving actual
notice the occurrence of any Default or Event of Default with respect to the
Securities, give the Holders notice of all uncured Defaults thereunder known to
it; provided, however, that, except in the case of an Event of Default in
payment with respect to the Securities or a Default or Event of Default in
complying with Section 5.01, the Trustee shall be protected in withholding such
notice if and so long as a committee of its Trust Officers in good faith
determines that the withholding of such notice is in the interest of the
Holders.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities (other
than an Event of Default specified in clause (h) or (i) of Section 6.01 with
respect to the Company) occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount at maturity of the outstanding
Securities by notice in writing to the Company may declare the unpaid principal
of (and premium, if any) and accrued interest to the
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date of acceleration on all the outstanding Securities to be due and payable
immediately and, upon any such declaration, such principal amount (and premium,
if any) and accrued interest, notwithstanding anything contained in this
Indenture or the Securities to the contrary, will become immediately due and
payable.
If an Event of Default specified in clause (h) or (i) of
Section 6.01 with respect to the Company occurs, all unpaid principal of and
accrued interest on all outstanding Securities shall ipso facto become
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
After a declaration of acceleration, but before a judgment or
decree of the money due in respect of the Securities has been obtained, the
Holders of not less than a majority in aggregate principal amount of the
Securities then outstanding by written notice to the Trustee may rescind an
acceleration and its consequences if all existing Events of Default (other than
the nonpayment of principal of and interest on the Securities which has become
due solely by virtue of such acceleration) have been cured or waived and if the
rescission would not conflict with any judgment or decree. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
No Holder will have any right to institute any proceeding with
respect to this Indenture or for any remedy thereunder, unless the Trustee (i)
shall have failed to act for a period of 60 days after receiving written notice
of a continuing Event of Default by such Holder and a request to act by Holders
of at least 25% in aggregate principal amount at maturity of Securities
outstanding, (ii) shall have been offered indemnity reasonably satisfactory to
it and (iii) shall not have received from the Holders of a majority in
aggregate principal amount at maturity of the outstanding Securities a
direction inconsistent with such request. However, such limitations do not
apply to a suit instituted by a Holder of any Security for enforcement of
payment of the principal of or interest on such Security on or after the due
date therefor (after giving effect to the grace period specified in clause (b)
of the first paragraph of this Article Six).
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect
the payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities, this Indenture or the Escrow
Agreement.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy maturing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
Upon a declaration of acceleration of the Securities in
accordance with Section 6.02, the Trustee shall foreclose on all Escrow
Collateral and take all other actions permitted of a secured party under the
UCC or otherwise.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 9.02, prior to the
declaration of acceleration of the Securities, the Holders of not less than a
majority in aggregate principal amount of the outstanding Securities by written
notice to the Trustee may waive an existing Default and its consequences,
except a Default in the payment of principal of or interest on any Security as
specified in Section 6.01(a), (b) or (c) or a Default in respect of
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any term or provision of this Indenture that may not be amended or modified
without the consent of each Holder affected as provided in Section 9.02. The
Company shall deliver to the Trustee an Officers' Certificate stating that the
requisite percentage of Holders have consented to such waiver and attaching
copies of such consents. In case of any such waiver, the Company, the Trustee
and the Holders shall be restored to their former positions and rights
hereunder and under the Securities, respectively. This paragraph of this
Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such
Section 316(a)(1)(B) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in
principal amount of the outstanding Securities may 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 it. However, the Trustee may refuse
to follow any direction that conflicts with law, this Indenture or the Escrow
Agreement, that the Trustee determines may be unduly prejudicial to the rights
of another Securityholder, or that may involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction. In the
event the Trustee takes any action or follows any direction pursuant to this
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against any loss or expense caused by taking such action
or following such direction. This Section 6.05 shall be in lieu of Section
316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
TIA.
SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to
this Indenture or the Securities unless:
(i) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal
amount of the outstanding Securities make a written request to the
Trustee to pursue a remedy;
(iii) such Holder or Holders offer and, if requested, provide
to the Trustee indemnity reasonably satisfactory to the Trustee
against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request; and
(v) during such 60-day period the Holders of a majority in
principal amount of the outstanding Securities (excluding Affiliates
of the Company) do not give the Trustee a direction which, in the
opinion of the Trustee, is inconsistent with the request.
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A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
such other Securityholder.
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 or interest on a
Security, on or after the respective due dates therefor, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in Section 6.01(a) or (b) or (c) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express
trust against the Company or any other obligor on the Securities for the whole
amount of principal and accrued interest remaining unpaid, together with
interest overdue on principal and to the extent that payment of such interest
is lawful, interest on overdue installments of interest, in each case at the
rate per annum borne by the Securities and 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.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Company (or
any other obligor upon the Securities), its creditors or its property and shall
be entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each
Securityholder 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
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent
and counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six or the Escrow Agreement, it shall pay out the money or property in
the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
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Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment to Securityholders pursuant to
this Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 shall not apply to a suit by the
Trustee, a suit by a Holder or group of Holders of more than 10% in aggregate
principal amount of the outstanding Securities, or to any suit instituted by
any Holder for the enforcement or the payment of the principal or interest on
any Securities on or after the respective due dates therefor.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in 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 a Default:
(1) The Trustee shall not be liable except for the
performance of such duties as are specifically set forth herein; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions conforming to the requirements of this Indenture or the
Escrow Agreement; however, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine such certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture or the Escrow Agreement.
(c) The Trustee shall not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts;
and
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(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) No provision of this Indenture or the Escrow Agreement
shall require the Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder or to
take or omit to take any action under this Indenture or take any action at the
request or direction of Holders if it shall have reasonable grounds for
believing that repayment of such funds is not assured to it or it does not
receive from such Holders an indemnity or security satisfactory to it in its
sole discretion against such risk, liability, loss, fee or expense which might
be incurred by it in compliance with such request or direction.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
7.01.
(f) The Trustee shall not be liable for interest on any money
received by it. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee shall conclusively rely on any document
believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel, which shall
conform to the provisions of Section 10.05. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or negligence of any
agent or attorney (other than an agent who is an employee of the Trustee)
appointed with due care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel of its selection and
the advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.
(f) Any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution.
(g) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture or the Escrow Agreement
at the request or direction of any of the Securityholders pursuant to this
Indenture, unless such Securityholders shall have offered to the Trustee
security or indemnity
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satisfactory to the Trustee against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction.
(h) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled
to examine the books, records and premises of the Company, personally or by
agent or attorney at the sole cost of the Company and shall incur no liability
or additional liability of any kind by reason of such inquiry or investigation.
(i) The Trustee shall not be deemed to have notice of any
Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless the Trustee shall have received written notice thereof at the
Corporate Trust Office of the Trustee, and such notice references the
Securities (including CUSIP Number) and this Indenture.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
its Affiliates with the same rights it would have if it were not Trustee,
subject to Section 7.10 hereof. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, the Escrow
Agreement or the Securities, it shall not be accountable for the Company's use
of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or any document issued in connection
with the sale of Securities or any statement in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default occurs and is continuing and the Trustee actually
knows of such Default, the Trustee shall mail to each Securityholder notice of
the Default within 30 days after the occurrence thereof. Except in the case of
a Default in payment of principal of or interest on any Security or a Default
in complying with any of the provisions of the Escrow Agreement, the Trustee
may withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interest of
Securityholders. This Section 7.05 shall be in lieu of the proviso to Section
315(b) of the TIA and such proviso to Section 315(b) of the TIA is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
TIA.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA Section 313(a), within 60 days after each
September 1 beginning with September 1, 1998, the Trustee shall mail to each
Securityholder a report dated as of such September 1 that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Section 313(b), (c) and
(d).
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A copy of each such report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange, if any, on
which the Securities are listed.
The Company shall promptly notify the Trustee in writing if
the Securities become listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time to time agree in
writing for its services. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including fees, disbursements and expenses of its agents and
counsel) incurred or made by it in addition to the compensation for its
services except any such disbursements, expenses and advances as may be
attributable to the Trustee's negligence or bad faith. Such expenses shall
include the reasonable compensation, disbursements and expenses of the
Trustee's agents, accountants, experts and counsel and any taxes or other
expenses incurred by a trust created pursuant to Section 8.01 hereof.
The Company shall indemnify the Trustee, its agents and
officers, for, and hold it harmless against any and all loss, damage, claims,
liability or expense, including taxes (other than franchise taxes imposed on
the Trustee and taxes based upon, measured by or determined by the income of
the Trustee), arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent that such loss, damage, claim, liability or expense is due to its
own negligence or bad faith. The Trustee shall notify the Company promptly of
any claim asserted against the Trustee for which it may seek indemnity.
However, the failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder. The Company shall defend the claim
and the Trustee shall cooperate in the defense (and may employ its own counsel)
at the Company's expense; provided, however, that the Company's reimbursement
obligation with respect to counsel employed by the Trustee will be limited to
the reasonable fees and expenses of such counsel.
The Company need not pay for any settlement made without its
written consent, which consent shall not be unreasonably withheld. The Company
need not reimburse any expense or indemnify against any loss or liability
incurred by the Trustee as a result of the material violation of this Indenture
by the Trustee.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a Lien prior to the Securities against all money
or property held or collected by the Trustee, in its capacity as Trustee,
except money or property held in trust to pay principal of or interest on
particular Securities or the Purchase Price or redemption price of any
Securities to be purchased or pursuant to an Offer to Purchase or redeemed.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(h) or (i) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute
expenses of administration under any Bankruptcy Law. The Company's obligations
under this Section 7.07 and any claim arising hereunder shall survive the
resignation or removal of any Trustee, the discharge of the Company's
obligations pursuant to Article Eight and any rejection or termination under
any Bankruptcy Law, and the termination of this Indenture.
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SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company
in writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor Trustee with the Company's consent. The
Company may at any time, other than during the existence of a Default or an
Event of Default, remove the Trustee by Company Order given at least 30 days
prior to the date of the proposed removal.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties
of the Trustee under this Indenture. A successor Trustee shall mail notice of
its succession to each Securityholder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in principal amount of the outstanding
Securities may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee.
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SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be
eligible to act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. If the
Trustee has or shall acquire any "conflicting interest" within the meaning of
TIA Section 310(b), the Trustee and the Company shall comply with the
provisions of TIA Section 310(b); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 7.10, the Trustee shall resign immediately in the
manner and with the effect hereinbefore specified in this Article Seven.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
SECTION 7.12. Trustee's Application for Instructions from the Company.
Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the
date on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or
omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date
shall not be less than three Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such
action (or the effective date in the case of an omission), the Trustee shall
have received written instructions in response to such application specifying
the action to be taken or omitted.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations.
The Company may terminate its substantive obligations in
respect of the Securities by delivering all outstanding Securities to the
Trustee for cancellation and paying all sums payable by it on account of
principal of and interest on all Securities or otherwise. In addition to the
foregoing, the Company may terminate its obligation under Sections 4.04, 4.06,
4.08, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20 (and
no Default with respect to such Sections under Section 6.01(c) shall thereafter
apply), by (i) depositing with the Trustee, under the terms of an irrevocable
trust agreement, money or U. S. Government Obligations sufficient (without
reinvestment) to pay all remaining indebtedness on the Securities at maturity
or an earlier redemption, (ii) delivering to the Trustee either an Opinion of
Counsel or a ruling directed to the Trustee from the Internal Revenue Service
to the effect that the Holders of the Securities will not recognize income,
gain or loss for federal income tax purposes as a result of such deposit and
termination of obligations, (iii) delivering to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
paragraph will not result in any of the Company, the Trustee or the trust
created by the Company's deposit of funds pursuant to this provision becoming
or being deemed to be an "investment company" under the Investment Company Act
of 1940, as amended (the "Investment Company Act"), and (iv) delivering to the
Trustee an Officers' Certificate and an Opinion of Counsel each stating
compliance with all conditions precedent provided for herein. In addition, the
Company may, provided that no Default has occurred and is continuing or would
arise therefrom (or, with respect to a Default specified in Section 6.01(h) or
(i), occurs 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 day)), terminate all of its substantive
obligations in respect of the Securities (including its obligations to pay the
principal of and interest on the Securities) by (i) depositing with the
Trustee, under the terms of an irrevocable trust agreement, money or U.S.
Government Obligations
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sufficient (without reinvestment) to pay all remaining indebtedness on the
Securities at maturity or upon earlier redemption, (ii) delivering to the
Trustee either a ruling directed to the Trustee from the Internal Revenue
Service to the effect that the Holders of the Securities will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit and termination of obligations or an Opinion of Counsel addressed to
the Trustee based upon such a ruling or based on a change in the applicable
Federal tax law since the date of this Indenture to such effect, (iii)
delivering to the Trustee an Opinion of Counsel to the effect that the
Company's exercise of its option under this paragraph will not result in any of
the Company, the Trustee or the trust created by the Company's deposit of funds
pursuant to this provision becoming or being deemed to be an "investment
company" under the Investment Company Act and (iv) delivering to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating compliance with
all conditions precedent provided for herein.
Notwithstanding the foregoing paragraph, the Company's
obligations under Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10, 2.12, 2.13
and 4.01 (but not with respect to termination of substantive obligations
pursuant to the third sentence of the foregoing paragraph), 4.02, 7.07, 7.08,
8.03 and 8.04 shall survive until the Securities are no longer outstanding.
Thereafter the Company's obligations in Sections 7.07, 8.03 and 8.04 shall
survive.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U. S. Government
Obligations deposited pursuant to this Section 8.01 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
Securities.
SECTION 8.02. Application of Trust Money.
The Trustee shall hold in trust money or U. S. Government
Obligations deposited with it pursuant to Section 8.01, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Indenture solely to the payment of principal of and
interest on the Securities.
SECTION 8.03. Repayment to Company.
Subject to Sections 7.07 and 8.01, the Trustee shall promptly
pay to the Company upon written request any excess money held by it at any
time. The Trustee shall pay to the Company upon written request any money held
by it for the payment of principal or interest that remains unclaimed for two
years; provided, however, that the Trustee before being required to make any
payment may at the expense of the Company cause to be published once in a
newspaper of general circulation in The City of New York or mail to each Holder
entitled to such money notice that such money remains unclaimed and that, after
a date specified therein which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining
shall be repaid to the Company. After payment to the Company, Securityholders
entitled to money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another person and all
liability of the Trustee or Paying Agent with respect to such money shall
thereupon cease.
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SECTION 8.04. Reinstatement.
If the Trustee is unable to apply any money or U.S. Government
Obligations in accordance with Section 8.01 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 Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01 until
such time as the Trustee is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 8.01; provided, however, that
if the Company has made any payment of interest on or principal of any
Securities because of the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company, when authorized by a resolution of its Board of
Directors, and the Trustee may amend or supplement this Indenture or the
Securities without notice to or consent of any Securityholder:
(i) to cure any ambiguity, defect or inconsistency;
provided, however, that such amendment or supplement does not
materially adversely affect the rights of any Holder;
(ii) to effect the assumption by a successor Person of all
obligations of the Company under the Securities, this Indenture and
the Escrow Agreement in connection with any transaction complying with
Article Five of this Indenture;
(iii) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(iv) to comply with any requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
(v) to make any change that would provide any additional
benefit or rights to the Holders;
(vi) to make any other change that does not materially
adversely affect the rights of any Holder under this Indenture;
(vii) to add to the covenants of the Company for the benefit
of the Holders, or to surrender any right or power herein conferred
upon the Company; or
(viii) to secure the Securities pursuant to the requirements of
Section 4.15 or otherwise;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.01.
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SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Company, when authorized by a
resolution of its Board of Directors, and the Trustee may amend or supplement
this Indenture or the Securities with the written consent of the Holders of a
majority in principal amount of the outstanding Securities. Subject to Section
6.07, the Holders of a majority in principal amount of the outstanding
Securities may waive compliance by the Company with any provision of this
Indenture or the Securities. However, without the consent of the Holder of each
Security affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 6.04, may not:
(1) change the maturity of the principal of any such
Security;
(2) alter the optional redemption or repurchase provisions
of any such Security or this Indenture in a manner adverse to the
Holders of such Security;
(3) reduce the principal amount of any such Security;
(4) reduce the rate of or extend the time for payment of
interest on any such Security;
(5) change the place or currency of payment of the principal
of or interest on any such Security;
(6) modify any provisions of Section 6.04 (other than to add
sections of this Indenture or the Securities subject thereto) or 6.07
or this Section 9.02 (other than to add sections of this Indenture or
the Securities which may not be amended, supplemented or waived
without the consent of each Securityholder affected);
(7) reduce the percentage of the principal amount of
outstanding Securities necessary for amendment to or waiver of
compliance with any provision of this Indenture or the Securities or
for waiver of any Default in respect thereof;
(8) waive a default in the payment of the principal of or
interest on or redemption payment with respect to any such Security
(except a rescission of acceleration of the Securities by the Holders
as provided in Section 6.02 and a waiver of the payment default that
resulted from such acceleration);
(9) modify the ranking or priority of such Security;
(10) modify the provisions of any covenant (or the related
definitions in this Indenture) requiring the Company to make any Offer
to Purchase in a manner materially adverse to the Holders; or
(11) modify the provisions of the Escrow Agreement or this
Indenture relating to the Escrow Collateral or release the Escrow
Collateral from the Lien under the Escrow Agreement or permit any
other obligation to be secured by the Escrow Collateral.
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It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
9.02 becomes effective, the Company shall mail to the Holders affected thereby
a notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent
Holder of that Security or portion of that Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is
not made on any Security. Subject to the following paragraph, any such Holder
or subsequent Holder may revoke the consent as to such Holder's Security or
portion of such Security by notice to the Trustee or the Company received
before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities
have consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders of Securities entitled to
consent to any amendment, supplement or waiver. If a record date is fixed,
then, notwithstanding the last sentence of the immediately preceding paragraph,
those persons who were Holders of Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders of such Securities after
such record date. No such consent shall be valid or effective for more than 90
days after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (11) of Section 9.02. In that case the amendment,
supplement or waiver shall bind each Holder of a Security who has consented to
it and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security.
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Failure to make the appropriate notation or issue a new Security
shall not affect the validity and effect of such amendment, supplement or
waiver.
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SECTION 9.06. Trustee to Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Nine is
authorized or permitted by this Indenture and that such amendment, supplement
or waiver constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms (subject to customary exceptions). The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that
are required to be a part of this Indenture, and shall, to the extent
applicable, be governed by such provisions. If any provision of this Indenture
modifies any TIA provision that may be so modified, such TIA provision shall be
deemed to apply to this Indenture as so modified. If any provision of this
Indenture excludes any TIA provision that may be so excluded, such TIA
provision shall be excluded from this Indenture.
The provisions of TIA Sections 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 10.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person, by facsimile and confirmed by overnight
courier, or mailed by first-class mail addressed as follows:
if to the Company:
Global TeleSystems Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Trustee Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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, first-class, postage
prepaid, to a Holder including any notice delivered in connection with TIA
Section 310(b), TIA Section 313(c), TIA Section 314(a) and TIA Section
315(b), shall be mailed to him at his address as set forth on the Security
Register and shall be sufficiently given to him if so mailed within the time
prescribed. To the extent required by the TIA, any notice or communication
shall also be mailed to any Person described in TIA Section 313(c).
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. Except for a notice to the Trustee, which is deemed given only
when received, if a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 10.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section
312(b) with other Securityholders with respect to their rights under this
Indenture or the Securities. The Company, the Trustee, the Registrar and any
other person shall have the protection of TIA Section 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take or refrain from taking any action under this Indenture, the Company
shall furnish to the Trustee at the request of the Trustee:
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(1) an Officers' Certificate in form and substance
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance satisfactory
to the Trustee stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion.
Each certificate (other than the certificates provided
pursuant to Section 4.07) or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of such
person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel
may rely on an Officers' Certificate or certificates of public
officials.
SECTION 10.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a
meeting of Securityholders. The Paying Agent or Registrar may make reasonable
rules for its functions.
SECTION 10.07. Governing Law.
The laws of the State of New York shall govern this Indenture
and the Securities.
SECTION 10.08. No Recourse Against Others.
A director, officer, employee, incorporator or stockholder of
the Company or any of its Affiliates, as such, shall not have any liability for
any obligations of the Company or any of its Affiliates under the Securities or
this Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability.
SECTION 10.09. Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
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SECTION 10.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 10.11. Severability.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and a Holder shall have no claim therefor against any party
hereto.
SECTION 10.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 10.13. Legal Holidays.
If a payment date is a not a Business Day at a place of
payment, payment may be made at that place on the next succeeding Business Day,
and no interest shall accrue for the intervening period.
SECTION 10.14. Judgment Currency.
The Company hereby agrees to indemnify the Trustee, its
directors, its officers, its employees and each person. If any, who controls
the Trustee within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any loss incurred by such person as a result of any
judgment or order being given or made against the Company for any U.S. dollar
amount due under this Agreement and such judgment or order being expressed and
paid in currency (the "Judgment Currency") other than United States dollars
and as a result of any variation as between (1) the rate of exchange at which
the United States dollar amount is converted into the Judgment Currency for
the purpose of such judgment or order and (ii) the spot rare of exchange in
The City of New York at which such party on the date of payment of such
judgement or order is able to purchase United States dollars with the amount of
the Judgment Currency actually received by such party. The foregoing
indemnity shall committee in full force and effect notwithstanding any such
judgment or order as aforesaid. The term "spot rate exchange" shall include any
premiums and cost of exchange payable in connection with the purchase of or
conversion with United States dollars.
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ARTICLE ELEVEN
COLLATERAL AND SECURITY
SECTION 11.01. Escrow Agreement.
The due and punctual payment of the first four scheduled
interest payments on the Securities when and as the same shall be due and
payable on an Interest Payment Date or by acceleration shall be secured as
provided in the Escrow Agreement which the Company and the Trustee have entered
into simultaneously with the execution of this Indenture. Upon the
acceleration of the maturity of the Securities, the Trustee shall foreclose
upon the Escrow Collateral. Each Holder of Securities, by its acceptance
thereof, consents and agrees to the terms of the Escrow Agreement (including,
without limitation, the provisions providing for foreclosure and disbursement
of Escrow Collateral) as the same may be in effect or may be amended from time
to time in accordance with its terms and the terms hereof and authorizes and
directs the Escrow Agent and the Trustee to enter into the Escrow Agreement and
to perform its obligations and exercise its rights thereunder in accordance
therewith. The Company shall deliver to the Trustee copies of the Escrow
Agreement, and shall do or cause to be done all such acts and things as may be
necessary or proper, or as may be required by the provisions of the Escrow
Agreement, to assure and confirm to the Trustee the security interest in the
Escrow Collateral contemplated by the Escrow Agreement or any part thereof, as
from time to time constituted, so as to render the same available for the
security and benefit of this Indenture with respect to, and of, the Securities,
according to the intent and purposes expressed in the Escrow Agreement. The
Company shall take any and all actions reasonably required to cause the Escrow
Agreement to create and maintain (to the extent possible under applicable law),
as security for the obligations of the Company hereunder, a first priority and
exclusive security interest in and on all the Escrow Collateral, in favor of
the Trustee for the benefit of the Holders of Securities, superior to and prior
to the rights of all third Persons and subject to no other Liens. The Trustee
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shall have no responsibility for perfecting or maintaining the perfection of
the Trustee's security interest in the Escrow Collateral or for filing any
instrument, document or notice in any public office at any time or times.
SECTION 11.02. Recording and Opinions.
(a) The Company shall furnish to the Trustee simultaneously
with the execution and delivery of this Indenture an Opinion of Counsel either
(i) stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, financing
statements or other instruments necessary to make effective the security
interest intended to be created by the Escrow Agreement and reciting the
details of such action, or (ii) stating that in the opinion of such counsel no
such action is necessary to make such security interest effective.
(b) The Company shall furnish to the Trustee on each
anniversary of the Issue Date (upon receipt of written notice from Escrow
Agent) until the date upon which the balance of Escrow Funds shall have been
reduced to zero, an Opinion of Counsel, dated as of such date, either (i)
stating that (A) in the opinion of such counsel, action has been taken with
respect to the recording, registering, filing, re-recording, re-registering and
refiling of all supplemental indentures, financing statements, continuation
statements or other instruments of further assurance as is necessary to
maintain the Lien of the Escrow Agreement and reciting the details of such
action or referring to prior Opinions of Counsel in which such details are
given and (B) based on relevant laws as in effect on the date of such Opinion
of Counsel, all financing statements and continuation statements have been
executed and filed that are necessary as of such date and during the succeeding
12 months fully to preserve and protect, to the extent such protection and
preservation are possible by filing, the rights of the Holders of Securities
and the Trustee hereunder and under the Escrow Agreement with respect to the
security interests in the Escrow Collateral or (ii) stating that, in the
opinion of such counsel, no such action is necessary to maintain such Lien and
assignment.
SECTION 11.03. Release of Escrow Collateral.
(a) Subject to subsections (b), (c) and (d) of this Section
11.03, the Escrow Collateral may be released from the security interest created
by the Escrow Agreement only in accordance with the provisions of the Escrow
Agreement.
(b) Except to the extent that any security interest on
proceeds of Escrow Collateral is automatically released by operation of Section
9-306 of the Uniform Commercial Code or other similar law, no Escrow Collateral
shall be released from the security interest created by the Escrow Agreement
pursuant to the provisions of the Escrow Agreement, other than to the Holders
pursuant to the terms thereof.
(c) At any time when an Event of Default shall have occurred
and be continuing and the maturity of the Securities shall have been
accelerated (whether by declaration or otherwise), no Escrow Collateral shall
be released pursuant to the provisions of the Escrow Agreement, and no release
of Escrow Collateral in contravention of this Section 11.03(c) shall be
effective as against the Holders of Securities, except for the disbursement of
all Escrow Funds (as defined in the Escrow Agreement) and other Escrow
Collateral to the Trustee pursuant to Section 6(c) of the Escrow Agreement.
(d) The release of any Escrow Collateral from the security
interests created by this Indenture and the Escrow Agreement shall not be
deemed to impair the security under this Indenture in contravention of the
provisions hereof if and to the extent the Escrow Collateral is released
pursuant to the terms hereof
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or pursuant to the terms of the Escrow Agreement. To the extent applicable,
the Company shall cause TIA Section 314(d) relating to the release of property
or securities from the security interest of the Escrow Agreement to be complied
with. Any certificate or opinion required by TIA Section 314(d) may be made
by an Officer of the Company except in cases where TIA Section 314(d) requires
that such certificate or opinion be made by an independent Person, which Person
shall be an independent engineer, appraiser or other expert selected or
approved by the Trustee in the exercise of reasonable care.
SECTION 11.04. Authorization of Actions to Be Taken by the Trustee Under the
Escrow Agreement.
Subject to the provisions of Section 7.01 and Section 7.02,
the Trustee may, without the consent of the Holders of Securities, on behalf of
the Holders of Securities, take all actions it deems necessary or appropriate
in order to (a) enforce any of the terms of the Escrow Agreement and (b)
collect and receive any and all amounts payable in respect of the obligations
of the Company hereunder. The Trustee shall have power to institute and
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Escrow Collateral by any acts that may be unlawful or in
violation of the Escrow Agreement or this Indenture, and such suits and
proceedings as the Trustee may deem expedient to preserve or protect its
interests and the interests of the Holders of Securities in the Escrow
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or
order would impair the security interest hereunder or be prejudicial to the
interests of the Holders of Securities or of the Trustee).
SECTION 11.05. Authorization of Receipt of Funds by the Trustee Under the
Escrow Agreement.
The Trustee is authorized to receive any funds for the benefit
of the Holders of Securities disbursed under the Escrow Agreement, and to make
further distributions of such funds to the Holders of Securities according to
the provisions of this Indenture.
SECTION 11.06. Termination of Security Interest.
Upon the earliest to occur of (i) the date upon which the
balance of Escrow Funds and other Escrow Collateral shall have been reduced to
zero, (ii) the payment of the first four scheduled interest payments on the
Securities, (iii) legal defeasance pursuant to Section 8.01 and (iv) covenant
defeasance pursuant to Section 8.01, the Trustee shall, at the written request
of the Company, release the security interest in the Escrow Collateral pursuant
to this Indenture and the Escrow Agreement upon the Company's compliance with
the provisions of the TIA pertaining to release of collateral.
[Signature Pages Follow]
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
GLOBAL TELESYSTEMS GROUP, INC.
By:
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
--------------------------------------
Name:
Title:
74
EXHIBIT A
[FORM OF SECURITY]
GLOBAL TELESYSTEMS GROUP, INC.
[ ]% Senior Note due 2005
CUSIP No.:
No. $
GLOBAL TELESYSTEMS GROUP, INC., a Delaware corporation (the "Company"),
which term includes any successor corporation), for value received promises to
pay to or registered assigns, the principal sum of Dollars, on
[ ], 2005.
Interest Payment Dates: [ ] and [ ], commencing [ ], 1998.
Interest Record Dates: [ ] and [ ]
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
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75
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
GLOBAL TELESYSTEMS GROUP, INC.
By:
----------------------------------
Name:
Title:
Attest:
---------------------------------
Name:
Title:
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the [ ]% Senior Notes due 2005, described in the
within-mentioned Indenture.
Dated: , ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇,
as Trustee
By:
----------------------------------
Authorized Signatory
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76
(REVERSE OF SECURITY)
GLOBAL TELESYSTEMS GROUP, INC.
[ ]% Senior Note due 2005
1. Interest.
GLOBAL TELESYSTEMS GROUP, INC., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security
at the rate per annum shown above. Cash interest on the Securities will accrue
from the most recent date to which interest has been paid or, if no interest
has been paid, from [insert Issue Date]. The Company will pay interest
semi-annually in arrears on each Interest Payment Date, commencing [
], 1998. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
The Company shall pay interest on overdue principal from time
to time on demand at the rate borne by the Securities and on overdue
installments of interest (without regard to any applicable grace periods) at
the rate borne by the Securities to the extent lawful.
2. Method of Payment.
The Company shall pay interest on the Securities (except
defaulted interest) to the persons who are the registered Holders at the close
of business on the Interest Record Date immediately preceding the Interest
Payment Date even if the Securities are cancelled on registration of transfer
or registration of exchange after such Interest Record Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Company shall pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts
("U.S. Legal Tender"). However, the Company may pay principal and interest by
wire transfer of Federal funds (provided that the Paying Agent shall have
received wire instructions on or prior to the relevant Interest Record Date),
or interest by check payable in such U.S. Legal Tender. The Company may
deliver any such interest payment to the Paying Agent or to a Holder at the
Holder's registered address.
3. Paying Agent and Registrar.
Initially, The Bank of New York, a New York banking corporation
(the "Trustee") will act as Paying Agent and Registrar in the Borough of
Manhattan, The City of New York. The Company may change any Paying Agent or
Registrar without notice to the Holders. The Company or any of its Subsidiaries
may, subject to certain exceptions, act as Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as
of [ ], 1998 (the "Indenture"), among the Company, Global TeleSystems
Group, Inc. and the Trustee. Capitalized terms herein are used as defined in
this Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture until such time
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as the Indenture is qualified under the TIA, and thereafter as in effect on the
date on which the Indenture is qualified under the TIA. Notwithstanding
anything to the contrary herein, the Securities are subject to all such terms,
and holders of Securities are referred to the Indenture and the TIA for a
statement of them. This is one of the Securities referred to in the
Indenture. The Securities referred to in the Indenture are general
obligations of the Company limited in aggregate principal amount to
$100,000,000.
5. Optional Redemption.
(a) The Securities will be redeemable at the option of the Company,
in whole or in part, at any time or from time to time, on or after [
], 2002 at the redemption prices (expressed as a percentage of principal
amount) set forth below, plus accrued and unpaid interest thereon, if any, to
the redemption date if redeemed during the twelve- month period commencing on
of the years set forth below:
Redemption
Year Price
---- ----------
2002 [ ]%
2003 [ ]%
2004 and thereafter 100.000%
(b) Redemption Upon Public Equity Offering or Strategic Equity
Investment.
At any time, or from time to time, prior to [ ],
2001, the Company may redeem up to one-third of the original aggregate
principal amount of the Securities at a redemption price equal to [ ]% of
the principal amount of the Securities so redeemed, plus accrued and unpaid
interest thereon, if any, to the redemption date, with the net cash proceeds of
one or more Public Equity Offerings or Strategic Equity Investments resulting
in aggregate gross proceeds to the Company of at least $75.0 million; provided,
however, that at least two-thirds of the principal amount of
Securities originally issued would remain outstanding immediately after giving
effect to any such redemption (excluding any Securities owned by the Company or
any of its Affiliates).
6. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at its registered address; provided,
however, that notice of redemption pursuant to paragraph 5(b) of this Security
will be mailed to each Holder of Securities to be redeemed no later than 60
days following the consummation of the last Public Equity Offering resulting in
gross cash proceeds to the Company, when aggregated with all prior Public
Equity Offerings, of at least $75.0 million. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation
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of the original Security. On and after the Redemption Date, interest will
cease to accrue on Securities or portions thereof called for redemption so long
as the Company has deposited with the Paying Agent for the Securities funds in
satisfaction of the redemption price pursuant to this Indenture.
7. Change of Control Offer.
Upon the occurrence of a Change of Control, the Company will
be required to offer to purchase all outstanding Securities at a purchase price
in cash equal to 101% of the aggregate principal amount thereof, plus accrued
and unpaid interest thereon, if any, to the Purchase Date.
8. Limitation on Disposition of Assets.
Upon the occurrence of certain Asset Sales, the Company is,
subject to certain conditions, obligated to make an offer to purchase
Securities at a purchase price in cash equal to 100% of the aggregate principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
Purchase Date.
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities or portions thereof selected for redemption, except
the unredeemed portion of any security being redeemed in part.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the
owner of it for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee and the Paying Agent will repay the funds
to the Company at its written request. After that, all liability of the
Trustee and such Paying Agent with respect to such funds shall cease.
12. Legal Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations under the
Indenture and the Securities except for certain provisions thereof, and may be
discharged from obligations to comply with certain covenants contained in the
Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the
Securities may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or compliance with any provision may
be waived with the
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consent of the Holders of a majority in aggregate principal amount of the
Securities then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture and the Securities to,
among other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities in addition to or in place of certificated
Securities, effect the assumption by a successor person of all obligations of
the Company under Securities, the Indenture and the Escrow Agreement in
connection with any transaction complying with Article Five of the Indenture or
comply with any requirements of the SEC in connection with the qualification of
the Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.
14. Restrictive Covenants.
The Indenture contains certain covenants that, among other
things, limit the ability of the Company and the Restricted Group Members to
make restricted payments, to incur indebtedness, to create liens, to sell
assets, to permit restrictions on dividends and other payments to become
applicable to Restricted Group Members, to consolidate, merge or sell all or
substantially all of its assets, to engage in transactions with affiliates or
certain other related persons. The limitations are subject to a number of
important qualifications and exceptions. The Company must annually report to
the Trustee on compliance with such limitations.
15. Defaults and Remedies.
If an Event of Default (other than certain events of
bankruptcy, insolvency or reorganization affecting the Company) occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Securities then outstanding by notice in writing to the Company may
declare all the Securities to be due and payable immediately in the manner and
with the effect provided in the Indenture. If certain events of bankruptcy,
insolvency or reorganization affecting the Company occur under the Indenture,
the Securities will ipso facto become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder of
Securities. Holders of Securities may not enforce the Indenture or the
Securities except as provided in this Indenture. The Trustee is not obligated
to enforce the Indenture or the Securities unless it has received indemnity
reasonably satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of certain continuing Defaults if it determines that withholding notice
is in their interest.
16. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Company, its Subsidiaries or their respective Affiliates as if it
were not the Trustee.
17. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator,
as such, of the Company or any of its Affiliates shall have any liability for
any obligation of the Company or any of its Affiliates under the Securities or
the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Security by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Securities.
▇-▇
▇▇
▇▇. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of
a Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
21. Governing Law.
The laws of the State of New York shall govern the Indenture
and this Security.
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81
ASSIGNMENT FORM
I or we assign and transfer this Security to
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
-------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: Signed:
------------------- -------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
-------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
82
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.10 or Section 4.16 of the Indenture, check the
appropriate box:
Section 4.10 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.10 or Section 4.16 of the
Indenture, state the amount: $_____________
Dated: Your Signature:
---------------------- -------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
--------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
83
EXHIBIT B
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder
shall bear a legend (which would be in addition to any other legends required
in the case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.
THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY
BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
B-1