EXHIBIT 4.8
--------------------------------------------------------------------------------
USN COMMUNICATIONS, INC.
$13,022,600
9% CONSENT CONVERTIBLE SUBORDINATED NOTES DUE 2006
------------------
INDENTURE
Dated as of January 13, 1998
------------------
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
Trustee
-------------------------------------------------------------------------------
CROSS-REFERENCE TABLE
Reconciliation and tie between the Trust Indenture Act of 1939, as amended, and
the Indenture, dated as of January 13, 1998
Trust Indenture Indenture
Act Section Section
----------- -----------
(S)310(a)(1)....................................................... 7.10
(a)(2)....................................................... 7.10
(a)(3)....................................................... N.A.
(a)(4)....................................................... N.A.
(a)(5)....................................................... 7.10
(b).......................................................... 7.08; 7.10
(c).......................................................... N.A.
(S)311(a).......................................................... 7.11
(b).......................................................... 7.11
(c).......................................................... N.A.
(S)312(a).......................................................... 7.06(a);
.......................................................... 7.06(b)
(b).......................................................... 7.06(c)
(c).......................................................... 7.06(d)
(S)313(a).......................................................... 7.06(e)
(b).......................................................... N.A.
(c).......................................................... 7.06(e);
.......................................................... 7.06(f)
(d).......................................................... 7.06
(S)314(a).......................................................... 4.11; 4.12
(b).......................................................... N.A
(c)(1)....................................................... 1.04; 12.03
(c)(2)....................................................... 1.04; 2.02;
....................................................... 12.03
(c)(3)....................................................... N.A.
(d).......................................................... 4.22
(e).......................................................... 12.04
(f).......................................................... 4.12
(S)315(a).......................................................... 7.01(b)
(b).......................................................... 7.05(a)
(c).......................................................... 7.01(a)
(d).......................................................... 7.01(c)
(e).......................................................... 6.10
(S)316(a).......................................................... 2.08
(a)(1)(A).................................................... 6.05
(a)(1)(B).................................................... 6.04
i
Trust Indenture Indenture
Act Section Section
----------- ----------
(a)(2)....................................................... N.A.
(b).......................................................... 6.07
(c).......................................................... 9.05
(S)317(a)(1)....................................................... 6.03
(a)(2)....................................................... 6.08
(b).......................................................... 2.04
(S)318(a).......................................................... 12.01
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be part of the Indenture.
ii
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION........................1
SECTION 1.1. Definitions.....................................................1
SECTION 1.2. Incorporation by Reference of Trust Indenture Act..............19
SECTION 1.3. Rules of Construction..........................................19
SECTION 1.4. Form of Documents Delivered to Trustee.........................20
SECTION 1.5. Acts of Holders................................................20
ARTICLE II
THE CONVERTIBLE NOTES.........................................................23
SECTION 2.1. Form and Dating................................................23
SECTION 2.2. Execution and Authentication...................................25
SECTION 2.3. Registrar and Paying Agent.....................................26
SECTION 2.4. Paying Agent to Hold Money in Trust............................27
SECTION 2.5. Global Convertible Notes.......................................27
SECTION 2.6. Transfer and Exchange..........................................28
SECTION 2.7. Replacement Convertible Notes..................................31
SECTION 2.8 Outstanding Convertible Notes..................................32
SECTION 2.9. Temporary Convertible Notes....................................32
SECTION 2.10. Cancellation...................................................33
SECTION 2.11. Payment of Interest; Interest Rights Preserved.................33
SECTION 2.12. Authorized Denominations.......................................34
SECTION 2.13. Computation of Interest, etc...................................34
SECTION 2.14. Persons Deemed Owners..........................................34
SECTION 2.15. CUSIP Numbers..................................................35
ARTICLE III
REDEMPTION....................................................................35
SECTION 3.1. Notice to Trustee..............................................35
SECTION 3.2. Selection of Convertible Notes to be Redeemed..................35
SECTION 3.3. Notice of Redemption...........................................36
SECTION 3.4. Effect of Notice of Redemption.................................37
SECTION 3.5. Deposit of Redemption Price....................................37
i
Page
SECTION 3.6. Convertible Notes Redeemed in Part..................................................37
SECTION 3.7. Optional Redemption.................................................................38
ARTICLE IV
COVENANTS..........................................................................................38
SECTION 4.1. Payment of Convertible Notes........................................................38
SECTION 4.2. Maintenance of Office or Agency.....................................................38
SECTION 4.3. Money for the Convertible Note Payments to be Held in Trust.........................39
SECTION 4.4. Corporate Existence.................................................................39
SECTION 4.5. Maintenance of Property.............................................................40
SECTION 4.6. Payment of Taxes and Other Claims...................................................40
SECTION 4.7. Repurchase at the Option of Holders upon a Change of Control........................40
SECTION 4.8. Limitation on Asset Sales...........................................................42
SECTION 4.9. Limitation on Issuance of Guarantees by Restricted Subsidiaries.....................47
SECTION 4.10. Restricted and Unrestricted Subsidiaries............................................47
SECTION 4.11. Reports.............................................................................48
SECTION 4.12. Compliance Certificate; Notice of Default or Event of Default.......................48
SECTION 4.13. INTENTIONALLY OMITTED...............................................................49
SECTION 4.14. Repurchase at the Option of Holders upon a Termination of Trading...................49
SECTION 4.15. INTENTIONALLY OMITTED...............................................................50
ARTICLE V
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER...............................................51
SECTION 5.1. Merger, Consolidation or Sale of Assets.............................................51
SECTION 5.2. Successor Corporation Substituted...................................................52
ARTICLE VI
DEFAULTS AND REMEDIES..............................................................................52
SECTION 6.1. Events of Default...................................................................52
SECTION 6.2. Acceleration........................................................................54
SECTION 6.3. Other Remedies......................................................................56
SECTION 6.4. Waiver of Existing Defaults.........................................................56
SECTION 6.5. Control by Majority.................................................................57
SECTION 6.6. Limitation on Suits.................................................................57
SECTION 6.7. Rights of Holders to Receive Payment................................................58
SECTION 6.8. Trustee May File Proofs of Claim....................................................58
ii
Page
SECTION 6.9. Priorities..........................................................................59
SECTION 6.10. Undertaking for Costs...............................................................59
SECTION 6.11. Waiver of Usury, Stay or Extension Laws.............................................59
SECTION 6.12. Trustee May Enforce Claims Without Possession of the Convertible
Notes.............................................................................60
SECTION 6.13. Restoration of Rights and Remedies..................................................60
SECTION 6.14. Rights and Remedies Cumulative......................................................60
SECTION 6.15. Delay or Omission Not Waiver........................................................60
ARTICLE VII
TRUSTEE............................................................................................61
SECTION 7.1. Duties of Trustee...................................................................61
SECTION 7.2. Rights of Trustee...................................................................62
SECTION 7.3. Individual Rights of Trustee........................................................63
SECTION 7.4. Trustee's Disclaimer................................................................63
SECTION 7.5. Notice of Defaults..................................................................63
SECTION 7.6. Preservation of Information; Reports by Trustee to Holders..........................63
SECTION 7.7. Compensation and Indemnity..........................................................64
SECTION 7.8. Replacement of Trustee..............................................................65
SECTION 7.9. Successor Trustee by Merger.........................................................67
SECTION 7.10. Eligibility; Disqualification.......................................................67
SECTION 7.11. Preferential Collection of Claims Against Company...................................68
ARTICLE VIII
SECTION 8.1. Company's Option to Effect Legal Defeasance or Covenant Defeasance..................69
SECTION 8.2. Legal Defeasance and Discharge......................................................69
SECTION 8.3. Covenant Defeasance.................................................................70
SECTION 8.4. Conditions to Defeasance or Covenant Defeasance.....................................70
SECTION 8.5. Deposited Money and U.S. Government Obligations to be Held in Trust;
Miscellaneous Provisions..........................................................71
SECTION 8.6. Reinstatement.......................................................................72
ARTICLE IX
AMENDMENTS.........................................................................................72
SECTION 9.1. Without Consent of Holders..........................................................72
SECTION 9.2. With Consent of Holders.............................................................73
iii
Page
SECTION 9.3. Effect of Supplemental Indentures.........................................................74
SECTION 9.4. Compliance with Trust Indenture Act.......................................................74
SECTION 9.5. Revocation and Effect of Consents and Waivers.............................................74
SECTION 9.6. Notation on or Exchange of Convertible Notes..............................................75
SECTION 9.7. Trustee to Execute Supplemental Indentures................................................75
SECTION 9.8. Solicitation of Consents..................................................................76
ARTICLE X
CONVERTIBLE NOTE GUARANTEES..............................................................................76
SECTION 10.1. Convertible Note Guarantees...............................................................76
SECTION 10.2. Limitation of Guarantor's Liability.......................................................79
SECTION 10.3. Execution and Delivery of Convertible Note Guarantees.....................................79
SECTION 10.4. When a Guarantor May Merge, etc...........................................................79
SECTION 10.5. Release of a Guarantor....................................................................80
ARTICLE XI
SUBORDINATION OF CONVERTIBLE NOTES AND CONVERTIBLE NOTE
GUARANTEES...............................................................................................80
SECTION 11.1. Convertible Notes and Convertible Note Guarantees Subordinated to
Senior Indebtedness.....................................................................80
SECTION 11.2. Payment Over of Proceeds Upon Dissolution, etc............................................81
SECTION 11.3. Prior Payment to Senior Indebtedness upon Acceleration of Convertible
Notes...................................................................................82
SECTION 11.4. No Payment When Senior Indebtedness in Default............................................83
SECTION 11.5. Payment Permitted If No Default...........................................................83
SECTION 11.6. Subrogation to Rights of Holders of Senior Indebtedness...................................83
SECTION 11.7. Provisions Solely to Define Relative Rights...............................................84
SECTION 11.8. Trustee to Effectuate Subordination.......................................................84
SECTION 11.9. No Waiver of Subordination Provisions.....................................................84
SECTION 11.10. Notice to Trustee.........................................................................85
SECTION 11.11. Reliance on Judicial Order or Certificate of Liquidating Agent............................86
SECTION 11.12. Trustee Not Fiduciary for Holders of Senior Indebtedness..................................86
SECTION 11.13. Rights of Trustee as Holder of Senior Indebtedness; Preservation of
Trustee's Rights........................................................................86
SECTION 11.14. Article Applicable to Paying Agents.......................................................86
SECTION 11.15. Certain Conversions Deemed Payment........................................................86
ARTICLE XII
iv
Page
CONVERSION OF CONVERTIBLE NOTES.....................................................................87
SECTION 12.1. Conversion Privilege and Conversion Price............................................87
SECTION 12.2. Exercise of Conversion Privileges....................................................88
SECTION 12.3. Fractions of Shares..................................................................89
SECTION 12.4. Adjustment of Conversion Price.......................................................89
SECTION 12.5. Notice of Adjustments of Conversion Price............................................97
SECTION 12.6. Notice of Certain Corporate Action...................................................97
SECTION 12.7. Company to Reserve Common Stock......................................................98
SECTION 12.8. Taxes on Conversions.................................................................99
SECTION 12.9. Covenant as to Common Stock..........................................................99
SECTION 12.10. Cancellation of Converted Convertible Notes..........................................99
SECTION 12.11. Provisions as to Consolidation, Merger or Sale of Assets.............................99
ARTICLE XIII
SATISFACTION AND DISCHARGE.........................................................................100
SECTION 13.1. Satisfaction and Discharge..........................................................100
SECTION 13.2. Application of Trust Money..........................................................101
SECTION 13.3. Repayment to the Company............................................................102
SECTION 13.4. Reinstatement.......................................................................102
ARTICLE XIV
MISCELLANEOUS......................................................................................102
SECTION 14.1. Trust Indenture Act Controls........................................................102
SECTION 14.2. Notices.............................................................................103
SECTION 14.3. Certificate and Opinion as to Conditions Precedent..................................103
SECTION 14.4. Statements Required in Certificate or Opinion.......................................103
SECTION 14.5. Communications by Holders with Other Holders........................................103
SECTION 14.6. Rules by Trustee, Paying Agent and Registrar........................................104
SECTION 14.7. Payments on Business Days...........................................................104
SECTION 14.8. Governing Law.......................................................................104
SECTION 14.9. No Recourse Against Others..........................................................104
SECTION 14.10. Successors..........................................................................104
SECTION 14.11. Counterparts........................................................................104
SECTION 14.12. Table of Contents; Headings.........................................................104
SECTION 14.13. Severability........................................................................104
SECTION 14.14. Further Instruments and Acts........................................................105
SECTION 14.15. Independent Covenants...............................................................105
v
EXHIBIT A FORM OF CONVERTIBLE NOTE
SCHEDULE A EXISTING AGREEMENTS OR STOCK OPTIONS INVOLVING COMMON STOCK
vi
INDENTURE, dated as of January 13, 1998, between USN COMMUNICATIONS,
INC., a Delaware corporation (the "Company"), having its principal office at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and ▇▇▇▇▇▇ TRUST
AND SAVINGS BANK, as trustee hereunder (the "Trustee"), having its Corporate
Trust Office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS OF THE COMPANY
The Company has duly authorized the creation and issue of its 9%
Consent Convertible Subordinated Notes due 2006 (the "Convertible Notes") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor), the Company has duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Convertible Notes, when executed by
the Company and authenticated and delivered by the Trustee hereunder and duly
issued by the Company, the valid obligations of the Company and to make this
Indenture a valid instrument of the Company, in accordance with their respective
terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises and the purchase of the Convertible Notes by the
Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Convertible Notes, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions. For all purposes of this Indenture, except
as otherwise expressly provided or unless the context otherwise requires:
"Accreted Value" means, with respect to the Convertible Notes, for any
Specified Date, the amount provided below for each $1,000 principal amount at
Stated Maturity of the Convertible Notes:
(a) If the Specified Date occurs on one of the following dates
(each a "Semi-Annual Accrual Date"), the Accreted Value will equal the amount
set forth below for such Semi-Annual Accrual Date:
Semi-Annual Accrual Date Accreted Value
------------------------ --------------
July 12, 1998............................ 802.45
January 13, 1999......................... 838.56
July 12, 1999............................ 876.30
January 13, 2000......................... 915.73
July 12, 2000............................ 956.94
January 13, 2001........................ 1,000.00
(b) if the Specified Date occurs before the first Semi-Annual
Accrual Date, the Accreted Value will equal the sum of (i) $767.90 and (ii) an
amount equal to the product of (y) the Accreted Value of the first Semi-Annual
Accrual Date less the original issue price multiplied by (z) a fraction, the
numerator of which is the number of days from the Issue Date to the Specified
Date, using a 360-day year of twelve 30-day months, and the denominator of which
is the number of days elapsed from the Issue Date to the first Semi-Annual
Accrual Date, using a 360-day year of twelve 30-day months;
(c) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the Accreted Value will equal the sum of (i) the Accreted Value for the
Semi-Annual Accrual Date immediately preceding such Specified Date and (ii) an
amount equal to the product of (y) the Accreted Value for the immediately
following Semi-Annual Accrual Date less the Accreted Value for the immediately
preceding Semi-Annual Accrual Date multiplied by (z) a fraction, the numerator
of which is the number of days from the immediately preceding Semi-Annual
Accrual Date to the Specified Date, using a 360-day year of twelve 30-day
months, and the denominator of which is 180; or
(d) if the Specified Date occurs after the last Semi-Annual
Accrual Date, the Accreted Value will equal $1,000.
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person,
but excluding Indebtedness which is extinguished, retired or repaid in
connection with such Person merging with or into or becoming a Subsidiary of
such specified Person.
"Act" when used with respect to any Holder, has the meaning set forth
in Section 1.5 hereof.
"Adjusted Net Assets" of a Guarantor at any date means the amount by
which the fair value of the assets and Property of such Guarantor exceeds the
total amount of liabilities, including without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under the Guarantee
of such Guarantor at such date.
"Affiliate" means, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person; provided that each Unrestricted Subsidiary shall be deemed to be an
Affiliate of the Company and of each other Subsidiary of the Company; provided
that any lender under a Credit Facility shall not be deemed to be an Affiliate
solely as the result of the Credit Facility; and provided, further, that neither
the Company nor any of its Wholly-Owned Restricted Subsidiaries shall be deemed
to be Affiliates of each other. For purposes of this definition, "control"
(including, with correlative meanings, the terms
2
"controlling," "under common control with" and "controlled by"), and as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of Voting Stock, by agreement or
otherwise; provided that beneficial ownership of 10% or more of the Voting Stock
of a Person (on a fully diluted basis) shall be deemed to be control.
"Agent Member" has the meaning set forth in Section 2.5(a) hereof.
"Asset Sale" means, with respect to any Person, any transfer,
conveyance, sale, lease or other disposition (including, without limitation,
dispositions pursuant to any consolidation or merger) by such Person or any of
its Restricted Subsidiaries to any Person other than to such Person or a
Restricted Subsidiary of such Person, in one transaction or a series of related
transactions (each hereinafter referred to as a "Disposition"), of (a) Capital
Stock of or other equity interests in any Restricted Subsidiary (other than
director's qualifying shares) except as provided in clause (iv) of this
definition, (b) all or substantially all of the assets of any division or line
of business of such Person or of any of the Restricted Subsidiaries or (c)
Property or assets of such Person or any of its Restricted Subsidiaries, the
Fair Market Value of which exceeds $500,000, other than (i) a Disposition of
Property in the ordinary course of business and consistent with industry
practice, (ii) a Disposition of Eligible Cash Equivalents, (iii) a Disposition
that constitutes a Restricted Payment permitted under Section 4.13 of the 14%
Senior Note Indenture and/or the 14 5/8% Senior Note Indenture as in effect on
the Issue Date, (iv) a Disposition of no more than 10 percent of the Capital
Stock of USN Solutions on a fully diluted basis pursuant to the exercise of the
USN Solutions Option, (v) a Disposition by the Company in connection with a
transaction permitted under Article V hereof and (vi) contribution of assets to
any Unrestricted Subsidiary constituting an Investment otherwise permitted under
the Senior Note Indentures as in effect on the Issue Date.
"Asset Sale Offer" has the meaning set forth in Section 4.8(c) hereof.
"Asset Sale Payment Date" has the meaning set forth in Section
4.8(d)(ii) hereof.
"Asset Sale Purchase Price" has the meaning set forth in Section
4.8(c) hereof.
"Board of Directors" means, with respect to any Person, the Board of
Directors (or similar governing body) of such Person or any committee of the
Board of Directors (or similar governing body) duly authorized to act on behalf
of such Board of Directors (or similar governing body).
"Board Resolution" means a duly adopted resolution of the Board of
Directors of a Person in full force and effect at the time of determination and
certified as such by the Secretary or an Assistant Secretary of such Person.
"BT" means BT Capital Partners, Inc.
3
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
or the City of Chicago are authorized or obligated by law, executive order or
regulation to close.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Indebtedness
arrangement conveying the right to use) real or personal property of such Person
which is required to be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person prepared in accordance
with GAAP and the Stated Maturity thereof shall be the date of the last payment
of rent or any amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a penalty.
"Capital Stock" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than Indebtedness convertible into an
equity interest), warrants or options to acquire an equity interest in such
Person.
"Cash Proceeds" means, with respect to any Asset Sale or issuance or
sale of Capital Stock by any Person, the aggregate consideration received in
respect of such sale or issuance by such Person in the form of cash and Eligible
Cash Equivalents; provided that with regard to an Asset Sale, any liabilities
(as shown on the Company's or such Restricted Subsidiary's most recent balance
sheet or in the notes thereto) of the Company or any Restricted Subsidiary
(other than liabilities that are by their terms subordinated to the Convertible
Notes or Convertible Note Guarantees, if any) which are assumed by the
transferee of any such assets and from which the Company and such Restricted
Subsidiary are completely released shall be deemed Cash Proceeds.
"Certificated Convertible Notes" has the meaning set forth in Section
2.1(c).
"Change of Control" shall be deemed to occur if (i) the sale,
conveyance, transfer or lease (other than to the Company or any Wholly-Owned
Restricted Subsidiary of the Company), whether direct or indirect, of all or
substantially all of the assets of the Company or of the Company and its
Restricted Subsidiaries taken as a whole to any "person" or "group" (within the
meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing, including any group acting for the purpose
of acquiring, holding or disposing of securities within the meaning of Rule 13d-
5(b)(i) under the Exchange Act) shall have occurred; or (ii) any "person" or
"group" (within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange
Act or any successor provision to either of the foregoing, including any group
acting for the purpose of acquiring, holding or disposing of securities within
the meaning of Rule 13d-5(b)(i) under the Exchange Act), other than any
Permitted Holder or Permitted Holders, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of more than 35 percent of the
total voting power of all classes of the Voting Stock of the Company (including
any warrants, options or rights to acquire such Voting Stock), calculated on a
fully diluted basis, and such voting power percentage is greater than or equal
to the total voting power percentage then beneficially owned by
4
the Permitted Holders in the aggregate; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company (together with any new directors whose
election or appointment by such board or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office.
"Change of Control Offer" has the meaning set forth in Section 4.7(a)
hereof.
"Change of Control Payment Date" has the meaning set forth in Section
4.7(b)(ii) hereof.
"Change of Control Purchase Price" has the meaning set forth in
Section 4.7(a) hereof.
"Chase" means Chase Venture Capital Associates, L.P.
"CIBC" means CIBC Wood Gundy Ventures, Inc.
"Class A Common Stock" means the Class A Common Stock, par value $0.01
per share, of the Company.
"clearing agency" has the meaning set forth in Section 3(a)(23) of the
Exchange Act.
"Closing Price" on any Trading Day with respect to the per share price
of any shares of Capital Stock means the last reported sale price regular way
or, in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if such shares of Capital Stock are not listed or
admitted to trading on such exchange, on the principal national securities
exchange on which such shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on The Nasdaq
National Market or, if such shares are not listed or admitted to trading on any
national securities exchange or quoted on such automated quotation system but
the issuer is a Foreign Issuer (as defined in Rule 3b-4(b) under the Exchange
Act) and the principal securities exchange on which such shares are listed or
admitted to trading is a Designated Offshore Securities Market (as defined in
Rule 902(a) under the Securities Act), the average of the reported closing bid
and asked prices regular way on such principal exchange, or, if such shares are
not listed or admitted to trading on any national securities exchange or quoted
on such automated quotation system and the issuer and principal securities
exchange do not meet such requirements, the average of the closing bid and asked
prices in the over-the-counter market as furnished by any New York Stock
Exchange member firm that is selected from time to time by the Company for that
purpose and is reasonably acceptable to the Trustee.
5
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this Indenture such commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, the body performing such duties at such time.
"Common Stock" means any stock of any class of any Person which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of such Person
and which is not subject to redemption by such Person, including, without
limitation, the Company's Class A Common Stock, $.01 par value. However,
subject to the provisions of Section 12.11, shares issuable on conversion of the
Convertible Notes shall include only shares of the class designated as Class A
Common Stock of the Company at the date of this Indenture or shares of any class
or classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which are not subject to redemption by the Company; provided
that if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Company" means the party named as such in the preamble to this
Indenture until a successor replaces it pursuant to the applicable provisions
hereof and, thereafter, means such successor.
"Company Order" means a written order signed in the name of the
Company by (i) its Chairman of the Board, its President, its Chief Executive
Officer, its Chief Operating Officer, a Vice Chairman or a Vice President, and
(ii) its Chief Financial Officer, its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary.
"Consent Warrant Agreement" means the Warrant Agreement, dated as of
August 25, 1997, between the Company and ▇▇▇▇▇▇ Trust and Savings Bank, as
warrant agent thereunder.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person and its Restricted Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, less amounts
attributable to Disqualified Stock of such Person.
"Constituent Person" has the meaning set forth in Section 12.11
hereof.
"Conversion Price" has the meaning set forth in Section 12.1 hereof.
"Conversion Reset" has the meaning set forth in Section 12.1 hereof.
"Conversion Reset Price" has the meaning set forth in Section 12.1
hereof.
6
"Convertible Note Guarantee" means a guarantee of the payment of the
Convertible Notes in the form of a supplemental indenture to this Indenture to
be executed and delivered by a Restricted Subsidiary, if and as required by and
pursuant to Section 4.10 hereof.
"Convertible Notes" has the meaning set forth in the Recitals of the
Company and more particularly means any of the Convertible Notes authenticated
and delivered under this Indenture.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office is, at the date of execution of this Indenture,
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Covenant Defeasance" has the meaning set forth in Section 8.3 hereof.
"Credit Facility" means one or more credit agreements, loan agreements
or similar agreements providing for working capital advances, term loans, letter
of credit facilities or similar advances, loans or facilities to the Company,
with a bank or syndicate of banks or other financial institutions, as such may
be amended, renewed, extended, supplemented, refinanced and replaced or refunded
from time to time.
"Current Market Price" has the meaning set forth in Section 12.4(h)
hereof.
"Default" means any event, act or condition, the occurrence of which
is, or after notice or the passage of time or both would be, an Event of
Default.
"Default Amount" has the meaning set forth in Section 6.2 hereof.
"Defaulted Interest" has the meaning set forth in Section 2.11 hereof.
"Defeasance" has the meaning set forth in Section 8.2 hereof.
"Depositary" means The Depository Trust Company, its nominees, and
their respective successors.
"Disposition" has the meaning set forth in the definition of "Asset
Sale" in this Section 1.1.
"Disqualified Stock" means any Capital Stock which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event or otherwise, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, or is exchangeable for
Indebtedness at any time, in whole or in part, on or prior to the Stated
Maturity of the Convertible Notes.
7
"Eligible Cash Equivalents" means (i) securities issued or directly
and fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof, provided that the full faith and credit of the United
States of America is pledged in support thereof; (ii) time deposits,
certificates of deposit or Eurodollar deposits of any commercial bank organized
in the United States having capital and surplus in excess of $500,000,000, with
a maturity date not more than one year from the date of acquisition; (iii)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) above entered into with any bank
meeting the qualifications specified in clause (ii) above; (iv) direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing, or
subject to tender at the option of the holder thereof, within 90 calendar days
after the date of acquisition thereof and, at the time of acquisition, having a
rating of A or better from Standard & Poor's or A-2 or better from Moody's; (v)
commercial paper issued by the parent corporation of any commercial bank
organized in the United States having capital and surplus in excess of
$500,000,000 and commercial paper issued by others having one of the two highest
ratings obtainable from either of Standard & Poor's or Moody's and in each case
maturing within 270 days after the date of acquisition; (vi) overnight bank
deposits and bankers' acceptances at any commercial bank organized in the United
States having capital and surplus in excess of $500,000,000; (vii) deposits
available for withdrawal on demand with a commercial bank organized in the
United States having capital and surplus in excess of $500,000,000, and (viii)
investments in money market funds substantially all of whose assets comprise
securities of the types described in clauses (i) through (vi).
"Enterprises" means Enterprises & Transcommunications, L.P. and Prime
VIII, L.P.
"Event of Default" has the meaning set forth in Section 6.1 hereof.
"'ex' date," (i) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
on the relevant exchange or in the relevant market from which the Closing Prices
were obtained without the right to receive such issuance or distribution, (ii)
when used with respect to any subdivision or combination of shares of Common
Stock, means the first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision or
construction becomes effective, and (iii) when used with respect to any tender
or exchange offer, means the first date on which the Common Stock trades regular
way on such exchange or in such market with the last time that tenders or
exchanges may be made pursuant to such tender or exchange offer (as it shall
have been amended).
"Excess Proceeds" has the meaning set forth in Section 4.8 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Exchange Rate Obligation" means, with respect to any Person, any
currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate
8
collar agreements, exchange rate insurance or other agreements or arrangements,
or combination thereof, designed to provide protection against fluctuations in
currency exchange rates.
"Fair Market Value" means, with respect to any asset or Property, the
sale value that could be obtained in an arms-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy, as determined in good faith by the
Board of Directors of the Company or a Restricted Subsidiary, as applicable.
"14% Senior Note Indenture" means the Indenture, dated as of September
30, 1996, between the Company and ▇▇▇▇▇▇ Trust and Savings Bank as trustee
thereunder with respect to the 14% Senior Notes, as amended and supplemented
from time to time.
"14 5/8% Senior Note Indenture" means the Indenture, dated as of
August 15, 1997, between the Company and ▇▇▇▇▇▇ Trust and Savings Bank as
trustee thereunder with respect to the 14 5/8% Senior Notes, as amended and
supplemented from time to time.
"14% Senior Notes" means the Company's 14% Senior Discount Notes due
2003 issued pursuant to the 14% Senior Note Indenture.
"14 5/8% Senior Notes" means the Company's 14 5/8% Senior Discount
Notes due 2004 issued pursuant to the 14 5/8% Senior Note Indenture.
"GAAP" means United States generally accepted accounting principles,
consistently applied, as set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, that are applicable to the circumstances as of the date of
determination; provided that, except as otherwise specifically provided herein,
all calculations made for purposes of determining compliance with this Indenture
shall utilize GAAP as in effect on the Issue Date.
"Global Convertible Note" has the meaning set forth in Section 2.1(c)
hereof.
"Guarantee" means any direct or indirect obligation, contingent or
otherwise, of a Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person in any manner. The terms
"guaranteed," "guaranteeing" and guarantor" shall have correlative meanings.
"Guaranteed Indebtedness" has the meaning set forth in Section 4.10(a)
hereof.
"Guarantor" means a Restricted Subsidiary that hereafter becomes a
Guarantor pursuant to Section 4.10 hereof and executes and delivers a
supplemental indenture to this Indenture relating to its Convertible Note
Guarantee.
9
"▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ Venture Partners IV - Direct Fund L.P. and
▇▇▇▇▇▇▇ Venture Partners V - Direct Fund L.P.
"Holder" means (i) in the case of any Certificated Convertible Note,
the Person in whose name such Certificated Note is registered in the Security
Register and (ii) in the case of any Global Convertible Note, the Depositary.
"Indebtedness" means at any time (without duplication), with respect
to any Person, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent, (i) any obligation of such Person for
money borrowed, (ii) any obligation of such Person evidenced by bonds,
debentures, notes, guarantees or other similar instruments, including, without
limitation, any such obligations incurred in connection with the acquisition of
Property, assets or businesses, excluding trade accounts payable made in the
ordinary course of business which are not more than 90 days overdue or which are
being contested in good faith and by appropriate proceedings, (iii) any
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (iv) any obligation of such Person issued or assumed as the deferred
purchase price of Property, assets or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of business, which
in either case are not more than 90 days overdue or which are being contested in
good faith and by appropriate proceedings, and for which adequate reserves are
being maintained on the books of the Company in accordance with GAAP), (v) any
Capital Lease Obligation of such Person, (vi) the maximum fixed redemption or
repurchase price of Disqualified Stock of such Person and, to the extent held by
other Persons, the maximum fixed redemption or repurchase price of Disqualified
Stock of such Person's Restricted Subsidiaries, at the time of determination,
(vii) the notional amount of any Interest Hedging Obligations or Exchange Rate
Obligations of such Person at the time of determination and (viii) any
obligation of the type referred to in clauses (i) through (vii) of this
definition of another Person and all dividends and distributions of another
Person the payment of which, in either case, such Person has guaranteed or is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument, and any such supplemental indenture,
respectively.
"Independent Financial Expert" has the meaning set forth in Section
12.4(g) hereof.
"Interest Hedging Obligation" means, with respect to any Person, an
obligation of such Person pursuant to any interest rate swap agreement, interest
rate cap, collar or floor agreement or other similar agreement or arrangement
designed to protect against or manage such Person's or any of its Restricted
Subsidiaries' exposure to fluctuations in interest rates.
10
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Convertible Notes.
"Investment" in any Person means any direct, indirect or contingent
(i) advance or loan to, guarantee of any Indebtedness of, extension of credit or
capital contribution to, such Person, (ii) acquisition of any shares of Capital
Stock, bonds, notes, debentures or other securities of such Person, or (iii)
acquisition, by purchase or otherwise, of all or substantially all of the
business, assets or stock or other evidence of beneficial ownership of such
Person; provided that Investments shall exclude accounts receivable and other
extensions of trade credit on commercially reasonable terms in accordance with
normal trade practices. The amount of an 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 other assets other than cash,
such Property or other assets shall be valued at its Fair Market Value at the
time of such transfer.
"Issue Date" means the date on which the Convertible Notes are first
authenticated and delivered under this Indenture.
"Joint Venture" means a Telecommunications Company of which less than
50 percent of the Voting Stock is held by the Company; provided that the
management and operations of such Person are controlled by a Strategic Investor
or by the Company pursuant to (i) the charter documents of such Person, or (ii)
an agreement among the holders of the Voting Stock of such Person, or (iii) a
management agreement between the Company and such Person.
"junior securities" has the meaning set forth in Section 11.15 hereof.
"Lien" means, with respect to any Property or other asset, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien (statutory or other), charge, easement,
encumbrance, preference, priority or other security or similar agreement or
preferential arrangement of any nature whatsoever on or with respect to such
Property or other asset (including, without limitation, any conditional sale or
title retention agreement having substantially the same economic effect as any
of the foregoing).
"Maturity" means, when used with respect to a Convertible Note, the
date on which the principal of such Convertible Note becomes due and payable as
provided therein or in this Indenture, whether on the date specified in such
Convertible Note as the fixed date on which the principal of such Convertible
Note is due and payable, on the Change of Control Payment Date or Asset Sale
Payment Date or upon an offer to repurchase upon a Termination of Trading of the
Common Stock of the Company, as applicable, or by declaration of acceleration,
call for redemption or otherwise.
11
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or, if ▇▇▇▇▇'▇
Investors Service, Inc. shall cease rating the specified debt securities and
such ratings business with respect thereto shall have been transferred to a
successor Person, such successor Person; provided that if ▇▇▇▇▇'▇ Investors
Service, Inc. ceases rating the specified debt securities and its rating
business with respect thereto shall not have been transferred to any successor
Person or such successor Person is Standard & Poor's, then "Moody's" shall mean
any other nationally recognized rating agency (other than Standard & Poor's)
that rates the specified debt securities selected by the Trustee.
"NASD" means the National Association of Securities Dealers, Inc.
"Net Cash Proceeds" means, with respect to the sale of any Property or
assets by any Person or any of its Restricted Subsidiaries, Cash Proceeds
received net of (i) all reasonable out-of-pocket expenses of such Person or such
Restricted Subsidiary incurred in connection with such a sale, including,
without limitation, all legal, title and recording tax expenses, commissions and
other fees and expenses incurred (but excluding any finder's fee or broker's fee
payable to any Affiliate of such Person) and all federal, state, foreign and
local taxes arising in connection with such sale that are paid or required to be
accrued as a liability under GAAP by such Person or its Restricted Subsidiaries,
(ii) all payments made or required to be made by such Person or its Restricted
Subsidiaries on any Indebtedness which is secured by such Properties or assets
in accordance with the terms of any Lien upon or with respect to such Properties
or assets or which must, by the terms of such Lien, or in order to obtain a
necessary consent to such transaction or by applicable law, be repaid in
connection with such sale and (iii) all contractually required distributions and
other payments made to minority interest holders (but excluding distributions
and payments to Affiliates of such Person) in Restricted Subsidiaries of such
Person as a result of such transaction; provided that, in the event that any
consideration for a transaction (which would otherwise constitute Net Cash
Proceeds) is required to be held in escrow pending determination of whether a
purchase price adjustment will be made, such consideration (or any portion
thereof) shall become Net Cash Proceeds only at such time as it is released to
such Person or its Restricted Subsidiaries from escrow; provided, further, that
any non-cash consideration received in connection with any transaction, which is
subsequently converted to cash, shall be deemed to be Net Cash Proceeds at such
time, and shall thereafter be applied in accordance with the applicable
provisions of this Indenture.
"1996 Warrant Agreement" means the Warrant Agreement, dated as of
September 30, 1996, between the Company and ▇▇▇▇▇▇ Trust and Savings Bank, as
warrant agent thereunder.
"1997 Warrant Agreement" means the Warrant Agreement, dated as of
August 15, 1997, between the Company and ▇▇▇▇▇▇ Trust and Savings Bank, as
warrant agent thereunder.
"nonelecting share" has the meaning set forth in Section 12.11 hereof.
"Northwood Entities" means Northwood Capital Partners LLC and
Northwood Ventures.
12
"Obligor" means the Company and the Guarantors, if any; "Obligors
means any of the Obligors, singly.
"Officer" means the Chairman of the Board of Directors, a Vice
Chairman of the Board of Directors, the President, the Chief Executive Officer,
the Chief Operating Officer, a Vice President, the Chief Financial Officer, the
Chief Accounting Officer, the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary.
"Officers' Certificate" means a certificate signed by (i) the Chairman
of the Board of Directors, a Vice Chairman of the Board of Directors, the
President, the Chief Executive Officer, the Chief Operating Officer or a Vice
President, and (ii) the Chief Financial Officer, the Chief Accounting Officer,
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary
of the Company or a Restricted Subsidiary and delivered to the Trustee, which
certificate shall comply with the provisions of Sections 1.4, 14.3 and 14.4
hereof.
"Old Convertible Note Asset Sale Offer" means an "Asset Sale Offer" as
defined in and made pursuant to the provisions of the Old Convertible Note
Indenture.
"Old Convertible Note Contingent Warrants" means the Warrants to be
issued to the holders of Old Convertible Notes pursuant to the 1996 Warrant
Agreement and Section 4.15 of the Old Convertible Note Indenture.
"Old Convertible Note Indenture" means the Indenture, dated as of
September 30, 1996, between the Company and ▇▇▇▇▇▇ Trust and Savings Bank, as
trustee thereunder, relating to the Old Convertible Notes, as amended and
supplemented from time to time.
"Old Convertible Notes" means the Company's 9% Convertible
Subordinated Notes due 2004, issued pursuant to the Old Convertible Note
Indenture.
"Opinion of Counsel" means a written opinion from legal counsel (who
may be counsel to the Company or the Trustee) who is acceptable to the Trustee,
which opinion shall comply with the provisions of Sections 1.4, 14.3 and 14.4
hereof; provided that any Opinion of Counsel delivered pursuant to Section 8.4
hereof shall not be rendered by an employee of the Company or any of its
Subsidiaries.
"Paying Agent" means any Person authorized by the Company to make
payments of principal, premium or interest with respect to the Convertible Notes
on behalf of the Company.
"Pari Passu Indebtedness" means any Indebtedness (secured or
unsecured) of the Company or any Guarantor that ranks pari passu in the right of
payment with the Senior Notes or the Senior Note Guarantees, as applicable.
13
"Permitted Holders" means J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇, CIBC, ▇▇▇▇▇▇▇, ▇▇, the Northwood Entities, Enterprises, and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Global Allocation Fund, Inc. and any of their respective Subsidiaries (or a
wholly-owned Subsidiary of the sole stockholder of any of the foregoing
Persons).
"Permitted Merger" has the meaning set forth in Section 5.1 hereof.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof or any other entity or
similar person.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"Private Placement Legend" means the legend in the form set forth in
Section 2.1(d)(i) hereof.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed,
tangible or intangible, excluding Capital Stock in any other Person.
"Public Equity Offering" means an underwritten public offering of
Capital Stock (other than Disqualified Stock) of the Company pursuant to an
effective registration statement filed under the Securities Act.
"Purchase Agreement" means the Purchase Agreement relating to the
Units and the Convertible Notes, dated September 23, 1996, among the Company and
the Initial Purchasers.
"Qualified Public Offering" means a Public Equity Offering resulting
in net proceeds to the Company of at least $35,000,000.
"Qualified Stock" of any Person means a class of Capital Stock other
than Disqualified Stock.
"Record Date" means, for the interest payable on any Interest Payment
Date, the date specified in Section 2.11 hereof.
"Record Expiration Date" has the meaning set forth in Section 1.5
hereof.
"Redemption Date" means, when used with respect to any Convertible
Note or part thereof to be redeemed hereunder, the date fixed for redemption of
such Convertible Notes pursuant to the terms of the Convertible Notes and this
Indenture.
14
"Redemption Price" means, when used with respect to any Convertible
Note or part thereof to be redeemed hereunder, the price fixed for redemption of
such Convertible Note pursuant to the terms of the Convertible Notes and this
Indenture, plus accrued and unpaid interest thereon, if any, to the Redemption
Date.
"Registrar" has the meaning set forth in Section 2.3 hereof.
"Repurchase Date" has the meaning set forth in Section 4.14(a) hereof.
"Repurchase Price" has the meaning set forth in Section 4.14(a)
hereof.
"Required Filing Date" has the meaning set forth in Section 4.11
hereof.
"Reset Date" has the meaning set forth in Section 12.1 hereof.
"Reset Event" has the meaning set forth in Section 12.1 hereof.
"Restricted Subsidiary" means (i) with respect to any Person other
than the Company and its Subsidiaries, a Subsidiary of such Person, and (ii)
with respect to the Company, any Subsidiary of the Company that has not been
classified as an Unrestricted Subsidiary.
"Rule 144" means Rule 144 under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Security Register" has the meaning set forth in Section 2.3 hereof.
"Senior Indebtedness" means all obligations of the Company under the
Senior Notes, the Senior Note Indentures and the Senior Note Guarantees
contained in the Senior Note Indentures, if any.
"Senior Note Asset Sale Offer" means an "Asset Sale Offer" as defined
in and made pursuant to the provisions of the Senior Note Indentures.
"Senior Note Contingent Warrants" means the Warrants to be issued to
the holders of 14% Senior Notes pursuant to the 1996 Warrant Agreement and
Section 4.20 of the 14% Senior Note Indenture and to the holders of the 14 5/8%
Senior Notes pursuant to the 1997 Warrant Agreement and Section 4.20 of the
14 5/8% Senior Note Indenture.
15
"Senior Note Guarantees" means a guarantee of payment of the Senior
Notes in the form of a supplemental indenture to the 14% Senior Note Indenture
and the 14 5/8% Senior Note Indenture to be executed and delivered pursuant to
Section 4.10 of the applicable Indenture.
"Senior Note Indentures" means (i) the 14% Senior Note Indenture and
(ii) the 14 5/8% Senior Note Indenture.
"Senior Notes" means the 14% Senior Notes and the 14 5/8% Senior
Notes.
"Significant Restricted Subsidiary" means a Restricted Subsidiary that
is a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under
the Securities Act and the Exchange Act.
"Special Record Date" means a date fixed by the Trustee pursuant to
Section 2.11 for the payment of Defaulted Interest.
Standard & Poor's" means Standard & Poor's Ratings Group, a division
of ▇▇▇▇▇▇-▇▇▇▇, Inc., or, if Standard & Poor's Ratings Group shall cease rating
the specified debt securities and such ratings business with respect thereto
shall have been transferred to a successor Person, such successor Person;
provided that if Standard & Poor's Ratings Group ceases rating the specified
debt securities and its ratings business with respect thereto shall not have
been transferred to any successor Person or such successor Person is Moody's,
then "Standard & Poor's" shall mean any other nationally recognized rating
agency (other than Moody's) that rates the specified debt securities selected by
the Trustee.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred), and, when used with respect
to any installment of interest on such security, the fixed date on which such
installment of interest is due and payable.
"Strategic Investor" means, with respect to any relevant transaction,
a Telecommuni cations Company which, both as of the Business Day immediately
before the day of the closing of such transaction and the Business Day
immediately after the day of the closing of such transaction, has, or whose
parent has, an equity market capitalization, a net asset value or annual
revenues of at least $2,000,000,000 on a consolidated basis. For purposes of
this definition, the term "parent" means any Person of which the relevant
Strategic Investor is a Subsidiary.
"Subsidiary" means, with respect to any Person, (i) any corporation
more than 50 percent of the outstanding shares of Voting Stock of which is
owned, directly or indirectly, by such Person, or by one of more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries of such Person, (ii) any general partnership, joint venture or
similar entity, more
16
than 50 percent of the outstanding partnership or similar interests of which are
owned, directly or indirectly, by such Person, or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries of such Person and (iii) any limited partnership of which such
Person or any Subsidiary of such Person is a general partner.
"Surviving Entity" has the meaning set forth in Section 5.1(a) hereof.
"Telecommunications Assets" means, with respect to any Person, assets
(including, without limitation, rights of way, trademarks and licenses to use
copyrighted material) that are utilized by such Person, directly or indirectly,
for the design, development, construction, installation, integration, operation,
management or provision of telecommunications systems and/or services, including
without limitation, any businesses or services in which the Company is currently
engaged and including any computer systems used in a Telecommunications
Business. Telecommunications Assets shall also include stock, joint venture or
partnership interests in another Person, provided that substantially all of the
assets of such other Person consist of Telecommunications Assets, and provided,
further, that if such stock, joint venture or partnership interests are held by
the Company or a Restricted Subsidiary, such other Person either is, or
immediately following the relevant transaction shall become, a Restricted
Subsidiary of the Company unless such Person is a Joint Venture. The
determination of what constitutes Telecommunication Assets shall be made by the
Board of Directors and evidenced by a Board Resolution delivered to the Trustee.
"Telecommunications Business" means the business of (i) transmitting,
or providing services relating to the transmission of, voice, video or data
through owned or leased transmission facilities, (ii) creating, developing or
marketing communications related network equipment, software and other devices
for use in (i) above or (iii) evaluating, participating or pursuing any other
activity or opportunity that is related to those specified in (i) or (ii) above
and includes, without limitation, any business in which the Company and its
Restricted Subsidiaries are currently engaged on the Issue Date.
"Telecommunications Company" means any Person substantially all of the
assets of which consist of Telecommunications Assets.
"Temporary Convertible Notes" has the meaning set forth in Section 2.9
hereof.
"Termination of Trading" means that the Class A Common Stock (or other
Common Stock into which the Convertible Notes are then convertible) had been
listed for trading on a U.S. national securities exchange or approved for
trading on an established over-the-counter trading market in the United States
and such Capital Stock thereafter becomes neither so listed nor so approved.
"Trading Day" means, with respect to a securities exchange or
automated quotation system, a day on which such exchange or system is open for a
full day of trading.
17
"Trigger Event" shall have the meaning set forth in Section 12.4(e)
hereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
(S)(S) 77aaa-77bbbb) as in effect on the date of this Indenture except as
required by Section 9.4 hereof, provided that in the event the Trust Indenture
Act of 1939 is amended after such date, "Trust Indenture Act" means, to the
extent required by any such amendment, the Trust Indenture Act of 1939, as so
amended.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and,
thereafter, means such successor.
"U.S. Government Obligations" means (i) securities that are (a) direct
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (b) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and (ii) depository receipts issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any U.S. Government Obligation which is specified in clause (i) above and held
by such bank for the account of the holder of such depository receipt, or with
respect to any specific payment of principal or interest on any U.S. Government
Obligation which is so specified and held, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal or interest of the U.S. Government Obligation evidenced by such
depository receipt.
"Unrestricted Subsidiary" means any Subsidiary of the Company that the
Company has classified as an "Unrestricted Subsidiary" and that has not been
reclassified as a Restricted Subsidiary, pursuant to Section 4.10 hereof.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or at the times that such class of Capital Stock has
voting power by reason of the happening of any contingency) to vote in the
election of members of the Board of Directors or comparable body of such Person.
Section 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms incorporated by reference in
this Indenture have the following meanings:
18
"indenture securities" means the Convertible 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 other
obligor on the Convertible Notes, if any.
All other Trust Indenture Act terms used or incorporated by reference
in this Indenture that are defined by the Trust Indenture Act, defined by Trust
Indenture Act reference to another statute or defined by Commission rule have
the meanings assigned to them therein.
Section 1.3 Rules of Construction. Unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(c) the words "herein," "hereof" and hereunder," and other words of
similar import, refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(d) "or" is not exclusive;
(e) "including" means including without limitation;
(f) words in the singular include the plural, and words in the plural
include the singular;
(g) when used with respect to the Senior Notes, the Old Convertible
Notes or the Convertible Notes, the term "principal amount" shall mean the
principal amount thereof at the Stated Maturity of such principal amount; and
(h) unless otherwise expressly provided herein, the principal amount
of any Preferred Stock shall be the greater of (i) the maximum liquidation value
of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory
repurchase price with respect to such Preferred Stock.
19
Section 1.4 Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the Company or a Guarantor
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters, upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or a
Guarantor stating that the information with respect to such factual matters is
in the possession of the Company or such Guarantor, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.5 Acts of Holders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments, of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are received by the Trustee and, where it is hereby expressly required, to the
Company and the Guarantors, if any. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 7.1)
conclusive in favor of the Trustee and the Company and the Guarantors, if any,
if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by an acknowledgment of notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of the signer's authority. The fact and date of the execution
of any such instrument or writing, or the authority of the person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
20
The ownership of Convertible Notes shall be proved by the Security
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder shall bind every future Holder of the same
Convertible Note and the Holder of every Convertible Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company or the Guarantors, if any, in reliance thereon, whether or not notation
of such action is made upon such Convertible Note.
The Company may set any day as a record date for the purpose of
determining the Holders of outstanding Convertible Notes entitled to give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given or taken by
Holders of Convertible Notes, provided that the Company may not set a record
date for, and the provisions of this paragraph shall not apply with respect to,
the giving or making of any notice, declaration, request or direction referred
to in the next paragraph. If any record date is set pursuant to this paragraph,
the Holders of outstanding Convertible Notes on such record date, and no other
Holders, shall be entitled to take the relevant actions whether or not such
Holders remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable Record
Expiration Date by Holders of the requisite principal amount of outstanding
Convertible Notes on such record date; and provided, further, that for the
purpose of determining whether Holders of the requisite principal amount of such
Convertible Notes have taken such action, no Convertible Note shall be deemed to
have been outstanding on such record date unless it is also outstanding on the
date such action is to become effective. Nothing in this paragraph shall
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), nor shall anything in this paragraph be
construed to render ineffective any action taken by Holders of the requisite
principal among of outstanding Convertible Notes on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Company at its own expense, shall cause notice of such record date, the proposed
action by Holders and the applicable Record Expiration Date to be given to the
Trustee in writing and to each Holder of Convertible Notes in the manner set
forth in Section 14.2 hereof.
The Trustee may set any day as a record date for the purpose of
determining the Holders of outstanding Convertible Notes entitled to join in the
giving or making of (i) any notice of Default under Section 6.1(d) hereof, (ii)
any declaration of acceleration referred to in Section 6.2 hereof, (iii) any
request to institute proceedings referred to in Section 6.6 hereof or (iv) any
direction referred to in Section 6.5 hereof. If any record date is set pursuant
to this paragraph, the Holders of outstanding Convertible Notes on such record
date, and no other Holders, shall be entitled to join in such notice,
declaration, request or direction, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Record Expiration Date by
Holders of the requisite principal amount of outstanding Convertible Notes on
such record date; and provided, further, that for the purpose of determining
21
whether Holders of the requisite principal amount of such Convertible Notes have
taken such action, no Convertible Note shall be deemed to have been outstanding
on such record date unless it is also outstanding on the date such action is to
become effective. Nothing in this paragraph shall be construed to prevent the
Trustee from setting a new record date for any action (whereupon the record date
previously set shall automatically and without any action by any Person be
cancelled and of no effect), nor shall anything in this paragraph be construed
to render ineffective any action taken by Holders of the requisite principal
amount of outstanding Convertible Notes on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Trustee,
at the Company's expense, shall cause notice of such record date, the matter(s)
to be submitted for potential action by Holders and the applicable Record
Expiration Date to be given to the Company in writing and to each Holder of
Convertible Notes in the manner set forth in Section 14.2 hereof.
With respect to any record date set pursuant to this Section 1.5, the
party hereto that sets such record date may designate any day as the "Record
Expiration Date" and from time to time may change the Record Expiration Date to
any earlier or later day, provided that no such change shall be effective unless
notice of the proposed new Record Expiration Date is given to the other party
hereto in writing, and to each Holder of Convertible Notes in the manner set
forth in Section 14.2 hereof, on or before the existing Record Expiration Date.
If a Record Expiration Date is not designated with respect to any record date
set pursuant to this Section 1.5, the party hereto that set such record date
shall be deemed to have initially designated the 180th day after such record
date as the Record Expiration Date with respect thereto, subject to its right to
change the Record Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Record Expiration Date shall be later than the
180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Convertible Note may do so
with regard to all or any part of the principal amount of such Convertible Note
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
ARTICLE II
THE CONVERTIBLE NOTES
Section 2.1 Form and Dating. (a) The Convertible Notes and the
certificate of authentication of the Trustee thereon shall be substantially in
the form of Exhibit A hereto, which is hereby incorporated in and expressly made
a part of this Indenture.
(b) The Convertible Notes may have such letters, numbers or other
marks of identification and such legends and endorsements, stamped, printed,
lithographed or engraved thereto, (i) as the Company may deem appropriate and as
are not inconsistent with the provisions of this Indenture, (ii) such as may be
required to comply with this Indenture, any law or any rule of any securities
exchange on which the Convertible Notes may be listed and (iii) such as may be
necessary
22
to conform to customary usage. Each Note shall be dated the date of its
authentication by the Convertible Trustee.
(c) The Convertible Notes shall be issued initially in the form of one
or more permanent, global notes in definitive, fully registered form, without
coupons (each a "Global Convertible Note") or one or more permanent,
certificated notes in definitive, fully-registered form, without coupons (each a
"Certificated Convertible Note"). Upon issuance, each Global Convertible Note
shall be duly executed by the Company and authenticated by the Trustee as
hereinafter provided and deposited with the Trustee as custodian for the
Depositary. Upon issuance, any such Certificated Convertible Note shall be duly
executed by the Company and authenticated by the Trustee as hereinafter
provided.
(d) The following legends shall appear on each Global Convertible
Note and each Certificated Convertible Note as indicated below:
(i) Except as provided in Section 2.6(a)(iii) hereof, each
Global Convertible Note and Certificated Convertible Note shall bear the
following legend on the face thereof:
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501 (A)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF ONE OR MORE OTHER
23
INSTITUTIONAL ACCREDITED INVESTORS, IN EACH CASE, HAVING A MINIMUM PURCHASE
PRICE OF AT LEAST $100,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO
OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED IN THE CASE OF
(d) UPON DELIVERY OF A TRANS FEREE LETTER OF REPRESENTATION AND IN THE CASE
OF (b), (c), (d) OR (e), UPON AN OPINION OF COUNSEL IF THE COMPANY OR
TRUSTEE SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE
(ii) Each Global Convertible Note shall bear the
following legend on the face thereof:
UNLESS THIS CONVERTIBLE NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO USN COMMUNICATIONS, INC. OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY CONVERTIBLE NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY OR SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL
CONVERTIBLE NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS CONVERTIBLE
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.6 OF THE INDENTURE, DATED AS OF JANUARY
13, 1998, BETWEEN USN COMMUNICATIONS, INC. AND THE TRUSTEE NAMED THEREIN,
PURSUANT TO WHICH THIS CONVERTIBLE NOTE WAS ISSUED.
24
(e) Definitive Convertible Notes shall be typed, printed,
lithographed or engraved or produced by any combination of such methods or
produced in any other manner permitted by the rules of any securities exchange
on which such Convertible Notes may be listed, all as determined by the Officers
of the Company executing such Convertible Notes, as evidenced by their execution
of such Convertible Notes.
Section 2.2 Execution and Authentication. The aggregate principal
amount at Stated Maturity of Convertible Notes outstanding at any time shall not
exceed $13,022,600 except as provided in Section 2.7 hereof. The Convertible
Notes shall be executed on behalf of the Company by its Chief Executive Officer,
its Chief Operating Officer, its President or any Vice President, under its
corporate seal reproduced or imprinted on the Convertible Notes by facsimile or
otherwise, and shall be attested by the Company's Secretary or one of its
Assistant Secretaries, in each case by manual or facsimile signature.
In case any Officer of the Company whose signature shall have been
placed upon any of the Convertible Notes shall cease to be such Officer of the
Company before authentication of such Convertible Notes by the Trustee and the
issuance and delivery thereof, such Convertible Notes may, nevertheless, be
authenticated by the Trustee and issued and delivered with the same force and
effect as though such Person had not ceased to be such Officer of the Company.
Notwithstanding any other provision hereof, the Trustee shall
authenticate and deliver Convertible Notes only upon receipt by the Trustee of
an Officers' Certificate and Opinion of Counsel complying with Section 14.4
hereof with respect to satisfaction of all conditions precedent contained in
this Indenture to authentication and delivery of such Convertible Notes.
Upon compliance by the Company with the provisions of the previous
paragraph, the Trustee shall, upon receipt of a Company Order requesting such
action, authenticate Convertible Notes for original issuance in an aggregate
principal amount at Stated Maturity not to exceed $13,022,600 in the form of one
or more Global Convertible Notes or Certificated Convertible Notes. Such Company
Order shall specify the amount of Convertible Notes to be authenticated, whether
such Convertible Notes will be Global Convertible Notes or Certificated
Convertible Notes, and the date on which the Convertible Notes are to be
authenticated and shall further provide instructions concerning registration,
amounts for each Holder and delivery.
Upon the occurrence of any event specified in Section 2.6(b) hereof
and compliance by the Company with the provisions of the paragraph preceding the
immediately preceding paragraph, the Company shall execute and the Trustee shall
authenticate and deliver to each beneficial owner identified by the Depositary,
in exchange for such beneficial owner's interest in a Global Convertible Note,
Certificated Convertible Notes representing Convertible Notes theretofore
represented by the Global Convertible Note.
A Convertible Note shall not be valid or entitled to any benefit under
this Indenture or obligatory for any purpose unless executed by the Company and
authenticated by the manual
25
signature of the Trustee as provided herein. The signature of an authorized
officer of the Trustee shall be conclusive evidence, and the only evidence, that
such Convertible Note has been authenticated and delivered under this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Convertible Notes. Unless limited by the
status of such appointment, an authenticating agent may authenticate Convertible
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. Any
authenticating agent of the Trustee shall have the same rights hereunder as any
Registrar or Paying Agent.
Section 2.3 Registrar and Paying Agent. The Company shall maintain,
pursuant to Section 4.2 hereof, an office or agency where the Convertible Notes
may be presented for registration of transfer or for exchange. The Company
shall cause to be kept at such office a register (the register maintained in
such office being herein sometimes referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Convertible Notes and of transfers of
Convertible Notes entitled to be registered or transferred as provided herein.
The Trustee, at its Corporate Trust Office, is initially appointed "Registrar"
for the purpose of registering Convertible Notes and transfers of Convertible
Notes as herein provided and as "Paying Agent" for the payment of principal of
(and premium, if any), and interest on, the Convertible Notes. The Company may,
upon written notice to the Trustee, change the designation of the Trustee as
Registrar or Paying Agent and appoint another Person to act as Registrar or
Paying Agent for purposes of this Indenture, except that for the purposes of
Article III, Article XIII and Sections 4.7, 4.8 and 4.14, none of the Company,
any Guarantor, any Restricted Subsidiary and any Affiliate shall act as Paying
Agent. If any Person other than the Trustee acts as Registrar, the Trustee
shall have the right at any time, upon reasonable notice, to inspect or examine
the Security Register and to make such inquiries of the Registrar as the Trustee
shall in its discretion deem necessary or desirable in performing its duties
hereunder.
The Company shall enter into an appropriate agency agreement with any
Person designated by the Company as Registrar or Paying Agent that is not a
party to this Indenture, which agreement shall incorporate the provisions of the
Trust Indenture Act and shall implement the provisions of this Indenture that
relate to such Registrar or Paying Agent. Prior to the designation of any such
Person, the Company shall, by written notice (which notice shall include the
name and address of such Person), inform the Trustee of such designation. If the
Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as
such.
Upon surrender for registration of transfer of any Convertible Note at
an office or agency of the Company designated for such purpose, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Convertible Notes of
any authorized denomination or denominations, of like tenor and aggregate
principal amount at Stated Maturity, all as requested by the transferor.
26
Every Convertible Note presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Trustee or
the Registrar) be duly endorsed, or be accompanied by a duly executed instrument
of transfer in form satisfactory to the Company, the Trustee and the Registrar,
by the Holder thereof or such Holder's attorney duly authorized in writing.
Section 2.4 Paying Agent to Hold Money in Trust. On or prior to each
due date of the principal, premium, or any payment of interest with respect to
any Convertible Note, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal, premium or interest when so becoming due.
The Company shall require each Paying Agent (other than the Trustee)
to agree in writing that such Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all money held by such Paying Agent for the payment of
principal, premium, and interest with respect to the Convertible Notes, shall
notify the Trustee of any default by the Company in making any such payment and
at any time during the continuance of any such default, upon the written request
of the Trustee, shall forthwith pay to the Trustee sums held in trust by such
Paying Agent.
The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by such Paying
Agent. Upon complying with this Section 2.4, the Paying Agent shall have no
further liability for the money delivered to the Trustee.
Section 2.5 Global Convertible Notes. (a) So long as a Global
Convertible Note is registered in the name of the Depositary or its nominee,
members of, or participants in, the Depositary ("Agent Members") shall have no
rights under this Indenture with respect to the Global Convertible Note held on
their behalf by the Depositary or the Trustee as its custodian, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Convertible Note for
all purposes. Notwithstanding the foregoing, nothing herein shall (i) prevent
the Company, the Trustee or any agent of the Company or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or (ii) impair, as between the Depositary and its Agent Members,
the operation of customary practices governing the exercise of the rights of a
Holder of Convertible Notes.
(b) The Holder of a Global Convertible Note may grant proxies
and otherwise authorize any Person, including Agent Members and Persons that may
hold interests in such Global Convertible Note through Agent Members, to take
any action which a Holder of Convertible Notes is entitled to take under this
Indenture or the Convertible Notes.
(c) Whenever, as a result of an optional redemption of
Convertible Notes by the Company, a Change of Control Offer, an Asset Sale
Offer, a repurchase upon a Termination of Trading pursuant to Section 4.14
hereof, or an exchange pursuant to the second sentence of Section 2.6(b) hereof,
a Global Convertible Note is redeemed, repurchased or exchanged in part, such
Global Convertible Note shall be surrendered by the Holder thereof to the
Trustee who shall cause an adjustment to be made to Schedule A thereof so that
the principal amount of such Global
27
Convertible Note will be equal to the portion of such Global Convertible Note
not redeemed, repurchased or exchanged and shall thereafter return such Global
Convertible Note to such Holder, provided that each such Global Convertible Note
shall be in a principal amount at Stated Maturity of $1,000 or an integral
multiple thereof.
Section 2.6 Transfer and Exchange. (a) With respect to the
Convertible Notes:
(i) By its acceptance of any Convertible Note represented
by a certificate bearing the Private Placement Legend, each Holder of, and
beneficial owner of an interest in, such Convertible Note acknowledges the
restrictions on transfer of such Convertible Note set forth in the Private
Placement Legend hereto and agrees that it will transfer such Convertible
Note only in accordance with the Private Placement Legend.
(ii) In connection with any transfer of a Convertible Note
bearing the Private Placement Legend, each Holder agrees to deliver to the
Company, such satisfactory evidence, which may include an opinion of
independent counsel licensed to practice law in the State of New York, as
reasonably may be requested by the Company to confirm that such transfer is
being made in accordance with the limitations set forth in the Private
Placement Legend. In the event the Company determines that any such
transfer is not in accordance with the Private Placement Legend, the
Company shall so inform the Registrar who shall not register such transfer;
provided that the Registrar shall not be required to determine (but may
rely on a determination made by the Company with respect to) the
sufficiency of any such evidence.
(iii) Upon the registration of transfer, exchange or
replacement of a Convertible Note not bearing the Private Placement
Legend, the Trustee shall deliver a Convertible Note or Convertible Notes
that do not bear the Private Placement Legend. Upon the transfer, exchange
or replacement of a Convertible Note bearing the Private Placement Legend,
the Trustee shall deliver a Convertible Note or Convertible Notes bearing
the Private Placement Legend, unless such legend may be removed from such
Convertible Note as provided in the next sentence. The Private Placement
Legend may be removed from a Convertible Note if there is delivered to the
Company such satisfactory evidence, which may include an opinion of
independent counsel licensed to practice law in the State of New York, as
reasonably may be requested by the Company to confirm that neither such
legend nor the restrictions on transfer set forth therein are required to
ensure that transfers of such Convertible Note will not violate the
registration and prospectus delivery requirements of the Securities Act;
provided that the Trustee shall not be required to determine (but may rely
on a determination made by the Company with respect to) the sufficiency of
any such evidence. Upon provision of such evidence, the Trustee shall
authenticate and deliver in exchange for such Convertible Note, a
Convertible
28
Note or Convertible Notes (representing the same aggregate principal amount
at Stated Maturity of the Convertible Note being exchanged) without such
legend. If the Private Placement Legend has been removed from a Convertible
Note, as provided above, no other Convertible Note issued in exchange for
all or any part of such Convertible Note shall bear such legend unless the
Company has reasonable cause to believe that such other Convertible Note
represents a "restricted security" within the meaning of Rule 144 and
instructs the Trustee in writing to cause a legend to appear thereon.
(iv) The Company shall deliver to the Trustee, and the
Trustee shall retain for two years, copies of all documents received
pursuant to this Section 2.6(a). The Company shall have the right to
inspect and make copies of all such documents at any reasonable time upon
the giving of reasonable written notice to the Trustee.
(b) Any Global Convertible Note shall be exchanged by the
Company for one or more Certificated Convertible Notes if (a) the Depositary (i)
has notified the Company that it is unwilling or unable to continue as, or
ceases to be, a clearing agency registered under Section 17A of the Exchange Act
and (ii) a successor to the Depositary registered as a clearing agency under
Section 17A of the Exchange Act is not able to be appointed by the Company
within 90 days or (b) the Company, in its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of Certificated Convertible
Notes. If an Event of Default occurs and is continuing, the Company shall, at
the request of the Holder thereof, exchange all or part of a Global Convertible
Note for one or more Certificated Convertible Notes; provided that such Global
Convertible Note, after such exchange, shall be $1,000 or an integral multiple
thereof. Whenever a Global Convertible Note is exchanged as a whole for one or
more Certificated Convertible Notes, it shall be surrendered by the Holder
thereof to the Trustee for cancellation. Whenever a Global Convertible Note is
exchanged in part for one or more Certificated Convertible Notes, it shall be
surrendered by the Holder thereof to the Trustee and the Trustee shall make the
appropriate notations thereon pursuant to Section 2.5(c) hereof. All
Certificated Convertible Notes issued in exchange for a Global Convertible Note
or any portion thereof shall be registered in such names, and delivered, as the
Depositary shall instruct the Trustee. Any Certificated Convertible Notes issued
pursuant to this Section 2.6(b) shall include the Private Placement Legend,
except as set forth in Section 2.6(a)(iii) hereof.
(c) A Holder may transfer a Convertible Note only upon the
surrender of such Convertible Note for registration of transfer. No such
transfer shall be effected until, and the transferee shall succeed to the rights
of a Holder only upon, final acceptance and registration of the transfer in the
Security Register by the Registrar. When Convertible Notes are presented to the
Registrar with a request to register the transfer of, or to exchange, such
Convertible Notes, the Registrar shall register the transfer or make such
exchange as requested if its requirements for such transactions and any
applicable requirements hereunder are satisfied. To permit registrations of
transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Certificated Convertible Notes at the Registrar's request.
29
(d) The Company shall not be required to make and the Registrar
need not register transfers or exchanges of Certificated Convertible Notes
selected for redemption (except, in the case of Certificated Convertible Notes
to be redeemed in part, the portion thereof not to be redeemed) for a period of
15 days before a selection of Certificated Convertible Notes to be redeemed.
(e) No service charge shall be made for any registration of
transfer or exchange of Convertible Notes, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer of Convertible Notes
(other than in respect of exchanges and transfers pursuant to Sections 2.9, 3.6,
4.7, 4.8, 4.14 and 9.6 hereof).
(f) All Convertible Notes issued upon any registration of
transfer or exchange pursuant to the terms of this Indenture will evidence the
same debt and will be entitled to the same benefits under this Indenture as the
Convertible Notes surrendered for such registration of transfer or exchange.
(g) Prior to the effectiveness under the Securities Act of a
registration statement with respect to the Convertible Notes, or at any time
during the suspension or following the termination thereof, Holders of
Convertible Notes (or holders of interests therein) and prospective purchasers
designated by such Holders of Convertible Notes (or such holders of interests
therein) shall have the right to obtain from the Company upon request by such
Holders (or such holders of interests) or prospective purchasers, during any
period in which the Company is not subject to Section 13 or Section 15(d) of the
Exchange Act, or is exempt from reporting pursuant to 12g3-2(b) under the
Exchange Act, the information required by paragraph (d)(4)(i) of Rule 144A in
connection with any transfer or proposed transfer of such Convertible Notes or
interests.
(h) Any Holder of a Global Convertible Note shall, by acceptance
of such Global Convertible Note, agree that transfers of beneficial interests in
such Global Convertible Note may be effected only through a book entry system
maintained by the Holder of such Global Convertible Note (or its agent), and
that ownership of a beneficial interest in the Convertible Notes represented
thereby shall be required to be reflected in book entry form. Transfers of a
Global Convertible Note shall be limited to transfers in whole and not in part,
to the Depositary, its successors, and their respective nominees. Interests of
beneficial owners in Global Convertible Note may be transferred in accordance
with the rules and procedures of the Depositary (or its successors).
Section 2.7 Replacement Convertible Notes. If any mutilated
Convertible Note is surrendered to the Trustee, the Company shall execute and
upon its written request the Trustee shall authenticate and deliver, in exchange
for any such mutilated Convertible Note, a new Convertible Note containing
identical provisions and of like principal amount, bearing a number not
contemporaneously outstanding.
30
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Convertible Note and (ii) such security or indemnity as may be required by them
to save either of them and any agent of each of them harmless, then, in the
absence of notice to the Company or the Trustee that such Convertible Note has
been acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Convertible Note, a new Convertible Note containing
identical provisions and of like principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Convertible Note
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Convertible Note, pay such Convertible Note.
Upon the issuance of any new Convertible Note under this Section 2.7,
the Company may require the payment by the Holder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Convertible Note issued pursuant to this Section 2.7 in lieu
of any destroyed, lost or stolen Convertible Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Convertible Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Convertible Notes duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed lost or stolen Convertible Notes.
Section 2.8 Outstanding Convertible Notes. Convertible Notes
outstanding at any time are all Convertible Notes authenticated by the Trustee
except for those canceled by it, those delivered to it for cancellation and
those described in this Section 2.8 as not outstanding. A Convertible Note does
not cease to be outstanding because the Company or an Affiliate of the Company
holds such Convertible Note.
If a Convertible Note is replaced pursuant to Section 2.7 hereof, it
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that such replaced Convertible Note is held by a bona fide
purchaser.
If the Paying Agent (other than the Company, a Guarantor or an
Affiliate of the Company or Guarantor) accrues interest or segregates and holds
in trust, in accordance with this Indenture, on a Redemption Date or Maturity
date money sufficient to pay all principal, premium, if any, and interest
payable on that date with respect to the Convertible Notes (or portions thereof)
to be redeemed or maturing, as the case may be, then on and after that date such
Convertible Notes (or
31
such portions thereof) shall cease to be outstanding and interest on them shall
cease to accrete in value or accrue interest, as the case may be.
In determining whether the Holders of the required principal amount of
Convertible Notes have concurred in any direction, waiver or consent or any
amendment, modification or other change to this Indenture, Convertible Notes
held or beneficially owned by the Company or a Restricted Subsidiary of the
Company or by an Affiliate of the Company or a Restricted Subsidiary of the
Company or by agents of any of the foregoing shall be disregarded, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent or any amendment, modification
or other change to this Indenture, only Convertible Notes which a Trust Officer
has actual knowledge to be so owned shall be so disregarded. Convertible Notes
so owned which have been pledged in good faith shall not be disregarded if the
pledgee establishes to the satisfaction of the Trustee such pledgee's right so
to act with respect to the Convertible Notes and that the pledgee is not the
Company or an Affiliate of the Company or any of their agents.
Section 2.9 Temporary Convertible Notes. Pending the preparation of
definitive Convertible Notes, the Company may execute, and the Trustee shall
authenticate, temporary notes ("Temporary Convertible Notes") which are printed,
lithographed, or otherwise produced, substantially of the tenor of the
definitive Convertible Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations.
If Temporary Convertible Notes are issued, the Company shall cause
definitive Convertible Notes to be prepared without unreasonable delay. After
the preparation of definitive Convertible Notes, the Temporary Convertible Notes
shall be exchangeable for definitive Convertible Notes upon surrender of the
Temporary Convertible Notes to the Trustee, without charge to the Holder. Until
so exchanged, Temporary Convertible Notes will evidence the same debt and will
be entitled to the same benefits under this Indenture as the definitive
Convertible Notes in lieu of which they have been issued.
Section 2.10 Cancellation. The Company at any time may deliver
Convertible Notes to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Convertible Notes surrendered to them for
registration of transfer, exchange, purchase, payment or conversion. The Trustee
shall cancel all Convertible Notes surrendered for registration of transfer,
exchange, purchase, payment, cancellation or conversion and shall destroy such
canceled Convertible Notes unless the Company shall by Company Order otherwise
direct. The Company may not issue new Convertible Notes to replace Convertible
Notes it has redeemed or paid or that have been delivered to the Trustee for
cancellation.
Section 2.11 Payment of Interest; Interest Rights Preserved.
Interest on any Convertible Note which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date, which shall be January 13 or
July 12, commencing July 12, 2002 shall be paid to the Person in whose name such
Convertible Note is registered at the close of business on the Record
32
Date for such interest payment, which shall be the December 31 or June 30
(whether or not a Business Day) immediately preceding such Interest Payment
Date.
Any interest on any Convertible Note which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Record Date, and, except as hereafter
provided, such Defaulted Interest, and any interest payable on such Defaulted
Interest, may be paid by the Company, at its election, as provided in clause (a)
or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest,
and any interest payable on such Defaulted Interest, to the Persons in whose
names the Convertible Notes are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on the Convertible Notes and
the date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as provided in this Clause.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be sent, first
class mail, postage prepaid, to each Holder at such Holder's address as it
appears in the Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names the Convertible Notes are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest, and any
interest payable on such Defaulted Interest, on the Convertible Notes in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Convertible Notes may be listed, and upon such notice as
may be required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.11, each
Convertible Note delivered under this Indenture upon registration of transfer
of, or in exchange for, or in lieu of, any other Convertible Note, shall carry
the rights to interest accrued and unpaid, and to accrue, which were carried by
such other Convertible Note.
33
Section 2.12 Authorized Denominations. The Convertible Notes shall be
issuable in denominations of $1,000 and any integral multiple thereof.
Section 2.13 Computation of Interest, etc. The Convertible Notes that
will be issued on the Issue Date will be issued at a discounted aggregate
principal amount of $10,000,000 and will accrete in value from the date of
original issuance thereof at a rate of 9% per annum, compounded semi-annually in
the manner specified in the definition of "Accreted Value" contained in Section
1.1 hereof, to an aggregate principal amount of $13,022,600 by January 13, 2001.
Thereafter, interest will accrue at a rate of 9% per annum. Interest on the
Convertible Notes shall be computed on the basis of a 360-day year of twelve 30-
day months. Notwithstanding any other term of this Indenture, the Company shall
not be obliged to pay any interest or other amounts under or in connection with
this Indenture in excess of the amount or rate permitted under or consistent
with applicable law.
Section 2.14 Persons Deemed Owners. Prior to the due presentation for
registration of transfer of any Convertible Note, the Company, the Trustee, the
Paying Agent, the Registrar or any co-Registrar may deem and treat the person in
whose name a Convertible Note is registered as the absolute owner of such
Convertible Note for the purpose of receiving payment of principal of, premium,
if any, and interest on such Convertible Note and for all other purposes
whatsoever, whether or not such Convertible Note is overdue, and none of the
Company, the Trustee, the Paying Agent, the Registrar or any co-Registrar shall
be affected by notice to the contrary.
Section 2.15 CUSIP Numbers. The Company, in issuing the Convertible
Notes, may use a "CUSIP" number for each series of Convertible Notes and, if so,
the Trustee shall use the relevant CUSIP number in any notices to Holders as a
convenience to such Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Convertible Notes and that reliance may be
placed only on the other identification numbers printed on the Convertible
Notes. The Company shall promptly notify the Trustee of any change in any CUSIP
number used.
ARTICLE III
REDEMPTION
Section 3.1 Notice to Trustee. If the Company elects to redeem
Convertible Notes pursuant to the optional redemption provisions of Section 3.7
and the Convertible Notes, it shall furnish an Officers' Certificate to the
Trustee setting forth the Redemption Date, the principal amount of Convertible
Notes to be redeemed and the Redemption Price. The Company shall give each such
notice to the Trustee at least 60 days prior to the Redemption Date unless the
Trustee consents to a shorter period. Such notice shall be accompanied by an
Officers' Certificate and an Opinion of Counsel from the Company to the effect
that such redemption will comply with any conditions to such redemption set
forth herein and in the Convertible Notes.
34
Section 3.2 Selection of Convertible Notes to be Redeemed. If less
than all the Convertible Notes are to be redeemed at any time, the Trustee shall
select the Convertible Notes to be redeemed on a pro rata basis, or by any other
method which the Trustee deems to be fair and appropriate and which complies
with any securities exchange or other applicable requirements, provided that the
Trustee may select for redemption in part only Convertible Notes in
denominations larger than $1,000. In selecting Convertible Notes to be redeemed
pursuant to this Section 3.2, the Trustee shall make such adjustments,
reallocations and eliminations as it shall deem proper so that the principal
amount of each Convertible Note to be redeemed shall be $1,000 or an integral
multiple thereof, by increasing, decreasing or eliminating any amount less than
$1,000 which would be allocable to any Holder. If the Convertible Notes to be
redeemed are Certificated Convertible Notes, the Certificated Convertible Notes
to be redeemed shall be selected by the Trustee by prorating, as nearly as may
be, or by any other method which the Trustee deems to be fair and appropriate
and which complies with any securities exchange or other applicable requirements
the principal amount of Certificated Convertible Notes to be redeemed among the
Holders of Certificated Convertible Notes registered in their respective names.
The Trustee in its discretion may determine the particular Convertible Notes (if
there are more than one) registered in the name of any Holder which are to be
redeemed, in whole or in part. Provisions of this Indenture that apply to
Convertible Notes called for redemption also apply to portions of Convertible
Notes called for redemption. The Trustee shall notify the Company promptly of
the Convertible Notes or portions of Convertible Notes to be redeemed.
Section 3.3 Notice of Redemption. At least 30 days but not more than
60 days before a Redemption Date, the Company shall send a notice of redemption,
first class mail, postage prepaid, to Holders of Convertible Notes to be
redeemed at the addresses of such Holders as they appear in the Security
Register.
The notice shall identify the Convertible Notes to be redeemed and
shall state:
(a) the Redemption Date;
(b) the Redemption Price (and shall specify the portion of such
Redemption Price that constitutes the amount of accrued and unpaid interest to
be paid, if any);
(c) the name and address of the Paying Agent;
(d) that the Convertible Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(e) if any Global Convertible Note is being redeemed in part,
the portion of the principal amount of such Convertible Note to be redeemed and
that, after the Redemption Date, the Global Convertible Note, with a notation on
Schedule A thereof adjusting the principal amount thereof to be equal to the
unredeemed portion, will be returned to the Holder thereof;
35
(f) if any Certificated Convertible Note is being redeemed in part,
the portion of the principal amount of such Convertible Note to be redeemed and
that, after the Redemption Date, a new Certificated Convertible Note or
Certificated Convertible Notes in principal amount at Stated Maturity equal to
the unredeemed portion will be issued;
(g) if fewer than all the outstanding Convertible Notes are to be
redeemed, the identification and principal amounts of the particular Convertible
Notes to be redeemed;
(h) the conversion price, the date on which the right to convert the
Convertible Notes will terminate and the place or places where such Convertible
Notes may be surrendered for conversion;
(i) that, unless the Company defaults in making the redemption
payment, payment of interest on, or the accretion of the value of, the
Convertible Notes (or portions thereof) called for redemption shall cease and
such Convertible Notes (or portions thereof) shall cease to accrete in value or
cease to accrue interest, as the case may be, on and after the Redemption Date;
(j) the paragraph of the Convertible Notes and the Section of this
Indenture pursuant to which the Convertible Notes are being called for
redemption; and
(k) any other information necessary to enable Holders to comply with
the notice of redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 3.3 in a timely manner; provided that the Company shall give the Trustee
not less than 60 days' notice unless the Trustee consents to a shorter period.
Section 3.4 Effect of Notice of Redemption. Once notice of redemption
is mailed, Convertible Notes called for redemption shall become due and payable
on the Redemption Date and at the Redemption Price stated in such notice, plus
interest, if any, accrued and unpaid on the Redemption Date; provided that if
the Redemption Date is after a regular Record Date and on or prior to the
Interest Payment Date, the accrued interest shall be payable to the Holder of
the redeemed Note on the relevant Record Date; and provided, further, that if a
Redemption Date is not a Business Day, payment shall be made on that next
succeeding Business Day and no interest shall accrue for the period from such
Redemption Date to such succeeding Business Day. Upon surrender to the Paying
Agent, such Convertible Notes shall be paid at the Redemption Price stated in
such notice. Failure to give notice or any defect in the notice to any Holder
shall not affect the validity of the notice to any other Holder.
Section 3.5 Deposit of Redemption Price. On or prior to 10:00 a.m.,
New York City time, on each Redemption Date, the Company shall deposit with the
Paying Agent (or, if the Company, one of its Subsidiaries or any of their
Affiliates is the Paying Agent, the Paying Agent shall segregate and hold in
trust for the benefit of the Holders) money, in federal or other immediately
36
available funds, sufficient to pay the Redemption Price on all Convertible Notes
to be redeemed on that date other than Convertible Notes or portions of
Convertible Notes called for redemption on such date which have been delivered
by the Company to the Trustee for cancellation and other than any Convertible
Notes or portions of Convertible Notes called for redemption on such date which
have been converted prior to such date.
So long as the Company complies with the preceding paragraph and the
other provisions of this Article III, interest on the Convertible Notes to be
redeemed on the applicable Redemption Date shall cease to accrue, or such
Convertible Notes shall cease to accrete in value, as the case may be, from and
after such date and such Convertible Notes or portions thereof shall be deemed
not to be entitled to any benefit under this Indenture except to receive payment
on the Redemption Date of the Redemption Price plus interest, if any, accrued
and unpaid on the Redemption Date. If any Convertible Note called for redemption
shall not be so paid upon surrender for redemption, then, from the Redemption
Date until such principal is paid, interest shall be paid on the unpaid
principal and, to the extent permitted by law, on any accrued but unpaid
interest thereon, in each case at the rate prescribed therefor by such
Convertible Notes.
Section 3.6 Convertible Notes Redeemed in Part. Upon surrender and
cancellation of a Certificated Convertible Note that is redeemed in part, the
Company shall issue and the Trustee shall authenticate and deliver to the
surrendering Holder (at the Company's expense) a new Certificated Convertible
Note equal in principal amount to the unredeemed portion of the Certificated
Convertible Note surrendered and canceled, provided that each such Certificated
Note shall be in a principal amount of $1,000 or an integral multiple thereof.
Upon surrender of a Global Convertible Note that is redeemed in part, the Paying
Agent shall forward such Global Convertible Note to the Trustee who shall make a
notation on Schedule A thereof to reduce the principal amount of such Global
Convertible Note to an amount equal to the unredeemed portion of such Global
Convertible Note, as provided in Section 2.5(c) hereof.
Section 3.7 Optional Redemption. The Convertible Notes will not be
redeemable at the option of the Company prior to January 13, 2002. During the
period from January 13, 2002 to January 13, 2004, the Convertible Notes will be
subject to redemption at the option of the Company, in whole but not in part,
upon not less than 30 nor more than 60 days' notice, if the Closing Price of the
Common Stock is at least 150 percent of the Conversion Price for thirty
consecutive days, at a Redemption Price equal to 100 percent of the principal
amount at Stated Maturity thereof plus accrued and unpaid interest (if any) to
the date of redemption; provided, that if the Common Stock is not traded on a
U.S. national securities exchange or approved for trading on an established
automated over-the-counter trading market in the United States and not quoted on
a consolidated transaction reporting tape, the Convertible Notes will not be
redeemable during such period. On or after January 13, 2004, the Convertible
Notes will be subject to redemption at the option of the Company, in whole or in
part, upon not less than 30 nor more than 60 days' notice at a Redemption Price
equal to 100 percent of the principal amount at Stated Maturity thereof, plus
accrued and unpaid interest, if any, to the Redemption Date.
37
ARTICLE IV
COVENANTS
Section 4.1 Payment of Convertible Notes. The Company shall promptly
pay the principal of, premium, if any, and interest on, the Convertible Notes on
the dates and in the manner provided in the Convertible Notes and in this
Indenture. Principal, premium and interest shall be considered paid on the date
due if, on such date, the Trustee or the Paying Agent holds in accordance with
this Indenture money sufficient to pay all principal, premium and interest then
due.
To the extent lawful, the Company shall pay interest on (i) any
overdue principal of (and premium, if any, on) the Convertible Notes, at the
interest rate borne on the Convertible Notes, plus 1% per annum, and (ii)
Defaulted Interest (without regard to any applicable grace period), and (iii)
any Reset Penalty that has not been paid when due, at the same rate. The
Company's obligation pursuant to the previous sentence shall apply whether such
overdue amount is due at its Stated Maturity, as a result of the Company's
obligations pursuant to Section 3.5, Section 4.7, Section 4.8 or Section 4.14
hereof, or otherwise.
Section 4.2 Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Convertible Notes may be presented or surrendered for payment or
conversion, where Convertible Notes may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Convertible Notes and this Indenture may be served. The Company
shall give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. As of the date hereof, the address of
such agency is: ▇▇▇▇▇▇ Trust and Savings Bank, c/▇ ▇▇▇▇▇▇ Trust Company of New
York, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee its agent to receive all
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the
Convertible Notes may be presented or surrendered for any or all of such
purposes, and may from time to time rescind such designations; provided that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York, for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation and any change in the location of any such other office or
agency.
Section 4.3 Money for the Convertible Note Payments to be Held in
Trust. If the Company, any Restricted Subsidiary of the Company or any of their
respective Affiliates shall at any time act as Paying Agent with respect to the
Convertible Notes, such Paying Agent shall, on or before each due date of the
principal of (and premium, if any) or interest on any of the Convertible Notes,
segregate and hold in trust for the benefit of the Persons entitled thereto
money sufficient to pay the
38
principal (and premium, if any) and interest, so becoming due until such money
shall be paid to such Persons or otherwise disposed of as herein provided, and
shall promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect
to the Convertible Notes, it shall, prior to or on each due date of the
principal of (and premium, if any) or interest on any of the Convertible Notes,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) and interest, so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium and interest, and
(unless such Paying Agent is the Trustee) the Paying Agent shall promptly notify
the Trustee of the Company's action or failure so to act.
Section 4.4 Corporate Existence. Subject to the provisions of Article
V hereof, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect the corporate existence, rights
(charter and statutory) and franchises of the Company and each of its Restricted
Subsidiaries; provided that the Company and any such Restricted Subsidiary shall
not be required to preserve the corporate existence of any such Restricted
Subsidiary or any such right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not disadvantageous in
any material respect to the Holders of Convertible Notes.
Section 4.5 Maintenance of Property. The Company shall cause all
Property used or useful in the conduct of its business or the business of any of
its Restricted Subsidiaries to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the Company, may be necessary
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided that nothing in this Section 4.5
shall prevent the Company from discontinuing the operation or maintenance of any
of such Property if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any of its
Restricted Subsidiaries and not disadvantageous in any material respect to the
Holders of Convertible Notes.
Section 4.6 Payment of Taxes and Other Claims. The Company shall pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any of its Restricted Subsidiaries or upon the
income, profits or Property of the Company or any of its Restricted Subsidiaries
and (b) all lawful claims for labor, material and supplies which, if unpaid,
might by law become a Lien upon the Property of the Company or any of its
Restricted Subsidiaries; provided that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings upon stay of execution or the enforcement
thereof and for which adequate reserves in accordance with GAAP or other
appropriate provision has been made.
39
Section 4.7 Repurchase at the Option of Holders upon a Change of
Control. (a) Upon the occurrence of a Change of Control, each Holder of
Convertible Notes shall have the right to require the Company to purchase such
Holder's Convertible Notes, in whole or in part in a principal amount that is an
integral multiple of $1,000, pursuant to an irrevocable and unconditional offer
described in Section 4.7(b) hereof (the "Change of Control Offer"), at a
purchase price (the "Change of Control Purchase Price") in cash equal to 101
percent of the Accreted Value of such Convertible Notes (or portions thereof) on
any Change of Control Payment Date occurring prior to January 13, 2001, plus
accrued and unpaid interest, if any, thereon to such Change of Control Payment
Date, or 101 percent of the principal amount at Stated Maturity of such
Convertible Notes (or portions thereof) on any Change of Control Payment Date
occurring on or after January 13, 2001, plus accrued and unpaid interest, if
any, to such Change of Control Payment Date.
(b) Within 30 days of the date of any Change of Control, the
Company, or the Trustee at the request and expense of the Company, shall send to
each Holder by first class mail, postage prepaid, a notice prepared by the
Company stating:
(i) that a Change of Control has occurred and a Change of
Control Offer is being made pursuant to this Section 4.7, and that all
Convertible Notes that are properly tendered will be accepted for payment;
(ii) the Change of Control Purchase Price, and the date
Convertible Notes are to be purchased pursuant to the Change of Control
Offer (the "Change of Control Payment Date"), which date shall be a date
occurring no earlier than 30 days nor later than 60 days subsequent to the
date such notice is mailed;
(iii) that any Convertible Notes or portions thereof not
properly tendered will continue to accrete in value or accrue interest, as
applicable, and will continue to have conversion rights;
(iv) that, unless the Company defaults in the payment of
the Change of Control Purchase Price with respect thereto, all Convertible
Notes or portions thereof accepted for payment pursuant to the Change of
Control Offer shall cease to accrete in value or accrue interest, as the
case may be, from and after the Change of Control Payment Date and will
cease to have conversion rights;
(v) that Holders electing to have any Convertible Notes
or portions thereof purchased pursuant to a Change of Control Offer will be
required to surrender such Convertible Notes, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of such Convertible
Notes completed, to the Paying Agent at the address specified in the
notice, prior to the close of business on the third Business Day preceding
the Change of Control Payment Date;
(vi) that Holders shall be entitled to withdraw such
election if the Paying Agent receives, not later than the close of business
on the second Business Day preceding the Change of Control Payment Date, a
telegram,
40
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Convertible Notes delivered for purchase,
and a statement that such Holder is withdrawing such Holder's election to
have such Convertible Notes or portions thereof purchased pursuant to the
Change of Control Offer;
(vii) that Holders electing to have Convertible Notes
purchased pursuant to the Change of Control Offer must specify the
principal amount that is being tendered for purchase, which principal
amount must be $1,000 or an integral multiple thereof;
(viii) that any Holder of Certificated Convertible Notes
whose Certificated Convertible Notes are being purchased only in part will
be issued new Certificated Convertible Notes equal in principal amount to
the unpurchased portion of the Certificated Convertible Note or Convertible
Notes surrendered, which unpurchased portion will be equal in principal
amount to $1,000 or an integral multiple thereof;
(ix) that the Trustee will return to the Holder of a
Global Convertible Note that is being purchased in part, such Global
Convertible Note with a notation on Schedule A thereof adjusting the
principal amount thereof to be equal to the unpurchased portion of such
Global Convertible Note; and
(x) the instructions and any other information necessary
to enable any Holder to accept a Change of Control Offer or effect
withdrawal of such acceptance.
(c) On the Change of Control Payment Date, the Company shall (i)
accept for payment any Convertible Notes or portions thereof properly tendered
pursuant to the Change of Control Offer; (ii) irrevocably deposit with the
Paying Agent, by 10:00 a.m., New York City time, on such date, in immediately
available funds, an amount equal to the Change of Control Purchase Price in
respect of all Convertible Notes or portions thereof so tendered, including
accrued and unpaid interest to such Change of Control Payment Date; and (iii)
deliver, or cause to be delivered, to the Trustee the Convertible Notes so
tendered together with an Officers' Certificate listing the Convertible Notes or
portions thereof tendered to the Company and accepted for payment. The Paying
Agent shall promptly send by first class mail, postage prepaid, to each Holder
of Convertible Notes or portions thereof so accepted for payment, payment in an
amount equal to the Change of Control Purchase Price for such Convertible Notes
or portions thereof, including accrued and unpaid interest, to such Change of
Control Payment Date. The Company shall publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date. For purposes of this Section 4.7, the Trustee shall act as the
Paying Agent.
(d) Upon surrender and cancellation of a Certificated
Convertible Note that is purchased in part pursuant to the Change of Control
Offer, the Company shall promptly issue and the Trustee shall authenticate and
deliver to the surrendering Holder of such Certificated Convertible
41
Note, a new Certificated Convertible Note equal in principal amount to the
unpurchased portion of such surrendered Certificated Convertible Note; provided
that each such new Certificated Convertible Note shall be in a principal amount
of $1,000 or an integral multiple thereof.
Upon surrender of a Global Convertible Note that is purchased in part
pursuant to a Change of Control Offer, the Paying Agent shall forward such
Global Convertible Note to the Trustee who shall make a notation on Schedule A
thereof to reduce the principal amount of such Global Convertible Note to an
amount equal to the unpurchased portion of such Global Convertible Note, as
provided in Section 2.5(c) hereof.
(e) The Company shall comply with the requirements of Section
14(e) under the Exchange Act and any other securities laws or regulations, to
the extent such laws and regulations are applicable, in connection with the
repurchase of Convertible Notes pursuant to a Change of Control Offer.
Section 4.8 Limitation on Asset Sales. (a) The Company shall not,
and shall not permit any of its Restricted Subsidiaries, directly or indirectly,
to, consummate an Asset Sale, unless:
(i) no Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(ii) the Company or such Restricted Subsidiary, as the
case may be, receives net consideration at the time of such Asset Sale at
least equal to the Fair Market Value (as evidenced by a Board Resolution of
the Company delivered to the Trustee) of the Property or assets sold or
otherwise disposed of;
(iii) at least 75 percent of the consideration received in
respect of such Asset Sale by the Company or such Restricted Subsidiary, as
the case may be, for such Property or assets consists of Cash Proceeds;
provided, however, that in connection with an Asset Sale of receivables,
100 percent of the consideration received in respect of such Asset Sale by
the Company or such Restricted Subsidiary, as the case may be, for such
receivables shall consist of Cash Proceeds; and
(iv) the Company or such Restricted Subsidiary, as the
case may be, uses the Net Cash Proceeds from such Asset Sale in the manner
set forth in Section 4.8(b) hereof.
(b) Within 270 days after the closing of any Asset Sale, the
Company or such Restricted Subsidiary, as the case may be, may, at its option:
(i) reinvest an amount equal to the Net Cash Proceeds, or
any portion thereof, from such Asset Sale in Telecommunications Assets;
and/or
(ii) apply an amount equal to such Net Cash Proceeds, or
remaining Net Cash Proceeds, (A) to the permanent reduction of Indebtedness
of
42
the Company (other than Indebtedness to a Restricted Subsidiary of the
Company) that is pari passu in right of payment with the Senior Notes, the
Old Convertible Notes and the Convertible Notes; provided, however, that in
connection with any such permanent reduction of Indebtedness of the
Company, the Company shall apply, pro rata, a portion of such Net Cash
Proceeds or remaining Net Cash Proceeds to the permanent reduction of the
aggregate amount of Senior Notes, the Old Convertible Notes and Convertible
Notes outstanding, or (B) to the permanent reduction of Indebtedness of any
Restricted Subsidiary of the Company that is pari passu in right of payment
with such Restricted Subsidiary's Senior Note Guarantees, Old Convertible
Note Guarantee and Convertible Note Guarantee, if applicable (other than
Indebtedness to the Company or another Restricted Subsidiary of the
Company).
Net Cash Proceeds from any Asset Sale that are not applied pursuant to
clause (i) or (ii) above shall constitute "Excess Proceeds."
(c) If at any time the aggregate amount of Excess Proceeds
calculated as of such date exceeds $5,000,000, the Company shall, within 30 days
of the date on which such Excess Proceeds exceed $5,000,000, use such Excess
Proceeds to make an offer, as described in Section 4.8(d) hereof (an "Asset Sale
Offer"), to purchase on a pro rata basis from all Holders of the Convertible
Notes and holders of Old Convertible Notes in an aggregate principal amount
equal to the maximum principal amount that may be purchased out of the then-
existing Excess Proceeds, at a purchase price (the "Asset Sale Purchase Price")
in cash equal to 100 percent of the Accreted Value of such Convertible Notes and
Old Convertible Notes on any Asset Sale Payment Date occurring prior to January
13, 2001, plus accrued and unpaid interest, if any, to such Asset Sale Payment
Date, or 100 percent of the principal amount at Stated Maturity of such
Convertible Notes or Old Convertible Notes on any Asset Sale Payment Date
occurring on or after January 13, 2001, plus accrued and unpaid interest, if
any, to such Asset Sale Payment Date; provided that, if any Senior Notes are
outstanding and the Senior Note Indentures have not been satisfied or
discharged, the Company shall be required to apply the Excess Proceeds first to
a 14% Senior Note Asset Sale Offer (as described in the 14% Senior Note
Indenture) and a 14 5/8% Senior Note Asset Sale Offer (as described in the
14 5/8% Senior Note Indenture), on a pro rata basis, and to the substantially
concurrent repayment or redemption of Pari Passu Indebtedness (if any) if
required by the instruments relating to such Pari Passu Indebtedness (which
repayment or redemption, in the case of a revolving credit arrangement or
multiple advance arrangement, reduces the commitment thereunder) in the manner
permitted by the Senior Note Indentures and to the extent that the aggregate
amount paid pursuant to the 14% Senior Note Asset Sale Offer and the 14 5/8%
Senior Note Asset Sale Offer and, if applicable, the repayment of Indebtedness
as permitted by the Senior Note Indentures is less than such Excess Proceeds,
the Company shall then make an Asset Sale Offer for such remaining portion of
such Excess Proceeds within 100 days of the date on which such Excess Proceeds
exceeded $5,000,000.
(d) Within 30 days (or 100 days if any Senior Notes are
outstanding and the Senior Note Indentures have not been satisfied or
discharged) of the date on which the amount of Excess Proceeds exceeds
$5,000,000 (but subject to the proviso of clause (c) of this Section 4.8),
43
the Company, or the Trustee at the request and expense of the Company, shall
send to each Holder by first class mail, postage prepaid, a notice prepared by
the Company stating:
(i) that an Asset Sale Offer is being made pursuant to this Section
4.8, and that all Convertible Notes that are properly tendered will be
accepted for payment, subject to proration in the event the amount of
Excess Proceeds is less than the aggregate Asset Sale Purchase Price of all
Convertible Notes and Old Convertible Notes promptly tendered pursuant to
the Asset Sale Offer and the Old Convertible Note Asset Sale Offer, as
applicable;
(ii) the Asset Sale Purchase Price, the amount of Excess Proceeds
that are available to be applied to purchase tendered Convertible Notes,
and the date Convertible Notes are to be purchased pursuant to the Asset
Sale Offer (the "Asset Sale Payment Date"), which date shall be a date no
earlier than 30 days nor later than 40 days subsequent to the date such
notice is mailed;
(iii) that any Convertible Notes or portions thereof not properly
tendered will continue to accrete in value or accrue interest, as the case
may be, and will continue to have conversion rights;
(iv) that, unless the Company defaults in the payment of the Asset
Sale Purchase Price with respect thereto, all Convertible Notes or portions
thereof accepted for payment pursuant to the Asset Sale Offer shall cease
to accrete in value or accrue interest, as the case may be, from and after
the Asset Sale Payment Date and will cease to have conversion rights;
(v) that any Holder electing to have any Convertible Notes or
portions thereof purchased pursuant to the Asset Sale Offer will be
required to surrender such Convertible Notes, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of such Convertible
Notes completed, to the Paying Agent at the address specified in the
notice, prior to the close of business on the third Business Day preceding
the Asset Sale Payment Date;
(vi) that any Holder shall be entitled to withdraw such election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Asset Sale Payment Date, a telegram,
telex, facsimile transmission or letter, setting forth the name of the
Holder, the principal amount of Convertible Notes delivered for purchase,
and a statement that such Holder is withdrawing such Holder's election to
have such Convertible Notes or portions thereof purchased pursuant to the
Asset Sale Offer;
(vii) that any Holder electing to have Convertible Notes purchased
pursuant to the Asset Sale Offer must specify the principal amount that is
being tendered for purchase, which principal amount must be $1,000 or an
integral multiple thereof;
44
(viii) that any Holder of Certificated Convertible
Notes whose Certificated Convertible Notes are being purchased only in part
will be issued new Certificated Convertible Notes equal in principal amount
to the unpurchased portion of the Certificated Convertible Note or
Convertible Notes surrendered, which unpurchased portion will be equal in
principal amount to $1,000 or an integral multiple thereof;
(ix) that the Trustee will return to the Holder of a
Global Convertible Note that is being purchased in part, such Global
Convertible Note with a notation on Schedule A thereof adjusting the
principal amount thereof to be equal to the unpurchased portion of such
Global Convertible Note; and
(x) the instructions and any other information
necessary to enable any Holder to accept an Asset Sale Offer, to tender
Convertible Notes and to have such Convertible Notes purchased, or to
effect withdrawal of such acceptance, pursuant to this Section 4.8.
(e) If the aggregate Asset Sale Purchase Price of the
Convertible Notes surrendered by Holders exceeds the amount of Excess Proceeds
as indicated in the notice required by Section 4.8(d) hereof, the Trustee shall
select the Convertible Notes to be purchased on a pro rata basis based on the
Accreted Value, as of the Asset Sale Payment Date if such Asset Sale Payment
Date is prior to January 13, 2001, or the principal amount at Stated Maturity,
if such Asset Sale Payment Date is on or after January 13, 2001, of the
Convertible Notes tendered, with such adjustments as may be deemed appropriate
by the Trustee and may be needed to comply with any securities exchange and
other applicable requirements, so that only Convertible Notes in denominations
of $1,000 or integral multiples thereof shall be purchased.
(f) On or before the Asset Sale Payment Date, the Company shall
(i) accept for payment any Convertible Notes or portions thereof properly
tendered and selected for purchase pursuant to the Asset Sale Offer and Section
4.8(e) hereof; (ii) irrevocably deposit with the Paying Agent, by 10:00 a.m.,
New York City time, on such date, in immediately available funds, an amount
equal to the Asset Sale Purchase Price in respect of all Convertible Notes or
portions thereof so accepted; and (iii) deliver, or cause to be delivered, to
the Trustee the Convertible Notes so accepted together with an Officers'
Certificate listing the Convertible Notes or portions thereof tendered to the
Company and accepted for payment. The Paying Agent shall promptly send by first
class mail, postage prepaid, to each Holder of Convertible Notes or portions
thereof so accepted for payment, payment in an amount equal to the Asset Sale
Purchase Price for such Convertible Notes or portions thereof. The Company shall
publicly announce the results of the Asset Sale Offer on or as soon as
practicable after the Asset Sale Payment Date. For purposes of this Section 4.8,
the Trustee shall act as the Paying Agent.
(g) Upon surrender and cancellation of a Certificated
Convertible Note that is purchased in part, the Company shall promptly issue and
the Trustee shall authenticate and deliver to the surrendering Holder of such
Certificated Convertible Note a new Certificated Convertible Note
45
equal in principal amount to the unpurchased portion of such surrendered
Certificated Convertible Note; provided that each such new Certificated
Convertible Note shall be in a principal amount of $1,000 or an integral
multiple thereof.
Upon surrender of a Global Convertible Note that is purchased in part
pursuant to an Asset Sale Offer, the Paying Agent shall forward such Global
Convertible Note to the Trustee who shall make a notation on Schedule A thereof
to reduce the principal amount of such Global Convertible Note to an amount
equal to the unpurchased portion of such Global Convertible Note, as provided in
Section 2.5(c) hereof.
(h) Upon completion of an Asset Sale Offer (including payment of the
Asset Sale Purchase Price for accepted Convertible Notes), any surplus Excess
Proceeds that were the subject of such offer shall cease to be Excess Proceeds,
and the Company may then use such amounts for general corporate purposes.
(i) The Company shall comply with the requirements of Section 14(e)
under the Exchange Act and any other securities laws or regulations, to the
extent such laws and regulations are applicable, in connection with the
repurchase of Convertible Notes pursuant to an Asset Sale Offer.
Section 4.9 Limitation on Issuance of Guarantees by Restricted
Subsidiaries. (a) The Company shall not permit any of its Restricted
Subsidiaries, directly or indirectly, to guarantee any Indebtedness of the
Company ("Guaranteed Indebtedness") other than the Convertible Notes, unless (i)
such Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a Convertible Note Guarantee (a
"Convertible Note Guarantee") of payment of the Convertible Notes by such
Restricted Subsidiary and (ii) such Restricted Subsidiary waives and will not in
any manner whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary of the Company as a result of any payment by
such Restricted Subsidiary under its Convertible Note Guarantee, provided that
any Restricted Subsidiary may guarantee any Credit Facility so long as such
Restricted Subsidiary enters into a Convertible Note Guarantee ranking pari
passu with its guarantee under such Credit Facility. If the Guaranteed
Indebtedness is pari passu with the Convertible Notes, then the guarantee of
such Guaranteed Indebtedness shall be pari passu with or subordinated to the
Convertible Note Guarantee; and if the Guaranteed Indebtedness is subordinated
to the Convertible Notes, then the guarantee of such Guaranteed Indebtedness
shall be subordinated to the Convertible Note Guarantee at least to the extent
that the Guaranteed Indebtedness is subordinated to the Convertible Notes.
(b) Notwithstanding the provisions of Section 4.10(a) hereof, any
Convertible Note Guarantee by a Restricted Subsidiary shall provide by its terms
that it shall be automatically and unconditionally released and discharged upon
the release or discharge of the guarantee which resulted in the creation of such
Restricted Subsidiary's Convertible Note Guarantee, except a discharge or
release by, or as a result of, payment under such guarantee.
46
Section 4.10 Restricted and Unrestricted Subsidiaries. (a) The
Company may designate a Subsidiary (including a newly formed or newly acquired
Subsidiary) of the Company or any of its Restricted Subsidiaries as an
Unrestricted Subsidiary, provided that so long as the Senior Notes remain
outstanding and the Senior Note Indentures have not been satisfied or
discharged, (i) immediately after giving effect to the transaction, the Company
could incur $1.00 of additional Indebtedness pursuant to Section 4.9(a) of each
of the Senior Note Indentures and (ii) such designation is at the time permitted
under Section 4.13(a) of each of the Senior Note Indentures. Notwithstanding any
provision of this Section 4.10(a), all Subsidiaries of an Unrestricted
Subsidiary will be Unrestricted Subsidiaries.
(b) An Unrestricted Subsidiary may be redesignated as a Restricted
Subsidiary. The designation of a Subsidiary of the Company as an Unrestricted
Subsidiary or the designation of an Unrestricted Subsidiary of the Company as a
Restricted Subsidiary shall be made by the Board of Directors as evidenced by a
Board Resolution delivered to the Trustee and shall be effective as of the date
specified in such Board Resolution, which shall not be prior to the date such
Board Resolution is delivered to the Trustee.
Section 4.11 Reports. Whether or not the Company is subject to
Section 13(a) or Section 15(d) of the Exchange Act, or any successor provision
thereto, the Company shall file with the Commission the annual reports,
quarterly reports and other documents which the Company would have been required
to file with the Commission pursuant to Section 13(a) or Section 15(d) of the
Exchange Act or any successor provision thereto if the Company were subject
thereto, such documents to be filed with the Commission on or prior to the
respective dates (the "Required Filing Dates") by which the Company would have
been required to file them. The Company shall also (whether or not it is
required to file reports with the Commission), within 30 days of each Required
Filing Date, (i) transmit by mail to all Holders of Convertible Notes, as their
names and addresses appear in the Security Register without cost to such Holders
or Persons, and (ii) file with the Trustee, copies of the annual reports,
quarterly reports and other documents (without exhibits) which the Company has
filed or would have filed with the Commission pursuant to Section 13(a) or
Section 15(d) of the Exchange Act, any successor provisions thereto or this
Section 4.11. The Company shall not be required to file any report with the
Commission if the Commission does not permit such filing.
Section 4.12 Compliance Certificate; Notice of Default or Event of
Default. (a) The Company shall deliver to the Trustee within 120 calendar days
after the end of each fiscal year of the Company ending after the date hereof,
an Officers' Certificate (which shall be signed by Officers satisfying the
requirements of Section 314 of the Trust Indenture Act), stating whether or not,
to the best knowledge of such Officers the Company has complied with all
conditions and covenants under this Indenture, and, if the Company shall be in
Default, specifying all such Defaults and the nature thereof of which such
Officer may have knowledge.
(b) So long as (and to the extent) not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.11 above shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation)
47
that in making the examination necessary for certification of such financial
statements, nothing has come to their attention which would lead them to believe
that the Company has violated any provision of Article IV or Article V of this
Indenture (or if any violation has occurred, specifying the nature and existence
thereof), it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of such
violation.
(c) The Company shall deliver written notice to the Trustee
within 5 Business Days after becoming aware of (i) any Default or Event of
Default, (ii) any event of default under either of the Senior Note Indentures or
(iii) any event of default or any default under any other mortgage, indenture or
instrument referred to in Section 6.1(e) hereof, describing such Default, Event
of Default or other event of default or default, its status and what action the
Company is taking or proposes to take with respect thereto.
Section 4.13 INTENTIONALLY OMITTED.
Section 4.14 Repurchase at the Option of Holders upon a Termination
of Trading. (a) In the event of any Termination of Trading occurring after the
Issue Date and on or prior to Maturity, each Holder of Convertible Notes will
have the right, at such Holder's option, to require the Company to repurchase
all or any part of such Holder's Convertible Notes on the date (the "Repurchase
Date") that is 30 days after the date the Company gives notice of the
Termination of Trading at a price (the "Repurchase Price") equal to 100 percent
of the Accreted Value of such Convertible Notes on any Repurchase Date occurring
prior to January 13, 2001, together with accrued and unpaid interest, if any,
thereon to the Repurchase Date or 100 percent of the principal amount at Stated
Maturity of such Convertible Notes on any Repurchase Date occurring on or after
January 13, 2001, plus accrued and unpaid interest, if any, thereon to the
Repurchase Date. On or prior to 10:00 a.m., New York City time on the Repurchase
Date, the Company shall irrevocably deposit with the Trustee or a Paying Agent
an amount of money sufficient to pay the Repurchase Price of the Convertible
Notes which are to be repurchased on or promptly following the Repurchase Date.
(b) On or before the 15th day after the occurrence of a
Termination of Trading, the Company, or the Trustee at the request and expense
of the Company, shall send to each Holder by first class mail, postage prepaid,
a notice prepared by the Company stating:
(i) that a Termination of Trading has occurred and that
each Holder has the right to require a repurchase of such Holder's Convertible
Notes, which repurchase right is made pursuant to this Section 4.14, and that
all Convertible Notes properly tendered will be repurchased;
(ii) the Repurchase Price, and the date Convertible Notes
are to be repurchased, which date shall be a date occurring no earlier than 30
days nor later than 40 days subsequent to the date such notice is mailed;
48
(iii) that any Convertible Notes or portions thereof
not properly tendered will continue to accrete in value or accrue interest,
as the case may be, and will continue to have conversion rights;
(iv) that, unless the Company defaults in the payment
of the Repurchase Price with respect thereto, all Convertible Notes or
portions thereof accepted for payment pursuant to the exercise of such
repurchase right shall cease to accrete in value or accrue interest, as the
case may be, from and after the Repurchase Date and will cease to have any
conversion rights;
(v) that any Holder electing to have any Convertible
Notes or portions thereof repurchased pursuant to the exercise of such
repurchase right will be required to surrender such Convertible Notes, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
such Convertible Notes completed, to the Paying Agent at the address
specified in the notice, prior to the close of business on the Repurchase
Date;
(vi) that any Holder electing to have Convertible
Notes purchased pursuant to such repurchase right must specify the
principal amount that is being tendered for purchase, which principal
amount must be $1,000 or an integral multiple thereof;
(vii) that any Holder of Certificated Convertible Notes
whose Certificated Convertible Notes are being purchased only in part will
be issued a new Certificated Convertible Note or Certificated Convertible
Notes equal in principal amount to the unpurchased portion of the
Certificated Convertible Note or Certificated Convertible Notes
surrendered, which unpurchased portion will be equal in principal amount to
$1,000 or an integral multiple thereof;
(viii) that the Trustee will return to the Holder of a
Global Convertible Note that is being purchased in part, such Global
Convertible Note with a notation on Schedule A thereof adjusting the
principal amount thereof to be equal to the unpurchased portion of such
Global Convertible Note; and
(ix) the instructions and any other information
necessary to enable any Holder to exercise such repurchase right or effect
withdrawal of such exercise.
(c) To exercise the repurchase right, the Holder of a
Convertible Note must deliver, on or before the close of business on the
Repurchase Date, irrevocable written notice to the Paying Agent (or an agent
designated by the Paying Agent for such purpose) and to the Trustee of the
Holder's exercise of such right, together with the certificates evidencing the
Convertible Notes with respect to which the right is being exercised, duly
endorsed for transfer. Such written notice is irrevocable. The Company or the
Trustee shall promptly send by first class mail, postage prepaid, to each Holder
of Convertible Notes or portions thereof so accepted for payment,
49
payment in an amount equal to the Repurchase Price for such Convertible Notes or
portions thereof. The Company shall publicly announce the results of the
exercises of repurchase rights upon a Termination of Trading on or as soon as
practicable after the Repurchase Date. For purposes of this Section 4.14, the
Trustee shall act as the Paying Agent.
Section 4.15 INTENTIONALLY OMITTED.
ARTICLE V
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
Section 5.1 Merger, Consolidation or Sale of Assets. The Company
shall not in any transaction or series of related transactions, consolidate
with, or merge with or into, any other Person or permit any other Person to
merge with or into the Company (other than a merger of a Restricted Subsidiary
of the Company into the Company in which the Company is the continuing
corporation), or sell, convey, assign, transfer, lease or otherwise dispose of
all or substantially all of the Property and assets of the Company and its
Restricted Subsidiaries taken as a whole to any other Person, unless:
(a) either (i) the Company shall be the continuing corporation or
(ii) the corporation (if other than the Company) formed by such consolidation or
into which the Company is merged, or the Person which acquires, by sale,
assignment, conveyance, transfer, lease or disposition, all or substantially all
of the Property and assets of the Company and its Restricted Subsidiaries taken
as a whole (any such corporation or Person being the "Surviving Entity") shall
be a corporation organized and validly existing under the laws of the United
States of America, any political subdivision thereof, any state thereof or the
District of Columbia, and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form reasonably satisfactory
to the Trustee, the due and punctual payment of the principal of (and premium,
if any) and interest on all the Convertible Notes and the performance of every
covenant and obligation in this Indenture on the part of the Company to be
performed or observed;
(b) immediately after giving effect to such transaction or series of
related transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of related transactions), no Default or
Event of Default shall have occurred and be continuing or would result
therefrom; and
(c) immediately after giving effect to such transaction or series of
transactions on a pro forma basis, the Company (or the Surviving Entity, if the
Company is not continuing) shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately prior to such
transaction.
50
In connection with any consolidation, merger, sale, assignment,
conveyance, lease, transfer of assets or other transactions contemplated by this
Section 5.1, the Company shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, conveyance, lease, transfer or other
transaction and any supplemental indenture in respect thereto comply with this
Article V and that all conditions precedent herein provided for relating to such
transactions have been complied with (all of the foregoing, a "Permitted
Merger").
Section 5.2 Successor Corporation Substituted. Upon any Permitted
Merger, the Surviving Entity shall succeed to, and be substituted for, and may
exercise every right and power of, the Company hereunder and the Convertible
Notes with the same effect as if such Surviving Entity had been named as the
Company herein; and when a Surviving Person duly assumes all of the obligations
and covenants of the Company pursuant hereto and the Convertible Notes, except
in the case of a lease, the predecessor Person shall be relieved of all such
obligations.
If such Surviving Entity shall have succeeded to and been substituted
for the Company, such surviving Entity may cause to be signed, and may issue
either in its own name or in the name of the Company prior to such succession
any or all of the Convertible Notes issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee; and upon the
order of such Surviving Entity, instead of the Company, and subject to all of
the terms, conditions and limitations in this Indenture, the Trustee shall act
thereafter and shall deliver any Convertible Notes which previously shall have
been signed and delivered by two Officers of the Company to the Trustee for
authentication. All of the Convertible Notes so issued, and any Convertible
Notes which such Surviving Entity thereafter shall cause to be signed and
delivered to the Trustee, shall have the same legal rights and benefits under
this Indenture as the Convertible Notes theretofore or thereafter issued in
accordance with the terms of this Indenture and the Convertible Note Guarantees,
if any, as though all of such Convertible Notes had been issued on the date of
execution hereof.
In the case of any such substitution, merger, sale, transfer,
conveyance or other disposal, such changes in phraseology and form (and in
substance) may be made in the Convertible Notes to be issued as may be
appropriate.
For all purposes of this Indenture and the Convertible Notes,
Subsidiaries of any Surviving Entity will, upon such transaction or series of
transactions, become Restricted Subsidiaries or Unrestricted Subsidiaries as
provided pursuant to this Indenture.
51
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default. "Event of Default," wherever used
herein with respect to the Convertible Notes, means any one of the following
events (whatever the reason for such event, and whether it shall be voluntary or
involuntary, or be effected by operation of law, pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of interest on any Convertible Note when
the same becomes due and payable, and the continuance of such Default for a
period of 30 days; or
(b) default in the payment of the principal of (or premium, if any,
on) any Convertible Note when the same becomes due and payable whether upon
Maturity, optional redemption, required repurchase (including pursuant to a
Change of Control Offer, an Asset Sale Offer or a repurchase offer upon a
Termination of Trading) or otherwise, or the failure to make an offer to
purchase any Convertible Note as herein required; or
(c) default in the performance, or breach, of any covenant or
agreement contained in Section 4.7, Section 4.8, Section 4.14 or Article V
hereof; or
(d) default in the performance, or breach, of any covenant or
warranty of the Company contained in this Indenture or the Convertible Notes
(other than a covenant or warranty addressed in Section 6.1(a), Section 6.1(b)
or Section 6.1(c) hereof), and the continuance of such Default or breach for a
period of 45 days after written notice thereof has been given to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25
percent of the aggregate principal amount at Stated Maturity of the outstanding
Convertible Notes; or
(e) Indebtedness of the Company or any Restricted Subsidiary is not
paid when due and payable within the applicable grace period, if any, or is
accelerated by the holders thereof and, in either case, the principal amount of
such accelerated or unpaid Indebtedness exceeds $5,000,000; or
(f) the entry by a court of competent jurisdiction of one or more
final nonappealable judgments uninsured or unindemnified for the payment of
money against the Company or any Restricted Subsidiary of the Company in an
aggregate uninsured or unindemnified amount in excess of $5,000,000, which is
not discharged, waived, stayed, bonded or satisfied for a period of 60
consecutive days; or
(g) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company or any Significant
Restricted Subsidiary of the Company in an involuntary case or proceeding under
United States bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Restricted Subsidiary of the
52
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of, or in respect
of, the Company or any Significant Restricted Subsidiary of the Company under
United States bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency, or similar law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or any Significant Restricted Subsidiary
of the Company or of any substantial part of the Property or assets of the
Company or any Significant Restricted Subsidiary of the Company, or ordering the
winding-up or liquidation of the affairs of the Company or any Significant
Restricted Subsidiary of the Company, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days; or
(h) (i) the commencement by the Company or any Significant
Restricted Subsidiary of the Company of a voluntary case or proceeding under
United States bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other similar
law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent; or (ii) the consent by the Company or any Significant Restricted
Subsidiary of the Company to the entry of a decree or order for relief in
respect of the Company or any Significant Restricted Subsidiary of the Company
in an involuntary case or proceeding under United States bankruptcy laws, as now
or hereafter constituted, or any other applicable Federal, state, or foreign
bankruptcy, insolvency, or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company or any
Significant Restricted Subsidiary of the Company; or (iii) the filing by the
Company or any Significant Restricted Subsidiary of the Company of a petition or
answer or consent seeking reorganization or relief under United States
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal, state or foreign bankruptcy, insolvency or other similar law; or (iv)
the consent by the Company or any Significant Restricted Subsidiary of the
Company to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or any Significant Restricted Subsidiary of
the Company or of any substantial part of the Property or assets of the Company
or any Significant Restricted Subsidiary, or the making by the Company or any
Significant Restricted Subsidiary of the Company of an assignment for the
benefit of creditors; or (v) the admission by the Company or any Significant
Restricted Subsidiary of the Company in writing of its inability to pay its
debts generally as they become due; or (vi) the taking of corporate action by
the Company or any Significant Restricted Subsidiary of the Company in
furtherance of any such action; or
(i) the occurrence and continuation of an "event of default" under
either of the Senior Note Indentures for a period of 30 consecutive days, after
written notice of the occurrence of such "event of default" has been given to
the Company by the Trustee or a Holder or Holders of Convertible Notes, which
notice states that such an event constitutes a Default hereunder.
Section 6.2 Acceleration. If any Event of Default (other than an
Event of Default specified in Section 6.1(g) or Section 6.1(h) hereof) occurs
and is continuing, then and in every such case, the Trustee by a notice in
writing to the Company, or the Holders of not less than 25 percent of the
outstanding aggregate principal amount at Stated Maturity of Convertible Notes
by a notice
53
in writing to the Company and the Trustee, may declare the Default Amount,
premium, if any, and any accrued and unpaid interest on all Convertible Notes
then outstanding to be immediately due and payable. Upon any such declaration,
such Default Amount, premium, if any, and any accrued and unpaid interest on all
Convertible Notes then outstanding will become and be immediately due and
payable. If an Event of Default specified in Section 6.1(g) or Section 6.1(h)
hereof occurs, the Default Amount, premium, if any, and any accrued and unpaid
interest on all Convertible Notes then outstanding shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder of Convertible Notes.
In the event of a declaration of acceleration because an Event of
Default set forth in Section 6.1(e) hereof has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the
event of default triggering such Event of Default pursuant to Section 6.1(e)
hereof shall be remedied, or cured or waived by the holders of the relevant
Indebtedness within 60 days after such event of default; provided that no
judgment or decree for the payment of the money due on the Convertible Notes has
been obtained by the Trustee as hereinafter in this Article VI provided. In the
event of a declaration of acceleration because an Event of Default set forth in
Section 6.1(i) hereof has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled (A) if the 14% Senior
Notes and/or 14 5/8% Senior Notes, as applicable, have been repaid, (B) if the
event of default under the 14% Senior Note Indenture and/or the 14 5/8% Senior
Note Indenture, as applicable, triggering such Event of Default pursuant to
Section 6.1(i) hereof shall be remedied or cured, or waived by the holders of
the 14% Senior Notes and/or the 14 5/8% Senior Notes, as applicable, or (C) if
the 14% Senior Notes and/or 14 5/8% Senior Notes, as applicable, have been
accelerated, then the acceleration of the 14% Senior Notes and/or 14 5/8% Senior
Notes, as applicable, shall have been rescinded within 60 days of the occurrence
of such event of default under the 14% Senior Note Indenture and/or the 14 5/8%
Senior Note Indenture, as applicable, and, in the case of clauses (A), (B) or
(C) above, the applicable Senior Note Trustee so certifies to the Trustee,
provided that any such event described in clause (A), (B) or (C) above must
occur prior to the commencement of an enforcement proceeding with respect to
this Indenture.
Until January 13, 2001, the "Default Amount" shall equal the Accreted
Value of the Convertible Notes, as of the date of determination. Thereafter, the
Default Amount of each Convertible Note shall equal 100 percent of the principal
amount at Stated Maturity thereof.
At any time after a declaration of acceleration with respect to
Convertible Notes has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee as hereinafter in this Article VI
provided, the Holders of a majority in aggregate principal amount at Stated
Maturity of the outstanding Convertible Notes, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if,
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue installments of interest, if any, on all
Convertible Notes,
54
(ii) the principal of (and premium, if any, on) any
Convertible Notes which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates prescribed
therefor in the Convertible Notes and this Indenture,
(iii) to the extent that payment of such interest, if
any, is lawful, interest on the Defaulted Interest at the rate prescribed
therefor in the Convertible Notes and this Indenture, and
(iv) all moneys paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements and
advances of the trustee, its agents and counsel and all other amounts due
to the Trustee pursuant to Section 7.7 hereof; and
(b) all Events of Default with respect to the Convertible Notes,
other than the non-payment of the principal of Convertible Notes which have
become due solely by such declaration of acceleration, have been cured or waived
by the Holders as provided herein.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
Section 6.3 Other Remedies. The Company covenants that if an Event of
Default specified in Section 6.1(a) or Section 6.1(b) occurs the Company shall,
upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders,
the whole amount then due and payable on the Convertible Notes for principal
(and premium, if any), accrued and unpaid interest, if any, and, to the extent
that payment of such interest shall be legally enforceable, interest upon the
overdue principal (and premium, if any) and upon Defaulted Interest, at the rate
or rates prescribed therefor in such Convertible Notes; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and all other
amounts due to the Trustee pursuant to Section 7.7 hereof. If the Company fails
to pay such amounts forthwith upon such demand, the Trustee, in its own name and
as trustee of an express trust, may institute a judicial proceeding for the
collection of, or pursue any available remedy under this Indenture or otherwise
to collect, the sums so due and unpaid, and may prosecute such proceeding to
judgment or final decree, and may enforce the same against the Company or any
other obligor upon such Convertible Notes and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the Property and
assets of the Company or any other obligor upon such Convertible Notes, wherever
situated.
If an Event of Default with respect to the Convertible Notes occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
55
Section 6.4 Waiver of Existing Defaults. The Holders of a majority in
aggregate principal amount at Stated Maturity of the Convertible Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all the
Convertible Notes waive any existing Default or Event of Default and its
consequences under this Indenture except (a) a continuing Default or Event of
Default in the payment of interest on, premium, if any, on or the principal of,
the Convertible Notes or (b) in respect of a covenant or provision hereof which
under Section 9.2 hereof cannot be modified or amended without the consent of
the Holder of each outstanding Note affected. Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 6.5 Control by Majority. The Holders of not less than a
majority in aggregate principal amount at Stated Maturity of the outstanding
Convertible Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided that
(a) such direction shall not be in conflict with any rule of law
or with this Indenture or unduly prejudicial to the rights of other Holders and
would not subject the Trustee to personal liability, it being understood that
(subject to Section 7.1 hereof) the Trustee shall have no duty to ascertain
whether or not such directions are unduly prejudicial to such Holders, and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 6.6 Limitation on Suits. No Holder of Convertible Notes shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Convertible Notes;
(b) the Holders of not less than 25 percent in aggregate
principal amount at Stated Maturity of the outstanding Convertible Notes shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee security
or indemnity satisfactory to the Trustee in its reasonable discretion against
the costs, expenses and liabilities to be incurred in compliance with such
request;
(d) the Trustee for 30 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 30-day period by the Holders of a majority in
aggregate principal amount at
56
Stated Maturity of the outstanding Convertible Notes; in any event, it being
understood and intended that no one or more Holders of Convertible Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Convertible Notes, or to obtain or to seek to obtain priority
or preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all Holders of Convertible Notes.
Section 6.7 Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of (premium, if any) and interest on the Convertible Notes held by
such Holder, on or after the respective due dates expressed in the Convertible
Notes or the Redemption Dates or purchase dates provided for herein or therein,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall be absolute and unconditional and shall not be impaired
or affected without the consent of such Holder.
Section 6.8 Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceedings, or any
voluntary or involuntary case under United States bankruptcy laws, as now or
hereafter constituted, relative to the Company or any other obligor upon the
Convertible Notes or the Property and assets of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of such Convertible Notes shall then be due and payable as therein expressed or
by declaration or otherwise or irrespective of whether the Trustee or any Holder
shall have made any demand on the Company for the payment of overdue principal
or interest or performed any other act pursuant to the provisions of this
Article) shall be entitled and empowered, by intervention in such proceeding or
otherwise, (i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Convertible
Notes, to file such other papers or documents and to take such other actions,
including participating as a member or otherwise in any official committee of
creditors appointed in the matter, as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel and all other amounts due to the Trustee pursuant to Section 7.7
hereof) and of the Holders allowed in such judicial proceeding, (ii) unless
prohibited by applicable law and regulations to vote on behalf of the Holders of
the Convertible Notes in any election of a trustee or standby trustee in an
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or Person performing similar actions in comparable proceedings, and
(iii) to collect and receive any moneys or other Property payable or deliverable
on any such claims and to distribute the same; and any receiver, assignee,
trustee, custodian, liquidator, sequestrator (or other similar official) in any
such proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof. Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement,
57
adjustment or composition affecting the Convertible 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.
In any proceedings brought by the Trustee (and any proceedings
involving the interpretation of this Indenture to which the Trustee shall be a
party), the Trustee shall be held to represent all the Holders of the
Convertible Notes, and it shall not be necessary to make any Holders of the
Convertible Notes parties to any such proceedings.
Section 6.9 Priorities. Any money collected by the Trustee pursuant
to this Article VI shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal (premium, if any), interest, if any, upon presentation of the
Convertible Notes and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
7.7 hereof;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) or interest, if any, on the Convertible
Notes, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Convertible Notes for principal (and premium, if
any) and interest, respectively; and
THIRD: To the Company, the Guarantors, if any, or as a court of
competent jurisdiction shall decide.
The Trustee may fix a record date and payment date from any payment to
Holders pursuant to this Section 6.9. At least 15 days before such record date,
the Company shall mail to each Holder and the Trustee a notice that states such
record date, the payment date and amount to be paid. The Trustee may mail such
notice in the name and at the expense of the Company.
Section 6.10 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Convertible Note by such Holder's acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture and the Convertible Note Guarantees, if any, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigation in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10 percent in principal amount at
Stated Maturity of the outstanding Convertible Notes, or to any suit instituted
by any Holder for the enforcement of the payment of the principal of (or
premium, if any) or interest, if any, on any Convertible Note on or after its
Stated Maturity.
58
Section 6.11 Waiver of Usury, Stay or Extension Laws. The Company and
each Guarantor, if any, (to the extent it may lawfully do so) shall not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture or the Convertible Note Guarantees, if any; and
the Company and each Guarantor, if any, (to the extent that it may lawfully do
so) hereby expressly waive all benefit or advantage of any such law, and shall
not hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.
Section 6.12 Trustee May Enforce Claims Without Possession of the
Convertible Notes. All rights of action and claims under this Indenture, the
Convertible Note Guarantees, if any, or the Convertible Notes may be prosecuted
and enforced by the Trustee without the possession of any of the Convertible
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name, as
trustee of an express trust, and any recovery of judgement shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Convertible Notes.
Section 6.13 Restoration of Rights and Remedies. If the Trustee or
any Holder of Convertible Notes has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case the Company, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
Section 6.14 Rights and Remedies Cumulative. Except as otherwise
provided in Section 2.7 hereof, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
Section 6.15 Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Convertible Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article VI, by the Convertible Note
Guarantees, if any, or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
59
ARTICLE VII
TRUSTEE
Section 7.1 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and shall use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default: (i)
the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and (ii) in the absence
of bad faith on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; provided that in the case of any such
certificates or opinions that by any provision of this Indenture are
specifically required to be furnished to the Trustee, the Trustee shall examine
such certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, provided that: (i) this paragraph (c) shall not limit the effect of
paragraph (b) of this Section 7.1; (ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and (iii) the
Trustee shall not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section
6.5 hereof.
(d) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(e) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(f) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk of liability is
not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Article VII and to the provisions of the Trust
Indenture Act.
60
Section 7.2 Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper Person. Except as provided in Section 7.1(b) hereof, the Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
any Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any such agent; provided that
such agent was appointed with due care by the Trustee.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee shall not be charged with knowledge of any
Default or Event of Default under Sections 6.1(c), 6.1(d), 6.1(e), 6.1(f),
6.1(g), 6.1(h) or 6.1(i) hereof (provided that the Trustee shall comply with the
automatic stay provisions of United States bankruptcy laws), of the identity of
any Restricted Subsidiary or of the existence of any Change of Control, Asset
Sale or Termination of Trading unless either (i) a Trust Officer shall have
actual knowledge thereof, or (ii) the Trustee shall have received notice thereof
in accordance with Sections 4.12 and 14.2 hereof from the Company or in
accordance with Section 14.2 hereof from any Holder of Convertible Notes.
(f) The Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(g) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in its discretion may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.
(h) The Trustee shall be under no obligation to exercise any of
the rights or powers vested by this Indenture at the request or direction of any
of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(i) The Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties hereunder.
61
As used throughout this Indenture, the term "actual knowledge" means
the actual fact or statement of knowing, without any duty to make any
investigation with regard thereto.
Section 7.3 Individual Rights of Trustee. The Trustee, any Paying
Agent or Registrar, in its individual or any other capacity, may become the
owner or pledgee of Convertible Notes and may otherwise deal with the Company or
its Affiliates with the same rights it would have if it were not Trustee, Paying
Agent or Registrar hereunder, as the case may be; provided that the Trustee must
in any event comply with Section 7.10 and Section 7.11 hereof.
Section 7.4 Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Convertible Note Guarantees, if any, or the Convertible
Notes, it shall not be accountable for the Company's use of the proceeds from
the Convertible Notes, and it shall not be responsible (a) for any statement of
the Company in this Indenture, including the recitals contained herein, or in
any document issued in connection with the sale of the Convertible Notes or in
the Convertible Notes other than the Trustee's certificate of authentication or
(b) for compliance by the Company with the Registration Rights Agreement.
Section 7.5 Notice of Defaults. Within 90 days after the occurrence
of any Default hereunder with respect to the Convertible Notes, the Trustee
shall transmit by mail to all Holders, as their names and addresses appear in
the Security Register, notice of such Default hereunder known to the Trustee,
unless such Default shall have been cured or waived; provided that, except in
the case of a Default in the payment of the principal of (or premium, if any) or
interest, if any, on any Convertible Note, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Trust Officers of the Trustee
in good faith determine that the withholding of such notice is in the interest
of Holders.
Section 7.6 Preservation of Information; Reports by Trustee to
Holders. (a) The Company shall furnish or cause to be furnished to the Trustee:
(i) semiannually, not less than 10 days prior to each
Interest Payment Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of the Record Date
immediately preceding such Interest Payment Date, and
(ii) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished;
provided that if and so long as the Trustee shall be the Registrar for the
Convertible Notes, no such list need be furnished with respect to the
Convertible Notes.
(b) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the
62
Trustee as provided in Section 7.6(a) hereof and the names and addresses of
Holders received by the Trustee in its capacity as Registrar, if so acting. The
Trustee may destroy any list furnished to it as provided in Section 7.6(a)
hereof upon receipt of a new list so furnished.
(c) Holders may communicate as provided in Section 312(b) of the
Trust Indenture Act with other Holders with respect to their rights under this
Indenture, the Convertible Note Guarantees, if any, or the Convertible Notes.
(d) Each Holder of Convertible Notes, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with this
Section 7.6, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under this Section 7.6.
(e) Within 60 days after May 15 of each year commencing with the
year 1997, the Trustee shall transmit by mail to all Holders of Convertible
Notes, a brief report dated as of such May 15 if and to the extent required
under Section 313(a) of the Trust Indenture Act.
(f) The Trustee shall comply with Sections 313(b) and 313(c) of
the Trust Indenture Act.
(g) A copy of each report described in Section 7.6(e) hereof
shall, at the time of its transmission to Holders, be filed by the Trustee with
each securities exchange, if any, upon which the Convertible Notes are then
listed, with the Commission and also with the Company. The Company shall
promptly notify the Trustee of any securities exchange upon which the
Convertible Notes are listed.
Section 7.7 Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The Company
shall reimburse the Trustee upon request for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents
and counsel. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust.
The Company shall indemnify the Trustee for, and hold it harmless
against, any and all loss, liability or expense (including reasonable attorneys'
fees) arising out of or incurred by it in connection with the acceptance or
administration of the trust created by this Indenture and the performance of its
duties hereunder, except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend any such claim and the
Trustee shall cooperate in the defense of such claim. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such
63
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
willful misconduct or negligence.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Convertible Notes on all money or
property held or collected by the Trustee other than money or property held in
trust to pay principal of, premium, if any, and interest on, particular
Convertible Notes.
The Company's payment obligations pursuant to this Section 7.7 shall
survive the resignation or removal of the Trustee and discharge of this
Indenture and any Convertible Note Guarantees. Subject to any other rights
available to the Trustee under applicable bankruptcy law, when the Trustee
incurs expenses after the occurrence of a Default specified in Section 6.1(g) or
Section 6.1(h) hereof, the expenses are intended to constitute expenses of
administration under bankruptcy law.
Section 7.8 Replacement of Trustee. (a) No resignation or removal of
the Trustee and no appointment of a successor Trustee pursuant to this Article
VII shall become effective until the acceptance of appointment by the successor
Trustee under this Section 7.8.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 calendar days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
of a majority in aggregate principal amount at Stated Maturity of the
outstanding Convertible Notes, delivered to the Trustee and to the Company.
(d) If at any time:
(i) The Trustee shall fail to comply with Section 310(b)
of the Trust Indenture Act after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Convertible Note for at
least six months, unless the Trustee's duty to resign is stayed in
accordance with the provisions of Section 310(b) of the Trust Indenture
Act; or
(ii) The Trustee shall cease to be eligible under Section
7.10 hereof and shall fail to resign after written request therefor by the
Company or by any such Holder; or
(iii) The Trustee shall become incapable of acting or a
decree or order for relief by a court having jurisdiction in the premises
shall have been
64
entered in respect of the Trustee in an involuntary case under the United
States bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or similar law; or a
decree or order by a court having jurisdiction in the premises shall have
been entered for the appointment of a receiver, custodian, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Trustee
or of its Property and assets or affairs, or any public officer shall take
charge or control of the Trustee or of its Property and assets or affairs
for the purpose of rehabilitation, conservation, winding up or liquidation;
or
(iv) The Trustee shall commence a voluntary case under the
United States bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or state bankruptcy, insolvency or similar law or
shall consent to the appointment of or taking possession by a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trustee or its Property and assets or affairs, or shall
make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Convertible Notes, or (ii) subject to Section 6.10
hereof, any Holder who has been a bona fide Holder of a Convertible Note for at
least six months may, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee for the Convertible Notes.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by or pursuant to a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by the Holders of a majority in aggregate principal amount at Stated
Maturity of the outstanding Convertible Notes delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with this Section 7.8, become the
successor Trustee and to that extent replace any successor Trustee appointed by
the Company. If no successor Trustee shall have been so appointed by the Company
or the Holders and shall have accepted appointment in the manner hereinafter
provided, any Holder that has been a bona fide Holder of a Convertible Note for
at least six months may, subject to Section 6.10 hereof, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such resignation, removal and appointment by first class mail,
postage prepaid, to the Holders as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Convertible Notes and the address of its Corporate Trust
Office.
65
(g) In the event of an appointment hereunder of a successor
Trustee, each such successor Trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts, and
duties of the retiring Trustee but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all Property and money held by such former
Trustee hereunder, subject to its Lien, if any, provided for in Section 7.7
hereof.
(h) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in Section 7.8(g) hereof.
(i) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article VII and under the Trust Indenture Act.
Section 7.9 Successor Trustee by Merger. Any corporation into which
the Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder; provided that such corporation shall be
otherwise qualified and eligible under this Article VII and under the Trust
Indenture Act, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Convertible Notes shall
have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Convertible Notes so authenticated
with the same effect as if such successor Trustee had itself authenticated such
Convertible Notes. In the event that any Convertible Notes shall not have been
authenticated by such predecessor Trustee, any such successor Trustee may
authenticate and deliver such Convertible Notes, in either its own name or that
of its predecessor Trustee, with the full force and effect which this Indenture
provides for the certificate of authentication of the Trustee.
Section 7.10 Eligibility; Disqualification. There shall at all times
be a Trustee hereunder which shall be
(i) a corporation organized and doing business under the
laws of the United States of America, any State or Territory thereof or the
District of Columbia, authorized under such laws to exercise corporate
trust powers, and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority, or
66
(ii) a corporation or other Person organized and doing
business under the laws of a foreign government that is permitted to act as
Trustee pursuant to a rule, regulation or order of the Commission,
authorized under such laws to exercise corporate trust powers, and subject
to supervision or examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to supervision or
examination applicable to United States institutional trustees, in either
case having a combined capital and surplus of at least $100,000,000.
If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 7.10, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible to serve as Trustee hereunder
pursuant to the provisions of this Section 7.10, it shall resign immediately in
the manner and with the effect specified in this Article VII.
The Indenture shall always have a Trustee which satisfies the
requirements of Section 310(a)(1), (2), and (5) of the Trust Indenture Act. If
the Trustee has or shall acquire any "conflicting interest" within the meaning
of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall
in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act. Nothing herein shall prevent the Trustee from filing with the
Commission the application referred to in the penultimate paragraph of Section
310(b) of the Trust Indenture Act.
Neither the Company, any Guarantor, any Subsidiary nor any Affiliate
of the Company shall serve as Trustee hereunder.
Section 7.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act.
A Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.
ARTICLE VIII
DEFEASANCE
Section 8.1 Company's Option to Effect Legal Defeasance or Covenant
Defeasance. The Company may elect, at its option, at any time, to have Section
8.2 or Section 8.3 hereof applied to the outstanding Convertible Notes (in whole
and not in part) upon compliance with the conditions set forth below in this
Article VIII, such election shall be evidenced by a Board Resolution delivered
to the Trustee.
Section 8.2 Legal Defeasance and Discharge. Upon the Company's
exercise of its option to have this Section 8.2 applied to the outstanding
Convertible Notes (in whole and not in part), the Company shall be deemed to
have been discharged from its obligations with respect to such Convertible Notes
as provided in this Section 8.2 on and after the date the conditions set forth
in
67
Section 8.4 hereof are satisfied (hereinafter called "Defeasance"). For this
purpose, such Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by such Convertible Notes and the
Company and the Guarantors, if any, shall be deemed to have satisfied all their
other obligations under such Convertible Notes, the Convertible Note Guarantees,
if any, and this Indenture (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), subject to the
following which shall survive until otherwise terminated or discharged
hereunder:
(a) the rights of Holders of such Convertible Notes to receive,
solely from the trust fund described in Section 8.4 hereof and as more fully set
forth in such Section 8.4 payments in respect of the principal of and any
premium and interest on such Convertible Notes when payments are due,
(b) the Company's obligations with respect to such Convertible
Notes under Sections 2.6, 2.7, 2.9, 4.2, 4.3, 4.4 and 11.3 hereof,
(c) the rights, powers, trusts, duties and immunities of the
Trustee under this Indenture,
(d) Article III hereof,
(e) this Article VIII, and
(f) Article XII hereof.
Subject to compliance with this Article VIII, the Company may exercise
its option to have this Section 8.2 applied to the outstanding Convertible Notes
(in whole and not in part) notwithstanding the prior exercise of its option to
have Section 8.3 hereof applied to such Convertible Notes.
Section 8.3 Covenant Defeasance. Upon the Company's exercise of its
option to have this Section 8.3 applied to the outstanding Convertible Notes (in
whole and not in part), (i) the Company shall be released from its obligations
under Sections 4.5 through 4.11, inclusive, Section 4.14, and any covenant added
to this Indenture subsequent to the Issue Date pursuant to Section 9.1 hereof,
(ii) the occurrence of any event specified in Section 6.1(c) or Section 6.1(d)
hereof, with respect to any of Sections 4.5 through 4.11, inclusive, Section
4.14, and any covenant added to this Indenture subsequent to the Issue Date
pursuant to Section 9.1 hereof, shall be deemed not to be or result in an Event
of Default, in each case with respect to such Convertible Notes as provided in
this Section 8.3 on and after the date the conditions set forth in Section 8.4
hereof are satisfied (hereinafter called "Covenant Defeasance"). For this
purpose, such Covenant Defeasance means that, with respect to such Convertible
Notes, the Company and the Guarantors, if any, may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such specified Section (to extent so specified in the case of Sections
6.1(c) and 6.1(d) hereof), whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document; but the
68
remainder of this Indenture, the Convertible Note Guarantees, if any, and such
Convertible Notes shall be unaffected thereby.
Section 8.4 Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to the application of Section 8.2 or Section
8.3 hereof to the outstanding Convertible Notes:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to the benefits of the Holders of such Convertible Notes, (i) money in an
amount, or (ii) U.S. Government Obligations which through the scheduled payment
of principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, money in an
amount, or (iii) a combination thereof, in each case sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or any such other qualifying trustee)
to pay and discharge, the principal of and any installment of interest on, such
Convertible Notes at the Stated Maturity thereof, in accordance with the terms
of this Indenture and such Convertible Notes.
(b) In the event of an election to have Section 8.2 hereof apply
to the outstanding Convertible Notes, the Company shall have delivered to the
Trustee an Opinion of Counsel stating that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (ii) since
the date of this Indenture, there has been a change in the applicable Federal
income tax law, in either case (i) or (ii) to the effect that, and based thereon
such opinion shall confirm that, the Holders of such Convertible Notes will not
recognize gain or loss for Federal income tax purposes as a result of the
deposit, Defeasance and discharge to be effected with respect to such
Convertible Notes and will be subject to Federal income tax on the same amount,
in the same manner and at the same times as would be the case if such deposit,
Defeasance and discharge were not to occur.
(c) In the event of an election to have Section 8.3 hereof apply
to the outstanding Convertible Notes, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of such Convertible
Notes will not recognize gain or loss for Federal income tax purposes as a
result of the deposit and Covenant Defeasance to be effected with respect to
such Convertible Notes and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if such
deposit and Covenant Defeasance were not to occur.
(d) No Default or Event of Default with respect to the
outstanding Convertible Notes shall have occurred and be continuing at the time
of such deposit after giving effect thereto and no Default or Event of Default
under Section 6.1(g) or 6.1(h) shall have occurred and be continuing on or prior
to the 91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 91st day).
69
(e) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming for the purpose of this clause (e) that all Convertible Notes are
in default within the meaning of such Act).
(f) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or coincided a default under, any other agreement or
instrument to which the Company or any Guarantor, if any, is a party or by which
it is bound.
(g) Such Defeasance or Covenant Defeasance shall not result in
the trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder.
(h) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
Section 8.5 Deposited Money and U.S. Government Obligations to be Held
in Trust; Miscellaneous Provisions. All money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee pursuant to Section
8.4 hereof in respect of the outstanding Convertible Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Convertible Notes and this Indenture, to the payment, either directly or through
any such Paying Agent as the Trustee may determine, to the Holders of such
Convertible Notes, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law. The Company
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to
Section 8.4 hereof or the principal and interest received in respect thereof
other than any such tax, fee or other charge which by law is for the account of
the Holders of outstanding Convertible Notes.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company Order
any money or U.S. Government Obligations held by it as provided in Section 8.4
hereof which, in the opinion of a nationally recognized firm of independent
public accounts expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof that would the be required to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be,
with respect to the outstanding Convertible Notes.
Section 8.6 Reinstatement. If the Trustee or Paying Agent is unable
to apply any money in accordance with this Article VIII with respect to any
Convertible Notes by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application then the obligations under this Indenture, the Convertible Note
Guarantees, if any, and such Convertible Notes from which the Company and any
Guarantor has been discharged or released pursuant to Section 8.2 or 8.3 hereof
shall be revived and reinstated as though
70
no deposit has occurred pursuant to this Article VIII with respect to such
Convertible Notes, until such time as the Trustee or Paying Agent is permitted
to apply all money held in trust pursuant to Section 8.5 hereof with respect to
such Convertible Notes in accordance with this Article VIII; provided that if
the Company or any Guarantor makes any payment of principal of or any premium,
interest, if any, on any such Convertible Note following such reinstatement of
its obligations, the Company or such Guarantor, as the case may be, shall be
subrogated to the rights (if any) of the Holders of such Convertible Notes to
receive such payment from the money so held in trust.
ARTICLE IX
AMENDMENTS
Section 9.1 Without Consent of Holders. The Company, the Guarantors,
if any, and the Trustee may, at any time, and from time to time, without notice
to or consent of any Holders of Convertible Notes, enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to evidence the succession of another Person to the Company
or a Guarantor, as applicable, and the assumption by such successor of the
covenants and obligations of the Company in this Indenture and the Convertible
Notes or such Guarantor contained in its Convertible Note Guarantee and this
Indenture; or
(b) to add to the covenants of the Company, for the benefit of
the Holders of all of the Convertible Notes, or to surrender any right or power
herein conferred upon the Company or the Guarantors, if any, by this Indenture;
or
(c) to add any additional Events of Default; or
(d) to provide for uncertificated Convertible Notes in addition
to or in place of Certificated Convertible Notes; or
(e) to evidence and provide for the acceptance of appointment
hereunder of a successor Trustee; or
(f) to cure any ambiguity herein, or to correct or supplement
any provision hereof which may be inconsistent with any other provision hereof
or to add any other provisions with respect to matters or questions arising
under this Indenture; provided that such actions shall not adversely affect the
interests of the Holders of Convertible Notes in any material respect; or
(g) to provide for Restricted Subsidiaries to become Guarantors
pursuant to Section 4.9 hereof and Article X hereof; or
(h) to secure the Convertible Notes; or
71
(i) to make provisions with respect to the conversion rights of
Holders pursuant to the requirements of Section 12.4 or Section 12.11 hereof; or
(j) to comply with the requirements of the Commission in order
to effect or maintain qualification of this Indenture under the Trust Indenture
Act.
Section 9.2 With Consent of Holders. With the consent of the Holders
of not less than a majority in aggregate principal amount of the outstanding
Convertible Notes, by Act of said Holders delivered to the Company, the
Guarantors, if any, and the Trustee, the Company, the Guarantors, if any, and
the Trustee may enter into one or more indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders; provided that no such supplemental indenture shall, without the
consent of the Holder of each outstanding Convertible Note:
(a) change the Stated Maturity of the principal of, or any
installment of interest, if any, on, any Convertible Note, or reduce the
Accreted Value or principal amount at Stated Maturity thereof (or any premium,
if any), or the interest thereon, that would be due and payable upon Stated
Maturity thereof, or reduce the Default Amount that would be due and payable
upon Stated Maturity thereof, or change the place of payment where, or the coin
or currency in which, any Convertible Note or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof; or
(b) reduce the percentage in principal amount, of the
outstanding Convertible Notes, the consent of whose Holders is necessary for any
such supplemental indenture or required for any waiver of compliance with
certain provisions of this Indenture or the Convertible Note Guarantees, if any,
or Defaults hereunder; or
(c) modify any of the provisions of Section 6.4 hereof, except
to increase any percentage set forth therein or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each outstanding Convertible Note affected thereby; or
(d) subordinate in right of payment, or otherwise subordinate,
the Convertible Notes or any Convertible Note Guarantees to any other
Indebtedness other than Senior Indebtedness; or
(e) modify any of the provisions of this Section 9.2, except to
increase any percentage set forth herein or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each outstanding Convertible Note affected thereby; or
(f) make any change in the provisions of Article XI, which would
adversely affect the Holders of the Convertible Notes; or
72
(g) adversely affect the rights of the Holders of the
Convertible Notes to convert such Convertible Notes; or
(h) modify the obligations of the Company to make offers to
purchase Convertible Notes upon a Change of Control or from the proceeds of
Asset Sales or upon a Termination of Trading.
It shall not be necessary for any Act of Holders under this Section
9.2 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Section 9.3 Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Convertible Notes
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
Section 9.4 Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Convertible Notes shall comply with the
Trust Indenture Act as then in effect.
Section 9.5 Revocation and Effect of Consents and Waivers. A consent
to an amendment, supplement or a waiver by a Holder of a Convertible Note shall
bind the Holder and every subsequent Holder of such Convertible Note or portion
of such Convertible Note that evidences the same debt as the consenting Holder's
Convertible Note, even if notation of the consent or waiver is not made on such
Convertible Note; provided that any such Holder or subsequent Holder may revoke
the consent or waiver as to such Holder's Convertible Note or portion of such
Convertible Note if the Trustee receives the notice of revocation before the
date the amendment, supplement or waiver become effective. After an amendment,
supplement or waiver becomes effective pursuant to this Article IX, it shall
bind every Holder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
Section 9.6 Notation on or Exchange of Convertible Notes. If a
supplemental indenture changes the terms of a Convertible Note, the Trustee may
require the Holder thereof to deliver such Convertible Note to the Trustee. The
Trustee may place an appropriate notation on such Convertible Note regarding the
changed terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for such Convertible Note shall
73
issue and the Trustee shall authenticate a new Convertible Note that reflects
the changed terms. Failure to make the appropriate notation or to issue a new
Convertible Note shall not affect the validity of such amendment of supplement.
Section 9.7 Trustee to Execute Supplemental Indentures. The Trustee
shall execute any supplemental indenture authorized pursuant to this Article IX
if such supplemental indenture does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but
shall not be required to, execute such supplemental indenture. In executing any
supplemental indenture, the Trustee shall be entitled to received indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.1
hereof) shall be fully protected in relying upon, an Officers' Certificate
(which need only cover the matters set forth in clause (a) below) and an Opinion
of Counsel provided by the Company stating that:
(a) such supplemental indenture is authorized or permitted by
this Indenture and that all conditions precedent to the execution, delivery and
performance of such supplemental indenture have been satisfied;
(b) the Company and the Guarantors, if any, have all necessary
corporate power and authority to execute and deliver the supplemental indenture
and that the execution, delivery and performance of such supplemental indenture
has been duly authorized by all necessary corporate action of the Company and
the Guarantors, if any;
(c) the execution, delivery and performance of the supplemental
indenture do not conflict with, or result in the breach of or constitute a
default under any of the terms, conditions or provisions of (i) this Indenture,
(ii) the charter documents and by-laws of the Company or any Guarantor, or (iii)
any material agreement or instrument to which the Company or any Guarantor is
subject;
(d) to the best knowledge and belief of legal counsel writing
such Opinion of Counsel, the execution, delivery and performance of the
supplemental indenture do not conflict with, or result in the breach of any of
the terms, conditions or provisions of (i) any law or regulation applicable to
the Company or any Guarantor, or (ii) any material order, writ, injunction or
decree of any court or governmental instrumentality applicable to the Company or
any Guarantor;
(e) such supplemental indenture has been duly and validly
executed and delivery by the Company and the Guarantors, if any, and this
Indenture together with such supplemental indenture constitutes a legal, valid
and binding obligation of the Company and the Guarantors, if any, enforceable
against the Company and the Guarantors, as applicable, in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and general equitable principles; and
(f) this Indenture together with such amendment or supplement
complies with the Trust Indenture Act.
74
Section 9.8 Solicitation of Consents. Neither the Company nor any of
its Subsidiaries nor any of their Affiliates shall, directly or indirectly, pay
or cause to be paid any consideration, whether by way of interest, fees or
otherwise, to any Holders of any Convertible Notes for or as an inducement to
any consent, waiver or amendment of any of the terms or provisions of this
Indenture, the Convertible Note Guarantees, if any, or the Convertible Notes,
unless such consideration is offered to be paid or agreed to be paid to all
Holders of the Convertible Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
ARTICLE X
CONVERTIBLE NOTE GUARANTEES
Section 10.1 Convertible Note Guarantees. (a) Subject to the
provisions of this Article X, each Restricted Subsidiary of the Company, if any,
which in accordance with Section 4.9 hereof is required in the future to become
a Guarantor and to guarantee the obligations of the Company and the Guarantors
under the Convertible Notes and the Convertible Note Guarantees, upon execution
of a supplemental indenture, hereby jointly and severally, irrevocably and
unconditionally guarantees to the Trustee and to each Holder of a Convertible
Note authenticated and delivered by the Trustee irrespective of the validity or
enforceability of this Indenture, the Convertible Notes, or the obligations of
the Company and any other Guarantors, under this Indenture that: (i) the
principal of, premium, if any, and any interest, if any, on the Convertible
Notes (including, without limitation, any interest that accrues after the filing
of a proceeding of the type described in Sections 6.1(g) and (h)) and any fees,
expenses and other amounts owing under this Indenture will be duly and
punctually paid in full when due, whether at Stated Maturity, by acceleration,
call for redemption, upon a Change of Control Offer, Asset Sale Offer, exercise
of a repurchase right upon a Termination of Trading, purchase or otherwise, and
interest on the overdue principal and (to the extent permitted by law) interest,
if any, on the Convertible Notes and any other amounts due in respect of the
Convertible Notes, if lawful, and all other obligations of the Company and the
Guarantors, if any, to the Holders of the Convertible Notes under this Indenture
and the Convertible Notes, whether now or hereafter existing, will be promptly
paid in full or performed, all strictly in accordance with the terms hereof, of
the Convertible Notes and of the Convertible Note Guarantees, if any; and (ii)
in case of any extension of time of payment or renewal of any Convertible Notes
or any of such other obligations, the same will be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at Stated Maturity, by acceleration, call for redemption, upon a Change
of Control Offer, Asset Sale Offer, exercise of a repurchase right upon a
Termination of Trading, purchase or otherwise. If payment is not made when due
of any amount so guaranteed for whatever reason, each Guarantor shall be jointly
and severally obligated to pay the same individually whether or not such failure
to pay has become an Event of Default which could cause acceleration pursuant to
Section 6.2. Each Guarantor agrees that this is a guarantee of payment and not
a guarantee of collection. An Event of Default under this Indenture or the
Convertible Notes shall constitute an Event of Default under this Convertible
Note Guarantee, and shall entitle the Holders to accelerate the obligations of
each Guarantor hereunder in the same manner and to the same extent as the
obligations of the Company. This Convertible Note Guarantee is intended to be
75
superior to or pari passu in right of payment with all Indebtedness of the
Guarantors, other than the Senior Note Guarantees, if any, of such Guarantors,
and each Guarantor's obligations are independent of any obligation of the
Company or any other Guarantor.
(b) Each Guarantor hereby agrees that its obligations hereunder
shall be joint and several, absolute, irrevocable and unconditional,
irrespective of the validity, regularity or enforceability of the Convertible
Notes, this Indenture, or any other document relating thereto, the absence of
any action to enforce the same, any waiver or consent by any Holder with respect
to any provisions hereof or thereof, any release of any other Guarantor, the
recovery of any judgment against the Company or any other Person, any action to
enforce the same or any other circumstance (including, without limitation, any
statute of limitations) which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each Guarantor hereby waives promptness,
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company or any other Person, any right
to require a proceeding first against the Company or any other Person, protest,
notice and all demands whatsoever and covenants that its Convertible Note
Guarantee will not be discharged except by complete performance of the
obligations contained in the Convertible Notes, this Indenture and this
Convertible Note Guarantee. If any Holder or the Trustee is required by any
court or otherwise to return to the Company or to any Guarantor, or any
receiver, trustee, assignee, liquidator or similar official under any applicable
bankruptcy or insolvency or other similar law any amount paid by the Company or
such Guarantor to the Trustee or such Holder, this Convertible Note Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and
effect.
(c) Until such time as the Convertible Notes and the other
obligations of the Company guaranteed hereby have been satisfied in full, each
Guarantor hereby irrevocably waives any claim or other rights that it may now or
hereafter acquire against the Company or any other Guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor's obligations
under this Convertible Note Guarantee, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of the Holders or the Trustee
against the Company or any other Guarantor, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from the Company or any other
Guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim, remedy or right.
If any amount shall be paid to such Guarantor in violation of the preceding
sentence at any time prior to the later of the payments in full of the
Convertible Notes and all other amounts payable under this Indenture, this
Convertible Note Guarantee and the Stated Maturity of the Convertible Notes,
such amount shall be held in trust for the benefit of the Holders and the
Trustee and shall forthwith be paid to the Trustee to be credited and applied to
the Convertible Notes and all other amounts payable under this Convertible Note
Guarantee, whether matured or unmatured, in accordance with the terms of this
Indenture, or to be held as collateral for any obligations or other amounts
payable under this Convertible Note Guarantee thereafter arising. Each Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Indenture and that the waiver set
forth in this Section 10.1(c) is knowingly made in contemplation of such
benefits. Each Guarantor further agrees that,
76
as between it, on the one hand, and the Holders and the Trustee, on the other
hand, (x) subject to this Article X, the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article VI for the purposes of this
Convertible Note Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
guaranteed hereby as provided in Article VI, such obligations (whether or not
due and payable) shall further then become due and payable by the Guarantors for
the purposes of this Convertible Note Guarantee.
(d) A Guarantor that makes a distribution or payment under a
Convertible Note Guarantee shall be entitled to contribution from each other
Guarantor in a pro rata amount based on the Adjusted Net Assets of each such
other Guarantor for all payments, damages and expenses incurred by that
Guarantor in discharging the Company's obligations with respect to the
Convertible Notes and this Indenture, or any other Guarantor with respect to its
Convertible Note Guarantee, so long as the exercise of such right does not
impair the rights of the Holders of the Convertible Notes under the Convertible
Note Guarantees.
(e) The Company shall cause each Restricted Subsidiary which,
after the date of this Indenture, is required pursuant to Section 4.10(a) hereof
to become a Guarantor to (a) execute and deliver to the Trustee a supplemental
indenture in form and substance reasonably satisfactory to the Trustee which
subjects such Restricted Subsidiary to the provisions of this Indenture as a
Guarantor, and (b) deliver to the Trustee an Opinion of Counsel to the effect
that such supplemental indenture has been duly authorized and executed by such
Person and constitutes the legal, valid, binding and enforceable obligation of
such Person (subject to such customary exceptions concerning debtor's rights and
equitable principles as may be acceptable to the Trustee in its reasonable
discretion) and containing such other matters as the Trustee may reasonably
request.
Section 10.2 Limitation of Guarantor's Liability. Each Guarantor and,
by its acceptance hereof, each beneficiary hereof, hereby confirms that it is
its intention that the Convertible Note Guarantee by such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of the United States
Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act, or any other bankruptcy, receivership, insolvency, liquidation or
other similar legislation or legal principles under any applicable foreign law
to the extent applicable to any Convertible Note Guarantees. To effectuate the
foregoing intention, each such Guarantor hereby irrevocably agrees that the
obligation of such Guarantor under its Convertible Note Guarantee under this
Article X shall be limited to the lesser of (a) an amount equal to such
Guarantor's Adjusted Net Assets as of the date such Guarantee is executed and
delivered or (b) the maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws and after giving effect to any collections from, rights
to receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under this
Article X result in the obligations of such Guarantor in respect of such maximum
amount not constituting a fraudulent conveyance or fraudulent transfer or not
otherwise being void, voidable or unenforceable under any bankruptcy,
reorganization, receivership, insolvency, liquidation or other similar
legislation or legal principles under any applicable foreign law.
77
Section 10.3 Execution and Delivery of Convertible Note Guarantees.
To further evidence its Convertible Note Guarantee set forth in Section 10.1
hereof, each Guarantor hereby agrees that a notation of such Convertible Note
Guarantee may be, but is not required to be, endorsed on each Convertible Note
authenticated and delivered by the Trustee and executed by either manual or
facsimile signature of an authorized officer of such Guarantor. Each Guarantor
hereby agrees that its Convertible Note Guarantee set forth in Section 10.1
hereof shall remain in full force and effect notwithstanding any failure to
endorse on each Convertible Note a notation of such Convertible Note Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or a
Convertible Note no longer holds that office at the time the Trustee
authenticates such Convertible Note or at any time thereafter, such Guarantor's
Convertible Note Guarantee of such Convertible Note shall be valid nevertheless.
The delivery of any Convertible Note by the Trustee, after the authentication
thereof hereunder, whether or not endorsed with a notation of the Convertible
Note Guarantee, shall constitute due delivery of any Convertible Note Guarantee
set forth in this Indenture on behalf of such Guarantor.
Section 10.4 When a Guarantor May Merge, etc. No Guarantor shall
consolidate with or merge with or into (whether or not such Guarantor is the
surviving person) another corporation, Person or entity whether or not
affiliated with such Guarantor (but excluding any consolidation or merger if the
surviving corporation is no longer a Subsidiary) unless (i) subject to the
provisions of Section 10.5 hereof, the Person formed by or surviving any such
consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor pursuant to a supplemental indenture in form
reasonably satisfactory to the Trustee under the Convertible Notes and this
Indenture and (ii) immediately after giving effect to such transaction, no
Default or Event of Default exists. In connection with any such consolidation
or merger, the Trustee shall be entitled to receive an Officers' Certificate and
an Opinion of Counsel stating that such consolidation or merger is permitted by
this Section 10.4.
Section 10.5 Release of a Guarantor. (a) Upon the sale or other
transfer of all of the Capital Stock of a Guarantor to any Person that is not an
Affiliate of the Company in compliance with the terms of this Indenture
(including, without limitation, Section 4.8 hereof), such Guarantor shall be
deemed automatically and unconditionally released and discharged from all
obligations under this Indenture without any further action required on the part
of the Trustee or any Holder; provided that the Net Cash Proceeds of such sale
or other disposition are applied in accordance with Section 4.8 of this
Indenture as if such sale or disposition were an Asset Sale and in accordance
with the applicable provisions of this Indenture. The Trustee shall deliver an
appropriate instrument or instruments evidencing such release upon receipt of a
request of the Company accompanied by an Officers' Certificate and Opinion of
Counsel certifying as to the compliance with this Section 10.5(a) and the other
applicable provisions of this Indenture.
(b) Notwithstanding the foregoing, any Convertible Note
Guarantee by a Restricted Subsidiary shall be automatically and unconditionally
released and discharged upon the release or discharge of the guarantee of
Guaranteed Indebtedness which resulted in the creation of such Convertible Note
Guarantee pursuant to Section 4.9 hereof, except a discharge or release by, or
as a result of, payment under such guarantee. The Trustee shall deliver an
appropriate instrument
78
or instruments evidencing such release upon receipt of a request of the Company
accompanied by an Officers' Certificate and Opinion of Counsel certifying as to
compliance with this Section 10.5(b) and the other applicable provisions of this
Indenture.
ARTICLE XI
SUBORDINATION OF CONVERTIBLE NOTES AND
CONVERTIBLE NOTE GUARANTEES
Section 11.1 Convertible Notes and Convertible Note Guarantees
Subordinated to Senior Indebtedness. The Company and the Guarantors covenant
and agree, and each Holder of a Convertible Note, by acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth and except as otherwise set forth in this Article, the Indebtedness
represented by the Convertible Notes and this Indenture (including the
Convertible Note Guarantees) and the payment of the principal of and premium, if
any, and interest on each and all of the Convertible Notes and of any amounts
due in respect of any Convertible Notes and this Indenture (including the
Convertible Note Guarantees and any payments thereon made or to be made by a
Guarantor under its Convertible Note Guarantee), are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness.
Section 11.2 Payment Over of Proceeds Upon Dissolution, etc. In the
event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding,
relative to the Company or other Obligor or to its creditors, as such, or to a
substantial part of its assets, or (b) any proceeding for the liquidation,
dissolution or other winding up of the Company or any other Obligor, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (c) any assignment for the benefit of creditors or any other marshalling of
assets and liabilities of the Company or any other Obligor, then and in any such
event the holders of Senior Indebtedness shall be entitled to receive payment in
full of all amounts due or to become due on or in respect of all Senior
Indebtedness, or provision shall be made for such payment in money or money's
worth, before the Holders of the Convertible Notes are entitled to receive any
payment or distribution of any kind or character, whether in cash, property or
securities, on account of principal of or premium, if any, or interest on the
Convertible Notes and on account of any amounts due in respect of any
Convertible Notes and any payment thereon made or to be made by a Guarantor
under its Convertible Note Guarantee, and to that end until the Senior
Indebtedness is paid in full the holders of Senior Indebtedness shall be
entitled to receive, for application to the payment thereof, any payment or
distribution of any kind or character, whether in cash, property or securities,
including any such payment or distribution which may be payable or deliverable
by reason of the payment of any other indebtedness of the Company or any other
Obligor being subordinated to the payment of the Convertible Notes or the
Convertible Note Guarantees, as applicable, which may be payable or deliverable
in respect of the Convertible Notes or the Convertible Note Guarantees, as
applicable, in any such case, proceeding, dissolution, liquidation or other
winding up, assignment for the benefit of creditors or other marshalling of
assets and liabilities of the Company or any other Obligor.
79
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Convertible Note shall have received
any payment or distribution of assets of the Company or any other Obligor of any
kind or character, whether in cash, property or securities, prohibited by the
foregoing, including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of the Company or
of a Guarantor being subordinated to the payment of the Convertible Notes or a
Convertible Note Guarantee, as applicable, before all Senior Indebtedness is
paid in full or payment thereof provided for, and if such fact shall, at or
prior to the time of such payment or distribution, have been made known to a
Trust Officer of the Trustee in writing or such Holder, as the case may be, then
and in such event such payment or distribution shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or distribution of
assets of the Company or any other Guarantor for application to the payment of
all Senior Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include securities of the Company or any
other Guarantor or other Person as reorganized or readjusted, or securities of
the Company or any other Guarantor or any other Person which are Capital Stock
or subordinated in right of payment to all Senior Indebtedness which may at the
time be outstanding to substantially the same extent as, or to a greater extent
than, the Convertible Notes or the Convertible Note Guarantees are so
subordinated as provided in this Article. The consolidation of the Company
with, or the merger of the Company into, another Person or the liquidation or
dissolution of the Company following the conveyance or transfer of its
Properties and assets substantially as an entirety to another person upon the
terms and conditions set forth in Article V shall not be deemed a dissolution,
winding up, liquidation, reorganization, assignment for the benefit of creditors
or marshalling of assets and liabilities of the Company for the purposes of this
Section if the Person formed by such consolidation or into which the Company is
merged or which acquires by conveyance or transfer such properties and assets
substantially as an entirety, as the case may be, shall, as part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article V. Similarly, the consolidation of a Guarantor with, or the
merger of a Guarantor into, another Person or the liquidation or dissolution of
a Guarantor to the extent permitted by this Indenture shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshalling of assets and liabilities of a Guarantor for the
purposes of this Section.
Section 11.3 Prior Payment to Senior Indebtedness upon Acceleration
of Convertible Notes. In the event that any Convertible Notes are declared due
and payable before their Stated Maturity, then and in such event the holders of
Senior Indebtedness outstanding at the time such Convertible Notes so become due
and payable shall be entitled to receive payment in full in cash of all amounts
due on or in respect of such Senior Indebtedness before the Holders of the
Convertible Notes are entitled to receive any payment (including any payment
which may be payable by reason of the payment of any other indebtedness of the
Company or any other Obligor being subordinated to the payment of the
Convertible Notes or the Convertible Note Guarantees, as applicable) by the
80
Company or any other Obligor on account of the principal of or premium, if any,
or interest, on or other amounts due in respect of, the Convertible Notes or the
Convertible Note Guarantees, as applicable, or on account of the purchase or
other acquisition of Convertible Notes, except for payments in Capital Stock or
securities which are subordinated in right of payment to all Senior
Indebtedness, which may at the time be outstanding, to substantially the same
extent as, or to a greater extent than, the Convertible Notes or the Convertible
Note Guarantees are so subordinated, as provided in this Article.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Convertible Note prohibited
by the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to a Trust Officer of the
Trustee in writing, or such Holder, as the case may be, then and in such event
such payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 11.2 would be applicable.
Section 11.4 No Payment When Senior Indebtedness in Default. (a)
In the event (i) and during the continuation of any default in the payment of
principal of, premium, if any, on, interest, if any, on, or other amounts due in
respect of, any Senior Indebtedness, whether at the date of a required payment,
maturity, upon mandatory prepayment, redemption or otherwise, or (ii) that any
event of default with respect to any Senior Indebtedness shall have occurred and
be continuing and shall have resulted in such Senior Indebtedness becoming or
being declared due and payable prior to the date on which it would otherwise
have become due and payable unless and until such event of default shall have
been cured or waived in writing or shall have ceased to exist and such
acceleration shall have been rescinded or annulled or if any judicial proceeding
is pending with respect to such event of default with respect to the Senior
Indebtedness, then no payment (including any payment which may be payable by
reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Convertible Notes) shall be made by the
Company on account of the principal of, premium, if any, interest on, or other
amounts due in respect of, the Convertible Notes or on account of the purchase,
redemption or other acquisition of Convertible Notes, except for payments in
Capital Stock or securities which are subordinated in right of payment to all
Senior Indebtedness, which may at the time be outstanding, to substantially the
same extent as, or to a greater extent than, the Convertible Notes or the
Convertible Note Guarantees are so subordinated, as provided in this Article.
(b) In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Convertible Note
prohibited by the foregoing provisions of this Section, and if such fact shall,
at or prior to the time of such payment, have been made known to a Trust Officer
of the Trustee in writing or to such Holder, as the case may be, then and in
such event such payment shall be paid over and delivered forthwith to the
Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 11.2 would be applicable.
81
Section 11.5 Payment Permitted If No Default. Nothing contained in
this Article or elsewhere in this Indenture or in any of the Convertible Notes
shall prevent (a) the Company or the Guarantors, at any time except during the
pendency of any case, proceeding, dissolution, liquidation, or other winding up,
assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 11.2 or under the conditions
described in Section 11.3 or 11.4, from making payments at any time of principal
of and premium, if any, or interest on the Convertible Notes, or other amounts
due in respect of the Convertible Notes, or the Convertible Note Guarantees, as
applicable, or (b) the application by the Trustee of any money deposited with it
hereunder to the payment of or on account of the principal of, premium, if any,
or interest on, or other amounts due in respect of, the Convertible Notes or
retention of such payment by the Holders, if, at the time of such application by
the Trustee, it did not have knowledge that such payment would have been
prohibited by the provisions of this Article.
Section 11.6 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the prior payment in full of all amounts due on or in respect of
Senior Indebtedness, the Holders of the Convertible Notes shall be subrogated to
the extent of the payments or distributions made to the holders of such Senior
Indebtedness pursuant to the provisions of this Article to the rights of the
holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of, premium, if any, on, interest on, and any other amounts due in
respect of, the Convertible Notes shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Convertible Notes or the Trustee would be entitled except for the provisions of
this Article, and no payments over pursuant to the provisions of this Article to
the holders of Senior Indebtedness by Holders of the Convertible Notes or the
Trustee, shall, as among the Company and any Guarantor, as the case may be, its
respective creditors other than holders of Senior Indebtedness and the Holders
of the Convertible Notes, be deemed to be a payment or distribution by the
Company or any Guarantor, as applicable, to or on account of the Senior
Indebtedness.
Section 11.7 Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Convertible Notes on the one
hand and the holders of Senior Indebtedness on the other hand. Nothing contained
in this Article or elsewhere in this Indenture or in the Convertible Notes is
intended to or shall (a) impair, as among the Company or any Guarantor, its
respective creditors other than holders of Senior Indebtedness and the Holders
of the Convertible Notes, the obligation of the Company or such Guarantor, which
is absolute and unconditional, to pay to the Holders of the Convertible Notes,
the principal of, premium, if any, on, interest on, and any other amounts due in
respect of, the Convertible Notes or in respect of the Convertible Note
Guarantees, as applicable, as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Company or the Guarantors, if any, of the Holders of the Convertible Notes and
creditors of the Company other than the holders of Senior Indebtedness; or (c)
prevent the Trustee or the Holder of any Convertible Notes from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the
82
holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
Section 11.8 Trustee to Effectuate Subordination. Each Holder of a
Convertible Note by his acceptance thereof authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided for in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes.
Section 11.9 No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or any Guarantor or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company or any Guarantor with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with. No provision of the subordination provisions contained
in this Article may be amended without the consent of a majority in principal
amount at Stated Maturity of Senior Indebtedness as provided by the terms of
such Senior Indebtedness.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Convertible Notes, without incurring responsibility to the Holders of the
Convertible Notes and without impairing or releasing the subordination provided
in this Article or the obligations hereunder of the Holders of the Convertible
Notes to be holders of Senior Indebtedness, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the time of payment,
of, or renew or alter, Senior Indebtedness, or otherwise amend or supplement in
any manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iii) release any person liable in any manner for
the collection of Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company or any Guarantor and any other Person.
Section 11.10 Notice to Trustee. The Company and each Guarantor shall
give prompt written notice to the Trustee of any fact known to the Company or
such Guarantor which would prohibit the making of any payment to or by the
Trustee in respect of the Convertible Notes or the Convertible Note Guarantees,
as applicable. Notwithstanding the provisions of this Article or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Convertible Notes or the Convertible Note
Guarantees unless and until a Trust Officer of the Trustee shall have received
written notice thereof from the Company, any Guarantor or a holder of Senior
Indebtedness or from any trustee therefor; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Section 7.1, shall be
entitled in all respects to assume that no such facts exist; provided that if a
Trust Officer of the Trustee shall not have received the notice provided for in
this Section at least three Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of, premium, if any, or interest on,
and any other amounts due in respect of any
83
Convertible Note), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such money was received and
shall not be affected by any notice to the contrary which may be received by it
within three Business Days prior to such date.
Subject to the provisions of Section 7.1, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such person under this Article, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
Section 11.11 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 7.1, and the
Holders of the Convertible Notes shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered in writing to the Trustee or to the Holders of Convertible Notes, for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of the Senior Indebtedness and other indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article.
Section 11.12 Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Convertible
Notes or to the Company or to any other Person cash, property or securities to
which holders of Senior Indebtedness shall be entitled by virtue of this Article
or otherwise.
Section 11.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payment to, the
Trustee under or pursuant to Section 7.7.
84
Section 11.14 Article Applicable to Paying Agents. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided that Section 11.13 shall not apply to the
Company or any Affiliate of the Company if it or such Affiliate acts as Paying
Agent.
Section 11.15 Certain Conversions Deemed Payment. For the purposes of
this Article only, (a) the issuance and delivery of junior securities upon
conversion of Convertible Notes in accordance with Article XII shall not be
deemed to constitute a payment or distribution on account of the principal of,
premium, if any, on, interest on, or other amounts due in respect of,
Convertible Notes or on account of the purchase or other acquisition of
Convertible Notes and (b) the payment, issuance or delivery of cash, property or
securities (other than junior securities) upon conversion of a Convertible Note
shall be deemed to constitute payment on account of the principal of such
Convertible Note. For the purposes of this Section, the term "junior securities"
means (i) shares of any class of Capital Stock of the Company and (ii)
securities of the Company or a Guarantor which are subordinated in right of
payment to all Senior Indebtedness which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Convertible Notes are so subordinated as provided
in this Article. Nothing contained in this Article or elsewhere in this
Indenture or in the Convertible Notes or the respective Convertible Note
Guarantees is intended to or shall impair, as among the Company, its respective
creditors other than holders of Senior Indebtedness and the Holders of the
Convertible Notes, the right, which is absolute and unconditional, of the Holder
of any Convertible Note to convert such Convertible Notes in accordance with and
subject to the provisions of Article XII.
ARTICLE XII
CONVERSION OF CONVERTIBLE NOTES
Section 12.1 Conversion Privilege and Conversion Price. Subject to and
upon compliance with the provisions of this Article, at the option of the Holder
thereof, any Convertible Note or any portion of the principal amount thereof
which equals $1,000 or any integral multiple thereof may be converted at any
time on or after 9:00 a.m. New York City time on March 13, 1998 at the Accreted
Value thereof (or of such portion thereof) as of the date of conversion thereof,
if such date of conversion is prior to January 13, 2001, or the principal amount
at Stated Maturity thereof (or of such portion thereof) if the date of
conversion thereof is on or after January 13, 2001, into fully paid and
nonassessable shares (calculated as to each conversion to the nearest 1/100 of a
share) of Common Stock, at the Conversion Price, determined as hereinafter
provided, in effect at the time of conversion. Such conversion right shall
expire at the close of business on the Business Day next preceding the Stated
Maturity of principal. In case a Convertible Note or portion thereof is called
for redemption, such conversion right in respect of the Convertible Note or
portion so called shall expire at the close of business on the Business Day next
preceding the Redemption Date, unless the Company defaults in making the payment
due upon redemption.
85
The price at which Common Stock of the Company shall be delivered upon
conversion (herein called the "Conversion Price") shall be equal to $10.121 per
share.
In the event that the Company consummates a sale or sales of any class
of Capital Stock for an amount, individually or in the aggregate, in excess of
$5,000,000 (each, a "Reset Event") and at the time of such sale or sales, the
equity valuation of the Company based upon such sale or sales (as evidenced by a
Board Resolution delivered to the Trustee) is less than $122,500,000, then on
the date of the consummation of any such Reset Event (the "Reset Date"), the
Conversion Price shall be adjusted (the "Conversion Reset") to equal 115 percent
of the price (the "Conversion Reset Price") at which such sale or sales were
consummated, provided, that if such sale or sales are consummated more than nine
months after a Qualified Public Offering at a total equity valuation of the
Company of at least $122,500,000, then no Conversion Reset will be required. In
the event that the Conversion Price before such calculation shall be equal to or
less than the Conversion Reset Price, then no additional adjustment to the
Conversion Price shall be made.
Notwithstanding anything to the contrary contained herein, no Holder
shall be entitled to convert any of its Convertible Notes into Common Stock of
the Company to the extent that any such conversion would constitute a violation
of any applicable securities laws of the United States, or any other applicable
jurisdiction. Any certificates evidencing Common Stock of the Company issued
upon the conversion of Convertible Notes shall bear such legends, including
legends reflecting restrictions on transfer required in order to maintain
compliance with the provisions of the Securities Act, as the Company shall deem
to be necessary or appropriate.
Section 12.2 Exercise of Conversion Privileges. In order to
exercise the conversion privilege, the Holder of any Convertible Note shall
surrender such Convertible Note, duly endorsed or assigned to the Company or in
blank, at any office or agency of the Company maintained pursuant to Section
4.2, accompanied by written notice to the Company in the form provided in the
Convertible Note (or such other notice as is acceptable to the Company) at such
office or agency that the Holder elects to convert such Convertible Note or, if
less than the entire principal amount thereof is to be converted, the portion
thereof to be converted. In the case of any Convertible Note which is
surrendered for conversion during the period from the close of business on any
Record Date through and including the next succeeding Interest Payment Date
(other than any Convertible Note whose Maturity is prior to such Interest
Payment Date), interest that is payable on such Interest Payment Date shall be
payable on such Interest Payment Date notwithstanding such conversion, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name that Convertible Note is registered at the close of
business on such Record Date; provided that Convertible Notes surrendered for
conversion subsequent to any such Record Date shall (except in the case of
Convertible Notes or portions thereof which have been called for redemption on a
Redemption Date within such period) be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Company of an amount equal
to the interest payable on such Interest Payment Date on the principal amount
being surrendered for conversion. Except as provided in the immediately
preceding sentence, in the case of any Convertible Note which is converted (a)
interest whose Stated Maturity is after the date of conversion of such
Convertible
86
Note shall not be payable, and (b) no payment or adjustment shall be made upon
conversion on account of any dividends on the Common Stock of the Company issued
upon conversion.
Convertible Notes shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Convertible Notes
for conversion in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Convertible Notes as Holders shall cease, and the
Person or Persons entitled to receive the Common Stock of the Company issuable
upon conversion shall be treated for all purposes as the record holder or
holders of such Common Stock as and after such time. As promptly as practicable
on or after the conversion date, the Company shall issue and shall deliver at
any office or agency of the Company maintained pursuant to Section 4.2 a
certificate or certificates for the number of full shares of Common Stock of the
Company issuable upon conversion, together with payment in lieu of any fraction
of a share, as provided in Section 12.3.
In the case of any Convertible Note which is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company, a
new Convertible Note or Convertible Notes of authorized denominations in
aggregate principal amount equal to the unconverted portion of the principal
amount of such Convertible Note.
Section 12.3 Fractions of Shares. No fractional share of Common Stock
of the Company shall be issued upon conversion of Convertible Notes. If more
than one Convertible Note shall be surrendered for conversion at one time by the
same Holder, the number of full shares of Common Stock which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Convertible Notes (or specified portions thereof) so
surrendered. Instead of any fractional share of such Common Stock which would
otherwise be issuable upon conversion of any Convertible Note or Convertible
Notes (or specified portions thereof), the Company shall pay a cash adjustment
in respect of such fractional share in an amount equal to such fraction
multiplied by the Closing Price at the close of business on the day of
conversion (or, if such day is not a Trading Day, on the Trading Day immediately
preceding such day).
Section 12.4 Adjustment of Conversion Price.
(a) In case the Company shall make a dividend or other distribution
on any class or series of Capital Stock of the Company exclusively in Common
Stock of the Company (other than a distribution referred to in paragraph (c) of
this Section), the Conversion Price in effect at the opening of business on the
day following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number of
shares of Common Stock of the Company outstanding at the close of business on
the date fixed for such determination and the denominator shall be the sum of
such number of shares of Common Stock and the total number of shares of Common
Stock constituting such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day following the
date fixed for such determination. In case the Company shall make a dividend or
other distribution on its Common Stock in shares of
87
its Capital Stock other than Common Stock, and such dividend or distribution
would not otherwise require reduction of the Conversion Price pursuant to
paragraph (d), then the Conversion Price and the number and kind of shares of
Capital Stock of the Company issuable upon the conversion of a Convertible Note
(as in effect immediately prior to such dividend or distribution) shall be
proportionately adjusted, so that the Holder of any Convertible Note thereafter
converted may receive the aggregate number and kind of shares of Capital Stock
of the Company that such Holder would have owned immediately following such
dividend or distribution if such Convertible Note had been converted immediately
prior thereto. For the purpose of this paragraph (a), the amount of Common
Stock of the Company at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of such Common Stock.
The Company shall not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
(b) Subject to the last sentence of paragraph (e) of this Section, in
case the Company shall make a dividend or other distribution on its Common Stock
consisting exclusively of, or shall otherwise issue to all holders of its Common
Stock, rights, options or warrants entitling the holders thereof to subscribe
for or purchase Common Stock or securities convertible into or exchangeable for
Common Stock at a price per share (determined on an as-converted or as-exercised
basis if the rights, options or warrants pertain to securities convertible into
or exchangeable for Common Stock) which is less than the Current Market Price
(determined as provided in paragraph (h) of this Section) on the date fixed for
the determination of stockholders entitled to receive such rights, options or
warrants, the Conversion Price in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by multiplying
such Conversion Price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock which the
aggregate of the offering price (including the minimum consideration payable
upon conversion or exchange of securities convertible into or exchangeable for
Common Stock) of the total number of shares of such Common Stock so offered for
subscription or purchase would purchase at such Current Market Price and the
denominator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination plus the number of
shares of Common Stock so offered for subscription or purchase, such reduction
to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
paragraph (b), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of fractions of
shares of such Common Stock. The Company shall not issue any rights, options or
warrants in respect of shares of Common Stock held in the treasury of the
Company.
(c) In case outstanding shares of Common Stock of the Company shall
be subdivided into a greater number of shares of such Common Stock, the
Conversion Price in effect at the opening of business on the day following the
day upon which such subdivision becomes effective shall be proportionately
reduced, and, conversely, in case outstanding shares of such Common Stock shall
be combined into a smaller number of shares of Common Stock, the Conversion
Price in effect at the opening of business on the day following the day upon
which such combination
88
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which subdivision or combination
becomes effective.
(d) (i) Subject to the last sentence of this paragraph (d)(i) and the
last sentence of paragraph (e) of this Section, in case the Company shall, by
dividend or otherwise, distribute to all holders of its Common Stock evidences
of its Indebtedness, shares of any class of its Capital Stock, cash or other
assets (including securities, but excluding any rights, options or warrants
referred to in paragraph (b) of this Section, excluding any dividend or
distribution paid exclusively in cash out of consolidated current or retained
earnings as shown on the books of the Company prepared in accordance with GAAP
(other than any Extraordinary Cash Dividend (as hereinafter defined)) and
excluding any dividend or distribution referred to in paragraph (a) or (c) of
this Section), the Conversion Price shall be reduced by multiplying the
Conversion Price in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to such distribution
by a fraction of which the numerator shall be the Current Market Price
(determined as provided in paragraph (h) of this Section) on such date less the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution) on such date of the
portion of the evidences of Indebtedness, shares of Capital Stock, cash and
other assets to be distributed applicable to one share of Common Stock and the
denominator shall be such Current Market Price, such reduction to become
effective immediately prior to the opening of business on the day following such
date. If the Board of Directors determines the fair market value of any
distribution for purposes of this paragraph (d)(i) by reference to the actual or
when-issued trading market for any securities comprising part or all of such
distribution, it must in doing so consider those prices in such market over the
same period used in computing the Current Market Price pursuant to paragraph (h)
of this Section, to the extent possible. For purposes of this paragraph (d), an
"Extraordinary Cash Dividend" shall be that portion, if any, of the aggregate
amount of all cash dividends paid in any fiscal year which exceeds $25,000,000.
For purposes of this paragraph (d), any dividend or distribution that includes
shares of Common Stock of the Company, rights, options or warrants to subscribe
for or purchase shares of such Common Stock or securities convertible into or
exchangeable for shares of Common Stock shall be deemed to be (x) a dividend or
distribution of the evidences of Indebtedness, cash, assets or shares of Capital
Stock other than shares of Common Stock, such rights, options or warrants or
such convertible or exchangeable securities (making any conversion price
reduction required by this paragraph (d)(i)) immediately followed by (y) in the
case of shares of Common Stock or such rights, options or warrants, a dividend
or distribution thereof (making any further conversion price reduction required
by paragraph (a) and (b) of this Section, except any shares of Common Stock
included in such dividend or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such determination" within the
meaning of paragraph (a) of this Section), or (z) in the case of such
convertible or exchangeable securities, a dividend or distribution of the number
of shares of Common Stock as would then be issuable upon the conversion or
exchange thereof, whether or not the conversion or exchange of such securities
is subject to any conditions (making any further conversion price reduction
required by paragraph (a) of this Section, except that the shares deemed to
constitute such dividend or distribution shall not be deemed "outstanding at the
close of business on the date fixed for such determination" within the meaning
of paragraph (a) of this Section).
89
(ii) In case the Company shall issue its Common Stock
for a consideration per share less than the Current Market Price
(determined as provided in paragraph (h) of this Section), the Conversion
Price shall be reduced by multiplying the Conversion Price in effect
immediately prior to the close of business on the date on which the Company
fixes the offering price of such additional Common Stock by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus a fraction equal to the aggregate consideration received
by the Company from the issuance of such additional shares of Common Stock
over the Current Market Price on the date on which the Company fixes the
offering price of such additional shares of Common Stock (determined as
provided in paragraph (h) of this Section), and the denominator of which
shall be the number of shares of Common Stock outstanding immediately after
giving effect to such issuance. The reduction in the Conversion Price
provided for in the preceding sentence shall not apply to issuances of
securities in transactions described in clauses (i) through (xi) of Section
15(d)(ii) of the Warrant Agreement;
(iii) In case the Company shall issue any securities
convertible into or exchangeable for its Common Stock for a consideration
per share (including the minimum consideration per share payable upon
conversion or exchange of any securities convertible into or exchangeable
for Common Stock) of Common Stock initially deliverable upon conversion or
exchange of such securities less than the Current Market Price (determined
as provided in paragraph (h) of this Section), the Conversion Price shall
be reduced by multiplying the Conversion Price in effect immediately prior
to the close of business on the date on which the Company fixes the
offering price of such additional shares by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of such securities plus a fraction equal
to the aggregate consideration received for the issuance of such securities
(including the minimum consideration per share payable upon conversion or
exchange of any securities convertible into or exchangeable for such Common
Stock) over the Current Market Price on the date on which the Company fixes
the offering price of such additional shares (determined as provided in
paragraph (h) of this Section), and the denominator of which shall be the
number of shares outstanding immediately prior to the issuance of such
securities plus the maximum number of shares deliverable upon conversion of
or in exchange for such securities at the initial conversion or exchange
rate. The reduction in the Conversion Price provided for in the preceding
sentence shall not apply to issuances of securities in transactions
described in clauses (i) through (ix) of Section 15(d)(iii) of the Warrant
Agreement.
(e) The reclassification of Common Stock of the Company into
securities which include securities other than such Common Stock (other than any
reclassification upon a consolidation or merger to which Section 12.11 applies)
shall be deemed to involve (i) a distribution of such securities other than such
Common Stock to all holders of such Common Stock (and the
90
effective date of such reclassification shall be deemed to be "the date fixed
for the determination of stockholders entitled to such distribution" within the
meaning of paragraph (d)(i) of this Section), and (ii) a subdivision or
combination, as the case may be, of the number of shares of Common Stock of the
Company outstanding immediately prior to such reclassification into the number
of shares of Common Stock outstanding immediately thereafter (and the effective
date of such reclassification shall be deemed to be "the day upon which such
subdivision becomes effective" or "the day upon which such combination becomes
effective," as the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of paragraph (c) of this
Section). Rights, options or warrants issued by the Company to all holders of
the Common Stock entitling the holders thereof to subscribe for or purchase
shares of such Common Stock (either initially or under certain circumstances),
which rights, options or warrants (i) are deemed to be transferred with such
Common Stock, (ii) are not exercisable and (iii) are also issued in respect of
future issuances of such Common Stock, in each case in clauses (i) through (iii)
until or upon the occurrence of a specified event or events ("Trigger Event"),
shall for purposes of this Section 12.4 not be deemed issued until the
occurrence of the earliest Trigger Event.
(f) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of the Common Stock of the Company cash (excluding any
cash that is distributed as part of a distribution referred to in paragraph
(d)(i) of this Section in an aggregate amount that, together with (i) the
aggregate amount of any other distributions to all holders of such Common Stock
made exclusively in cash within the 12 months preceding the date fixed for the
determination of shareholders entitled to such distribution and in respect of
which no Conversion Price adjustment pursuant to paragraph (d)(i) or this
paragraph (f) has been made previously and (ii) the aggregate of any cash plus
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors) as of such date of determination of consideration payable in respect
of any tender offer by the Company or a Restricted Subsidiary for all or any
portion of its Common Stock, and any purchase by the Company of its Common Stock
in the open market, consummated within the 12 months preceding such date of
determination and in respect of which no Conversion Price adjustment pursuant to
paragraph (f) of this Section has been made previously, exceeds 12.5% of the
product of the Current Market Price (determined as provided in paragraph (h) of
this Section) on such date of determination times the number of shares of Common
Stock of the Company outstanding on such date, the Conversion Price shall be
reduced by multiplying the Conversion Price in effect immediately prior to the
close of business on such date of determination by a fraction of which the
numerator shall be the Current Market Price (determined as provided in paragraph
(h) of this Section) on such date less the amount of cash to be distributed at
such time applicable to one share of such Common Stock and the denominator shall
be such Current Market Price, such reduction to become effective immediately
prior to the opening of business on the day after such date.
(g) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock of the Company shall be
consummated, or in case the Company shall purchase shares of Common Stock in the
open market, the Conversion Price shall be reduced by multiplying the Conversion
Price in effect immediately prior to the Expiration Time by a fraction of which
(x) the numerator shall be the product of the Current Market Price
91
(determined as provided in paragraph (h) of this Section) times the number of
shares of such Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time and (y) the denominator shall be the sum of (A)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders upon consummation of such tender or exchange offer, or
upon such purchase, and (B) the product of such Current Market Price times such
number of outstanding shares at the Expiration Time minus the number of shares
accepted for payment in such tender or exchange offer, or so purchased (the
"Purchased Shares"). For the purpose of this paragraph, "Expiration Time" means
either the last time that tenders may be made pursuant to a tender offer or
exchanges may be made pursuant to an exchange offer, or the time of an agreement
to purchase shares in the open market, as the case may be. Any reduction in the
Conversion Price pursuant to this paragraph shall be made immediately following
the close of business on the last Trading Day used to compute Current Market
Price; provided, that, such reduction shall be deemed to have become effective
immediately prior to the opening of business on the day following the Expiration
Time. To the extent that a Holder converts Convertible Notes prior to the
conclusion of the period for which Current Market Price is to be calculated, any
adjustment in the amount of Common Stock of the Company issuable upon exercise
of such Convertible Note shall inure to the benefit of the Holder of such
Convertible Note at the close of business on the first Trading Day following the
Expiration Time. In no event shall the Exercise Price be increased as a result
of the consummation of any of the transactions contemplated by this paragraph
(g).
(h) For the purpose of any computation under this paragraph and
paragraphs (b) and (d), of this Section, the current market price per share of
Common Stock (the "Current Market Price") on any date shall be deemed to be the
average of the daily Closing Prices for the 30 consecutive Trading Days
commencing 45 Trading Days before the date in question. Notwithstanding anything
to the contrary contained in this paragraph, (i) if the "ex" date for any event
(other than the issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to paragraph (a), (b),
(c) or (d) above occurs on or after the 15th Trading Day prior to the date in
question and prior to the "ex" date for the issuance or distribution requiring
such computation, the Closing Price for each Trading Day prior to the "ex" date
for such other event shall be adjusted by multiplying such Closing Price by the
same fraction by which the Conversion Price is so required to be adjusted as a
result of such other event, (ii) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the Conversion Price pursuant to paragraph (a), (b), (c) or (d), above occurs
on or after the "ex" date for the issuance or distribution requiring such
computation and on or prior to the date in question, the Closing Price for each
Trading Day on and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of such other event,
and (iii) if the "ex" date for the issuance or distribution requiring such
computation is on or prior to the date in question, after taking into account
any adjustment required pursuant to clause (ii) of this proviso, the Closing
Price for each Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market value on the date in
question (as determined by the Board of Directors in a manner consistent with
any determination of such value for purposes of paragraph (d) of this Section,
whose determination shall be conclusive and described in a Board Resolution) of
the evidences of Indebtedness, shares of Capital Stock or assets being
distributed applicable to one share of Common
92
Stock of the Company as of the close of business on the day before such "ex"
date. If on any date there has not been a Public Equity Offering of if there is
no Closing Price available for the Common Stock of the Company on any date, the
Current Market Price shall be determined (a) in good faith by the Board of
Directors of the Company and certified in a board resolution, based on the most
recently completed arms-length transaction between the Company and a person
other than an Affiliate (as defined in Rule 405 of the Securities Act of 1933,
as amended) of the Company and the closing of which occurs on such date or
within such a six-month period of (b) if no transaction shall have occurred with
the six-month period preceding such date or if such transaction is in excess of
$1 million, by an Independent Financial Expert appointed in the manner provided
for in paragraph (g)(i) of this Section 12.4.
(i) (i) If any event shall occur as to which the other
provisions of this Section 12.4 are not strictly applicable but the failure to
make any adjustment would have the effect of depriving Holders of the benefit of
all or a portion of the conversion rights in respect of any Convertible Note in
accordance with the essential intent and principles of this Section 12.4, then,
in each such case, the Company shall appoint an Independent Financial Expert,
which shall give its opinion upon the adjustment, if any, on a basis consistent
with the essential intent and principles established in this Section 12.4
necessary to preserve, without dilution, such conversion rights. Upon receipt of
such opinion, the Company will promptly mail a copy thereof to the Holders and
shall make the adjustments described therein. As used herein, an "Independent
Financial Expert" is a firm (A) which does not, and whose directors, officers
and employees or Affiliates do not, have a direct or indirect financial interest
in the Company and (B) which, in the judgment of the Board of Directors, is
otherwise independent and qualified to perform the task for which it is to be
engaged.
(ii) The Company will not, by amendment of its certificate
of incorporation or through any consolidation, merger, reorganization,
transfer of assets, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of the Convertible Notes, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the
rights of the Holders thereof against dilution or other impairment. Without
limiting the generality of the foregoing, the Company (i) will take all
such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable shares of its
Common Stock on the conversion of the Convertible Notes from time to time
outstanding and (ii) will not take any action which results in any
adjustment of the Conversion Price if the total number of shares of its
Common Stock issuable after the action upon the conversion of all of the
Convertible Notes would exceed the total number of shares of such Common
Stock then authorized by the Company's certificate of incorporation and
available for the purposes of issue upon such exercise.
(j) The Company may, but shall not be obligated to, make such
reductions in the Conversion Price, in addition to those required by paragraphs
(a), (b), (c), (d) and (e) of this Section, as it considers to be advisable in
order that any event treated for United States federal
93
income tax purposes as a dividend of stock or stock rights shall not be taxable
to the recipients or, if that is not possible, to diminish any income taxes that
are otherwise payable because of such event.
(k) No adjustment in the Conversion Price shall be required unless
such adjustment (plus any other adjustments not previously made by reason of
this paragraph (k) would require an increase or decrease of at least 1 percent
in the Conversion Price; provided that any adjustments which by reason of this
paragraph (k) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment.
(l) Notwithstanding any other provision of this Section 12.4, no
adjustment to the Conversion Price shall reduce the Conversion Price below the
then par value per share of the Common Stock of the Company, and any such
purported adjustment shall instead reduce the Conversion Price to such par
value. The Company hereby covenants not to take any action to increase the par
value per share of its Common Stock.
(m) In any case in which this Section 12.4 shall require that an
adjustment in the Conversion Price be made effective as of or immediately after
a record date for a specified event, the Company may elect to defer until the
occurrence of such event (i) issuing to the Holder of any Convertible Note
exercised after such record date the shares of Common Stock and other Capital
Stock of the Company, if any, issuable upon such exercise over and above the
shares of Common Stock and other Capital Stock of the Company, if any, issuable
upon such exercise on the basis of the Conversion Price prior to such adjustment
and (ii) paying to such Holder any amount in cash in lieu of a fractional share
pursuant to Section 12.3 hereof; provided that the Company shall deliver to such
Holder a due ▇▇▇▇ or other appropriate instrument evidencing such Holder's right
to receive such additional shares of Common Stock, other Capital Stock and cash
upon the occurrence of the event requiring such adjustment.
(n) When No Adjustment Required.
(i) No adjustment need be made for a transaction referred
to in subsections (a), (b), (c) or (d) of this Section 12.4 if Holders are to
participate in the transaction on a basis and with notice that the Board of
Directors determines to be fair and appropriate in light of the basis and notice
on which holders of Common Stock of the Company participate in the transaction.
(ii) No adjustment need be made for a change in the par
value, or from par value to no par value, or from no par value to par value, of
the Common Stock of the Company.
(iii) No adjustment need to be made in respect of (x) the
issuance of the Senior Note Contingent Warrants and Old Convertible Note
Contingent Warrants or the exercise of any such Warrants.
(iv) No adjustment need to be made in respect of the
issuance of any Additional Warrants (as defined in the Old Convertible Note
94
Indenture) or convertible securities pursuant to Section 4.15 of the Old
Convertible Note Indenture or the exercise of such Additional Warrants or
the conversion of such convertible securities.
(v) No adjustment need be made in respect of (x) any
adjustment in the warrant exercise price of the warrants issued pursuant to
the 1996 Warrant Agreement as contemplated by such 1996 Warrant Agreement
or (y) any adjustment in the warrant exercise price of the Additional
Warrants as contemplated thereby.
(vi) No adjustment need be made in respect of (1) the
exercise of the warrants issued pursuant to the 1997 Warrant Agreement, as
contemplated by the 1997 Warrant Agreement; (2) the exercise of warrants
issued pursuant to the Consent Warrant Agreement, as contemplated by the
Consent Warrant Agreement; (3) the conversion of shares of the Company's
9.0% Cumulative Convertible Pay-In-Kind Preferred Stock, Series A; and (4)
any adjustment of the warrant exercise price of the warrants issued
pursuant to the 1997 Warrant Agreement or the warrants issued pursuant to
the Consent Warrant Agreement in accordance with their respective terms or
any adjustment in the conversion price of the Old Convertible Notes in
accordance with the terms of the Old Convertible Note Indenture.
Section 12.5 Notice of Adjustments of Conversion Price. Whenever the
Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price in
accordance with Section 12.4 and shall prepare a certificate signed by the
Treasurer or Chief Financial Officer of the Company setting forth the adjusted
Conversion Price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed (with a copy
to the Trustee) at each office or agency maintained for the purpose of
conversion of Convertible Notes pursuant to Section 4.2; and
(b) a notice stating that the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price shall forthwith be prepared, and
as soon as practicable after it is prepared, such notice shall be furnished by
the Company to the Trustee and mailed by the Company at its expense to all
Holders at their last addresses as they shall appear in the Security Register.
Section 12.6 Notice of Certain Corporate Action. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable (i) otherwise than exclusively in cash
or (ii) exclusively in cash in an amount that would require a Conversion Price
adjustment pursuant to paragraph (d) (i) of Section 13.4; or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights, options or warrants to subscribe for or purchase any
shares of Capital Stock of any
95
class or of any other rights (excluding shares of Capital Stock or options for
Capital Stock issued pursuant to a benefit plan for employees, officers or
directors of the Company); or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of the outstanding shares of such
Common Stock), or of any consolidation, merger or share exchange to which the
Company is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender or
exchange offer (other than an exchange offer contemplated by clause (c) above)
for all or a portion of the outstanding shares of Common Stock (or shall amend
any such tender or exchange offer to change the maximum number of shares being
sought or the amount or type of consideration being offered (including by
exchange) therefor);then the Company shall cause to be filed at each office or
agency maintained pursuant to Section 4.2, and shall cause to be mailed to all
Holders at their last addresses as they shall appear in the Note Register, at
least 21 days (or 11 days in any case specified in clause (a), (b) or (e) above)
prior to the applicable record, effective or expiration date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or granting of rights, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of its Common Stock of record who will be entitled to such dividend,
distribution, rights, options or warrants are to be determined, (y) the date on
which such reclassification, consolidation, merger, share exchange, sale,
transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of its Common
Stock of record shall be entitled to exchange their Common Stock for securities,
cash or other property deliverable upon such reclassification, consolidation,
merger, share exchange, sale, transfer, dissolution, liquidation or winding up,
or (z) the date on which such tender or exchange offer (other than an exchange
offer contemplated by clause (y) above) commenced, the date on which such tender
or exchange offer is scheduled to expire unless extended, the consideration
offered and the other material terms thereof (or the material terms of any
amendment thereto). Neither the failure to give any such notice nor any defect
therein shall affect the legality or validity of any action described in clauses
(a) through (e) of this Section 12.6.
Section 12.7 Company to Reserve Common Stock. The Company shall at all
times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock or out of its Common Stock held in
treasury, for the purpose of effecting the conversion of Convertible Notes, the
full number of shares of its Common Stock then issuable upon the conversion of
all outstanding Convertible Notes.
Section 12.8 Taxes on Conversions. The Company will pay any and all
original issuance, transfer, stamp and other similar taxes that may be payable
in respect of the issue or delivery of shares of its Common Stock on conversion
of Convertible Notes pursuant hereto. The Company
96
shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issue and delivery of shares of its Common Stock
in a name other than that of the Holder of the Convertible Note or Convertible
Notes to be converted, and no such issue or delivery shall be made unless and
until the person requesting such issue has paid to the Company the amount of any
such tax, or has established to the satisfaction of the Company that such tax
has been paid.
Section 12.9 Covenant as to Common Stock.
(a) The Company covenants that all shares of its Common Stock
which may be issued upon conversion of Convertible Notes will upon issue be
validly issued, fully paid and nonassessable.
(b) The Company shall from time to time take all action
necessary so that the Common Stock which may be issued upon conversion of
Convertible Notes, immediately upon their issuance (or, if such Common Stock is
subject to restrictions on transfer under the Securities Act, upon their resale
pursuant to an effective registration statement filed under the Securities Act),
will be listed on the principal securities exchanges, interdealer quotation
systems and markets, if any, on which other shares of Common Stock of the
Company are then listed or quoted.
Section 12.10 Cancellation of Converted Convertible Notes. All
Convertible Notes delivered for conversion shall be delivered to the Trustee to
be canceled by or at the direction of the Trustee, which shall dispose of the
same as provided in Section 2.10.
Section 12.11 Provisions as to Consolidation, Merger or Sale of
Assets. In case of any consolidation of the Company with, or merger of the
Company into, any other person, any merger of another person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of the Company)
or any sale or transfer of all or substantially all of the assets of the
Company, the Person formed by such consolidation or resulting from such merger
or which acquires such assets, as the case may be, shall execute and deliver to
the Trustee a supplemental indenture providing that the Holder of each
Convertible Note then outstanding shall have the right thereafter, during the
period such Convertible Note shall be convertible as specified in Section 12.1,
but subject to Section 12.12 hereof, to convert such Convertible Note only into
the kind and amount of securities, cash and other Property, if any, receivable
upon such consolidation, merger, sale or transfer by a holder of the amount of
Common Stock of the Company into which such Convertible Note might have been
converted immediately prior to such consolidation, merger, sale or transfer,
assuming such holder of Common Stock (i) is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer
(provided that if the kind or amount of securities, cash and other Property
receivable upon such consolidation, merger, sale or transfer is not the same for
each share of Common Stock held immediately prior to such consolidation, merger,
sale or transfer by other than a Constituent Person or an Affiliate thereof and
in respect of which such rights
97
of election shall not have been exercised ("nonelecting share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by each
nonelecting share shall be deemed to be the kind and amount so receivable per
share by a plurality of the nonelecting shares). Such supplemental indenture
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The above
provisions of this Section shall similarly apply to successive consolidations,
mergers, sales or transfers.
ARTICLE XIII
SATISFACTION AND DISCHARGE
Section 13.1 Satisfaction and Discharge. This Indenture shall upon
the request of the Company cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of Convertible Notes herein
expressly provided for, the Company's obligations under Sections 7.7 and 13.4
hereof, and the Company's, the Trustee's and the Paying Agent's obligations
under Section 13.3 hereof) and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture when
(a) either
(i) all Convertible Notes theretofore authenticated and
delivered (other than (A) Convertible Notes which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 2.7
and (B) Convertible Notes for whose payment money has been deposited in
trust with the Trustee or any Paying Agent and thereafter paid to the
Company or discharged from such trust) have been delivered to the Trustee
for cancellation; or
(ii) all such Convertible Notes not theretofore delivered
to the Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated
Maturity within one year, or
(C) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of clause (A), (B) or (C) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
such purpose money or U.S. Government Obligations in an amount sufficient (as
certified by an independent public
98
accountant designated by the Company) to pay and discharge the entire
indebtedness on such Convertible Notes not theretofore delivered to the Trustee
for cancellation, for principal (and premium, if any) and interest, if any, to
the date of such deposit (in the case of Convertible Notes which have become due
and payable) or the Stated Maturity or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums
then due and payable hereunder by the Company;
(c) no Default or Event of Default with respect to the
Convertible Notes shall have occurred and be continuing on the date of such
deposit and after giving effect to such deposit; and
(d) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
Company's obligations in Sections 2.3, 2.4, 2.6, 2.7, 2.11, 7.7, 7.8, 13.2, 13.3
and 13.4 and the conversion provisions contained in Article XII and the
Trustee's and Paying Agent's obligations in Section 13.3 shall survive until the
Convertible Notes are no longer outstanding. Thereafter, only the Company's
obligations in Sections 7.7, 13.3 and 13.4 and the Trustee's and Paying Agent's
obligations in Section 13.3 shall survive.
In order to have money available on a payment date to pay principal or
interest on the Convertible Notes, the U.S. Government Obligations shall be
payable as to principal or interest at least one Business Day before such
payment date in such amounts as will provide the necessary money. U.S.
Government Obligations shall not be callable at the issuer's option.
Section 13.2 Application of Trust Money. All money deposited with
the Trustee pursuant to Section 13.1 shall be held in trust and, at the written
direction of the Company, be invested prior to maturity in U.S. Government
Obligations, and applied by the Trustee in accordance with the provisions of the
Convertible Notes and this Indenture, to the payment, either directly or through
any Paying Agent as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium if any) and interest for the payment of which
money has been deposited with the Trustee; but such money need not be segregated
from other funds except to the extent required by law.
Section 13.3 Repayment to the Company. The Trustee and the Paying
Agent shall promptly pay to the Company upon written request any excess money or
securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due; provided, that the Company shall
99
have either caused notice of such payment to be mailed to each Holder of the
Convertible Notes entitled thereto no less than 30 days prior to such repayment
or within such period shall have published such notice in a financial newspaper
of widespread circulation published in The City of New York, including, without
limitation, The Wall Street Journal. After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
Section 13.4 Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with Section
13.1 by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's and Guarantors' obligations under
this Indenture, the Convertible Notes and the Convertible Note Guarantees, if
any, shall be revived and reinstated as though no deposit has occurred pursuant
to Section 13.1 until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with Section
13.2; provided that if the Company or the Guarantors have made any payment of
interest on or principal of any Convertible Notes because of the reinstatement
of their obligations, the Company or such Guarantors shall be subrogated to the
rights of the Holders of such Convertible Notes to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Trust Indenture Act Controls. If and to the extent
that any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by, or with another provision (an "incorporated provision")
included in this Indenture by operation of, Sections 310 to 318, inclusive, of
the Trust Indenture Act, such imposed duties or incorporated provision shall
control. If any provisions of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or excluded,
as the case may be.
Section 14.2 Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first class mail, postage prepaid,
addressed as follows: if to the Company: USN Communications, Inc., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq., Vice President and General Counsel, with a copy to Skadden, Arps,
Slate, Meager & ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇; if to the Trustee: ▇▇▇▇▇▇ Trust and Savings Bank, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Indenture Trustee Administration.
The Company or the Trustee, by notice to the other, many designate
additional or different addresses for subsequent notices or communications. Any
notice or communication mailed to a Holder shall be sent to the Holder by first
class mail, postage prepaid, at the Holder's address as
100
it appears in the Security Register and shall be duly given if so sent within
the time prescribed. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed to the Company, the Trustee or a Holder
in the manner provided above, it is duly given, whether or not the addressee
receives it, but shall not be effective in the case of the Trustee unless it is
actually received. In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable to give notice by mail
to Holders, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
Section 14.3 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee: (a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and (b) an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Section 14.4 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture (other than pursuant to Section 4.12 hereof)
shall include: (a) a statement that the individual making such certificate or
opinion has read such covenant or condition; (b) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based; (c) a statement
that, in the opinion of such individual, such person has made such examination
or investigation as is necessary to enable such person to express an informed
opinion as to whether or not such covenant or condition has been complied with;
and (d) a statement as to whether or not, in the opinion of such individual,
such covenant or condition has been complied with.
Section 14.5 Communications by Holders with Other Holders. Holders
may communicate pursuant to Section 312(b) of the Trust Indenture Act with other
Holders with respect to their rights under this Indenture or the Convertible
Notes. The Company, the Guarantors, the Trustee, the Registrar and anyone else
shall have the protection of Section 312(c) of the Trust Indenture Act.
Section 14.6 Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Holders, and any
Registrar and Paying Agent may make reasonable rules for their functions;
provided that no such rule shall conflict with terms of this Indenture or the
Trust Indenture Act.
Section 14.7 Payments on Business Days. If a payment hereunder is
scheduled to be made on a date that is not a Business Day, payment shall be made
on the next succeeding date that is a Business Day, and no interest shall accrue
with respect to that payment during the intervening period. If a regular record
date is a date that is not a Business Day, such record date shall not be
affected.
101
Section 14.8 Governing Law. THIS INDENTURE AND THE CONVERTIBLE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, EXCEPT WITH REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
Section 14.9 No Recourse Against Others. No director, officer,
employer, incorporator or stockholder of the Company, as such, shall have any
liability for any obligations of the Company under the Convertible Notes or this
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation, solely by reason of its status as a director,
officer, employee, incorporator or stockholder of the Company. By accepting a
Convertible Note, each Holder waives and releases all such liability (but only
such liability) as part of the consideration for issuance of such Convertible
Note to such Holder.
Section 14.10 Successors. All agreements of the Company in this
Indenture and the Convertible Notes shall bind its successors and assigns
whether so expressed or not. All agreements of the Trustee in this Indenture
shall bind its successors and assigns whether so expressed or not.
Section 14.11 Counterparts. This Indenture may be executed in any
number of counterparts and by the parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
Section 14.12 Table of Contents; Headings. The table of contents,
cross-reference table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
of provisions hereof.
Section 14.13 Severability. In case any provision in this Indenture
or in the Convertible Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 14.14 Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
Section 14.15 Independent Covenants. Each covenant contained in this
Indenture is intended by the parties to be a separate and independent covenant,
the compliance or noncompli ance with such to be determined independently and
without regard to whether the Company or a Restricted Subsidiary is in
compliance with another covenant contained in this Indenture.
102
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
USN COMMUNICATIONS, INC.
By
---------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title Chairman of the Board,
President and Chief Executive
Officer
[Corporate Seal]
Attest
----------------------
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Trustee
By
---------------------------
Name:
Title:
[Corporate Seal]
Attest
----------------------
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ )
) SS.:
COUNTY OF ▇▇▇▇ )
On the ___ day of January, 1988, before me personally came J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, to
me known, who being by me duly sworn, did depose and say that he is Chairman of
the Board, President and Chief Executive Officer of USN Communications, Inc.,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed his name thereto
by like authority.
Notary Public
State of Illinois
My commission expires
[Seal]
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ )
) SS.:
COUNTY OF ▇▇▇▇ )
On the ___ day of January, 1998, before me personally came J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, to
me known, who being by me duly sworn, did depose and say that he is Chairman of
the Board, President and Chief Executive Officer of USN Communications, Inc.,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed his name thereto
by like authority.
Notary Public
State of Illinois
My commission expires
[Seal]
105