EXECUTION COPY
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WINSTAR COMMUNICATIONS, INC.,
as Issuer
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
----------------------
Indenture
Dated as of March 15, 1998
----------------------
11% Senior Subordinated Deferred Interest Notes Due 2008
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2
CROSS-REFERENCE TABLE
----------------------
TIA Sections Indenture Sections
ss.310(a)(1)........................................... 7.10
(a)(2)......................................... 7.10
(b)............................................ 7.08
ss.313(c).............................................. 7.06; 11.02
ss.314(a).............................................. 4.18; 11.02
(a)(4)......................................... 4.17; 11.02
(c)(1)......................................... 11.03
(c)(2)......................................... 11.03
(e)............................................ 11.04
ss.315(b).............................................. 7.05; 11.02
ss.316(a)(1)(A)........................................ 6.05
(a)(1)(B)...................................... 6.04
(b)............................................ 6.07
ss.317(a)(1)........................................... 6.08
(a)(2)......................................... 6.09
ss.318(a).............................................. 11.01
(c)......................................... 11.01
-------------------------
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
Page
RECITALS OF THE COMPANY......................................................................... 1
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions................................................................... 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act............................. 18
SECTION 1.03. Rules of Construction......................................................... 18
SECTION 1.04. Ranking of the Securities..................................................... 19
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating............................................................... 19
SECTION 2.02. Execution and Authentication.................................................. 19
SECTION 2.03. Registrar and Paying Agent.................................................... 20
SECTION 2.04. Paying Agent To Hold Money in Trust........................................... 20
SECTION 2.05. Securityholder Lists.......................................................... 20
SECTION 2.06. Transfer and Exchange......................................................... 20
SECTION 2.07. Replacement Securities........................................................ 21
SECTION 2.08. Outstanding Securities........................................................ 21
SECTION 2.09. Temporary Securities.......................................................... 22
SECTION 2.10. Cancelation................................................................... 22
SECTION 2.11. Defaulted Interest............................................................ 22
SECTION 2.12. CUSIP Numbers................................................................. 22
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption........................................................... 23
SECTION 3.02. Notices to Trustee............................................................ 23
SECTION 3.03. Selection of Securities To Be Redeemed........................................ 23
SECTION 3.04. Notice of Redemption.......................................................... 24
SECTION 3.05. Effect of Notice of Redemption................................................ 24
SECTION 3.06. Deposit of Redemption Price................................................... 25
SECTION 3.07. Payment of Securities Called for Redemption................................... 25
SECTION 3.08. Securities Redeemed in Part................................................... 25
ii
ARTICLE FOUR
COVENANTS Page
SECTION 4.01. Payment of Securities......................................................... 25
SECTION 4.02. Maintenance of Office or Agency............................................... 26
SECTION 4.03. Limitation on Indebtedness.................................................... 26
SECTION 4.04. Limitation on Senior Subordinated Indebtedness................................ 28
SECTION 4.05. Limitation on Restricted Payments............................................. 29
SECTION 4.06. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries......................................... 31
SECTION 4.07. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries................................................... 33
SECTION 4.08. Limitation on Issuances of Guarantees by Restricted
Subsidiaries.............................................................. 33
SECTION 4.09. Limitation on Transactions with Shareholders and Affiliates................... 33
SECTION 4.10. Limitation on Asset Sales..................................................... 34
SECTION 4.11. Repurchase of Securities upon a Change of Control............................. 35
SECTION 4.12. Existence..................................................................... 36
SECTION 4.13. Payment of Taxes and Other Claims............................................. 36
SECTION 4.14. Maintenance of Properties and Insurance....................................... 36
SECTION 4.15. Notice of Defaults............................................................ 37
SECTION 4.16. Compliance Certificates....................................................... 37
SECTION 4.17. SEC Reports and Reports to Holders............................................ 38
SECTION 4.18. Waiver of Stay, Extension or Usury Laws....................................... 38
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc................................................... 38
SECTION 5.02. Successor Substituted......................................................... 39
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default............................................................. 39
SECTION 6.02. Acceleration.................................................................. 40
SECTION 6.03. Other Remedies................................................................ 41
SECTION 6.04. Waiver of Past Defaults....................................................... 41
SECTION 6.05. Control by Majority........................................................... 42
SECTION 6.06. Limitation on Suits........................................................... 42
SECTION 6.07. Rights of Holders to Receive Payment.......................................... 42
SECTION 6.08. Collection Suit by Trustee.................................................... 43
SECTION 6.09. Trustee May File Proofs of Claim.............................................. 43
SECTION 6.10. Priorities.................................................................... 43
SECTION 6.11. Undertaking for Costs......................................................... 44
iii
Page
SECTION 6.12. Restoration of Rights and Remedies............................................ 44
SECTION 6.13. Rights and Remedies Cumulative................................................ 44
SECTION 6.14. Delay or Omission Not Waiver.................................................. 44
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General....................................................................... 44
SECTION 7.02. Certain Rights of Trustee..................................................... 45
SECTION 7.03. Individual Rights of Trustee.................................................. 46
SECTION 7.04. Trustee's Disclaimer.......................................................... 46
SECTION 7.05. Notice of Default............................................................. 46
SECTION 7.06. Reports by Trustee to Holders................................................. 46
SECTION 7.07. Compensation and Indemnity.................................................... 46
SECTION 7.08. Replacement of Trustee........................................................ 47
SECTION 7.09. Successor Trustee by Merger, Etc.............................................. 48
SECTION 7.10. Eligibility................................................................... 48
SECTION 7.11. Money Held in Trust........................................................... 48
SECTION 7.12. Withholding Taxes............................................................. 48
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations.......................................... 48
SECTION 8.02. Defeasance and Discharge of Indenture......................................... 49
SECTION 8.03. Defeasance of Certain Obligations............................................. 51
SECTION 8.04. Application of Trust Money.................................................... 53
SECTION 8.05. Repayment to Company.......................................................... 53
SECTION 8.06. Reinstatement................................................................. 53
SECTION 8.07. Insiders...................................................................... 53
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.................................................... 54
SECTION 9.02. With Consent of Holders....................................................... 54
SECTION 9.03. Revocation and Effect of Consent.............................................. 55
SECTION 9.04. Notation on or Exchange of Securities......................................... 55
SECTION 9.05. Trustee to Sign Amendments, Etc............................................... 56
SECTION 9.06. Conformity with Trust Indenture Act........................................... 56
iv
ARTICLE TEN Page
SUBORDINATION
SECTION 10.01. Securities Subordinate to Senior Indebtedness............................. 56
SECTION 10.02. No Payment on Securities in Certain Circumstances......................... 56
SECTION 10.03. Payment Over of Proceeds Upon Dissolution, Etc............................ 57
SECTION 10.04. Subrogation of Holders to Rights of Holders of
Senior Indebtedness................................................ 59
SECTION 10.05. Obligations of Company Unconditional...................................... 59
SECTION 10.06. Payments May Be Made Prior to Dissolution................................. 60
SECTION 10.07. No Waiver of Subordination Provisions..................................... 60
SECTION 10.08. Authorization to Trustee to Take Action to Effectuate
Subordination...................................................... 60
SECTION 10.09. Senior Indebtedness May Be Renewed or Extended, Etc....................... 60
SECTION 10.10. Trustee to Have No Fiduciary Duty to Holders of Senior
Indebtedness....................................................... 61
SECTION 10.11. Rights of Trustee as Holder of Senior Indebtedness........................ 61
SECTION 10.12. Notice to Trustee......................................................... 61
SECTION 10.13. Reliance on Judicial Order or Certificate of Liquidating
Agent.............................................................. 62
SECTION 10.14. Not to Prevent Events of Default.......................................... 62
SECTION 10.15. Trustee's Compensation Not Prejudiced..................................... 62
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act of 1939............................................... 62
SECTION 11.02. Notices................................................................... 62
SECTION 11.03. Certificate and Opinion as to Conditions Precedent........................ 63
SECTION 11.04. Statements Required in Certificate or Opinion............................. 63
SECTION 11.05. Rules by Trustee, Paying Agent or Registrar............................... 64
SECTION 11.06. Payment Date Other Than a Business Day.................................... 64
SECTION 11.07. Governing Law............................................................. 64
SECTION 11.08. No Adverse Interpretation of Other Agreements............................. 64
SECTION 11.09. No Recourse Against Others................................................ 64
SECTION 11.10. Successors................................................................ 65
SECTION 11.11. Duplicate Originals....................................................... 65
SECTION 11.12. Separability.............................................................. 65
SECTION 11.13. Table of Contents, Headings, Etc.......................................... 65
EXHIBIT A Form of Security.......................................................... EA-1
Rule 144A/Regulation S Appendix
INDENTURE, dated as of March 15, 1998, between WINSTAR
COMMUNICATIONS, INC., a Delaware corporation, as issuer (the "Company") and
UNITED STATES TRUST COMPANY OF NEW YORK, as trustee (the "Trustee").
RECITALS OF THE COMPANY
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's 11%
Senior Subordinated Deferred Interest Notes Due 2008 (the "Initial Securities")
and, if and when issued pursuant to a registered exchange for Initial
Securities, the Company's 11% Senior Subordinated Deferred Interest Notes Due
2008 (the "Exchange Securities") and, if and when issued pursuant to a private
exchange for Initial Securities, the Company's 11% Senior Subordinated Deferred
Interest Notes Due 2008 (the "Private Exchange Securities", together with the
Exchange Securities and the Initial Securities, the "Securities"):
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"1995 Notes" means the 1995 Senior Notes and the Convertible Notes.
"1997 Notes" means the 1997 Senior Notes and the Equipment Notes.
"1995 Senior Notes" means the 14% Senior Discount Notes Due 2005 of
the Company.
"1997 Senior Notes" means the 14 1/2% Senior Deferred Interest Notes
Due 2005 of the Company.
"1997 Senior Subordinated Notes" means the 15% Senior Subordinated
Deferred Interest Notes Due 2007 of the Company.
"Accumulated Amount" means, as of any date (the "Specified
Date"), the amount provided below for each $1,000 principal amount of the
Securities:
(i)if the Specified Date occurs on one of the following dates
(each, a "SemiAnnual Interest Accrual Date"), the Accumulated Amount
will equal the amount set forth below for such SemiAnnual Interest
Accrual Date:
Accumulated
SemiAnnual Interest Accrual Date Amount
--------------------------------- -----------
September 15, 1998................................... $1,053.78
March 15, 1999....................................... 1,111.74
2
September 15, 1999.................................. 1,172.88
March 15, 2000...................................... 1,237.39
September 15, 2000.................................. 1,305.45
March 15, 2001...................................... 1,377.25
September 15, 2001.................................. 1,452.99
March 15, 2002...................................... 1,532.91
September 15, 2002.................................. 1,617.22
March 15, 2003...................................... 1,706.17
(ii)if the Specified Date occurs before the first SemiAnnual
Interest Accrual Date, the Accumulated Amount will equal the sum of (A)
$1,000 and (B) an amount equal to the product of (1) the Accumulated
Amount for the first SemiAnnual Interest Accrual Date less $1,000
multiplied by (2) a fraction, the numerator of which is the number of
days elapsed from the Issue Date to the Specified Date, using a 360-day
year of twelve 30-day months, and the denominator of which is the
number of days from the Issue Date to the first SemiAnnual Interest
Accrual Date, using a 360-day year of twelve 30-day months;
(iiiif the Specified Date occurs between two SemiAnnual
Interest Accrual Dates, the Accumulated Amount will equal the sum of
(A) the Accumulated Amount for the SemiAnnual Interest Accrual Date
immediately preceding such Specified Date and (B) an amount equal to
the product of (1) the Accumulated Amount for the immediately following
SemiAnnual Interest Accrual Date less the Accumulated Amount for the
immediately preceding SemiAnnual Interest Accrual Date multiplied by
(2) a fraction, the numerator of which is the number of days elapsed
from the immediately preceding SemiAnnual Interest Accrual Date to the
Specified Date, using a 360-day year of twelve 30-day months, and the
denominator of which is 180; or
(iv)if the Specified Date occurs after the last SemiAnnual
Interest Accrual Date, the Accumulated Amount will equal $ 1,706.17.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period determined in conformity with GAAP; provided, however, that the
following items shall be excluded in computing Adjusted Consolidated Net Income
(without duplication): (i) the net income of any Person (other than net income
attributable to a Restricted Subsidiary) in which any Person (other than the
Company or any of its Restricted Subsidiaries) has a joint interest and the net
income of any Unrestricted Subsidiary, except to the extent of the amount of
dividends or other distributions actually paid to the Company or any of its
Restricted Subsidiaries by such other Person, including, without limitation, an
Unrestricted Subsidiary during such period; (ii) solely for the purposes of
calculating the amount of Restricted Payments that may be made pursuant to
clause (C) of the first paragraph of Section 4.05 (and in such case, except to
the extent includable pursuant to clause (i) above), the net income (or loss) of
any Person accrued prior to the date it becomes a Restricted Subsidiary or is
merged into or consolidated with the Company or any of its Restricted
Subsidiaries or all or substantially all of the property
3
and assets of such Person are acquired by the Company or any of its Restricted
Subsidiaries; (iii) the net income of any Restricted Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of such net income is not at the time permitted by the
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Restricted Subsidiary; (iv) any gains or losses (on an after-tax basis)
attributable to Asset Sales; (v) except for purposes of calculating the amount
of Restricted Payments that may be made pursuant to clause (C) of the first
paragraph of Section 4.05, any amount paid as, or accrued for, cash dividends on
Preferred Stock of the Company or any Restricted Subsidiary owned by Persons
other than the Company and any of its Restricted Subsidiaries; and (vi) all
extraordinary gains and extraordinary losses.
"Adjusted Consolidated Net Tangible Assets" means the total
amount of assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding 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
Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles (other than licenses issued by the FCC), all as set forth on the
quarterly or annual consolidated balance sheet of the Company and its Restricted
Subsidiaries, prepared in conformity with GAAP and most recently filed with the
SEC pursuant to Section 4.17; provided, however, that the value of any licenses
issued by the FCC shall, in the event of an auction for similar licenses, be
equal to the fair market value ascribed thereto in good faith by the Board of
Directors and evidenced by a Board Resolution. As used in this Indenture,
references to financial statements of the Company and its Restricted
Subsidiaries shall be adjusted to exclude Unrestricted Subsidiaries if the
context requires.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Paying Agent, authenticating agent
or co- Registrar.
"Allocated Proceeds" has the meaning provided in Section 4.05.
"Asset Acquisition" means (i) an Investment by the Company or
any of its Restricted Subsidiaries in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or shall be merged
into or consolidated with the Company or any of its Restricted Subsidiaries or
(ii) an acquisition by the Company or any of its Restricted Subsidiaries of the
property and assets of any Person other than the Company or any of its
Restricted Subsidiaries that constitute substantially all of a division or line
of business of such Person.
4
"Asset Sale" means any sale, transfer or other disposition
(including by way of merger, consolidation or sale-leaseback transactions) in
one transaction or a series of related transactions by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries
or (iii) any other property or assets of the Company or any of its Restricted
Subsidiaries outside the ordinary course of business of the Company or such
Restricted Subsidiary and, in each case, that is not governed by the provisions
of Article Five; provided, however, that the following shall not be included
within the meaning of "Asset Sale": (A) sales or other dispositions of
inventory, receivables and other current assets; (B) sales or other dispositions
of equipment that has become worn out, obsolete or damaged or otherwise
unsuitable for use in connection with the business of the Company or its
Restricted Subsidiaries; (C) a substantially simultaneous exchange of, or a sale
or disposition (other than 85% or more for cash or cash equivalents) by the
Company or any of its Restricted Subsidiaries of, licenses issued by the FCC or
applications or bids therefor; provided, however, that the consideration
received by the Company or any such Restricted Subsidiary in connection with
such exchange, sale or disposition shall be equal to the fair market value of
licenses so exchanged, sold or disposed of, as determined by the Board of
Directors; and (D) except for purposes of the definition of "Indebtedness to
EBITDA Ratio," any sale or other disposition of securities of an Unrestricted
Subsidiary.
"Average Life" means, at any date of determination with
respect to any debt security, the quotient obtained by dividing (i) the sum of
the products of (a) the number of years from such date of determination to the
dates of each successive scheduled principal payment of such debt security and
(b) the amount of such principal payment by (ii) the sum of all such principal
payments.
"Board of Directors" means the Board of Directors of the
Company or any committee of such Board of Directors duly authorized to act with
respect to this Indenture.
"Board Resolution" means a copy of a resolution, certified by
the Secretary or Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in The City of New York, or in the city of
the Corporate Trust Office of the Trustee, are authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) in equity of such Person, whether now outstanding
or issued after the date of this Indenture, including, without limitation, all
Common Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) of which the discounted
present value of the rental obligations of such Person as lessee, in conformity
with GAAP, is required to be capitalized on the balance sheet of such Person;
and "Capitalized Lease Obligations" means the discounted present value of the
rental obligations under such lease.
5
"Cash-Pay Notes" means the 10% Senior Subordinated Notes Due
2008 of the Company.
"Cash-Pay Notes Indenture" means the Indenture, dated as of
March 15, 1998, between the Company and United States Trust Company of New York,
pursuant to which the Cash-Pay Notes were issued.
"Change of Control" means such time as (i) a "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act,
other than the Permitted Investor, becomes the ultimate "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of Voting Stock representing more
than 50% of the total voting power of the Voting Stock of the Company on a fully
diluted basis or (ii) individuals who on the Issue Date constituted the Board of
Directors (together with any new directors whose election by the Board of
Directors or whose nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the members of the Board of
Directors then in office who either were members of the Board of Directors on
the Issue Date or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the members of the
Board of Directors then in office.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's common stock, whether now
outstanding or issued after the date of this Indenture, including, without
limitation, all series and classes of such common stock.
"Company" means the party named as such in the paragraph
preceding the recitals hereof until a successor replaces it pursuant to Article
Five of this Indenture and thereafter means the successor.
"Company Order" means a written request or order signed in the
name of the Company (i) by its Chairman, a Vice Chairman, its President or a
Vice President and (ii) by its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary and delivered to the Trustee; provided, however, that
such written request or order may be signed by any two of the officers or
directors listed in clause (i) above in lieu of being signed by one of such
officers or directors listed in such clause (i) and one of the officers listed
in clause (ii) above.
"Consolidated EBITDA" means, for any period, the sum of the
amounts for such period of (i) Adjusted Consolidated Net Income, (ii)
Consolidated Interest Expense, to the extent such amount was deducted in
calculating Adjusted Consolidated Net Income, (iii) income taxes, to the extent
such amount was deducted in calculating Adjusted Consolidated Net Income (other
than income taxes (either positive or negative) attributable to extraordinary
and nonrecurring gains or losses or sales of assets), (iv) depreciation expense,
to the extent such amount was deducted in calculating Adjusted Consolidated Net
Income, (v) amortization expense, to the extent such amount was deducted in
calculating Adjusted Consolidated Net Income and (vi) all other noncash items
reducing Adjusted Consolidated Net Income (other than items that will require
cash payments and for which an accrual or reserve is, or is required by GAAP to
be, made), less all noncash items increasing Adjusted Consolidated Net Income,
all as determined on a consolidated basis for the Company and its Restricted
Subsidiaries in
6
conformity with GAAP; provided, however, that, if any Restricted Subsidiary is
not a Wholly Owned Restricted Subsidiary, Consolidated EBITDA shall be reduced
(to the extent not otherwise reduced in accordance with GAAP) by an amount equal
to (A) the amount of the Adjusted Consolidated Net Income attributable to such
Restricted Subsidiary multiplied by (B) the quotient of (1) the number of shares
of outstanding Common Stock of such Restricted Subsidiary not owned on the last
day of such period by the Company or any of its Restricted Subsidiaries divided
by (2) the total number of shares of outstanding Common Stock of such Restricted
Subsidiary on the last day of such period.
"Consolidated Interest Expense" means, for any period, the
aggregate amount of interest in respect of Indebtedness (including amortization
of original issue discount on any Indebtedness and the interest portion of any
deferred payment obligation, calculated in accordance with the effective
interest method of accounting; all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and
Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and its Restricted Subsidiaries during such
period; excluding, however, (i) any amount of such interest of any Restricted
Subsidiary if the net income of such Restricted Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income pursuant to clause (iii) of the
definition thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated
Net Income pursuant to clause (iii) of the definition thereof) and (ii) any
premiums, fees and expenses (and any amortization thereof) payable in connection
with the offering of the Securities, the Cash-Pay Notes, the Convertible
Preferred Stock, the 1997 Senior Subordinated Notes, the 1997 Notes, the WSAC
Loan and the Exchangeable Preferred Stock, all as determined on a consolidated
basis (without taking into account Unrestricted Subsidiaries) in conformity with
GAAP.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Redeemable Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of the Company or any of its Restricted Subsidiaries, each item to
be determined in conformity with GAAP (excluding the effects of foreign currency
exchange adjustments under Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 52).
"Convertible Notes" means the 14% Convertible Senior Subordinated
Discount Notes due 2005 of the Company.
"Convertible Notes Indenture" means the Indenture dated as of
October 23, 1995, between the Company and United States Trust Company of New
York pursuant to which the Convertible Notes were issued.
7
"Corporate Trust Office" means the office of the Trustee at
which the corporate trust business of the Trustee shall, at any particular time,
be principally administered, which office is, at the date of this Indenture,
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
"Convertible Preferred Stock" means the Series D 7% Senior
Cumulative Convertible Preferred Stock Due 2010 of the Company.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect the Company or any of its Restricted Subsidiaries against fluctuations
in currency values to or under which the Company or any of its Restricted
Subsidiaries is a party or a beneficiary on the date of this Indenture or
becomes a party or a beneficiary thereafter.
"Default" means any event that is, or after notice or passage
of time or both would be, an Event of Default.
"Deemed Closing Date" means March 18, 1997.
"Designated Senior Indebtedness" means the 1995 Senior Notes,
the 1997 Senior Notes, the Equipment Note Guarantees and any Indebtedness
constituting Senior Indebtedness of the Company that, at the date of
determination, has an aggregate principal amount of at least $25,000,000 and
that is specifically designated by the Company in the instrument creating or
evidencing such Senior Indebtedness as "Designated Senior Indebtedness."
"Equipment Notes" means the $200,000,000 of 12 1/2% Guaranteed
Senior Secured Notes Due 2004 of WEC and the $50,000,000 of 12 1/2% Guaranteed
Senior Secured Notes Due 2004 of WEC II.
"Equipment Note Guarantees" means the Guarantees provided by
the Company with respect to the Equipment Notes.
"Exchange Debentures" means the 14 1/4% Senior Subordinated
Deferred Interest Notes Due 2007 of the Company issuable in exchange for the
Exchangeable Preferred Stock.
"Exchangeable Preferred Stock" means the Series C 14 1/4%
Senior Cumulative Exchangeable Preferred Stock Due 2007 of the Company.
"Fair Market Value" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Board of Directors (whose determination shall
be conclusive) and evidenced by a Board Resolution.
"FCC" means the United States Federal Communications
Commission and any state or local telecommunications authority, department,
commission or agency (and any successors thereto).
8
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of this Indenture,
including, without limitation, those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession. All ratios and
computations contained in this Indenture shall be computed in conformity with
GAAP applied on a consistent basis, except that calculations made for purposes
of determining compliance with the terms of the covenants set forth in Article
Four and Article Five and with other provisions of this Indenture shall be made
without giving effect to (i) the amortization of any expenses incurred in
connection with the offering of the Securities, the Cash-Pay Notes, the
Convertible Preferred Stock, the 1997 Senior Subordinated Notes, the 1997 Notes,
the WSAC Loan and the Exchangeable Preferred Stock and (ii) except as otherwise
provided, the amortization of any amounts required or permitted by Accounting
Principles Board Opinion Nos. 16 and 17.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other Person (whether
arising by virtue of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guaranteed Indebtedness" has the meaning provided in Section
4.08.
"Holder" means the Person in whose name a Security is
registered on the books of the registrar for the Securities.
"Incur" means, with respect to any Indebtedness, to incur,
create, issue, assume, Guarantee or otherwise become liable for or with respect
to, or become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including, with respect to the Company and its Restricted
Subsidiaries, an "Incurrence" of Indebtedness by reason of a Person becoming a
Restricted Subsidiary of the Company; provided, however, that neither the
accrual of interest nor the accretion of original issue discount shall be
considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date
of determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments (whether negotiable or
non-negotiable), (iii) all obligations of such Person in respect of letters of
credit or other similar instruments (including reimbursement obligations with
respect thereto), (iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services, which purchase price
9
is due more than six months after the date of placing such property in service
or taking delivery and title thereto or the completion of such services, except
trade payables, (v) all obligations of such Person as lessee under Capitalized
Leases, (vi) all Indebtedness of other Persons secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of such Indebtedness shall be the lesser of
(A) the fair market value of such asset at such date of determination and (B)
the amount of such Indebtedness, (vii) all Indebtedness of other Persons
Guaranteed by such Person to the extent such Indebtedness is Guaranteed by such
Person and (viii) to the extent not otherwise included in this definition,
obligations under Currency Agreements and Interest Rate Agreements. The amount
of Indebtedness of any Person at any date shall be the outstanding balance at
such date of all unconditional obligations as described above and, with respect
to contingent obligations that are included in any of clauses (i) through (viii)
above, the maximum liability upon the occurrence of the contingency giving rise
to the obligation; provided, however, that (A) the amount outstanding at any
time of any Indebtedness issued with original issue discount is (1) for purposes
of determining the Indebtedness to EBITDA Ratio, the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with GAAP
and (2) for all other purposes, the amount determined in clause (1) on the date
such Indebtedness is originally Incurred and (B) Indebtedness shall not include
any liability for federal, state, local or other taxes.
"Indebtedness to EBITDA Ratio" means, as at any date of
determination, the ratio of (i) the aggregate amount of Indebtedness of the
Company and its Restricted Subsidiaries on a consolidated basis ("Consolidated
Indebtedness") as at the date of determination (the "Transaction Date") to (ii)
the Consolidated EBITDA of the Company for the then most recent four full fiscal
quarters for which reports have been filed pursuant to Section 4.17 (such four
full fiscal quarter period being referred to herein as the "Four Quarter
Period"); provided, however, that (x) pro forma effect shall be given to any
Indebtedness Incurred from the beginning of the Four Quarter Period through the
Transaction Date (including any Indebtedness Incurred on the Transaction Date),
to the extent outstanding on the Transaction Date, (y) if during the period
commencing on the first day of such Four Quarter Period through the Transaction
Date (the "Reference Period"), the Company or any of the Restricted Subsidiaries
shall have engaged in any Asset Sale, Consolidated EBITDA for such period shall
be reduced by an amount equal to the EBITDA (if positive), or increased by an
amount equal to the EBITDA (if negative), directly attributable to the assets
which are the subject of such Asset Sale and any related retirement of
Indebtedness as if such Asset Sale and related retirement of Indebtedness had
occurred on the first day of such Reference Period or (z) if during such
Reference Period the Company or any of the Restricted Subsidiaries shall have
made any Asset Acquisition, Consolidated EBITDA of the Company shall be
calculated on a pro forma basis as if such Asset Acquisition and any Incurrence
of Indebtedness to finance such Asset Acquisition had taken place on the first
day of such Reference Period.
"Indenture" means this Indenture as originally executed or as
it may be amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture.
"Interest Payment Date" means each semiannual interest payment
date on March 15 and September 15 of each year, commencing September 15, 2003.
10
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement or other similar agreement or
arrangement designed to protect the Company or any of its Restricted
Subsidiaries against fluctuations in interest rates in respect of Indebtedness
to or under which the Company or any of its Restricted Subsidiaries is a party
or a beneficiary on the date of this Indenture or becomes a party or a
beneficiary hereafter; provided, however, that the notional principal amount
thereof does not exceed the principal amount of the Indebtedness of the Company
and its Restricted Subsidiaries that bears interest at floating rates.
"Investment" in any Person means any direct or indirect
advance, loan or other extension of credit (including, without limitation, by
way of Guarantee or similar arrangement; but excluding advances to customers in
the ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable on the balance sheet of the Company or its Restricted
Subsidiaries) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of Capital Stock, bonds,
notes, debentures or other similar instruments issued by, such Person and shall
include (i) the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary and (ii) the fair market value of the Capital Stock held by the
Company and the Restricted Subsidiaries of any Person that has ceased to be a
Restricted Subsidiary by reason of any transaction permitted by clause (iii) of
Section 4.07. For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.05, (i) "Investment" shall include the fair market value of the assets
(net of liabilities) of any Restricted Subsidiary of the Company at the time
that such Restricted Subsidiary of the Company is designated an Unrestricted
Subsidiary and shall exclude the fair market value of the assets (net of
liabilities) of any Unrestricted Subsidiary at the time that such Unrestricted
Subsidiary is designated a Restricted Subsidiary of the Company and (ii) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined
by the Board of Directors in good faith.
"Issue Date" means the date on which the Securities are
originally issued under this Indenture.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof, any sale with recourse against the seller or any Affiliate of the
seller, or any agreement to give any security interest).
"Net Cash Proceeds" means, (a) with respect to any Asset Sale,
the proceeds of such Asset Sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any Restricted
Subsidiary of the Company) and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of (i) brokerage
commissions and other fees and expenses (including fees and expenses of counsel
and investment bankers) related to such Asset Sale, (ii) provisions for all
taxes (whether or not such taxes will actually be paid or are payable) as a
result of such Asset Sale without regard to the consolidated results of
operations of the Company and its
11
Restricted Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
that either (A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale and (iv) appropriate amounts to be
provided by the Company or any Restricted Subsidiary of the Company as a reserve
against any liabilities associated with such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined in conformity
with GAAP and (b) with respect to any issuance or sale of Capital Stock, the
proceeds of such issuance or sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any Restricted
Subsidiary of the Company) and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees incurred in connection with
such issuance or sale and net of taxes paid or payable by the Company or any of
its subsidiaries as a result thereof.
"Offer to Purchase" means an offer to purchase Securities by
the Company from the Holders thereof that is required by Section 4.10 or Section
4.11 which is commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that all
Securities validly tendered will be accepted for payment on a pro rata basis;
(ii) the purchase price and the Payment Date; (iii) that any Security not
tendered will continue to accrue interest pursuant to its terms; (iv) that,
unless the Company defaults in the payment of the purchase price, any Security
accepted for payment pursuant to the Offer to Purchase shall cease to accrue
interest on and after the Payment Date; (v) that Holders electing to have a
Security purchased pursuant to the Offer to Purchase will be required to
surrender the Security together with the form entitled "Option of the Holder to
Elect Purchase" on the reverse side thereof completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the
Business Day immediately preceding the Payment Date; (vi) that Holders will be
entitled to withdraw their election if the Paying Agent receives, not later than
the close of business on the third Business Day immediately preceding the
Payment Date, a telegram, facsimile transmission or letter setting forth the
name of such Holder, the principal amount of the Securities delivered for
purchase and a statement that such Holder is withdrawing his election to have
such Securities purchased; and (vii) that Holders whose Securities are being
purchased only in part will be issued new Securities equal in principal amount
(and accrued and unpaid interest) to the unpurchased portion thereof; provided,
however, that each Security purchased and each new Security issued shall be in a
principal amount of $1,000 or integral multiples thereof. On the Payment Date,
the Company shall (i) accept for payment on a pro rata basis any Securities or
portions thereof tendered pursuant to an Offer to Purchase; (ii) deposit with
the Paying Agent 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 all Securities or portions thereof so accepted together with an
Officers' Certificate specifying the Securities or portions thereof accepted for
payment by the Company. The Paying Agent shall promptly mail to the Holders of
the Securities so accepted for payment in an amount equal to the purchase price,
and the Trustee shall promptly authenticate and mail to such Holders a new
Security equal in principal amount
12
to any unpurchased portion of the Securities surrendered; provided, however,
that each Security purchased and each new Security issued shall be in a
principal amount of $1,000 or integral multiples thereof. The Company will
publicly announce the results of an Offer to Purchase as soon as practicable
after the Payment Date. The Trustee shall act as the Paying Agent for an Offer
to Purchase. The Company will comply with Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder to the extent such laws and
regulations are applicable, in the event that the Company is required to
repurchase Securities pursuant to an Offer to Purchase.
"Officer" means, with respect to the Company, (i) the Chairman
of the Board, the Vice-Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer and (ii) the
Treasurer or any Assistant Treasurer, or the Secretary or any Assistant
Secretary.
"Officers' Certificate" means a certificate signed by one
Officer listed in clause (i) of the definition thereof and one Officer listed in
clause (ii) of the definition thereof; provided, however, that any such
certificate may be signed by any two of the Officers listed in clause (i) of the
definition thereof in lieu of being signed by one Officer listed in clause (i)
of the definition thereof and one Officer listed in clause (ii) of the
definition thereof. Each Officers' Certificate (other than certificates provided
pursuant to TIA Section 314(a)(4)) shall include the statements provided for in
TIA Section 314(e).
"Opinion of Counsel" means a written opinion signed by legal
counsel who may be an employee of or counsel to the Company. Each such Opinion
of Counsel shall include the statements provided for in TIA Section 314(e).
"Paying Agent" has the meaning provided in Section 2.03,
except that, for the purposes of Article Eight, the Paying Agent shall not be
the Company or a Subsidiary of the Company or an Affiliate of any of them. The
term "Paying Agent" includes any additional Paying Agent.
"Payment Date" means the date of purchase, which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date a
notice is mailed pursuant to an Offer to Purchase.
"Permitted Investment" means (i) an Investment in a Restricted
Subsidiary or a Person which will, upon the making of such Investment, become a
Restricted Subsidiary or be merged or consolidated with or into or transfer or
convey all or substantially all its assets to, the Company or a Restricted
Subsidiary; (ii) Temporary Cash Investments; (iii) payroll, travel and similar
advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses in accordance with GAAP; (iv) loans or
advances to employees in a principal amount not to exceed $1,000,000 at any one
time outstanding; (v) stock, obligations or securities received in satisfaction
of judgments; (vi) Investments, to the extent that the consideration provided by
the Company or any of its Restricted Subsidiaries consists solely of Capital
Stock (other than Redeemable Stock) of the Company; (vii) notes payable to the
Company that are received by the Company as payment of the purchase price for
Capital Stock (other than Redeemable Stock) of the Company; and (viii)
acquisitions of a minority equity interest in entities engaged in the
telecommunications business; provided, however, that (A) the acquisition of a
majority equity interest in such entities is not permitted under
13
U.S. law without FCC consent, (B) the Company or one of its Restricted
Subsidiaries has the right to acquire Capital Stock representing a majority of
the voting power of the Voting Stock of such entity upon receipt of FCC consent
and (C) in the event that such consent has not been obtained within 18 months of
funding such Investment, the Company or one of its Restricted Subsidiaries has
the right to sell such minority equity interest in the seller thereof for
consideration consisting of the consideration originally paid by the Company and
its Restricted Subsidiaries for such minority equity interest.
"Permitted Investor" means ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock" means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference stock,
whether now outstanding or issued after the Deemed Closing Date, including,
without limitation, all series and classes of such preferred or preference
stock.
"principal" of a debt security, including the Securities,
means the principal amount due on such debt security, which, in the case of the
Securities, shall be the Accumulated Amount from time to time.
"Redeemable Stock" means any class or series of Capital Stock
of any Person that by its terms or otherwise is (i) required to be redeemed
prior to the Stated Maturity of the Securities , (ii) redeemable at the option
of the holder of such class or series of Capital Stock at any time prior to the
Stated Maturity of the Securities (unless the redemption price is, at the
Company's option, without conditions precedent, payable solely in Common Stock
(other than Redeemable Stock) of the Company) or (iii) convertible into or
exchangeable for Capital Stock referred to in clause (i) or (ii) above or
Indebtedness having a scheduled maturity prior to the Stated Maturity of the
Securities; provided, however, that any Capital Stock that would not constitute
Redeemable Stock but for provisions thereof giving holders thereof the right to
require such Person to repurchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
Stated Maturity of the Securities shall not constitute Redeemable Stock if the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are no more favorable to the holders of such Capital Stock than the provisions
of Section 4.10 and Section 4.11 and such Capital Stock specifically provides
that such Person will not repurchase or redeem any such stock pursuant to such
provision prior to the Company's repurchase of such Securities as are required
to be repurchased pursuant to the provisions of Section 4.10 and Section 4.11.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which such Security is to be redeemed pursuant
to this Indenture.
14
"Registrar" has the meaning provided in Section 2.03.
"Regular Record Date" for the interest payable on any Interest
Payment Date means March 1 or September 1 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee,
means the chairman or any vice chairman of the board of directors, the chairman
or any vice chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, any
assistant vice president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, the cashier, any assistant cashier, any trust officer
or assistant trust officer, the controller or any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Restricted Payments" has the meaning provided in Section 4.05.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission and any
successor agency.
"Securities" means any of the securities, as defined in the
first paragraph of the recitals hereof, that are authenticated and delivered
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning provided in Section 2.03.
"Senior Indebtedness" means the following obligations of the
Company, whether outstanding on the Issue Date or thereafter Incurred: (i) all
Indebtedness and all other monetary obligations of the Company under the 1995
Senior Notes, the 1997 Senior Notes, and the Equipment Note Guarantees, (ii) all
other Indebtedness of the Company (other than the Securities, the Cash-Pay
Notes, the 1997 Senior Subordinated Notes, the Exchange Debentures and the
Convertible Notes), including principal and interest on such Indebtedness,
unless such Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such Indebtedness is issued, is pari passu with, or
subordinated in right of payment to, the Securities and (iii) all fees, expenses
and indemnities payable in connection with the 1995 Senior Notes, the 1997
Senior Notes and the Equipment Note Guarantees (including any agreements
pursuant to which the 1995 Senior Notes, the 1997 Senior Notes or the Equipment
Note Guarantees were issued); provided, however, that the term "Senior
Indebtedness" shall not include (a) any Indebtedness of the Company that, when
Incurred and without respect to any election under Section 1111(b) of the United
States Bankruptcy Code, was without recourse to the Company, (b) any
Indebtedness of the Company to a Subsidiary of the Company or to a joint venture
in which the Company has an interest, (c) any Indebtedness of the Company, to
the extent not permitted by Section 4.03 or Section 4.04, (d) any repurchase,
redemption or other obligation in respect of
15
Redeemable Stock, (e) any Indebtedness to any employee of the Company or any of
its Subsidiaries, (f) any liability for federal, state, local or other taxes
owed or owing by the Company or (g) any trade payables of the Company. Senior
Indebtedness of the Company will also include interest accruing subsequent to
events of bankruptcy of the Company and its Subsidiaries at the rate provided
for in the document governing such Senior Indebtedness, whether or not such
interest is an allowed claim enforceable against the debtor in a bankruptcy case
under federal bankruptcy law.
"Senior Subordinated Obligations" means any principal of,
premium, if any, or interest on the Securities and the Cash-Pay Notes, payable
pursuant to the terms of the Securities and the Cash-Pay Notes or upon
acceleration, to the extent relating to the purchase of Securities and the
Cash-Pay Notes or amounts corresponding to such principal, premium, if any, or
interest on the Securities and the Cash-Pay Notes.
"Significant Subsidiary" means, at any date of determination,
any Restricted Subsidiary of the Company that, together with its Subsidiaries,
(i) for the most recent fiscal year of the Company, accounted for more than 10%
of the consolidated revenues of the Company and its Restricted Subsidiaries or
(ii) as of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"Stated Maturity" means, (i) with respect to any debt
security, the date specified in such debt security as the fixed date on which
the final installment of principal of such debt security is due and payable and
(ii) with respect to any scheduled installment of principal of or interest on
any debt security, the date specified in such debt security as the fixed date on
which such installment is due and payable.
"Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which Voting Stock
representing more than 50% of the voting power of the outstanding Voting Stock
is owned, directly or indirectly, by such Person and one or more other
Subsidiaries of such Person.
"Subsidiary Guarantee" has the meaning provided in Section
4.08.
"Telecommunications Assets" means any (i) entity or business
substantially all the revenues of which are derived from (a) providing
transmission of sound, data or video; (b) the sale or provision of phone cards,
"800" services, voice mail, switching, enhanced telecommunications services,
telephone directory or telephone number information services or
telecommunications network intelligence; or (c) any business ancillary or
directly related to the businesses referred to in clause (a) or (b) above and
(ii) any assets used primarily to effect such transmission or provide the
products or services referred to in clause (a) or (b) above and any directly
related or ancillary assets including, without limitation, licenses and
applications, bids and agreements to acquire licenses, or other authority to
provide transmission services previously granted, or to be granted, by the FCC.
"Telecommunications Subsidiary" means (i) WinStar Gateway
Network, Inc., WinStar Wireless, Inc., WinStar Telecommunications, Inc., WinStar
Milliwave, Inc., WinStar Locate, Inc. and WinStar Wireless Fiber Corp., and, in
each case, its
16
successors and (ii) any other Restricted Subsidiary of the Company that holds
more than a de minimis amount of Telecommunications Assets.
"Temporary Cash Investment" means any of the following: (i)
direct obligations of the United States or any agency thereof or obligations
fully and unconditionally guaranteed by the United States or any agency thereof;
(ii) time deposit accounts, certificates of deposit and money market deposits
maturing within 180 days of the date of acquisition thereof issued by a bank or
trust company which is organized under the laws of the United States, any state
thereof or any foreign country recognized by the United States, and which bank
or trust company has capital, surplus and undivided profits aggregating in
excess of $50,000,000 (or the foreign currency equivalent thereof) and has
outstanding deposits or debt which is rated "A" (or such similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor; (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above; (iv)
commercial paper, maturing not more than six months after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States, any state
thereof or any foreign country recognized by the United States with a rating at
the time as of which any investment therein is made of "P-1" (or higher)
according to ▇▇▇▇▇'▇ Investors Service, Inc. or "A-1" (or higher) according to
Standard & Poor's Ratings Group; and (v) securities with maturities of six
months or less from the date of acquisition issued or fully and unconditionally
guaranteed by any state, commonwealth or territory of the United States, or by
any political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Ratings Group or ▇▇▇▇▇'▇ Investors Service, Inc.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act
of 1939, as amended (15 U.S. Code ▇▇.▇▇. 77aaa-77bbb), as in effect on the date
this Indenture was executed, except as provided in Section 9.06.
"Transaction Date" means, with respect to the Incurrence of
any Indebtedness by the Company or any of its Restricted Subsidiaries, the date
such Indebtedness is to be Incurred and, with respect to any Restricted Payment,
the date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph
of this Indenture until a successor replaces it in accordance with the
provisions of Article Seven of this Indenture and thereafter means such
successor.
"United States Bankruptcy Code" means the Bankruptcy Reform
Act of 1978, as amended and as codified in Title 11 of the United States Code,
as amended from time to time hereafter, or any successor federal bankruptcy law.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Restricted Subsidiary of the Company (including any newly acquired or newly
formed Subsidiary of the Company), other than a guarantor of the Securities, to
be an Unrestricted Subsidiary unless such
17
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, the Company or any Restricted Subsidiary; provided, however, that neither
the Company nor its Restricted Subsidiaries has any Guarantee of any
Indebtedness of such Subsidiary outstanding at the time of such designation and
either (A) the Subsidiary to be so designated has total assets of $1,000 or less
or (B) if such Subsidiary has assets greater than $1,000, such designation would
be permitted under the provisions of Section 4.05. Notwithstanding the
foregoing, WinStar New Media Company, Inc., Non Fiction Films Inc. and WinStar
Global Products, Inc. and their Subsidiaries are Unrestricted Subsidiaries. The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary of the Company; provided, however, that immediately after giving
effect to such designation (x) the Company could Incur $1.00 of additional
Indebtedness under the first paragraph of Section 4.03 and (y) no Default or
Event of Default shall have occurred and be continuing. Any such designation by
the Board of Directors shall be evidenced to the Trustee by promptly filing with
the Trustee a copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing provisions. Anything to the contrary contained in this Indenture
notwithstanding, no Telecommunications Subsidiary may be designated an
Unrestricted Subsidiary.
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof at any time prior
to the Stated Maturity of the Securities , and shall also include a depositary
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of
the holder of a depositary receipt; provided, however, that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S.
Government Obligation evidenced by such depositary receipt.
"Voting Stock" means with respect to any Person, Capital Stock
of any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"WEC" means WinStar Equipment Corp. and its successors.
"WEC II" means WinStar Equipment II Corp. and its successors.
"WSAC" means WinStar Switch Acquisition Corp. and its
successors.
"WSAC Credit Agreement" means the Credit Agreement dated as of
October 17, 1997, among WSAC, the Lenders named therein, Credit Suisse First
Boston, as documentation agent, and Salomon Brothers Inc, as syndication agent
and collateral and administrative agent, as in effect from time to time.
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"WSAC Loan" means all Indebtedness and other obligations of
WSAC arising in connection with the WSAC Credit Agreement.
"Wholly Owned" means, with respect to any Subsidiary of any
Person, such Subsidiary if all of the outstanding Capital Stock in such
Subsidiary (other than any director's qualifying shares or Investments by
foreign nationals mandated by applicable law) is owned by such Person or one or
more Wholly Owned Subsidiaries of such Person.
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:
"indenture securities" means the Securities;
"indenture security holder" means a Holder or a
Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"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 a rule of the
SEC and not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction. Unless the context
otherwise requires:
(i)a term has the meaning assigned to it;
(ii)an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv)words in the singular include the plural, and words in
the plural include the singular;
(v)provisions apply to successive events and transactions;
(vi)"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; and
(vii) all references to Sections or Articles refer to
Sections or Articles of this Indenture unless otherwise
indicated.
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SECTION 1.04. Ranking of the Securities. The Securities shall
rank pari passu with the Convertible Notes, the 1997 Senior Subordinated Notes,
the Exchange Debentures and the Cash-Pay Notes.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating. Provisions relating to the
Initial Securities, the Private Exchange Securities and the Exchange Securities
are set forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this
Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to the Appendix
(with such appropriate insertions, omissions, substitutions and other variations
as are required by this Indenture) which is hereby incorporated in and expressly
made a part of this Indenture. The Exchange Securities, the Private Exchange
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A (with such appropriate insertions,
omissions, substitutions and other variations as are required by this
Indenture), 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, agreements to which the Company is subject, if any,
or usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). Each Security shall be dated the date of its
authentication. The terms of the Securities set forth in the Appendix and
Exhibit A are part of the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two Officers
shall sign the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security 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 and deliver Securities for
original issue upon a written order of the Company signed by two Officers. Such
order shall specify the amount of the Securities to be authenticated (not to
exceed $250,000,000) and the date on which the original issue of Securities is
to be authenticated. The aggregate principal amount of Securities outstanding at
any time may not exceed that amount except as provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate the Securities. Unless limited by the terms of such
appoint ment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authen tication by such agent. An authenticating agent has the
same rights as any Registrar or Paying Agent.
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SECTION 2.03. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange (the
"Security Register"). The Company may have one or more co-registrars and one or
more additional paying agents. The term "Paying Agent" includes any additional
paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms 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, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. On or prior
to each due date of the principal and interest on any Security, the Company
shall deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Security holders or the Trustee all money 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. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.
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 Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing on or before
each interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange. The Securities shall be
issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When Securities are presented to the
Registrar or a co-registrar with a request (i) to register a transfer or (ii) to
exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall register the transfer or make the transfer,
as requested if the requirements of Section 8-401(1) of the Uniform Commercial
Code are met; provided, however, that any Security 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 and
21
the Trustee duly executed by the Holder thereof or by his attorney duly
authorized in writing. To permit registration of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Securities at the
Registrar's or co-registrar's request. The Company may require payment of a sum
sufficient to pay all taxes, assessments or other governmental charges in
connection with any transfer or exchange pursuant to this Section. The Company
shall not be required to make and the Registrar need not register transfers or
exchanges of Securities selected for redemption (except, in the case of
Securities to be redeemed in part, the portion thereof not to be redeemed) or
any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
All Securities issued upon any transfer or exchange pursuant
to the terms of this Indenture will evidence the same debt and will be entitled
to the same benefits under this Indenture as the Securities surrendered upon
such transfer or exchange.
SECTION 2.07. Replacement Securities. If a mutilated Security
is surrendered to the Registrar 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 and deliver a replacement Security if the
requirements of Section 8-405 of the Uniform Commercial Code are met and the
Holder satisfies any other reasonable requirements of the Trustee. If required
by the Trustee or the Company, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss which any of them may suffer if a Security is replaced. The Company and
the Trustee may charge the Holder for their expenses in replacing a Secur ity.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancelation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security; provided,
however, that, in determining whether the Holders of the requisite principal
amount of the outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to
22
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.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, then on and after that date, such Securities (or portions thereof) shall
cease to be outstanding and interest on them shall cease to accrue.
SECTION 2.09. Temporary Securities. Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate and deliver temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Company and the Trustee consider appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities and deliver them in exchange for temporary
Securities.
SECTION 2.10. Cancelation. The Company at any time may deliver
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancelation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancelation.
SECTION 2.11. Defaulted Interest. If and to the extent the
Company defaults in a payment of interest on the Securities, the Company shall
pay defaulted interest (plus interest on such defaulted interest to the extent
lawful) in any lawful manner. The Company may pay the defaulted interest to the
persons who are Securityholders on a subsequent special record date. The Company
shall fix or cause to be fixed any such special record date and payment date to
the reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
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ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption. The Securities may be
redeemed at the election of the Company, in whole at any time, or in part from
time to time on or after March 15, 2003 and prior to maturity, upon not less
than 30 nor more than 60 days' prior notice mailed by first-class mail to each
Holder's last address as it appears in the Security Register, at the following
Redemption Prices (expressed as a percentage of the Accumulated Amount of the
Securities), plus accrued and unpaid interest, if any, on such Accumulated
Amount to the Redemption Date (subject to the right of Holders of record on the
relevant Regular Record Date that is on or prior to the Redemption Date to
receive interest due on the relevant Interest Payment Date), if redeemed during
the 12-month period commencing on March 15 of the years set forth below:
Year Redemption Price
---- ----------------
2003 105.500%
2004 103.667
2005 101.833
2006 and thereafter 100.000
========================= ===============
SECTION 3.02. Notices to Trustee. If the Company elects to
redeem Securities pursuant to Section 3.01, it shall notify the Trustee in
writing of the Redemption Date and the principal amount of Securities to be
redeemed plus interest accrued and premium due thereon, if any, to the
Redemption Date.
The Company shall give each notice provided for in this
Section 3.02 in an Officers' Certificate at least five days before mailing the
notice to Holders referred to in Section 3.01.
SECTION 3.03. Selection of Securities To Be Redeemed. If less
than all of the Securities are to be redeemed at any time, 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 listed on a national securities exchange,
on a pro rata basis, by lot or by such other method as the Trustee in its sole
discretion shall deem fair and appropriate; provided, however, that no
Securities of $1,000 in principal amount or less shall be redeemed in part.
The Trustee shall make the selection from the Securities
outstanding and not previously called for redemption. Securities in
denominations of $1,000 in principal amount may only be redeemed in whole. The
Trustee may select for redemption portions (equal to $1,000 in principal amount
or any integral multiple thereof) of Securities that have denominations larger
than $1,000 in principal amount. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company and the Registrar promptly in
writing of the Securities or portions of Securities to be called for redemption.
24
SECTION 3.04. Notice of Redemption. With respect to any
redemption of Securities pursuant to Section 3.01, 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.
The notice shall identify the Securities to be redeemed and
shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered
to the Paying Agent in order to collect the Redemption Price;
(e) 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 plus accrued
interest to the Redemption Date upon surrender of the Securities to the
Paying Agent;
(f) that, if any Security is being redeemed in part, the
portion of the principal amount (equal to $1,000 in principal amount or
any integral multiple thereof) of such Security to be redeemed and
that, on and 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 reissued; and
(g) that, if any Security contains a CUSIP number as provided
in Section 2.12, no representation is being made as to the correctness
of the CUSIP number either as printed on the Securities or as contained
in the notice of redemption and that reliance may be placed only on the
other identification numbers printed on the Securities.
At the Company's request (which request may be revoked by the
Company at any time prior to the time at which the Trustee shall have given such
notice to the Holders), made in writing to the Trustee at least five days before
mailing the notice to the Holders referred to in this Section 3.04, the Trustee
shall give such notice of redemption in the name and at the expense of the
Company. If, however, the Company gives such notice to the Holders, the Company
shall concurrently deliver to the Trustee an Officers' Certificate stating that
such notice has been given.
SECTION 3.05. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the relevant Redemption Date and at the Redemption Price. Upon surrender of any
Securities to the Paying Agent, such Securities shall be paid at the Redemption
Price, plus accrued interest, if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed,
whether or not the Holder receives the notice. In any event, failure to give
such notice, or any
25
defect therein, shall not affect the validity of the proceedings for the
redemption of Securities held by Holders to whom such notice was properly given.
SECTION 3.06. Deposit of Redemption Price. On or prior to any
Redemption Date, the Company shall deposit with the Paying Agent (or, if the
Company is acting as its own Paying Agent, shall segregate and hold in trust as
provided in Section 2.04) money sufficient to pay the Redemption Price of and
accrued interest on all Securities to be redeemed on that date other than
Securities or portions thereof called for redemption on that date that have been
delivered by the Company to the Trustee for cancelation.
SECTION 3.07. Payment of Securities Called for Redemption. If
notice of redemption has been given in the manner provided above, the Securities
or portion of Securities specified in such notice to be redeemed shall become
due and payable on the Redemption Date at the Redemption Price stated therein,
together with accrued interest to such Redemption Date, and on and after such
date (unless the Company shall default in the payment of such Securities at the
Redemption Price and accrued interest to the Redemption Date, in which case the
principal, until paid, shall bear interest from the Redemption Date at the rate
prescribed in the Securities), such Securities shall cease to accrue interest.
Upon surrender of any Security for redemption in accordance with a notice of
redemption, such Security shall be paid and redeemed by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders registered as
such at the close of business on the relevant Regular Record Date.
SECTION 3.08. Securities Redeemed in Part. Upon surrender of
any Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder a new Security equal in principal
amount to the unredeemed portion of such surrendered Security.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities. The Company shall pay the
principal of, premium, if any, and interest on the Securities on the dates and
in the manner provided in the Securities and this Indenture. An installment of
principal, premium, if any, or interest shall be considered paid on the date due
if the Trustee or Paying Agent (other than the Company, a Subsidiary of the
Company, or any Affiliate of any of them) holds on that date money designated
for and sufficient to pay the installment. If the Company or any Subsidiary of
the Company or any Affiliate of any of them, acts as Paying Agent, an
installment of principal, premium, if any, or interest shall be considered paid
on the due date if the entity acting as Paying Agent complies with Section 2.04.
As provided in Section 6.09, upon any bankruptcy or reorganization procedure
relative to the Company, the Trustee shall serve as the Paying Agent and
conversion agent, if any, for the Securities.
26
The Company shall pay interest on overdue principal, premium,
if any, and interest on overdue installments of interest, to the extent lawful,
at the rate per annum specified in the Securities.
SECTION 4.02. Maintenance of Office or Agency. The Company
will maintain an office or agency (which may be an office of the Trustee,
Registrar or co-registrar or any Affiliate of any of them) where Securities may
be surrendered for registration of transfer or exchange or for presentation for
payment and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will 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 11.02.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
The Company hereby initially designates the Corporate Trust
Office of the Trustee, located in the Borough of Manhattan, the City of New
York, as such office of the Company in accordance with Section 2.03.
SECTION 4.03. Limitation on Indebtedness. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness (other than the Securities and Indebtedness existing on the Issue
Date); provided, however, that the Company may Incur Indebtedness if, after
giving effect to the Incurrence of such Indebtedness and the receipt and
application of the proceeds therefrom, the Indebtedness to EBITDA Ratio would be
greater than zero and less than 5:1.
Notwithstanding the foregoing, the Company and any Restricted
Subsidiary (except as specified below) may Incur each and all of the following:
(i)Indebtedness of the Company outstanding at any time in an
aggregate principal amount not to exceed $200,000,000, less any amount
of Indebtedness Incurred pursuant to this clause (i) and permanently
repaid as provided under Section 4.10;
(ii)Indebtedness (A) to the Company evidenced by an
unsubordinated promissory note or (B) to any of its Restricted
Subsidiaries; provided, however, that any event which results in any
such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Indebtedness (other than to the Company or
another Restricted Subsidiary) shall be deemed, in each case, to
constitute an Incurrence of such Indebtedness not permitted by this
clause (ii);
(iiiIndebtedness issued in exchange for, or the net proceeds
of which are used to refinance or refund, then outstanding
Indebtedness, other than Indebtedness Incurred under clause (i), (ii),
(v), (vi) or (viii) of this paragraph, and any refinancings thereof in
an amount not to exceed the amount so refinanced
27
or refunded (plus premiums, accrued interest, fees and expenses);
provided, however, that Indebtedness the proceeds of which are used to
refinance or refund the Securities or Indebtedness that is pari passu
with, or subordinated in right of payment to, the Securities shall only
be permitted under this clause (iii) if (A) in case the Securities are
refinanced in part or the Indebtedness to be refinanced is pari passu
with the Securities, such new Indebtedness, by its terms or by the
terms of any agreement or instrument pursuant to which such new
Indebtedness is outstanding, is expressly made pari passu with, or
subordinate in right of payment to, the remaining Securities, (B) in
case the Indebtedness to be refinanced is subordinated in right of
payment to the Securities, such new Indebtedness, by its terms or by
the terms of any agreement or instrument pursuant to which such new
Indebtedness is outstanding, is expressly made subordinate in right of
payment to the Securities, at least to the extent that the Indebtedness
to be refinanced is subordinated to the Securities and (C) such new
Indebtedness, determined as of the date of Incurrence of such new
Indebtedness, does not mature prior to the Stated Maturity of the
Indebtedness to be refinanced or refunded, and the Average Life of such
new Indebtedness is at least equal to the remaining Average Life of the
Indebtedness to be refinanced or refunded; provided further, however,
that in no event may Indebtedness of the Company be refinanced by means
of any Indebtedness of any Restricted Subsidiary of the Company
pursuant to this clause (iii);
(iv)Indebtedness (A) in respect of performance, surety or
appeal bonds provided in the ordinary course of business, (B) under
Currency Agreements and Interest Rate Agreements; provided, however,
that such agreements do not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in
foreign currency exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder and (C) 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 of the Restricted Subsidiaries pursuant to such agreements, in any
case Incurred in connection with the disposition of any business,
assets or Restricted Subsidiary of the Company (other than Guarantees
of Indebtedness Incurred by any Person acquiring all or any portion of
such business, assets or Restricted Subsidiary of the Company 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 Subsidiary in connection with such disposition;
(v)Indebtedness of the Company not to exceed, at any one time
outstanding, two times the Net Cash Proceeds received by the Company
from and after March 1, 1998 (less the amount of any such Net Cash
Proceeds the receipt of which permitted the Company or any Restricted
Subsidiary to make any Restricted Payment, including any Restricted
Payment described in the second paragraph under Section 4.05) from the
issuance and sale of its Capital Stock (other than Redeemable Stock and
Preferred Stock that provides for the payment of dividends in cash);
provided, however, that such Indebtedness (x) does not mature prior to
the Stated Maturity of the Securities and has an Average Life longer
than the Securities and (y) is pari passu with or subordinated to the
Securities at least to the extent that the Securities are subordinated
to Senior Indebtedness;
28
(vi)Indebtedness of any Restricted Subsidiary Incurred
pursuant to any credit agreement of such Restricted Subsidiary in
effect on the Issue Date (and refinancings thereof), up to the amount
of the commitment under such credit agreement on the Issue Date;
(vii) Indebtedness to the extent such Indebtedness is secured
by Liens which are purchase money or other Liens upon equipment or
inventory acquired or held by the Company or any of its Restricted
Subsidiaries taken or obtained by (A) the seller or lessor of such
equipment or inventory to secure all or a part of the purchase price or
lease payments therefor or (B) the person who makes advances or incurs
obligations, thereby giving value to the Company to enable it to
purchase or acquire rights in such equipment or inventory, to secure
the repayment of all or a part of the advances so made or obligations
so incurred; provided, however, that such Liens do not extend to or
cover any property or assets of the Company or any Restricted
Subsidiary other than the equipment or inventory acquired;
(viiIndebtedness of any Restricted Subsidiary not to exceed,
at any one time outstanding, 80% of the accounts receivable net of
reserves and allowances for doubtful accounts, determined in accordance
with GAAP, of such Restricted Subsidiary and its Restricted
Subsidiaries (without duplication); and
(ix)Indebtedness of the Company, to the extent the proceeds
thereof are immediately used to purchase the 1995 Notes, the 1997
Notes, the 1997 Senior Subordinated Notes, the Exchange Debentures, the
Securities or the Cash-Pay Notes tendered in an Offer to Purchase made
as a result of a Change of Control.
(b) For purposes of determining any particular amount of
Indebtedness under this Section 4.03, 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. For purposes of
determining compliance with this Section 4.03, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the above clauses, the Company, in its sole discretion, shall
classify such item of Indebtedness and only be required to include the amount
and type of such Indebtedness in one of such clauses.
(c) The Company will not, and will not permit any Restricted
Subsidiary to, Incur any Guarantee of Indebtedness of any Unrestricted
Subsidiary.
SECTION 4.04. Limitation on Senior Subordinated Indebtedness.
The Company will not (i) Incur any Indebtedness, other than the Securities, that
is expressly made subordinated in right of payment to any Senior Indebtedness of
the Company unless such Indebtedness, by its terms and by the terms of any
agreement or instrument pursuant to which such Indebtedness is outstanding is
expressly made pari passu with, or subordinate in right of payment to, the
Securities pursuant to provisions substantially similar to those contained in
Article 10; provided, however, that the foregoing limitation shall not apply to
distinctions between categories of Senior Indebtedness of the Company that exist
by reason of any Liens or Guarantees arising or created in respect of some but
not all Senior Indebtedness of the Company or (ii) Incur any Indebtedness
secured by a Lien if such Indebtedness is not Senior Indebtedness of the
Company, unless contemporaneously therewith effective provision is made to
secure the Securities equally
29
and ratably with such secured Indebtedness for so long as such secured
Indebtedness is secured by a Lien.
SECTION 4.05. Limitation on Restricted Payments. The Company
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, (i) declare or pay any dividend or make any distribution on its
Capital Stock (other than dividends or distributions payable solely in shares of
its or such Restricted Subsidiary's Capital Stock (other than Redeemable Stock)
held by such holders or in options, warrants or other rights to acquire such
shares of Capital Stock) other than such Capital Stock held by the Company or
any of its Restricted Subsidiaries (and other than pro rata dividends or
distributions on Common Stock of Restricted Subsidiaries); (ii) repurchase,
redeem, retire or otherwise acquire for value any shares of Capital Stock of the
Company (including options, warrants or other rights to acquire such shares of
Capital Stock) held by Persons other than any Wholly Owned Restricted
Subsidiaries of the Company; (iii) make any voluntary or optional principal
payment, or voluntary or optional redemption, repurchase, defeasance, or other
acquisition or retirement for value, of Indebtedness of the Company that is
subordinated in right of payment to the Securities or (iv) make any Investment,
other than a Permitted Investment, in any Person (such payments or any other
actions described in clauses (i) through (iv) being collectively "Restricted
Payments") if, at the time of, and after giving effect to, the proposed
Restricted Payment: (A) a Default or Event of Default shall have occurred and be
continuing, (B) except with respect to any Investment (other than an Investment
consisting of the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary), the Company could not Incur at least $1.00 of Indebtedness under
the first paragraph of Section 4.03 or (C) the aggregate amount expended for all
Restricted Payments (the amount so expended, if other than in cash, to be
determined in good faith by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution) after the Deemed Closing Date
shall exceed the sum of (1) 50% of the aggregate amount of the Adjusted
Consolidated Net Income (or, if the Adjusted Consolidated Net Income is a loss,
minus 100% of such amount) (determined by excluding income resulting from
transfers of assets by the Company or a Restricted Subsidiary to an Unrestricted
Subsidiary) accrued on a cumulative basis during the period (taken as one
accounting period) beginning on the first day of the fiscal quarter immediately
following the Deemed Closing Date and ending on the last day of the last fiscal
quarter preceding the Transaction Date for which reports have been filed
pursuant to Section 4.17 plus (2) the aggregate Net Cash Proceeds received by
the Company after the Deemed Closing Date (less the amount of such Net Cash
Proceeds the receipt of which served as the basis on which the Company Incurred
Indebtedness pursuant to clause (v) of the second paragraph under Section 4.03
or pursuant to any similar provision contained in the indenture relating to the
1995 Senior Notes as in effect on the Deemed Closing Date (such Net Cash
Proceeds being herein called "Allocated Proceeds")) from the issuance and sale
permitted by this Indenture of its Capital Stock (other than Redeemable Stock)
to a Person who is not a Subsidiary of the Company, or from the issuance to a
Person who is not a Subsidiary of the Company of any options, warrants or other
rights to acquire Capital Stock of the Company (in each case, exclusive of any
convertible Indebtedness, Redeemable Stock or any options, warrants or other
rights that are redeemable at the option of the Holder, or are required to be
redeemed, prior to the Stated Maturity of the Securities) plus (3) an amount
equal to the net reduction in Investments (other than reductions in Permitted
Investments and other than reductions in Investments made pursuant to clauses
(vi) or (vii) of the second paragraph of this Section 4.05 in any Person
resulting from payments of interest on Indebtedness,
30
dividends, repayments of loans or advances, or other transfers of assets, in
each case to the Company or any Restricted Subsidiary (except to the extent any
such payment is included in the calculation of Adjusted Consolidated Net
Income), or from redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of
"Investments"), not to exceed the amount of Investments previously made by the
Company and its Restricted Subsidiaries in such Person.
The foregoing provision shall not be violated by reason of:
(i)the payment of any dividend within 60 days after the date
of declaration thereof if, at said date of declaration, such payment
would comply with the foregoing paragraph;
(ii)the redemption, repurchase, defeasance or other
acquisition or retirement for value of Indebtedness that is
subordinated in right of payment to the Securities, including premium,
if any, and accrued and unpaid interest, with the proceeds of, or in
exchange for, Indebtedness Incurred under clause (iii) of the second
paragraph of Section 4.03;
(iiithe repurchase, redemption or other acquisition of Capital
Stock of the Company (or options, warrants or other rights to acquire
such Capital Stock) in exchange for, or out of the proceeds (other than
Allocated Proceeds), of a substantially concurrent sale of, shares of
Capital Stock or options, warrants or other rights to acquire such
Capital Stock (in each case other than Redeemable Stock) of the
Company;
(iv)the making of any other Restricted Payment made by
exchange for, or out of the proceeds (other than Allocated Proceeds)
of, a substantially concurrent sale of, shares of the Capital Stock or
options, warrants or other rights to acquire such Capital Stock (in
each case other than Redeemable Stock) of the Company;
(v)payments or distributions, in the nature of satisfaction
of dissenters' rights, pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with the
provisions of this Indenture applicable to mergers, consolidations and
transfers of all or substantially all of the property and assets of the
Company;
(vi)Investments, not to exceed $30,000,000 at any one time
outstanding;
(vii) Investments, not to exceed $30,000,000 at any one time
outstanding, in entities, substantially all of the assets of which
consist of Telecommunications Assets;
(vii)(A) cash payments in lieu of the issuance of fractional
shares of Common Stock upon conversion (including mandatory
conversion) of the Convertible Notes provided for in the Convertible
Notes Indenture and (B) cash payments on the Convertible Notes
required to be made under the provisions of the Convertible Notes
Indenture that relate to repurchases of Convertible Notes upon a
change of control and that relate to limitations on sales of assets;
31
(ix)cash payments in lieu of the issuance of fractional shares
of Common Stock of the Company upon conversion of any class of
Preferred Stock of the Company; provided, however, that this exception
shall not be available with respect to more than two such conversions
with respect to any such class of Preferred Stock by any given
Affiliate of the Company;
(x)Investments in entities that directly (or indirectly
through subsidiaries) own licenses granted by the FCC or any other
governmental entity with authority to grant telecommunications
licenses; provided, however, that, in each case the Company or a
Restricted Subsidiary shall, at the time of making such Investment,
have an active role in the management or operation of such entity and
in the provision of telecommunications services by such entity; and
(xi)the redemption of the shares of Exchangeable Preferred Stock
upon mandatory redemption on December 15, 2007;
provided, however, that, except in the case of clauses (i) and (iii) of this
paragraph, no Default or Event of Default shall have occurred and be continuing
or occur as a consequence of the actions or payments set forth herein. Any
Investments made other than in cash shall be valued, in good faith, by the Board
of Directors. Any Investment made pursuant to clause (vi) or (vii) of this
paragraph shall be deemed to be no longer outstanding (and repaid in full) if
and when the Person in which such Investment is made becomes a Restricted
Subsidiary of the Company.
Each Restricted Payment permitted pursuant to the preceding
paragraph (other than the Restricted Payment referred to in clause (ii)
thereof), and the Net Cash Proceeds from any issuance and sale of Capital Stock
referred to in clauses (iii) or (iv) shall be included in calculating whether
the conditions of clause (C) of the first paragraph of this Section 4.05 have
been met with respect to any subsequent Restricted Payments. In the event the
proceeds of an issuance of Capital Stock of the Company are used for the
redemption, repurchase or other acquisition of the Securities or Indebtedness
that is pari passu with the Securities, then the Net Cash Proceeds of such
issuance shall be included in clause (C) of the first paragraph of this Section
4.05 only to the extent such proceeds are not used for such redemption,
repurchase or other acquisition of the Securities or such Indebtedness.
SECTION 4.06. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries. The Company will not, and will
not permit any Restricted Subsidiary to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Restricted Subsidiary to:
(i)pay dividends or make any other distributions permitted by
applicable law on any Capital Stock of such Restricted Subsidiary owned
by the Company or any other Restricted Subsidiary;
(ii)pay any Indebtedness owed to the Company or any other
Restricted Subsidiary that owns, directly or indirectly, any Capital
Stock of such Restricted Subsidiary;
32
(iii) make loans or advances to the Company or any other
Restricted Subsidiary that owns, directly or indirectly, any Capital
Stock of such Restricted Subsidiary; or
(iv)transfer any of its property or assets to the Company or any
other Restricted Subsidiary that owns, directly or indirectly, any
Capital Stock of such Restricted Subsidiary.
The foregoing provisions shall not prohibit any encumbrances
or restrictions:
(i)existing on the Issue Date in this Indenture or any other
agreement in effect on the Issue Date, and any extensions,
refinancings, renewals or replacements of such agreements; provided,
however, that the encumbrances and restrictions in any such extensions,
refinancings, renewals or replacements are no less favorable in any
material respect to the Holders than those encumbrances or restrictions
that are then in effect and that are being extended, refinanced,
renewed or replaced;
(ii)existing under or by reason of applicable law;
(iii) existing with respect to any Person or the property or
assets of such Person acquired by the Company or any Restricted
Subsidiary, at the time of such acquisition and not incurred in
contemplation thereof, which encumbrances or restrictions are not
applicable to any Person or the property or assets of any Person other
than such Person or the property or assets of such Person so acquired;
(iv)in the case of clause (iv) of the first paragraph of this
Section 4.06, (A) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset, (B)
existing by virtue of any transfer of, agreement to transfer, option or
right with respect to, or Lien on, any property or assets of the
Company or any Restricted Subsidiary not otherwise prohibited by this
Indenture or (C) arising or agreed to in the ordinary course of
business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of property or
assets of the Company or any Restricted Subsidiary in any manner
material to the Company or any Restricted Subsidiary; or
(v)with respect to a Restricted Subsidiary and imposed
pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock of, or
property and assets of, such Restricted Subsidiary. Nothing contained
in this Section 4.06 shall prevent the Company or any Restricted
Subsidiary from (A) restricting the sale or other disposition of
property or assets of the Company or any of its Restricted Subsidiaries
that secure Indebtedness of the Company or any of its Restricted
Subsidiaries or (B) creating, incurring, assuming or suffering to exist
any Liens otherwise permitted pursuant to the indenture relating to the
1997 Senior Notes as in effect on the Deemed Closing Date.
33
SECTION 4.07. Limitation on the Issuance and Sale of Capital
Stock of Restricted Subsidiaries. The Company will not sell, and will not permit
any Restricted Subsidiary, directly or indirectly, to issue or sell any shares
of Capital Stock of a Restricted Subsidiary (including options, warrants or
other rights to purchase shares of such Capital Stock) except:
(i)to the Company or a Wholly Owned Restricted Subsidiary;
(ii)issuances or sales to foreign nationals of shares of Capital
Stock of foreign Restricted Subsidiaries;
(iii) if, immediately after giving effect to such issuance or
sale, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary; or
(iv)issuances or sales of Common Stock of Restricted
Subsidiaries, other than the Telecommunications Subsidiaries, if
within six months of each such issuance or sale, the Company or such
Restricted Subsidiary applies an amount not less than the Net Cash
Proceeds thereof (if any) in accordance with clause (A) or (B) of the
first paragraph of Section 4.10.
SECTION 4.08. Limitation on Issuances of Guarantees by
Restricted Subsidiaries. The Company will not permit any Restricted Subsidiary,
directly or indirectly, to Guarantee any Indebtedness of the Company
("Guaranteed Indebtedness"), unless (i) such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture to this Indenture
providing for a Guarantee (a "Subsidiary Guarantee") of payment of the
Securities by such Restricted Subsidiary and (ii) such Restricted Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Restricted Subsidiary as a result of any
payment by such Restricted Subsidiary under its Subsidiary Guarantee; provided,
however, that this paragraph shall not be applicable to any Guarantee of any
Restricted Subsidiary that (x) existed at the time such Person became a
Restricted Subsidiary and (y) was not Incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary. 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 Subsidiary Guarantee or (B) subordinated to the Securities,
then the Guarantee of such Guaranteed Indebtedness shall be subordinated to the
Subsidiary Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated to the Securities.
Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Subsidiary shall provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Company of all of the Company's
and each Restricted Subsidiary's Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by this Indenture) or (ii) the release or discharge of the
Guarantee which resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by or as a result of payment under such Guarantee.
SECTION 4.09. Limitation on Transactions with Shareholders and
Affiliates. The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into, renew or extend any transaction
(including, without
34
limitation, the purchase, sale, lease or exchange of property or assets, or the
rendering of any service) with any holder (or any Affiliate of such holder) of
5% or more of any class of Capital Stock of the Company or with any Affiliate of
the Company or any Restricted Subsidiary, except upon fair and reasonable terms
no less favorable to the Company or such Restricted Subsidiary than could be
obtained, at the time of such transaction or, if such transaction is pursuant to
a written agreement, at the time of the execution of the agreement providing
therefor, in a comparable arm's-length transaction with a Person that is not
such a holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply
to (i) transactions (A) approved by a majority of the disinterested members of
the Board of Directors or (B) for which the Company or a Restricted Subsidiary
delivers to the Trustee a written opinion of a nationally recognized investment
banking firm stating that the transaction is fair to the Company or such
Restricted Subsidiary from a financial point of view; (ii) any transaction
solely between the Company and any of its Wholly Owned Restricted Subsidiaries
or solely between Wholly Owned Restricted Subsidiaries; (iii) the payment of
reasonable fees to directors of the Company who are not employees of the
Company; (iv) any payments or other transactions pursuant to any tax-sharing
agreement between the Company and any other Person with which the Company files
a consolidated tax return or with which the Company is part of a consolidated
group for tax purposes; or (v) any Restricted Payments not prohibited by the
provisions of Section 4.05 (other than pursuant to clause (iv) of the definition
of "Permitted Investment" or clause (vi) of the second paragraph of Section
4.05). Notwithstanding the foregoing, any transaction (or series of related
transactions) with any Unrestricted Subsidiary covered by the first paragraph of
this Section 4.09 and not covered by clauses (i) through (v) of this paragraph,
the aggregate amount of which does not exceed $250,000 in value in any year will
not be covered by this Section 4.09 and, if the aggregate value of such
transaction exceeds $250,000 in any year, will not be covered by this Section
4.09 if such transaction has been determined by the Board of Directors to be
fair to the Company.
SECTION 4.10. Limitation on Asset Sales. The Company will not,
and will not permit any Restricted Subsidiary to, consummate any Asset Sale,
unless (i) the consideration received by the Company or such Restricted
Subsidiary is at least equal to the fair market value of the assets sold or
disposed of and (ii) at least 85% of the consideration received consists of cash
or Temporary Cash Investments. In the event and to the extent that the Net Cash
Proceeds received by the Company or its Restricted Subsidiaries from one or more
Asset Sales occurring on or after the Issue Date in any period of 12 consecutive
months exceed 10% of Adjusted Consolidated Net Tangible Assets (determined as of
the date closest to the commencement of such 12-month period for which a
consolidated balance sheet of the Company and its Subsidiaries has been
prepared), then the Company shall or shall cause the relevant Restricted
Subsidiary to (i) within six months after the date Net Cash Proceeds so received
exceed 10% of Adjusted Consolidated Net Tangible Assets (A) apply an amount
equal to such excess Net Cash Proceeds to permanently repay unsubordinated
Indebtedness of the Company, or Indebtedness of any Restricted Subsidiary, in
each case owing to a Person other than the Company or any of its Restricted
Subsidiaries or (B) invest an equal amount, or the amount not so applied
pursuant to clause (A) (or enter into a definitive agreement committing to so
invest within six months after the date of such agreement), in property or
assets of a nature or type or that are used in a business (or in a company
having property and assets of a nature or type, or engaged in a business)
similar or related to the nature or type of the property and assets of, or the
business of, the Company and its
35
Restricted Subsidiaries existing on the date of such investment (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and evidenced by a Board Resolution) and (ii) apply (no later than the end of
the six-month period referred to in clause (i)) such excess Net Cash Proceeds
(to the extent not applied pursuant to clause (i)) as provided in the following
paragraph of this Section 4.10. The amount of such excess Net Cash Proceeds
required to be applied (or to be committed to be applied) during such six-month
period as set forth in clause (i) of the preceding sentence and not applied as
so required by the end of such period shall constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate
amount of Excess Proceeds not theretofore subject to an Offer to Purchase
pursuant to this Section 4.10 totals at least $10,000,000, the Company must
commence, not later than the 15th Business Day after the first day of such
month, and consummate an Offer to Purchase from the Holders and from the holders
of the Cash-Pay Notes on a pro rata basis an aggregate principal amount of
Securities and Cash-Pay Notes equal to the Excess Proceeds on such date of
purchase, at a purchase price equal to 101% of the Accumulated Amount of such
Securities or the principal amount of the Cash-Pay Notes on such date of
purchase, plus accrued and unpaid interest (if any) on such Accumulated Amount
of Securities or principal amount of Cash-Pay Notes, as the case may be, to the
date of purchase; provided, however, that no Offer to Purchase shall be required
to be commenced with respect to the Securities or the Cash-Pay Notes until the
Business Day following the payment date with respect to the Offer to Purchase
any 1997 Notes and need not be commenced if the Excess Proceeds remaining after
application thereof to the 1997 Notes purchased in such Offer to Purchase
applicable thereto are less than $10,000,000; provided further, however, that no
Securities or Cash-Pay Notes may be purchased under this Section 4.10 unless the
Company shall have purchased all 1997 Notes tendered pursuant to such Offer to
Purchase applicable thereto.
SECTION 4.11. Repurchase of Securities upon a Change of
Control. The Company must commence, within 30 days of the occurrence of a Change
of Control, and consummate an Offer to Purchase for all the Securities then
outstanding, at a purchase price equal to 101% of the Accumulated Amount of the
Securities on the date of purchase, plus accrued and unpaid interest (if any) on
such Accumulated Amount to the date of purchase. Prior to the mailing of the
notice to Holders of Securities commencing such Offer to Purchase, but in any
event within 30 days following any Change of Control, the Company covenants to
(i) repay in full all indebtedness of the Company that would prohibit the
repurchase of the Securities pursuant to such Offer to Purchase or (ii) obtain
any requisite consents under instruments governing any such indebtedness of the
Company to permit the repurchase of the Securities. The Company shall first
comply with the covenant in the preceding sentence before it shall repurchase
Securities pursuant to this Section 4.11.
The Company may not repurchase any Securities (or any other
subordinated obligations, including the Cash-Pay Notes, the 1997 Senior
Subordinated Notes, the Exchange Debentures and the Convertible Notes) pursuant
to this Section 4.11 until it has repurchased all of the 1995 Senior Notes and
the 1997 Senior Notes and has caused each of WEC and WEC II to repurchase all of
the WEC Equipment Notes and WEC II Equipment Notes, respectively, tendered
pursuant to any Offer to Purchase as a result of such Change of Control.
However, if the Company is unable to repay all of its Indebtedness that would
prohibit repurchase of the Securities or is unable to obtain the
36
consents of the holders of Indebtedness, if any, of the Company outstanding at
the time of a Change of Control whose consent would be so required to permit the
repurchase of Securities or otherwise fails to purchase any Securities validly
tendered, then the Company will have breached this Section 4.11. This breach
will constitute an Event of Default under this Indenture if it continues for a
period of 30 consecutive days after written notice is given to the Company by
the Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities outstanding. In addition, the failure by the Company to repurchase
Securities at the conclusion of the Offer to Purchase will constitute an Event
of Default without any waiting period or notice requirements.
SECTION 4.12. Existence. Subject to Articles Four and Five of
this Indenture, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and the existence of
each of its Restricted Subsidiaries in accordance with the respective
organizational documents of the Company and each such Subsidiary and the rights
(whether pursuant to charter, partnership certificate, agreement, statute or
otherwise), material licenses and franchises of the Company and each such
Subsidiary; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the existence of any
Restricted Subsidiary (other than of the Company), if the maintenance or
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries taken as a whole. In addition, the
Company agrees to take such actions, within a reasonable time after the Issue
Date (and in any event prior to any proceeding initiated regarding the
dissolution of the Company), as may be necessary to ensure that it shall be in
good standing under the laws of the jurisdiction of its incorporation.
SECTION 4.13. Payment of Taxes and Other Claims. The Company
will pay or discharge and shall cause each of its Subsidiaries to pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent (i) all material taxes, assessments and governmental charges levied
or imposed upon (a) the Company or any such Subsidiary, (b) the income or
profits of any such Subsidiary which is a corporation or (c) the property of the
Company or any such Subsidiary and (ii) all material lawful claims for labor,
materials and supplies that, if unpaid, might by law become a lien upon the
property of the Company or any such 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 the amount, applicability
or validity of which is being contested in good faith by appropriate proceedings
and for which adequate reserves have been established.
SECTION 4.14. Maintenance of Properties and Insurance. The
Company will cause all properties used or useful in the conduct of its business
or the business of any of its Restricted Subsidiaries, to be maintained and kept
in reasonable condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the 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 4.14 shall prevent the Company or any such
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 Company, desirable in the conduct of the business of the
Company or such Subsidiary.
37
The Company will provide or cause to be provided, for itself
and its Restricted Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds customarily insured against
by corporations similarly situated and owning like properties, including, but
not limited to, product liability insurance and public liability insurance, with
reputable insurers or with the government of the United States of America, or an
agency or instrumentality thereof, in such amounts, with such deductibles and by
such methods as shall be customary for corporations similarly situated in the
industry in which the Company or such Restricted Subsidiary, as the case may be,
is then conducting business.
SECTION 4.15. Notice of Defaults. In the event that the
Company becomes aware of any Default or Event of Default, the Company, promptly
after it becomes aware thereof, will give written notice thereof to the Trustee.
SECTION 4.16. Compliance Certificates. (a) Beginning with
respect to the fiscal year ended December 31, 1998, the Company shall deliver to
the Trustee, within 90 days after the end of the Company's fiscal year, an
Officers' Certificate stating whether or not the signers know of any Default or
Event of Default that occurred during such fiscal year. Such certificates shall
contain a certification from the principal executive officer, principal
financial officer or principal accounting officer of the Company that a review
has been conducted of the activities of the Company and the Restricted
Subsidiaries and the Company's and the Restricted Subsidiaries' performance
under this Indenture and that, to the best knowledge of such officer, the
Company has complied with all conditions and covenants under this Indenture. For
purposes of this Section 4.16, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture. If they do know of such a Default or Event of Default, the
certificate shall describe any such Default or Event of Default and its status.
(b) Beginning with respect to the fiscal year ended December
31, 1998, the Company shall (to the extent not prohibited by applicable
accounting rules) deliver to the Trustee, within 90 days after the end of its
fiscal year, a certificate signed by the Company's independent certified public
accountants stating (i) that their audit examination has included a review of
the terms of this Indenture and the Securities as they relate to accounting
matters, (ii) that they have read the most recent Officers' Certificate
delivered to the Trustee pursuant to paragraph (a) of this Section 4.16 and
(iii) whether, in connection with their audit examination, anything came to
their attention that caused them to believe that the Company, as the case may
be, was not in compliance with any of the terms, covenants, provisions or
conditions of Article Four and Section 5.01 of this Indenture as they pertain to
accounting matters and, if any Default or Event of Default has come to their
attention, specifying the nature and period of existence thereof; provided,
however, that such independent certified public accountants shall not be liable
in respect of such statement by reason of any failure to obtain knowledge of any
such Default or Event of Default that would not be disclosed in the course of an
audit examination conducted in accordance with generally accepted auditing
standards in effect at the date of such examination.
(c) Within 90 days after the end of the Company's fiscal year,
the Company shall deliver to the Trustee a list of all Significant Subsidiaries.
The Trustee shall have no duty with respect to any such list except to keep it
on file and available for inspection by the Holders.
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SECTION 4.17. SEC Reports and Reports to Holders. Whether or
not the Company is required to file reports with the SEC, if any Securities are
outstanding, the Company shall file with the SEC, all such reports and other
information as it would be required to file with the SEC by Sections 13(a) or
15(d) under the Exchange Act. The Company shall supply the Trustee and each
Holder of Securities or shall supply to the Trustee for forwarding to each such
Holder, without cost to the Trustee or such Holder, copies of such reports or
other information.
SECTION 4.18. Waiver of Stay, Extension or Usury Laws. The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or that 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 will not hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc. The Company shall
not consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person (other than a consolidation or merger with or into
a Wholly Owned Restricted Subsidiary with a positive net worth; provided,
however, that, in connection with any such merger or consolidation, no
consideration (other than Common Stock in the surviving Person or the Company)
shall be issued or distributed to the stockholders of the Company) or permit any
Person to merge with or into the Company unless:
(i) the Company shall be the continuing Person, or the Person
(if other than the Company) formed by such consolidation or into which
the Company is merged or that acquired or leased such property and
assets of the Company shall be a corporation organized and validly
existing under the laws of the United States of America or any
jurisdiction thereof and shall expressly assume, by a supplemental
indenture, executed and delivered to the Trustee, all of the
obligations of the Company on all of the Securities and under this
Indenture;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a
pro forma basis, the Company or any Person becoming the successor
obligor of the Securities shall have a Consolidated Net Worth equal to
or greater than the Consolidated Net Worth of the Company immediately
prior to such transaction;
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(iv) immediately after giving effect to such transaction on a
pro forma basis the Company, or any Person becoming the successor
obligor of the Securities, could Incur at least $1.00 of Indebtedness
under the first paragraph of Section 4.03, and
(v) the Company delivers to the Trustee an Officers'
Certificate (attaching the arithmetic computations to demonstrate
compliance with clauses (iii) and, if applicable, (iv)) and Opinion of
Counsel, in each case stating that such consolidation, merger or
transfer and such supplemental indenture complies with the provisions
of this Section 5.01 and that all conditions precedent provided for
herein relating to such transaction have been complied with;
provided, however, that clauses (iii) and (iv) above do not apply if, in the
good faith determination of the Board of Directors of the Company, whose
determination shall be evidenced by a Board Resolution, the principal purpose of
such transaction is to change the state of incorporation of the Company;
provided further, however, that any such transaction shall not have as one of
its purposes the evasion of the foregoing limitations.
SECTION 5.02. Successor Substituted. Upon any consolidation or
merger, or any sale, conveyance, transfer or other disposition of all or
substantially all of the property and assets of the Company in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. An "Event of Default" shall
occur with respect to the Securities if:
(a) the Company defaults in the payment of principal of (or
premium, if any, on) any Security when the same becomes due and payable
at maturity, upon acceleration, redemption or otherwise, whether or not
such payment is prohibited by the provisions of Article Ten;
(b) the Company defaults in the payment of interest on any
Security when the same becomes due and payable, and such default
continues for a period of 30 days, whether or not such payment is
prohibited pursuant to the provisions of Article 10;
(c) the Company defaults in the performance of or breaches any
other covenant or agreement of the Company contained in this Indenture
or under the Securities, and such default or breach continues for a
period of 30 consecutive days after written notice by the Trustee or
the Holders of 25% or more in aggregate principal amount of the
Securities;
40
(d) there occurs with respect to any issue or issues of
Indebtedness of the Company or any Significant Subsidiary having an
outstanding principal amount of $25,000,000 or more in the aggregate
for all such issues of all such Persons, whether such Indebtedness now
exists or shall hereafter be created, (i) an event of default that has
caused the holder thereof to declare such Indebtedness to be due and
payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or
annulled within 30 days of such acceleration and/or (ii) the failure to
make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or
extended within 30 days of such payment default;
(e) any final judgment or order (not covered by insurance) for
the payment of money in excess of $25,000,000 in the aggregate for all
such final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Significant Subsidiary and shall
not be paid or discharged, and there shall be any period of 60
consecutive days following entry of the final judgment or order that
causes the aggregate amount for all such final judgments or orders
outstanding and not paid or discharged against all such Persons to
exceed $25,000,000 during which a stay of enforcement of such final
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect;
(f) a court having jurisdiction in the premises enters a
decree or order for (i) relief in respect of the Company or any
Significant Subsidiary in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
(ii) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property
and assets of the Company or any Significant Subsidiary or (iii) the
winding up or liquidation of the affairs of the Company or any
Significant Subsidiary and, in each case, such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(g) the Company or any Significant Subsidiary (i) commences a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an
order for relief in an involuntary case under any such law, (ii)
consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any
Significant Subsidiary or (iii) effects any general assignment for the
benefit of creditors.
SECTION 6.02. Acceleration. If an Event of Default (other than
an Event of Default specified in clause (f) or (g) of Section 6.01 that occurs
with respect to the Company) occurs and is continuing under this Indenture, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding, by written notice to the Company (and to the
Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the principal of, premium, if any, and
accrued interest on the Securities to be immediately due and payable. Upon a
declaration of acceleration, such principal, premium, if any, and accrued
interest shall be immediately due and payable. In the event of a declaration of
41
acceleration because an Event of Default set forth in clause (d) of Section 6.01
has occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (d) shall be remedied or cured by the
Company or the relevant Significant Subsidiary or waived by the holders of the
relevant Indebtedness within 60 days after the declaration of acceleration with
respect thereto. If an Event of Default specified in clause (f) or (g) of
Section 6.01 occurs with respect to the Company, the principal of, premium, if
any, and accrued interest on the Securities then outstanding shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration, but
before a judgment or decree for the payment of the money due has been obtained
by the Trustee, the Holders of at least a majority in principal amount of the
outstanding Securities, by written notice to the Company and to the Trustee, may
waive all past Defaults and rescind and annul such declaration of acceleration
and its consequences if (a) the Company has paid or deposited with the Trustee a
sum sufficient to pay (i) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, (ii) all overdue interest on all Securities,
(iii) the principal of and premium, if any, on any Securities that have become
due otherwise than by such declaration or occurrence of acceleration and
interest thereon at the rate prescribed therefor by such Securities, and (iv) to
the extent that payment of such interest is lawful, interest upon overdue
interest at the rate prescribed therefor by such Securities, (b) all existing
Events of Default, other than the nonpayment of the principal of, premium, if
any, and accrued interest on the Securities that have become due solely by such
declaration of acceleration, have been cured or waived and (c) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction.
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, premium, if any, or
interest on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
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.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections
6.02, 6.07 and 9.02, the Holders of at least a majority in principal amount of
the outstanding Securities, by written notice to the Trustee, may waive all past
Defaults and Events of Default and rescind and annul a declaration of
acceleration (except a Default in the payment of principal of, premium, if any,
or interest on any Security as specified in clause (a) or (b) of Section 6.01 or
in respect of a covenant or provision of this Indenture which cannot be modified
or amended without the consent of the holder of each outstanding Security
affected) if (i) all existing Events of Default, other than the nonpayment of
principal of, premium, if any, or interest on the Securities that have become
due solely by such declaration of acceleration, have been cured or waived and
(ii) the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction. Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this
42
Indenture; but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereto.
SECTION 6.05. Control by Majority. The Holders of at least a
majority in aggregate 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 the Trustee;
provided, however, that the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that may involve the Trustee in personal
liability, or that the Trustee determines in good faith may be unduly
prejudicial to the rights of Holders not joining in the giving of such
direction; and provided further, however, that the Trustee may take any other
action it deems proper that is not inconsistent with any directions received
from Holders of Securities pursuant to this Section 6.05.
SECTION 6.06. Limitation on Suits. A Holder or Holders may not
institute any proceeding, judicial or otherwise, with respect to this Indenture
or the Securities, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder or Holders have previously given to the Trustee
written notice of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount
of outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to the Trustee against any costs, liabilities
or expenses to be incurred in compliance with such request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Securities have not given the
Trustee a direction that is inconsistent with such written request.
For purposes of Section 6.05 of this Indenture and this
Section 6.06, the Trustee shall comply with TIA Section 316(a) in making any
determination of whether the Holders of the required aggregate principal amount
of outstanding Securities have concurred in any request or direction of the
Trustee to pursue any remedy available to the Trustee or the Holders with
respect to this Indenture or the Securities or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Security to receive payment of principal of, premium, if any, or interest
on such Holder's Security on or after the respective due dates expressed on such
Security, or to bring suit for the enforcement
43
of any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default in payment of principal, premium or interest specified in clause (a),
(b) or (c) of Section 6.01 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 of the Securities for the whole amount of principal,
premium, if any, and accrued interest remaining unpaid, together with interest
on overdue principal, premium, if any, and, to the extent that payment of such
interest is lawful, interest on overdue installments of interest, in each case
at the rate specified in 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 any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor of the Securities), its creditors or its
property and shall be entitled and empowered to collect and receive any monies,
securities or other property payable or deliverable upon conversion or exchange
of the Securities or upon any such claims and to distribute the same, and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay 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 empower the Trustee to authorize or consent to, or accept or adopt on
behalf of any Holder, any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. Priorities. If the Trustee holds or collects
any money or property pursuant to this Article Six, it shall pay out the money
or property in the following order:
First: to the Trustee for all amounts due under Section 7.07;
Second: to Holders for amounts then due and unpaid for principal
of, premium, if any, and interest on the Securities in respect of
which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium, if
any, and interest, respectively; and
Third: to the Company or any other obligors of the Securities, as
their interests may appear, or as a court of competent jurisdiction
may direct.
44
The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment to Holders 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 may
require any party litigant in such suit to file an undertaking to pay the costs
of the suit, and the court may assess reasonable costs, including reasonable
attorneys' fees, 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 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 of this Indenture, or a suit by Holders of more than
10% in principal amount of the outstanding Securities.
SECTION 6.12. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then, and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Company, Trustee and the Holders shall continue as though no
such proceeding has been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or wrongfully taken Securities in Section 2.07, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article Six or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General. The duties and responsibilities of the
Trustee shall be as provided by the TIA and as set forth herein. Whether or not
herein expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Article Seven.
45
SECTION 7.02. Certain Rights of Trustee. Subject to TIA
Sections 315(a) through (d):
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document and may in good faith
conclusively rely as to the truth of the statements and the correctness
of the opinions therein;
(ii) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good
faith in reliance on such certificate, opinion and/or an accountants'
certificate;
(iii) the Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care;
(iv) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders, unless such Holders shall have
offered to the Trustee security or indemnity reasonably satisfactory to
it against the costs, expenses and liabilities that might be incurred
by it in compliance with such request or direction;
(v) the Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within
its rights or powers or for any action it takes or omits to take in
accordance with the direction of the Holders of a majority in principal
amount of the Outstanding Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture; provided, however, that the Trustee's conduct
does not constitute negligence or bad faith;
(vi) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a fact or circumstance be proved
or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, request and
rely upon an Officer's Certificate;
(vii) 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; and
46
(viii) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a written Company Order and
any resolution of the Board of Directors may be sufficiently evidenced
by a written Board Resolution.
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 the Trustee. Any Agent may do the same
with like rights. However, the Trustee is subject to TIA Sections 310(b) and
311.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the
Securities, (ii) shall not be accountable for the Company's use or application
of the proceeds from the Securities and (iii) shall not be responsible for any
statement in the Securities other than its certificate of authentication.
SECTION 7.05. Notice of Default. If any Default or any Event
of Default occurs and is continuing and if such Default or Event of Default is
known to a trust officer of the Trustee, the Trustee shall mail to each Holder
in the manner and to the extent provided in TIA Section 313(c) notice of the
Default or Event of Default within five Business Days after it occurs, unless
such Default or Event of Default has been cured; provided, however, that, except
in the case of a default in the payment of the principal of, premium, if any, or
interest on any Security, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or the Responsible Officer of the Trustee in
good faith determines that the withholding of such notice is in the interest of
the Holders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days
after each May 15, beginning with May 15, 1999, the Trustee shall mail to each
Holder as provided in TIA Section 313(c) a brief report that complies with TIA
Section 313(a) dated as of such May 15, if required by TIA Section 313(a).
SECTION 7.07. Compensation and Indemnity. The Company shall
pay to the Trustee from time to time and upon the Trustee's request such
compensation as shall be agreed upon in writing for its services in any capacity
hereunder. The compensation of the Trustee 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 out-of-pocket expenses and advances
incurred or made by the Trustee; provided, however, that the Trustee shall be
under no obligation whatsoever under this Indenture or any other document
delivered in connection with the Securities, to advance or expend its own funds.
Such expenses shall include the reasonable compensation and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it
harmless against, any loss or liability or expense incurred by it without
negligence or bad faith on its part in connection with the acceptance or
administration of this Indenture and its duties under this Indenture and the
Securities, including, without limitation, the costs and expenses of defending
itself against any claim or liability and of complying with any process served
upon it or any of its officers in connection with the exercise or performance of
any of its powers or duties under this Indenture and the Securities.
47
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a lien prior to the Securities on 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, premium, if any, and
interest on particular Securities.
If the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in clause (f) or (g) of Section
6.01, the expenses and the compensation for the services are intended to
constitute expenses of administration under Title 11 of the United States
Bankruptcy Code or any applicable federal or state law for the relief of
debtors.
SECTION 7.08. Replacement of Trustee. A resignation or removal
of the Trustee and appointment of a successor Trustee shall become effective
only upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08.
The Trustee may resign at any time by so notifying the Company
in writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the outstanding Securities may
remove the Trustee by so notifying the Trustee in writing and may appoint a
successor Trustee with the consent of the Company. The Company may at any time
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 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 outstanding Securities may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company. If the successor Trustee does not deliver its written acceptance
required by the next succeeding paragraph of this Section 7.08 within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after the
delivery of such written acceptance, either subject to the lien provided in
Section 7.07 or less amounts retained by the retiring Trustee to satisfy amounts
owed to it pursuant to the terms of this Indenture, including but not limited to
Section 7.07 hereof, as the retiring Trustee determines, (i) the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee, (ii) the resignation or removal of the retiring Trustee shall become
effective and (iii) the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder.
If the Trustee is no longer eligible under Section 7.10, any
Holder who satisfies the requirements of TIA Section 310(b) may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
The Company shall give notice of any resignation and any
removal of the Trustee and each appointment of a successor Trustee to all
Holders. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
48
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 shall continue
indefinitely 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 national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
SECTION 7.10. Eligibility. This Indenture shall always have a
Trustee who satisfies the requirements of TIA Section 310(a)(1). The Trustee
shall have a combined capital and surplus of at least $25,000,000 as set forth
in its most recent published annual report of condition.
SECTION 7.11. Money Held in Trust. The Trustee shall not be
liable for interest on any money received by it except as the Trustee may agree
in writing with the Company. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law and except for
money held in trust under Article Eight of this Indenture.
SECTION 7.12. Withholding Taxes. The Trustee, as agent for the
Company, shall exclude and withhold from each payment of principal and interest
and other amounts due hereunder or under the Securities any and all withholding
taxes applicable thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any amounts
payable in respect of the Securities, to withhold such amounts and timely pay
the same to the appropriate authority in the name of and on behalf of the
holders of the Securities, that it will file any necessary withholding tax
returns or statements when due, and that, as promptly as possible after the
payment thereof, it will deliver to each Holder of a Security appropriate
documentation showing the payment thereof, together with such additional
documentary evidence as such Holders may reasonably request from time to time.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. Except as
otherwise provided in this Section 8.01, the Company may terminate its
obligations under the Securities and this Indenture if:
(i) all Securities previously authenticated and delivered
(other than destroyed, lost or stolen Securities that have been
replaced or Securities that are paid pursuant to Section 4.01 or
Securities for whose payment money or securities have theretofore been
held in trust and thereafter repaid to the Company, as provided in
Section 8.05) have been delivered to the Trustee for cancelation and
the Company has paid all sums payable by it hereunder; or
49
(ii) (A) the Securities mature within one year or all of them
are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption, (B)
the Company irrevocably deposits in trust with the Trustee during such
one-year period, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee, as trust funds solely
for the benefit of the Holders for that purpose, money or U.S.
Government Obligations sufficient (in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee), without
consideration of any reinvestment of any interest thereon, to pay
principal, premium, if any, and interest on the Securities to maturity
or redemption, as the case may be, and to pay all other sums payable by
it hereunder, (C) no Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such
deposit, (D) such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound and
(E) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with.
With respect to the foregoing clause (i), the Company's
obligations under Section 7.07 shall survive. With respect to the foregoing
clause (ii), the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06,
2.07, 2.11, 4.01, 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 shall survive until the
Securities are no longer outstanding. Thereafter, only the Company's obligations
in Sections 7.07, 8.05 and 8.06 shall survive. After any such irrevocable
deposit, the Trustee upon request shall acknowledge in writing the discharge of
the Company's obligations, as the case may be, under the Securities and this
Indenture except for those surviving obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The
Company will be deemed to have paid and will be discharged from any and all
obligations in respect of the Securities on the 123rd day (or, to the extent
applicable under clause (D) below, one year) after the date of the deposit
referred to in clause (A) of this Section 8.02 if:
(A) with reference to this Section 8.02, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10
of this Indenture) and conveyed all right, title and interest for the
benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust
funds in trust, specifically pledged to the Trustee for the benefit of
the Holders as security for payment of the principal of, premium, if
any, and interest, if any, on the Securities, and dedicated solely to,
the benefit of the Holders, in and to (1) money in an amount, (2) U.S.
Government Obligations that, through the payment of interest, premium,
if any, and principal in respect thereof in accordance with their
terms, will provide, not later than one day before the due date of any
payment referred to in this clause (A), money in an amount or (3) a
combination thereof in an amount sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such interest
and after payment of all federal,
50
state and local taxes or other charges and assessments in respect
thereof payable by the Trustee, the principal of, premium, if any, and
accrued interest on the outstanding Securities at the Stated Maturity
or earlier optional redemption of such principal or interest; provided,
however, that the Trustee shall have been irrevocably instructed to
apply such money or the proceeds of such U.S. Government Obligations to
the payment of such principal, premium, if any, and interest with
respect to the Securities;
(B) such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(C) immediately after giving effect to such deposit on a pro
forma basis, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit; and no Default or Event of
Default shall occur during the period ending on the 123rd day (or one
year) after such date of deposit;
(D) the Company shall have delivered to the Trustee (1) either
(x) a ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders will not recognize income, gain
or loss for federal income tax purposes as a result of the Company's
exercise of its option under this Section 8.02 and will be subject to
federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such option had not been
exercised or (y) an Opinion of Counsel to the same effect as the ruling
described in clause (x) above accompanied by a ruling to that effect
published by the Internal Revenue Service, unless there has been a
change in the applicable federal income tax law since the date of this
Indenture such that a ruling from the Internal Revenue Service is no
longer required and (2) an Opinion of Counsel to the effect that (x)
the creation of the defeasance trust does not violate the Investment
Company Act of 1940 and (y) after the passage of 123 days following the
deposit (except, with respect to any trust funds for the account of any
Holder who may be deemed to be an "insider" for purposes of the United
States Bankruptcy Code, after one year following the deposit), the
trust funds will not be subject to the effect of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code or Section 15 of the New York Debtor and
Creditor Law in a case commenced by or against the Company under either
such statute, and either (i) the trust funds will no longer remain the
property of the Company (and therefore will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally) or (ii) if a court
were to rule under any such law in any case or proceeding that the
trust funds remained property of the Company (a) assuming such trust
funds remained in the possession of the Trustee prior to such court
ruling to the extent not paid to the Holders, the Trustee will hold,
for the benefit of the Holders, a valid and perfected security interest
in such trust funds that is not avoidable in bankruptcy or otherwise
except for the effect of Section 552(b) of the United States Bankruptcy
Code on interest on the trust funds accruing after the commencement of
a case under such statute and (b) the Holders will be entitled to
receive adequate protection of their interests in such trust funds if
such trust funds are used in such case or proceeding;
51
(E) if the Securities are then listed on a national securities
exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit defeasance and discharge will
not cause the Securities to be delisted; and
(F) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day
(or one year) period referred to in clause (D)(2)(y) of this Section 8.02, none
of the Company's obligations under this Indenture shall be discharged.
Subsequent to the end of such 123- day (or one year) period with respect to this
Section 8.02, the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05,
2.06, 2.07, 2.11, 4.01, 4.02, 7.07, 7.08, 8.05 and 8.06 shall survive until the
Securities are no longer outstanding. Thereafter, only the Company's obligations
in Sections 7.07, 8.05 and 8.06 shall survive. If and when a ruling from the
Internal Revenue Service or an Opinion of Counsel referred to in clause (D)(1)
of this Section 8.02 may be provided specifically without regard to, and not in
reliance upon, the continuance of the Company's obligations under Section 4.01,
then the Company's obligations under such Section 4.01 shall cease upon delivery
to the Trustee of such ruling or Opinion of Counsel and compliance with the
other conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02.
After any such irrevocable deposit, the Trustee upon written
request shall acknowledge in writing the discharge of the Company's obligations
under the Securities and this Indenture except for those surviving obligations
in the immediately preceding paragraph.
SECTION 8.03. Defeasance of Certain Obligations. The Company
may omit to comply with any term, provision or condition set forth in clauses
(iii) and (iv) of Section 5.01 and Sections 4.03 through 4.19, and clause (c) of
Section 6.01 with respect to clauses (iii) and (iv) of Section 5.01 and Sections
4.03 through 4.19, and clauses (d) and (e) of Section 6.01 shall be deemed not
to be Events of Default, in each case with respect to the outstanding Securities
if:
(i) with reference to this Section 8.03, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section
7.10) and conveyed all right, title and interest to the Trustee for the
benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust
funds in trust, specifically pledged to the Trustee for the benefit of
the Holders as security for payment of the principal of, premium, if
any, and interest, if any, on the Securities, and dedicated solely to,
the benefit of the Holders, in and to (A) money in an amount, (B) U.S.
Government Obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms, will
provide, not later than one day before the due date of any payment
referred to in this clause (i), money in an amount or (C) a combination
thereof in an amount sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof
52
delivered to the Trustee, to pay and discharge, without consideration
of the reinvestment of such interest and after payment of all federal,
state and local taxes or other charges and assessments in respect
thereof payable by the Trustee, the principal of, premium, if any, and
interest on the outstanding Securities on the Stated Maturity or
earlier optional redemption of such principal or interest; provided,
however, that the Trustee shall have been irrevocably instructed to
apply such money or the proceeds of such U.S. Government Obligations to
the payment of such principal, premium, if any, and interest with
respect to the Securities;
(ii) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it
is bound;
(iii) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit;
(iv) the Company has delivered to the Trustee an Opinion of
Counsel to the effect that (A) the creation of the defeasance trust
does not violate the Investment Company Act of 1940, (B) the Holders
have a valid first-priority security interest in the trust funds, (C)
the Holders will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and the defeasance of the
obligations referred to in the first paragraph of this Section 8.03 and
will be subject to federal income tax on the same amount and in the
same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred and (D) after the passage of
123 days following the deposit (except, with respect to any trust funds
for the account of any Holder who may be deemed to be an "insider" for
purposes of the United States Bankruptcy Code, after one year following
the deposit), the trust funds will not be subject to the effect of
▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code or Section 15 of the
New York Debtor and Creditor Law in a case commenced by or against the
Company under either such statute, and either (1) the trust funds will
no longer remain the property of the Company (and therefore will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally)
or (2) if a court were to rule under any such law in any case or
proceeding that the trust funds remained property of the Company (x)
assuming such trust funds remained in the possession of the Trustee
prior to such court ruling to the extent not paid to the Holders, the
Trustee will hold, for the benefit of the Holders, a valid and
perfected security interest in such trust funds that is not avoidable
in bankruptcy or otherwise (except for the effect of Section 552(b) of
the United States Bankruptcy Code on interest on the trust funds
accruing after the commencement of a case under such statute), (y) the
Holders will be entitled to receive adequate protection of their
interests in such trust funds if such trust funds are used in such case
or proceeding and (z) no property, rights in property or other
interests granted to the Trustee or the Holders in exchange for, or
with respect to, such trust funds will be subject to any prior rights
of holders of other Indebtedness of the Company or any of its
Subsidiaries;
(v) if the Securities are then listed on a national
securities exchange, the Company shall have delivered to the Trustee an
Opinion of Counsel to the
53
effect that such deposit defeasance and discharge will not cause the
Securities to be delisted; and
(vi) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. Application of Trust Money. Subject to Section
8.06, the Trustee or Paying Agent shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the
case may be, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with the Securities and this Indenture to
the payment of principal of, premium, if any, and interest on the Securities;
but such money need not be segregated from other funds except to the extent
required by law.
SECTION 8.05. Repayment to Company. Subject to Sections 7.07,
8.01, 8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the
Company upon request set forth in an Officers' Certificate any excess money held
by them at any time and thereupon shall be relieved from all liability with
respect to such money. The Trustee and the Paying Agent shall pay to the Company
upon request any money held by them for the payment of principal, premium, if
any, or interest that remains unclaimed for two years; provided, however, that
the Trustee or such Paying Agent before being required to make any payment shall
cause to be published at the expense of the Company once in a newspaper of
general circulation in the City of New York or mail to each Holder entitled to
such money at such Holder's address (as set forth in the Security Register)
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 will be repaid to the
Company. After payment to the Company, Holders entitled to such money must look
to the Company for payment as general creditors unless an applicable law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
Section 8.01, 8.02 or 8.03, as the case may be, 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, 8.02
or 8.03, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with Section 8.01, 8.02 or 8.03, as the case may be; provided, however, that, if
the Company has made any payment of principal of, premium, if any, or interest
on 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
or Paying Agent.
SECTION 8.07. Insiders. With respect to the determination of
the Persons constituting beneficial owners of Securities and whether any such
Person is an "insider" for purposes of Sections 8.02(D)(2)(y) and 8.03(iv)(D),
the Trustee may rely on an Officers' Certificate.
54
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Company, when
authorized by resolutions of its Board of Directors, and the Trustee may amend
or supplement this Indenture or the Securities without notice to or the consent
of any Holder:
(a) to cure any ambiguity, defect or inconsistency in this
Indenture; provided, however, that such amendments or supplements shall
not adversely affect the interests of the Holders in any material
respect;
(b) to comply with Article Five;
(c) to comply with any requirements of the SEC in connection
with the qualification of this Indenture under the TIA;
(d) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee; or
(e) to make any change that, in the opinion of the Board of
Directors of the Company evidenced by a Board Resolution, does not
materially and adversely affect the rights of any Holder.
SECTION 9.02. With Consent of Holders. Subject to Sections
6.04 and 6.07 and without prior notice to the Holders, the Company, when
authorized by its Board of Directors (as evidenced by a Board Resolution), and
the Trustee may amend this Indenture and the Securities with the written consent
of the Holders of a majority in principal amount of the Securities then
outstanding, and the Holders of a majority in principal amount of the Securities
then outstanding by written notice to the Trustee may waive future compliance by
the Company with any provision of this Indenture or the Securities.
Notwithstanding the provisions of this Section 9.02, without
the consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or adversely affect any right of repayment
at the option of any Holder of any Security, or the currency in which,
any Security or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date);
(ii) reduce the percentage in principal amount of
outstanding Securities the consent of whose Holders is required for any
such supplemental
55
indenture, for any waiver of compliance with certain provisions of this
Indenture or certain Defaults and their consequences provided for in
this Indenture;
(iii) waive a Default in the payment of principal of,
premium, if any, or interest on, any Security; or
(iv) modify any of the provisions of this Section 9.02,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each outstanding Security affected thereby.
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. The Company will
mail supplemental indentures to Holders upon request. 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 or waiver.
SECTION 9.03. Revocation and Effect of Consent. 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 a Security or
portion of a Security that evidences the same debt as the Security of the
consenting Holder, even if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder may revoke the consent as to its
Security or portion of its Security. Such revocation shall be effective only if
the Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective. An amendment, supplement or waiver shall
become effective on receipt by the Trustee of written consents from the Holders
of the requisite percentage in principal amount of the outstanding Securities.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the last two sentences of the immediately preceding paragraph,
those persons who were Holders 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 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 Holder unless it is of the type described in any of clauses (i)
through (v) of Section 9.02. In case of an amendment or waiver of the type
described in clauses (i) through (v) of Section 9.02, the amendment or waiver
shall bind each Holder who has consented to it and every subsequent Holder of a
Security that evidences the same indebtedness as the Security of the consenting
Holder.
SECTION 9.04. Notation on or Exchange of Securities. If an
amendment, supplement or waiver changes the terms of a Security, the Trustee may
56
require the Holder to deliver such Security to the Trustee. The Trustee may
place an appropriate notation on the Security about the changed terms and return
it to the Holder and the Trustee may place an appropriate notation on any
Security thereafter authenticated. 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.
SECTION 9.05. 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. Subject to the preceding sentence, the Trustee shall sign such
amendment, supplement or waiver if the same does not adversely affect the rights
of the Trustee. The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.06. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article Nine shall conform to
the requirements of the TIA as then in effect.
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Securities Subordinate to Senior Indebtedness.
The Company and the Trustee each covenants and agrees, and each Holder, by its
acceptance of a Security, likewise covenants and agrees, that all Securities
shall be issued subject to the subordination provisions contained in this
Article Ten, and each Holder of a Security, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that the Senior
Subordinated Obligations shall be, to the extent and in the manner set forth in
this Article Ten, subordinated in right of payment and subject to the prior
payment in full, in cash or cash equivalents, of all amounts payable under
Senior Indebtedness including, without limitation, the Company's obligations
under the Designated Senior Indebtedness and any interest accruing subsequent to
an event specified in Sections 6.01(f) and 6.01(g), whether or not such interest
is an allowed claim enforceable against the debtor under the United States
Bankruptcy Code. The Securities are pari passu with the Convertible Notes, the
1997 Senior Subordinated Notes, the Exchange Debentures and the Cash-Pay Notes.
SECTION 10.02. No Payment on Securities in Certain
Circumstances. (a) No direct or indirect payment by or on behalf of the Company
of any Senior Subordinated Obligations, whether pursuant to the terms of the
Securities or upon acceleration or otherwise, shall be made if, at the time of
such payment, there exists a default in the payment of all or any portion of the
obligations on any Senior Indebtedness, and such default shall not have been
cured or waived, or the benefits of this sentence waived by or on behalf of, the
holders of such Senior Indebtedness.
(b) In addition, during the continuance of any other event of
default with respect to any Designated Senior Indebtedness pursuant to which the
maturity thereof may be accelerated, upon receipt by the Trustee of written
notice from the trustee or
57
other representative for the holders of such Designated Senior Indebtedness (or
the holders of at least a majority in principal amount of such Designated Senior
Indebtedness then outstanding), no payment of Senior Subordinated Obligations
may be made by or on behalf of the Company upon or in respect of the Securities
for a period (a "Payment Blockage Period") commencing on the date of receipt of
such notice and ending 159 days thereafter (unless, in each case, such Payment
Blockage Period shall be terminated by written notice to the Trustee from such
trustee of, or other representatives for, such holders). Not more than one
Payment Blockage Period may be commenced with respect to the Securities during
any period of 360 consecutive days. Notwithstanding anything in this Indenture
to the contrary, there must be 180 consecutive days in any 360-day period in
which no Payment Blockage Period is in effect. No event of default that existed
or was continuing (it being acknowledged that any subsequent action that would
give rise to an event of default pursuant to any provision under which an event
of default previously existed or was continuing shall constitute a new event of
default for this purpose) on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or shall be made, the basis for the
commencement of a second Payment Blockage Period by the representative for, or
the holders of, such Designated Senior Indebtedness, whether or not within a
period of 360 consecutive days, unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder and the Trustee has
received notice pursuant to Section 10.12 that such payment is prohibited by
paragraphs (a) and (b) of this Section 10.02, the Trustee shall promptly notify
the holders of the Senior Indebtedness identified to the Trustee by the Company
as being holders of Senior Indebtedness of such prohibited payment and such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that, upon notice from the Trustee
to the holders of Senior Indebtedness that such prohibited payment has been
made, the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) within 30 days of receipt of such notice from the
Trustee, notify the Trustee of the amounts then due and owing on the Senior
Indebtedness, if any, and only the amounts specified in such notice to the
Trustee shall be paid to the holders of Senior Indebtedness and any excess above
such amounts due and owing on Senior Indebtedness shall be paid to the Holders.
SECTION 10.03. Payment Over of Proceeds Upon Dissolution, Etc.
(a) Upon any payment or distribution of assets or securities of the Company of
any kind or character, whether in cash, property or securities, upon any
dissolution or winding up or total or partial liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness (including any interest accruing subsequent to an event of
bankruptcy, whether or not such interest is an allowed claim enforceable against
the debtor under the United States Bankruptcy Code) shall first be paid in full,
in cash or cash equivalents, before the Holders of the Securities or the Trustee
on behalf of the Holders of the Securities shall be entitled to receive any
payment by the Company on account of Senior Subordinated Obligations, or any
payment to acquire any of the Securities for cash, property or securities, or
any distribution with respect to the Securities of any cash, property or
securities. Before any payment may be
58
made by, or on behalf of, the Company of any Securities upon any such
dissolution, winding up, liquidation or reorganization, any payment or
distribution of assets or securities of the Company of any kind or character,
whether in cash, property or securities, to which the Holders of the Securities
or the Trustee on behalf of the Holders of the Securities would be entitled, but
for the subordination provisions of this Article Ten, shall be made by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person making such payment or distribution or by the Holders of
the Securities or the Trustee if received by them or it, directly to the holders
of the Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders) or their
representatives as their respective interests appear, to the extent necessary to
pay all such Senior Indebtedness in full, in cash or cash equivalents, after
giving effect to any concurrent payment, distribution or provision therefor to
or for the holders of such Senior Indebtedness.
(b) To the extent any payment of Senior Indebtedness (whether
by or on behalf of the Company, as proceeds of security or enforcement of any
right of setoff or otherwise) is declared to be fraudulent or preferential, set
aside or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person, the Senior Indebtedness or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred. To the extent the obligation to
repay any Senior Indebtedness is declared to be fraudulent, invalid, or
otherwise set aside under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then the obligation so declared fraudulent, invalid
or otherwise set aside (and all other amounts that would come due with respect
thereto had such obligation not been so affected) shall be deemed to be
reinstated and outstanding as Senior Indebtedness for all purposes of this
Indenture as if such declaration, invalidity or setting aside had not occurred.
(c) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or
securities, shall be received by the Trustee or any Holder at a time when such
payment or distribution is prohibited by Section 10.03(a) and before all
obligations in respect of Senior Indebtedness are paid in full, in cash or cash
equivalents, such payment or distribution shall be received and held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness (pro rata to such holders on the basis of the respective
amount of Senior Indebtedness held by such holders) or their representatives, or
to the trustee under the Senior Note Indenture, or to the trustee or trustees
under any other indenture pursuant to which any such Senior Indebtedness may
have been issued, as their respective interests appear, for application to the
payment of Senior Indebtedness remaining unpaid until all such Senior
Indebtedness has been paid in full, in cash or cash equivalents, after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of such Senior Indebtedness.
(d) For purposes of this Section 10.03, the words "cash,
property or securities" shall not be deemed to include, so long as the effect of
this clause is not to cause the Securities to be treated in any case or
proceeding or similar event described in this Section 10.03 as part of the same
class of claims as the Senior Indebtedness or any class of claims pari passu
with, or senior to, the Senior Indebtedness for any payment or
59
distribution, securities of the Company or any other corporation provided for by
a plan of reorganization or readjustment that are subordinated, at least to the
extent that the Securities are subordinated, to the payment of all Senior
Indebtedness then outstanding; provided, however, that (i) if a new corporation
results from such reorganization or readjustment, such corporation assumes the
Senior Indebtedness and (ii) the rights of the holders of the Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company with or into, another corporation or the liquidation or
dissolution of the Company following the sale, conveyance, transfer, lease or
other disposition of all or substantially all of its property and assets to
another corporation upon the terms and conditions provided in Article Five shall
not be deemed a dissolution, winding up, liquidation or reorganization for the
purposes of this Section 10.03 if such other corporation shall, as a part of
such consolidation, merger, sale, conveyance, transfer, lease or other
disposition, comply with the conditions provided in Article Five.
SECTION 10.04. Subrogation of Holders to Rights of Holders of
Senior Indebtedness. Upon the payment in full of all Senior Indebtedness in cash
or cash equivalents, the Holders of Securities shall be subrogated to the rights
of the holders of Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company made on such Senior Indebtedness
until the principal of, premium, if any, and interest on the Securities shall be
paid in full, and no such payments or distributions to the holders of Senior
Indebtedness (or any trustee therefor) of any cash, property or securities of
the Company to which the Holders or the Trustee on their behalf would be
entitled except for the provisions of this Article Ten, and no payment pursuant
to the provisions of this Article Ten to the holders of Senior Indebtedness by
Holders or the Trustee on their behalf shall be, as among the Trustee, the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders, deemed to be a payment by the Company to or on account of the Senior
Indebtedness, it being understood that the provisions of this Article Ten are
and are intended solely for the purpose of defining the relative rights of, the
Holders, on the one hand, and the holders of the Senior Indebtedness, on the
other hand.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article Ten shall
have been applied, pursuant to the provisions of this Article Ten, to the
payment of all amounts payable under Senior Indebtedness, then, and in such
case, the Holders shall be entitled to receive from the holders of such Senior
Indebtedness any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount required to make payment in full, in cash
or cash equivalents, of such Senior Indebtedness of such holders.
SECTION 10.05. Obligations of Company Unconditional. Nothing
contained in this Article Ten or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders, the obligation
of the Company, which is unconditional and absolute, to pay to the Holders the
principal of, premium, if any, and interest on the Securities as and when the
same shall become due and payable in accordance with their terms, or to affect
the relative rights of the Holders and creditors of the Company other than the
holders of the Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law upon a Default or an Event of Default under this Indenture,
subject to the rights, if any, under this Article Ten, of the holders of Senior
Indebtedness
60
in respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article Ten will restrict the right of the Trustee or the
Holders to take any action to declare the Securities to be due and payable prior
to their Stated Maturity pursuant to Section 6.01 or to pursue any rights or
remedies hereunder; provided, however, that all Senior Indebtedness then due and
payable or thereafter declared to be due and payable shall first be paid in
full, in cash or cash equivalents, before the Holders or the Trustee are
entitled to receive any direct or indirect payment from the Company of Senior
Subordinated Obligations.
SECTION 10.06. Payments May Be Made Prior to Dissolution.
Nothing contained in this Article Ten or elsewhere in this Indenture or in any
of the Securities (a) shall prevent the Company at any time, except under the
conditions described in Article Six or Section 10.02 or 10.03, from making
payments of or on account of the Senior Subordinated Obligations to the Holders
entitled thereto or from depositing any moneys with the Trustee for such
payments, or (b) shall prevent the application by the Trustee (or any Paying
Agent other than the Company) of any moneys deposited with it hereunder to the
payment of or on account of the Senior Subordinated Obligations, if the Trustee
or such Paying Agent, as the case may be, did not, at least two business days
prior to the date upon which such payment becomes due and payable, have written
notice as provided in Section 10.02 or 10.12 of any event prohibiting the making
of such payment. The Company shall give prompt written notice to the Trustee of
any dissolution, winding up, liquidation or reorganization of the Company.
SECTION 10.07. No Waiver of Subordination Provisions. No right
of any present or future holder of any Senior Indebtedness of the Company to
enforce the subordination provisions of this Article Ten shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with. The provisions of this Article Ten are intended to
be for the benefit of, and shall be enforceable directly by, the holders of
Senior Indebtedness.
SECTION 10.08. Authorization to Trustee to Take Action to
Effectuate Subordination. Each Holder of Securities by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate, as between the Holders and the holders
of the Senior Indebtedness, the subordination as provided in this Article Ten
and appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 10.09. Senior Indebtedness May Be Renewed or Extended,
Etc. Without in any way limiting the generality of Section 10.07 of this
Indenture, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Holders and without impairing or releasing the
subordination provided in this Article Ten or the obligations hereunder of the
Holders to the holders of Senior Indebtedness, do any one or more of the
following: (a) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness or any instrument
61
evidencing the same or any agreement under which Senior Indebtedness is
outstanding or secured; (b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Senior
Indebtedness; and (d) exercise or refrain from exercising any rights against the
Company and any other Person.
SECTION 10.10. Trustee to Have No Fiduciary Duty to Holders of
Senior Indebtedness. With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Ten, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness and the
Trustee shall not be liable to any holder of Senior Indebtedness if it shall pay
over or deliver to the Holders, the Company or any other Person moneys or assets
to which any holder of Senior Indebtedness shall be entitled by virtue of this
Article Ten or otherwise.
SECTION 10.11. Rights of Trustee as Holder of Senior
Indebtedness. The Trustee shall be entitled to all rights set forth in this
Article Ten in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as such
holder.
SECTION 10.12. Notice to Trustee. The Company shall give
prompt written notice to the Trustee of any fact known to the Company which
would prohibit the making of any payment of moneys to or by the Trustee in
respect of Securities pursuant to the provisions of this Article Ten or
otherwise. The Trustee shall not be charged with knowledge of the existence of a
default or event of default with respect to the Senior Indebtedness or any other
facts that would prohibit the making of any payment to or by the Trustee unless
and until the Trustee shall have received written notice thereof mailed or
delivered to the Trustee at its Corporate Trust Office signed by an Officer of
the Company, any holder or representative of any class of Senior Indebtedness or
any trustee or agent therefor; and prior to the receipt of any such written
notice, the Trustee shall, subject to Article Seven, be entitled to assume that
no such facts exist; provided, however, that, if the Trustee shall not have
received the notice provided for in this Section 10.12 at least two Business
Days prior to the date upon which, by the terms of this Indenture, any money
shall become payable for any purpose (including, without limitation, the payment
of the principal or, premium, if any, or interest on any Security), then
notwithstanding anything herein to the contrary, the Trustee shall have full
power and authority to receive any money from the Company and to apply the same
to the purpose for which they were received, and shall not be affected by any
notice to the contrary that may be received by it on or after such prior date
except for an acceleration of the Securities prior to such application. Nothing
contained in this Section 10.12 shall limit the right of the holders of Senior
Indebtedness to recover payments as contemplated by this Article Ten. The
foregoing shall not apply if the Paying Agent is the Company.
The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself or itself to be a holder of
any Senior Indebtedness (or a trustee on behalf of, or other representative of,
such holder) to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee or representative on behalf of any such holder.
In the event that the Trustee
62
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article Ten, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article Ten.
SECTION 10.13. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article Ten, the Trustee and the Holders shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction in
which bankruptcy, dissolution, winding up, liquidation or reorganization
proceedings are pending, or upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person making such
payment or distribution, delivered to the Trustee or to the Holders for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
Ten.
SECTION 10.14. Not to Prevent Events of Default. The failure
to make a payment on account of principal of, premium, if any, or interest on
the Securities by reason of any provision of this Article Ten will not be
construed as preventing the occurrence of an Event of Default.
SECTION 10.15. Trustee's Compensation Not Prejudiced. Nothing in
this Article Ten will apply to amounts due to the Trustee pursuant to other
sections of this Indenture.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act of 1939. This Indenture
shall be 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.
SECTION 11.02. Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail addressed as follows:
if to the Company:
WinStar Communications, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
63
if to the Trustee:
United States Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Division
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be mailed
at the Company's expense to such Holder's address as it appears on the Security
Register by first class mail and shall be sufficiently given to such Holder if
so mailed within the time prescribed. Copies of any such communication or notice
to a Holder shall also be mailed to the Trustee and each Agent at the same time.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
Except for a notice to the Trustee, which is deemed given only when received,
and except as otherwise provided in this Indenture, if a notice or communication
is mailed in the manner provided in this Section 11.02 it is duly given, whether
or not the addressee receives it.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be in writing and filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 11.03. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of
such Counsel, all such conditions precedent have been complied with.
SECTION 11.04. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) a statement that each person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
64
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion
contained in such certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each
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 11.05. Rules by Trustee, Paying Agent or Registrar.
The Trustee may make reasonable rules for action by or at a meeting of Holders.
The Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.06. Payment Date Other Than a Business Day. If an
Interest Payment Date, Redemption Date, Change of Control Payment Date, Excess
Proceeds Payment Date, Stated Maturity or date of maturity of any Security shall
not be a Business Day, then payment of principal of, premium, if any, or
interest on such Security, as the case may be, need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the Interest Payment Date, Change of Control Payment Date,
Excess Proceeds Payment Date, or Redemption Date, or at the Stated Maturity or
date of maturity of such Security; provided, however, that no interest shall
accrue for the period from and after such Interest Payment Date, Change of
Control Payment Date, Excess Proceeds Payment Date, Redemption Date, Stated
Maturity or date of maturity, as the case may be.
SECTION 11.07. Governing Law. This Indenture and the
Securities shall be governed by the laws of the State of New York, excluding (to
the extent permissible by law) any rule of law that would cause the application
of the laws of any jurisdiction other than the State of New York.
SECTION 11.08. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any Subsidiary of the Company. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.09. No Recourse Against Others. No recourse for the
payment of the principal of, premium, if any, or interest on any of the
Securities, or for any claim based thereon or otherwise in respect thereof, and
no recourse under or upon any obligation, covenant or agreement of the Company
contained in this Indenture, or in any of the Securities, or because of the
creation of any Indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer, director, employee or controlling person, as
such, of the Company or of any successor Person thereof in such capacity; it
being expressly understood that all such liability is hereby expressly waived
and released as a condition of, and as consideration for, the execution of this
Indenture and the issue of the Securities.
65
SECTION 11.10. Successors. All agreements of the Company in
this Indenture and the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 11.11. Duplicate 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 11.12. Separability. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 11.13. Table of Contents, Headings, Etc. The Table of
Contents, Cross-Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms and provisions hereof.
66
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
WINSTAR COMMUNICATIONS, INC.
By:__________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK
By:__________________________
Name:
Title:
EXHIBIT A
[FACE OF EXCHANGE NOTE OR PRIVATE EXCHANGE NOTE]
*/
**/
***/
WINSTAR COMMUNICATIONS, INC.
11% Senior Subordinated Deferred Interest Note Due 2008
CUSIP _________
No. $_________
WINSTAR COMMUNICATIONS, INC., a Delaware corporation (the
"Company", which term includes any successor under the Indenture hereinafter
referred to), for value received, promises to pay to _____________, or its
registered assigns, the principal sum of ___________________ ($__________) on
March 15, 2008.
SemiAnnual Interest Accrual Date: March 15 and September 15,
commencing September 15, 1998.
Interest Payment Dates: March 15 and September 15, commencing
September 15, 2003.
Regular Record Dates: March 1 and September 1.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
-----------------------
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to the Rule 144A/Regulation S Appendix and the attachment
from such Exhibit 1 caption "[TO BE ATTACHED TO GLOBAL SECURITIES]--SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY".
**/ If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to the Rule 144A/Regulation S
Appendix and replace the Assignment Form included in this Exhibit A with
Assignment Form included in such Exhibit 1.
***/ Add the Original Issue Discount Legend from Exhibit 1 to the Rule
144A/Regulation S Appendix..
EA-2
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.
Date: WINSTAR COMMUNICATIONS, INC.
By: ______________________________
Name:
Title:
(Form of Trustee's Certificate of Authentication)
This is one of the 11% Senior Subordinated Deferred Interest Notes
Due 2008 described in the within-mentioned Indenture.
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
Date:
By: _______________________________
Authorized Signatory
EA-3
[REVERSE SIDE OF EXCHANGE NOTE OR PRIVATE EXCHANGE NOTE]
WINSTAR COMMUNICATIONS, INC.
11% Senior Subordinated Deferred Interest Note Due 2008
1. Principal and Interest.
The Company will pay the principal of this Note on March 15,
2008.
The Company promises to pay interest on the Accumulated Amount
of this Note on each Interest Payment Date, as set forth below, at the rate per
annum shown above.
Until March 15, 2003, interest on the Notes will accrue at a
rate of 11% per annum and be compounded semiannually on each SemiAnnual Interest
Accrual Date, but (except as provided below) will not be payable in cash. From
and after March 15, 2003, interest on the Accumulated Amount of each Note will
be payable semiannually (to the holders of record of the Notes at the close of
business on the March 1 or September 1 immediately preceding the relevant
Interest Payment Date) on each Interest Payment Date, commencing September 15,
2003.
"Accumulated Amount" means, as of any date (the "Specified
Date"), the amount provided below for each $1,000 principal amount of Notes.
(i) If the Specified Date occurs on one of the following dates
(each, a "SemiAnnual Interest Accrual Date"), the Accumulated Amount of
this Note will equal the amount set forth below for such Note for such
SemiAnnual Interest Accrual Date:
Accumulated
SemiAnnual Interest Accrual Date Amount
-------------------------------- -----------
September 15, 1998............................. $1,053.78
March 15, 1999................................. 1,111.74
September 15, 1999............................. 1,172.88
March 15, 2000................................. 1,237.39
September 15, 2000............................. 1,305.45
March 15, 2001................................. 1,377.25
September 15, 2001............................. 1,452.99
March 15, 2002................................. 1,532.91
September 15, 2002............................. 1,617.22
March 15, 2003................................. 1,706.17
(ii) if the Specified Date occurs before the first SemiAnnual
Interest Accrual Date, the Accumulated Amount will equal the sum of (A)
$1,000 and (B) an amount equal to the product of (1) the Accumulated
Amount for the first SemiAnnual Interest Accrual Date less $1,000
multiplied by (2) a fraction, the numerator of which is the number of
days elapsed from the Issue Date to the Specified Date, using a 360-day
year
EA-4
of twelve 30-day months, and the denominator of which is the number of
days from the Issue Date to the first SemiAnnual Interest Accrual Date,
using a 360-day year of twelve 30-day months;
(iii) if the Specified Date occurs between two SemiAnnual
Interest Accrual Dates, the Accumulated Amount will equal the sum of
(A) the Accumulated Amount for the SemiAnnual Interest Accrual Date
immediately preceding such Specified Date and (B) an amount equal to
the product of (1) the Accumulated Amount for the immediately following
SemiAnnual Interest Accrual Date less the Accumulated Amount for the
immediately preceding SemiAnnual Interest Accrual Date multiplied by
(2) a fraction, the numerator of which is the number of days elapsed
from the immediately preceding SemiAnnual Interest Accrual Date to the
Specified Date, using a 360-day year or twelve 30-day months, and the
denominator of which is 180; or
(iv) if the Specified Date occurs after the last SemiAnnual
Interest Accrual Date, the Accumulated Amount of this Note will equal
$1,706.17.
Notwithstanding anything to the contrary above, (i) if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Note from and including the date on
which any such Registration Default shall occur to but excluding the earlier of
(x) the date on which all Registration Defaults have been cured and (y) the date
on which all Notes become freely transferable by Holders other than Affiliates
of the Company without further registration under the Securities Act. Such
additional interest will be payable in cash semiannually in arrears, at a rate
per annum equal to .50% of the Accumulated Amount of the Notes on the relevant
additional interest payment date. Such additional interest will be payable on
each SemiAnnual Interest Accrual Date or Interest Payment Date, as the case may
be, commencing with the first SemiAnnual Interest Accrual Date following the
applicable Registration Default. Payments of additional interest on the Notes
will be made to the Holders of Notes on the Regular Record Date (or, if there is
no Regular Record Date, the date 15 days prior to such SemiAnnual Interest
Accrual Date) immediately preceding such SemiAnnual Interest Accrual Date or
Interest Payment Date.
The Company shall pay interest on overdue principal and
premium, if any, and (to the extent lawful) interest on overdue installments of
interest.
2. Method of Payment.
The Company will pay principal as provided above and interest
(except defaulted interest) on the Accumulated Amount of the Notes as provided
above on each March 15 and September 15, commencing September 15, 2003, to the
persons who are Holders (as reflected in the Security Register) at the close of
business on the March 1 or September 1 immediately preceding the relevant
Interest Payment Date, in each case, even if the Note is canceled on
registration of transfer or registration of exchange after such record date;
provided, however, that, with respect to the payment of principal, the Company
will not make payment to the Holder unless this Note is surrendered to a Paying
Agent.
The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Payments in respect of the Notes represented by a global Note
(including principal, premium and interest) will be made by wire transfer of
immediately available funds to the accounts specified by The Depository Trust
Company. The Company will make all payments in respect of a certificated
EA-5
Note (including principal, premium and interest) by mailing a check to the
registered address of each Holder thereof; provided, however, that payments on a
certificated Note will be made by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the trustee
may accept in its discretion).
3. Paying Agent and Registrar.
Initially, United States Trust Company of New York (the
"Trustee") will act as authenticating agent, Paying Agent and Registrar. The
Company may change any authenticating agent, Paying Agent or Registrar without
notice. The Company, any Subsidiary or any Affiliate of any of them may act as
Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Notes under an Indenture dated as of
March 15, 1998, (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
indicated. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act. The
Notes are subject to all such terms, and Holders are referred to the Indenture
and the Trust Indenture Act for a statement of all such terms. To the extent
permitted by applicable law, in the event of any inconsistency between the terms
of this Note and the terms of the Indenture, the terms of the Indenture shall
control.
The Indenture limits the original aggregate principal amount
of the Notes to $250,000,000 (subject to Section 2.07 of the Indenture).
5. Redemption.
The Notes will not be redeemable prior to March 15, 2003.
Thereafter, the Notes will be redeemable, at the Company's option, in whole at
any time or in part from time to time upon not less than 30 nor more than 60
days' prior notice mailed by first-class mail to each Holders' last address as
it appears in the Security Register, at the following Redemption Prices
(expressed as a percentage of the Accumulated Amount of the Notes), plus accrued
and unpaid interest, if any, on such Accumulated Amount to the Redemption Date
(subject to the right of Holders of record on the relevant Regular Record Date
that is on or prior to the Redemption Date to receive interest due on the
relevant Interest Payment Date), if redeemed during the 12- month period
commencing March 15 of the years set forth below:
Year Redemption Price
---- ----------------
2003 105.500%
2004 103.667
2005 101.833
2006 and thereafter 100.000
6. Notice of Redemption.
Notice of any optional redemption will be mailed by the
Company at least 30 days but not more than 60 days before a Redemption Date to
each Holder of Notes to be redeemed at his last address as it appears in the
Security Register. Notes in original
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denominations larger than $1,000 may be redeemed in part; provided, however,
that Notes will only be issued in denominations of $1,000 principal amount or
integral multiples thereof. On and after the Redemption Date, interest ceases to
accrue on Notes (or portions of Notes) called for redemption, unless the Company
defaults in the payment of the Redemption Price.
7. Repurchase upon Change in Control.
Upon the occurrence of a Change of Control, each Holder shall
have the right to require the repurchase of its Notes by the Company in cash
pursuant to the offer described in the Indenture at a purchase price equal to
101% of the Accumulated Amount of such Notes on such date of purchase, plus
accrued and unpaid interest, if any, on such Accumulated Amount to the date of
purchase (the "Change of Control Payment").
A notice of such Change of Control will be mailed within 30
days after any Change of Control occurs to each Holder at his last address as it
appears in the Security Register. Notes in original denominations larger than
$1,000 may be sold to the Company in part; provided, however, that Notes will
only be issued in denominations of $1,000 principal amount at maturity or
integral multiples thereof. On and after the Change of Control Payment Date,
interest ceases to accrue on Notes or portions of Notes surrendered for purchase
by the Company, unless the Company defaults in the payment of the Change of
Control Payment.
8. Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in
denominations of $1,000 of principal amount and integral multiples thereof. A
Holder may register the transfer or exchange of Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Notes selected for redemption. Also, it need not
register the transfer or exchange of any Notes for a period of 15 days before a
selection of Notes to be redeemed is made.
9. Persons Deemed Owners.
A Holder shall be treated as the owner of a Note for all
purposes.
10. Unclaimed Money.
If money for the payment of principal, premium, if any, or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company at its request. After that, Holders entitled
to the money must look to the Company for payment, unless an applicable law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
11. Discharge Prior to Redemption or Maturity.
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Notes and the Indenture if
the Company deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Notes to redemption or maturity, as
the case may be.
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12. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding, and any existing
default or compliance with any provision may be waived with the consent of the
Holders of at least a majority in principal amount of the Notes then
outstanding. Without notice to or the consent of any Holder, the parties thereto
may amend or supplement the Indenture or the Notes to, among other things, cure
any ambiguity, defect or inconsistency and make any change that, in the opinion
of the Board of Directors of the Company, does not materially and adversely
affect the rights of any Holder.
13. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of
the Company and its Restricted Subsidiaries, among other things, to incur
additional indebtedness; pay dividends or make distributions in respect of their
capital stock; make investments or make certain other restricted payments; sell
assets; issue or sell stock of Restricted Subsidiaries; enter into transactions
with stockholders or affiliates; or, with respect to the Company, consolidate,
merge or sell all or substantially all of its assets. Within 90 days after the
end of the last fiscal quarter of each year, the Company must report to the
Trustee on compliance with such limitations.
14. Successor Persons.
Generally, when a successor person or other entity assumes all
the obligations of its predecessor under the Notes and the Indenture, the
predecessor person will be released from those obligations.
15. Defaults and Remedies.
The following events constitute "Events of Default" under the
Indenture: (a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable, upon acceleration, redemption or
otherwise whether or not such payment is prohibited by the subordination
provisions of the Indenture; (b) default in the payment of interest on any Note
when the same becomes due and payable, and such default continues for a period
of 30 days whether or not such payment is prohibited by the subordination
provisions of the Indenture; (c) the Company defaults in the performance of or
breaches any other covenant or agreement of the Company in the Indenture or
under the Notes and such default or breach continues for a period of 30
consecutive days after written notice by the Trustee or the Holders of 25% or
more in aggregate principal amount of the Notes; (d) there occurs with respect
to any issue or issues of Indebtedness of the Company or any Significant
Subsidiary having an outstanding principal amount of $25,000,000 or more in the
aggregate for all such issues of all such Persons, whether such Indebtedness now
exists or shall hereafter be created, (i) an event of default that has caused
the holder thereof to declare such Indebtedness to be due and payable prior to
its Stated Maturity and such Indebtedness has not been discharged in full or
such acceleration has not been rescinded or annulled within 30 days of such
acceleration and/or (ii) the failure to make a principal payment at the final
(but not any interim) fixed maturity and such defaulted payment shall not have
been made, waived or extended within 30 days of such payment default; (e) any
final judgment or order (not covered by insurance) for the payment of money in
excess of $25,000,000 in the aggregate for all such final judgments or orders
against all such Persons (treating any deductibles, self-insurance or retention
as not so covered) shall be rendered against the Company or any Significant
Subsidiary and shall not be
EA-8
paid or discharged, and there shall be any period of 60 consecutive days
following entry of the final judgment or order that causes the aggregate amount
for all such final judgments or orders outstanding and not paid or discharged
against all such Persons to exceed $25,000,000 during which a stay of
enforcement of such final judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; (f) a court having jurisdiction in the
premises enters a decree or order for (i) relief in respect of the Company or
any Significant Subsidiary in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (ii)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (iii) the winding up or liquidation of the affairs of
the Company or any Significant Subsidiary and, in each case, such decree or
order shall remain unstayed and in effect for a period of 60 consecutive days;
or (g) the Company or any Significant Subsidiary (i) commences a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (ii) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (iii) effects any general assignment for the benefit
of creditors.
If an Event of Default (other than an Event of Default
specified in clause (f) or (g) above that occurs with respect to the Company)
occurs and is continuing under the Indenture, the Trustee or the Holders of at
least 25% in aggregate principal amount of the Notes, then outstanding, by
written notice to the Company (and to the Trustee if such notice is given by the
Holders), may, and the Trustee at the request of such Holders shall, declare the
principal of, premium, if any, and accrued interest, if any, on the Notes to be
immediately due and payable. If a bankruptcy or insolvency default with respect
to the Company or any Restricted Subsidiary occurs and is continuing, the
principal amount of the Notes automatically becomes due and payable. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of at least a
majority in principal amount of the Notes then outstanding may direct the
Trustee in its exercise of any trust or power.
16. Subordination.
The payment of the Notes is, to the extent set forth in the
Indenture, subordinated in right of payment in full, in cash or cash
equivalents, of all Senior Indebtedness of the Company. To the extent provided
in the Indenture, Senior Indebtedness of the Company must be paid before the
Notes may be paid. The Company agrees, and each Holder by accepting a Note
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purposes.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any
other capacity, may make loans to, accept deposits from and perform services for
the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
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18. No Recourse Against Others.
No incorporator, stockholder, officer, director, employee or
controlling person as such, of the Company or of any successor Person thereof in
such capacity, shall have any liability for any obligations of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
19. Authentication.
This Note shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on the other side
of this Note.
20. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Note, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein.
21. Abbreviations.
Customary abbreviations may be used in the name of a Holder 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).
22. Governing Law.
The Indenture and the Notes shall be governed by the laws of
the State of New York, excluding (to the extent permissible by law) any rule of
law that would cause the application of the laws of any jurisdiction other than
the State of New York.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to WinStar
Communications, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: General Counsel.
EA-10
ASSIGNMENT FORM
I or we assign and transfer this Note to:
Please insert social security or other identifying number of assignee
______________________________________________________________________
______________________________________________________________________
Print or type name, address and zip code of assignee and irrevocably appoint
____________________ , as agent, to transfer this Note on the books of the
Company.
The agent may substitute another to act for him.
Dated _________ Signed ______________________________________
(Sign exactly as name appears on the other side of this Note)
Signature Guarantee _________________________________________1
-------------------
1 The Holder's signature must be guaranteed by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" as
defined by Rule 17Ad-15 under the Exchange Act.
EA-11
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.10 or Section 4.11 of the Indenture, check the Box: |_|
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.10 or Section 4.11 of the Indenture, state the amount (in
principal amount): $_____________
Date: ________________
Your Signature: ___________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: ________________________________________2
------------------
2 The Holder's signature must be guaranteed by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" as
defined by Rule 17Ad-15 under the Exchange Act.
RULE 144A/REGULATION S APPENDIX
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE
144A, AND TO CERTAIN PERSONS IN OFFSHORE TRANSACTIONS IN RELIANCE ON
REGULATION S.
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Depositary" means The Depository Trust Company, its nominees
and their respective successors.
"Exchange Securities" means the 11% Senior Subordinated
Deferred Interest Notes Due 2008 to be issued pursuant to this Indenture in
connection with a Registered Exchange Offer pursuant to the Registration Rights
Agreement.
"Initial Purchasers" means Credit Suisse First Boston
Corporation, Salomon Brothers Inc, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC.
"Initial Securities" means the 11% Senior Subordinated
Deferred Interest Notes Due 2008, issued under this Indenture on or about the
date hereof.
"Private Exchange" means the offer by the Company, pursuant to
the Registration Rights Agreement, to the Initial Purchasers to issue and
deliver to each Initial Purchaser, in exchange for the Initial Securities held
by the Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means the 11% Senior
Subordinated Deferred Interest Notes Due 2008 to be issued pursuant to this
Indenture to the Initial Purchasers in a Private Exchange.
"Purchase Agreement" means the Purchase Agreement dated March
17, 1998, among the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A under the Securities Act.
"Registered Exchange Offer" means the offer by the Company,
pursuant to the Registration Rights Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount of Exchange Securities registered
under the Securities Act.
A-2
"Registration Rights Agreement" means the Registration
Rights Agreement dated March 17, 1998, among the Company and the Initial
Purchasers.
"Securities" means the Initial Securities, the Exchange
Securities and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depositary), or any successor person
thereto and shall initially be the Trustee.
"Shelf Registration Statement" means the registration
statement issued by the Company, in connection with the offer and sale of
Initial Securities or Private Exchange Securities, pursuant to the Registration
Rights Agreement.
"Transfer Restricted Securities" means Definitive Securities
and Securities that bear or are required to bear the legend set forth in Section
2.3(d) hereto.
1.2 Other Definitions
Defined in
Term Section:
---- -------------
"Agent Members"......................................2.1(b)
"Global Security"....................................2.1(a)
"Regulation S".......................................2.1(a)
"Rule 144A"..........................................2.1(a)
2. The Securities.
2.1 Form and Dating.
The Initial Securities are being offered and sold by the
Company pursuant to the Purchase Agreement.
(a) Global Securities. Initial Securities offered and sold to
a QIB in reliance on Rule 144A under the Securities Act ("Rule 144A") or in
reliance on Regulation S under the Securities Act ("Regulation S"), in each case
as provided in the Purchase Agreement, shall be issued initially in the form of
one or more permanent global Securities in definitive, fully registered form
without interest coupons with the global securities legend and restricted
securities legend set forth in Exhibit 1 hereto (each, a "Global Security"),
which shall be deposited on behalf of the purchasers of the Initial Securities
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary (or with such other custodian as the Depositary may direct), and
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount at maturity of the Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee as hereinafter
provided.
A-3
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (b)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary or by the Trustee as the
custodian of the Depositary or under such Global Security, and the Depositary
may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this
Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global
Securities will not be entitled to receive physical delivery of certificated
Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
Initial Securities for original issue in an aggregate principal amount of
$250,000,000 and (2) Exchange Securities or Private Exchange Securities for
issue only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to the Registration Rights Agreement, for a like principal amount of
Initial Securities, in each case upon a written order of the Company signed by
two Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company. Such order shall specify the amount of the Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated and whether the Securities are to be Initial Securities,
Exchange Securities or Private Exchange Securities. The aggregate principal
amount of Securities outstanding at any time may not exceed $250,000,000 except
as provided in Section 2.07 of this Indenture.
2.3 Transfer and Exchange. (a) Transfer and Exchange of Global
Securities. (i) The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depositary, in accordance with
this Indenture (including applicable restrictions on transfer set forth herein,
if any) and the procedures of the Depositary therefor. A transferor of a
beneficial interest in a Global Security shall deliver to the Registrar a
written order given in accordance with the Depositary's procedures containing
information regarding the participant account of the Depositary to be credited
with a beneficial interest in the Global Security. The Registrar shall, in
accordance with such instructions, instruct the Depositary to credit to the
account of the Person specified in such instructions a beneficial interest in
the Global Security and to debit the account of the Person making the transfer
the beneficial interest in the Global Security being transferred.
A-4
(ii) Notwithstanding any other provisions of this Rule
144A/Regulation S Appendix (other than the provisions set forth in
Section 2.4), a Global Security may not be transferred as a whole
except by the Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.
(iii) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 or
Section 2.09 of the Indenture prior to the consummation of a Registered
Exchange Offer or the effectiveness of a Shelf Registration Statement
with respect to such Securities, such Securities may be exchanged only
in accordance with such procedures as are substantially consistent with
the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Securities
intended to ensure that such transfers comply with Rule 144A or
Regulation S, as the case may be) and such other procedures as may from
time to time be adopted by the Company.
(b) Legend.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in
exchange therefor or in substitution thereof) shall bear a legend in
substantially the following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS
SECURITY MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED
THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY (I) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II)
OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY ▇▇▇▇▇ ▇▇ ▇▇▇
▇-▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act, in the
case of any Transfer Restricted Security that is represented by a
Global Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a certificated Security
that does not bear the legend set forth above and rescind any
restriction on the transfer of such Transfer Restricted Security, if
the Holder certifies in writing to the Registrar that its request for
such exchange was made in reliance on Rule 144 (such certification to
be in the form set forth on the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial Securities or
Private Exchange Securities, as the case may be, all requirements
pertaining to legends on such Initial Security or such Private Exchange
Security will cease to apply, the requirements requiring any such
Initial Security or such Private Exchange Security issued to certain
Holders to be issued in global form will cease to apply, and a
certificated Initial Security or Private Exchange Security without
legends will be available to the transferee of the Holder of such
Initial Securities or Private Exchange Securities upon exchange of such
transferring Holder's certificated Initial Security or Private Exchange
Security or directions to transfer such Holder's interest in the Global
Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which Holders of such
Initial Securities are offered Exchange Securities in exchange for
their Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will cease to apply and certificated Initial Securities
with the Restricted Securities Legend set forth in Exhibit 1 hereto
will be available to Holders of such Initial Securities that do not
exchange their Initial Securities, and Exchange Securities in
certificated or global form will be available to Holders that exchange
such Initial Securities in such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities pursuant to which Holders of such Initial
Securities are offered Private Exchange Securities in exchange for
their Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will still apply, and Private Exchange Securities in
global form with the Restricted Securities Legend set forth in Exhibit
1 hereto will be available to Holders that exchange such Initial
Securities in such Private Exchange.
(c) Cancelation or Adjustment of Global Security. At such time
as all beneficial interests in a Global Security have either been exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, such
Global Security shall be
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returned to the Depositary for cancelation or retained and canceled by the
Trustee. At any time prior to such cancelation, if any beneficial interest in a
Global Security is exchanged for certificated or Definitive Securities,
redeemed, repurchased or canceled, the principal amount at maturity of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such reduction.
(d) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate certificated
Securities, Definitive Securities and Global Securities at the
Registrar's or co-registrar's request.
(ii) 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, assessments or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Sections 3.07, 4.10, 4.11 and
9.04 of the Indenture).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any certificated Security
selected for redemption in whole or in part pursuant to Article Three
of this Indenture, except the unredeemed portion of any certificated
Security being redeemed in part, or (b) any Security for a period
beginning 15 Business Days before the mailing of a notice of an offer
to repurchase or redeem Securities or 15 Business Days before an
interest payment date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(e) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of or a participant
in the Depositary or other Person with respect to the accuracy of the
records of the Depositary or its nominee or of any participant or
member thereof with respect to any ownership interest in the Securities
or with respect to the delivery to any participant, member, beneficial
owner or other Person (other than the Depositary) of any
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notice (including any notice of redemption) or the payment of any
amount under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to or upon
the order of the registered Holders (which shall be the Depositary or
its nominee in the case of a Global Security). The rights of beneficial
owners in any Global Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depositary with respect to
its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers
between or among Depositary participants, members or beneficial owners
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.
2.4 Certificated Securities.
(a) A Global Security deposited with the Depositary or with
the Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not appointed by
the Company within 90 days of such notice, or (ii) an Event of Default has
occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the Depositary
to the Trustee located in the Borough of Manhattan, The City of New York, to be
so transferred, in whole or from time to time in part, without charge, and the
Trustee shall authenticate and deliver, upon such transfer of each portion of
such Global Security, an equal aggregate principal amount of certificated
Initial Securities of authorized denominations. Any portion of a Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depositary shall direct.
Any certificated Initial Security delivered in exchange for an interest in the
Global Security shall, except as otherwise provided by Section 2.3(d), bear the
Restricted Securities Legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent
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Members and Persons that may hold interests through Agent Members, to take any
action which a Holder is entitled to take under this Indenture or the
Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a), the Company will promptly make available to the
Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
EXHIBIT 1
to
Rule 144A/REGULATION S APPENDIX
[FACE OF INITIAL NOTE]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR 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.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE REGISTERED FORM, THIS CERTIFICATE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC
TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE
UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH
(IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE
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HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
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[Original Issue Discount Legend]
FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR
PURPOSES OF SECTION 1273 OF THE CODE, THE ISSUE PRICE IS $1,000 AND THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT IS $1,644.56, IN EACH CASE PER $1,000 PRINCIPAL
AMOUNT OF THIS SECURITY. THE AMOUNT OF THE ORIGINAL ISSUE DISCOUNT ATTRIBUTABLE
TO THE PERIOD COMMENCING MARCH 20, 1998 AND ENDING ON MARCH 15, 2003 IS $706.17.
FOR PURPOSES OF SECTION 1275 OF THE CODE, THE ISSUE DATE OF THIS SECURITY IS
MARCH 20, 1998. FOR PURPOSES OF SECTION 1272 OF THE CODE, THE YIELD TO MATURITY
(COMPOUNDED SEMIANNUALLY ON MARCH 15 AND SEPTEMBER 15) IS 11.00%, CALCULATED
BASED ON THE APPROXIMATE METHOD.
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WINSTAR COMMUNICATIONS, INC.
11% Senior Subordinated Deferred Interest Note Due 2008
CUSIP _________
No. $___________
WINSTAR COMMUNICATIONS, INC., a Delaware corporation (the
"Company", which term includes any successor under the Indenture hereinafter
referred to), for value received, promises to pay to ____________, or its
registered assigns, the principal sum of ____________ ($_____) on March 15,
2008.
SemiAnnual Interest Accrual Date: March 15 and September 15,
commencing September 15, 1998.
Interest Payment Dates: March 15 and September 15, commencing
September 15, 2003.
Regular Record Dates: March 1 and September 1.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.
Date: WINSTAR COMMUNICATIONS, INC.
By: ___________________________
Name:
Title:
(Form of Trustee's Certificate of Authentication)
This is one of the 11% Senior Subordinated Deferred Interest Notes Due
2008 described in the within-mentioned Indenture.
Date:
UNITED STATES TRUST
COMPANY OF NEW YORK, as
Trustee
By: _________________________________
Authorized Signatory
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[REVERSE SIDE OF NOTE]
WINSTAR COMMUNICATIONS, INC.
11% Senior Subordinated Deferred Interest Note Due 2008
1. Principal and Interest.
The Company will pay the principal of this Note on March 15,
2008.
The Company promises to pay interest on the Accumulated Amount
of this Note on each Interest Payment Date, as set forth below, at the rate per
annum shown above.
Until March 15, 2003, interest on the Notes will accrue at a
rate of 11% per annum and be compounded semiannually on each SemiAnnual Interest
Accrual Date, but (except as provided below) will not be payable in cash. From
and after March 15, 2003, interest on the Accumulated Amount of each Note will
be payable semiannually (to the holders of record of the Notes at the close of
business on the March 1 or September 1 immediately preceding the relevant
Interest Payment Date) on each Interest Payment Date, commencing September 15,
2003.
"Accumulated Amount" means, as of any date (the "Specified
Date"), the amount provided below for each $1,000 principal amount of Notes.
(i) If the Specified Date occurs on one of the following dates
(each, a "SemiAnnual Interest Accrual Date"), the Accumulated Amount of
this Note will equal the amount set forth below for such Note for such
SemiAnnual Interest Accrual Date:
Accumulated
SemiAnnual Interest Accrual Date Amount
-------------------------------- -----------
September 15, 1998..................................... $1,053.78
March 15, 1999......................................... 1,111.74
September 15, 1999..................................... 1,172.88
March 15, 2000......................................... 1,237.39
September 15, 2000..................................... 1,305.45
March 15, 2001......................................... 1,377.25
September 15, 2001..................................... 1,452.99
March 15, 2002......................................... 1,532.91
September 15, 2002..................................... 1,617.22
March 15, 2003......................................... 1,706.17
(ii) if the Specified Date occurs before the first SemiAnnual
Interest Accrual Date, the Accumulated Amount will equal the sum of (A)
$1,000 and (B) an amount equal to the product of (1) the Accumulated
Amount for the first SemiAnnual Interest Accrual Date less $1,000
multiplied by (2) a fraction, the
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numerator of which is the number of days elapsed from the Issue Date to
the Specified Date, using a 360-day year of twelve 30-day months, and
the denominator of which is the number of days from the Issue Date to
the first SemiAnnual Interest Accrual Date, using a 360-day year of
twelve 30-day months;
(iii) if the Specified Date occurs between two SemiAnnual
Interest Accrual Dates, the Accumulated Amount will equal the sum of
(A) the Accumulated Amount for the SemiAnnual Interest Accrual Date
immediately preceding such Specified Date and (B) an amount equal to
the product of (1) the Accumulated Amount for the immediately following
SemiAnnual Interest Accrual Date less the Accumulated Amount for the
immediately preceding SemiAnnual Interest Accrual Date multiplied by
(2) a fraction, the numerator of which is the number of days elapsed
from the immediately preceding SemiAnnual Interest Accrual Date to the
Specified Date, using a 360-day year or twelve 30-day months, and the
denominator of which is 180; or
(iv) if the Specified Date occurs after the last SemiAnnual
Interest Accrual Date, the Accumulated Amount of this Note will equal
$1,706.17.
Notwithstanding anything to the contrary above, (i) if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Note from and including the date on
which any such Registration Default shall occur to but excluding the earlier of
(x) the date on which all Registration Defaults have been cured and (y) the date
on which all Notes become freely transferable by Holders other than Affiliates
of the Company without further registration under the Securities Act. Such
additional interest will be payable in cash semiannually in arrears, at a rate
per annum equal to .50% of the Accumulated Amount of the Notes on the relevant
additional interest payment date. Such additional interest will be payable on
each SemiAnnual Interest Accrual Date or Interest Payment Date, as the case may
be, commencing with the first SemiAnnual Interest Accrual Date following the
applicable Registration Default. Payments of additional interest on the Notes
will be made to the Holders of Notes on the Regular Record Date (or, if there is
no Regular Record Date, the date 15 days prior to such SemiAnnual Interest
Accrual Date) immediately preceding such SemiAnnual Interest Accrual Date or
Interest Payment Date.
The Company shall pay interest on overdue principal and
premium, if any, and (to the extent lawful) interest on overdue installments of
interest.
2. Method of Payment.
The Company will pay principal as provided above and interest
(except defaulted interest) on the Accumulated Amount of the Notes as provided
above on each March 15 and September 15, commencing September 15, 2003, to the
persons who are Holders (as reflected in the Security Register) at the close of
business on the March 1 or September 1 immediately preceding the relevant
Interest Payment Date, in each case, even if the Note is canceled on
registration of transfer or registration of exchange after such record date;
provided, however, that, with respect to the payment of principal, the Company
will not make payment to the Holder unless this Note is surrendered to a Paying
Agent.
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The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Payments in respect of the Notes represented by a global Note
(including principal, premium and interest) will be made by wire transfer of
immediately available funds to the accounts specified by The Depository Trust
Company. The Company will make all payments in respect of a certificated Note
(including principal, premium and interest) by mailing a check to the registered
address of each Holder thereof; provided, however, that payments on a
certificated Note will be made by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the trustee
may accept in its discretion).
3. Paying Agent and Registrar.
Initially, United States Trust Company of New York (the
"Trustee") will act as authenticating agent, Paying Agent and Registrar. The
Company may change any authenticating agent, Paying Agent or Registrar without
notice. The Company, any Subsidiary or any Affiliate of any of them may act as
Paying Agent, Registrar or co- Registrar.
4. Indenture.
The Company issued the Notes under an Indenture dated as of
March 15, 1998 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
indicated. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act. The
Notes are subject to all such terms, and Holders are referred to the Indenture
and the Trust Indenture Act for a statement of all such terms. To the extent
permitted by applicable law, in the event of any inconsistency between the terms
of this Note and the terms of the Indenture, the terms of the Indenture shall
control.
The Indenture limits the original aggregate principal amount
of the Notes to $250,000,000 (subject to Section 2.07 of the Indenture).
5. Redemption.
The Notes will not be redeemable prior to March 15, 2003.
Thereafter, the Notes will be redeemable, at the Company's option, in whole at
any time or in part from time to time upon not less than 30 nor more than 60
days' prior notice mailed by first-class mail to each Holders' last address as
it appears in the Security Register, at the following Redemption Prices
(expressed as a percentage of the Accumulated Amount of the Notes), plus accrued
and unpaid interest, if any, on such Accumulated Amount to the Redemption Date
(subject to the right of Holders of record on the relevant Regular Record Date
that is on or prior to the Redemption Date to receive interest due on the
relevant Interest Payment Date), if redeemed during the 12-month period
commencing March 15 of the years set forth below:
Year Redemption Price
----- ----------------
2003 105.500%
2004 103.667
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2005 101.833
2006 and thereafter 100.000
6. Notice of Redemption.
Notice of any optional redemption will be mailed by the
Company at least 30 days but not more than 60 days before a Redemption Date to
each Holder of Notes to be redeemed at his last address as it appears in the
Security Register. Notes in original denominations larger than $1,000 may be
redeemed in part; provided, however, that Notes will only be issued in
denominations of $1,000 principal amount or integral multiples thereof. On and
after the Redemption Date, interest ceases to accrue on Notes (or portions of
Notes) called for redemption, unless the Company defaults in the payment of the
Redemption Price.
7. Repurchase upon Change in Control.
Upon the occurrence of a Change of Control, each Holder shall
have the right to require the repurchase of its Notes by the Company in cash
pursuant to the offer described in the Indenture at a purchase price equal to
101% of the Accumulated Amount of such Notes on such date of purchase, plus
accrued and unpaid interest, if any, on such Accumulated Amount to the date of
purchase (the "Change of Control Payment").
A notice of such Change of Control will be mailed within 30
days after any Change of Control occurs to each Holder at his last address as it
appears in the Security Register. Notes in original denominations larger than
$1,000 may be sold to the Company in part; provided, however, that Notes will
only be issued in denominations of $1,000 principal amount at maturity or
integral multiples thereof. On and after the Change of Control Payment Date,
interest ceases to accrue on Notes or portions of Notes surrendered for purchase
by the Company, unless the Company defaults in the payment of the Change of
Control Payment.
8. Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in
denominations of $1,000 of principal amount and integral multiples thereof. A
Holder may register the transfer or exchange of Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Notes selected for redemption. Also, it need not
register the transfer or exchange of any Notes for a period of 15 days before a
selection of Notes to be redeemed is made.
9. Persons Deemed Owners.
A Holder shall be treated as the owner of a Note for all
purposes.
10. Unclaimed Money.
If money for the payment of principal, premium, if any, or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company at its request. After that, Holders entitled
to the money must look
EI-10
to the Company for payment, unless an applicable law designates another Person,
and all liability of the Trustee and such Paying Agent with respect to such
money shall cease.
11. Discharge Prior to Redemption or Maturity.
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Notes and the Indenture if
the Company deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Notes to redemption or maturity, as
the case may be.
12. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding, and any existing
default or compliance with any provision may be waived with the consent of the
Holders of at least a majority in principal amount of the Notes then
outstanding. Without notice to or the consent of any Holder, the parties thereto
may amend or supplement the Indenture or the Notes to, among other things, cure
any ambiguity, defect or inconsistency and make any change that, in the opinion
of the Board of Directors of the Company, does not materially and adversely
affect the rights of any Holder.
13. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of
the Company and its Restricted Subsidiaries, among other things, to incur
additional indebtedness; pay dividends or make distributions in respect of their
capital stock; make investments or make certain other restricted payments; sell
assets; issue or sell stock of Restricted Subsidiaries; enter into transactions
with stockholders or affiliates; or, with respect to the Company, consolidate,
merge or sell all or substantially all of its assets. Within 90 days after the
end of the last fiscal quarter of each year, the Company must report to the
Trustee on compliance with such limitations.
14. Successor Persons.
Generally, when a successor person or other entity assumes all
the obligations of its predecessor under the Notes and the Indenture, the
predecessor person will be released from those obligations.
15. Defaults and Remedies.
The following events constitute "Events of Default" under the
Indenture: (a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable, upon acceleration, redemption or
otherwise whether or not such payment is prohibited by the subordination
provisions of the Indenture; (b) default in the payment of interest on any Note
when the same becomes due and payable, and such default continues for a period
of 30 days whether or not such payment is prohibited by the subordination
provisions of the Indenture; (c) the Company defaults in the performance of or
breaches any other covenant or agreement of the Company in the Indenture or
under the Notes and such default or breach continues for a period of 30
consecutive days after written notice by the Trustee or the Holders of 25% or
more in
EI-11
aggregate principal amount of the Notes; (d) there occurs with respect to any
issue or issues of Indebtedness of the Company or any Significant Subsidiary
having an outstanding principal amount of $25,000,000 or more in the aggregate
for all such issues of all such Persons, whether such Indebtedness now exists or
shall hereafter be created, (i) an event of default that has caused the holder
thereof to declare such Indebtedness to be due and payable prior to its Stated
Maturity and such Indebtedness has not been discharged in full or such
acceleration has not been rescinded or annulled within 30 days of such
acceleration and/or (ii) the failure to make a principal payment at the final
(but not any interim) fixed maturity and such defaulted payment shall not have
been made, waived or extended within 30 days of such payment default; (e) any
final judgment or order (not covered by insurance) for the payment of money in
excess of $25,000,000 in the aggregate for all such final judgments or orders
against all such Persons (treating any deductibles, self-insurance or retention
as not so covered) shall be rendered against the Company or any Significant
Subsidiary and shall not be paid or discharged, and there shall be any period of
60 consecutive days following entry of the final judgment or order that causes
the aggregate amount for all such final judgments or orders outstanding and not
paid or discharged against all such Persons to exceed $25,000,000 during which a
stay of enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; (f) a court having jurisdiction in
the premises enters a decree or order for (i) relief in respect of the Company
or any Significant Subsidiary in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (ii)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (iii) the winding up or liquidation of the affairs of
the Company or any Significant Subsidiary and, in each case, such decree or
order shall remain unstayed and in effect for a period of 60 consecutive days;
or (g) the Company or any Significant Subsidiary (i) commences a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (ii) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (iii) effects any general assignment for the benefit
of creditors.
If an Event of Default (other than an Event of Default
specified in clause (f) or (g) above that occurs with respect to the Company)
occurs and is continuing under the Indenture, the Trustee or the Holders of at
least 25% in aggregate principal amount of the Notes, then outstanding, by
written notice to the Company (and to the Trustee if such notice is given by the
Holders), may, and the Trustee at the request of such Holders shall, declare the
principal of, premium, if any, and accrued interest, if any, on the Notes to be
immediately due and payable. If a bankruptcy or insolvency default with respect
to the Company or any Restricted Subsidiary occurs and is continuing, the
principal amount of the Notes automatically becomes due and payable. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of at least a
majority in principal amount of the Notes then outstanding may direct the
Trustee in its exercise of any trust or power.
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16. Subordination.
The payment of the Notes is, to the extent set forth in the
Indenture, subordinated in right of payment in full, in cash or cash
equivalents, of all Senior Indebtedness of the Company. To the extent provided
in the Indenture, Senior Indebtedness of the Company must be paid before the
Notes may be paid. The Company agrees, and each Holder by accepting a Note
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purposes.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any
other capacity, may make loans to, accept deposits from and perform services for
the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
No incorporator, stockholder, officer, director, employee or
controlling person as such, of the Company or of any successor Person thereof in
such capacity, shall have any liability for any obligations of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
19. Authentication.
This Note shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on the other side
of this Note.
20. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Note, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein.
21. Abbreviations.
Customary abbreviations may be used in the name of a Holder 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).
22. Governing Law.
The Indenture and the Notes shall be governed by the laws of
the State of New York, excluding (to the extent permissible by law) any rule of
law that would cause the application of the laws of any jurisdiction other than
the State of New York.
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The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to WinStar
Communications, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: General Counsel.
EI-14
ASSIGNMENT FORM
I or we assign and transfer this Note to:
Please insert social security or other identifying number of assignee
______________________________________________________________________
______________________________________________________________________
Print or type name, address and zip code of assignee and irrevocably appoint
_________________________, as agent, to transfer this Note on the books of the
Company.
The agent may substitute another to act for him.
Dated _________ Signed _______________________________________
___________________________________________________________
(Sign exactly as name appears on the other side of this Note)
Signature Guarantee ___________________________________________________1
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
---------------
1 The Holder's signature must be guaranteed by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" as
defined by Rule 17Ad-15 under the Exchange Act.
EI-15
CHECK ONE BOX BELOW
(1) /_/ to the Company; or
(2) /_/ pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) /_/ inside the United States to a "qualified
institutional buyer" (as defined in Rule 144A under
the Securities Act of 1933) that purchases for its
own account or for the account of a qualified
institutional buyer to whom notice is given that such
transfer is being made in reliance on Rule 144A, in
each case pursuant to and in compliance with Rule
144A under the Securities Act of 1933; or
(4) /_/ outside the United States in an offshore
transaction within the meaning of Regulation S under
the Securities Act in compliance with Rule 904 under
the Securities Act of 1933; or
(5) /_/ pursuant to another available exemption from
registration provided by Rule 144 under the
Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however,
that if box (4) or (5) is checked, the Trustee may require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
------------------------
Signature
Signature Guarantee:
----------------------------- --------------------------
Signature must be guaranteed Signature
------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to
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Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A.
Dated: ________________ ______________________________
NOTICE: To be executed by
an executive officer
EI-17
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Date of Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Exchange Principal Amount of this Principal Amount of this Global Security following officer of Trustee or
Global Security Global Security such decrease or increase) Securities Custodian
EI-18
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.10 or Section 4.11 of the Indenture, check the Box: |_|
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.10 or Section 4.11 of the Indenture, state the amount (in
principal amount): $_____________
Date: ___________
Your Signature: ______________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: __________________________________________2
--------------------------------
2 The Holder's signature must be guaranteed by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" as
defined by Rule 17Ad-15 under the Exchange Act.