Exhibit 4.01
------------------------------------------------------------------------------
------------------------------------------------------------------------------
IDT CORPORATION,
as Company,
and
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
_____________________
INDENTURE
_____________________
Dated as of February 18, 1998
up to $275,000,000
8 3/4 % Senior Notes due 2006
------------------------------------------------------------------------------
------------------------------------------------------------------------------
CROSS REFERENCE TABLE
TIA Section Indenture Section
----------- -----------------
310 (a)(1) ........................................................... 7.10
(a)(2) ........................................................... 7.10
(a)(3) ........................................................... N.A.
(a)(4) ........................................................... N.A.
(a)(5) ........................................................... 7.10
(b) ................................................ 7.08; 7.10; 10.02
(c) ........................................................... N.A.
311 (a) ........................................................... 7.11
(b) ........................................................... 7.11
(c) ........................................................... N.A.
312 (a) ........................................................... 2.05
(b) ........................................................... 10.03
(c) ........................................................... 10.03
313 (a) ........................................................... 7.06
(b)(1) ........................................................... N.A.
(b)(2) ........................................................... 7.06
(c) ...................................................... 7.06; 10.02
(d) ........................................................... 7.06
314 (a) ................................................ 4.06; 4.08; 10.02
(b) ........................................................... N.A.
(c)(1) ........................................................... 10.04
(c)(2) ........................................................... 10.04
(c)(3) ........................................................... N.A.
(d) ........................................................... N.A.
(e) ........................................................... 10.05
(f) ........................................................... N.A.
315 (a) .......................................................... 7.01(b)
(b) ...................................................... 7.05; 10.02
(c) .......................................................... 7.01(a)
(d) .......................................................... 7.01(c)
(e) ........................................................... 6.11
316 (a)(last sentence) ............................................... 2.09
(a (1)(A) ........................................................ 6.05
(a)(1)(B) ........................................................ 6.04
(a)(2) ........................................................ N.A.
(b) ........................................................... 6.07
(c) ........................................................... 9.04
317 (a)(1) ........................................................... 6.08
(a)(2) ........................................................... 6.09
(b) ........................................................... 2.04
318 (a) ........................................................... 10.01
(c) ........................................................... 10.01
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions................................................. 1
Section 1.02. Incorporation by Reference of TIA........................... 20
Section 1.03. Rules of Construction....................................... 20
ARTICLE TWO
THE NOTES
Section 2.01. Form and Dating............................................. 21
Section 2.02. Execution and Authentication; Aggregate Principal Amount.... 22
Section 2.03. Registrar and Paying Agent.................................. 23
Section 2.04. Paying Agent to Hold Assets in Trust........................ 24
Section 2.05. Holder Lists................................................ 24
Section 2.06. Transfer and Exchange....................................... 24
Section 2.07. Replacement Notes........................................... 25
Section 2.08. Outstanding Notes........................................... 25
Section 2.09. Treasury Notes.............................................. 25
Section 2.10. Temporary Notes............................................. 26
Section 2.11. Cancellation................................................ 26
Section 2.12. Defaulted Interest.......................................... 26
Section 2.13. CUSIP Numbers............................................... 27
Section 2.14. Deposit of Monies........................................... 27
Section 2.15. Restrictive Legends......................................... 27
Section 2.16. Book-Entry Provisions for Global Security................... 29
Section 2.17. Special Transfer Provisions................................. 30
ARTICLE THREE
REDEMPTION
Section 3.01. Notices to Trustee.......................................... 32
Section 3.02. Selection of Notes to be Redeemed........................... 33
Section 3.03. Optional Redemption......................................... 33
i
Section 3.04. Notice of Redemption........................................ 34
Section 3.05. Effect of Notice of Redemption.............................. 35
Section 3.06. Deposit of Redemption Price................................. 35
Section 3.07. Notes Redeemed in Part...................................... 36
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Notes............................................ 36
Section 4.02. Maintenance of Office or Agency............................. 36
Section 4.03. Corporate Existence......................................... 36
Section 4.04. Payment of Taxes and Other Claims........................... 37
Section 4.05. Maintenance of Properties and Insurance..................... 37
Section 4.06. Compliance Certificate; Notice of Default................... 38
Section 4.07. Compliance with Laws........................................ 38
Section 4.08. Provision of Financial Information.......................... 38
Section 4.09. Waiver of Stay, Extension or Usury Laws..................... 39
Section 4.10. Limitation on Restricted Payments........................... 39
Section 4.11. Limitations on Transactions with Affiliates................. 42
Section 4.12. Limitation on Incurrence of Indebtedness.................... 42
Section 4.13. Limitation on Restrictions Affecting Restricted
Subsidiaries............................................. 45
Section 4.14. Change of Control........................................... 45
Section 4.15. Limitation on Asset Sales................................... 46
Section 4.16. Limitation on the Issuance and Sale of Equity Interests
of Restricted Subsidiaries................................ 48
Section 4.17. Limitation on Liens......................................... 48
Section 4.18. Limitation on Issuances of Guarantees by Restricted
Subsidiaries.............................................. 48
Section 4.19. Designation of Unrestricted Subsidiaries.................... 49
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. Merger, Consolidation and Sale of Assets.................... 50
Section 5.02. Successor Corporation....................................... 50
ii
ARTICLE SIX
REMEDIES
Section 6.01. Events of Default........................................... 51
Section 6.02. Acceleration................................................ 52
Section 6.03. Other Remedies.............................................. 53
Section 6.04. Waiver of Past Defaults..................................... 53
Section 6.05. Control by Majority......................................... 53
Section 6.06. Limitation on Suits......................................... 54
Section 6.07. Right of Holders To Receive Payment......................... 54
Section 6.08. Collection Suit by Trustee.................................. 54
Section 6.09. Trustee May File Proofs of Claim............................ 55
Section 6.10. Priorities.................................................. 55
Section 6.11. Undertaking for Costs....................................... 55
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties of Trustee........................................... 56
Section 7.02. Rights of Trustee........................................... 57
Section 7.03. Individual Rights of Trustee................................ 58
Section 7.04. Trustee's Disclaimer........................................ 58
Section 7.05. Notice of Default........................................... 58
Section 7.06. Reports by Trustee to Holders............................... 59
Section 7.07. Compensation and Indemnity.................................. 59
Section 7.08. Replacement of Trustee...................................... 60
Section 7.09. Successor Trustee by Merger, Etc............................ 61
Section 7.10. Eligibility; Disqualification............................... 61
Section 7.11. Preferential Collection of Claims Against Company........... 61
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.01. Termination of Company's Obligations........................ 61
Section 8.02. Application of Trust Money.................................. 64
Section 8.03. Repayment to the Company.................................... 64
Section 8.04. Reinstatement............................................... 64
iii
Section 8.05. Acknowledgment of Discharge by Trustee...................... 65
ARTICLE NINE
MODIFICATION OF THE INDENTURE
Section 9.01. Without Consent of Holders.................................. 65
Section 9.02. With Consent of Holders..................................... 66
Section 9.03. Compliance with TIA......................................... 67
Section 9.04. Revocation and Effect of Consents........................... 67
Section 9.05. Notation on or Exchange of Notes............................ 68
Section 9.06. Trustee To Sign Amendments, Etc............................. 68
Section 9.07. Payments for Consent........................................ 68
ARTICLE TEN
MISCELLANEOUS
Section 10.01. TIA Controls................................................ 69
Section 10.02. Notices..................................................... 69
Section 10.03. Communications by Holders with other Holders................ 70
Section 10.04. Certificate and Opinion as to Conditions Precedent.......... 70
Section 10.05. Statements Required in Certificate or Opinion............... 70
Section 10.06. Rules by Trustee, Paying Agent, Registrar................... 71
Section 10.07. Legal Holidays.............................................. 71
Section 10.08. Governing Law............................................... 71
Section 10.09. No Adverse Interpretation of Other Agreements............... 71
Section 10.10. No Personal Liability....................................... 71
Section 10.11. Successors.................................................. 71
Section 10.12. Duplicate Originals......................................... 72
Section 10.13. Severability................................................ 72
Section 10.14. Independence of Covenants................................... 72
EXHIBIT A Form of Note............................................... A-1
EXHIBIT B Form of Certificate To Be Delivered in Connection with
Transfers to Non-QIB Accredited Investors................ B-1
EXHIBIT C Form of Certificate To Be Delivered in Connection
with Transfers Pursuant to Regulation S.................. C-1
iv
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of the Indenture.
v
INDENTURE, dated as of February 18, 1998, between IDT CORPORATION, a
Delaware corporation (the "Company") and First Trust National Association, as
Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 8 3/4 % Senior
Notes due 2006 to be issued initially in the principal amount of $100,000,000
and thereafter in an additional principal amount, if any, up to $275,000,000
subject to the terms and conditions contained herein, and, to provide
therefor, the Company has duly authorized the execution and delivery of this
Indenture. All things necessary to make the Notes (as defined), when duly
issued and executed by the Company and authenticated and delivered hereunder,
the valid and binding obligations of the Company and to make this Indenture a
valid and binding agreement of the Company, have been done.
Each party hereto agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's 8 3/4 % Senior
Notes due 2006:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person (a) assumed in
connection with an Acquisition from such Person or (b) existing at the time
such Person becomes a Restricted Subsidiary or is merged or consolidated with
or into the Company or any Restricted Subsidiary; provided, however, that
such Indebtedness was not Incurred in connection with, or in contemplation
of, such Acquisition, such Person becoming a Restricted Subsidiary or such
merger or consolidation.
"Acquired Person" means, with respect to any specified Person, any other
Person which merges with or into or becomes a Subsidiary of such specified
Person.
"Acquisition" means (i) any capital contribution (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise) by the Company or any Restricted
Subsidiary to any other Person, or any acquisition or purchase of Equity
Interests of any other Person by the Company or any Restricted Subsidiary, in
either case pursuant to which such Person shall become a Restricted
Subsidiary or shall be consolidated, merged with or into the Company or any
Restricted Subsidiary or (ii) any acquisition by the Company or any
Restricted Subsidiary of the assets of any Person which constitute
substantially all of an operating unit or line of business of such Person or
which is otherwise outside of the ordinary course of business.
"Additional Interest" has the meaning provided in the Registration Rights
Agreement.
1
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities, by agreement or otherwise.
"Affiliate Transaction" has the meaning provided in Section 4.11.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Agent Members" has the meaning provided in Section 2.16.
"amend" means amend, modify, supplement, restate or amend and restate,
including successively; and "amending" and "amended" have correlative meanings.
"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease
(that has the effect of a disposition) or other disposition (including, without
limitation, any merger, consolidation or sale-leaseback transaction) to any
Person other than the Company or a Restricted Subsidiary, in one transaction or
a series of related transactions, of any Equity Interest of any Restricted
Subsidiary or any other property or asset of the Company or any Restricted
Subsidiary (including the receipt of proceeds paid on account of the loss of or
damage to any property or asset and awards of compensation for any asset taken
by condemnation, eminent domain or similar proceedings). For the purposes of
this definition, the term "Asset Sale" shall not include (a) any transaction
consummated in compliance with Section 5.01; provided, however, that any
transaction consummated in compliance with Section 5.01 involving a sale,
conveyance, assignment, transfer, lease or other disposal of less than all of
the properties or assets of the Company and the Restricted Subsidiaries shall be
deemed to be an Asset Sale with respect to the properties or assets of the
Company and Restricted Subsidiaries that are not so sold, conveyed, assigned,
transferred, leased or otherwise disposed of in such transaction; (b) sales of
property or equipment that has become worn out, obsolete or damaged or otherwise
unsuitable for use in connection with the business of the Company or any
Restricted Subsidiary, as the case may be; and (c) any transaction consummated
in compliance with Section 4.10. In addition, solely for purposes of Section
4.15, sales, conveyances, transfers, leases or other dispositions of properties
or assets involving assets with a Fair Market Value not in excess of $500,000 in
the aggregate in any fiscal year shall be deemed not to be an Asset Sale.
"Authenticating Agent" has the meaning provided in Section 2.02.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal, state or
foreign law for the relief of debtors.
"Basket" has the meaning set forth in Section 4.10.
2
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the secretary or an assistant secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which commercial banking institutions in the City of New York or the city in
which the Trustee is located are required or authorized by law or other
governmental action to be closed.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be so required to be capitalized on the balance sheet in accordance
with GAAP.
"Cash Equivalents" means: (a) U.S. dollars; (b) securities issued or
directly and fully guaranteed or insured by the U.S. government or any agency or
instrumentality thereof having maturities of not more than six months from the
date of acquisition; (c) certificates of deposit and eurodollar time deposits
with maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million; (d) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in
clauses (b) and (c) entered into with any financial institution meeting the
qualifications specified in clause (c) above; and (e) commercial paper rated
P-1, A-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. or
Standard & Poor's Ratings Group, respectively, and in each case maturing within
six months after the date of acquisition.
"Certificated Securities" means Notes in definitive registered form.
"Change of Control" shall mean the occurrence of any of the following
events (whether or not approved by the Board of Directors of the Company):
(a) any "person" or "group" other than a Permitted Holder (1) is or becomes the
"beneficial owner," directly or indirectly, of 30% or more of the total voting
power of the Voting Equity Interests of the Company or (2) has the power,
directly or indirectly, to elect a majority of the members of the Board of
Directors of the Company; (b) the Company consolidates with, or merges with or
into, another Person or the Company or one or more Restricted Subsidiaries sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
of the assets of the Company and the Restricted Subsidiaries, taken as a whole,
to any Person (other than a Wholly Owned Restricted Subsidiary), or any Person
consolidates with, or merges with or into, the Company, in any such event other
than pursuant to a transaction in which the Person or Persons that "beneficially
owned," directly or indirectly, a majority of the Voting Equity Interests of the
Company immediately prior to such transaction, "beneficially own," directly or
indirectly, a majority of the total voting power of the Voting Equity Interests
of the surviving or transferee Person; (c) during any consecutive two-year
period, individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by the
Board of
3
Directors of the Company or whose nomination for election by the stockholders
of the Company was approved by a vote of at least a majority of the directors
then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office; (d) there shall occur the
liquidation or dissolution of the Company. For purposes of this definition,
(I) "group" has the meaning under Section 13(d) and 14(d) of the Exchange Act
or any successor provision to either of the foregoing, including any group
acting for the purpose of acquiring, holding or disposing of securities
within the meaning of Rule 13d-5(b)(1) under the Exchange Act, (II)
"Permitted Holder" means ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or any Permitted Transferee, but
excluding any charitable organization established solely by one or more of
such holders or Family Members, (III) "beneficial ownership" has the meaning
set forth in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
Person shall be deemed to have "beneficial ownership" of all securities that
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, upon the happening of an event
or otherwise, and (IV) "Permitted Transferee" means, (A) the Company, and (B)
with respect to each holder who is a natural person, (i) the spouse of such
holder, lineal ancestors of such holder or spouse and any person who is a
lineal descendant of a grandparent of such holder or the spouse, or a spouse
of any such lineal descendant or such lineal ancestor (collectively referred
to as the "Family Members" of such holder); (ii) the trustee of a trust
exclusively for the benefit of such holder or any Family Member; (iii) any
▇▇▇ or 401(k) employee benefit plan of such holder; (iv) the estate or any
appointed guardian or custodian of such holder; and (v) any corporation or
partnership controlled by such holder.
"Change of Control Date" has the meaning set forth in Section 4.14.
"Common Equity Interests" means any Equity Interests other than Preferred
Equity Interests.
"Common Stock" means the Company's Common Stock, $.01 par value.
"Company" means IDT Corporation, a Delaware corporation.
"Consolidated Fixed Charges" means, for any period, Consolidated Interest
Expense plus dividends declared and payable on Preferred Equity Interests of
the Company.
"Consolidated Income Tax Expense" means, with respect to any period, the
provision for federal, state, local and foreign income taxes payable by the
Company and the Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the aggregate amount
of interest in respect of Indebtedness (including capitalized interest,
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 Protection Obligations;
and interest on Indebtedness that is guaranteed or secured by the Company or any
of its Restricted
4
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.
"Consolidated Net Income" means, with respect to any period, the net income
of the Company and the Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, adjusted, to the extent included in
calculating such net income, by excluding, without duplication, (a) all
extraordinary gains or losses for such period, (b) all gains or losses from the
sales or other dispositions of assets out of the ordinary course of business
(net of taxes, fees and expenses relating to the transaction giving rise
thereto) for such period; (c) that portion of such net income derived from or in
respect of investments in Persons other than Restricted Subsidiaries, except to
the extent actually received in cash by the Company or any Restricted Subsidiary
(subject, in the case of any Restricted Subsidiary, to the provisions of clause
(f) of this definition); (d) the portion of such net income (or loss) allocable
to minority interests in any Person (other than a Restricted Subsidiary) for
such period, except to the extent the Company's allocation portion of such
Person's net income for such period is actually received in cash by the Company
or any Restricted Subsidiary (subject, in the case of any Restricted Subsidiary,
to the provisions of clause (f) of this definition); (e) the net income (or
loss) of any other Person combined with the Company or any Restricted Subsidiary
on a "pooling of interests" basis attributable to any period prior to the date
of combination; and (f) the net income of any Restricted Subsidiary to the
extent that the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is not at the time (regardless of any
waiver) permitted, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Restricted Subsidiary or its Equity
Interest holders.
"Consolidated Net Worth" of any Person means the consolidated stockholders'
equity of such Person, determined on a consolidated basis in accordance with
GAAP, less (without duplication) amounts attributable to (x) Disqualified Equity
Interests of such Person and its Subsidiaries or (y) Unrestricted Subsidiaries.
"Consolidated Operating Cash Flow" means, with respect to any period,
Consolidated Net Income for such period increased (without duplication), to
the extent deducted in calculating such Consolidated Net Income, by (a)
Consolidated Income Tax Expense for such period; (b) Consolidated Fixed
Charges for such period; and (c) depreciation, amortization and any other non
cash items for such period (other than any non cash item which requires the
accrual of, or a reserve for, cash charges for any future period) of the
Company and the Restricted Subsidiaries, including, without limitation,
amortization of capitalized debt issuance costs for such period, all of the
foregoing determined on a consolidated basis in accordance with GAAP minus
non-cash items to the extent they increase Consolidated Net Income (including
the partial or entire reversal of reserves taken in prior periods) for such
period.
"Corporate Trust Office" means the Office of the Trustee at which at any
particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is
located at ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
5
"Covenant Defeasance" has the meaning set forth in Section 8.01.
"Credit Facility" means a senior term loan or senior revolving credit
facility provided by one or more financial institutions that provide credit in
the ordinary course of their business.
"Cumulative Operating Cash Flow" means, as at any date of determination,
the positive cumulative Consolidated Operating Cash Flow realized during the
period commencing on the Issue Date and ending on the last day of the most
recent fiscal quarter immediately preceding the date of determination for which
consolidated financial information of the Company is available or, if such
cumulative Consolidated Operating Cash Flow for such period is negative, the
negative amount by which cumulative Consolidated Operating Cash Flow is less
than zero.
"Currency Agreement" shall mean any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement, which may include the
use of derivatives, designed to protect the Company or any Restricted Subsidiary
against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Default Interest Payment Date" has the meaning set forth in Section 2.12.
"Depository" means The Depository Trust Company, its nominees and
successors and any institution that succeeds the Depository Trust Company as
depository and Holder of Global Notes hereunder.
"Designation" has the meaning set forth in Section 4.19.
"Designation Amount" has the meaning set forth in Section 4.19.
"Disinterested Director" means a member of the Board of Directors of the
Company who does not have any direct or indirect financial interest in or with
respect to the transaction being considered, except by virtue of his or her
membership on the Board of Directors.
"Disposition" means, with respect to any Person, any merger, consolidation
or other business combination involving such Person (whether or not such Person
is the Surviving Person) or the sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of such Person's assets.
"Disqualified Equity Interest" means any Equity Interest which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable at the option of the holder thereof), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable, at the option of the holder thereof, in
whole or in part, on or prior to the earlier of the maturity date of the Notes
or the date
6
on which no Notes remain outstanding; provided, however, that any Equity
Interests that would not constitute Disqualified Equity Interests but for
provisions thereof giving holders thereof the right to require the Company to
repurchase or redeem such Equity Interests upon the occurrence of a change in
control occurring prior to the final maturity date of the Notes shall not
constitute Disqualified Equity Interests if the change in control provisions
applicable to such Equity Interests are no more favorable to the holders of such
Equity Interests than the provisions of Section 4.14 and such Equity Interests
specifically provide that the Company will not repurchase or redeem any such
Equity Interests pursuant to such provisions prior to the Company's repurchase
of the Notes as are required to be repurchased pursuant to Section 4.14.
"Dollar Equivalent" shall mean, with respect to a monetary amount in a
currency other than U.S. Dollars, at any time for the determination thereof, the
amount of U.S. Dollars obtained by converting such other currency involved in
such computation into U.S. dollars at the rate for the purchase of U.S. dollars
with the applicable currency as set forth in the Key Currency Cross Rates table
of The Wall Street Journal (or a successor table) on the date that is two
business days prior to such determination.
"Equity Interest" in any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including partnership interests, whether general or limited, in
such Person, including any Preferred Equity Interests.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.15.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Exchange Notes" means the 8 3/4 % Senior Notes due 2006 to be issued in
exchange for the Initial Notes pursuant to the Registration Rights Agreement or,
with respect to Initial Notes issued under this Indenture subsequent to the
Issue Date, pursuant to Section 2.02.
"Expiration Date" has the meaning set forth in the definition of "Offer to
Purchase."
"Fair Market Value" means, with respect to any asset, the price (after
taking into account any liabilities relating to such assets) which could be
negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction; provided, however, that the Fair Market
Value of any such asset or assets shall be determined by the Board of Directors
of the Company acting in good faith, which determination shall be evidenced by a
resolution of such Board delivered to the Trustee.
"GAAP" means, at any date of determination, generally accepted accounting
principles in effect in the United States which are applicable at the date of
determination and which are consistently applied for all applicable periods.
7
"Global Note" has the meaning provided in Section 2.01.
"guarantee" means, as applied to any obligation, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit. A guarantee shall include,
without limitation, any agreement to maintain or preserve any other person's
financial condition or to cause any other Person to achieve certain levels of
operating results.
"Guaranteed Indebtedness" has the meaning provided in Section 4.18.
"Holder" means a holder of Notes.
"Incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of a Person existing at the time
such Person becomes a Restricted Subsidiary or is merged or consolidated with or
into the Company or any Restricted Subsidiary shall be deemed to be Incurred at
such time.
"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent, (a) every obligation of such Person for money borrowed;
(b) every obligation of such Person evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses; (c) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person; (d)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable incurred in the
ordinary course of business and payable in accordance with industry practices,
or other accrued liabilities arising in the ordinary course of business which
are not overdue or which are being contested in good faith); (e) every Capital
Lease Obligation of such Person; (f) every net obligation under interest rate
swap or similar agreements or foreign currency hedge, exchange or similar
agreements of such Person; (g) every obligation of the type referred to in
clauses (a) through (f) of another Person and all dividends of another Person
the payment of which, in either case, such Person has guaranteed or is
responsible or liable for, directly or indirectly, as obligor, guarantor or
otherwise; and (h) any and all deferrals, renewals, extensions and refundings
of, or amendments, modifications or supplements to, any liability of the kind
described in any of the preceding clauses (a) through (g) above. Indebtedness
(i) shall never be calculated taking into account any cash and cash equivalents
held by such Person; (ii) shall not include obligations of any Person (x)
arising from the honoring by a bank or other
8
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business, provided
that such obligations are extinguished within two Business Days of their
incurrence unless covered by an overdraft line, (y) resulting from the
endorsement of negotiable instruments for collection in the ordinary course of
business and consistent with past business practices and (z) under stand-by
letters of credit to the extent collateralized by cash or Cash Equivalents;
(iii) which provides that an amount less than the principal amount thereof shall
be due upon any declaration of acceleration thereof shall be deemed to be
incurred or outstanding in an amount equal to the accreted value thereof at the
date of determination determined in accordance with GAAP; and (iv) shall include
the liquidation preference and any mandatory redemption payment obligations in
respect of any Disqualified Equity Interests of the Company and any Preferred
Equity Interests of any Restricted Subsidiary.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Independent Financial Advisor" means a nationally recognized, accounting,
appraisal, investment banking firm or consultant with experience in a
Telecommunications Business that is, in the judgment of the Company's Board of
Directors, qualified to perform the task for which it has been engaged (i) which
does not, and whose directors, officers and employees or Affiliates do not, have
a direct or indirect financial interest in the Company and (ii) which, in the
judgment of the Board of Directors of the Company, is otherwise independent and
qualified to perform the task for which it is to be engaged.
"Initial Notes" means, collectively, (i) the 8 3/4 % Senior Notes due 2006
of the Company issued on the Issue Date and (ii) one or more series of 8 3/4 %
Senior Notes due 2006 that are issued under this Indenture subsequent to the
Issue Date pursuant to Section 2.02, in an aggregate principal amount up to
$275,000,000.
"Institutional Purchasers" means BT Alex. ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ LLC, ▇▇▇▇▇▇▇▇▇ & Company, Inc., and Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
or any other original purchasers of any Initial Notes issued after the Issue
Date.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"interest" means, with respect to the Notes, the sum of any cash interest
and any Additional Interest on the Notes.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Notes.
"Interest Rate Protection Obligations" means, with respect to any Person,
the Obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
9
"Investment" means, with respect to any Person, any direct or indirect
loan, advance, guarantee or other extension of credit or capital contribution to
(by means of transfers of cash or other property or assets to others or payments
for property or services for the account or use of others, or otherwise), or
purchase or acquisition of capital stock, bonds, notes, debentures or other
securities or evidences of Indebtedness issued by, any other Person. The amount
of any Investment shall be the original cost of such Investment, plus the cost
of all additions thereto, and minus the amount of any portion of such Investment
repaid to such Person in cash as a repayment of principal or a return of
capital, as the case may be, but without any other adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment. In determining the amount of any investment involving a transfer of
any property or asset other than cash, such property shall be valued at its fair
market value at the time of such transfer, as determined in good faith by the
board of directors (or comparable body) of the Person making such transfer.
"Issue Date" means February 18, 1998, the original issue date of the Notes.
"Legal Defeasance" has the meaning set forth in Section 8.01.
"Legal Holiday" has the meaning provided in Section 10.07.
"Leverage Ratio" means the ratio of (a) the Total Consolidated Indebtedness
as of the date of calculation (the "Determination Date") to (b) two times the
Consolidated Operating Cash Flow for the latest two fiscal quarters for which
financial information is available immediately preceding such Determination Date
(the "Measurement Period"). For purposes of calculating Consolidated Operating
Cash Flow for the Measurement Period immediately prior to the relevant
Determination Date, (I) any Person that is a Restricted Subsidiary on the
Determination Date (or would become a Restricted Subsidiary on such
Determination Date in connection with the transaction that requires the
determination of such Consolidated Operating Cash Flow) will be deemed to have
been a Restricted Subsidiary at all times during such Measurement Period, (II)
any Person that is not a Restricted Subsidiary on such Determination Date (or
would cease to be a Restricted Subsidiary on such Determination Date in
connection with the transaction that requires the determination of such
Consolidated Operating Cash Flow) will be deemed not to have been a Restricted
Subsidiary at any time during such Measurement Period, and (III) if the Company
or any Restricted Subsidiary shall have in any manner (x) acquired (through an
Acquisition or the commencement of activities constituting such operating
business) or (y) disposed of (by way of an Asset Sale or the termination or
discontinuance of activities constituting such operating business) any operating
business during such Measurement Period or after the end of such period and on
or prior to such Determination Date, such calculation will be made on a pro
forma basis in accordance with GAAP as if, in the case of an Acquisition or the
commencement of activities constituting such operating business, all such
transactions had been consummated on the first day of such Measurement Period
and, in the case of an Asset Sale or termination or discontinuance of activities
constituting such operating business, all such transactions had been consummated
prior to the first day of such Measurement Period (it being understood that in
calculating Consolidated Operating Cash Flow the exclusions set forth in
10
clauses (a) through (f) of the definition of Consolidated Net Income shall apply
to an Acquired Person as if it were a Restricted Subsidiary).
"Lien" means any lien, mortgage, charge, security interest, hypothecation,
assignment for security or encumbrance of any kind (including any conditional
sale or capital lease or other title retention agreement, any lease in the
nature thereof, and any agreement to give any security interest).
"Maturity Date" means the date, which is set forth on the face of the
Notes, on which the Notes will mature.
"Net Cash Proceeds" means the aggregate proceeds in the form of cash or
Cash Equivalents received by the Company or any Restricted Subsidiary in respect
of any Asset Sale, including all cash or Cash Equivalents received upon any
sale, liquidation or other exchange of proceeds of Asset Sales received in a
form other than cash or Cash Equivalents, net of (a) the direct costs relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof; (b) taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements); (c) amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale; (d) amounts deemed, in good faith, appropriate by the Board of
Directors of the Company to be provided as a reserve, in accordance with GAAP,
against any liabilities associated with such assets which are the subject of
such Asset Sale (provided that the amount of any such reserves shall be deemed
to constitute Net Cash Proceeds at the time such reserves shall have been
released or are not otherwise required to be retained as a reserve); and (e)
with respect to Asset Sales by Subsidiaries, the portion of such cash payments
attributable to Persons holding a minority interest in such Subsidiary.
"Notes" means, collectively, the Initial Notes, the Private Exchange Notes,
if any, and the Exchange Notes, treated as a single class of securities, as
amended or supplemented from time to time in accordance with the terms of this
Indenture, that are issued pursuant to this Indenture.
"Note Amount" has the meaning set forth in Section 4.15.
"Obligations" means any principal, interest (including, without limitation,
post-petition interest), penalties, fees, indemnifications, reimbursement
obligations, damages and other liabilities payable under the documentation
governing any Indebtedness.
"Offer" has the meaning set forth in the definition of "Offer to Purchase."
"Offering Memorandum" means the confidential Offering Memorandum dated
February 12, 1998 of the Company relating to the offering of the Notes.
"Offer to Purchase" means a written offer (the "Offer") sent by or on
behalf of the Company by first-class mail, postage prepaid, to each holder at
his address appearing in the register for the Notes on the date of the Offer
offering to purchase up to the principal amount of
11
Notes specified in such Offer at the purchase price specified in such Offer (as
determined pursuant to this Indenture). Unless otherwise required by applicable
law, the Offer shall specify an expiration date (the "Expiration Date") of the
Offer to Purchase, which shall be not less than 20 Business Days nor more than
60 days after the date of such Offer, and a settlement date (the "Purchase
Date") for purchase of Notes to occur no later than five Business Days after the
Expiration Date. The Company shall notify the Trustee at least 15 Business Days
(or such shorter period as is acceptable to the Trustee) prior to the mailing of
the Offer of the Company's obligation to make an Offer to Purchase, and the
Offer shall be mailed by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company. The Offer shall contain
all the information required by applicable law to be included therein. The
Offer shall also contain information concerning the business of the Company and
its Subsidiaries which the Company in good faith believes will enable such
Holders to make an informed decision with respect to the Offer to Purchase
(which at a minimum will include (i) the most recent annual and quarterly
financial statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in the document required to be
filed with the Trustee pursuant to this Indenture (which requirements may be
satisfied by delivery of such documents together with the Offer), (ii) a
description of material developments in the Company's business subsequent to the
date of the latest of such financial statements referred to in clause
(i) (including a description of the events requiring the Company to make the
Offer to Purchase), (iii) if applicable, appropriate pro forma financial
information concerning the Offer to Purchase and the events requiring the
Company to make the Offer to Purchase and (iv) any other information required by
applicable law to be included therein). The Offer shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of this Indenture pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding Notes offered
to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such amount has been
determined pursuant to the Section of this Indenture requiring the Offer to
Purchase) (the "Purchase Amount");
(4) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of Notes accepted for payment (as specified
pursuant to this Indenture) (the "Purchase Price");
(5) that the holder may tender all or any portion of the Notes
registered in the name of such holder and that any portion of a Note
tendered must be tendered in an integral multiple of $1,000 principal
amount at maturity;
(6) the place or places where Notes are to be surrendered for tender
pursuant to the Offer to Purchase;
12
(7) that interest on any Note not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will continue to
accrue;
(8) that on the Purchase Date the Purchase Price will become due and
payable upon each Note being accepted for payment pursuant to the Offer to
Purchase and that interest thereon shall cease to accrue on and after the
Purchase Date;
(9) that each holder electing to tender all or any portion of a Note
pursuant to the Offer to Purchase will be required to surrender such Note
at the place or places specified in the Offer prior to the close of
business on the Expiration Date (such Note being, if the Company or the
Trustee so requires, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Trustee
duly executed by, the holder thereof or his attorney duly authorized in
writing);
(10) that holders will be entitled to withdraw all or any portion of
Notes tendered if the Company (or its Paying Agent) receives, not later
than the close of business on the fifth Business Day next preceding the
Expiration Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the holder, the principal amount of the Note the
holder tendered, the certificate number of the Note the holder tendered and
a statement that such holder is withdrawing all or a portion of his tender;
(11) that (a) if Notes in an aggregate principal amount less than or
equal to the Purchase Amount are duly tendered and not withdrawn pursuant
to the Offer to Purchase, the Company shall purchase all such Notes and (b)
if Notes in an aggregate principal amount in excess of the Purchase Amount
are tendered and not withdrawn pursuant to the Offer to Purchase, the
Company shall purchase Notes having an aggregate principal amount equal to
the Purchase Amount on a pro rata basis (with such adjustments as may be
deemed appropriate so that only Notes in denominations of $1,000 principal
amount at maturity or integral multiples thereof shall be purchased); and
(12) that in the case of any holder whose Note is purchased only in
part, the Company shall execute and the Trustee shall authenticate and
deliver to the holder of such Note without service charge, a new Note or
Notes, of any authorized denomination as requested by such holder, in an
aggregate principal amount equal to and in exchange for the unpurchased
portion of the Note so tendered.
An Offer to Purchase shall be governed by and effected in accordance with
the provisions above pertaining to any Offer.
"Officer" means, with respect to any Person, the Chairman of the Board of
Directors, the Chief Executive Officer, the President, the Chief Operating
Officer, any Vice President, the Chief Financial Officer, the Treasurer, the
Controller, or the Secretary of such Person, or any other officer designated by
the Board of Directors serving in a similar capacity.
13
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chief Executive Officer, the President or any Vice President and
the Chief Financial Officer or any Treasurer of such Person that shall comply
with applicable provisions of this Indenture.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
10.04 and 10.05, as they relate to the giving of an Opinion of Counsel.
"Other Debt" has the meaning provided in Section 4.15.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Investments" means (a) Cash Equivalents; (b) Investments in
prepaid expenses, negotiable instruments held for collection and lease, utility
and workers' compensation, performance and other similar deposits; (c) loans and
advances to employees made in the ordinary course of business not to exceed
$500,000 in the aggregate at any one time outstanding; and (d) Interest Rate
Protection Obligations and Currency Agreements permitted under Section 4.12.
"Permitted Liens" means (a) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary; provided, however, that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not secure any
property or assets of the Company or any Restricted Subsidiary other than the
property or assets subject to the Liens prior to such merger or consolidation;
(b) Liens existing on the Issue Date; (c) Liens securing Indebtedness Incurred
solely for the purpose of financing all or any part of the purchase price or
cost of design, development, construction, or installation of property or assets
used in the business of the Company or the Restricted Subsidiaries, or repairs,
additions or improvements to such assets; provided, however, that (I) such Liens
secure Indebtedness in an amount not in excess of the original purchase price or
the original cost of any such assets or repair, addition or improvement thereto
(plus an amount equal to the reasonable fees and expenses in connection with the
incurrence of such Indebtedness), (II) such Liens do not extend to any other
assets of the Company or the Restricted Subsidiaries (and, in the case of
repair, addition or improvements to any such assets, such Lien extends only to
the assets (and improvements thereto or thereon) repaired, added to or
improved), (III) the Incurrence of such Indebtedness is permitted by Section
4.12 and (IV) such Liens attach within 90 days of such purchase, construction,
installation, repair, addition or improvement; (d) Liens to secure any
Refinancings, in whole or in part, of any Indebtedness secured by Liens referred
to in the clauses above so long as such Lien does not extend to any other
property (other than improvements thereto); (e) Liens securing letters of credit
entered into in the ordinary course of business and consistent with past
business practice; (f) Liens securing Indebtedness under Credit Facilities
Incurred under clause (ix) of paragraph (b) or under paragraph (a) of Section
4.12; (g) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been
14
made therefore; (h) Liens of landlords or of mortgagees of landlords arising by
operation of law, provided that the rental payments secured thereby are not yet
due and payable; (i) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security; (j) easements, rights-of-way, restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the business of the
Company or any of its Restricted Subsidiaries; (k) judgments or attachment Liens
not giving rise to an Event of Default; (l) any interest or title of a lessor in
property subject to any Capital Lease Obligation or other lease; and (m) Liens
incurred in the ordinary course of business of the Company or any Restricted
Subsidiary of the Company with respect to obligations that do not exceed
$2.0 million at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (b) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Company or such
Restricted Subsidiary.
"Permitted Refinancing" means, with respect to any Indebtedness,
Indebtedness to the extent representing a Refinancing of such Indebtedness;
provided, however, that (1) the Refinancing Indebtedness shall not exceed the
sum of the amount of the Indebtedness being Refinanced, plus the amount of
accrued interest or dividends thereon, the amount of any reasonably determined
prepayment premium necessary to accomplish such Refinancing and reasonable fees
and expenses incurred in connection therewith; (2) the Refinancing Indebtedness
shall have a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of the Indebtedness being Refinanced and shall
not permit redemption or other retirement (including pursuant to any required
offer to purchase to be made by the Company or any Restricted Subsidiary) of
such Indebtedness at the option of the holder thereof prior to the final stated
maturity of the Indebtedness being Refinanced, other than a redemption or other
retirement at the option of the holder of such Indebtedness (including pursuant
to a required offer to purchase made by the Company or a Restricted Subsidiary)
upon a change of control of the Company pursuant to provisions substantially
similar to those contained in Section 4.14; (3) Indebtedness that ranks pari
passu with the Notes may be Refinanced only with Indebtedness that is made pari
passu with or subordinate in right of payment to the Notes, and Indebtedness
that is subordinated in right of payment to the Notes may be Refinanced only
with Indebtedness that is subordinate in right of payment to the Notes on terms
no less favorable to the Holders than those contained in the Indebtedness being
Refinanced; and (4) the Refinancing Indebtedness shall be Incurred by the
obligor on the Indebtedness being Refinanced or by the Company.
"Permitted Transferee" means with respect to any Person: (a) in the case of
any person who is a natural person, such individual's spouse or children, any
trust for such individual's benefit or the benefit of such individual's spouse
or children, or any corporation or partnership in which the direct and
beneficial owner of all of the equity interest is such Person or such
individual's spouse or children or any trust for the benefit of such persons;
(b) in the case of any Person who is a natural person, the heirs, executors,
administrators or personal representatives upon the death of such Person or upon
the incompetency or disability of such Person for purposes of the protection and
management of such individual's assets; and (c) in the case of any Person who is
not a natural Person, any Affiliate of such Person.
15
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, limited liability
partnership, limited partnership, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Physical Notes" has the meaning provided in Section 2.01.
"Preferred Equity Interest," in any Person, means an Equity Interest of any
class or classes (however designated) which is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over Equity
Interests of any other class in such Person.
"Principal" of a debt security means the principal of the security plus,
when appropriate, the premium, if any, on the security.
"Private Exchange Notes" has the meaning set forth in the Registration
Rights Agreement.
"Private Placement Legend" means the legend initially set forth on the
Initial Notes and the Private Exchange Notes in the form set forth in Section
2.15.
"pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms of this Indenture, a calculation in accordance with
Article 11 of Regulation S-X under the Securities Act, as determined by the
Board of Directors of the Company in consultation with its independent public
accountants.
"Public Equity Offering" means an underwritten public offering of Common
Equity Interests of the Company pursuant to an effective registration statement
filed under the Securities Act (excluding registration statements filed on Form
S-8).
"Purchase Amount" has the meaning set forth in the definition of "Offer to
Purchase."
"Purchase Date" has the meaning set forth in the definition of "Offer to
Purchase."
"Purchase Price" has the meaning set forth in the definition of "Offer to
Purchase."
"Qualified Equity Interest" means any Equity Interest of the Company other
than any Disqualified Equity Interest.
"Qualified Institutional Buyer" or "QIB" shall have the meaning specified
in Rule 144A under the Securities Act.
"Record Date" means the Record Date specified in the Notes.
"redeem" means redeem, repurchase, defease or otherwise acquire or retire
for value; and "redemption" and "redeemed" have correlative meanings.
16
"Redemption Date," when used with respect to, any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price fixed for such redemption, including principal and premium, if
any, pursuant to this Indenture and the Notes.
"refinance" means refinance, renew, extend, replace, defease or refund,
including successively; and "refinancing" and "refinanced" have correlative
meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
Restricted Subsidiary of Indebtedness incurred in accordance with Section 4.12,
in each case that does not (1) result in an increase in the aggregate principal
amount of Indebtedness of such Person as of the date of such proposed
Refinancing (plus the amount of any premium required to be paid under the terms
of the instrument governing such Indebtedness and plus the amount of reasonable
expenses incurred by the Company or such Restricted Subsidiary in connection
with such Refinancing) or (2) create Indebtedness with (A) a Weighted Average
Life to Maturity that is less than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced or (B) a final maturity earlier than the final
maturity of the Indebtedness being Refinanced.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of the Issue Date among the Company and the Initial Purchasers and any
other registration rights agreement covering similar matters that may be
executed and delivered by the Company in connection with the issuance of any
Initial Notes after the Issue Date.
"Regulation S" means Regulation S under the Securities Act.
"Replacement Assets" means (x) properties and assets (other than cash or
any Equity Interests or other security) that will be used in a
Telecommunications Business of the Company and the Restricted Subsidiaries or
(y) Equity Interests of any Person engaged primarily in a Telecommunications
Business, which Person will become on the date of acquisition thereof a
Restricted Subsidiary as a result of the Company's acquiring such Equity
Interests.
"Required Filing Date" shall have the meaning set forth in Section 4.08.
"Restricted Payment" shall have the meaning set forth in Section 4.10.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to request and conclusively rely on an Opinion of Counsel with respect
to whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company that has not
been designated by the Board of Directors of the Company, by a resolution of the
Board of Directors of the Company delivered to the Trustee, as an Unrestricted
Subsidiary pursuant to Section 4.19.
17
Any such designation may be revoked by a resolution of the Board of Directors
of the Company delivered to the Trustee, subject to the provisions of Section
4.18.
"Revocation" has the meaning set forth in Section 4.19.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Significant Restricted Subsidiary" means, at any date of determination,
(a) any Restricted Subsidiary that, together with its Subsidiaries that
constitute Restricted Subsidiaries (i) for the most recent fiscal year of the
Company accounted for more than 5.0% of the consolidated revenues of the Company
and the Restricted Subsidiaries or (ii) as of the end of such fiscal year, owned
more than 5.0% of the consolidated assets of the Company and the Restricted
Subsidiaries, all as set forth on the consolidated financial statements of the
Company and the Restricted Subsidiaries for such year prepared in conformity
with GAAP, and (b) any Restricted Subsidiary which, when aggregated with all
other Restricted Subsidiaries that are not otherwise Significant Restricted
Subsidiaries and as to which any event described in clauses (g) or (h) of
Section 6.01 has occurred and is continuing, would constitute a Significant
Restricted Subsidiary under clause (a) of this definition.
"Significant Subsidiary" shall have the meaning set forth in Rule 1.02(w)
of Regulation S-X under the Securities Act.
"Stated Maturity," when used with respect to any Note or any installment of
interest thereon, means the date specified in such Note as the fixed date on
which the principal of such Note or such installment of interest is due and
payable.
"Subordinated Indebtedness" means any Indebtedness of the Company which is
expressly subordinated in right of payment to the Notes.
"Subsidiary" means, with respect to any Person, (a) any corporation of
which the outstanding Voting Equity Interests having at least a majority of the
votes entitled to be cast in the election of directors shall at the time be
owned, directly or indirectly, by such Person, or (b) any other Person of which
at least a majority of Voting Equity Interests are at the time, directly or
indirectly, owned by such first named Person.
"Subsidiary Guarantee" has the meaning provided in Section 4.18.
"Surviving Person" means, with respect to any Person involved in or that
makes any Disposition, the Person formed by or surviving such Disposition or the
Person to which such Disposition is made.
18
"Tax" shall mean any tax, duty, levy, impost, assessment or other
governmental charge (including penalties, interest and any other liabilities
related thereto).
"Taxing Authority" shall mean any government or political subdivision or
territory or possession of any government or any authority or agency therein or
thereof having power to tax.
"Telecommunications Acquisition" means an Acquisition of properties or
assets to be used in a Telecommunications Business or of the Equity Interests of
any Person that becomes a Restricted Subsidiary; provided, however, that such
Person's properties and assets shall consist principally of properties or assets
that will be used in a Telecommunications Business.
"Telecommunications Business" means any business of owning, constructing,
financing and operating a telephone and/or communications system, including any
Internet services system, Internet telephony system, and any business conducted
by the Company or any Restricted Subsidiary on the Issue Date.
"Total Consolidated Indebtedness" means, as at any date of determination,
an amount equal to the aggregate amount of all Indebtedness of the Company and
the Restricted Subsidiaries outstanding as of such date of determination, after
giving effect to any Incurrence of Indebtedness and the application of the
proceeds therefrom giving rise to such determination.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb), as amended, as in effect on the date of this Indenture, except as
otherwise provided in Section 9.03.
"Trust Officer" means any Officer or assistant officer of the Trustee
assigned by the Trustee to administer this Indenture, or in the case of a
successor trustee, an officer assigned to the department, division or group
performing the corporation trust work of such successor and assigned to
administer this Indenture.
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"Unrestricted Subsidiary" means any Subsidiary of the Company designated as
such pursuant to and in compliance with Section 4.19. Any such designation may
be revoked by a Board Resolution of the Company delivered to the Trustee,
subject to the provisions of Section 4.19.
"U.S. Government Obligations" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
19
"Voting Equity Interests" means Equity Interests in a corporation or other
Person with voting power under ordinary circumstances entitling the holders
thereof to elect the Board of Directors or other governing body of such
corporation or Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the sum of the
products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment of final maturity, in respect thereof, by
(ii) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment, by (b) the then
outstanding aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary all of
the outstanding Voting Equity Interests (other than directors' qualifying
shares) of which are owned, directly or indirectly, by the Company.
Section 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such provision
is incorporated by reference in, and made a part of, this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"Indenture Securities" means the Notes.
"Indenture Security Holder" means a Holder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Trustee.
"Obligor" on the Indenture Securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
Section 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP of any date of
determination;
20
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in
the plural include the singular;
(5) "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
(6) any reference to a statute, law or regulation means
that statute, law or regulation as amended and in effect from time to
time and includes any successor statute, law or regulation; provided,
however, that any reference to the Bankruptcy Law shall mean the
Bankruptcy Law as applicable to the relevant case.
ARTICLE TWO
THE NOTES
Section 2.01. Form and Dating.
The Notes and the Trustee's certificate of authentication relating thereto
shall be substantially in the form of Exhibit A. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
depository rule or usage. The Company and the Trustee shall approve the form
of the Notes and any notation, legend or endorsement on them. If required,
the Notes may bear the appropriate legend regarding any original issue
discount for federal income tax purposes. Each Note shall be dated the date
of its issuance and shall show the date of its authentication.
The terms and provisions contained in the Notes, annexed hereto as
Exhibits A, shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A and Notes offered and sold
in reliance on Regulation S shall be issued initially in the form of one or
more permanent global Notes in registered form, substantially in the form set
forth in Exhibit A (the "Global Note"), deposited with the Trustee, as
custodian for the Depository, duly executed by the Company and authenticated
by the Trustee as hereinafter provided and shall bear all the legends set
forth in Section 2.15. The aggregate principal amount of the Global Note may
from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depository, as hereinafter
provided.
Notes issued in exchange for interests in a Global Note pursuant to
Section 2.16 may be issued in the form of permanent certificated Notes in
registered form in substantially the form set
21
forth in Exhibit A (the "Physical Notes") and shall bear the first legend set
forth in Section 2.15. All Notes offered and sold in reliance on Regulation S
shall remain in the form of a Global Note until the consummation of the Exchange
Offer (as defined in the Registration Rights Agreement); provided, however, that
all of the time periods specified in the Registration Rights Agreement to be
complied with by the Company have been so complied with.
Section 2.02. Execution and Authentication; Aggregate Principal Amount.
Two Officers (each of whom shall, in each case, have been duly authorized
by all requisite corporate actions) shall sign the Notes for the Company by
manual or facsimile signature. The Company's seal shall be impressed,
affixed, imprinted or reproduced on the Notes and may be imprinted by
facsimile.
If an Officer whose signature is on a Note was an Officer at the time of
such execution but no longer holds that office or position at the time the
Trustee authenticates the Note, the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue in the
aggregate principal amount not to exceed $275,000,000 in one or more series,
provided that the aggregate principal amount of Initial Notes on the Issue
Date is not greater than $100,000,000, (ii) Private Exchange Notes from time
to time only in exchange for a like principal amount of Initial Notes and
(iii) Exchange Notes from time to time only in exchange for (A) a like
principal amount of Initial Notes or (B) a like principal amount of Private
Exchange Notes, in each case upon a written order of the Company in the form
of an Officers' Certificate of the Company. Notwithstanding the foregoing,
any order executed by the Company on the Issue Date with respect to Global
Notes issued in the initial principal amount of $0 may be executed by any two
executive officers of the Company. Each such written order shall specify the
amount of Notes to be authenticated and the date on which the Notes are to be
authenticated, whether the Notes are to be Initial Notes, Private Exchange
Notes or Exchange Notes and whether (subject to Section 2.01) the Notes are
to be issued as Physical Notes or Global Notes or such other information as
the Trustee may reasonably request. In addition, with respect to
authentication pursuant to clause (iii) of the first sentence of this
paragraph, the first such written order from the Company shall be accompanied
by an Opinion of Counsel of the Company in a form reasonably satisfactory to
the Trustee stating that the issuance of the Exchange Notes does not give
rise to an Event of Default, complies with this Indenture and has been duly
authorized by the Company. The aggregate principal amount of Notes
outstanding at any time may not exceed $275,000,000, except as provided in
Sections 2.07 and 2.08.
In the event that the Company shall issue and the Trustee shall
authenticate any Notes issued under this Indenture subsequent to the Issue
Date pursuant to the first sentence of the immediately preceding paragraph,
the Company shall use its reasonable efforts to obtain the
22
same "CUSIP" number for such Notes as is printed on the Notes outstanding at
such time; provided, however, that if any series of Notes issued under this
Indenture subsequent to the Issue Date is determined, pursuant to an Opinion
of Counsel of the Company in a form reasonably satisfactory to the Trustee to
be a different class of security than the Notes outstanding at such time for
federal income tax purposes, the Company may obtain a "CUSIP" number for such
Notes that is different than the "CUSIP" number printed on the Notes then
outstanding.
Notwithstanding the foregoing, all Notes issued under this Indenture shall
vote and consent together on all matters (as to which any of such Notes may
vote or consent) as one class and no series of Notes will have the right to
vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may
authenticate Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
Authenticating Agent. An Authenticating Agent has the same rights as an
Agent to deal with the Company or with any Affiliate of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be located in
the Borough of Manhattan in the City of New York, State of New York) where
(a) Notes may be presented or surrendered for registration of transfer or for
exchange ("Registrar"), (b) Notes may be presented or surrendered for payment
("Paying Agent") and (c) notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Registrar shall
keep a register of the Notes and of their transfer and exchange. The Company,
upon prior written notice to the Trustee, may have one or more co-Registrars
and one or more additional paying agents reasonably acceptable to the
Trustee. The term "Paying Agent" includes any additional Paying Agent. The
Company may act as its own Paying Agent, except that for the purposes of
payments on the Notes pursuant to Sections 4.14 and 4.15, neither the Company
nor any Affiliate of the Company may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee, in advance, of
the name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such and shall be entitled to appropriate compensation in
accordance with Section 7.07.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. Any
of the Registrar, the Paying Agent or any other agent may resign upon 30
days' notice to the Company. The office of the Paying Agent and
23
Registrar for purposes of this Section 2.03 shall be at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇.
Section 2.04. Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that such Paying Agent shall hold in trust for the benefit
of the Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, premium, if any, or interest on, the Notes (whether
such assets have been distributed to it by the Company or any other obligor
on the Notes), and the Company and the Paying Agent shall notify the Trustee
of any Default by the Company (or any other obligor on the Notes) in making
any such payment. The Company at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any
payment Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for
any assets distributed. Upon distribution to the Trustee of all assets that
shall have been delivered by the Company to the Paying Agent, the Paying
Agent shall have no further liability for such assets.
Section 2.05. Holder 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 the Holders. If the Trustee is not the Registrar, the Company shall
furnish or cause the Registrar to furnish to the Trustee five (5) Business
Days before each Interest Payment Date and at such other times as the Trustee
may request in writing a list as of such date and in such form as the Trustee
may reasonably require of the names and addresses of the Holders, which list
may be conclusively relied upon by the Trustee.
Section 2.06. Transfer and Exchange.
When Notes are presented to the Registrar or a co-Registrar with a request
to register the transfer of such Notes or to exchange such Notes for an equal
principal amount of Notes or other authorized denominations, the Registrar or
co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the
Notes 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 Company, the Trustee and the Registrar or co-Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing. To permit registration of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Notes at the Registrar's or
co-Registrar's written request. No service charge shall be made for any
registration of transfer or exchange, but the Company may require payment of
a sum sufficient to cover any transfer tax, fee or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchanges or transfers pursuant to
Sections 2.10, 3.04, 4.14, 4.15 or 9.05, in which event the Company shall be
responsible for the payment of such taxes). The Registrar or co-Registrar
shall not be required to register the transfer of or exchange of any Note (i)
during a period beginning at the opening of business 15 days before the
24
mailing of a notice of redemption of Notes and ending at the close of
business on the day of such mailing, (ii) selected for redemption in whole or
in part pursuant to Article Three, except the unredeemed portion of any Note
being redeemed in part or (iii) between a Record Date and the next succeeding
Interest Payment Date.
Any Holder of a beneficial interest in a Global Note shall, by acceptance
of such Global Note, agree that transfers of beneficial interests in such
Global Notes may be effected only through a book entry system maintained by
the Holder of such Global Note (or its agent), and that ownership of a
beneficial interest in the Note shall be required to be reflected in a book
entry system.
Section 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if
the Trustee's requirements are met. If required by the Trustee or the
Company, such Holder must provide satisfactory evidence of such loss,
destruction or taking, and an indemnity bond or other indemnity of reasonable
tenor, sufficient in the reasonable judgment of the Company and the Trustee,
to protect the Company, the Trustee or any Agent from any loss which any of
them may suffer if a Note is replaced. Every replacement Note shall
constitute an obligation of the Company. The Company and the Trustee each
may charge such Holder for its expenses in replacing such Note.
Section 2.08. Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those canceled by it, those delivered to
it for cancellation and those described in this Section as not outstanding.
Subject to the provisions of Section 2.09, a Note does not cease to be
outstanding because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
bona fide purchaser. A mutilated Note ceases to be outstanding upon
surrender of such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent holds U.S.
Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal, premium, if any, and interest due on the Notes payable on that
date and is not prohibited from paying such money to the Holders thereof
pursuant to the terms of this Indenture, then on and after that date such
Notes shall be deemed not to be outstanding and interest on them shall cease
to accrue.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of Notes
have concurred in any direction, waiver, consent or notice, Notes owned by
the Company or an Affiliate of the Company shall be considered as though they
are not outstanding, except that for
25
the purposes of determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Notes which a Trust Officer of
the Trustee actually knows are so owned shall be so considered. The Company
shall notify the Trustee, in writing, when it or, to its knowledge, any of
its Affiliates repurchases or otherwise acquires Notes, of the aggregate
principal amount of such Notes so repurchased or otherwise acquired and such
other information as the Trustee may reasonably request and the Trustee shall
be entitled to rely thereon.
Section 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon receipt of a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated
and the date on which the temporary Notes are to be authenticated. Temporary
Notes shall be substantially in the form of definitive Notes but may have
variations that the Company considers appropriate for temporary Notes and so
indicate in the Officers' Certificate. Without unreasonable delay, the
Company shall prepare and execute, and the Trustee shall authenticate, upon
receipt of a written order of the Company pursuant to Section 2.02,
definitive Notes in exchange for temporary Notes.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for transfer, exchange or payment. The Trustee, or at
the direction of the Trustee, the Registrar or the Paying Agent, and no one
else, shall cancel and, at the written direction of the Company, shall
dispose, in its customary manner, of all Notes surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.07, the Company may
not issue new Notes to replace Notes that it has paid or delivered to the
Trustee for cancellation. If the Company shall acquire any of the Notes,
such acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Notes unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.11.
Section 2.12. Defaulted Interest.
The Company will pay interest on overdue principal from time to time on
demand at the rate of interest then borne by the Notes. The Company shall,
to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand
at the rate of interest then borne by the Notes. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months, and, in the
case of a partial month, the actual number of days elapsed.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest, plus (to the extent lawful) any interest payable
on the defaulted interest, to the Persons who are Holders on a subsequent
special record date. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment (a "Default Interest Payment Date"), and at the same
time the Company shall
26
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such defaulted interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior to the
date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such defaulted interest as
provided in this Section; provided, however, that in no event shall the
Company deposit monies proposed to be paid in respect of defaulted interest
later than 11:00 a.m. New York City time of the proposed Default Interest
Payment Date. At least 15 days before the subsequent special record date,
the Company shall mail (or cause to be mailed) to each Holder, as of a recent
date selected by the Company, with a copy to the Trustee, a notice that
states the subsequent special record date, the payment date and the amount of
defaulted interest, and interest payable on such defaulted interest, if any,
to be paid. Notwithstanding the foregoing, any interest which is paid prior
to the expiration of the 30-day period set forth in Section 6.01(a) shall be
paid to Holders as of the regular record date for the Interest Payment Date
for which interest has not been paid. Notwithstanding the foregoing, the
Company may make payment of any defaulted interest in any other lawful manner
not inconsistent with the requirements of any securities exchange on which
the Notes may be listed, and upon such notice as may be required by such
exchange.
Section 2.13. CUSIP Numbers.
The Company in issuing the Notes may use one or more "CUSIP" numbers, and,
if so, the Trustee shall use the CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided, however, that no
representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of the CUSIP number printed in the notice or on the
Notes, and that reliance may be placed only on the other identification
numbers printed on the Notes. The Company shall promptly notify the Trustee
of any change in the CUSIP numbers.
Section 2.14. Deposit of Monies.
Prior to 11:00 a.m. New York City time on each Interest Payment Date,
Maturity Date, Redemption Date and Purchase Date, the Company shall have
deposited with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such Interest Payment Date,
Maturity Date, Redemption Date and Purchase Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders
on such Interest Payment Date, Maturity Date, Redemption Date and Purchase
Date, as the case may be.
Section 2.15. Restrictive Legends.
Each Global Note and Physical Note that constitutes a Restricted Security
or is sold in compliance with Regulation S shall bear the following legend
(the "Private Placement Legend") on the face thereof until after the second
anniversary of the later of the Issue Date and the last date on which the
Company or any Affiliate of the Company was the owner of such Note (or any
predecessor security) (or such shorter period of time as permitted by Rule
144(k) under the Securities Act or any successor provision thereunder) (or
such longer period of time as may be required under the Securities Act or
applicable state securities laws in the opinion of counsel for the Company,
unless otherwise agreed by the Company and the Holder thereof):
27
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER
THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO THE DATE THAT
IS TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER THEREOF OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
(AN "ACCREDITED INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR
HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS
SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE
COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
28
Each Global Note shall also bear the following legend on the face thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR
BY ANY SUCH NOMINEE OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE
OF SUCH SUCCESSOR DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY 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 HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC). ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.17 OF THE
INDENTURE GOVERNING THIS NOTE.
Section 2.16. Book-Entry Provisions for Global Security.
(a) The Global Notes initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, (ii) be delivered to the
Depository or its custodian and (iii) bear legends as set forth in Section
2.15.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Notes, and the Depository may be treated by the Company, the Trustee
and any Agent of the Company or the Trustee as the absolute owner of such
Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any Agent of the
Company or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Note.
29
(b) Transfers of a Global Note shall be limited to transfers in whole,
but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in a Global Note may be transferred
or exchanged for Physical Notes in accordance with the rules and procedures
of the Depository and the provisions of Section 2.17. In addition, Physical
Notes shall be transferred to all beneficial owners in exchange for their
beneficial interests in a Global Note if (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for the
Global Notes and a successor Depository is not appointed by the Company
within 90 days of such notice or (ii) an Event of Default has occurred and is
continuing and the Registrar has received a written request from the
Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Note in an amount equal to the principal
amount of the beneficial interest in the Global Note to be transferred, and
the Company shall execute and the Trustee shall authenticate and deliver, one
or more Physical Notes of like tenor and amount.
(d) In connection with the transfer of an entire Global Note to
beneficial owners pursuant to paragraph (b), such Global Note shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Note, an equal aggregate principal amount of Physical Notes of
authorized denominations registered in the names of such beneficial owners.
(e) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in a Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of
Section 2.17, bear the Private Placement Legend applicable to the Physical
Notes set forth in Section 2.15.
(f) The Holder of a Global Note may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests
through Agent Members, to take any action which a Holder is entitled to take
under this Indenture or the Notes.
Section 2.17. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S.
Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Note constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to
any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note constituting a
Restricted Security, whether or not such Note bears the Private Placement
Legend, if (x) the requested transfer is after the second anniversary of the
Issue Date (provided, however, that neither the Company nor any Affiliate of
the Company has held any beneficial interest in such Note, or portion
thereof, at any time on or prior to the second anniversary of the Issue Date)
or (y) (1) in the case of a transfer to an Institutional Accredited Investor
which is not a QIB (excluding Non-
30
U.S. Persons), the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit B and any legal opinions and
certifications required thereby or (2) in the case of a transfer to a
Non-U.S. Person, the proposed transferor has delivered to the Registrar a
certificate substantially in the form of Exhibit C; and
(ii) if the proposed transferor is an Agent Member holding a beneficial
interest in the Global Note, upon receipt by the Registrar of (x) the
certificate, if any, required by paragraph (i) above and (y) written
instructions given in accordance with the Depository's and the Registrar's
procedures, whereupon (a) the Registrar shall reflect on its books and
records the date and (if the transfer does not involve a transfer of
outstanding Physical Notes) a decrease in the principal amount of such Global
Note in an amount equal to the principal amount of the beneficial interest in
the Global Note to be transferred, and (b) the Company shall execute and the
Trustee shall authenticate and deliver one or more Physical Notes of like
tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with respect
to the registration of any proposed transfer of a Note constituting a
Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer of any Restricted Note,
whether or not such Note bears the Private Placement Legend, if (x) the
requested transfer is after the second anniversary of the Issue Date;
provided, however, that neither the Company nor any Affiliate of the Company
has held any beneficial interest in such Note, or portion thereof, at any
time on or prior to the second anniversary of the Issue Date or (y) if such
transfer is being made by a proposed transferor who has checked the box
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed
the certification provided for on the form of Note stating, or has otherwise
advised the Company and the Registrar in writing, that it is purchasing the
Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a QIB within
the meaning of Rule 144A, 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 it has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to claim
the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to be
transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in a Global Note, upon receipt by the Registrar of
written instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of such Global Note in an
amount equal to the principal amount of the Physical Notes to be transferred,
and the Trustee shall cancel the Physical Notes so transferred.
(c) Private Placement Legend. Upon the transfer, exchange or replacement
of Notes not bearing the Private Placement Legend, the Registrar shall
deliver Notes that do not bear the
31
Private Placement Legend. Upon the transfer, exchange or replacement of
Notes bearing the Private Placement Legend, the Registrar shall deliver only
Notes that bear the Private Placement Legend unless (i) the requested
transfer is after the second anniversary of the Issue Date (provided,
however, that neither the Company nor any Affiliate of the Company has held
any beneficial interest in such Note, or portion thereof, prior to or on the
second anniversary of the Issue Date), or (ii) there is delivered to the
Registrar an Opinion of Counsel reasonably satisfactory to the Company and
the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with
the provisions of the Securities Act.
(d) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer
of such Note set forth in this Indenture and in the Private Placement Legend
and agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.16 or this Section
2.17. The Company shall have the right to inspect and make copies of all
such letters, notices or other written communications at any reasonable time
during the Registrar's normal business hours upon the giving of reasonable
written notice to the Registrar.
(e) Transfers of Notes Held by Affiliates. Any certificate (i)
evidencing a Note that has been transferred to an Affiliate of the Company
within two years after the Issue Date, as evidenced by a notation on the
Assignment Form for such transfer or in the representation letter delivered
in respect thereof or (ii) evidencing a Note that has been acquired from an
Affiliate (other than by an Affiliate) in a transaction or a chain of
transactions not involving any public offering, shall, until two years after
the last date on which either the Company or any Affiliate of the Company was
an owner of such Note, in each case, bear a legend in substantially the form
set forth in Section 2.15, unless otherwise agreed by the Company (with
written notice thereof to the Trustee).
ARTICLE THREE
REDEMPTION
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 5 of the Notes
and Section 3.03, it shall notify the Trustee and the Paying Agent in writing
of the Redemption Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01 at
least 30 but not more than 60 days before the Redemption Date (unless a
shorter notice period shall be satisfactory to the Trustee, as evidenced in a
writing signed on behalf of the Trustee), together with an Officers'
Certificate stating that such redemption shall comply with the conditions
32
contained herein and in the Notes, the Redemption Date, the Redemption Price
and the principal amount of the Notes to be redeemed.
If the Company is required to make an offer to redeem Notes pursuant to
the provisions of Section 4.14 or 4.15 hereof, it shall furnish to the
Trustee at least 30 days but not more than 60 days before a Redemption Date
(or such shorter period as may be agreed to by the Trustee in writing), an
Officers' Certificate setting forth (i) the Section of this Indenture
pursuant to which the redemption shall occur, (ii) the Redemption Date, (iii)
the principal amount of Notes to be redeemed, (iv) the Redemption Price and
(v) a statement to the effect that (a) the Company or one of its Subsidiaries
has effected an Asset Sale and the conditions set forth in Section 4.15 have
been satisfied or (b) a Change of Control has occurred and the conditions set
forth in Section 4.14 have been satisfied, as applicable.
Section 3.02. Selection of Notes to be Redeemed.
In the event that less than all of the Notes are to be redeemed at any
time pursuant to Paragraph 5 of the Notes and Section 3.03, selection of such
Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
such Notes are listed as certified to the Trustee by the Company, or, if such
Notes are not then listed on a national securities exchange, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and
appropriate; provided, however, that no Notes of a principal amount of U.S.
$1,000 or less shall be redeemed in part; provided, further, however, that if
a partial redemption is made with the proceeds of a Public Equity Offering,
selection of the Notes or portions thereof for redemption shall be made by
the Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to DTC procedures), unless such method is otherwise
prohibited. Notice of redemption shall be mailed by first-class mail at
least 30 but not more than 60 days before the redemption date to each Holder
of Notes to be redeemed at its registered address. If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note
shall state the portion of the principal amount thereof to be redeemed. A
new Note in a principal amount equal to the unredeemed portion thereof will
be issued in the name of the Holder thereof upon cancellation of the original
Note. On and after the Redemption Date, interest will cease to accrue on
Notes or portions thereof called for redemption as long as the Company has
deposited with the Paying Agent funds in satisfaction of the applicable
Redemption Price pursuant to this Indenture.
Section 3.03. Optional Redemption.
(a) The Notes will be redeemable, at the Company's option, in whole at
any time or in part from time to time, on and after February 15, 2002, upon
not less than 30 nor more than 60 days' notice, at the following Redemption
Prices (expressed as percentages of the principal amount thereof) if redeemed
during the twelve-month period commencing on February 15 of the year set
forth below, plus, in each case, accrued and unpaid interest thereon, if any,
to the date of redemption:
Year Percentage
---- ----------
33
2002 .............................. 104.375%
2003 .............................. 102.188%
2004 and thereafter ............... 100.000%
(b) At any time, or from time to time, on or prior to February 15, 2001,
the Company may, at its option, use the net cash proceeds of one or more
Public Equity Offerings to redeem up to 35% of the Notes at a Redemption
Price equal to 108.75 % of the principal amount thereof plus accrued and
unpaid interest thereon, if any, to the date of redemption; provided,
however, that at least 65% of the principal amount of Notes issued under
the Indenture remains outstanding immediately after giving effect to any such
redemption (excluding any Notes owned by the Company or any of its
Affiliates). In order to effect the foregoing redemption with the proceeds
of any Public Equity Offering, the Company shall make such redemption not
more than 90 days after the consummation of any such Public Equity Offering.
Section 3.04. Notice of Redemption.
At least 30 days but not more than 60 days before the Redemption Date, the
Company shall mail or cause to be mailed a notice of redemption by
first-class mail to each Holder of Notes to be redeemed at its registered
address, with a copy to the Trustee and any Paying Agent. At the Company's
request, the Trustee shall give the notice of redemption in the Company's
name and at the Company's expense. The Company shall provide such notices of
redemption to the Trustee at least five days before the intended mailing
date. In any case, failure to give such notice or any defect in the notice
to the Holder of any Note shall not affect the validity of the proceeding for
the redemption of any other Note.
Each notice of redemption shall identify (including the CUSIP number) the
Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such
redemption is being made;
(5) that Notes called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price plus accrued
interest, if any;
(6) that, unless the Company defaults in making the
redemption payment, interest on Notes or applicable portions thereof
called for redemption ceases to accrue on and after the Redemption
Date, and the only remaining right of the Holders of such Notes is to
receive payment of the Redemption Price plus
34
accrued interest as of the Redemption Date, if any, upon surrender to
the Paying Agent of the Notes redeemed;
(7) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the
Redemption Date, and upon surrender of such Note, a new Note or Notes
in the aggregate principal amount equal to the unredeemed portion
thereof will be issued; and
(8) if fewer than all of the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding
after such partial redemption.
No representation is made as to the accuracy of the CUSIP numbers listed in
such notice or printed on the Notes.
The Company will comply with the requirements of 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 connection with the purchase
of Notes.
Section 3.05. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.04, such
notice of redemption shall be irrevocable and Notes called for redemption
become due and payable on the Redemption Date and at the Redemption Price
plus accrued interest as of such date, if any. Upon surrender to the Trustee
or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price plus accrued interest thereon to the Redemption Date, but
installments of interest, the maturity of which is on or prior to the
Redemption Date, shall be payable to Holders of record at the close of
business on the relevant Record Dates referred to in the Notes. Interest
shall accrue on or after the Redemption Date and shall be payable only if the
Company defaults in payment of the Redemption Price.
Section 3.06. Deposit of Redemption Price.
On or before 11:00 a.m. New York City time on the Redemption Date and in
accordance with Section 2.14, the Company shall deposit with the Paying Agent
U.S. Legal Tender sufficient to pay the Redemption Price plus accrued
interest, if any, of all Notes to be redeemed on that date. The Paying Agent
shall promptly return to the Company any U.S. Legal Tender so deposited which
is not required for that purpose, except with respect to monies owed as
obligations to the Trustee pursuant to Article Seven.
Unless the Company fails to comply with the preceding paragraph and
defaults in the payment of such Redemption Price plus accrued interest, if
any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable Redemption Date, whether or not such Notes are presented for
payment.
35
Section 3.07. Notes Redeemed in Part.
Upon surrender of a Note that is to be redeemed in part, the Trustee shall
authenticate for the Holder a new Note or Notes equal in principal amount to
the unredeemed portion of the Note surrendered.
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Notes.
(a) The Company shall pay the principal of, premium, if any, and interest
on the Notes on the dates and in the manner provided in the Notes and in this
Indenture.
(b) An installment of principal of or interest on the Notes shall be
considered paid on the date it is due if the Trustee or Paying Agent (other
than the Company or any of its Affiliates) holds, prior to 11:00 a.m. New
York City time on that date, U.S. Legal Tender designated for and sufficient
to pay in a timely manner the installment in full and is not prohibited from
paying such money to the Holders pursuant to the terms of this Indenture or
the Notes.
(c) Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 10.02.
Section 4.03. Corporate Existence.
Except as provided in Article Five, the Company shall do or shall cause to
be done all things necessary to preserve and keep in full force and effect
its corporate existence and the corporate, partnership or other existence of
each of its Restricted Subsidiaries in accordance with the respective
organizational documents of the Company and each such Restricted Subsidiary
and the material rights (charter, and statutory) and franchises of the
Company and each such Restricted Subsidiary; provided, however, that the
Company shall not be required to preserve, with respect to itself, any
material right or franchise and, with respect to any of its Restricted
Subsidiaries, any such existence, material right or franchise, if the Board
of Directors of the
36
Company shall determine in good faith that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole.
Section 4.04. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments
and governmental charges (including withholding taxes and any penalties,
interest and additions to taxes) levied or imposed upon the Company or any of
the Restricted Subsidiaries or properties of the Company or any of the
Restricted Subsidiaries 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 of the Restricted Subsidiaries; provided,
however, that the Company shall not be required to pay or discharge or cause
to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate negotiations or proceedings properly instituted and diligently
conducted for which adequate reserves, to the extent required under GAAP,
have been taken.
Section 4.05. Maintenance of Properties and Insurance.
(a) The Company shall cause all material properties owned by or leased to
it and its Restricted Subsidiaries and used or useful in the conduct of their
business to be maintained and kept in normal condition, repair and working
order and supplied with all necessary equipment and shall cause to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company or such Restricted Subsidiary
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 shall prevent the Company or any of its
Restricted Subsidiaries from discontinuing the use, operation or maintenance
of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Board of Directors of
the Company or of the Board of Directors of the Restricted Subsidiary
concerned, or of an officer (or other agent employed by the Company or any of
its Restricted Subsidiaries) of the Company or such Restricted Subsidiary
having managerial responsibility for any such property, desirable in the
conduct of the business of the Company or any of its Restricted Subsidiaries.
(b) The Company shall cause to be provided insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
good faith judgment of the Board of Directors or other governing body or
officer of the Company or its Restricted Subsidiaries, as the case may be,
are adequate and appropriate for the conduct of the business of the Company
or such Restricted Subsidiaries, as the case may be, 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 appropriate, in the good faith judgment of the Board of
Directors or other governing body or officer of the Company or such
Restricted Subsidiary, as the case may be, in light of the applicable risks
incurred in connection with the business and affairs of the Company or the
relevant Restricted Subsidiary, as applicable.
37
Section 4.06. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, (i) within 90 days after
the end of each of the Company's first three fiscal quarters and (ii) within
120 days after the end of the Company's fourth fiscal quarter, an Officers'
Certificate (signed by the principal executive officer, principal financial
officer or principal accounting officer) stating that a review of its
activities and the activities of its Restricted Subsidiaries during the
preceding fiscal quarter has been made under the supervision of the signing
officers with a view to determining whether it has kept, observed, performed
and fulfilled its obligations under this Indenture and further stating, as to
each such officer signing such certificate, that to the best of such
officers' knowledge the Company during such preceding fiscal quarter has
kept, observed, performed and fulfilled each and every such obligation and no
Default or Event of Default occurred during such quarter and at the date of
such certificate there is no Default or Event of Default that has occurred
and is continuing or, if such signers do know of such Default or Event of
Default, the certificate shall describe the Default or Event of Default and
its status with particularity. The Officers' Certificate shall also notify
the Trustee should the Company elect to change the manner in which it fixes
its fiscal year end.
(b) So long as any of the Notes are outstanding (i) if any Default or
Event of Default has occurred and is continuing or (ii) if any Holder seeks
to exercise any remedy hereunder with respect to a claimed Default under this
Indenture or the Notes, the Company shall promptly deliver to the Trustee by
registered or certified mail or by telegram, telex or facsimile transmission
followed by hard copy by registered or certified mail an Officers'
Certificate specifying such event, notice or other action within five
Business Days of its becoming aware of such occurrence.
Section 4.07. Compliance with Laws.
The Company shall comply, and shall cause each of its Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations,
orders and restrictions of the United States of America, all states and
municipalities thereof and of any governmental department, commission, board,
regulatory authority, bureau, agency and instrumentality of the foregoing, in
respect of the conduct of their respective businesses and the ownership of
their respective properties, except for such noncompliances as could not
singly or in the aggregate reasonably be expected to have a material adverse
effect on the financial condition, business, prospects or results of
operations of the Company and its Restricted Subsidiaries taken as a whole.
Section 4.08. Provision of Financial Information.
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file with
the SEC (if permitted by SEC practice and applicable law and regulations) the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the SEC pursuant to such Section 13(a) or
15(d) or any successor provision thereto if the Company were so required,
such documents to be filed with the SEC on or prior to the respective dates
(the "Required Filing Dates") by which the Company would have been required
so to file such documents if the
38
Company were so required. The Company shall also in any event (a) within 15
days of each Required Filing Date (whether or not permitted or required to be
filed with the SEC) (i) transmit (or cause to be transmitted) by mail to all
Holders, as their names and addresses appear in the Note register, without
cost to such Holders, and (ii) file with the Trustee, copies of the annual
reports, quarterly reports and other documents which the Company is required
to file with the SEC pursuant to the preceding sentence, or, if such filing
is not so permitted, information and data of a similar nature, and (b) if,
notwithstanding the preceding sentence, filing such documents by the Company
with the SEC is not permitted by SEC practice or applicable law or
regulations, promptly upon written request supply copies of such documents to
any Holder. In addition, for so long as any Notes remain outstanding, the
Company will furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act, and, to any
beneficial holder of Notes, if not obtainable from the SEC, information of
the type that would be filed with the SEC pursuant to the foregoing
provisions, upon the request of any such Holder. Notwithstanding anything to
the contrary herein, the Trustee shall have no duty to review such documents
for purposes of determining compliance with any provisions of this Indenture.
Section 4.09. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury
law or other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit
or advantage of any such law, and covenants that it shall not hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
Section 4.10. Limitation on Restricted Payments.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or any other distribution on any
Equity Interests of the Company or any Restricted
Subsidiary or make any payment or distribution to the
direct or indirect holders of Equity Interests (in
their capacity as such) of the Company or any
Restricted Subsidiary (other than any dividends,
distributions and payments made to the Company or any
Restricted Subsidiary and dividends or distributions
payable to any Person solely in Qualified Equity
Interests or in options, warrants or other rights to
purchase Qualified Equity Interests);
39
(ii) redeem any Equity Interests of the Company or any Restricted
Subsidiary (other than any such Equity Interests owned
by the Company or any Restricted Subsidiary);
(iii) redeem or make any principal payment on, prior to any
scheduled maturity, scheduled repayment or scheduled
sinking fund payment, any Subordinated Indebtedness
(other than any Subordinated Indebtedness held by any
Restricted Subsidiary); or
(iv) make any Investment (other than Permitted Investments) (any
of the foregoing, a "Restricted Payment"), unless
(a) no Default shall have occurred and be continuing at the time of
or after giving effect to such Restricted Payment;
(b) immediately after giving effect to such Restricted Payment, the
Company would be able to Incur $1.00 of additional Indebtedness
under the first paragraph of Section 4.12; and
(c) immediately after giving effect to such Restricted Payment, the
aggregate amount of all Restricted Payments (including the Fair
Market Value of any non-cash Restricted Payment) declared or made
on or after the Issue Date (excluding any Restricted Payment
described in clauses (ii), (iii), (iv) or (v) of the next
paragraph) does not exceed an amount equal to the sum of the
following (the "Basket"):
(1) (x) the Cumulative Operating Cash Flow determined at the
time of such Restricted Payment less (y) 200% of
cumulative Consolidated Fixed Charges determined for
the period (treated as one accounting period)
commencing on the first day of the fiscal quarter in
which the Issue Date occurs and ending on the last day
of the most recent fiscal quarter immediately preceding
the date of such Restricted Payment; plus
(2) the aggregate net cash proceeds received by the Company
either (x) as capital contributions to the Company
after the Issue Date or (y) from the issue and sale
(other than to a Subsidiary of the Company) of
Qualified Equity Interests after the Issue Date (other
than (A) any issuance and sale of Qualified Equity
Interests financed, directly or indirectly, using funds
(i) borrowed from the Company or any of its
Subsidiaries until and to the extent such borrowing is
repaid or (ii) contributed, extended, guaranteed or
advanced by the Company or any of its Subsidiaries
(including, without limitation, in respect of any
employee stock ownership or benefit plan) and (B) any
such net cash proceeds counted toward clause (iv)(x) of
paragraph (b) of Section 4.12; plus
40
(3) the aggregate amount by which Indebtedness (other than any
Subordinated Indebtedness) of the Company or any
Restricted Subsidiary is reduced on the Company's
consolidated balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date into Qualified Equity
Interests (less the amount of any cash, or the fair
value of property, distributed by the Company or any
Restricted Subsidiary upon such conversion or
exchange); plus
(4) in the case of the disposition or repayment of any
Investment that was treated as a Restricted Payment
made after the Issue Date, an amount (to the extent not
included in the computation of Cumulative Operating
Cash Flow) equal to the lesser of: (x) the return in
cash of capital with respect to such Investment and (y)
the amount of such Investment that was treated as a
Restricted Payment, in either case, less the cost of
the disposition of such Investment and net of taxes;
plus
(5) so long as the Designation thereof was treated as a
Restricted Payment made after the Issue Date, with
respect to any Unrestricted Subsidiary that has been
redesignated as a Restricted Subsidiary after the Issue
Date in accordance with Section 4.19, the Company's
proportionate interest in an amount equal to the excess
of (x) the total assets of such Subsidiary, valued on
an aggregate basis at Fair Market Value, over (y) the
total liabilities of such Subsidiary, determined in
accordance with GAAP (and provided that such amount
shall not in any case exceed the Designation Amount
with respect to such Restricted Subsidiary upon its
Designation); minus
(6) with respect to each Subsidiary of the Company which has
been designated as an Unrestricted Subsidiary after the
Issue Date in accordance with Section 4.19, the greater
of (x) $0 and (y) the Designation Amount thereof
(measured as of the Date of Designation); plus
(7) $60.0 million.
The foregoing provisions will not prevent (i) the payment of any dividend
or distribution on Equity Interests within 60 days after the date of
declaration of such dividend or distribution, if at the date of such
declaration, such dividend or distribution would comply with the provisions
of this Indenture; (ii) the redemption of any Equity Interests of the Company
in exchange for, or out of the net cash proceeds of the substantially
concurrent issue and sale (other than to a Subsidiary of the Company) of,
Qualified Equity Interests; (iii) any Investment to the extent that the
consideration therefor consists of Qualified Equity Interests; (iv) the
redemption of Subordinated Indebtedness made in exchange for, or out of the
net cash proceeds of, a substantially concurrent issue and sale (other than
to a Subsidiary) of, (x) Qualified Equity Interests or (y) other Subordinated
Indebtedness having no stated maturity for the payment of principal thereof
prior to the final stated maturity of the Notes; or (v) the redemption of any
Equity Interests of the
41
Company held by directors, officers or employees of the Company or any of its
Subsidiaries upon their death, retirement or other termination not to exceed
$500,000 in the aggregate in any calendar year; provided, however, that any
unused amount may be used only in the next succeeding calendar year; provided,
further, however, that (A) in the case of each of clauses (ii), (iii), (iv) and
(v), no Default shall have occurred and be continuing or would arise therefrom
and (B) no issuance of Qualified Equity Interests pursuant to clause (ii), (iii)
or (iv) shall increase the Basket or count toward clause (iv)(x) of paragraph
(b) of Section 4.12.
Section 4.11. Limitations on Transactions with Affiliates.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, conduct any business or enter into any
transaction or series of related transactions with or for the benefit of any
Affiliate, any holder of 5% or more of any class of Equity Interests or any
officer, director or employee of the Company or any Restricted Subsidiary
(each, an "Affiliate Transaction"), unless such Affiliate Transaction is on
terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than could reasonably be obtained at such
time in a comparable transaction with an unaffiliated third party. For any
such transaction that involves value in excess of $2.0 million, the Company
shall deliver to the Trustee an Officers' Certificate stating that a majority
of the Disinterested Directors has determined that the transaction satisfies
the above criteria and shall evidence such a determination by a Board
Resolution delivered to the Trustee. For any such transaction that involves
value in excess of $10.0 million, the Company shall also obtain a written
opinion from an Independent Financial Advisor to the effect that such
transaction is fair, from a financial point of view, to the Company or such
Restricted Subsidiary, as the case may be.
Notwithstanding the foregoing, the restrictions set forth in this covenant
shall not apply to (i) transactions exclusively between or among the Company
and one or more Restricted Subsidiaries or exclusively between or among
Restricted Subsidiaries; (ii) customary directors' fees, indemnification and
similar arrangements, employee salaries, bonuses or employment agreements,
compensation or employee benefit arrangements and incentive arrangements with
any officer, director or employee of the Company entered into in the ordinary
course of business; (iii) transactions pursuant to agreements in effect on
the Issue Date, as such agreements are in effect on the Issue Date or as
thereafter amended or supplemented in a manner not adverse to the Holders;
(iv) loans and advances to officers, directors and employees of the Company
or any Restricted Subsidiary for travel, entertainment, moving and other
relocation expenses, in each case made in the ordinary course of business and
consistent with past business practices; and (v) any Restricted Payments
permitted by this Indenture.
Section 4.12. Limitation on Incurrence of Indebtedness.
(a) The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, Incur any Indebtedness; provided,
however, that the Company may Incur Indebtedness if, at the time of such
Incurrence, the Leverage Ratio would be less than or equal to (i) 5.5 to 1.0
if Incurred within the first three years of the Issue Date and (ii) 5.0 to
1.0 if Incurred thereafter.
42
(b) The foregoing limitations of paragraph (a) of this covenant will not
apply to any of the following:
(i) the Notes issued on the Issue Date and Permitted
Refinancings thereof, and the Exchange Notes;
(ii) Indebtedness of the Company or any Restricted
Subsidiary to the extent outstanding on the date of this Indenture,
and Permitted Refinancings thereof;
(iii) Indebtedness (including Indebtedness of a Restricted
Subsidiary Incurred and outstanding on or prior to the date on which
such Subsidiary was acquired by the Company) of the Company Incurred
to finance the cost (including the cost of design, construction,
acquisition (including acquisitions by way of capital lease or by way
of acquisitions of the capital stock of a Person that becomes a
Restricted Subsidiary to the extent of the fair market value of the
equipment, inventory or assets so acquired), installation or
integration) of equipment used in the Telecommunications Business or
ownership rights with respect to indefeasible rights of use or minimum
investment units (or similar ownership interests) in transnational
fiber optic cable or other transmission facilities, in each case
purchased or leased by the Company after the Issue Date, and Permitted
Refinancings thereof;
(iv) Indebtedness of the Company in an aggregate amount not
to exceed 2.0 times (x) the net cash proceeds received after the Issue
Date by the Company from the issuance and sale of its Common Stock
(other than to a Subsidiary of the Company) (provided, however, that
such net cash proceeds shall not increase the Basket) and (y) the Fair
Market Value of Common Equity Interests of the Company issued as
consideration in a Telecommunications Acquisition; provided, however,
that any Indebtedness Incurred under this clause (iv) shall have a
Weighted Average Life to Maturity greater than the Weighted Average
Life to Maturity of the Notes and shall not require repayment or
redemption (including pursuant to any required offer to purchase)
prior to the Maturity Date (other than a redemption upon a change of
control of the Company pursuant to Section 4.14.);
(v) (1) Indebtedness of any Restricted Subsidiary owed to
and held by the Company or any Restricted Subsidiary and
(2) Indebtedness of the Company owed to and held by any Restricted
Subsidiary which is unsecured and subordinated in right of payment to
the payment and performance of the Company's obligations under the
Notes; provided, however, that an Incurrence of Indebtedness that is
not permitted by this clause (v) shall be deemed to have occurred upon
(x) any sale or other disposition of any Indebtedness of the Company
or any Restricted Subsidiary referred to in this clause (v) to any
Person other than the Company or any Restricted Subsidiary or (y) any
Restricted
43
Subsidiary that holds Indebtedness of the Company or another Restricted
Subsidiary ceasing to be a Restricted Subsidiary;
(vi) Interest Rate Protection Obligations of the Company
relating to Indebtedness of the Company (which Indebtedness (x) bears
interest at fluctuating interest rates and (y) is otherwise permitted
to be Incurred under this covenant); provided, however, that the
notional principal amount of such Interest Rate Protection Obligations
does not exceed the principal amount of the Indebtedness to which such
Interest Rate Protection Obligations relate;
(vii) Indebtedness of the Company under Currency Agreements
to the extent relating to (x) Indebtedness of the Company and/or (y)
obligations to purchase assets, properties or services incurred in the
ordinary course of business of the Company or any Restricted
Subsidiary; provided, however, that such Currency Agreements do not
increase the Indebtedness or other obligations of the Company and the
Restricted Subsidiaries outstanding other than as a result of
fluctuations in foreign currency exchange rates or by reason of fees,
indemnities or compensation payable thereunder;
(viii) Indebtedness of the Company and/or any Restricted
Subsidiary in respect of performance bonds of the Company or any
Restricted Subsidiary or surety bonds provided by the Company or any
Restricted Subsidiary incurred in the ordinary course of business and
on ordinary business terms in connection with the construction or
operation of a Telecommunications Business;
(ix) Indebtedness of the Company under one or more Credit
Facilities, and guarantees by Restricted Subsidiaries thereof (in
compliance with the provisions of Section 4.18), in an aggregate
amount not to exceed at any time the greater of (x) $35.0 million and
(y) 65% of accounts receivable reflected on the Company's latest
consolidated balance sheet;
(x) Indebtedness of the Company, to the extent that the net
proceeds thereof are promptly (A) used to repurchase Notes tendered in
an Offer to Purchase in connection with a Change of Control or
(B) deposited to defease all of the Notes pursuant to Section 8.1; and
(xi) Indebtedness Incurred in an aggregate amount which,
when taken together with the aggregate amount of all other
Indebtedness of the Company and its Restricted Subsidiaries incurred
under this clause outstanding on the date of such Incurrence (other
than Indebtedness permitted by clauses (i) through (x) above or
paragraph (a)) does not exceed $200.0 million.
(c) For purposes of determining any particular amount of Indebtedness
under this covenant, Guarantees, Liens or obligations with respect to letters
of credit supporting Indebtedness otherwise included in the determination of
such particular amount shall not be
44
included; provided, however, that the foregoing shall not in any way be deemed
to limit the provisions of Section 4.18.
(d) For purposes of determining compliance with the foregoing covenant,
(i) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described above, the Company, in its sole
discretion, will classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of the above clauses and
(ii) an item of Indebtedness may be divided and classified in more than one of
the types of Indebtedness described above.
Section 4.13. Limitation on Restrictions Affecting Restricted Subsidiaries.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of
any Restricted Subsidiary to (x) pay dividends or make any other
distributions to the Company or any other Restricted Subsidiary on its Equity
Interests or with respect to any other interest or participation in, or
measured by, its profits, or pay any Indebtedness owed to the Company or any
other Restricted Subsidiary, (y) make loans or advances to, or guarantee any
Indebtedness or other obligations of, the Company or any other Restricted
Subsidiary or (z) transfer any of its properties or assets to the Company or
any other Restricted Subsidiary.
The foregoing shall not prohibit (a) any encumbrance or restriction
existing under or by reason of any agreement in effect on the Issue Date, as
any such agreement is in effect on such date or as thereafter amended or
supplemented but only if such encumbrance or restriction is no more
restrictive than in the agreement being amended; (b) any encumbrance or
restriction existing under or by reason of any agreement relating to any
Acquired Indebtedness; provided such encumbrance or restriction shall not
apply to any assets of the Company or any Restricted Subsidiary other than
the Restricted Subsidiary acquired or its assets; (c) customary provisions
contained in an agreement that has been entered into for the sale or
disposition of all or substantially all of the capital stock or assets of a
Restricted Subsidiary; provided, however, that (x) such encumbrance or
restriction is applicable only to such Restricted Subsidiary or assets and
(y) such sale or disposition is made in accordance with Section 4.15; (d) any
encumbrance or restriction existing under or by reason of applicable law; (e)
customary provisions restricting subletting or assignment of any lease
governing any leasehold interest of any Restricted Subsidiary; (f) covenants
in purchase money obligations for property acquired in the ordinary course of
business restricting transfer of such property; or (g) covenants in security
agreements securing Indebtedness of a Restricted Subsidiary (to the extent
that such Liens were otherwise incurred in accordance with Section 4.17) that
restrict the transfer of property subject to such agreements.
Section 4.14. Change of Control.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall notify the
Holders of such occurrence in the manner prescribed by Section 10.02 and
shall, within 20 days after the Change of Control Date,
45
make an Offer to Purchase all Notes then outstanding at a purchase price in cash
equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Purchase Date. The Company's obligations may
be satisfied if a third party makes the Offer to Purchase in the manner, at the
times and otherwise in compliance with the requirements of the Indenture
applicable to an Offer to Purchase made by the Company and purchases all Notes
validly tendered and not withdrawn under such Offer to Purchase.
On the Purchase Date, the Company shall, to the extent permitted by law,
(i) accept for payment all Notes or portions thereof properly tendered pursuant
to the Offer to Purchase, (ii) deposit with the Paying Agent an amount equal to
the aggregate Purchase Price in respect of all Notes or portions thereof so
tendered and (iii) deliver, or cause to be delivered, to the Trustee for
cancellation the Notes so accepted together with an Officers' Certificate
stating that such Notes or portions thereof have been tendered to and purchased
by the Company. The Paying Agent will promptly either (x) pay to the Holder
against presentation and surrender (or, in the case of partial payment,
endorsement) of the Global Notes or (y) in the case of Certificated Securities,
mail to each Holder of Notes the Purchase Price for such Notes, and the Trustee
will promptly authenticate and deliver to the Holder of the Global Notes a new
Global Note or Notes or, in the case of Physical Notes, mail to each Holder new
Certificated Securities, as applicable, equal in principal amount to any
unpurchased portion of the Notes surrendered, if any, provided that each new
Certificated Security will be in a principal amount of $1,000 or an integral
multiple thereof. The Company will notify the Trustee and the Holders of the
results of the Offer to Purchase on or as soon as practicable after the Purchase
Date.
Neither the Board of Directors of the Company nor the Trustee may waive the
provisions of this Section 4.14 relating to the Company's obligation to make an
Offer to Purchase or a Holder's right to redemption upon a Change of Control.
The Company shall comply with the requirements of 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 connection with the
repurchase of Notes pursuant to an Offer to Purchase. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 4.14, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
the provisions of this Section 4.14 by virtue thereof.
Section 4.15. Limitation on Asset Sales.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, make any Asset Sale, unless (x) the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the assets sold or otherwise disposed of and (y) at least 85%
of such consideration consists of (i) cash or Cash Equivalents, (ii)
Replacement Assets or (iii) any combination of the foregoing. The amount of
any Indebtedness (other than any Subordinated Indebtedness) of the Company or
any Restricted Subsidiary that is actually assumed by the transferee in such
Asset Sale and from which the Company and the Restricted Subsidiaries are
46
fully released shall be deemed to be cash for purposes of determining the
percentage of cash consideration received by the Company or such Restricted
Subsidiary. Any Net Cash Proceeds from any Asset Sale that are not (x) invested
in Replacement Assets or (y) used to reduce Indebtedness under Credit Facilities
(with a permanent concomitant reduction of commitments thereunder) within 270
days of the consummation of such Asset Sale shall constitute "Excess Proceeds"
subject to disposition as provided below.
Within 30 days after the aggregate amount of Excess Proceeds equals or
exceeds $10.0 million, the Company shall make an Offer to Purchase, from all
Holders, that aggregate principal amount of Notes as can be purchased with
the Note Portion of Excess Proceeds at a price in cash equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to any
purchase date. To the extent that the aggregate amount of principal and
accrued interest of Notes validly tendered and not withdrawn pursuant to an
Offer to Purchase is less than the Excess Proceeds, the Company may use such
surplus for general corporate purposes. If the aggregate amount of principal
and accrued interest of Notes validly tendered and not withdrawn by Holders
thereof exceeds the amount of Notes that can be purchased with the Note
Portion of Excess Proceeds, Notes to be purchased will be selected pro rata
based on the aggregate principal amount of Notes tendered by each Holder.
Upon completion of an Offer to Purchase, the amount of Excess Proceeds with
respect to the applicable Asset Sale shall be reset to zero.
In the event that any other Indebtedness of the Company that ranks pari
passu with the Notes (the "Other Debt") requires an offer to purchase to be
made to repurchase such Other Debt upon the consummation of an Asset Sale,
the Company may apply the Excess Proceeds otherwise required to be applied to
an Offer to Purchase to offer to purchase such Other Debt and to an Offer to
Purchase so long as the amount of such Excess Proceeds applied to purchase
the Notes is not less than the Note Portion of Excess Proceeds. With respect
to any Excess Proceeds, the Company shall make the Offer to Purchase in
respect thereof at the same time as the analogous offer to purchase is made
pursuant to any Other Debt and the Purchase Date in respect thereof shall be
the same as the purchase date in respect thereof pursuant to any Other Debt.
For purposes of this covenant, "Note Portion of Excess Proceeds" means (1)
if no Other Debt is being offered to be purchased, the amount of the Excess
Proceeds and (2) if Other Debt is being offered to be purchased, the amount
of the Excess Proceeds equal to the product of (x) the Excess Proceeds and
(y) a fraction the numerator of which is the aggregate amount of all Notes
tendered pursuant to the Offer to Purchase related to such Excess Proceeds
(the "Note Amount") and the denominator of which is the sum of the Note
Amount and the aggregate amount as of the relevant purchase date of all Other
Debt tendered and purchased pursuant to a concurrent offer to purchase such
Other Debt made at the time of such Offer to Purchase.
In the event that the Company makes an Offer to Purchase the Notes, the
Company shall comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1
under, the Exchange Act, and any other applicable Federal or state securities
laws and regulations and any applicable requirements of any securities
exchange on which the Notes are listed.
47
Section 4.16. Limitation on the Issuance and Sale of Equity Interests of
Restricted Subsidiaries.
The Company shall not sell, and shall not cause or permit any Restricted
Subsidiary, directly or indirectly, to issue or sell, any Equity Interests of
a Restricted Subsidiary, except (i) to the Company or a Wholly Owned
Restricted Subsidiary; (ii) if, immediately after giving effect to such
issuance or sale, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary; or (iii) in the case of issuance of Equity Interests
by a non-Wholly Owned Restricted Subsidiary if, after giving effect to such
issuance, the Company maintains its direct or indirect percentage of
beneficial and economic ownership of such non-Wholly Owned Restricted
Subsidiary.
Section 4.17. Limitation on Liens.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, Incur any Lien (other than any
Permitted Lien) of any kind against or upon any of their respective
properties or assets now owned or hereafter acquired, or any proceeds, income
or profits therefrom, unless contemporaneously therewith or prior thereto,
(i) in the case of any Lien securing an obligation that ranks pari passu with
the Notes, effective provision is made to secure the Notes equally and
ratably with or prior to such obligation with a Lien on the same collateral
and (ii) in the case of any Lien securing an obligation that is subordinated
in right of payment to the Notes, effective provision is made to secure the
Notes with a Lien on the same collateral that is prior to the Lien securing
such subordinated obligation, in each case, for so long as such obligation is
secured by such Lien.
Section 4.18. Limitation on Issuances of Guarantees by Restricted
Subsidiaries.
The Company shall not cause or 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 pursuant to which
such Restricted Subsidiary guarantees (a "Subsidiary Guarantee") all of the
Company's obligations under the Notes and the Indenture 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. If the Guaranteed Indebtedness is (A) pari passu with
the Notes, then the guarantee of such Guaranteed Indebtedness shall be pari
passu with, or subordinated to, the Subsidiary Guarantee or (B) subordinated
to the Notes, then the guarantee of such Guaranteed Indebtedness shall be
subordinated to the Subsidiary Guarantee at least to the extent that the
Guaranteed Indebtedness is subordinated to the Notes.
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 Equity Interests of the Company or
any Restricted Subsidiary in, or all or substantially all the assets of, such
Restricted Subsidiary (which sale, exchange or transfer is made in accordance
with this Indenture) or (ii) the
48
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 4.19. Designation of Unrestricted Subsidiaries.
(a) The Company may designate any Subsidiary of the Company as an
"Unrestricted Subsidiary" under this Indenture (a "Designation") only if:
(i) no Default shall have occurred and be continuing at the
time of or after giving effect to such Designation;
(ii) at the time of and after giving effect to such
Designation, the Company could Incur $1.00 of additional Indebtedness
pursuant to the first paragraph of Section 4.12; and
(iii) the Company would be permitted to make an Investment
(other than a Permitted Investment) at the time of Designation
(assuming the effectiveness of such Designation) pursuant to the first
paragraph of Section 4.10 in an amount (the "Designation Amount")
equal to the Fair Market Value of the Company's proportionate interest
in the net worth of such Subsidiary on such date.
All Subsidiaries of Unrestricted Subsidiaries shall be Unrestricted
Subsidiaries.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, at any time (x) provide credit support
for, subject any of its properties or assets (other than the Equity Interests
of any Unrestricted Subsidiary) to the satisfaction of, or guarantee, any
Indebtedness of any Unrestricted Subsidiary (including any undertaking,
agreement or instrument evidencing such Indebtedness), (y) be liable for any
Indebtedness of any Unrestricted Subsidiary or (z) be liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse
of time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the
occurrence of a default with respect to any Indebtedness of any Unrestricted
Subsidiary.
(b) The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") only if:
(i) no Default shall have occurred and be continuing at the
time of and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such Revocation would, if
Incurred at such time, have been permitted to be Incurred for all
purposes of the Indenture.
49
All Designations and Revocations must be evidenced by resolutions of the
Board of Directors of the Company, delivered to the Trustee certifying
compliance with the foregoing provisions.
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. Merger, Consolidation and Sale of Assets.
(a) The Company shall not consolidate with or merge with or into (whether
or not the Company is the Surviving Person) any other Person and the Company
shall not, and shall not cause or permit any Restricted Subsidiary to, sell,
convey, assign, transfer, lease or otherwise dispose of all or substantially
all of the property and assets of the Company and the Restricted
Subsidiaries, taken as a whole, to any Person or Persons in a single
transaction or series of related transactions, unless: (i) either (x) the
Company shall be the Surviving Person or (y) the Surviving Person (if other
than the Company) shall be a corporation organized and validly existing under
the laws of the United States of America or any State thereof or the District
of Columbia, and shall, in any such case, expressly assume by a supplemental
indenture, the due and punctual payment of the principal of and interest on
the Notes and the performance and observance of every covenant of this
Indenture and the Registration Rights Agreement to be performed or observed
on the part of the Company; (ii) immediately after giving effect to such
transaction, no Default shall have occurred and be continuing; and (iii)
immediately after giving effect to such transaction, the Company or the
Surviving Person (as the case may be) could Incur at least $1.00 of
additional Indebtedness pursuant to the first paragraph of Section 4.12 (if
the Company shall not be the Surviving Person, all references to the Company
and the Restricted Subsidiaries in the definitions used to determine the
Leverage Ratio shall be to the Surviving Person and its Subsidiaries after
giving effect to such transaction (excluding any Unrestricted Subsidiaries)).
(b) For purposes of this Section 5.01, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all the properties and assets of one or
more Restricted Subsidiaries, the Equity Interests of which constitutes all
or substantially all the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all the properties and
assets of the Company.
Section 5.02. Successor Corporation.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in the first paragraph of Section 5.01
in which the Company is not the Surviving Person and the Surviving Person is
to assume all the Obligations of the Company under the Notes, the Indenture
and the Registration Rights Agreement pursuant to a supplemental indenture,
such Surviving Person shall succeed to, and be substituted for, and may
exercise every right and power of, the Company and the Company shall be
discharged from its Obligations under the Notes, the Indenture and the
Registration Rights Agreement.
50
ARTICLE SIX
REMEDIES
Section 6.01. Events of Default.
An "Event of Default" means any of the following events:
(a) the failure to pay interest on any Notes when the same becomes due
and payable and the failure continues for a period of 30 days;
(b) the failure to pay the principal on any Notes, when such principal
becomes due and payable, at Stated Maturity, upon redemption, acceleration or
otherwise;
(c) the failure to perform or comply with any of the provisions of
Section 4.14 or Section 5.01;
(d) a failure in the observance or performance of any other covenant or
agreement of the Company contained in this Indenture which default continues
for a period of 30 days after the Company receives written notice specifying
the default (and demanding that such default be remedied) from the Trustee or
the Holders of at least 25% of the outstanding principal amount of the Notes;
(e) there shall be, with respect to any issue or issues of Indebtedness
of the Company or any Restricted Subsidiary having an outstanding principal
amount of $5.0 million or more in the aggregate for all such issues of all
such Persons, whether such Indebtedness now exists or shall hereafter be
created, (x) an event of default that has caused the holders thereof (or
their representative) (I) to declare such Indebtedness to be due and payable
prior to its scheduled maturity and such Indebtedness has not been discharged
in full or such acceleration has not been rescinded or annulled within 45
days following such acceleration and/or (II) to commence judicial proceeding
to foreclose upon, or to exercise remedies under applicable law or applicable
security documents to take ownership of, the property or assets securing such
Indebtedness and/or (y) the failure to make a principal payment at the final
(but not any interim) fixed maturity and such defaulted payment shall not
have been made, waived or extended within 45 days of such payment default;
(f) one or more judgments in an aggregate amount in excess of $5.0
million shall have been rendered against the Company or any of its Restricted
Subsidiaries and such judgments remain undischarged or unstayed for a period
of 60 days after such judgment or judgments become final and non-appealable;
(g) the Company or any of its Significant Subsidiaries pursuant to or
under or within the meaning of any Bankruptcy Law:
(i) admits in writing its inability to pay its debts generally as
they become due;
51
(ii) commences a voluntary case or proceeding;
(iii) consents to the entry of an order for relief against it
in an involuntary case or proceeding;
(iv) consents or acquiesces in the institution of a
bankruptcy or insolvency proceeding against it;
(v) consents to the appointment of a Custodian of it or for
all or substantially all of its property; or
(vi) makes a general assignment for the benefit of its
creditors, or any of them takes any action to authorize or effect any
of the foregoing,
or takes any other similar action under foreign laws relating to insolvency; or
(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries in an involuntary case or proceeding;
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries for all or substantially all of their
properties taken as a whole; or
(iii) orders the liquidation of the Company, the Company or
any of their Significant Subsidiaries,
or any similar release is granted under foreign laws relating to insolvency, and
in each case, the order or decree remains unstayed and in effect for 60 days.
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
Section 6.01(g) or (h) with respect to the Company) shall occur and be
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the outstanding Notes may declare the principal of and accrued
interest on all the Notes to be due and payable by notice in writing to the
Company and the Trustee specifying the respective Event of Default and the
same shall become immediately due and payable. If an Event of Default
specified in Section 6.01(g) or (h) with respect to the Company occurs and is
continuing, then all unpaid principal of, and premium, if any, and accrued
and unpaid interest on all of the outstanding Notes 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 a declaration of acceleration with respect to the Notes
as described in the preceding paragraph, the Holders of a majority in
principal amount of the Notes may rescind and cancel such declaration and its
consequences (a) if the rescission would not conflict with any
52
judgment or decree, (b) if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of the acceleration, (c) to the extent the payment of such interest
is lawful, interest on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (d) if the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (e) in the event of the cure or waiver of an
Event of Default of the type described in clauses (g) or (h) of Section 6.01,
the Trustee shall have received an Officers' Certificate and an Opinion of
Counsel that such Event of Default has been cured or waived. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
Section 6.03. Other Remedies.
(a) 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 the principal of, premium, if any, or interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture.
(b) All rights of action and claims under this Indenture or the Notes may
be enforced by the Trustee even if it does not possess any of the Notes or
does not produce any of them in the proceeding. A delay or omission by the
Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted
by law.
Section 6.04. Waiver of Past Defaults.
Prior to the acceleration of the Notes, the Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may, on behalf of the Holders of all the Notes, waive any existing
Default or Event of Default and its consequences under this Indenture, except
a Default or Event of Default specified in Section 6.01(a) or (b) or in
respect of any provision hereof which cannot be modified or amended without
the consent of the Holder so affected pursuant to Section 9.02. When a
Default or Event of Default is so waived, it shall be deemed cured and shall
cease to exist. This Section 6.04 shall be in lieu of Section 316(a)(1)(B)
of the TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly
excluded from this Indenture and the Notes, as permitted by the TIA.
Section 6.05. Control by Majority.
Holders of the Notes may not enforce this Indenture or the Notes except as
provided in this Article Six and under the TIA. The Holders of a majority in
aggregate principal amount of the then outstanding Notes have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee, provided, however, that the Trustee may refuse to follow any
direction (a) that conflicts with any rule of law or this Indenture, (b) that
the Trustee, in its sole discretion, determines may be unduly prejudicial to
the rights of another Holder, or (c) that may expose the
53
Trustee to personal liability for which adequate indemnity provided to the
Trustee against such liability is not reasonably assured to it; provided,
further, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction or this Indenture.
This Section 6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and
such Section 316(a)(1)(A) of the TIA is hereby expressly excluded from this
Indenture and the Notes, as permitted by the TIA.
Section 6.06. Limitation on Suits.
No Holder of any Notes shall have any right to institute any proceeding
with respect to this Indenture or the Notes or any remedy hereunder, unless
the Holders of at least 25% in aggregate principal amount of the outstanding
Notes have made written request, and such Holders shall have offered
reasonable indemnity reasonably satisfactory to the Trustee to institute such
proceeding as Trustee under the Notes and this Indenture, the Trustee has
failed to institute such proceeding within 60 days after receipt of such
notice, request and offer of indemnity and the Trustee, within such 60-day
period, has not received directions inconsistent with such written request by
Holders of a majority in aggregate principal amount of the outstanding Notes.
The foregoing limitations shall not apply to a suit instituted by a Holder
of a Note for the enforcement of the payment of the principal of, premium, if
any, or interest on, such Note on or after the respective due dates expressed
or provided for in such Note.
A Holder may not use this Indenture to prejudice the rights of any other
Holders or to obtain priority or preference over such other Holders.
Section 6.07. Right of Holders to Receive Payment.
Notwithstanding any other provision in this Indenture, the right of any
Holder of a Note to receive payment of the principal of, premium, if any, and
interest on such Note, on or after the respective due dates expressed or
provided for in such Note, or to bring suit for the enforcement of any such
payment on or after the respective due dates, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in clause (a) or (b) 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
on the Notes for the whole amount of the principal of, premium, if any, and
accrued interest remaining unpaid, together with interest on overdue
principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per
annum provided for by the Notes 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 and any other amounts due the Trustee pursuant to the
provisions of Section 7.07.
54
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, counsel, accountants and experts)
and the Holders allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and
shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the
same, and any Custodian in any such judicial proceedings is hereby authorized
by each 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 authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article Six it shall
pay out such money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts
due under Section 7.07, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and
the cost and expenses of collection;
SECOND: to Holders for interest accrued on the Notes, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Notes for interest;
THIRD: to Holders for the principal amounts (including any
premium) owing under the Notes, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Notes for the principal (including any premium); and
FOURTH: the balance, if any, to the Company.
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 in its discretion
55
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, 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 any
suit by the Trustee, any suit by a Holder pursuant to Section 6.07, or a suit
by a Holder or Holders of more than 10% in aggregate principal amount of the
outstanding Notes.
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture
and use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture that are adverse to the
Trustee.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
56
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01
and Section 7.02.
(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
Section 7.02. Rights of Trustee.
Subject to the provisions of Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel of its selection and may require an Officers' Certificate or an
Opinion of Counsel, which shall conform to Sections 10.04 and 10.05. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel and the written advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect to any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to the
Company, to examine the books, records, and premises of the
57
Company, personally or by agent or attorney and to consult with the officers
and representatives of the Company, including the Company's accountants and
attorneys.
(f) The Trustee shall be under no obligation to exercise any of its
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders have offered to the Trustee reasonable indemnity
satisfactory to the Trustee against the costs, expenses and liabilities which
may be incurred by it in compliance with such request, order or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) Except with respect to Section 4.01, the Trustee shall have no duty
to inquire as to the performance of the Company with respect to the covenants
contained in Article 4. In addition, the Trustee shall not be deemed to have
knowledge of an Event of Default except (i) any Default or Event of Default
occurring pursuant to Sections 4.01, 6.01(a) or 6.01(b) or (ii) any Default
or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
(i) Delivery of reports, information and documents to the Trustee under
Section 4.08 is for informational purposes only and the Trustee's receipt of
the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein,
including the Company's compliance with any of their covenants hereunder (as
to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company, or any of the
Subsidiaries or their respective Affiliates with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with the provisions of Sections 7.10 and
7.11.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes, and it shall not be accountable for the Company's use
of the proceeds from the Notes, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement of the Company in this
Indenture or the Notes other than the Trustee's certificate of authentication.
Section 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it is
known to a Trust Officer, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 30 days after obtaining knowledge
thereof. Except in the case of a Default or an Event of
58
Default in payment of principal of, or interest on, any Note, including an
accelerated payment, a Default in payment pursuant to an Offer to Purchase
and a Default in compliance with Article Five hereof, the Trustee may
withhold the notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its directors and/or
Trust Officers in good faith determines that withholding the notice is in the
interest of the Holders. The foregoing sentence of this Section 7.05 shall be
in lieu of the proviso to Section 315(b) of the TIA and such proviso to
Section 315(b) of the TIA is hereby expressly excluded from this Indenture
and the Notes, as permitted by the TIA.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after May 15 of each year beginning with 1998, the Trustee
shall, to the extent that any of the events described in TIA Section 313(a)
occurred within the previous twelve months, but not otherwise, mail to each
Holder a brief report dated as of such date that complies with TIA Section
313(a). The Trustee also shall comply with TIA Sections 313(b), (c) and (d).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the SEC and each stock exchange, if any,
on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become listed
on any stock exchange and the Trustee shall comply with TIA Section 313(d).
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation
for its services as has been agreed to in writing signed by the Company and
the Trustee. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable out-of-pocket expenses incurred
or made by it in connection with the performance of its duties under this
Indenture. Such expenses shall include the reasonable fees and expenses of
the Trustee's agents, counsel, accountants and experts.
The Company shall indemnify each of the Trustee (or any predecessor
Trustee) and its agents, employees, stockholders, Affiliates and directors
and officers for, and hold them each harmless against, any and all loss,
liability, damage, claim or expense (including reasonable fees and expenses
of counsel), including taxes (other than taxes based on the income of the
Trustee) incurred by them except for such actions to the extent caused by any
negligence, bad faith or willful misconduct on their part, arising out of or
in connection with the acceptance or administration of this trust including
the reasonable costs and expenses of defending themselves against any claim
or liability in connection with the exercise or performance of any of their
rights, powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its Obligations hereunder except to the extent such failure
shall have prejudiced the Company. At the Trustee's sole discretion, the
Company shall defend the claim and the Trustee shall cooperate and may
participate in the defense; provided, however, that any settlement of a claim
shall be approved in writing by the Trustee if
59
such settlement would result in an admission of liability by the Trustee or
if such settlement would not be accompanied by a full release of the Trustee
for all liability arising out of the events giving rise to such claim.
Alternatively, the Trustee may at its option have separate counsel of its own
choosing and the Company shall pay the reasonable fees and expenses of such
counsel.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or premium, if any, or interest on
particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 7.07 shall survive the termination of this
Indenture.
Section 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee and appoint a successor Trustee with the Company's consent, by so
notifying the Company and the Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall notify each Holder of such event
and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in aggregate
principal amount of the outstanding Notes may appoint a successor Trustee to
replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The Company shall mail notice of such
successor Trustee's appointment to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in aggregate
60
principal amount of the outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding any resignation or replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07 shall
continue for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts or converts into, or
transfers all or substantially all of its corporate trust business to,
another corporation, the resulting, surviving or transferee corporation
without any further act shall, if such resulting, surviving or transferee
corporation is otherwise eligible hereunder, be the successor Trustee;
provided, however, that such corporation shall be otherwise qualified and
eligible under this Article Seven.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirement
of TIA Sections 310(a)(1), (2) and (5). The Trustee (or, in the case of a
Trustee that is a subsidiary of another bank or a corporation included in a
bank holding company system, the related bank or bank holding company) shall
have a combined capital and surplus of at least $100,000,000 as set forth in
its most recent published annual report of condition, and have a Corporate
Trust Office in the City of New York. In addition, if the Trustee is a
subsidiary of another bank or a corporation included in a bank holding
company system, the Trustee, independently of such bank or bank holding
company, shall meet the capital requirements of TIA Section 310(a)(2). The
Trustee shall comply with the TIA Section 310(b); provided, however, that
there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are
outstanding, if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met. The provisions of TIA Section 310 shall apply to the
Company, as obligor of the Notes.
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.01. Termination of Company's Obligations.
61
This Indenture will be discharged and will cease to be of further effect
(except as to surviving rights or registration of transfer or exchange of the
Notes, as expressly provided for in this Indenture) as to all outstanding
Notes when (a) either (i) all Notes, theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid and
Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust) have been delivered to the Trustee for
cancellation or (ii) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient in the opinion of a nationally recognized firm of independent
public accountants, to pay and discharge the entire Indebtedness on the Notes
not theretofore delivered to the Trustee for cancellation, the principal of,
premium, if any, and interest on the Notes to the date of deposit together
with irrevocable instructions from the Company directing the Trustee to apply
such funds to the payment thereof at maturity or redemption, as the case may
be; (b) the Company has paid all other sums payable under this Indenture by
the Company; and (c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that all conditions precedent
under this Indenture relating to the satisfaction and discharge of this
Indenture have been complied with; provided, however, that such counsel may
rely, as to matters of fact, on a certificate or certificates of officers of
the Company.
The Company may, at its option and at any time, elect to have its
obligations discharged with respect to the outstanding Notes ("Legal
Defeasance"). Such Legal Defeasance means that the Company shall be deemed
to have paid and discharged the entire indebtedness represented by the
outstanding Notes, except for (a) the rights of Holders to receive payments
in respect of the principal of, premium, if any, and interest on the Notes
when such payments are due, which such payments shall be paid in accordance
with Section 8.02, (b) the Company's obligations with respect to the Notes
concerning issuing temporary Notes, registration of Notes, mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency
for payments, (c) the rights, powers, trust, duties and immunities of the
Trustee and the Company's obligations in connection therewith and (d) the
Legal Defeasance provisions of this Section 8.01. In addition, the Company
may, at its option and at any time, elect to have the obligations of the
Company released with respect to covenants contained in Sections 4.04, 4.05,
4.08 and 4.10 through 4.19 and Article Five ("Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not constitute
a Default or Event of Default with respect to the Notes. In the event of
Covenant Defeasance, those events described under Section 6.01 (except those
events described in Section 6.01(a), (b), (g) and (h)) will no longer
constitute an Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, under an
irrevocable trust agreement, for the benefit of the Holders cash in United
States dollars, non-callable U.S. Government obligations, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal
62
of, premium, if any, and interest on the Notes on the stated date for payment
thereof or on the applicable Redemption Date, as the case may be;
(b) in the case of Legal Defeasance, the Company shall have delivered to
the Trustee an Opinion of Counsel in the United States reasonably acceptable
to the Trustee confirming that (i) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (ii) since
the date of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
opinion of counsel shall confirm that, the Holders will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and in either case, and (iii) the Holders will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of Covenant Defeasance, the Company shall have delivered
to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default with
respect to this Indenture resulting from the Incurrence of Indebtedness, all
or a portion of which will be used to defease the Notes concurrently with
such Incurrence) or insofar as Events of Default under Section 6.01(g) or (h)
from bankruptcy or insolvency events are concerned at any time in the period
ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under this Indenture (other
than a Default or Event of Default with respect to this Indenture resulting
from the Incurrence of Indebtedness, all or a portion of which will be used
to defease the Notes concurrently with such Incurrence) or any other material
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance, as the case may be, have been complied with; and
(h) the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that, subject to customary assumptions and conclusions after
the 91st day following the deposit, the trust funds will not be subject to
the effect of any applicable federal, New York or
63
Pennsylvania bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally.
Notwithstanding the foregoing, the Opinion of Counsel required by clauses
(b)(i) and (c) above need not be delivered if all the Notes not theretofore
delivered to the Trustee for cancellation (i) have become due and payable,
(ii) will become due and payable on the maturity date within one year, or
(iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by such
Trustee in the name, and at the expense, of the Company.
Section 8.02. Application of Trust Money.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or U.S.
Government Obligations deposited with it pursuant to Section 8.01, and shall
apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of the principal
of and interest on the Notes. The Trustee shall be under no obligation to
invest said U.S. Legal Tender or U.S. Government Obligations.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.01 or the principal
and interest received in respect thereof other than any such tax, fee or
other charge which by law is for the account of the Holders of outstanding
Notes.
Section 8.03. Repayment to the Company.
Subject to Sections 7.07 and 8.01, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations 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 or interest that remains unclaimed for one year;
provided, however, that the Company shall, if requested by the Trustee or
Paying Agent, give to the Trustee or Paying Agent, indemnification reasonably
satisfactory to it against any and all liability which may be incurred by it
by reason of such paying; provided, further, that the Trustee or such Paying
Agent, before being required to make any payment, may at the expense of the
Company cause to be published once in a newspaper of general circulation in
the City of New York or mail to each Holder entitled to such money notice
that such money remains unclaimed and that after a date specified therein
which shall be at least 30 days from the date of such publication or mailing
any unclaimed balance of such money then remaining 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 8.04. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with Section 8.01 by reason of any
legal proceeding or
64
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01 until
such time as the Trustee or Paying Agent is permitted to apply all such U.S.
Legal Tender or U.S. Government Obligations in accordance with Section 8.01;
provided, however, that if the Company has made any payment of interest on or
principal of any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.
Section 8.05. Acknowledgment of Discharge by Trustee.
After (i) the conditions of Section 8.01 have been satisfied, (ii) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company and (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i) above relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture except for those surviving obligations specified in Section
8.01, provided the legal counsel delivering such opinion of Counsel may rely
as to matters of fact on one or more Officers' Certificates of the Company.
ARTICLE NINE
MODIFICATION OF THE INDENTURE
Section 9.01. Without Consent of Holders.
The Company, when authorized by a resolution of its Board of Directors,
and the Trustee may amend or supplement this Indenture or the Notes without
notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not materially adversely
affect the rights of any Holder;
(2) to effect the assumption by a successor Person of all
obligations of the Company under the Notes, this Indenture and the
Registration Rights Agreement in connection with any transaction
complying with Article Five of this Indenture;
(3) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(4) to comply with any requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
65
(5) to make any change that would provide any additional
benefit or rights to the Holders;
(6) to make any other change that does not adversely affect
the rights of any Holder under this Indenture; or
(7) to add to the covenants of the Company for the benefit
of the Holders, or to surrender any right or power herein conferred
upon the Company;
provided, however, that the Company has delivered to the Trustee an Opinion
of Counsel stating that such amendment or supplement complies with the
provisions of this Section 9.01.
Section 9.02. With Consent of Holders.
Subject to Section 6.07, the Company, when authorized by a resolution of
its Board of Directors, and the Trustee may amend or supplement this
Indenture or the Notes with the written consent of the Holders of a majority
in principal amount of the outstanding Notes. Subject to Section 6.07, the
Holders of a majority in principal amount of the outstanding Notes may waive
compliance by the Company with any provision of this Indenture or the Notes.
However, without the consent of the Holder of each Note affected, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
may not:
(1) change the maturity of the principal of any such Note;
(2) alter the optional redemption or repurchase provisions
of any such Note or this Indenture in a manner adverse to the Holders
of such Note;
(3) reduce the principal amount of any such Note;
(4) reduce the rate of or extend the time for payment of
interest on any such Note;
(5) change the place or currency of payment of the
principal of or interest on any such Note;
(6) modify any provisions of Sections 6.04 (other than to
add sections of this Indenture or the Notes subject thereto) or 6.07
or this Section 9.02 (other than to add sections of this Indenture or
the Notes which may not be amended, supplemented or waived without the
consent of each Holder affected);
(7) reduce the percentage of the principal amount of
outstanding Notes necessary for amendment to or waiver of compliance
with any provision of this Indenture or the Notes or for waiver of any
Default in respect thereof;
(8) waive a default in the payment of the principal of or
interest on or redemption payment with respect to any such Note
(except a rescission of
66
acceleration of the Notes by the Holders as provided in Section 6.02 and a
waiver of the payment default that resulted from such acceleration);
(9) modify the ranking or priority of such Note; or
(10) modify the provisions of any covenant (or the related
definitions in this Indenture) requiring the Company to make any Offer
to Purchase in a manner adverse to the Holders.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
Section 9.03. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect; provided, however, that this Section
9.03 shall not of itself require that this Indenture or the Trustee be
qualified under the TIA or constitute any admission or acknowledgment by any
party hereto that any such qualification is required prior to the time this
Indenture and the Trustee are required by the TIA to be so qualified.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent
Holder may revoke the consent as to such Holder's Note or portion of such
Note by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the
Holders of the requisite principal amount of Notes have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver. An
amendment, supplement or waiver becomes effective upon receipt by the Trustee
of such Officers' Certificate and evidence of consent by the Holders of the
requisite percentage in principal amount of outstanding Notes.
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
second sentence 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 revoke any consent previously given,
67
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 unless consents from Holders of the requisite percentage in
principal amount of outstanding Notes required hereunder for the
effectiveness of such consents shall have also been given and not revoked
within such 90-day period.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it makes a change described in any of clauses (1)
through (10) of Section 9.02. In that case the amendment, supplement or
waiver shall bind each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt
as the consenting Holder's Note.
Section 9.05. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of such Note to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Note about the changed
terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determine, the Company in exchange for the Note shall issue and
the Trustee shall authenticate a new Note that reflects the changed terms.
Failure to make the appropriate notation or issue a new Note shall not affect
the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article Nine; provided, however, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. In executing such amendment, supplement or waiver the Trustee
shall be entitled to receive indemnity reasonably satisfactory to it, and
shall be fully protected in relying upon an Opinion of Counsel and an
Officers' Certificate of the Company, stating that no Event of Default shall
occur as a result of such amendment, supplement or waiver and that the
execution of such amendment, supplement or waiver is authorized or permitted
by this Indenture, provided, however, that the legal counsel delivering such
Opinion of Counsel may rely as to matters of fact on one or more Officers'
Certificates of the Company. Such Opinion of Counsel shall not be an expense
of the Trustee.
Section 9.07. Payments for Consent.
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the
terms or provisions of the Notes, this Indenture or the Registration Rights
Agreement unless such consideration is offered to be paid or agreed to be
paid to all Holders that consent, waive or agree to amend in the time frame
set forth in the solicitation documents relating to such consent, waiver or
agreement.
68
ARTICLE TEN
MISCELLANEOUS
Section 10.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the
TIA, the required provision shall control; provided, however, that this
Section 10.01 shall not of itself require that this Indenture or the Trustee
be qualified under the TIA or constitute any admission or acknowledgment by
any party hereto that any such qualification is required prior to the time
this Indenture and the Trustee are required by the TIA to be so qualified.
Section 10.02. Notices.
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company:
IDT Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
if to the Trustee:
First Trust National Association
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
The Company and the Trustee by written notice to the other may designate
additional or different addresses for notices to such Person. Any notice or
communication to the Company or
69
the Trustee shall be deemed to have been given or made as of the date so
delivered if hand delivered; when answered back, if telexed; when receipt is
acknowledged, if faxed; one (1) business day after mailing by reputable
overnight courier and five (5) calendar days after mailing if sent by registered
or certified mail, postage prepaid (except that a notice of change of address
shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Holder shall be mailed to him by
first class mail or other equivalent means at his address as it appears on the
registration books of the Registrar ten (10) days prior to such mailing and
shall be sufficiently given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
Section 10.03. Communications by Holders with other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company,
the Trustee, the Registrar and any other Person shall have the protection of
TIA Section 312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory
to the Trustee, stating that, in the opinion of the signers, all
conditions precedent to be performed by the Company, if any, provided for
in this Indenture relating to the proposed action have been complied with;
and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with (which counsel, as to factual matters, may rely on an
Officers' Certificate).
Section 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
70
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is reasonably necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of
each such Person, such condition or covenant has been complied with.
Section 10.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.
Section 10.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment is a
Saturday, a Sunday or a day on which banking institutions in New York, New
York or at such place of payment are not required to be open. If a payment
date is a Legal Holiday at such place, payment may be made at such place on
the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
Section 10.08. Governing Law.
This Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
applicable principles of conflicts of law.
Section 10.09. 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 of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 10.10. No Personal Liability.
No director, officer, employee, incorporator or stockholder of the Company
or any of its Affiliates, as such, shall have any liability for any
obligations of the Company or any of its Affiliates under the Notes or this
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
Section 10.11. Successors.
71
All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors.
Section 10.12. Duplicate Originals.
All parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but
all of them together shall represent the same agreement.
Section 10.13. Severability.
In case any one or more of the provisions in this Indenture or in the
Notes shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
Section 10.14. Independence of Covenants.
All covenants and agreements in this Indenture and the Notes shall be
given independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists.
72
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
IDT CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: General Counsel and Secretary
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
73
EXHIBIT A
CUSIP No.:
[LEGEND REQUIRED BY SECTION 2.15]
IDT CORPORATION
8 3/4% SENIOR NOTE DUE 2006
No. [ ]
$
IDT CORPORATION, a Delaware corporation (the "Company"), for value
received, promises to pay to Cede & Co. or registered assigns the principal sum
of One Hundred Million ($100,000,000) Dollars on February ___, 2006.
Interest Payment Dates: February 15 and August 15, commencing August 15,
1998
Record Dates: [February 1] and [August 1]
Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
IDT CORPORATION
By: ________________________________
Name:
Title:
By:__________________________
Name:
Title:
Dated:
A-1
Certificate of Authentication
This is one of the 8 3/4% Senior Notes due 2006 referred to in the
within-mentioned Indenture.
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By:________________________
Authorized Signatory
(Seal)
Date of Authentication:
A-2
(REVERSE OF SECURITY)
8 3/4% Senior Note due 2006
1. Interest. IDT CORPORATION, a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at the rate per
annum shown above. Interest on the Notes will accrue from the most recent date
on which interest has been paid or, if no interest has been paid, from February
18, 1998. The Company will pay interest semi-annually in arrears on each
Interest Payment Date, commencing August 15, 1998. Interest will be computed on
the basis of a 360-day year of twelve 30-day months and, in the case of a
partial month, the actual number of days elapsed.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are canceled on registration of transfer or registration
of exchange (including pursuant to an Exchange Offer (as defined in the
Registration Rights Agreement)) after such Record Date. Holders must surrender
Notes to a Paying Agent to collect principal payments. The Company shall pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts ("U.S. Legal Tender").
However, the Company may pay principal and interest by its check payable in such
U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, First Trust National
Association (the "Trustee") will act as Paying Agent and Registrar. The Company
may change any Paying Agent, Registrar or co-Registrar without notice to the
Holders.
4. Indenture. The Company issued the Notes under an Indenture, dated as
of February 18, 1998 (the "Indenture"), between the Company and the Trustee.
This Note is one of a duly authorized issue of Notes of the Company designated
as its 8 3/4% Senior Notes due 2006 (the "Notes"). The Notes are limited
(except as otherwise provided in the Indenture) in aggregate principal amount to
$275,000,000, which may be issued under the Indenture; provided the principal
amount of Initial Notes issued on the Issue Date is $100,000,000. The Notes
include the Initial Notes, the Private Exchange Notes and the Exchange Notes
issued in exchange for the Initial Notes pursuant to the Registration Rights
Agreement. The Initial Notes and the Exchange Notes are treated as a single
class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such
A-3
terms, and Holders of Notes are referred to the Indenture and said Act for a
statement of them. The Notes are general unsecured obligations of the Company.
Each Holder, by accepting a Note, agrees to be bound by all of the terms
and provisions of the Indenture, as the same may be amended from time to time in
accordance with its terms.
5. Redemption. The Notes will be redeemable, at the Company's option, in
whole at any time or in part from time to time, on and after February 15, 2002,
upon not less than 30 nor more than 60 days' notice, at the following Redemption
Prices (expressed as percentages of the principal amount thereof) if redeemed
during the twelve-month period commencing on February 15 of the year set forth
below, plus, in each case, accrued and unpaid interest thereon, if any, to the
date of redemption:
Year Percentage
2002...................... 104.375%
2003...................... 102.188%
2004 and thereafter....... 100.000%
At any time, or from time to time, on or prior to February 15, 2001, the
Company may, at its option, use the net cash proceeds of one or more Public
Equity Offerings to redeem up to 35% of the Notes at a Redemption Price equal to
108.75% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of redemption; provided, however, that at least 65%
of the principal amount of Notes issued under the Indenture remains outstanding
immediately after giving effect to any such redemption (excluding any Notes
owned by the Company or any of its Affiliates). In order to effect the
foregoing redemption with the proceeds of any Public Equity Offering, the
Company shall make such redemption not more than 90 days after the consummation
of any such Public Equity Offering.
6. Ranking. The Notes are general unsecured obligations of the Company,
and rank senior in right of payment to all future Indebtedness of the Company
that is, by its terms or by the terms of the agreement or instrument governing
such Indebtedness, expressly subordinated in right of payment to the Notes and
pari passu in right of payment with all existing and future unsecured
liabilities of the Company that are not so subordinated.
7 Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of the
Notes called for redemption shall have been deposited with the Paying Agent for
redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
A-4
8. Offers to Purchase. Sections 4.14 and 4.15 of the Indenture provide
that, after certain Asset Sales (as defined in the Indenture) and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. Registration Rights. Pursuant to a Registration Rights Agreement
among the Company and the Initial Purchasers, the Company will be obligated to
consummate an exchange offer pursuant to which the Holders of the Initial Notes
shall have the right to exchange the Initial Notes for Exchange Notes of the
Company, which will be registered under the Securities Act, in like principal
amount and having terms substantially identical in all material respects as the
Initial Notes. The Holders of the Initial Notes shall be entitled to receive
certain additional interest payments in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in accordance
with the terms of the Registration Rights Agreement.
10. Denominations; Transfer; Exchange. The Notes are in registered form,
without coupons, and in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or to exchange 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
certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for
redemption.
11. Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for one year, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity. If the Company at any time
deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, and including, under certain
circumstances, its obligation to pay the principal of and interest on the Notes
but without affecting the rights of the Holders to receive such amounts from
such deposits).
14. Amendment; Supplement; Waiver. Subject to certain exceptions set
forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of a majority in aggregate
principal amount of the Notes then outstanding, and any past Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or
A-5
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Notes in addition
to or in place of certificated Notes, comply with any requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the TIA or
comply with Article Five of the Indenture or make any other change that does not
adversely affect the rights of any Holder of a Note.
15. Restrictive Covenants. The Indenture imposes certain limitations on
the ability of the Company and its Subsidiaries to, among other things, incur
additional Indebtedness, pay dividends or make certain other Restricted
Payments, consummate certain Asset Sales, enter into certain transactions with
Affiliates, incur liens, impose restrictions on the ability of a Subsidiary to
pay dividends or make certain payments to the Company and its Subsidiaries,
merge or consolidate with any other Person or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of the assets of the
Company. Such limitations are subject to a number of important qualifications
and exceptions. Pursuant to Section 4.06 of the Indenture, the Company must
report quarterly to the Trustee on compliance with such limitations.
16. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.
17. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be due
and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture or the Notes unless it has received indemnity reasonably satisfactory
to it. The Indenture permits, subject to certain limitations therein provided,
Holders of a majority in aggregate principal amount of the Notes then
outstanding to direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Notes notice of any continuing Default or
Event of Default (except a Default in payment of principal or interest when due,
for any reason or a Default in compliance with Article Five of the Indenture) if
it determines that withholding notice is in their interest.
18. Trustee Dealings with the Company and Its Subsidiaries. The Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with the Company, its
Subsidiaries or their respective Affiliates as if it were not the Trustee.
19. No Recourse Against Others. No director, officer, employee or
shareholder, as such, of the Company shall have any liability for any obligation
of the Company under the Notes, the Indenture or the Registration Rights
Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
A-6
20. Authentication. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
21. Governing Law. This Note and the Indenture shall be governed by and
construed in accordance with the laws of the State of New York, as applied to
contracts made and performed within the State of New York, without regard to
principles of conflict of laws. Each of the parties hereto agrees to submit to
the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or relating to this Note.
22. Abbreviations and Defined Terms. Customary abbreviations may be used
in the name of a Holder of a Note 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).
23. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture, which has the text of this Note.
Requests may be made to: IDT Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇.
A-7
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Print or type name, address and zip code and social security or tax ID number
of assignee)
and irrevocably appoint ____________________________, 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 your name appears on the
other side of this Note)
Signature Guarantee: _________________________________________________________
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) February 18, 2000, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer:
[Check One]
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933,
as amended) that has furnished to the Trustee a signed
letter containing certain representations and agreements
(the form of which letter can be obtained from the Trustee);
or
(4) ___ outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act of 1933,
as amended; or
(5) ___ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act of 1933, as amended; or
A-8
(6) ___ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) ___ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
/ / The transferee is an Affiliate of the Company.
Unless one of the items is checked, the Trustee will refuse to register any
of the Notes evidenced by this certificate in the name of any person other than
the registered Holder thereof; provided, however, that if item (3), (4), (5) or
(7) is checked, the Company or the Trustee may require, prior to registering any
such transfer of the Notes, in their sole discretion, such written legal
opinions, certifications (including an investment letter in the case of box (3)
or (4)) and other information as the Trustee or 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, as amended.
If none of the foregoing items are checked, the Trustee or Registrar shall
not be obligated to register this Note in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.17 of the Indenture shall have
been satisfied.
Dated: ____________ Signed: _________________________________________________
(Sign exactly as your name appears on
the other side of this Note)
Signature Guarantee: ______________________________________________________
A-9
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: ______________ ___________________________________________________
NOTICE: to be executed by an executive officer
A-10
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.14 or Section 4.15 of the Indenture, check the appropriate box:
Section 4.14 [____]
Section 4.15 [____]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.14 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$______________________
Dated:__________________ ___________________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular
without alteration or enlargement or any change
whatsoever and be guaranteed.
Signature Guarantee: _________________________________________________________
A-11
EXHIBIT B
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
[__________], [____]
First National Trust Association
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed purchase of 8 3/4% Senior Notes due 2006
(the "Notes") of IDT Corporation, a Delaware corporation (the "Company"), we
confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated February 12, 1998, relating to the Notes and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated in the section
entitled "Transfer Restrictions" of such Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is subject to
certain restrictions and conditions set forth in the Indenture relating to the
Notes (the "Indenture") as described in the Offering Memorandum and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and conditions
and the Securities Act of 1933, as amended (the "Securities Act"), and all
applicable state securities laws.
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
persons except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Notes, we will do so only (i) to the Company
or any subsidiary thereof, (ii) inside the United States in accordance with Rule
144A under the Securities Act to a "qualified institutional buyer" (as defined
in Rule 144A promulgated under the Securities Act), (iii) inside the United
States to an institutional "accredited investor" (as defined below) that, prior
to such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to the Trustee (as defined in the Indenture) a signed letter
containing certain representations and agreements relating to the restrictions
on transfer of the Notes (the form of which letter can be obtained from the
Trustee), (iv) outside the United States in accordance with Rule 904 of
Regulation S promulgated under the Securities Act to non-U.S. persons, (v)
pursuant to the exemption from
B-1
registration provided by Rule 144 under the Securities Act (if available), (vi)
pursuant to an effective registration statement under the Securities Act, and in
each of cases (i) to (vi), in accordance with any applicable securities laws of
any state of the U.S. or any other jurisdiction and we further agree to provide
to any person purchasing any of the Notes from us a notice advising such
purchaser that resales of the Notes are restricted as stated herein.
4. We understand that, on any proposed resale of any Notes, we will be
required to furnish to the Trustee and the Company such certification, legal
opinions and other information as the Trustee and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or their investment, as the case may be.
6. We are acquiring the Notes purchased by us for our account or for one
or more accounts (each of which is an institutional "accredited investor") as to
each of which we exercise sole investment discretion.
You, the Company, the Trustee and others are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By: ________________________________
Name:
Title:
B-2
EXHIBIT C
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
[____________], [____]
First National Trust Association
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Re: IDT Corporation (the "Company")
8 3/4% Senior Notes due 2006 (the Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United States;
(2) either (a) at the time the buy offer was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States, or (b)
the transaction was executed in, on or through the facilities of a designated
off-shore securities market and neither we nor any person acting on our behalf
knows that the transaction has been pre-arranged with a buyer in the United
States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions applicable
to the Notes.
C-1
You, the Company and counsel for the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: ______________________________
Authorized Signature
C-2