1
EXHIBIT 4.4
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MIDCOM COMMUNICATIONS INC.
Issuer
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8 1/4% Convertible Subordinated Notes due 2003
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INDENTURE
Dated as of August 22, 1996
_________________________________
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company
as Trustee
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2
CROSS-REFERENCE TABLE1
TRUST INDENTURE ACT SECTION INDENTURE SECTION
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.08; 9.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.06, 12.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.03, 4.04, 12.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.05
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.11
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
N.A. means not applicable
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1 This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. OTHER DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.04. RULES OF CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II
THE NOTES
SECTION 2.01. FORM AND DATING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.02. EXECUTION AND AUTHENTICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.05. NOTEHOLDER LISTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.06. TRANSFER AND EXCHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.07. REPLACEMENT NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.08. OUTSTANDING NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.09. TREASURY SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.10. TEMPORARY NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.11. CANCELLATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.12. DEFAULTED INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.13. CUSIP NUMBERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE III
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.03. NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.06. NOTES REDEEMED IN PART . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.07. OPTIONAL REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV
COVENANTS
SECTION 4.01. PAYMENT OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.02. MAINTENANCE OF OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.03. SEC REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.04. COMPLIANCE CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.05. CORPORATE EXISTENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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SECTION 4.06. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.07. CHANGE OF CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.08. STAY, EXTENSION AND USURY LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE V
CONVERSION
SECTION 5.01 CONVERSION PRIVILEGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.02 MANNER OF EXERCISE OF CONVERSION PRIVILEGE . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.03 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.04 ADJUSTMENT OF CONVERSION PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.05 NOTICE TO HOLDERS PRIOR TO CERTAIN CORPORATE ACTIONS . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.06 RESERVATION OF SHARES OF COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.07 TAXES UPON CONVERSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.08 COVENANTS AS TO COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.09 CONSOLIDATION OR MERGER OR SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.10 DISCLAIMER OF RESPONSIBILITY FOR CERTAIN MATTERS . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.11 CANCELLATION OF CONVERTED NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.12 VOLUNTARY REDUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VI
SUBORDINATION
SECTION 6.01. AGREEMENT TO SUBORDINATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.03. DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.04. ACCELERATION OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.05. WHEN DISTRIBUTION MUST BE PAID OVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.06. NOTICE BY COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.07. SUBROGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.08. RELATIVE RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.11. RIGHTS OF TRUSTEE AND PAYING AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.12. AUTHORIZATION TO EFFECT SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.13. ARTICLE APPLICABLE TO PAYING AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.14. SENIOR INDEBTEDNESS ENTITLED TO RELY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VII
SUCCESSORS
SECTION 7.01. MERGER, CONSOLIDATION OR SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.02. SUCCESSOR CORPORATION SUBSTITUTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.03. PURCHASE OPTION ON CHANGE OF CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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ARTICLE VIII
DEFAULTS AND REMEDIES
SECTION 8.01. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.02. ACCELERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 8.03. OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 8.04. WAIVER OF PAST DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 8.05. CONTROL BY MAJORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.06. LIMITATION ON SUITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.07. RIGHTS OF NOTEHOLDERS TO RECEIVE PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.08. COLLECTION SUIT BY TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.09. TRUSTEE MAY FILE PROOFS OF CLAIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.10. PRIORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.11. UNDERTAKING FOR COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE IX
THE TRUSTEE
SECTION 9.01. DUTIES OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 9.02. RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 9.03. INDIVIDUAL RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9.04. TRUSTEE'S DISCLAIMER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9.05. NOTICE OF DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9.06. REPORTS BY TRUSTEE TO NOTEHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9.07. COMPENSATION AND INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9.08. REPLACEMENT OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9.09. SUCCESSOR TRUSTEE BY MERGER, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.10. ELIGIBILITY; DISQUALIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE X
DISCHARGE OF INDENTURE
SECTION 10.01. TERMINATION OF COMPANY'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 10.02. REPAYMENT TO COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XI
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 11.01. WITHOUT CONSENT OF NOTEHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.02. WITH CONSENT OF NOTEHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.03. COMPLIANCE WITH TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 11.04. REVOCATION AND EFFECT OF CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 11.05. NOTATION ON OR EXCHANGE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 11.06. TRUSTEE PROTECTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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ARTICLE XII
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 12.02. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 12.03. COMMUNICATION BY NOTEHOLDERS WITH OTHER
NOTEHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 12.06. RULES BY TRUSTEE AND AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 12.07. LEGAL HOLIDAYS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 12.08. NO RECOURSE AGAINST OTHERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 12.09. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 12.10. OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 12.11. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 12.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 12.13. SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 12.14. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 12.15. TABLE OF CONTENTS, HEADINGS, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
EXHIBIT A FORM OF CONVERTIBLE SUBORDINATED NOTE
EXHIBIT B FORM OF TRANSFER CERTIFICATE PURSUANT TO SECTION 2.06(a)(ii)
EXHIBIT C FORM OF TRANSFER CERTIFICATE PURSUANT TO SECTION 2.06(a)(iii)
EXHIBIT D FORM OF TRANSFER CERTIFICATE PURSUANT TO SECTION 2.06(a)(iv) and (v)
EXHIBIT E FORM OF TRANSFER CERTIFICATE PURSUANT TO SECTION 2.06(a)(iv) and (vi)
EXHIBIT F FORM OF TRANSFER CERTIFICATE PURSUANT TO SECTION 2.06(a)(v) (Transferor)
EXHIBIT G FORM OF TRANSFER CERTIFICATE PURSUANT TO SECTION 2.06(a)(v) (Euroclear or Cedel)
EXHIBIT H FORM OF TRANSFER CERTIFICATE PURSUANT TO SECTION 2.06(a)(v) (Certificated Notes)
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INDENTURE dated as of August 22, 1996 between MIDCOM
Communications Inc., a Washington corporation (the "Company"), and IBJ ▇▇▇▇▇▇▇▇
Bank & Trust Company, a New York banking corporation, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the holders of $85,000,000
aggregate principal amount of the Company's 8 1/4% Convertible Subordinated
Notes due 2003, or, if PaineWebber Incorporated and Wheat, First Securities,
Inc. (the "Initial Purchasers") exercise their over-allotment option granted in
the Purchase Agreement defined below, of up to $97,750,000 aggregate principal
amount of the Company's 8 1/4% Convertible Subordinated Notes due 2003 (in
either case, the "Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Affiliate" of any specified person means any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as used with
respect to any person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of
such person, whether through the ownership of voting securities or by agreement
or otherwise.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Applicable Procedures" means the applicable procedures of the
Depositary, Euroclear or Cedel, as the case may be.
"Board of Directors" means the Board of Directors of the
Company or any authorized committee of the Board.
"Board Resolution" means a duly authorized and adopted
resolution of the Board of Directors certified by the Secretary of the Company
as in full force and effect and delivered to the Trustee.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interest, participations, rights or other equivalents (however
designated) or corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Change of Control" means the occurrence of one or more of the
following events: (a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than a Permitted Holder,
is or becomes the "beneficial owner" (as defined in Rules
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13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of shares
representing more than 50% of the combined total voting power of the then
outstanding securities entitled to vote generally in elections of directors of
the Company (the "Voting Stock"), (b) the Company consolidates with or merges
into any other corporation, or conveys, transfers, or leases, whether directly
or indirectly, all or substantially all of its assets to any person, or any
other person merges into the Company, and, in the case of any such transaction,
the outstanding Common Stock of the Company is changed or exchanged as a
result, unless the stockholders of the Company immediately before such
transaction own, directly or indirectly immediately following such transaction,
at least a majority of the combined voting power of the outstanding voting
securities of the corporation resulting from such transaction in substantially
the same proportion inter se as their ownership of the Voting Stock immediately
before such transaction, (c) at any time the Continuing Directors do not
constitute a majority of the Board of Directors of the Company (or, if
applicable, a successor corporation to the Company) or (d) the Common Stock (or
other common stock into which the Notes are then convertible) is neither listed
for trading on a United States national securities exchange nor approved for
trading on an established automated over-the-counter trading market in the
United States.
"Common Stock" means the common stock of the Company as the
same exists at the date of the execution of this Indenture or as such stock may
be constituted from time to time.
"Company" means the party named as such above until a
successor replaces it in accordance with Article VII and thereafter means the
successor.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of the Board of Directors at the time of
such nomination or election.
"Conversion Price" means the initial conversion price
specified in Section 9 of the form of Note, as adjusted in accordance with the
provisions of Article V.
"Credit Agreement" means that certain Credit Agreement, dated
as of November 8, 1995, by and among the Company, PacNet, Inc., Adval, Inc.,
Advanced Network Design, Cel-Tech International Corp., Transamerica Business
Credit Corporation, as agent for the lenders, and the lenders parties thereto,
as amended through July 26, 1996, providing for up to $43 million of revolving
credit borrowings, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time.
"Daily Market Price" means the price of a share of Common
Stock on the relevant date, determined (a) on the basis of the last reported
sale price regular way of the Common Stock as reported on the Nasdaq National
Market (the "NNM"), or if the Common Stock is not then listed on the NNM, as
reported on such national securities exchange upon which the Common Stock is
listed, or (b) if there is no such reported sale on the day in question, on the
basis of the average of the closing bid and asked quotations regular way as so
reported, or (c) if the Common Stock is not listed on the NNM or on any
national securities exchange, on the basis of the average of the high bid and
low asked quotations regular way on the day in question in the over-the-counter
market as reported by the National Association of Securities Dealers Automated
Quotation System, or if not so quoted, as reported by National Quotation
Bureau, Incorporated, or a similar organization.
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"Default" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees
and their respective successors.
"Designated Senior Indebtedness" means any particular Senior
Indebtedness having an outstanding principal amount or commitment in excess of
$10 million with respect to which the instrument creating or evidencing the
same or the assumption or guarantee thereof (or related agreements or documents
to which the Company is a party) expressly provides that such Indebtedness
shall be "Designated Senior Indebtedness" for purposes of the Indenture
(provided that such instrument, agreement or other document may place
limitations and conditions on the right of such Senior Indebtedness to exercise
the rights of Designated Senior Indebtedness.)
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, the
Regulation S Temporary Global Note, the Regulation S Permanent Global Note and
the Rule 144A Global Note.
"Indebtedness" means, with respect to any person, all
obligations, whether or not contingent, of such person (i) (a) for borrowed
money (including, but not limited to, any indebtedness secured by a security
interest, mortgage or other lien on the assets of the Company which is (1)
given to secure all or part of the purchase price of property subject thereto,
whether given to the vendor of such property or to another, or (2) existing on
property at the time of acquisition thereof), (b) evidenced by a note,
debenture, bond or other written instrument, (c) under a lease required to be
capitalized on the balance sheet of the lessee under GAAP, (d) in respect of
letters of credit, bank guarantees or bankers' acceptances (including
reimbursement obligations with respect to any of the foregoing), (e) with
respect to Indebtedness secured by a mortgage, pledge, lien, encumbrance,
charge or adverse claim affecting title or resulting in an encumbrance to which
the property or assets of such person are subject, whether or not the
obligation secured thereby shall have been assumed by or shall otherwise be
such person's legal liability, (f) in respect of the balance of deferred and
unpaid purchase price of any property or assets, or (g) under interest rate or
currency swap agreements, cap, floor and collar agreements, spot and forward
contracts and similar agreements and arrangements; (ii) with respect to any
obligation of others of the type described in the preceding clause (i) or under
clause (iii) below assumed by or guaranteed in any manner by such person,
contingent or otherwise (and, without duplication, the obligations of such
person under any such assumptions, guarantees or other such arrangements); and
(iii) any and all deferrals, renewals, extensions, refinancings and refundings
of, or amendments, modifications or supplements to, any of the foregoing.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Initial Purchasers" means PaineWebber Incorporated and Wheat,
First Securities, Inc.
"Interest Payment Date" has the meaning set forth in Section
1 of the Notes.
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"Issuance Date" means the date on which the Notes are first
authenticated and issued under this Indenture.
"Liquidated Damages" has the meaning set forth in Section 10
of the Notes.
"Maturity Date" means August 15, 2003
"Noteholder" or "holder" means a person in whose name a Note
is registered.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering Memorandum" means the offering memorandum relating
to the Notes dated August 15, 1996.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the President, any Vice-President, the Treasurer, the Secretary, any
Assistant Treasurer or any Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers, one of whom must be the Chairman of the Board, the Chief Executive
Officer, the President, the Treasurer or a Vice-President of the Company.
"Opinion of Counsel" means a written opinion that meets the
requirements of Section 12.05 from legal counsel who is acceptable to the
Trustee. So long as such counsel is acceptable to the Trustee, such counsel
may be an employee of or counsel to the Company or the Trustee or may be
outside counsel to the Company or the Trustee, except to the extent otherwise
indicated in this Indenture.
"Permitted Designee" means (i) a spouse or child of a
Permitted Holder, (ii) trusts for the benefit of a Permitted Holder or a spouse
or child of a Permitted Holder, (iii) in the event of death or incompetence of
a Permitted Holder, his estate, heirs, executor, administrator, committee or
other personal representative or (iv) any Affiliate of a Permitted Holder.
"Permitted Holders" means ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and
their Permitted Designees.
"person" or "Person" means any individual, corporation,
limited liability company, partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"principal" of a debt security means the principal of the
security plus the premium, if any, on the security.
"Record Date" has the meaning set forth in Section 1 of the
Notes.
"Registration Rights Agreement" means the Registration Rights
Agreement relating to the Notes dated as of August 22, 1996, between the
Company and the Initial Purchasers.
"Regulation S" means Regulation S promulgated under the
Securities Act.
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"Regulation S Global Note" means a Regulation S Temporary
Global Note or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global
note that contains the Global Securities Legend on the face thereof and the
additional schedule referred to in footnote 1 to the form of the Note attached
hereto as Exhibit A, and that is deposited with and registered in the name of
the Depositary or its nominee, representing a series of Notes sold in reliance
on Regulation S.
"Regulation S Certificated Note" means a certificated note in
fully registered form without coupons and that contains the Restricted
Securities Legend on the face thereof, in the form of the Note attached hereto
as Exhibit A, sold in reliance on Regulation S.
"Regulation S Temporary Global Note" means a temporary global
note that contains the Global Securities Legend and the Regulation S Temporary
Note Legend on the face thereof and the additional schedule and paragraph
referred to in footnotes 1 and 2 to the form of the Note attached hereto as
Exhibit A, and that is deposited with and registered in the name of the
Depositary or its nominee, representing a series of Notes sold in reliance on
Regulation S.
"Representative" means the (a) trustee, agent or
representative for any Senior Indebtedness or (b) with respect to any Senior
Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners
of such Senior Indebtedness, any holder or owner of such Senior Indebtedness
acting with the consent of the required persons necessary to bind such holders
or owners of such Senior Indebtedness and (ii) in the case of all other such
Senior Indebtedness, the holder or owner of such Senior Indebtedness.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"Rule 144A Global Note" means a permanent global note that
contains the Global Securities Legend on the face thereof and the additional
schedule referred to in footnote 1 to the form of the Note attached hereto as
Exhibit A, and that is deposited with and registered in the name of the
Depositary, representing a series of Notes sold in reliance on Rule 144A.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Notes described above issued under this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the principal of, premium, if any,
and interest on, rent under, and any other amounts payable on or in respect of
the Credit Agreement and any other Indebtedness of the Company (including,
without limitation, any Obligations in respect of such Indebtedness and, in the
case of Designated Senior Indebtedness, any interest accruing after the filing
of a petition by or against the Company under any Bankruptcy Law, whether or
not allowed as a claim after such filing in any proceeding under such
Bankruptcy Law), whether outstanding on the date of this Indenture or
thereafter created, incurred, assumed, guaranteed or in effect guaranteed by
the Company (including all deferrals, renewals, extensions or refundings of, or
amendments, modifications or supplements to the foregoing); provided, however,
that Senior Indebtedness does not include (v) Indebtedness evidenced by the
Notes, (w) any liability for federal, state, local or other taxes owed or owing
by the Company, (x) Indebtedness of the Company to any Subsidiary of the
Company, (y) trade payables of the Company, and (z) any
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particular Indebtedness in which the instrument creating or evidencing the same
or the assumption or guarantee thereof (or related agreements or documents to
which the Company is a party) expressly provides that such Indebtedness shall
not be senior in right of payment to, or is pari passu with, or is subordinated
or junior to, the Notes.
"Shelf Registration Statement" shall have the meaning set
forth in the Registration Rights Agreement.
"Significant Subsidiary" means any subsidiary of the Company
which is a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated under the Securities Act and the Exchange Act (as
such Regulation is in effect on the date hereof).
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of execution of this Indenture.
"Time of Determination" means the time and date of the earlier
of (i) the record date for determining stockholders entitled to receive their
rights, warrants or distributions referred to in Section 5.04(b) and (c), or
(ii) the commencement of "ex-dividend" trading on the exchange or market
referred to in the definition of the term "Daily Market Price."
"Transfer Restricted Securities" shall have the meaning set
forth in the Registration Rights Agreement.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the
President, any Vice President or any other officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust matters.
"U.S. Government Obligations" means 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. In order to have money available on a
payment date to pay principal or interest on the Notes, the U.S. Government
Obligations shall be payable as to principal or interest on or 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.
"U.S. person" has the meaning specified in Regulation S.
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SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- -------
"Agent Members" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01
"Cedel" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
"Certificated Notes" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
"Change of Control Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07
"Change of Control Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07
"Change of Control Payment" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07
"Change of Control Payment Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07
"Commencement Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07
"Conversion Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Conversion Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.02
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01
"Euroclear" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01
"Expiration Time" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.07
"Non-Global Purchaser" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
"Offer Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Payment Blockage Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.03
"Payment Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01
"Purchase Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
"Purchased Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04
"QIBs" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Tender Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"Commission" means the SEC;
"indenture securities" means the Notes;
"indenture security holder" means a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Notes means the Company or any other obligor
on the Notes.
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All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(c) references to "GAAP" shall mean GAAP in effect as of
the time when and for the period as to which such accounting
principles are to be applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and words
in the plural include the singular; and
(f) provisions apply to successive events and
transactions.
ARTICLE II
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication
relating thereto shall be substantially in the form of Exhibit A hereto, which
Exhibit A is hereby incorporated in and expressly made a part of this
Indenture. The Notes may have notations, legends or endorsements required by
law, stock exchange rule, agreements to which the Company is subject, if any,
or usage. The Company shall furnish any such legend not contained in Exhibit A
to the Trustee in writing. Each Note shall be dated the date of its
authentication.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
The Notes shall be issued only in denominations of $1,000 and
integral multiples thereof.
(a) Global Notes. Notes offered and sold to qualified
institutional buyers as defined in Rule 144A ("QIBs") in reliance on Rule 144A
shall be issued initially in the form of one or more Rule 144A Global Notes in
definitive, fully registered form, which shall be deposited on behalf of the
purchasers of the Notes represented thereby with the Trustee, at its New York
office, as custodian for the Depositary, and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Rule 144A Global Notes may from time to time
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be increased or decreased by adjustments made on the records of the Trustee and
the Depositary or its nominee as hereinafter provided.
Notes offered and sold in reliance on Regulation S shall be
issued initially in the form of (i) Regulation S Certificated Notes or (ii) the
Regulation S Temporary Global Note in fully registered form which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Trustee, at its New York office, as custodian for the Depositary, and
registered in the name of the Depositary or the nominee of the Depositary for
the accounts of designated agents holding on behalf of the Euroclear System
("Euroclear") or Cedel Bank, societe anonyme ("Cedel"), duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The "40-day
restricted period" (as defined in Regulation S) shall be terminated upon the
receipt by the Trustee of (i) a written certificate from the Depositary,
together with copies of certificates from Euroclear and Cedel Bank certifying
that they have received certification of non-United States beneficial ownership
of 100% of the aggregate principal amount of the Regulation S Temporary Global
Note (except to the extent of any beneficial owners thereof who acquired an
interest therein pursuant to another exemption from registration under the
Securities Act and who will take delivery of a beneficial ownership interest in
a Rule 144A Global Note, all as contemplated by Section 2.06(a)(ii) hereof),
and (ii) an Officers' Certificate from the Company. Following the termination
of the 40-day restricted period, beneficial interests in the Regulation S
Temporary Global Note shall be exchanged for beneficial interests in Regulation
S Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously
with the authentication of Regulation S Permanent Global Notes, the Trustee
shall cancel the Regulation S Temporary Global Note. The aggregate principal
amount of the Regulation S Temporary Global Note and the Regulation S Permanent
Global Notes may from time to time be increased or decreased by adjustments
made on the records of the Trustee and the Depositary or its nominee, as the
case may be, in connection with transfers of interest as hereinafter provided.
Each Global Note shall represent such of the outstanding Notes
as shall be specified therein and each shall provide that it shall represent
the aggregate amount of outstanding Notes from time to time endorsed thereon
and that the aggregate amount of outstanding Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Note Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
The provisions of the "Operating Procedures of the Euroclear
System" and "Terms and Conditions Governing Use of Euroclear" and the
"Management Regulations" and "Instructions to Participants" of Cedel Bank shall
be applicable to interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by the Agent Members through
Euroclear or Cedel Bank.
Except as set forth in Section 2.06 hereof, the Global Notes
may be transferred, in whole and not in part, only to another nominee of the
Depositary or to a successor of the Depositary or its nominee.
Upon effectiveness of the Shelf Registration Statement, the
Notes resold or transferred pursuant to the prospectus forming part of the
Shelf Registration Statement may be represented by one or more permanent global
Notes in definitive, fully registered form without interest coupons with the
Global Securities Legend but not the Restricted Securities Legend set forth in
Exhibit A hereto, registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The
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aggregate principal amount of such global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and
the Depositary or its nominee to reflect transfers of beneficial interests from
the Regulation S Permanent Global Notes and the Rule 144A Global Notes, subject
to the rules and procedures of Euroclear and Cedel, as the case may be, and the
Depositary.
(b) Book-Entry Provisions. This Section 2.01(b) shall
apply only to the Rule 144A Global Note and the Regulation S Permanent Global
Note deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.01(b), authenticate and deliver initially the Global Notes
that (a) shall be registered in the name of the Depositary or the nominee of
the Depositary and (b) shall be delivered by the Trustee to the Depositary or
pursuant to the Depositary's instructions or held by the Trustee as custodian
for the Depositary.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights either under this Indenture with respect to any
Global Note held on their behalf by the Depositary or by the Trustee as
custodian for the Depositary or under such Global Note, and the Depositary may
be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of
an owner of a beneficial interest in any Global Note.
(c) Certificated Notes. Except as provided in Sections
2.06 and 2.10, owners of beneficial interests in Global Notes will not be
entitled to receive physical delivery of certificated Notes. Purchasers of
Notes who are not QIBs and did not purchase Notes sold in reliance on
Regulation S under the Securities Act (referred to herein as the "Non-Global
Purchasers") will receive certificated Notes bearing the Restricted Securities
Legend set forth in Exhibit A hereto ("Certificated Notes"). Certificated
Notes will bear the Restricted Securities Legend set forth on Exhibit A unless
removed in accordance with Section 2.06(b) hereof and may not be exchanged for
a Global Note, or interest therein, at any time.
After a transfer of any Notes during the period of the
effectiveness of a Shelf Registration Statement with respect to the Notes, all
requirements pertaining to the Restricted Security Legend on such Notes will
cease to apply, the requirements requiring any such Note issued to certain
holders be issued in global form will cease to apply, and a Certificated Note
without the Restricted Securities Legend will be available to the holder of
such Notes who transfers such Notes pursuant to a prospectus which is part of
such Shelf Registration Statement.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced, either manually
or by facsimile, on the Notes.
If an Officer whose signature is on a Note no longer holds
that office at the time the Note is authenticated, the Note shall nevertheless
be valid.
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A Note shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee. Such signature shall be
conclusive evidence that the Note has been authenticated under this Indenture.
Upon a written order of the Company signed by two Officers,
the Trustee shall authenticate the Notes for original issue up to an aggregate
principal amount of $85,000,000 (plus up to $12,750,000 aggregate principal
amount of Notes that may be sold by the Company pursuant to the over-allotment
option granted pursuant to the Purchase Agreement). The aggregate principal
amount of Notes outstanding at any time shall not exceed such amount except as
provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
or an Affiliate of the Company.
SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The Company shall maintain in the Borough of Manhattan, City
of New York, State of New York (i) an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar"), (ii) an
office or agency where Notes may be presented for payment ("Paying Agent") and
(iii) an office or agency where Notes may be presented for conversion
("Conversion Agent"). The Registrar shall keep a register of the Notes and of
their transfer and exchange. The Company may appoint one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents in such other locations as it shall determine. The term
"Paying Agent" includes any additional paying agent and the term "Conversion
Agent" includes any additional conversion agent. The Company may change any
Paying Agent, Registrar, co-registrar or Conversion Agent without prior notice
to any Noteholder. The Company shall notify the Trustee of the name and
address of any Agent not a party to this Indenture. If the Company fails to
appoint or maintain another entity as Registrar, Paying Agent or Conversion
Agent, the Trustee shall act as such. The Company or any of its Affiliates may
act as Paying Agent, Registrar, co-registrar or Conversion Agent.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Noteholders or the Trustee all money held by the Paying Agent for
the payment of principal or interest on the Notes, and will notify the Trustee
of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. 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 money disbursed
by it. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or an Affiliate of the Company) shall have no further liability for the
money. If the Company or an Affiliate of the Company acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the
Noteholders all money held by it as Paying Agent.
SECTION 2.05. NOTEHOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Noteholders and shall otherwise
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comply with TIA Section 312(a). If the Trustee is not the Registrar, the
Company shall furnish to the Trustee on or before each Interest Payment Date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Noteholders.
SECTION 2.06. TRANSFER AND EXCHANGE.
Where Notes are presented to the Registrar or a co-registrar
with a request to register a transfer or to exchange them for an equal
principal amount of Notes of other denominations, the Registrar shall register
the transfer or make the exchange if its requirements for such transactions are
met. To permit registrations of transfers and exchanges, the Company shall
issue and deliver to the Trustee and the Trustee shall authenticate Notes at
the Registrar's request. No service charge shall be made for any registration
of transfer or exchange (except as otherwise expressly permitted herein), but
the Company may require payment of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection therewith (other than any
such transfer tax or similar governmental charge payable upon exchanges
pursuant to Sections 2.10, 3.06 or 11.05 hereof).
The Company shall not be required (i) to issue, register the
transfer of or exchange Notes during a period beginning at the opening of
business fifteen (15) days before the day of any selection of Notes for
redemption under Section 3.02 and ending at the close of business on the day of
selection, (ii) to register the transfer or exchange of any Notes so selected
for redemption in whole or in part, except the unredeemed portion of any Notes
being redeemed in part or (iii) to register the transfer of any Notes
surrendered for repurchase pursuant to Section 4.07.
All Notes issued upon any transfer or exchange of Notes in
accordance with this Indenture shall be the valid and binding obligations of
the Company, evidencing the same debt, and entitled to the same benefits under
this Indenture as the Notes surrendered upon such registration of transfer or
exchange.
(a) Notwithstanding any provision to the contrary in this
Indenture, so long as a Global Note remains outstanding and is held by or on
behalf of the Depositary, transfers of a Global Note, in whole or in part, or
of any beneficial interest therein, shall only be made in accordance with
Section 2.01(b) and this Section 2.06(a); provided, however, that beneficial
interests in a Global Note may be transferred to persons who take delivery
thereof in the form of a beneficial interest in the same Global Note in
accordance with the transfer restrictions set forth in the Restricted
Securities Legend and under the heading "Notice to Investors" in the Offering
Memorandum.
(i) Except for transfers or exchanges made in accordance
with any of clauses (ii) through (v) of this Section 2.06(a),
transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to nominees of the Depositary
or to a successor of the Depositary or such successor's nominee.
(ii) Rule 144A Global Note to Regulation S Global Note.
If, at any time, an owner of a beneficial interest in a Rule 144A
Global Note deposited with the Depositary or the Trustee as custodian
for the Depositary wishes to transfer its interest in such Rule 144A
Global Note to a person who is required or permitted to take delivery
thereof in the form of an interest in a Regulation S Global Note, such
owner shall, subject to the Applicable Procedures, exchange or cause
the exchange of such interest for an equivalent beneficial interest in
a Regulation S Global Note as provided in this Section 2.06(a)(ii).
Upon receipt by the Trustee of (1) instructions given in accordance
with the Applicable
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Procedures from an Agent Member directing the Trustee to credit or
cause to be credited a beneficial interest in the Regulation S Global
Note in an amount equal to the beneficial interest in the Rule 144A
Global Note to be exchanged, (2) a written order given in accordance
with the Applicable Procedures containing information regarding the
participant account of the Depositary and the Euroclear or Cedel
account to be credited with such increase and (3) a certificate in the
form of Exhibit B attached hereto given by the owner of such
beneficial interest stating that the transfer of such interest has
been made in compliance with the transfer restrictions applicable to
the Global Notes and pursuant to and in accordance with Rule 903 or
Rule 904 of Regulation S, then the Trustee shall instruct the
Depositary to reduce or cause to be reduced the aggregate principal
amount at maturity of the applicable Rule 144A Global Note and to
increase or cause to be increased the aggregate principal amount at
maturity of the applicable Regulation S Global Note by the principal
amount at maturity of the beneficial interest in the Rule 144A Global
Note to be exchanged, to credit or cause to be credited to the account
of the person specified in such instructions a beneficial interest in
the Regulation S Global Note equal to the reduction in the aggregate
principal amount at maturity of the Rule 144A Global Note, and to
debit or cause to be debited from the account of the person making
such exchange or transfer the beneficial interest in the Rule 144A
Global Note that is being exchanged or transferred.
(iii) Regulation S Global Note to Rule 144A Global Note.
If, at any time, an owner of a beneficial interest in a Regulation S
Global Note deposited with the Depositary or with the Trustee as
custodian for the Depositary wishes to transfer its interest in such
Regulation S Global Note to a person who is required or permitted to
take delivery thereof in the form of an interest in a Rule 144A Global
Note, such owner shall, subject to the Applicable Procedures, exchange
or cause the exchange of such interest for an equivalent beneficial
interest in a Rule 144A Global Note as provided in this Section
2.06(a)(iii). Upon receipt by the Trustee of (1) instructions from
Euroclear or Cedel, if applicable, and the Depositary, directing the
Trustee, as Registrar, to credit or cause to be credited a beneficial
interest in the Rule 144A Global Note equal to the beneficial interest
in the Regulation S Global Note to be exchanged, such instructions to
contain information regarding the participant account with the
Depositary to be credited with such increase, (2) a written order
given in accordance with the Applicable Procedures containing
information regarding the participant account of the Depositary and
(3) a certificate in the form of Exhibit C attached hereto given by
the owner of such beneficial interest and stating (A) if the transfer
is pursuant to Rule 144A, that the person transferring such interest
in a Regulation S Global Note reasonably believes that the person
acquiring such interest in a Rule 144A Global Note is a QIB and is
obtaining such beneficial interest in a transaction meeting the
requirements of Rule 144A and any applicable blue sky or securities
laws of any state of the United States, (B) that the transfer complies
with the requirements of Rule 144A under the Securities Act and any
applicable blue sky or securities laws of any state of the United
States or (C) if the transfer is pursuant to any other exemption from
the registration requirements of the Securities Act, that the transfer
of such interest has been made in compliance with the transfer
restrictions applicable to the Global Notes and pursuant to and in
accordance with the requirements of the exemption claimed, such
statement to be supported by an Opinion of Counsel from the transferee
or the transferor in form reasonably acceptable to the Company and to
the Registrar, then the Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the Regulation S Global
Note and to increase or cause to be increased the aggregate principal
amount at maturity of the applicable Rule 144A Global Note by the
principal amount at maturity of the beneficial interest in the
Regulation S Global Note to be exchanged, and the Trustee, as
Registrar, shall instruct the Depositary, concurrently with such
reduction, to credit or cause to be credited to the account of the
person specified in such instructions a beneficial
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interest in the applicable Rule 144A Global Note equal to the
reduction in the aggregate principal amount at maturity of the
Regulation S Global Note and to debit or cause to be debited from the
account of the person making such transfer the beneficial interest in
the Regulation S Global Note that is being transferred.
(iv) Global Note to Certificated Note. If an owner of a
beneficial interest in a Global Note deposited with the Depositary or
with the Trustee as custodian for the Depositary wishes at any time to
transfer its interest in such Global Note to a person who is required
or permitted to take delivery thereof in the form of a Certificated
Note, such owner may, subject to the Applicable Procedures, cause the
exchange of such interest for one or more Certificated Notes of any
authorized denomination or denominations and of the same aggregate
principal amount at maturity. Upon receipt by the Trustee of (1)
instructions from Euroclear or Cedel, if applicable, and the
Depositary directing the Trustee, as Registrar, to authenticate and
deliver one or more Certificated Notes of the same aggregate principal
amount at maturity as the beneficial interest in the Global Note to be
exchanged, such instructions to contain the name or names of the
designated transferee or transferees, the authorized denomination or
denominations of the Certificated Notes to be so issued and
appropriate delivery instructions, (2) a certificate in the form of
Exhibit D attached hereto given by the owner of such beneficial
interest and stating that the person transferring such interest in
such Global Note reasonably believes that the person acquiring the
Certificated Notes for which such interest is being exchanged is an
"accredited investor" (as defined in Rule 501(a)(1), (2), (3), (4) or
(7) of Regulation D under the Securities Act) and is acquiring such
Certificated Notes having an aggregate principal amount of not less
than $100,000 for its own account or for one or more accounts as to
which the transferee exercises sole investment discretion, (3) a
certificate in the form of Exhibit E attached hereto given by the
person acquiring the Certificated Notes for which such interest is
being exchanged, to the effect set forth therein, and (4) such other
certifications, legal opinions or other information as the Company or
the Trustee may reasonably require to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act, then
Euroclear or Cedel, if applicable, or the Trustee, as Registrar, shall
instruct the Depositary to reduce or cause to be reduced such Global
Note by the aggregate principal amount at maturity of the beneficial
interest therein to be exchanged and to debit or cause to be debited
from the account of the person making such transfer the beneficial
interest in the Global Note that is being transferred, and
concurrently with such reduction and debit the Company shall execute,
and the Trustee shall authenticate and deliver, one or more
Certificated Notes of the same aggregate principal amount at maturity
in accordance with the instructions referred to above.
(v) Regulation S Temporary Global Note to Regulation S
Permanent Global Note. Within a reasonable period of time following
the termination of the "restricted period" (as defined in Regulation S
under the Securities Act) with respect to the issuance of the Notes,
beneficial interests in the Regulation S Temporary Global Note shall
be exchanged for an interest in the Regulation S Permanent Global Note
in definitive, fully registered form pursuant to the Applicable
Procedures; provided, however, that prior to (i) the payment of
interest or principal with respect to a holder's beneficial interest
in the Regulation S Temporary Global Note and (ii) any exchange of
such beneficial interest for a beneficial interest in the Regulation S
Permanent Note, Euroclear or Cedel receive a certificate substantially
in the form of Exhibit F hereto from the beneficial owner of such
beneficial interest and Euroclear or Cedel deliver a certificate
substantially in the form of Exhibit G hereto to the Trustee (or the
paying agent if different from the Trustee). Upon proper presentment
to the Trustee of a certificate substantially in the form of Exhibit H
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hereto and subject to the rules and procedures of the Depositary or
its direct or indirect participants, including Euroclear and Cedel, an
interest in a Regulation S Permanent Global Note may be exchanged for
a Certificated Note that is free from any restriction on transfer
(other than such as are solely attributable to any holder's status).
(vi) Certificated Note to Certificated Note. If a holder
of a Certificated Note wishes at any time to transfer such
Certificated Note to a person who is required to take delivery thereof
in the form of a Certificated Note, such holder may, subject to the
restrictions on transfer set forth herein and in such Certificated
Note, cause the exchange of such Certificated Note for one or more
Certificated Notes of any authorized denomination or denominations and
of the same aggregate principal amount at maturity. Upon receipt by
the Trustee, as Registrar, at its office in The City of New York of
(1) such Certificated Note, duly endorsed as provided herein, (2)
instructions from such holder directing the Trustee, as Registrar, to
authenticate and deliver one or more Certificated Notes of the same
aggregate principal amount at maturity as the Certificated Note to be
exchanged, such instructions to contain the name or authorized
denomination or denominations of the Certificated Notes to be so
issued and appropriate delivery instructions, (3) a certificate from
the holder of the Certificated Note to be exchanged in the form of
Exhibit D attached hereto, (4) a certificate in the form of Exhibit E
attached hereto given by the person acquiring the Certificated Notes
for which such interest is being exchanged, to the effect set forth
therein, and (5) such other certifications, legal opinions or other
information as the Company may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act, then the Trustee, as Registrar, shall cancel or cause
to be cancelled such Certificated Note and concurrently therewith, the
Company shall execute, and the Trustee shall authenticate and deliver,
one or more Certificated Notes of the same aggregate principal amount
at maturity, in accordance with the instructions referred to above.
(vii) Certificated Note for Global Note. A Certificated
Note may not be transferred or exchanged for a beneficial interest in
a Global Note.
(viii) Other Exchanges. In the event that a beneficial
interest in a Global Note is exchanged for Notes in definitive
registered form pursuant to Section 2.10, prior to the effectiveness
of a Shelf Registration Statement with respect to such Notes, such
Notes may be exchanged only in accordance with such procedures as are
substantially consistent with the provisions of clauses (ii) through
(v) above (including the certification requirements intended to ensure
that such transfers comply with Rule 144A or Regulation S under the
Securities Act, as the case may be) and such other procedures as may
from time to time be adopted by the Company and furnished in an
Officers' Certificate to the Trustee.
(ix) Restricted Period. Prior to the termination of the
"restricted period" (as defined in Regulation S under the Securities
Act) with respect to the issuance of the Notes, transfers of interests
in the Regulation S Temporary Global Note to "U.S. persons" (as
defined in Regulation S under the Securities Act) shall be limited to
transfers made pursuant to the provisions of Section 2.06(a)(iii).
The Company shall provide an Officers' Certificate to advise the
Trustee as to the termination of the restricted period and the Trustee
may rely conclusively thereon.
(b) Except in connection with a Shelf Registration
Statement contemplated by and in accordance with the terms of the Registration
Rights Agreement, if Notes are issued upon the transfer, exchange or
replacement of Notes bearing the Restricted Securities Legend set forth
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in Exhibit A hereto, or if a request is made to remove such Restricted
Securities Legend on Notes, the Notes so issued shall bear the Restricted
Securities Legend, or the Restricted Securities Legend shall not be removed, as
the case may be, unless there is delivered to the Company such satisfactory
evidence, which may include an opinion of counsel licensed to practice law in
the State of New York, as may be reasonably required by the Company or the
Trustee, that neither the legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the
provisions of Rule 144A, Rule 144 or Regulation S under the Securities Act or,
with respect to Certificated Notes, that such Notes are not "restricted" within
the meaning of Rule 144 under the Securities Act. Upon provision of such
satisfactory evidence, the Trustee, at the direction of the Company, shall
authenticate and deliver Notes that do not bear the legend.
(c) Neither the Company nor the Trustee shall have any
responsibility for any actions taken or not taken by the Depositary.
SECTION 2.07. REPLACEMENT NOTES.
If the holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken or if such Note is mutilated and is surrendered
to the Trustee, the Company shall issue and the Trustee shall authenticate a
replacement Note if the Trustee's and the Company's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be sufficient in
the judgment of both to protect the Company, the Trustee, any Agent or any
authenticating agent from any loss which any of them may suffer if a Note is
replaced. The Company may charge the relevant holder for its expenses in
replacing a Note.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, or is about to be purchased by
the Company pursuant to Article III hereof, the Company in its discretion may,
instead of issuing a new Note, pay or purchase such Note, as the case may be.
Every replacement Note is an additional obligation of the
Company.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered
to it for cancellation, and those described in this Section as not outstanding.
If a Note is replaced, paid or purchased in accordance with
the terms of this Indenture, it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced, paid or purchased Note is
held by a bona fide purchaser.
If Notes are considered paid under Section 4.01 hereof or
converted under Article V hereof, they cease to be outstanding and interest on
them ceases to accrue.
Subject to Section 2.09 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.
SECTION 2.09. TREASURY SECURITIES.
In determining whether the Noteholders of the required
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by the Company or an Affiliate of the Company shall be considered
as though they are not outstanding, except that for the
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purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes identified to the Trustee as
so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
(a) Until definitive Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of a written order of the
Company as set forth in Section 2.02, shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Notes.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes.
(b) A Global Note deposited with the Depositary or with
the Trustee as custodian for the Depositary pursuant to Section 2.01 shall be
transferred to the beneficial owners thereof in the form of Certificated Notes
only if such transfer complies with Section 2.06 and (i) the Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Note or if at any time such Depositary ceases to be a "clearing
agency" registered under the Exchange Act and a successor depositary is not
appointed by the Company within 90 days of such notice, or (ii) the Company, at
its option, notifies the Trustee in writing that it elects to cause the
issuance of Notes in the form of Certificated Notes under the Indenture, then
upon surrender by the Global Note holder of its Global Notes, Notes in
certificated form will be issued to each person that the Global Note holder and
the Depositary identify as being a beneficial owner of the related Notes.
(c) Any Global Note that is transferable to the
beneficial owners thereof in the form of Certificated Notes pursuant to this
Section 2.10 shall be surrendered by the Depositary to the Trustee located in
the Borough of Manhattan, The City of New York, to be so transferred, in whole
or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Note, an equal aggregate principal amount at maturity of Notes of authorized
denominations in the form of Certificated Notes. Any portion of a Global Note
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depositary shall direct. Any Note in the form
of Certificated Notes delivered in exchange for an interest in the Rule 144A
Global Note shall, except as otherwise provided by Section 2.06(b), bear the
Restricted Securities Legend set forth in Exhibit A hereto. Any Note in the
form of Certificated Notes delivered in exchange for an interest in the
Regulation S Temporary Global Note shall, except as otherwise provided by
Section 2.06(b), bear the Restricted Securities Legend set forth in Exhibit A
hereto.
(d) Subject to the provisions of Section 2.10(c), the
registered holder of a Global Note may grant proxies and otherwise authorize
any person, including Agent Members and persons that may hold interests through
Agent Members, to take any action which a holder is entitled to take under this
Indenture or the Notes.
(e) In the event of the occurrence of either of the
events specified in Section 2.10(b), the Company will promptly make available
to the Trustee a reasonable supply of Certificated Notes in definitive, fully
registered form without interest coupons.
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SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar, Paying Agent and Conversion Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
redemption, conversion, exchange or payment. The Trustee shall promptly cancel
all Notes surrendered for registration of transfer, redemption, conversion,
exchange, payment, replacement or cancellation and shall dispose of canceled
Notes in accordance with its standard procedures or as the Company directs.
The Company may not issue new Notes to replace Notes that it has paid or
redeemed or that have been delivered to the Trustee for cancellation or that
any holder has converted.
SECTION 2.12. DEFAULTED INTEREST.
If the Company fails to make a payment of interest on the
Notes, it shall pay such defaulted interest plus any interest payable on the
defaulted interest, in any lawful manner. It may pay such defaulted interest,
plus any such interest payable on it, to the persons who are holders of Notes
on a subsequent special record date. The Company shall fix any such record
date and payment date. At least 15 days before any such record date, the
Company shall mail or cause to be mailed to Noteholders a notice that states
such record date, payment date and amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBERS.
The Company in issuing the Notes may use one or more "CUSIP"
numbers, and if so, such CUSIP number(s) shall be included in notices of
redemption, repurchase or exchange as a convenience to holders of Notes;
provided, however, that any such notice may state that no representation is
made as to the correctness or accuracy of any CUSIP number printed in the
notice or on the Notes and that reliance may be placed only on the other
identification numbers printed on the Notes. The Company will promptly notify
the Trustee of any change in the CUSIP number(s).
ARTICLE III
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provision of the Notes (Section 5 of the Notes) and Section 3.07
hereof, it shall furnish to the Trustee at least 45 days but not more than 60
days before the redemption date (unless a shorter notice period shall be
satisfactory to the Trustee) an Officers' Certificate setting forth (i) the
Section of this Indenture pursuant to which the redemption shall occur, (ii)
the redemption date, (iii) the principal amount of Notes (if less than all) to
be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all the Notes are to be redeemed, the Trustee
shall select the Notes to be redeemed pro rata, by lot or such other method
that the Trustee considers fair and appropriate, or by a method that complies
with the requirements of the principal national securities exchange or national
market system on which the Notes are listed, if any. The Trustee shall make
the selection not less than 30 days and not more than 60 days before the
redemption date from Notes
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outstanding and not previously called for redemption. The Trustee may select
for redemption portions of the principal of Notes that have denominations
larger than $1,000. Notes and portions thereof that the Trustee selects shall
be in amounts of $1,000 or integral multiples of $1,000. Provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption. The Trustee shall notify the Company promptly
upon selection by the Trustee of the Notes or portions of Notes to be called
for redemption.
If any Note selected for partial redemption is converted in
part after such selection, the converted portion of such Note shall be deemed
(so far as may be) to be the portion to be selected for redemption. The Notes
(or portions thereof) so selected shall be deemed duly selected for redemption
for all purposes hereof, notwithstanding that any such Note is converted in
whole or in part before the mailing of the notice of redemption. Upon any
redemption of less than all the Notes, the Company and the Trustee may treat as
outstanding any Notes surrendered for conversion during the period 15 days next
preceding the mailing of a notice of redemption and need not treat as
outstanding any Note authenticated and delivered during such period in exchange
for the unconverted portion of any Note converted in part during such period.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail a notice of redemption to each holder whose Notes
are to be redeemed at such holder's registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) the amount of accrued interest to be paid;
(d) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the
redemption date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued;
(e) the name and address of the Paying Agent;
(f) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(g) that interest on Notes called for redemption ceases
to accrue on and after the redemption date (unless the Company
defaults in the payment of the redemption price);
(h) the section of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed;
(i) the aggregate principal amount of Notes (if less than
all) that are being redeemed;
(j) the CUSIP number(s), if any, of the Notes (provided
that the disclaimer permitted by Section 2.13 may be made);
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(k) that Notes called for redemption may be converted at
any time prior to the close of business on the last trading day
immediately preceding the redemption date and if not converted prior
to the close of business on such date, the right of conversion will be
lost; and
(l) that in the case of Notes or portions thereof called
for redemption on a date that is also an Interest Payment Date, the
interest payment due on such date shall be paid to the person in whose
name the Note is registered at the close of business on the relevant
Record Date.
Such notice shall also state the current Conversion Price and
the date on which the right to convert such Notes or portions thereof into
Common Stock of the Company will expire.
At the Company's request, the Trustee shall give notice of
redemption in the Company's name and at the Company's expense.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Notes called for
redemption become due and payable by the Company on the redemption date at the
price set forth in the Note.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
At least one Business Day prior to the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent money in
immediately available funds sufficient to pay the redemption price of and
accrued interest on all Notes to be redeemed on that date unless theretofore
converted into Common Stock pursuant to the provisions hereof. On the
redemption date, the Trustee or the Paying Agent shall return to the Company
any money not required for that purpose.
On and after the redemption date, unless the Company shall
default in the payment of the redemption price, interest will cease to accrue
on the principal amount of the Notes or portions thereof called for redemption
and for which funds have been set apart for payment. In the case of Notes or
portions thereof redeemed on a redemption date which is also an Interest
Payment Date, the interest payment due on such date shall be paid to the person
in whose name the Note is registered at the close of business on the relevant
Record Date.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the holder at the sole
expense of the Company a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
The Company may redeem all or any portion of the Notes, upon
the terms and at the redemption prices set forth in Section 5 of the Notes.
Any redemption pursuant to this Section 3.07 shall be made pursuant to the
provisions of Section 3.01 through 3.06 hereof.
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ARTICLE IV
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay the principal of, interest and
Liquidated Damages (if any) on, the Notes on the dates and in the manner
provided in the Notes. Principal and interest and Liquidated Damages, if any,
shall be considered paid on the date due if the Paying Agent (other than the
Company or a Subsidiary of the Company) holds as of 10:00 A.M. New York City
time on that date money designated for and sufficient to pay all principal and
interest and Liquidated Damages, if any, then due unless such money is paid to
holders of Senior Indebtedness pursuant to Article VI. To the extent lawful,
the Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law, to the extent allowed under such
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the rate borne by the Notes, compounded
semiannually.
SECTION 4.02. MAINTENANCE OF OFFICE.
The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Administration Office of the Trustee specified in Section 12.10.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
SECTION 4.03. SEC REPORTS.
(a) Whether or not required by the rules and regulations of
the SEC and within the applicable time periods that are (or would be)
prescribed thereby, so long as any Notes are outstanding, the Company shall
furnish to the Trustee and all holders (i) all quarterly and annual financial
information that would be required to be contained in a filing with the SEC on
Forms 10-Q and 10-K if the Company were required to file such forms, including
a "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, an audit report
thereon by the Company's certified independent accountants and (ii) all current
reports that would be required to be filed with the SEC on Form 8-K if the
Company were required to file such reports. In addition, whether or not
required by the rules and regulations of the SEC, the Company shall file a copy
of all such information with the SEC for public availability (unless the SEC
will not accept such a filing) and shall promptly make such information
available to all prospective investors and Noteholders who request it in
writing. The Company shall at all times comply with TIA Section 314(a).
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(b) For so long as any Transfer Restricted Securities (as
defined in the Registration Rights Agreement) remain outstanding, the Company
shall furnish to all holders or beneficial holders and prospective purchasers
of the Notes designated by the holders of Transfer Restricted Securities,
promptly upon their written request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
(c) The Company shall reimburse the Trustee for its
reasonable expenses incurred in reproducing a sufficient number of copies of
all reports and other documents and information that the Trustee may be
requested to deliver to the Holders and others under this Section 4.03.
SECTION 4.04. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 95 days after
the end of each fiscal year of the Company, an Officers' Certificate stating
that a review of the activities of the Company and its subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled all of its obligations under, and complied with the
covenants and conditions contained in, this Indenture, and further stating, as
to each such Officer signing such certificate, that to the best of his
knowledge the Company has kept, observed, performed and fulfilled each and
every covenant, and complied with the covenants and conditions contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions hereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which such Officer may have knowledge) and that to the best of such
Officer's knowledge no event has occurred and remains in existence by reason of
which payments on account of the principal of, interest and Liquidated Damages
(if any) on, the Notes are prohibited.
One of the Officers signing such Officers' Certificate shall
be either the Company's principal executive officer, principal financial
officer or principal accounting officer.
The Company will, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon becoming aware of:
(a) any Default or Event of Default; or
(b) any event of default under any other mortgage,
indenture or instrument of the Company or any of its Subsidiaries, as
such term is used in Section 8.01(e),
an Officers' Certificate specifying such Default or Event of Default.
Immediately upon the occurrence of any event giving rise to
the payment of Liquidated Damages in accordance with Section 10 of the Notes or
the termination of any such payment obligation, the Company shall deliver an
Officers' Certificate to the Trustee notifying the Trustee of such event giving
rise to such payment of Liquidated Damages or the termination of such payment
obligation.
SECTION 4.05. CORPORATE EXISTENCE.
Subject to Article VII hereof, the Company will do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate,
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partnership or other existence of each subsidiary of the Company in accordance
with the respective organizational documents of each subsidiary and the rights
(charter and statutory), licenses and franchises of the Company and its
subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any subsidiary, 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 its subsidiaries taken as a whole and that the loss
thereof is not adverse in any material respect to the Noteholders.
SECTION 4.06. TAXES.
The Company shall, and shall cause each of its subsidiaries
to, pay prior to delinquency all taxes, assessments and governmental levies,
except as contested in good faith and by appropriate proceedings and except
when the failure to make such payment will not have a material adverse effect
on the Company and its Subsidiaries taken as a whole or be adverse in any
material respect to the Noteholders.
SECTION 4.07. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each
holder of Notes shall have the right, in accordance with this Section 4.07, to
require the Company to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of such holder's Notes (the "Change of Control
Offer") at a cash purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
Change of Control Payment Date (the "Change of Control Payment").
(b) The Change of Control Offer shall remain open for a
period specified by the Company which shall be no less than 20 Business Days
following the delivery of a Change of Control Notice (as defined below) (the
"Commencement Date"), except to the extent that a longer period is required by
applicable law (the "Tender Period"). The Change of Control Payment Date and
the Tender Period may be extended to the extent required by law; however, if so
extended, it shall constitute an Event of Default if the Change of Control
Payment Date does not occur within 90 days of the Change of Control. Upon the
expiration of the Tender Period (the "Change of Control Payment Date"), the
Company shall purchase the principal amount of Notes required to be purchased
pursuant to this Section 4.07 (the "Offer Amount").
(c) If the Change of Control Payment Date is on or after
a Record Date and on or before the related Interest Payment Date, any accrued
interest will be paid to the person in whose name a Note is registered at the
close of business on such Record Date, and no additional interest will be
payable to Noteholders who tender Notes pursuant to the Change of Control
Offer.
(d) The Company shall provide the Trustee with notice of
the Change of Control Offer at least 10 days before the Commencement Date.
(e) Within 30 days following any Change of Control, the
Company or the Trustee (at the expense of the Company) shall send, by
first-class mail, a notice (the "Change of Control Notice") to each of the
Noteholders, which shall govern the terms of the Change of Control Offer and
shall state:
(i) that the Change of Control Offer is being made
pursuant to this Section 4.07 hereof and the Tender Period;
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(ii) the Offer Amount, the Change of Control Payment (as
determined in accordance with this Section 4.07), the Change of
Control Payment Date, and that all Notes tendered will be accepted for
payment;
(iii) that Noteholders electing to have a Note or portion
thereof purchased pursuant to any Change of Control Offer will be
required to surrender the Note, with the form entitled "Option of
Noteholder To Elect Purchase" on the reverse of the Note completed, to
the Company, a depositary, if appointed by the Company, or a 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;
(iv) that Noteholders will be entitled to withdraw their
election if the Company, depositary or Paying Agent, as the case may
be, receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, or such
longer period as may be required by law, a letter or a telegram,
telex, facsimile transmission (receipt of which is confirmed and
promptly followed by a letter) setting forth the name of the
Noteholder, the principal amount of the Note or portion thereof the
Noteholder delivered for purchase and a statement that such Noteholder
is withdrawing his election to have the Note or portion thereof
purchased;
(v) that any Note or portion thereof not tendered or
accepted for payment will continue to accrue interest;
(vi) that, unless the Company defaults in the payment of
the Change of Control Payment, any Note or portion thereof accepted
for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date; and
(vii) that Noteholders whose Notes are being purchased only
in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased
portion must be equal to $1,000 in principal amount or an integral
multiple thereof.
In addition, the Change of Control Notice shall, to the extent
permitted by applicable law, be accompanied by a copy of the information
regarding the Company and its Subsidiaries which is required to be contained in
the most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K
(including any financial statements or other information required to be
included or incorporated by reference therein) and any Reports on Form 8-K
filed since the date of such Quarterly Report or Annual Report which the
Company has filed with the SEC on or prior to the date of the notice. The
Change of Control Notice shall contain all instructions and materials necessary
to enable such Noteholders to tender Notes pursuant to the Change of Control
Offer.
(f) At least one Business Day prior to the Change of
Control Payment Date, the Company shall irrevocably deposit with the Trustee or
a Paying Agent in immediately available funds an amount equal to the Offer
Amount to be held for payment in accordance with the terms of this Section. On
the Change of Control Payment Date, the Company shall, to the extent lawful,
(i) accept for payment the Notes or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deliver or cause the depositary or Paying Agent
to deliver to the Trustee Notes so accepted and (iii) deliver to the Trustee an
Officers' Certificate stating such Notes or portions thereof have been accepted
for payment by the Company in accordance with the terms of this Section 4.07.
The depositary, the Paying Agent or the Company, as the case may be, shall
promptly (but in any case not later than 10 calendar days after the Change of
Control Payment
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Date) mail or deliver to each tendering Noteholder an amount equal to the
purchase price of the Notes tendered by such Noteholder, and the Trustee shall
promptly authenticate and mail or deliver to such Noteholders a new Note equal
in principal amount to any unpurchased portion of the Note surrendered. Any
Notes not so accepted shall be promptly mailed or delivered by or on behalf of
the Company to the holder thereof. The Company will publicly announce in a
newspaper of general circulation the results of the Change of Control Offer on,
or as soon as practicable after, the Change of Control Payment Date.
(g) The Change of Control Offer shall be made by the
Company in compliance with all applicable provisions of the Exchange Act, and
all applicable tender offer rules promulgated thereunder.
SECTION 4.08. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture, including, without
limitation, the payment of the Notes; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law has
been enacted.
ARTICLE V
CONVERSION
SECTION 5.01 CONVERSION PRIVILEGE.
Subject to and upon compliance with the provisions of this
Article V, the holder of any Note shall have the right, at his option, at any
time on or prior to the close of business on the Maturity Date (or, if such
Note or portion thereof is called for redemption pursuant to Article III, then
in respect of such Note or portion thereof, on or prior to the close of
business on the Business Day immediately preceding the date fixed for
redemption, unless the Company shall default in payment due upon redemption
thereof in which case such conversion right will terminate at the close of
business on the date such default is cured), to convert the principal amount of
any such Note, or any portion of such principal amount which is $1,000 or an
integral multiple thereof, into that number of fully paid and nonassessable
whole shares of Common Stock obtained by dividing the principal amount of the
Note or portion thereof to be converted by the Conversion Price in effect at
such time and by surrender of the Note so to be converted in whole or in part,
such surrender to be made in the manner provided in Section 5.02.
SECTION 5.02 MANNER OF EXERCISE OF CONVERSION PRIVILEGE.
In order to exercise the conversion privilege, the holder of
any Note to be converted in whole or in part shall surrender such Note, duly
endorsed or assigned to the Company or in blank, at any of the offices or
agencies to be maintained for such purpose by the Company pursuant to Section
4.02, accompanied by the funds, if any, required by the last paragraph of this
Section, and shall give irrevocable written notice of conversion in the form
provided on the Notes (or such other notice as is acceptable to the Company) to
the Company (a "Conversion Notice") at such office or agency that the holder
elects to convert such Note or the portion thereof specified
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in said notice. Such Conversion Notice shall also state the name or names,
together with the address or addresses, in which the certificate or
certificates for shares of Common Stock which shall be issuable in such
conversion shall be issued. Each Note surrendered for conversion shall, unless
the shares issuable on conversion are to be issued in the same name as the name
in which such Note is registered, be accompanied by instruments of transfer, in
form satisfactory to the Company, duly executed by the holder or his duly
authorized attorney and in amount sufficient to pay any transfer or similar
tax. As promptly as practicable after the surrender of such Note and the
receipt of such Conversion Notice, instruments of transfer and funds, if any,
as aforesaid, the Company shall issue and shall deliver at such office or
agency to such holder, or on his written order, a certificate or certificates
for the number of whole shares of Common Stock issuable upon the conversion of
such Note or portion thereof in accordance with the provisions of this Article
V and a check or cash in respect of any fractional interest in a share of
Common Stock arising upon such conversion, as provided in Section 5.03. In
case any Note of a denomination greater than $1,000 shall be surrendered for
partial conversion, the Company shall execute and the Trustee shall register or
cause to be registered and shall authenticate and deliver to or upon the order
of the holder of the Note so surrendered at the expense of the Company, a new
Note or Notes in authorized denominations in an aggregate principal amount
equal to the unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such Note shall
have been surrendered and such Conversion Notice (and any applicable
instruments of transfer and any required funds) received by the Company as
aforesaid, and the Person or Persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of the shares
represented thereby at such time on such date and such conversion shall be at
the Conversion Price in effect at such time on such date, unless the stock
transfer books of the Company shall be closed on that date, in which event such
Person or Persons shall be deemed to have become such holder or holders of
record at the close of business on the next succeeding day on which such stock
transfer books are open, but such conversion shall be at the Conversion Price
in effect on the date upon which such Note shall have been surrendered and such
Conversion Notice received by the Company.
Any Note or portion thereof surrendered for conversion after
the close of business on a Record Date for payment of interest and prior to the
opening of business on the next succeeding Interest Payment Date shall be
accompanied by payment, in funds acceptable to the Company, of an amount equal
to the interest thereon that is to be paid on such Interest Payment Date on the
principal amount being converted (unless any such Note or portion thereof being
converted shall have been called for redemption on a redemption date occurring
between the close of business on such Record Date and the opening of business
on such Interest Payment Date, in which case no such payment shall be
required); provided, however, that no such payment need be made if there shall
exist at the time of conversion a default in the payment of interest on the
Notes. An amount equal to such payment shall be paid by the Company on such
Interest Payment Date to the holder of such Notes at the close of business on
such Record Date; provided, however, that, if the Company shall default in the
payment of interest on such Interest Payment Date, such amount shall be paid to
the Person who made such required payment. Except as provided for above in
this Section, no payments or adjustments shall be made upon conversion on
account of accrued interest on the Notes or for any dividends or distributions
on any shares of Common Stock delivered upon the conversion of such Notes as
provided in this Article.
In order to exercise the conversion privilege with respect to
any interest in a Global Note, the beneficial holder must complete the
appropriate instruction form for conversion pursuant
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to the Depositary's book-entry conversion program and follow the other
procedures set forth in such program.
Upon the conversion of a Global Note, the Trustee, or the
Custodian at the direction of the Trustee, shall make a notation on such Global
Note as to the reduction in the principal amount represented thereby.
SECTION 5.03 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.
No fractional shares or scrip representing fractions of shares
of Common Stock shall be issued upon conversion of the Notes. If more than one
Note shall be surrendered for conversion at one time by the same holder, the
number of full shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate principal amount of the Notes, or
specified portions thereof to be converted, so surrendered. Instead of any
fractional interest in a share of Common Stock which would otherwise be
deliverable upon the conversion of any Note or Notes, the Company shall pay to
the holder of such Note an amount in cash (computed to the nearest cent) equal
to the Daily Market Price thereof at the close of business on the Business Day
next preceding the day of conversion multiplied by the fractional interest
(expressed as a percentage) that otherwise would have been deliverable to such
holder upon such conversion of the Notes.
SECTION 5.04 ADJUSTMENT OF CONVERSION PRICE.
The Conversion Price shall be as specified in Section 9 of the
form of Note, subject to adjustment as provided below. The Conversion Price
shall be adjusted from time to time by the Company as follows:
(a) In case the Company, after the date of this
Indenture, shall (i) pay a dividend or make a distribution on its Common Stock
in shares of Common Stock, (ii) subdivide its outstanding shares of Common
Stock into a greater number of shares, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares, or (iv) issue by reclassification
of its Common Stock any shares of Capital Stock of the Company, the Conversion
Price in effect immediately prior to such action shall be adjusted so that the
holder of any Note thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock or other Capital Stock of the
Company that it would have owned or been entitled to receive immediately
following such action had such Note been converted immediately prior to the
occurrence of such event. An adjustment made pursuant to this subsection (a)
shall become effective immediately after the record date, in the case of a
dividend or distribution, or immediately after the effective date, in the case
of a subdivision, combination or reclassification. If, as a result of an
adjustment made pursuant to this subsection (a), the holder of any Note
thereafter surrendered for conversion shall become entitled to receive shares
of two or more classes of Capital Stock or shares of Common Stock and other
Capital Stock of the Company, the Board of Directors (whose determination shall
be conclusive and shall be described in a statement filed by the Company with
the Trustee and with any Conversion Agent as soon as practicable) shall
determine the allocation of the adjusted Conversion Price between or among
shares of such classes of Capital Stock or shares of Common Stock and other
Capital Stock.
(b) In case the Company, after the date of this
Indenture, shall issue rights, warrants or options to all or substantially all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within 45 days after the date fixed for determination for shareholders
entitled to receive such rights, warrants or options) to subscribe for or
purchase shares of Common Stock (or securities convertible into Common Stock)
at a price per share less than the
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current market price per share (as determined pursuant to subsection (h) of
this Section 5.04) of the Common Stock, the Conversion Price in effect
immediately prior thereto shall be adjusted so that it shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the date of issuance of such rights, warrants or options by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights, warrants or options (immediately prior to such
issuance), plus the number of shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so offered for
subscription or purchase (or the aggregate conversion price of the convertible
securities so offered for subscription or purchase) would purchase at such
current market price, and of which the denominator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights,
warrants or options (immediately prior to such issuance) plus the number of
additional shares of Common Stock so offered for subscription or purchase (or
into which the convertible securities so offered for subscription or purchase
are convertible). Such adjustment shall be made successively whenever any such
rights, warrants or options are issued, and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such rights, warrants or options. In determining whether any rights, warrants
or options entitle the holders to subscribe for or purchase shares of Common
Stock (or securities convertible into Common Stock) at less than such current
market price, and in determining the aggregate offering price of such shares of
Common Stock (or conversion price of such convertible securities), there shall
be taken into account any consideration received by the Company for such
rights, warrants or options (and for such convertible securities), the value of
such consideration, if other than cash, to be determined by the Board of
Directors (whose determination shall be conclusive and shall be described in a
certificate filed with the Trustee and with any Conversion Agent by the Company
as soon as practicable). If at the end of the period during which such
warrants, rights or options are exercisable not all such warrants, rights or
options shall have been exercised, the adjusted Conversion Price shall be
immediately readjusted to what it would have been based on the number of
additional shares of Common Stock actually issued (or the number of shares of
Common Stock issuable upon conversion of convertible securities actually
issued).
(c) In case the Company, after the date of this
Indenture, shall distribute to all or substantially all holders of its
outstanding Common Stock any shares of Capital Stock (other than Common Stock),
evidences of its indebtedness or assets (excluding dividends payable
exclusively in cash and any issuance of Capital Stock pursuant to
reclassifications for which adjustment is required pursuant to subsection (a)
of this Section 5.04) or rights, warrants or options to subscribe for or
purchase Capital Stock of the Company (excluding those referred to in
subsection (b) of this Section 5.04) entitling them to subscribe for or
purchase Capital Stock at a price per share less than the fair market value of
such Capital Stock (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), then in
each such case the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the record date of such distribution by a fraction of
which the numerator shall be the current market price per share (as determined
pursuant to subsection (h) of this Section 5.04) of the Common Stock less the
fair market value on such record date (as determined by the Board of Directors,
whose determination shall be conclusive and shall be described in a certificate
filed with the Trustee and with any Conversion Agent by the Company as soon as
practicable) of the portion of the Capital Stock or the evidences of
indebtedness or the assets so distributed to the holder of one share of Common
Stock or of such subscription rights, warrants or options applicable to one
share of Common Stock and of which the denominator shall be such current market
price per share of Common Stock. Such adjustment shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such distribution. If at the end of the period during
which warrants, rights or options described in this subsection (c) are
exercisable not all such warrants, rights or options shall have been exercised,
the adjusted Conversion Price shall be immediately
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readjusted to what it would have been based on the number of warrants, rights
or options actually exercised. Notwithstanding the foregoing, in the event
that the fair market value of the Capital Stock, evidences of indebtedness,
assets, subscription rights, warrants or options so distributed exceeds the
current market price per share of Common Stock, or such current market price
exceeds such fair market value by less than $0.10 per share, the Company may,
in lieu of making an adjustment in the Conversion Price pursuant to this
subsection (c), make adequate provision so that each Noteholder who converts
such Note after the record date for such distribution will be entitled to
receive upon such conversion, in addition to shares of Common Stock, the amount
of Capital Stock, evidences of indebtedness, assets, subscription rights,
warrants or options such Noteholder would have received had such Note been
converted immediately prior to the record date for such distribution.
(d) Notwithstanding anything in subsection (b) or (c) of
this Section 5.04 to the contrary, with respect to any rights, warrants or
options covered by subsection (b) or (c) of this Section 5.04, if such rights,
warrants or options are only exercisable upon the occurrence of certain
triggering events, then for purposes of this Section 5.04 such rights, warrants
or options shall not be deemed issued or distributed, and any adjustment to the
Conversion Price required by subsection (b) or (c) of this Section 5.04 shall
not be made until such triggering events occur and such rights, warrants or
options become exercisable.
(e) In case the Company, after the date of this
Indenture, shall (i) issue shares of its Common Stock (excluding those
issuances referred to in subsection (a) or (b) to this Section 5.04) at a price
per share less than the current market price per share (as determined pursuant
to subsection (h) of this Section 5.04) on the date the Company fixes the
offering price of such additional shares or (ii) issue any options, warrants or
other securities convertible into or exchangeable or exercisable for Common
Stock (such options, warrants or other securities being collectively referred
to herein as "Equity Interests") for a consideration per share of Common Stock
initially deliverable upon conversion, exchange or exercise of such securities
less than the current market price per share (as determined pursuant to
subsection (h) of this Section 5.04) then, in either case, the Conversion Price
shall be reduced immediately thereafter so that it shall equal the price
determined by multiplying such Conversion Price in effect immediately prior
thereto by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such additional
shares plus the number of shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock so offered, or, in the case
of clause (ii) above, the aggregate consideration for the issuance of such
Equity Interests, would purchase at the current market price and the
denominator shall be the number of shares of Common Stock that would be
outstanding immediately after the issuance of such additional shares, or, in
the case of clause (ii) above, such number of outstanding shares plus the
maximum number of shares of Common Stock deliverable upon conversion or in
exchange for or upon exercise of such Equity Interests at the initial
conversion, exchange or exercise price. Such adjustment shall be made
successively whenever such an issuance is made.
This subsection (e) does not apply to:
(1) any transaction described in subsections (a),
(b) or (c) of this Section 5.04; or
(2) the issuance of the Notes or the issuance of
Common Stock upon conversion of the Notes; or
(3) the issuance of Common Stock upon (i) the
exercise of any Equity Interests issued after the date of the Indenture, to the
extent that any required adjustment to the
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Conversion Price has been made pursuant to this subsection (e); (ii) the
issuance of Common Stock pursuant to the exercise of any Equity Interest
outstanding on the date of this issuance, or pursuant to any contract or other
arrangement described in the Offering Memorandum; or
(4) any Common Stock or Equity Interests issued
to the Company's (or any Subsidiary's) employees or directors pursuant to any
plan or agreement approved by either the stockholders of the Company or a
majority of the Company's independent directors; or
(5) the issuance of any Common Stock or Equity
Interests in any bona fide underwritten public offering.
(f) In case the Company, after the date of this
Indenture, shall, by dividend or otherwise, at any time distribute to all
holders of its Common Stock cash (including any cash that is distributed as
part of a distribution referred to in subsection (c) of this Section) in an
aggregate amount that, together with (i) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash
within the 12 months preceding the date fixed for determining the stockholders
entitled to such distribution and in respect of which no Conversion Price
adjustment pursuant to this subsection (f) has been made 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 Board
Resolution), as of such date of determination, of consideration payable in
respect of any tender offer by the Company or a subsidiary for all or any
portion of the Common Stock consummated within 12 months preceding the date
fixed for determining the stockholders entitled to such distribution and in
respect of which no Conversion Price adjustment pursuant to subsection (g) of
this Section has been made, exceeds 15% of the product of the current market
price per share (determined as provided in subsection (h) of this Section) on
the date fixed for the determination of stockholders entitled to receive such
distribution times the number of shares of Common Stock outstanding on such
date, the Conversion Price shall be reduced by multiplying such Conversion
Price by a fraction of which the numerator shall be the current market price
per share (determined as provided in subsection (h) of this Section) on the
date fixed for such determination less the amount of cash so distributed during
such period 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 date after the date fixed for such
determination. Notwithstanding the foregoing, in the event that the amount of
cash and the fair market value of such consideration so distributed exceeds the
current market price per share of Common Stock, or such current market price
exceeds such fair market value by less than $0.10 per share, the Company may,
in lieu of making an adjustment in the Conversion Price pursuant to this
subsection (f), make adequate provision so that each Noteholder who converts
such Note after the record date for such distribution will be entitled to
receive upon such conversion, in addition to shares of Common Stock, the amount
of cash or other consideration such Noteholder would have received had such
Note been converted immediately prior to the record date for such distribution.
(g) In case a tender offer made by the Company or any
subsidiary, after the date of this Indenture, for all or any portion of the
Common Stock shall be consummated and such tender offer shall involve an
aggregate consideration having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution) as of the last time (the "Expiration Time") that tenders may be
made pursuant to such tender offer (as it may be amended) that, together with
(i) aggregate of the cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution), as of the consummation of such tender offer, of other
consideration paid or payable in respect of any tender offer by the Company or
a subsidiary for all or any portion of the Common Stock consummated within the
12 months preceding the
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consummation of such tender offer and in respect of which no Conversion Price
adjustment pursuant to this subsection (g) has been made and (ii) the aggregate
amount of any distributions to all holders of Common Stock made exclusively in
cash within the 12 months preceding the consummation of such tender offer and
in respect of which no Conversion Price adjustment pursuant to subsection (f)
of this Section has been made, exceeds 15% of the product of the current market
price per share (determined as provided in subsection (h) of this Section)
immediately prior to the Expiration Time times the number of shares of Common
Stock outstanding (including any tendered shares) at the Expiration Time, the
Conversion Price shall be reduced by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be (i) the product of the current market price per share (determined as
provided in subsection (h) of this Section) immediately prior to the Expiration
Time times the number of shares of Common Stock outstanding (including any
tendered shares) at the Expiration Time minus (ii) the fair market value
(determined as aforesaid) of the aggregate consideration payable to
stockholders upon consummation of such tender offer (the shares accepted for
payment in the tender offer being referred to as the "Purchased Shares") and
the denominator shall be the product of (x) such current market price per share
times (y) such number of outstanding shares at the Expiration Time minus the
number of Purchased Shares, such reduction to become effective immediately
prior to the opening of business on the day following the Expiration Time;
provided that, if the number of Purchased Shares or the aggregate consideration
payable therefor have not been finally determined by such opening of business,
the adjustment required by this subsection (g) shall, pending such final
determination, be made based upon the preliminary announced results of such
tender offer, and, after such final determination shall have been made, the
adjustment required by this subsection (g) shall be made based upon the number
of Purchased Shares and the aggregate consideration payable therefor as so
finally determined.
(h) For the purpose of any computation under subsections
(b) through (g) of this Section 5.04, the current market price per share of
Common Stock on any date shall be deemed to be the average of the Daily Market
Prices for the shorter of (i) 30 consecutive Business Days ending on the last
full trading day on the exchange or market referred to in determining such
Daily Market Prices prior to the Time of Determination or (ii) the period
commencing on the date next succeeding the first public announcement of the
issuance of such rights or warrants or such distribution through such last full
trading day prior to the Time of Determination.
(i) In any case in which this Section 5.04 shall require
that an adjustment be made immediately following a record date or an effective
date, the Company may elect to defer (but only until five business days
following the filing by the Company with the Trustee and any Conversion Agent
of the certificate required by subsection (k) of this Section 5.04) issuing to
the holder of any Note converted after such record date or effective date the
shares of Common Stock issuable upon such conversion over and above the shares
of Common Stock issuable upon such conversion on the basis of the Conversion
Price prior to adjustment, and paying to such holder any amount of cash in lieu
of a fractional share.
(j) No adjustment in the Conversion Price shall be
required to be made unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any adjustments
which by reason of this subsection (j) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 5.04 shall be made to the nearest cent or to
the nearest 1/100th of a share, as the case may be. No adjustment to the
Conversion Price need be made if only the par value of the Common Stock is
changed (including any change to no par value Common Stock). To the extent
that the Notes become convertible into cash, no adjustment need be made
thereafter as to such cash and interest will not accrue on such cash. Anything
in this Section 5.04 to the contrary notwithstanding, the Company shall be
entitled to make such reduction in the Conversion Price,
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in addition to those required by this Section 5.04, as it in its discretion
shall determine to be advisable in order that any stock dividend, subdivision
of shares, distribution of rights to purchase stock or securities, or
distribution of securities convertible into or exchangeable for stock hereafter
made by the Company to its stockholders shall not be taxable to the recipients.
(k) Whenever the Conversion Price is adjusted as herein
provided, (i) the Company shall promptly file with the Trustee and any
Conversion Agent other than the Trustee a certificate signed by the President,
any Vice President or the Treasurer of the Company setting forth the Conversion
Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment and the manner of computing the same, which
certificate shall be conclusive evidence of the correctness of such adjustment,
and (ii) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be given by the
Company to the holders of Notes in the manner provided in Section 12.02. The
Company may correct any previous certificate and notice given pursuant to this
subsection (k) by (i) promptly filing with the Trustee and any Conversion Agent
other than the Trustee a new certificate in the form required by this
subsection (k) and (ii) giving a new notice to the holders of Notes in the form
and manner required by this subsection (k). Such new certificate and notice
shall state that such certificate and notice are being provided to correct the
previous certificate and notice. Except as otherwise provided in Section 9.01,
neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to the certificate required by this subsection (k)
except to exhibit the same to any holder of Notes who requests to inspect it.
The certificate required by this subsection (k) shall be filed at each office
or agency maintained for the purposes of conversion of Notes pursuant to
Section 2.03.
(l) In the event that at any time, as a result of an
adjustment made pursuant to subsection (a) of this Section 5.04, the holder of
any Note thereafter surrendered for conversion shall become entitled to receive
any shares of the Company other than shares of Common Stock, thereafter the
Conversion Price of such other shares so receivable upon conversion of any Note
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to Common Stock
contained in this Article V and the other provisions of this Article V
applicable to Common Stock shall apply to such other shares.
(m) Consideration Received
For purposes of any computation respecting consideration
received pursuant to subsection (e) of this Section 5.04, the following shall
apply:
(1) in the case of the issuance of shares of
Common Stock for cash, the consideration shall be the amount of such
cash, provided that in no case shall any deduction be made for any
commissions, discounts or other expenses incurred by the Company for
any underwriting of the issue or otherwise in connection therewith;
(2) in the case of the issuance of shares of
Common Stock for a consideration in whole or in part other than cash,
the consideration other than cash shall be deemed to be the fair
market value thereof (irrespective of the accounting treatment
thereof) as determined in good faith by the Board of Directors; and
(3) in the case of the issuance of Equity
Interests, the aggregate consideration received therefor shall be
deemed to be the consideration received by the Company for the
issuance of such Equity Interests plus the additional minimum
consideration, if any, to be received by the Company upon the
conversion, exchange or
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exercise thereof (the consideration in each case to be determined in
the same manner as provided in clauses (1) and (2) of this
subsection).
SECTION 5.05 NOTICE TO HOLDERS PRIOR TO CERTAIN CORPORATE ACTIONS.
In case:
(a) the Company shall take any action that would
require an adjustment in the Conversion Price pursuant to Section
5.04(c); or
(b) the Company shall authorize the granting to the
holders of its Common Stock generally of rights, warrants or options
to subscribe for or purchase any shares of stock of any class or of
any other rights (other than employee or director stock options); or
(c) there shall be any reorganization or
reclassification of the Common Stock (other than a subdivision or
combination of the outstanding Common Stock and other than a change in
the par value of the Common Stock), or any consolidation or merger to
which the Company is a party, or any conveyance, transfer, sale or
lease of the Company's properties and assets as, or substantially as,
an entirety; or
(d) the Company takes any action which would require
a supplemental indenture pursuant to Section 5.09; or
(e) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then the Company shall cause to be filed with the Trustee and any Conversion
Agent, and shall cause to be given to the holders of Notes, in the manner
provided in Section 12.02, as promptly as possible, but in any event at least
10 days prior to the applicable date hereinafter specified, a notice stating
(i) the date on which a record is to be taken for the purpose of such dividend,
or distribution or rights or warrants, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to be entitled to such
distribution or rights are to be determined, or (ii) the date on which such
reorganization, reclassification, consolidation, merger, conveyance, transfer,
sale, lease, dissolution, liquidation or winding up is expected to become
effective or occur, and, if applicable, the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities, cash or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
transfer, sale, lease, liquidation or winding up. Failure to give such notice
or any defect therein shall not affect the legality or validity of the
proceedings described in subsection (a), (b), (c) or (d) of this Section 5.05.
SECTION 5.06 RESERVATION OF SHARES OF COMMON STOCK.
The Company shall at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but
unissued shares of Common Stock or its issued shares of Common Stock held in
its treasury, or both, for the purpose of effecting conversions of Notes, the
full number of shares of Common Stock deliverable upon the conversion of all
outstanding Notes not theretofore converted.
Before taking any action that would cause an adjustment
reducing the Conversion Price below the then par value (if any) of the shares
of Common Stock deliverable upon conversion
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of the Notes, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock at such
adjusted Conversion Price.
SECTION 5.07 TAXES UPON CONVERSION.
The Company shall pay any and all documentary, stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock on conversions of Notes pursuant hereto; provided,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock in a name other than that of the holder of the Note or Notes to
be converted and no such issue or delivery shall be made unless and until the
Person requesting such issue or delivery 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 5.08 COVENANTS AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which
may be delivered upon conversions of Notes will upon delivery be duly and
validly issued and fully paid and nonassessable, free of all liens,
encumbrances and charges and not subject to any preemptive rights. Shares of
Common Stock issuable upon conversion of a Transfer Restricted Security shall
bear such restrictive legends as the Company shall provide in accordance with
applicable law. If shares of Common Stock are to be issued upon conversion of
a Transfer Restricted Security and they are to be registered in a name other
than that of the holder of such Transfer Restricted Security, then the person
in whose name such shares of Common Stock are to be registered must deliver to
the Trustee a certificate satisfactory to the Company and signed by such person
as to compliance with the restrictions on transfer contained in such
restrictive legends.
The Company further covenants that, for so long as the Common
Stock shall be listed on the Nasdaq National Market or any national securities
exchange, the Company will, if permitted by the rules of Nasdaq National Market
or such national securities exchange, list and keep listed all Common Stock
issuable upon conversion of the Notes.
SECTION 5.09 CONSOLIDATION OR MERGER OR SALE OF ASSETS.
Notwithstanding any other provision herein to the contrary, in
case of any consolidation or merger to which the Company is a party (other than
a merger or consolidation which does not result in any reclassification,
conversion, exchange or cancellation of the outstanding shares of Common Stock
of the Company), or in case of any conveyance, transfer, sale or lease to
another corporation of the properties and assets of the Company as, or
substantially as, an entirety, the corporation formed by such consolidation, or
the corporation whose securities, cash or other property will immediately after
the merger or consolidation be owned, by virtue of the merger or consolidation,
by the holders of Common Stock of the Company immediately prior to the merger
or the corporation which shall have acquired such properties and assets of the
Company, as the case may be, shall promptly execute and deliver to the Trustee
a supplemental indenture providing that the holder of each Security then
outstanding shall have the right thereafter to convert such Note, during the
period such Note is convertible as specified in this Article V, into the kind
and amount of securities, cash or other property receivable upon such
consolidation, merger, conveyance, transfer, sale or lease by a holder of the
number of shares of Common Stock into which such Note might have been converted
immediately prior to such consolidation, merger, conveyance, transfer, sale or
lease, assuming such holder of Common Stock (i) is not a Person with which the
Company consolidated or into which the Company merged or was merged or to
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which such conveyance, transfer, sale or lease was made or an Affiliate of such
Person and (ii) did not exercise statutory rights of election, if any, as to
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, conveyance, transfer, sale or lease (provided that, if
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, conveyance, transfer, sale or lease is not the same for
each share of Common Stock in respect of which such rights of election shall
not have been exercised ("non-electing share"), then for the purposes of this
Section 5.09 the kind and amount of securities, cash or other property
receivable upon such consolidation, merger, conveyance, transfer, sale or lease
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by the holders of a plurality of the non-electing 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 V in relation to any shares of stock or other securities or property
thereafter deliverable on the conversion of the Notes.
The above provisions of this Section 5.09 shall similarly
apply to successive consolidations, mergers, conveyances, transfers, sales or
leases.
The Company shall give notice of the execution of such a
supplemental indenture to the holders of Notes in the manner provided in
Section 12.02 within 30 days after the execution thereof; provided, however,
that such notice need not be given if such information has been provided
prospectively in the notice given pursuant to Section 5.05. Failure to give
such notice, or any defects therein, shall not affect the legality or validity
of any such supplemental indenture or any transaction contemplated in this
Section 5.09.
SECTION 5.10 DISCLAIMER OF RESPONSIBILITY FOR CERTAIN MATTERS.
Neither the Trustee nor any Conversion Agent shall at any time
be under any duty or responsibility to any holder of Notes to determine whether
any facts exist which may require any adjustment of the Conversion Price, or
with respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Trustee nor any
Conversion Agent shall be accountable with respect to the listing or
registration referred to in Section 5.08 or the validity or value (or the kind
or amount) of any shares of Common Stock, or of any securities, cash or other
property, which may at any time be issued or delivered upon the conversion of
any Note; and neither the Trustee nor any Conversion Agent makes any
representation with respect thereto. Neither the Trustee nor any Conversion
Agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or to make any cash payment upon the surrender of any Note for the
purpose of conversion or, subject to the provisions of Section 9.01, to comply
with any of the covenants of the Company contained in this Article V.
SECTION 5.11 CANCELLATION OF CONVERTED NOTES.
All Notes delivered for conversion shall be delivered to the
Trustee to be cancelled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 2.11.
SECTION 5.12 VOLUNTARY REDUCTION.
The Company from time to time may reduce the Conversion Price
by any amount for any period of time if the period is at least 20 days or such
longer period as may be required by law and if the reduction is irrevocable
during such period.
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ARTICLE VI
SUBORDINATION
SECTION 6.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each holder of Notes by accepting a
Note agrees, that the indebtedness evidenced by the Note is subordinated in
right of payment, to the extent and in the manner provided in this Article VI,
to the prior payment in full of all Senior Indebtedness (whether outstanding on
the date hereof or hereafter created, incurred, assumed or guaranteed), and
that the subordination is for the benefit of the holders of Senior
Indebtedness.
SECTION 6.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, in an assignment for the benefit of creditors or any marshalling of
the Company's assets and liabilities:
(1) holders of Senior Indebtedness shall be entitled to
receive payment in full of all Obligations due in respect of such
Senior Indebtedness in cash or U.S. Government Obligations or other
payment satisfactory to the holders of the Senior Indebtedness before
holders of Notes shall be entitled to receive any payment with respect
to the Notes; and
(2) until all Senior Indebtedness then due and payable is
paid in full in cash or U.S. Government Obligations or other payment
satisfactory to the holders of the Senior Indebtedness, any
distribution to which holders of Notes would be entitled but for this
Article VI shall be made to holders of Senior Indebtedness, as their
interests may appear.
SECTION 6.03. DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS.
The Company may not make any payment or distribution to the
Trustee, any Paying Agent or any holder of Notes in respect of Obligations with
respect to the Notes and may not acquire from the Trustee or any holder of
Notes any Notes until all Designated Senior Indebtedness has been paid in full
in cash or U.S. Government Obligations or other payment satisfactory to the
holders of the Designated Senior Indebtedness if:
(i) a default in the payment of any principal of,
premium, if any, interest, rent or other Obligations in respect of
Designated Senior Indebtedness occurs and is continuing beyond any
applicable grace period in the agreement, indenture or other document
governing such Designated Senior Indebtedness; or
(ii) a default, other than a payment default, on
Designated Senior Indebtedness occurs and is continuing that then
permits holders of such Designated Senior Indebtedness to accelerate
its maturity and the Trustee receives a notice of the default (a
"Payment Blockage Notice") from a person who may give it pursuant to
Section 6.11 hereof.
If the Trustee receives any Payment Blockage Notice pursuant
to this Section 6.03, no subsequent Payment Blockage Notice shall be effective
for purposes of such Section unless and until (i) at least 365 days shall have
elapsed since the effectiveness of the immediately prior Payment Blockage
Notice and (ii) all scheduled payments of principal, premium, if any, and
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interest on the Notes that have come due have been paid in full in cash. No
nonpayment default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis for
a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions
in respect of the Notes and may acquire them upon the earlier of:
(1) the date upon which the default is cured or waived, or
(2) in the case of a default referred to in Section
6.03(ii) hereof, 179 days pass after notice is received if the
maturity of such Designated Senior Indebtedness has not been
accelerated,
if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment, distribution or acquisition.
SECTION 6.04. ACCELERATION OF NOTES.
In the event of the acceleration of the Notes because of an
Event of Default, the Company may not make any payment or distribution to the
Trustee or any holder of Notes in respect of Obligations with respect to Notes
and may not acquire or purchase any Notes from the Trustee or any holder of
Notes until all Senior Indebtedness then due and payable has been paid in full
in cash or U.S. Government Obligations or other payment satisfactory to the
holders of Senior Indebtedness or such acceleration is rescinded in accordance
with the terms of this Indenture. If payment of the Notes is accelerated
because of an Event of Default, the Company shall promptly notify holders of
Senior Indebtedness of the acceleration.
SECTION 6.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event the Company shall have made distributions of
assets of the Company of any kind for any Obligations with respect to the Notes
to the Trustee, Paying Agent or directly to any holder of Notes whether in
cash, property or securities, including without limitation by way of set-off or
otherwise, at a time when such payment or distribution is prohibited by this
Indenture, such payment shall be held by the Trustee, Paying Agent or such
holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, to the extent necessary to make payment in full of any Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness; provided that the
foregoing shall apply to the Trustee and any Paying Agent only if the Trustee
or such Paying Agent has actual knowledge (as determined in accordance with
Section 6.11) that such payment or distribution is prohibited by this
Indenture.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Article VI, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of holders of Notes or the Company or any other person money or assets
to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article VI, except if such payment is made as a result of the wilful misconduct
or gross negligence of the Trustee.
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SECTION 6.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee of any facts
known to the Company that would cause a payment of any Obligations with respect
to the Notes or the purchase of any Notes by the Company to violate this
Article, but failure to give such notice shall not affect the subordination of
the Notes to the Senior Indebtedness as provided in this Article.
SECTION 6.07. SUBROGATION.
After all Senior Indebtedness is paid in full and until the
Notes are paid in full, holders of Notes shall be subrogated (equally and
ratably with all other indebtedness pari passu with the Notes) to the rights of
holders of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the holders
of Notes have been applied to the payment of Senior Indebtedness. A
distribution made under this Article to holders of Senior Indebtedness that
otherwise would have been made to holders of Notes is not, as between the
Company and holders of Notes, a payment by the Company on the Notes.
SECTION 6.08. RELATIVE RIGHTS.
This Article defines the relative rights of holders of Notes
and holders of Senior Indebtedness. Nothing in this Indenture shall:
(a) impair, as between the Company and holders of Notes,
the obligation of the Company, which is absolute and unconditional, to
pay principal of, and interest and Liquidated Damages (if any) on, the
Notes in accordance with their terms;
(b) affect the relative rights of holders of Notes and
creditors (other than with respect to Senior Indebtedness) of the
Company other than their rights in relation to holders of Senior
Indebtedness; or
(c) prevent the Trustee or any holder of Notes from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Indebtedness to
receive distributions and payments otherwise payable to holders of
Notes.
If the Company fails because of this Article to pay principal of, or
interest or Liquidated Damages (if any) on, a Note on the due date, the failure
is still a Default or Event of Default.
SECTION 6.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Indebtedness to enforce the
subordination of the indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any holder of Notes or by the
failure of the Company or any such holder to comply with this Indenture.
SECTION 6.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Senior Indebtedness, the distribution may be made and the notice
given to their Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article VI, the Trustee and the holders of Notes shall be
entitled to rely upon any order or decree
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made by any court of competent jurisdiction or upon any certificate of such
Representative or of the liquidating trustee or agent or other person making
any distribution to the Trustee or to the holders of Notes for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article VI.
SECTION 6.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article VI or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee (other than pursuant to Section 6.05), and the
Trustee may continue to make payments on the Notes, unless the Trustee shall
have received at least two business days prior to the date of such payment or
distribution written notice of facts that would cause such payment or
distribution with respect to the Notes to violate this Article. Only the
Company or a Representative may give the notice.
Nothing in this Article VI shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 9.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.
SECTION 6.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each holder of a Note by the holder's acceptance thereof
authorizes and directs the Trustee on the holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article VI, and appoints the Trustee to act as the holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.02 hereof at least 30 days before the expiration of
the time to file such claim, the holders of any Senior Indebtedness or their
Representatives are hereby authorized to file an appropriate claim for and on
behalf of the holders of the Notes.
SECTION 6.13. 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 VI 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, however, that the second and third paragraphs of Section
6.11 shall not apply to the Company or any subsidiary of the Company if it or
such subsidiary acts as Paying Agent.
SECTION 6.14. SENIOR INDEBTEDNESS ENTITLED TO RELY.
The holders of Senior Indebtedness shall have the right to
rely upon this Article VI, and no amendment or modification of the provisions
contained herein shall diminish the rights of such holders unless such holders
shall have agreed in writing thereto.
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ARTICLE VII
SUCCESSORS
SECTION 7.01. MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company may not consolidate or merge with or into, or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions to, another corporation, person or entity unless:
(a) the Company is the surviving corporation or the
entity or the person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made
is a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia;
(b) the entity or person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or
person to which such sale, assignment, transfer, lease, conveyance or
other disposition will have been made expressly assumes all the
Obligations of the Company, pursuant to a supplemental indenture in a
form reasonably satisfactory to the Trustee, under the Notes and the
Indenture;
(c) immediately after such transaction no Default or
Event of Default exists; and
(d) the Company or such person shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger, conveyance, transfer or lease
and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this provision
of this Indenture and that all conditions precedent in this Indenture
relating to such transaction have been satisfied.
SECTION 7.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 7.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for and may exercise
every right and power of, the Company under this Indenture with the same effect
as if such successor person has been named as the Company herein; and the
Company shall be released from its obligations under this Indenture and the
Securities, except as to any obligation that arises from or as a result of such
transaction.
SECTION 7.03. PURCHASE OPTION ON CHANGE OF CONTROL.
This Article VII does not affect the obligations of the
Company (including without limitation any successor to the Company) under
Section 4.07.
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ARTICLE VIII
DEFAULTS AND REMEDIES
SECTION 8.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment of interest or
Liquidated Damages, if any on any Note when the same becomes due and
payable and the Default continues for a period of 30 days after the
date due and payable;
(b) the Company defaults in the payment of the principal
of any Note when the same becomes due and payable at maturity, upon
redemption or otherwise;
(c) the Company fails to observe or perform any covenant
or agreement contained in Section 4.07 or Article V hereof;
(d) the Company or any Subsidiary thereof fails to
observe or perform any other covenant or agreement contained in this
Indenture or the Notes required by any of them to be performed and the
Default continues for a period of 60 days after notice from the
Trustee to the Company or from the holders of 25% in aggregate
principal amount of the outstanding Notes to the Company and the
Trustee stating that such notice is a "Notice of Default";
(e) there is a default under any mortgage, indenture or
instrument under which there is issued or by which there is secured or
evidenced any indebtedness for money borrowed by the Company or any of
its Subsidiaries (or the payment of which is guaranteed by the Company
or any of its Subsidiaries), whether such indebtedness or guarantee
now exists or is created after the Issuance Date, which default (i) is
caused by a failure to pay when due principal of or interest on such
indebtedness within the grace period provided for in such indebtedness
(which failure continues beyond any applicable grace period) (a
"Payment Default") or (ii) results in the acceleration of such
indebtedness prior to its express maturity and, in each case, the
principal amount of any such indebtedness, together with the principal
amount of any other such indebtedness under which there is a Payment
Default or the maturity of which has been so accelerated, aggregates
$10 million or more;
(f) a final judgment or judgments for the payment of
money are entered by a court or courts of competent jurisdiction
against the Company or any Subsidiary of the Company which remains
undischarged for a period (during which such judgment (s) shall not be
bonded or execution shall not be effectively stayed) of 60 days,
provided that the aggregate of all such judgments which are not fully
insured by a reputable insurance company exceeds $10 million;
(g) the Company or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law; (i) commences a voluntary
case, (ii) consents to the entry of an order for relief against it in
an involuntary case in which it is the debtor, (iii) consents to the
appointment of a Custodian of it or for all or substantially all of
its property, (iv) makes a general assignment for the benefit of its
creditors, or (v) generally is unable to pay its debts as the same
become due; or
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(h) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (i) is for relief against the
Company or any Significant Subsidiary in an involuntary case, (ii)
appoints a Custodian of the Company or any Significant Subsidiary or
for all or substantially all of its property, or (iii) orders the
liquidation of the Company or any Significant Subsidiary, and the
order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
SECTION 8.02. ACCELERATION.
If an Event of Default (other than an Event of Default
specified in clauses (g) and (h) of Section 8.01 hereof) occurs and is
continuing, the Trustee by notice to the Company, or the Noteholders of at
least 25% in principal amount of the then outstanding Notes by notice to the
Company and the Trustee, may declare all the Notes to be due and payable. Upon
such declaration, the principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Notes shall be due and payable immediately.
If an Event of Default specified in clause (g) or (h) of Section 8.01 hereof
occurs, such an amount shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Noteholder. The Noteholders of a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration.
SECTION 8.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal of, or
interest or Liquidated Damages (if any) on, the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Noteholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.
SECTION 8.04. WAIVER OF PAST DEFAULTS.
The holders of a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may waive an existing Default
or Event of Default and its consequences except a continuing Default or Event
of Default in the payment of the principal of, or interest or Liquidated
Damages (if any) on, any Note (other than the non-payment of principal of the
Notes which has become due solely by virtue of an acceleration which has been
duly rescinded as provided above), or in respect of a covenant or provision of
this Indenture which cannot be modified or amended without the consent of all
holders of Notes. When a Default or Event of Default is waived, it is cured
and ceases; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.
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SECTION 8.05. CONTROL BY MAJORITY.
The holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, is unduly prejudicial to the rights
of other Noteholders, or would involve the Trustee in personal liability.
SECTION 8.06. LIMITATION ON SUITS.
A Noteholder may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Noteholder gives to the Trustee notice of a
continuing Event of Default;
(b) the Noteholders of at least 25% in principal amount
of the then outstanding Notes make a request to the Trustee to pursue
the remedy;
(c) such Noteholder or Noteholders offer to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or
expense;
(d) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Noteholders of a
majority in principal amount of the then outstanding Notes do not give
the Trustee a direction inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the
rights of another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 8.07. RIGHTS OF NOTEHOLDERS TO RECEIVE PAYMENT.
Subject to the provisions of Article VI hereof, the right of
any Noteholder of a Note to receive payment of principal of, and interest and
Liquidated Damages (if any) on, the Note, on or after the respective due dates
expressed in the Note, or to bring suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected without
the consent of the Noteholder made pursuant to this Section.
SECTION 8.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 8.01(a) or (b)
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, and interest and Liquidated Damages (if any) on, on the Notes
remaining unpaid and, to the extent lawful, interest on overdue principal and
interest and Liquidated Damages, if any, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
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SECTION 8.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Noteholders allowed in any judicial proceedings relative to the
Company, its creditors or its property. Nothing contained herein shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Noteholder any plan of reorganization, arrangement, adjustment
or composition affecting the Notes or the rights of any Noteholder thereof, or
to authorize the Trustee to vote in respect of the claim of any Noteholder in
any such proceeding.
SECTION 8.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee for all amounts due under Section 9.07
hereof;
Second: to the holders of Senior Indebtedness to the extent
required by Article VI;
Third: to Noteholders for amounts due and unpaid on the Notes
for principal and interest and Liquidated Damages, if any, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal and interest and Liquidated
Damages, if any, respectively; and
Fourth: to the Company.
The Trustee may fix a record date and payment date for any
payment to Noteholders made pursuant to this Section.
SECTION 8.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
holder pursuant to Section 8.07 hereof, or a suit by Noteholders of more than
10% in principal amount of the then outstanding Notes.
ARTICLE IX
THE TRUSTEE
SECTION 9.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
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(b) Except during the continuance of an Event of Default
of which the Trustee has been charged with knowledge pursuant to Section
9.02(e): (i) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others and (ii) the Trustee may in good
faith conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the 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 wilful
misconduct, except that: (i) this paragraph does not limit the effect of
paragraph (b) of this Section 9.01; (ii) the Trustee shall not be liable for
any error of judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts and
(iii) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 8.05 hereof.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section 9.01.
(e) The Trustee may refuse to perform any duty or
exercise any right or power unless it receives indemnity satisfactory to it
against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
SECTION 9.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely, and shall be protected in
acting or refraining from acting, on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel, or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed by the
Trustee with due care.
(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.
(e) The Trustee shall not be charged with knowledge of
any Event of Default under subsection (c), (d), (e) or (f) of Section 8.01 or
of the identity of any Significant Subsidiary unless either (1) a Trust Officer
assigned to Corporate Trust Administration shall have actual knowledge thereof,
or (2) the Trustee shall have received notice thereof in accordance with
Section 12.02 hereof from the Company or any holder.
(f) 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
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discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit.
SECTION 9.03. INDIVIDUAL RIGHTS OF TRUSTEE.
Subject to Sections 9.10 and 9.11 hereof, the Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or an Affiliate of the Company with the
same rights it would have if it were not Trustee. Any Agent may do the same
with like rights.
SECTION 9.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes,
it shall not be accountable for the Company's use of the proceeds from the
Notes, and it shall not be responsible (i) for any statement of the Company in
the Indenture or any statement in the Notes other than its authentication or
(ii) for compliance by the Company with the Registration Rights Agreement.
SECTION 9.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and
if the Trustee is charged with knowledge thereof pursuant to Section 9.02(e),
the Trustee shall mail to Noteholders a notice of the Default or Event of
Default within 60 days after it occurs. Except in the case of a Default or
Event of Default in payment on any Note, the Trustee may withhold the notice if
and so long as the Trustee in good faith determines that withholding the notice
is in the interests of Noteholders.
SECTION 9.06. REPORTS BY TRUSTEE TO NOTEHOLDERS.
Within 60 days after the reporting date stated in Section
12.10, the Trustee shall mail to Noteholders a brief report dated as of such
reporting date that complies with TIA Section 313(a) if and to the extent
required by such Section 313(a). The Trustee also shall comply with TIA
Section 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to
Noteholders shall be filed with the SEC and each stock exchange or securities
market on which the Notes are listed. The Company shall timely notify the
Trustee when the Notes are listed or quoted on any stock exchange or securities
market.
SECTION 9.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time
compensation for its services hereunder in accordance with a written agreement
between the Company and the Trustee. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such
disbursements and expenses may include the reasonable disbursements,
compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss,
liability or reasonable expense incurred by it arising out of or in connection
with the acceptance or administration of its
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duties under this Indenture and the trusts hereunder, including the reasonable
costs and expenses of defending itself against or investigating any claim of
liability in the premises, 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 the claim
with counsel designated by the Company, who may be outside counsel to the
Company but shall in all events be reasonably satisfactory to the Trustee, and
the Trustee shall cooperate in the defense. In addition, the Trustee may
retain separate counsel and, if the Trustee shall have been advised by such
counsel that there may be one or more legal defenses available to the Trustee
which are different from or in addition to those available to the Company and
which the counsel designated by the Company would be precluded from asserting
or that the Trustee has one or more interests that conflict with those of the
Company, the Company shall pay the reasonable fees and expenses of such
separate counsel. The indemnification herein extends to any settlement,
provided that the Company will not be liable for any settlement made without
its consent, provided, further, that such consent will not be unreasonably
withheld.
The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through its negligence,
lack of good faith or wilful misconduct.
The obligations of the Company under this Section 9.07 shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 8.01(g) or (h) occurs, the expenses and
the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
SECTION 9.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The
holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company. The Company
may remove the Trustee if:
(a) the Trustee fails to comply with Section 9.10 hereof,
unless the Trustee's duty to resign is stayed as provided in TIA
Section 310(b);
(b) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Noteholders of a majority in principal amount of the then
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outstanding Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Noteholders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10 hereof,
unless the Trustee's duty to resign is stayed as provided in TIA Section
310(b), any Noteholder who has been a bona fide holder of a Note for at least
six months may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee. Notwithstanding
replacement of the Trustee pursuant to this Section 9.08, the Company's
obligations under Section 9.07 hereof shall continue for the benefit of the
retiring trustee with respect to expenses and liabilities incurred by it prior
to such replacement.
SECTION 9.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 9.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1) and (5). The Trustee shall always have
a combined capital and surplus as stated in Section 12.10 hereof. The Trustee
is subject to TIA Section 310(b).
SECTION 9.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
ARTICLE X
DISCHARGE OF INDENTURE
SECTION 10.01. TERMINATION OF COMPANY'S OBLIGATIONS.
This Indenture shall cease to be of further effect (except
that the Company's obligations under Sections 9.07 and 10.02 hereof shall
survive) when all outstanding Notes theretofore authenticated and issued have
been delivered to the Trustee for cancellation and the Company has paid all
sums payable hereunder.
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Thereupon, the Trustee upon request of the Company, shall
acknowledge in writing the discharge of the Company's obligations under this
Indenture, except for those surviving obligations specified above.
SECTION 10.02. REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall promptly pay to the
Company upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal of, or interest or
Liquidated Damages (if any) on, the Notes that remains unclaimed for two years
after the date upon which such payment shall have become due; provided,
however, that the Company shall have first caused notice of such payment to the
Company to be mailed to each Noteholder entitled thereto no less than 30 days
prior to such payment. After payment to the Company, the Trustee and the
Paying Agent shall have no further liability with respect to such money and
Noteholders entitled to the money must look to the Company for payment as
general creditors unless any applicable abandoned property law designates
another person.
ARTICLE XI
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 11.01. WITHOUT CONSENT OF NOTEHOLDERS.
The Company and the Trustee may amend or supplement this
Indenture or the Notes without the consent of any Noteholder:
(a) to cure any ambiguity, defect or inconsistency in a
manner not adverse to the interests of any Noteholder;
(b) to comply with Sections 5.12 and 7.01 hereof;
(c) to provide for uncertificated Notes in addition to
certificated Notes;
(d) to make any change that does not adversely affect the
interests hereunder of any Noteholder;
(e) to make any changes to or add to the covenants of the
Company for the benefit of the holders of Notes; or
(f) to qualify this Indenture under the TIA or to comply
with the requirements of the SEC in order to maintain the
qualification of the Indenture under the TIA.
SECTION 11.02. WITH CONSENT OF NOTEHOLDERS.
Subject to Section 8.07 hereof, the Company and the Trustee
may amend or supplement this Indenture or the Notes with the written consent
(including consents obtained in connection with any tender offer) of the
Noteholders of at least a majority in principal amount of the then outstanding
Notes. Subject to Sections 8.04 and 8.07 hereof, the Noteholders of a majority
in principal amount of the Notes then outstanding may also waive compliance in
a
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particular instance by the Company with any provision of this Indenture or the
Notes. However, without the consent of each Noteholder affected, an amendment,
supplement or waiver under this Section may not:
(a) reduce the principal amount of Notes whose holders
must consent to an amendment, supplement or waiver;
(b) reduce the rate of or change the time for payment of
interest on any Note;
(c) reduce the principal of or change the fixed maturity
of any Note or alter the redemption provisions of Sections 5, 6 and 7
of the Notes;
(d) make any Note payable in money other than that stated
in the Note;
(e) make any change in Section 8.04, 8.07 or 11.02 hereof
(including this sentence);
(f) waive a default in the payment of the principal of,
or interest or Liquidated Damages (if any) on, any Note (except a
rescission of acceleration of the Notes by the holders of at least a
majority in aggregate principal amount of the outstanding Notes and a
waiver of the Payment Default that resulted from such acceleration);
(g) waive a redemption payment payable on any Note (other
than a payment pursuant to Section 4.07); or
(h) make any change in Articles V and VI hereof that
adversely affects the interests of the Noteholders.
To secure a consent of the Noteholders under this Section
11.02, it shall not be necessary for the Noteholders to approve the particular
form of any proposed amendment, supplement or waiver, but it shall be
sufficient if such consent approves the substance thereof.
Neither the Company nor any of its Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any holder of Notes or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or
agreed to be paid to all holders of the 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.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to Noteholders a notice briefly
describing the amendment or waiver.
SECTION 11.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture or the Notes shall be set
forth in a supplemental indenture that complies with the TIA as then in effect.
SECTION 11.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Noteholder of a Note is a continuing consent by the
Noteholder and every subsequent Noteholder of a Note or portion of a Note that
evidences the same debt as the consenting Noteholder's Note,
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57
even if notation of the consent is not made on any Note. However, any such
Noteholder or subsequent Noteholder may revoke the consent as to such
Noteholder's Note or portion of a Note if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officers'
Certificate certifying that the Noteholders of the requisite principal amount
of Notes have consented to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Noteholders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
persons who were Noteholders at such record date (or their duly designated
proxies), and only those persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Noteholders after such record date.
No consent shall be valid or effective for more than 90 days after such record
date unless consents from Noteholders of the principal amount of Notes required
hereunder for such amendment or waiver to be effective shall have also been
given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective it
shall bind every Noteholder, unless it is of the type described in any of
clauses (a) through (h) of Section 11.02 hereof. In such case, the amendment
or waiver shall bind each Noteholder who has consented to it and every
subsequent Noteholder that evidences the same debt as the consenting
Noteholder's Note.
SECTION 11.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an
amendment or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue, and the Trustee shall authenticate, new Notes
that reflect the amendment or waiver.
SECTION 11.06. TRUSTEE PROTECTED.
The Trustee shall sign all supplemental indentures, except
that the Trustee may, but need not, sign any supplemental indenture that
adversely affects its rights.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is automatically deemed to be
incorporated in this Indenture by the TIA, the incorporated provision shall
control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company or the Trustee to
the other is duly given if in writing and delivered in person or mailed by
first-class mail with postage prepaid (registered or certified, return receipt
requested) to the other's address stated in Section 12.10 hereof. The Company
or the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.
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58
Any notice or communication to a Noteholder shall be mailed by
first-class mail, with postage prepaid, to his address shown on the register
kept by the Registrar. Failure to mail a notice or communication to a
Noteholder or any defect in it shall not affect its validity or sufficiency
with respect to other Noteholders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the
addressee receives it.
If the Company mails a notice or communication to Noteholders,
it shall mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
In case by reason of the suspension of regular mail service,
or by reason of any other cause, it shall be impossible to mail any notice as
required by the Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of such
notice.
SECTION 12.03. COMMUNICATION BY NOTEHOLDERS WITH OTHER NOTEHOLDERS.
Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this Indenture or the
Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate, in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 12.05), stating that, in the opinion
of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have
been satisfied; and
(b) an Opinion of Counsel, in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 12.05), stating that, in the opinion
of such counsel, all such conditions precedent and covenants have been
satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 4.03) shall include:
(a) a statement that the person signing such certificate
or rendering such 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;
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59
(c) a statement that, in the opinion of such person, 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 satisfied; and
(d) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by, or a
meeting of, Noteholders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
SECTION 12.07. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which
banking institutions in the State of New York are not required to be open. If
a payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If any other operative date
for purposes of this Indenture shall occur on a Legal Holiday then for all
purposes the next succeeding day that is not a Legal Holiday shall be such
operative date.
SECTION 12.08. NO RECOURSE AGAINST OTHERS.
No director, officer, employee or shareholder, as such, of the
Company shall have any liability for any obligations of the Company under the
Notes or the Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Noteholder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
SECTION 12.09. COUNTERPARTS.
This Indenture may be executed in any number of counterparts
and by the parties hereto 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 12.10. OTHER PROVISIONS.
The Company initially appoints the Trustee as Paying Agent,
Registrar, Conversion Agent and authenticating agent, as provided in Section
2.02.
The first certificate pursuant to Section 4.03 hereof shall be
for the fiscal year ending on December 31, 1996.
The reporting date for Section 9.06 hereof is May 15 of each
year. The first reporting date is May 15, 1997.
The Trustee shall always have a combined capital and surplus
of at least $100,000,000 as set forth in its most recent published annual
report of condition.
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The Company's address is:
MIDCOM Communications Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Trustee's address is:
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 12.11. GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS
INDENTURE AND THE NOTES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
SECTION 12.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or an Affiliate. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 12.13. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes
shall bind its successor. All agreements of the Trustee in this Indenture
shall bind its successor.
SECTION 12.14. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 12.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
MIDCOM COMMUNICATIONS INC.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President of
Finance and Administration and
Chief Financial Officer
Attest:
By: ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Secretary
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY,
as Trustee
By:
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Attest:
By:
--------------------------
Name:
Title:
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
MIDCOM COMMUNICATIONS INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President of
Finance and Administration and
Chief Financial Officer
Attest:
By:
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Secretary
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY,
as Trustee
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Attest:
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Secretary
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EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO MIDCOM COMMUNICATIONS INC. (THE "COMPANY") OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC)
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY AND ANY SHARES OF COMMON STOCK ISSUED UPON CONVERSION
HEREOF 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 AND ANY SHARES OF COMMON
STOCK ISSUED UPON CONVERSION HEREOF MAY BE 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 OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY 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 ▇▇▇▇▇ ▇▇ ▇▇▇
▇
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 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 OR ANY COMMON STOCK ISSUED UPON CONVERSION HEREOF OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
[Regulation S Temporary Note Legend]
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL
NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE, ARE AS
SPECIFIED IN THE INDENTURE. NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF
THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
INTEREST HEREON.
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CUSIP No. 59563X AA 0 (59563X AB 8)
CINS No. U59360 AA 2
[ISIN No. U59360 AA 2 7]
No. __________ $_________
MIDCOM COMMUNICATIONS INC.
8 1/4% CONVERTIBLE SUBORDINATED NOTE DUE 2003
MIDCOM Communications Inc., a Washington corporation (the
"Company"), promises to pay to
________________________________________________________________ or registered
assigns, the principal sum of $________ [(or such lesser or greater amounts as
indicated on Schedule A hereof)](1) on August 15, 2003, subject to the further
provisions of this Note set forth on the reverse hereof which further
provisions shall for all purposes have the same effect as if set forth at this
place.
Interest Payment Dates: February 15 and August 15, commencing February 15, 1997
Interest Record Dates: February 1 and August 1
IN WITNESS WHEREOF, MIDCOM Communications Inc. has caused this
Note to be signed manually or by facsimile by its duly authorized officers and
a facsimile of its corporate seal to be affixed hereto or imprinted hereon.
Dated: MIDCOM COMMUNICATIONS, INC.
By:
--------------------------------
By:
--------------------------------
[Seal]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 8 1/4% Convertible Subordinated
Notes due 2003 described in the within-mentioned Indenture.
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY, as Trustee
By:
-------------------------------
Authorized Signatory
---------------
(1) Applicable to Global Securities only.
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66
MIDCOM COMMUNICATIONS INC.
1. INTEREST. MIDCOM Communications Inc., a Washington
corporation (the "Company"), promises to pay interest on the principal amount
of this Note at the rate of 8 1/4% per annum. The Company will pay interest
semiannually on each February 15 and August 15 (each an "Interest Payment
Date"), commencing on February 15, 1997, to holders of record on the
immediately preceding February 1 and August 1 (each a "Record Date").
Interest on the Notes will accrue from the most recent date to which
interest has been paid, or if no interest has been paid, from August 22, 1996.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law, to the
extent allowed under such Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the rate borne by the Notes,
compounded semiannually.
2. METHOD OF PAYMENT. The Company will pay interest on
the Notes (except defaulted interest) to the Persons who are registered holders
of the Notes at the close of business on the Record Date immediately preceding
the relevant Interest Payment Date (other than with respect to a Note or
portion thereof called for redemption on a redemption date, or repurchased in
connection with a Change of Control on a repurchase date, during the period
from the close of business on a Record Date to (but excluding) the next
succeeding Interest Payment Date (in which case accrued interest shall be
payable, unless such Note is converted, to the holder of the Note or portion
thereof redeemed or repurchased in accordance with the applicable redemption or
repurchase provisions of the Indenture). Holders must surrender Notes to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Company may pay principal
and interest by check payable in such money, and may mail such check to the
holder's registered address; provided that all payments with respect to Notes
the holders of which have given wire transfer instructions to the Company and
to the Trustee at least five Business Days prior to the applicable Interest
Payment Date will be required to be made by wire transfer of immediately
available funds to the accounts specified by the holders thereof.
3. PAYING AGENT, REGISTRAR AND CONVERSION AGENT.
Initially, the Trustee will act as Paying Agent, Registrar and Conversion
Agent. The Company may change any Paying Agent, Registrar, co-registrar or
Conversion Agent without prior notice. The Company or any of its Affiliates
may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an
indenture, dated as of August 22, 1996 (the "Indenture"), between the Company
and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
the Trust Indenture Act of 1939, as amended (15 U.S. Code Section Section
77aaa-77bbbb) as in effect on the date of the Indenture. The Notes are subject
to, and qualified by, all such terms, certain of which are summarized hereon,
and holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are unsecured general obligations of the Company limited in
aggregate principal amount to $85,000,000 (or, if the Initial Purchasers'
over-allotment option is exercised in full, $97,750,000) and subordinated in
right of payment to all existing and future Senior Indebtedness of the Company.
Capitalized terms not defined herein have the same meaning as is given to them
in the Indenture.
5. OPTIONAL REDEMPTION. The Notes are not redeemable at
the Company's option prior to August 15, 2001. Thereafter, the Notes will be
subject to redemption at the option
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67
of the Company, in whole or in part (in any integral multiple of $1,000), upon
not less than 30 nor more than 60 days prior notice at the following redemption
prices (expressed as percentages of the principal amount), if redeemed during
the 12-month period beginning on August 15 of the years indicated:
Redemption
Year Price
---- ----------
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.179%
2002 and thereafter . . . . . . . . . . . . . . . . . . . . . . 100.000%
in each case together with accrued but unpaid interest and Liquidated Damages,
if any, to the redemption date (subject to the right of holders of record on
the relevant Record Date to receive interest due on an Interest Payment Date
that is on or prior to such Redemption Date). On or after the redemption date,
interest will cease to accrue on the Notes, or portion thereof, called for
redemption, unless the Company defaults in its obligations with respect
thereto.
6. NOTICE OF REDEMPTION. Notice of redemption will be
mailed, by first-class mail, at least 30 days but not more than 60 days prior
to the date fixed for redemption to the holder of each Note to be redeemed at
such holder's last address of record on the books of the Registrar. The Notes
in denominations larger than $1,000 may be redeemed in part but only in
integral multiples of $1,000. In the event of a redemption of less than all of
the Notes, the Notes will be chosen for redemption by the Trustee in accordance
with the Indenture.
If this Note is redeemed subsequent to a Record Date with
respect to any Interest Payment Date specified above and on or prior to such
Interest Payment Date, then any accrued interest will be paid to the person in
whose name this Note is registered at the close of business on such Record
Date.
7. REPURCHASE AT OPTION OF HOLDER. If there is a Change
of Control, the Company shall be required to offer to purchase on the Change of
Control Payment Date all outstanding Notes at a cash purchase price equal to
101% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, to the Change of Control Payment Date. Holders of
Notes that are subject to an offer to purchase will receive a Change of Control
Offer from the Company at least 20 Business Days prior to any related Change of
Control Payment Date and may elect to have such Notes or portions thereof in
authorized denominations purchased by completing the form entitled "Option of
Holder To Elect Purchase" appearing below. Holders have the right to withdraw
their election by delivering a written notice of withdrawal to the Company or
the Paying Agent in accordance with the terms of the Indenture.
8. SUBORDINATION. The payment of the principal of,
interest on or any other amounts due on the Notes is subordinated in right of
payment to all existing and future Senior Indebtedness of the Company, as
described in the Indenture. Each holder, by accepting a Note, agrees to such
subordination and authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and appoints the Trustee as its attorney-in-fact for such purpose.
9. CONVERSION. The holder of any Note has the right,
exercisable at any time prior to the close of business (New York time) on the
date of the Note's maturity, to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $1,000) into fully paid and
nonassessable whole shares of Common Stock at the initial Conversion Price of
$14.0875 per share, subject to adjustment under certain circumstances, except
that if a Note is called for redemption, the conversion right will terminate at
the close of business on the Business Day immediately preceding the date fixed
for redemption.
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To convert a Note, a holder must (1) complete and sign a
conversion notice substantially in the form set forth below, (2) surrender the
Note to a Conversion Agent, (3) furnish appropriate endorsements or transfer
documents if required by the Registrar or Conversion Agent and (4) pay any
transfer or similar tax, if required. The number of shares issuable upon
conversion of a Note is determined by dividing the principal amount of the Note
converted by the Conversion Price in effect on the Conversion Date. No
fractional shares will be issued upon conversion but a cash adjustment will be
made for any fractional interest.
Any Note or portion thereof surrendered for conversion after
the close of business on a Record Date for payment of interest and prior to the
opening of business on the next succeeding Interest Payment Date shall be
accompanied by payment, in funds acceptable to the Company, of an amount equal
to the interest thereon that is to be paid on such Interest Payment Date on the
principal amount being converted (unless any such Note or portion thereof being
converted shall have been called for redemption on a redemption date occurring
between the close of business on such Record Date and the opening of business
on such Interest Payment Date, in which case no such payment shall be
required); provided, however, that no such payment need be made if there shall
exist at the time of conversion a default in the payment of interest on the
Notes. An amount equal to such payment shall be paid by the Company on such
Interest Payment Date to the holder of such Notes at the close of business on
such Record Date; provided, however, that, if the Company shall default in the
payment of interest on such Interest Payment Date, such amount shall be paid to
the Person who made such required payment. Except as provided in the
Indenture, no payments or adjustments shall be made upon conversion on account
of accrued interest on the Notes or for any dividends or distributions on any
shares of Common Stock delivered upon the conversion of such Notes.
A Note in respect of which a holder has delivered an "Option
of Holder to Elect Purchase" form appearing below exercising the option of such
holder to require the Company to purchase such Note may be converted only if
the notice of exercise is withdrawn as provided above and in accordance with
the terms of the Indenture. The above description of conversion of the Notes
is qualified by reference to, and is subject in its entirety by, the more
complete description thereof contained in the Indenture.
In order to exercise the conversion privilege with respect to
any interest in a Global Note, the beneficial holder must complete the
appropriate instruction form for conversion pursuant to the Depositary's
book-entry conversion program and follow the other procedures set forth in such
program. Upon the conversion of a Global Note, the Trustee, or the Custodian
at the direction of the Trustee, shall make a notation on such Global Note as
to the reduction in the principal amount represented thereby.
10. REGISTRATION RIGHTS. The holder of this Note is
entitled to the benefits of a Registration Rights Agreement, dated as of August
22, 1996, among the Company and the Initial Purchasers (the "Registration
Rights Agreement"). Pursuant to the Registration Rights Agreement, the Company
has agreed for the benefit of the holders of the Notes that (i) it will, at its
cost, within 60 days after the closing of the sale of the Notes (the
"Closing"), file a shelf registration statement (the "Shelf Registration
Statement") with the Securities and Exchange Commission (the "SEC") with
respect to resales of the Notes and the Common Stock issuable upon conversion
thereof, (ii) such Shelf Registration Statement shall be declared effective by
the SEC within 150 days after the Closing, and (iii) subject to certain
exceptions, the Company will maintain such Shelf Registration Statement
continuously effective under the Securities Act until the third anniversary of
the date of the Closing or such earlier date as of which all the Notes or the
Common Stock issuable upon conversion thereof have been sold pursuant to such
Shelf Registration Statement. If (a) the Company fails to file the Shelf
Registration Statement required by the
6
69
Registration Rights Agreement on or before the date specified above for such
filing, (b) such Shelf Registration Statement is not declared effective by the
SEC on or prior to the date specified above for such effectiveness, or (c) the
Shelf Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted Notes
during the periods specified in the Registration Rights Agreement (each such
event referred to in clauses (a) through (c) above a "Registration Default"),
then the Company will pay liquidated damages to each holder of Transfer
Restricted Securities, with respect to the first 90-day period immediately
following the occurrence of such Registration Default in an amount equal to
$0.05 per week per $1,000 principal amount of Notes constituting Transfer
Restricted Securities held by such holder ("Liquidated Damages"). The amount
of the Liquidated Damages will increase by an additional $0.05 per week per
$1,000 principal amount of Notes constituting Transfer Restricted Securities
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of Liquidated Damages of $0.25 per week
per $1,000 principal amount of Notes constituting Transfer Restricted
Securities. All accrued Liquidated Damages shall be paid by the Company on
each Interest Payment Date for which Liquidated Damages are owed to the holders
of Global Notes by wire transfer of immediately available funds or by federal
funds check and to holders of Certificated Notes registered as such as of the
preceding Record Date by mailing checks to their registered addresses.
Following the cure of all Registration Defaults, the accrual of Liquidated
Damages will cease.
11. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered, and Notes may be
exchanged, as provided in the Indenture. The Registrar may require a holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture.
The Registrar need not exchange or register the transfer of any Note or portion
of a Note selected for redemption (except the unredeemed portion of any Note
being redeemed in part). Also, it need not exchange or register the transfer
of any Note for a period of 15 days before a selection of Notes to be redeemed.
12. PERSONS DEEMED OWNERS. The registered holder of a
Note may be treated as its owner for all purposes.
13. UNCLAIMED MONEY. If money for the payment of
principal of, or interest or Liquidated Damages, if any, on the Notes remains
unclaimed for two years, the Trustee and the Paying Agent shall pay the money
back to the Company at its written request. After that, holders of Notes
entitled to the money must look to the Company for payment unless the
applicable abandoned property law designates another Person and, in either
case, all liability of the Trustee and the Paying Agent with respect to such
money shall cease.
14. DEFAULTS AND REMEDIES. The Notes shall have the
Events of Default as set forth in Section 8.01 of the Indenture. Subject to
certain limitations in the Indenture, if an Event of Default occurs and is
continuing, the Trustee by notice to the Company, or the holders of at least
25% in aggregate principal amount of the then outstanding Notes by notice to
the Company and the Trustee, may declare all the Notes to be due and payable
immediately, except that in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all Notes shall become due and
payable immediately without further action or notice.
The holders of a majority in principal amount of the Notes
then outstanding by written notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
7
70
the acceleration. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding Notes issued under the
Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish annually compliance certificates to the Trustee. The
above description of Events of Default and remedies is qualified by reference
to, and subject in its entirety by, the more complete description thereof
contained in the Indenture.
15. AMENDMENTS, SUPPLEMENTS AND WAIVERS. Subject to
certain exceptions, the Indenture or the Notes may be amended or supplemented
with the consent of the holders of at least a majority in principal amount of
the then outstanding Notes (including consents obtained in connection with a
tender offer or exchange offer for Notes), and any existing default may be
waived with the consent of the holders of a majority in principal amount of the
then outstanding Notes. Without the consent of any holder, the Indenture or
the Notes may be amended to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to certificated Notes, to provide
for assumption of the Company's obligations to holders, to reduce the
Conversion Price, to make any change that does not adversely affect the rights
of any holder, to make any changes to or add to the covenants of the Company
for the benefit of holders, to qualify the Indenture under the TIA, or to
comply with the requirements of the SEC in order to maintain the qualification
of the Indenture under the TIA.
Without the consent of each holder affected, an amendment, supplement
or waiver of the Indenture or the Notes may not: (a) reduce the principal
amount of Notes whose holders must consent to an amendment, supplement or
waiver; (b) reduce the rate of or change the time for payment of interest on
any Notes; (c) reduce the principal of or change the fixed maturity of any Note
or alter the redemption provisions of Sections 5, 6 and 7 of the Notes; (d)
make the principal of, or premium, if any, or interest on, any Note payable in
money other than as provided for in the Indenture and in the Notes; (e) make
any change in the provisions of the Indenture relating to waivers of past
defaults or the rights of holders of Notes to receive payments of principal of,
premium, if any, or interest or Liquidated Damages (if any) on, the Notes; (f)
waive a default in the payment of principal of, or premium, if any, or interest
or Liquidated Damages (if any) on, the Notes (except a rescission of
acceleration of the Notes by the holders of at least a majority in aggregate
principal amount of the Notes and a waiver of the Payment Default that resulted
from such acceleration); (g) waive a redemption payment with respect to any
Note (other than a payment required pursuant to section 4.07 of the Indenture);
(h) except as permitted by the Indenture, modify the provisions of the
Indenture relating to conversion or subordination of the Notes in a manner
adverse to the holders thereof; or (i) make any change in the amendment and
waiver provisions of the Indenture and the Notes.
16. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in
its individual or any other capacity, may become the owner or pledgee of the
Notes and may otherwise deal with the Company or an Affiliate of the Company
with the same rights it would have, as if it were not Trustee, subject to
certain limitations provided for in the Indenture and in the TIA. Any Agent
may do the same with like rights.
17. NO RECOURSE AGAINST OTHERS. A director, officer,
employee or shareholder of the Company, as such, shall not have any liability
for any obligations of the Company under the Notes or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each holder of the Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Notes.
8
71
18. GOVERNING LAW. THE INTERNAL LAWS OF THE STATE OF NEW
YORK SHALL GOVERN THE INDENTURE AND THE NOTES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
19. AUTHENTICATION. The Notes shall not be valid until
authenticated by the manual signature of an authorized signatory of the Trustee
or an authenticating agent.
20. ABBREVIATIONS. Customary abbreviations may be used
in the name of a holder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
21. CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company has caused one or more CUSIP numbers to be printed on the Notes and the
Trustee may use CUSIP numbers in notices of redemption as a convenience to
Holders. No representation is made as to the accuracy of such numbers either
as printed on the Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
The Company will furnish to any holder of the Notes upon
written request and without charge a copy of the Indenture and/or the
Registration Rights Agreement. Request may be made to:
MIDCOM Communications Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
[22. EXCHANGE FOR PERMANENT NOTE; LIMITATIONS. Until this
Regulation S Temporary Global Note is exchanged for Regulation S Permanent
Global Notes, the Holder hereof shall not be entitled to receive payments of
interest hereon; until so exchanged in full, this Regulation S Temporary Global
Note shall in all other respects be entitled to the same benefits as other
Notes under the Indenture.
This Regulation S Temporary Global Note is exchangeable in
whole or in part for one or more Regulation S Permanent Global Notes or Rule
144A Global Notes only (i) on or after the termination of the 40-day restricted
period (as defined in Regulation S) and (ii) upon presentation of certificates
(accompanied by an Opinion of Counsel, if applicable) required by Article II of
the Indenture. Upon exchange of this Regulation S Temporary Global Note for
one or more Regulation S Permanent Global Notes or Rule 144A Global Notes, the
Trustee shall cancel this Regulation S Temporary Global Note.](2)
---------------
(2) Applicable to Regulation S Temporary Notes only.
9
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________ agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Your Signature:
--------------------------------------------------------
(Sign exactly as your name appears on the other
side of this Note)
Date:
--------------------
Signature Guarantee:(1)
------------------------------------------------
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the date that is three years after the later of
the date of original issuance of such Notes and the last date, if any, on which
such Notes were owned by the Company or any Affiliate of the Company, the
undersigned confirms that such Notes are being transferred:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
(3) [ ] pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
---------------
(1) Signature must be guaranteed by a commercial bank, trust
company or member firm of the New York Stock Exchange.
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73
(4) [ ] to an "accredited investor" (as defined in Rule
501(a)(1), (2), (3), (4) or (7) under the Securities
Act of 1933 that has furnished to the Trustee a
signed letter containing certain representations and
agreements (the form of which letter can be obtained
from the Trustee); or
(5) [ ] pursuant to another available exemption from the
registration requirements of the Securities Act of
1933; or
(6) [ ] pursuant to an effective registration statement under
the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the name of
any person other than the registered holder thereof; provided,
however, that if box (2), (3), (4) or (5) is checked, the Trustee may
require, prior to registering any such transfer of the Notes such
legal opinions, certifications and other information as the Company
has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act.
-----------------------------------
Signature
Signature Guarantee:(1)
----------------------------- -----------------------------------
Signature must be guaranteed Signature
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:
----------------------- -----------------------------------
NOTICE: To be executed by
an executive officer
---------------
(1) Signature must be guaranteed by a commercial bank, trust
company or member firm of the New York Stock Exchange.
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[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE A
The initial principal amount of this Global Note shall be
$_______. The following increases or decreases in the principal amount of this
Global Note have been made:
--------------------------------------------------------------------------------
Amount of increase
in Principal Signature of
Amount of this Principal Amount authorized
Global Note Amount of decrease of this Global signatory of
including upon in Principal Note following Trustee or
exercise of over- Amount of this such decrease or Securities
Date Made allotment option Global Note increase Custodian
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
12
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note or a portion thereof
repurchased by the Company pursuant to Section 4.07 of the Indenture, check the
box: [ ]
If the purchase is in part, indicate the portion (in
denominations of $1,000 or any integral multiple thereof) to be purchased:
_________________
Your Signature:
------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Date:
-------------------------
Signature Guarantee:(1)
---------------------------
---------------
(1) Signature must be guaranteed by a commercial bank, trust
company or member firm of the New York Stock Exchange.
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ELECTION TO CONVERT
To MIDCOM Communications Inc.:
The undersigned owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion below designated,
into Common Stock of MIDCOM Communications Inc. in accordance with the terms of
the Indenture referred to in this Note, and directs that the shares issuable
and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Any holder of Notes, upon the exercise of its conversion
rights in accordance with the terms of the Indenture and the Note, agrees to be
bound by the terms of the Registration Rights Agreement relating to the Common
Stock issuable upon conversion of the Notes.
Date:
Convert in whole [ ]
Portions of Note to be converted ($1,000
or integral multiples thereof):
$________________
----------------------------------------
Signature (for conversion only)
-----------------------------------------
Please Print or Typewrite Name and
Address, Including Zip Code, and Social
Security or Other Identifying Number
-----------------------------------------
-----------------------------------------
-----------------------------------------
Signature Guarantee:(1)
--------------
---------------
(1) Signature must be guaranteed by a commercial bank, trust
company or member firm of the New York Stock Exchange.
14
77
EXHIBIT B
FORM OF TRANSFER CERTIFICATE
FOR TRANSFER FROM
RULE 144A GLOBAL NOTE
TO REGULATION S GLOBAL NOTE
(Transfers pursuant to Section 2.06(a)(ii)
of the Indenture)
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: MIDCOM Communications Inc.
8 1/4% Convertible Subordinated Notes due 2003 (the "Notes")
Reference is hereby made to the Indenture dated as of August
22, 1996 (the "Indenture") between MIDCOM Communications Inc., as Issuer, and
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the Indenture.
This letter relates to U.S. $____________ aggregate principal
amount of Notes which are held in the form of the Rule 144A Global Note (CUSIP
No. 59563X AA 0) with the Depositary in the name of _______________________
[name of transferor] (the "Transferor") to effect the transfer of the Notes in
exchange for an equivalent beneficial interest in the Regulation S Global Note.
In connection with such request, the Transferor does hereby
certify that such transfer has been effected in accordance with the transfer
restrictions set forth in the Notes and (i) with respect to transfers made in
reliance on Regulation S, does certify that:
(1) the offer of the Notes was not made to a person in
the United States;
(2) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither the
Transferor nor any person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the United States Securities
Act of 1933 (the "Securities Act");
(ii) with respect to transfers made in reliance on Rule 144 certify that the
Notes are being transferred in a transaction permitted by Rule 144 under the
Securities Act; and (iii) with respect to transfers made in reliance on Rule
144A, that such Notes are being transferred in accordance with Rule 144A under
the Securities Act to a transferee that the Transferor reasonably believes is
purchasing the Notes for its own account or an account with respect to which
the transferee
B-1
78
exercises sole investment discretion and the transferee and any such account is
a "qualified institutional buyer" within the meaning of Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
In addition, if the sale is made during a restricted period
and the provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1) of Regulation S
are applicable thereto, we confirm that such sale has been made in accordance
with the applicable provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1), as
the case may be.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate
have the meanings set forth in Regulation S.
[Name of Transferor]
By:
--------------------------------
Name:
Title:
Date:
B-2
79
EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM REGULATION S GLOBAL NOTE
TO RULE 144A GLOBAL NOTE
(Transfers pursuant to Section 2.06(a)(iii)
of the Indenture)
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: MIDCOM Communications Inc.
8 1/4% Convertible Subordinated Notes due 2003 (the "Notes")
Reference is hereby made to the Indenture dated as of August
22, 1996 (the "Indenture") between MIDCOM Communications Inc., as Issuer, and
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the Indenture.
This letter relates to U.S. $__________ aggregate principal
amount of Notes which are held in the form of the Regulation S Global Note with
the Depositary (CINS No. U59360 AA 2) in the name of ____________________ [name
of transferor] (the "Transferor") to effect the transfer of the Notes in
exchange for an equivalent beneficial interest in the Rule 144A Global Note.
In connection with such request, and in respect of such Notes
the Transferor does hereby certify that such Notes are being transferred in
accordance with (i) the transfer restrictions set forth in the Notes and (ii)
Rule 144A under the United States Securities Act of 1933 to a transferee that
the Transferor reasonably believes is purchasing the Notes for its own account
or an account with respect to which the transferee exercises sole investment
discretion and the transferee and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A, in a transaction meeting
the requirements of Rule 144A and in accordance with applicable securities laws
of any state of the United States or any other jurisdiction.
[Name of Transferor],
By:
--------------------------------
Name:
Title:
Dated:
C-1
80
EXHIBIT D
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM GLOBAL NOTE OR CERTIFICATED
SECURITY TO CERTIFICATED SECURITY
(Transfers pursuant to Section 2.06(a)(iv)
or Section 2.06(a)(v) of the Indenture)
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: MIDCOM Communications Inc.
8 1/4% Convertible Subordinated Notes due 2003 (the "Notes")
Reference is hereby made to the Indenture dated as of August
22, 1996 (the "Indenture") between MIDCOM Communications Inc., as Issuer, and
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the Indenture.
This letter relates to U.S. $___________ aggregate principal
amount of Notes which are held [in the form of the [Rule 144A/Regulation S]
[Global] Note (CUSIP No. 59563X AA 0 (59563X AB 8)/CINS No. U59360 AA 2) with
the Depositary](1) in the name of ________________ [name of transferor] (the
"Transferor") to effect the transfer of the Notes.
In connection with such request, and in respect of such Notes,
the Transferor does hereby certify that such Notes are being transferred in
accordance with (i) the transfer restrictions set forth in the Notes and (ii)
to a transferee that the Transferor reasonably believes is an "accredited
investor" (as defined in Rule 501(a)(1), (2), (3), (4) or (7) of Regulation D
under the Securities Act of 1933) and is acquiring at least $100,000 principal
amount of Notes for its own account or for one or more accounts as to which the
transferee exercises sole investment discretion and (iii) in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
[Name of Transferor],
By:
--------------------------------
Name:
Title:
Dated:
---------------
(1) Insert, if appropriate.
D-1
81
EXHIBIT E
FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE
(Transfers pursuant to Section 2.06(a)(iv) and Section 2.06(a)(vi))
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: MIDCOM Communications Inc.
8 1/4% Convertible Subordinated Notes due 2003 (the "Notes")
Reference is hereby made to the Indenture dated as of August
22, 1996 (the "Indenture") between MIDCOM Communications Inc., as Issuer, and
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the Indenture.
This letter relates to U.S. $____________ aggregate principal
amount of Notes which are held [in the form of the [Rule 144A/Regulation S]
Global Note (CUSIP No. 59563X AA 0 /CINS No. U59360 AA 2) with the
Depositary](1) in the name of _______________________ [name of transferor] (the
"Transferor") to effect the transfer of the Notes to the undersigned.
In connection with such request, and in respect of such Notes
we confirm that:
1. We understand that the Notes were originally offered in a
transaction not involving any public offering in the United States
within the meaning of the United States Securities Act of 1933, as
amended (the "Securities Act"), that the Notes have not been
registered under the Securities Act and that (A) the Notes may be
offered, resold, pledged or otherwise transferred only (i) 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, in a transaction
meeting the requirements of Rule 144 under the Securities Act, outside
the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act or in accordance
with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel if the Company so
requests), (ii) to the Company or (iii) 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 purchaser will, and each
subsequent holder is required to, notify any subsequent purchaser from
it of the resale restrictions set forth in (A) above.
2. We are a corporation, partnership or other entity having
such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of an investment in the
Notes, and we are (or any account for which we are purchasing under
paragraph 4 below is) an accredited investor as defined in Rule
501(a)(1),
---------------
(1) Insert and modify, if appropriate.
▇-▇
▇▇
(▇), (▇), (4) or (7) under the Securities Act, able to bear the
economic risk of our proposed investment in the Notes.
3. We are acquiring the Notes for our own account (or for
accounts as to which we exercise sole investment discretion and have
authority to make, and do make, the statements contained in this
letter) and not with a view to any distribution of the Notes, subject,
nevertheless, to the understanding that the disposition of our
property shall at all times be and remain within our control.
4. We are, and each account (if any) for which we are
purchasing Notes is, purchasing Notes having an aggregate principal
amount of not less than $100,000.
5. We understand that (a) the Notes will be delivered to us
in registered form only and that the certificate delivered to us in
respect of the Notes will bear a legend substantially to the following
effect:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY AND ANY SHARES OF COMMON STOCK ISSUED UPON CONVERSION HEREOF
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 AND ANY SHARES OF COMMON
STOCK ISSUED UPON CONVERSION HEREOF MAY BE 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 OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY 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 OR ANY COMMON STOCK ISSUED UPON CONVERSION HEREOF OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
and (b) such certificates will be reissued without the foregoing
legend only in accordance with the terms of the Indenture.
6. We agree that in the event that at some future time we
wish to dispose of any of the Notes, we will not do so unless:
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83
(a) the Notes are sold to the Company or any
Subsidiary thereof;
(b) the Notes are sold to a qualified
institutional buyer in compliance with Rule 144A under the
Securities Act;
(c) the Notes are sold to an accredited investor,
as defined in Rule 501(a)(1), (2), (3), (4) or (7) under the
Securities Act, acquiring at least $100,000 principal amount
of the Notes that, prior to such transfer, furnishes to the
Trustee a signed letter containing certain representations and
agreements relating to the restrictions on transfer of the
Notes (the form of which letter can be obtained from such
Trustee);
(d) the Notes are sold outside the United States
in compliance with Rule 903 or Rule 904 under the Securities
Act;
(e) the Notes are sold by us pursuant to Rule 144
under the Securities Act; or
(f) the Notes are sold pursuant to an effective
registration statement under the Securities Act.
Very truly yours,
[PURCHASER]
By:
--------------------------------
Name:
Title:
Dated:
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
FORM OF CERTIFICATE FOR TRANSFERS OF
REGULATION S TEMPORARY GLOBAL NOTE
FOR REGULATION S PERMANENT GLOBAL NOTE
(Transfers pursuant to Section 2.06(a)(v))
(Transferor)
[▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, BRUSSELS OFFICE AS
OPERATOR OF THE EUROCLEAR SYSTEM]
[CEDEL BANK, SOCIETE ANONYME]
Re: MIDCOM Communications Inc.
8 1/4% Convertible Subordinated Notes due 2003 (the "Notes")
Reference is hereby made to the Indenture dated as of August
22, 1996 (the "Indenture") between MIDCOM Communications Inc., as Issuer, and
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the Indenture.
This certificate relates to U.S. $____________ aggregate
principal amount of Notes which are held in the form of the Regulation S
Temporary Global Note (CINS No. U59360 AA 2) with the Depositary in the name of
________________________ [name of transferor] (the "Transferor") to effect the
transfer of the beneficial interest in such Regulation S Temporary Global Note
for a beneficial interest in an equivalent aggregate principal amount of the
Regulation S Permanent Global Note.
In connection with such request, and in respect of such Notes
we confirm that:
1. We are either not a U.S. person (as defined below) or we
have purchased our beneficial interest in the above referenced
Regulation S Temporary Global Note in a transaction that is exempt
from the registration requirements under the Securities Act.
2. We are delivering this certificate in connection with
obtaining a beneficial interest in the Regulation S Permanent Global
Note in exchange for our beneficial interest in the Regulation S
Temporary Global Note.
For purposes of this certificate, "U.S. person" means (i) any
individual resident in the United States, (ii) any partnership or corporation
organized or incorporated under the laws of the United States, (iii) any estate
of which an executor or administrator is a U.S. person (other than an estate
governed by foreign law and of which at least one executor or administrator is
a non-U.S. person who has sole or shared investment discretion with respect to
is assets), (iv) any trust of which any trustee is a U.S. person (other than a
trust of which at least one trustee is a non-U.S. person who has sole or shared
investment discretion with respect to its assets and no beneficiary of the
trust (and no settlor if the trust is revocable) is a U.S. person), (v) any
agency or branch of a foreign entity located in the United States, (vi) any
non-discretionary or similar account (other than an estate or trust) held by a
dealer or other fiduciary for the benefit or account
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of a U.S. person, (vii) any discretionary or similar account (other than an
estate or trust) held by a dealer or other fiduciary organized, incorporated or
(if an individual) resident in the United States (other than such an account
held for the benefit or account of a non-U.S. person), (viii) any partnership
or corporation organized or incorporated under the laws of a foreign
jurisdiction and formed by a U.S. person principally for the purpose of
investing in securities not registered under the Securities Act (unless it is
organized or incorporated, and owned, by accredited investors within the
meaning of Rule 501(a) under the Securities Act who are not natural persons,
estates or trusts); provided, however, that the term "U.S. person" shall not
include (A) a branch or agency of a U.S. person that is located and operating
outside the United States for valid business purposes as a locally regulated
branch or agency engaged in the banking or insurance business, (B) any employee
benefit plan established and administered in accordance with the law, customary
practices and documentation of a foreign country and (C) the international
organizations set forth in Section 902(o)(7) of Regulation S under the
Securities Act and any other similar international organizations, and their
agencies, affiliates and pension plans.
We irrevocably authorize you to produce this certificate or a copy
hereof to any interested party in any administrative or other proceedings with
respect to the matters covered by this certificate.
Very truly yours,
[TRANSFEROR]
By:
--------------------------------
Name:
Title:
To be completed by the account holder
as, or as agent for, the beneficial
owner(s) of the Notes to which this
Dated: certificate relates.
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86
EXHIBIT G
FORM OF CERTIFICATE FOR TRANSFERS OF
REGULATION S TEMPORARY GLOBAL NOTE
FOR REGULATION S PERMANENT GLOBAL NOTE
(Transfers pursuant to Section 2.06(a)(v))
(Euroclear or Cedel)
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: MIDCOM Communications Inc.
8 1/4% Convertible Subordinated Notes due 2003 (the "Notes")
Reference is hereby made to the Indenture dated as of August
22, 1996 (the "Indenture") between MIDCOM Communications Inc., as Issuer, and
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the Indenture.
This certificate relates to U.S. $____________ aggregate
principal amount of Notes which are held in the form of the Regulation S
Temporary Global Note (CINS No. U59360 AA 2) with the Depositary to effect the
transfer of the beneficial interest in such Regulation S Temporary Global Note
for a beneficial interest in an equivalent aggregate principal amount of the
Regulation S Permanent Global Note.
In connection with such request, this is to certify that,
based solely on certificates we have received in writing, by tested telex or by
electronic transmission from member organizations appearing in our records as
persons being entitled to a portion of the principal amount of the Regulation S
Temporary Global Note set forth above (our "Member Organizations")
substantially to the effect set forth in the Indenture, U.S. $_________
aggregate principal amount of the Notes is owned by persons that are not
citizens or residents of the United States, domestic partnerships, domestic
corporations or any estate or trust the income of which is subject to United
States federal income taxation regardless of its source or any other person
deemed a "U.S. person" under Regulation S under the Securities Act of 1933, as
amended.
We further certify (i) that we are not making available
herewith for exercise (or if relevant, exercise of any rights of collection of
any interest) any portion of the Regulation S Global Note excepted in such
certificates and (ii) that, as of the date hereof, we have not received any
notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any portion of the
part submitted herewith for exchange (or, if relevant, exercise or any rights
of collection of any interest) are no longer true and cannot be relied upon as
of the date hereof.
We understand that this certificate is required in connection with
certain laws, and, if applicable, certain securities laws of the United States.
In connection therewith, if administrative or legal proceedings are commenced
or threatened in connection with which this certificate is or
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87
would be relevant, we irrevocably authorize you to produce this certification
to any interested party in such proceedings.
Very truly yours,
[▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, BRUSSELS OFFICE AS
OPERATOR OF THE EUROCLEAR SYSTEM]
[CEDEL BANK, SOCIETE ANONYME]
By:
--------------------------------
Name:
Title:
Dated:
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EXHIBIT H
FORM OF CERTIFICATE FOR TRANSFERS OF
REGULATION S PERMANENT GLOBAL NOTE FOR
CERTIFICATED SECURITIES
(Transfers pursuant to Section 2.06(a)(v))
(Transferor)
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: MIDCOM Communications Inc.
8 1/4% Convertible Subordinated Notes due 2003 (the "Notes")
Reference is hereby made to the Indenture dated as of August
22, 1996 (the "Indenture") between MIDCOM Communications Inc., as Issuer, and
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the Indenture.
This certificate relates to U.S. $____________ aggregate
principal amount of Notes which are held in the form of the Regulation S
Permanent Global Note (CINS No. U59360 AA 2) with the Depositary in the name of
____________________________ [name of transferor] (the "Transferor") to effect
the transfer of the beneficial interest in such Regulation S Permanent Global
Note for a beneficial interest in an equivalent aggregate principal amount of
Certificated Securities.
In connection with such request, and in respect of such Notes
we confirm that:
1. We are either not a U.S. person (as defined below) or we
have purchased our beneficial interest in the above referenced
Regulation S Permanent Global Note in a transaction that is exempt
from the registration requirements under the Securities Act.
2. We are delivering this certificate in connection with
obtaining a beneficial interest in Certificated Notes in exchange for
our beneficial interest in the Regulation S Permanent Global Note.
For the purposes of this certificate, "U.S. person" means (i)
any individual resident in the United States, (ii) any partnership or
corporation organized or incorporated under the laws of the United States,
(iii) any estate of which an executor or administrator is a U.S. person (other
than an estate governed by foreign law and of which at least one executor or
administrator is a non-U.S. person who has sole or shared investment discretion
with respect to its assets), (iv) any trust of which any trustee is a U.S.
person (other than a trust of which at least one trustee is a non-U.S. person
who has sole or shared investment discretion with respect to its assets and no
beneficiary of the trust (and no settlor if the trust is revocable) is a U.S.
person), (v) any agency or branch of a foreign entity located in the United
States, (vi) any non-discretionary or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account of a U.S.
person, (vii) any discretionary or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated or (if an
individual) resident in the United States (other than such an account held for
the benefit or account of a non-U.S. person), (viii) any
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89
partnership or corporation organized or incorporated under the laws of a
foreign jurisdiction and formed by a U.S. person principally for the purpose of
investing in securities not registered under the Securities Act (unless it is
organized or incorporated, and owned, by accredited investors within the
meaning of Rule 501(a) under the Securities Act who are not natural persons,
estates, or trusts); provided, however, that the term "U.S. person" shall not
include (A) a branch or agency of a U.S. person that is located and operating
outside the United States for valid business purposes as a locally regulated
branch or agency engaged in the banking or insurance business, (B) any employee
benefit plan established and administered in accordance with the law, customary
practices and documentation of a foreign country and (C) the international
organizations set forth in Section 902(o)(7) of Regulation S under the
Securities Act and any other similar international organizations, and their
agencies, affiliates and pension plans.
We irrevocably authorize you to produce this certificate or a copy
hereof to any interested party in any administrative or other proceedings with
respect to the matters covered by this certificate.
Very truly yours,
[TRANSFEROR]
By:
-----------------------------
Name:
Title:
To be completed by the account holder
as, or the agent for, the beneficial
owner(s) of the Convertible Notes to
Date: which this certificate relates.
H-2